Document:

Unassociated Document

    EXHIBIT
4.2

     

    MORTGAGE CONSOLIDATION AND
MODIFICATION AGREEMENT

     

    THIS
AGREEMENT (this “Agreement”) made as of this 9th day
of October, 2002, between DEUTSCHE BANC MORTGAGE CAPITAL, L.L.C., having an
address at 31 West 52nd Street, 10th Floor, New York, New York 10019 (“Mortgagee”) and URBAN DEVELOPMENT
PARTNERS (61), LLC, a Connecticut limited liability company, whose address is
457 Madison Avenue, New York, New York 10022 (“Mortgagor”).

     

    W I T N E S S E T
H:

     

    WHEREAS,
Mortgagee is the lawful owner and holder of (i) those certain mortgages
described in Schedule
B hereto (collectively, the “Mortgages”) encumbering the premises
described in Schedule
A hereto together with all improvements now or hereafter located thereon
and all other property intended to be encumbered by the Mortgages (collectively,
the “Premises”) and (ii) the notes
secured by the Mortgages (collectively, the “Notes”); and

     

    WHEREAS,
the total aggregate principal amount which is secured by the Mortgages is
$15,850,000 (the “Consolidated
Indebtedness”) plus interest thereon;
and

     

    WHEREAS,
Mortgagee, as the holder of the Mortgages, and Mortgagor, as the owner of the
Premises, have agreed to consolidate and coordinate the liens of the Mortgages
and to modify the terms of the Mortgages in the manner hereinafter set
forth.

     

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

     

    1.           Mortgagor
hereby assumes and agrees to pay the Consolidated Indebtedness and interest
thereon at the rate of interest and on the terms provided for in that certain
Note Consolidation and Modification Agreement dated the date hereof between
Mortgagor and Mortgagee (the “Note
Modification Agreement”).

     

    2.           All
of the provisions of the Mortgages shall be superseded by the provisions of the
mortgage attached hereto as Exhibit A and
Mortgagor agrees to comply with and be subject to all of the terms, covenants,
and conditions of the mortgage attached hereto as Exhibit A, except
that (i) the original principal amount secured by such mortgage shall be the
Consolidated Indebtedness, (ii) the definition therein of the term “Note” shall mean the Notes, as
consolidated and modified by the Note Modification Agreement, and (iii) the
definition therein of the term “Debt” shall mean the
Consolidated Indebtedness and all other sums which may be secured by the
Mortgages.

     

    3.           The
parties hereto certify that this Agreement secures the same indebtedness
evidenced by the Notes and secured by the Mortgages and secures no further or
other indebtedness or obligation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.           Mortgagor
covenants and agrees that there exist no defenses, counterclaims or offsets with
respect to Mortgagor’s obligations for the payment of the Consolidated
Indebtedness as herein provided.

     

    [THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as
of the date first above written.

     

    
      
        	 	
                MORTGAGEE:

              	 
	 	 	 
	 	DEUTSCHE
      BANC MORTGAGE CAPITAL, L.L.C.	 
	 	 	 	 
	
                 

              	
                By:
      

              	
                /s/
      Michelle Leighton

              	 
	 	 	
                Name:  Michelle
      Leighton

              	 
	 	 	
                Title:  Director

              	 

      

    

     

    
      
        	 	
                MORTGAGOR:

              	 
	 	 	 
	 	
                URBAN
      DEVELOPMENT PARTNERS (61), LLC, 

                a
      Connecticut limited liability company

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	
                Urban
      (61), Inc., a Connecticut

                
                  corporation,
      its managing member

                

              	 

      

    

     

    
      
        	
                 

              	
                By:
      

              	/s/ Philip
      R. Carter	 
	 	 	
                Name:  Philip
      R. Carter

              	 
	 	 	
                Title:  President

              	 

      

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
    

     

    State of
New York          
 )

                                               
ss.:

    County of
New York       )

     

    On the
8th
day of October 2002, before me, the undersigned, a Notary Public in and for said
State, personally appeared Michelle Leighton, 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.

     

    
      
        	
                 

              	
                By:
      

              	/s/
      Karen D. Bernsohn	 
	 	 	
                Notary
      Public

              	 

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    State of
New York          
 )

                                               
ss.:

    County of
New York       )

     

    On the
4th
day of October, 2002, before me, the undersigned, a Notary Public in and for
said State, personally appeared Philip R. Carter, 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.

     

    
      
        
          	
                   

                	
                  By:
      

                	/s/
      Mark
      M. Leskiw	 
	 	 	
                  
                    Notary
      Public

                  

                	 

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    SCHEDULE
A

    Legal
Description

     

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

     

    BEGINNING
at a point on the southerly side of 61st Street
distant 125 feet easterly from the corner formed by the intersection of the
southerly side of 61st Street
and the easterly side of Second Avenue;

     

    RUNNING
THENCE easterly along the southerly side of 61st Street,
110 feet 6 inches to the westerly side of the land taken by the City of New York
for the Queensborough Bridge approach;

     

    THENCE
southerly along the westerly side of said land and parallel with the easterly
side of Second Avenue, 102 feet 10 inches;

     

    THENCE
westerly and parallel with the southerly side of 61st Street,
60 feet 6 inches;

     

    THENCE
northerly and parallel with the easterly side of Second Avenue, 2 feet 5 inches
to the centre line of the block;

     

    THENCE
westerly and along centre line of the block and parallel with the southerly side
of 61st
Street, 50 feet;

     

    THENCE
northerly and parallel with the easterly side of Second Avenue, 100 feet 5
inches to the point or place of BEGINNING.

     

    
      
        
        

      

      
        Sch.
A-1

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
B

     

    Schedule
of Mortgages

     

    
      	
              1.

            	
              Mortgage
      made by 306 East 61 Corp. -to- Excelsior Savings Bank, in the amount of
      $240,000.00, dated 8/16/62 and recorded on 8/20/62 in Liber 6080 mp 190.
      (Mortgage Tax Paid $1,200.00.)

            

    

     

    
      	
               
      

            	
              (a)

            	
              Assignment
      of Mortgage made by Excelsior Empire Savings Bank f/k/a Excelsior Savings
      Bank -to- The Western Savings Fund Society of Philadelphia,
      dated 10/23/67 and recorded on 10/26/67 in Record Liber 236 cp
      46.  Assigns
mortgage 1.

            

    

     

    
      	
              2.

            	
              Mortgage
      made by 306 East 61 Corp -to- The Western Savings Fund Society of
      Philadelphia, in the amount of $538,556.49, dated 10/25/67 and recorded on
      10/31/67 in Record Liber 237 cp 221. (Mortgage Tax Paid
      $2,693.00.)

            

    

     

    
      	
               
      

            	
              (a)

            	
              Consolidation
      and Extension Agreement made between The Western Savings Fund Society of
      Philadelphia -and- 306 East 61 Corp., dated as of 10/25/67 and recorded on
      10/31/67 in Record Liber 237 page 230.  Consolidates mortgages
      1 and 2 to form a single lien of
  $750,000.00.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Extension
      Agreement made between The Western Savings Fund Society of Philadelphia
      -and- 306 East 61 Corp., dated 10/1/72 and recorded on 2/26/73 in Reel 269
      page 1259.  Extends Mortgages 1 and 2, as
      consolidated.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Assignment
      of Mortgage made by The Philadelphia Savings Fund Society, successor by
      merger to The Western Savings Fund Society of Philadelphia -to-John Alden
      Life Insurance Company, dated as of 9/23/83 and recorded on 8/16/84 in
      Reel 824 page 3.  Assigns mortgages 1 and 2, as
      consolidated.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Extension
      Agreement made between John Alden Life Insurance Company -and-306 East 61
      Corp., dated as of 10/1/87 and recorded on 1/14/88 in Reel 1347
      page 1887.  Extends Mortgages 1 and 2, as
      consolidated.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Assignment
      of Mortgage made by John Alden Life Insurance Company -to-Apple Bank for
      Savings, dated 11/1/88 and recorded on 11/28/88 in Reel 1498
      page 2408.  Assigns Mortgages 1 and 2, as
      consolidated.

            

    

     

    
      	
              3.

            	
              Mortgage
      made by 306 East 61 Corp. -to- Ellen Harrison and Alice Sinkoff, in the
      amount of $2,000,000.00, dated 12/14/84 and recorded on 12/18/84 in Reel
      857 page 512. (Mortgage Tax Paid
  $45,000.00.)

            

    

     

    
      	
               
      

            	
              (a)

            	
              Extension
      Agreement made between Ellen Harrison and Alice Sinkoff -and-
      306 East 61 Corp., dated 11/4/88 and recorded on 11/28/88 in Reel
      1498 page 2416.  Extends Mortgage
3.

            

    

     

    
      
        
        

      

      
        Sch.
B-1

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              Extension
      Agreement made between Ellen Harrison and Alice Sinkoff -and- 306 East 61
      Corp., dated 3/22/95 and recorded on 8/4/95 in Reel 2230 page
      1973.  Extends Mortgage
3.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Assignment
      of Mortgage made by Marvin W. Sinkoff, Executor of the Estate of Alice B.
      Sinkoff deceased -to- Marvin W. Sinkoff, dated 11/17/97 and recorded on
      5/26/98 in Reel 2574 page 1752.  Assigns mortgage
    3.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Assignment
      of Mortgage made by Marvin M. Sinkoff -to- Apple Bank for Savings, dated
      12/1/98 and recorded on 12/31/98 in Reel 2784 page
      2315.  Assigns mortgage
3.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Assignment
      of Mortgage made by Ellen Harrison -to- Apple Bank for Savings, dated
      12/1/98 and recorded on 12/31/98 in Reel 2784 page
      2310.  Assigns mortgage
3.

            

    

     

    
      	
              4.

            	
              Mortgage
      made by 306 East 61 Corp. -to- Apple Bank for Savings, in the amount of
      $635,259.80, dated 11/4/88 and recorded on 11/28/88 in Reel 1498 page
      2374.  (Mortgage Tax Paid
$14,294.25.)

            

    

     

    
      	
               
      

            	
              (a)

            	
              Consolidation
      and Extension Agreement made between 306 East 61 Corp. -and-Apple Bank for
      Savings, dated 11/4/88 and recorded on 11/28/88 in Reel 1498 page
      2381.  Consolidates mortgages 1, 2 and 4 to form a single lien
      of $1,000,000.00.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Modification
      & Extension Agreement made between 306 East 61 Corp., -and-Apple Bank
      for Savings, dated as of 12/1/93 and recorded on 8/4/95 in Reel 2230 page
      1928.  Modifies and Extends Mortgages 1, 2 and 4, as
      consolidated.

            

    

     

    
      	
              5.

            	
              Mortgage
      made by 306 East 61 Corp. -to- Apple Bank for Savings, in the amount of
      $150,000.00, dated 12/1/98 and recorded on 12/31/98 in Reel 2784 page
      2320.  (Mortgage Tax Paid
$3,000.00.)

            

    

     

    
      	
               
      

            	
              (a)

            	
              Consolidation
      and Extension Agreement made between 306 East 61 Corp. -and-Apple Bank for
      Savings, dated as of 12/1/98 and recorded on 12/31/98 in Reel 2784 page
      2327.  Consolidates mortgages 1, 2, 3, 4 and 5 to form a single
      lien of $3,150,000.00.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Assignment
      of Mortgage made by Apple Bank for Savings -to- Builders Bank, recorded on
      5/21/01 in Reel 3292 Page 1630.  Assigns mortgages #1 through
      #5, as consolidated.

            

    

     

    
      	
              6.

            	
              Mortgage
      made by Urban Development Partners (61) LLC -to- Builders Bank, in the
      amount of $10,120,746.39, dated 5/10/01 and recorded on 5/21/01 in Reel
      3292 Page 1640.  (Mortgage Tax Paid
  $278,319.25.)

            

    

     

    
      	
               
      

            	
              (a)

            	
              Consolidation,
      Amended and Restated Mortgage Agreement made between Urban Development
      Partners (61) LLC -and- Builders Bank, dated 5/10/01 and recorded on
      5/21/01 in Reel 3292 Page 1651.  Consolidates mortgages #1
      through #6 to form a single lien of
  $13,150,000.00.

            

    

     

    
      
        
        

      

      
        Sch.
B-2

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              Assignment
      of Mortgage made by Builders Bank, 10/9/02 and recorded __/__/02 in Reel
      ___, page ___.  Assigns mortgages #1 through #6, as
      consolidated.

            

    

     

    
      	
              7.

            	
              Gap
      Mortgage made by Urban Development Partners (61) LLC to Deutsche Banc
      Mortgage Capital, L.L.C. in the amount of $2,700,000.00, dated 10/9/02 and
      recorded ___/___/02 in Reel ___, page___.  (Mortgage Tax
      Paid:  $74,250.00)

            

    

     

    
      
        
        

      

      
        Sch.
B-3

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

     

    Form
of Mortgage

     

    (See
Attached Pages)

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    
      
        

        

      

      URBAN
DEVELOPMENT PARTNERS (61), LLC,

       

      as
Mortgagor

       

      to

       

      DEUTSCHE
BANC MORTGAGE CAPITAL, L.L.C.,

       

      as
Mortgagee

       

        
          

        

      

    

    

    MORTGAGE
AND SECURITY AGREEMENT

     

      
        

      

    

     

    Date:  October
9, 2002

     

    PREPARED
BY AND UPON RECORDATION RETURN TO:

     

    Cadwalader,
Wickersham & Taft

    227 West
Trade Street

    Suite
2400

    Charlotte,
North Carolina 28202

    Attention:  Jeffrey
J. Lee, Esq.

     

    
      THIS
MORTGAGE DOES NOT COVER REAL PROPERTY PRINCIPALLY 

      IMPROVED
BY ONE OR MORE STRUCTURES CONTAINING IN THE 

      AGGREGATE
NOT MORE THAN SIX RESIDENTIAL DWELLING UNITS, EACH 

      DWELLING
UNIT HAVING ITS OWN SEPARATE COOKING FACILITIES.

       

      
        

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

    TABLE OF
CONTENTS

    
      
        
          

          
            	 
      	 
      	 	
                    Page

                  
	
                    ARTICLE
      I

                     

                    
                      TAXES
      AND UTILITIES

                    

                  
	 
      	 
      	 	 
      
	
                    1.1

                  	
                    Payment
      of Taxes

                  	 	
                    4

                  
	
                    1.2

                  	
                    Tax
      and Insurance Impound Account

                  	 	
                    5

                  
	
                    1.3

                  	
                    Payment
      of Utilities, Assessments, Charges, Etc

                  	 	
                    5

                  
	
                    1.4

                  	
                    Additional
      Taxes

                  	 	
                    5

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      II

                     

                    
                      INSURANCE

                    

                  
	 
      	 
      	 	 
      
	
                    2.1

                  	
                    Insurance

                  	 	
                    6

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      III

                     

                    
                      CASUALTY
      AND CONDEMNATION

                    

                  
	 
      	 
      	 	 
      
	
                    3.1

                  	
                    Casualty
      and Condemnation

                  	 	
                    9

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      IV

                     

                    
                      ENVIRONMENTAL
      MATTERS

                    

                  
	 
      	 
      	 	 
      
	
                    4.1

                  	
                    Hazardous
      Waste and Other Substances

                  	 	
                    13

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      V

                     

                    
                      RESERVES

                    

                  
	 
      	 
      	 	 
      
	
                    5.1

                  	
                    Payment
      Reserve

                  	 	
                    17

                  
	
                    5.2

                  	
                    Replacement
      Reserve

                  	 	
                    18

                  
	
                    5.3

                  	
                    Repair
      and Remediation Reserve

                  	 	
                    19

                  
	
                    5.4

                  	
                    Rollover
      Reserve

                  	 	
                    20

                  
	
                    5.5

                  	
                    Rent
      Abatement Reserve

                  	 	
                    22

                  
	
                    5.6

                  	
                    Cash
      Sweep Reserve

                  	 	
                    22

                  
	
                    5.7

                  	
                    Reserves;
      General

                  	 	
                    24

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      VI

                     

                    
                      RENTS;
      LEASES; ALIENATION

                    

                  
	 
      	 
      	 	 
      
	
                    6.1

                  	
                    Rents
      and Profits

                  	 	
                    27

                  

          

           

          
            
              
              

            

            
              i

              
                

              

            

            
              
              

            

          

           

          
            	
                    6.2

                  	
                    Leases

                  	 	
                    28

                  
	
                    6.3

                  	
                    Alienation
      and Further Encumbrances

                  	 	
                    29

                  
	
                    6.4

                  	
                    Easements
      and Rights-of-Way

                  	 	
                    31

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      VII

                     

                    
                      PROPERTY
      MANAGEMENT

                    

                  
	 
      	 
      	 	 
      
	
                    7.1

                  	
                    Management

                  	 	
                    32

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      VIII

                     

                    
                      INDEMNIFICATION

                    

                  
	 
      	 
      	 	 
      
	
                    8.1

                  	
                    Indemnification;
      Subrogation

                  	 	
                    32

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      IX

                     

                    
                      REPORTING

                    

                  
	 
      	 
      	 	 
      
	
                    9.1

                  	
                    Access
      Privileges and Inspections

                  	 	
                    34

                  
	
                    9.2

                  	
                    Financial
      Statements and Books and Records

                  	 	
                    34

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      X

                     

                    
                      WARRANTIES
      AND COVENANTS

                    

                  
	 
      	 
      	 	 
      
	
                    10.1

                  	
                    Warranties
      of Mortgagor

                  	 	
                    35

                  
	
                    10.2

                  	
                    Waste;
      Alteration of Improvements

                  	 	
                    38

                  
	
                    10.3

                  	
                    Zoning

                  	 	
                    38

                  
	
                    10.4

                  	
                    Covenants
      with Respect to Indebtedness, Operations, Fundamental Changes of
      Mortgagor

                  	 	
                    39

                  
	
                    10.5

                  	
                    Additional
      Covenants with Respect to Mortgagor

                  	 	
                    42

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      XI

                     

                    
                      FURTHER
      ASSURANCES

                    

                  
	 
      	 
      	 	 
      
	
                    11.1

                  	
                    Defense
      of Title

                  	 	
                    42

                  
	
                    11.2

                  	
                    Performance
      of Obligations

                  	 	
                    42

                  
	
                    11.3

                  	
                    Construction
      Liens

                  	 	
                    43

                  
	
                    11.4

                  	
                    Further
      Documentation

                  	 	
                    43

                  
	
                    11.5

                  	
                    Payment
      of Costs; Mortgagee’s Right to Cure

                  	 	
                    44

                  
	
                    11.6

                  	
                    Compliance
      with Laws

                  	 	
                    45

                  
	
                    11.7

                  	
                    Attorney-in-Fact
      Provisions

                  	 	
                    45

                  

          

           

          
            
              
              

            

            
              ii

              
                

              

            

            
              
              

            

          

           

          
            	
                    ARTICLE
      XII

                     

                    
                      PAYMENT;
      DEFEASANCE; PREPAYMENT

                    

                  
	 
      	 
      	 	 
      
	
                    12.1

                  	
                    Payment
      of the Notes

                  	 	
                    45

                  
	
                    12.2

                  	
                    Computation
      of Interest

                  	 	
                    46

                  
	
                    12.3

                  	
                    Application
      of Payments

                  	 	
                    
                      46

                    

                  
	
                    12.4

                  	
                    Prepayment

                  	 	
                    
                      46

                    

                  
	
                    12.5

                  	
                    Defeasance

                  	 	
                    
                      46

                    

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      XIII

                     

                    
                      SECURITY
      PROVISIONS

                    

                  
	 
      	 
      	 	 
      
	
                    13.1

                  	
                    Security
      Interest

                  	 	
                    49

                  
	
                    13.2

                  	
                    Security
      Agreement

                  	 	
                    50

                  
	
                    13.3

                  	
                    Secured
      Indebtedness

                  	 	
                    51

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      XIV

                     

                    
                      DEFAULT

                    

                  
	 
      	 
      	 	 
      
	
                    14.1

                  	
                    Events
      of Default

                  	 	
                    51

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      XV

                     

                    
                      REMEDIES

                    

                  
	 
      	 
      	 	 
      
	
                    15.1

                  	
                    Remedies
      Available

                  	 	
                    53

                  
	
                    15.2

                  	
                    Application
      of Proceeds

                  	 	
                    55

                  
	
                    15.3

                  	
                    Right
      and Authority of Receiver or Mortgagee in the Event of Default; Power of
      Attorney

                  	 	
                    56

                  
	
                    15.4

                  	
                    Occupancy
      After Foreclosure

                  	 	
                    57

                  
	
                    15.5

                  	
                    Notice
      to Account Debtors

                  	 	
                    57

                  
	
                    15.6

                  	
                    Cumulative
      Remedies

                  	 	
                    57

                  
	
                    15.7

                  	
                    Payment
      of Expenses

                  	 	
                    57

                  
	
                    15.8

                  	
                    Mortgagor’s
      Waivers

                  	 	
                    58

                  
	
                    15.9

                  	
                    Submission
      to Jurisdiction; Waiver of Jury Trial

                  	 	
                    58

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      XVI

                     

                    
                      MISCELLANEOUS
      TERMS AND CONDITIONS

                    

                  
	 
      	 
      	 	 
      
	
                    16.1

                  	
                    Time
      of Essence

                  	 	
                    59

                  
	
                    16.2

                  	
                    Release
      of Mortgage

                  	 	
                    59

                  
	
                    16.3

                  	
                    Notices

                  	 	
                    59

                  
	
                    16.4

                  	
                    Successors
      and Assigns; Joint and Several Liability

                  	 	
                    60

                  
	
                    16.5

                  	
                    Severability

                  	 	
                    60

                  
	
                    16.6

                  	
                    Gender

                  	 	
                    60

                  

          

           

          
            
              
              

            

            
              iii

              
                

              

            

            
              
              

            

          

           

          
            	
                    16.7

                  	
                    Waiver;
      Discontinuance of Proceedings

                  	 	
                    60

                  
	
                    16.8

                  	
                    Section
      Headings

                  	 	
                    61

                  
	
                    16.9

                  	
                    Governing
      Law

                  	 	
                    61

                  
	
                    16.1

                  	
                    Counting
      of Days

                  	 	
                    61

                  
	
                    16.11

                  	
                    Relationship
      of the Parties

                  	 	
                    61

                  
	
                    16.12

                  	
                    Unsecured
      Portion of Indebtedness

                  	 	
                    61

                  
	
                    16.13

                  	
                    Cross
      Default

                  	 	
                    61

                  
	
                    16.14

                  	
                    Inconsistency
      with Other Loan Documents

                  	 	
                    61

                  
	
                    16.15

                  	
                    No
      Merger

                  	 	
                    61

                  
	
                    16.16

                  	
                    Rights
      With Respect to Junior Encumbrances

                  	 	
                    62

                  
	
                    16.17

                  	
                    Mortgagee
      May File Proofs of Claim

                  	 	
                    62

                  
	
                    16.18

                  	
                    Fixture
      Filing

                  	 	
                    62

                  
	
                    16.19

                  	
                    Counterparts

                  	 	
                    62

                  
	
                    16.2

                  	
                    Recording
      and Filing

                  	 	
                    62

                  
	
                    16.21

                  	
                    Entire
      Agreement and Modifications

                  	 	
                    62

                  
	
                    16.22

                  	
                    Maximum
      Interest

                  	 	
                    63

                  
	
                    16.23

                  	
                    Certain
      Matters Relating to Mortgaged Property Located in the State of New
      York

                  	 	
                    63

                  

          

           

        

        
          
            
            

          

          
            iv

            
              

            

          

          
            
            

          

        

      

    

    

    INDEX
OF DEFINITIONS

     

    “2011 Minimum Rollover
Threshold” – Section 5.6(a)

     

    “2011 Rollover Spaces”
– Section 5.6(b)

     

    “ACM’s”– Section
4.1(i)

     

    “All Future Payments”
– Section 12.4(c)

     

    “Allocable 2011 Rollover
Amount” – Section 5.6(b)

     

    “Assignment” – Section
6.1

     

    “Buyer” – Section
6.3(b)(2)

     

    “Cash Sweep Reserve” –
Section 5.6(a)

     

    “Code” – Section
12.5

     

    “CERCLA” – Section
4.1(a)

     

    “Collateral” – Section
13.1

     

    “Contracts” –
Paragraph 9 of the granting clause

     

    “Debt” – Last
paragraph of the securing clause

     

    “Default” – Section
1.2

     

    “Default Interest
Rate” – As defined in the Note

     

    “Defeasance
Collateral” – Section 12.5(c)(2)

     

    “Defeasance Security
Agreement” – Section 12.5(c)(1)

     

    “Deferred Maintenance”
– Section 5.3

     

    “Eligible Accounts” –
Section 5.7(b)

     

    “Eligible Institution”
– Section 5.7(b)

     

    “Engineering Report” –
Section 5.3

     

    “Environmental Indemnity
Agreement” – Section 4.1

     

    “Environmental Laws” –
Section 4.1(a)

     

    “Future Rent
Abatements” – Section 5.4(a)

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “General Intangibles”
– Paragraph 11 of the granting clause

     

    “Hazardous Substances”
– Section 4.1(a)

     

    “Impound Account” –
Section 1.2

     

    “Improvements” –
Paragraph 2 of the granting clause

     

    “Increased Rollover Reserve
Threshold” – Section 5.4(a)

     

    “Indemnitor” – Section
10.1(b)

     

    “Initial Rollover Reserve
Threshold” – Section 5.4(a)

     

    “Interest” – Section
16.22

     

    “Lead Based Paint” –
Section 4.1(g)

     

    “Lead Based Paint
Report” – Section 4.1(j)

     

    “Lease; Leases” –
Paragraph 8 of the granting clause

     

    “Loan” – Last
paragraph of the securing clause

     

    “Licenses” – Section
10.1(f)

     

    “Loan Documents” –
Paragraph B of the securing clause & Section 6.5

     

    “Maintenance Program”
– Section 4.1(i)

     

    “Maturity Date” – As
defined in the Note

     

    “Monthly Payment” – As
defined in the Note

     

    “Monthly Rollover
Deposit” – Section 5.4(a)

     

    “Mortgaged Property” –
First paragraph of the granting clause

     

    “Note” – Paragraph A
of the securing clause

     

    “O&M Plan” –
Section 4.1(k)

     

    “Payment Dates” – As
defined in the Note

     

    “Payment Reserve” –
Section 5.1(a)

     

    “Permitted
Encumbrances” – Section 10.1(a)

     

    “Permitted
Investments” – Section 5.7(b)

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Permitted Materials”
– Section 4.1(a)

     

    “Premises” – Paragraph
1 of the granting clause

     

    “Rating Agency” or
“Rating
Agencies” – Section 6.3(a)

     

    “Release Date” –
Section 12.5(A)

     

    “REMIC”–Section
12.5

     

    “Rent Abatement
Reserve” – Section 5.5

     

    “Rent Roll” – Section
10.1(t)

     

    “Rents and Profits” –
Paragraph 8 of the granting clause

     

    “Repair and Remediation
Reserve” – Section 5.3

     

    “Replacement Reserve”
– Section 5.2(a)

     

    “Replacements” –
Section 5.2(a)

     

    “Reserves” – Section
5.7(a)

     

    “Rollover Reserve” –
Section 5.4(a)

     

    “Rollover Reserve
Threshold” – Section 5.4(a)

     

    “Sale”–Section
6.3(b)

     

    “SPE Component Entity”
– Section 10.5

     

    “Stub Interest” – As
defined in the Note

     

    “Tenant; Tenants” –
Paragraph 8 of the granting clause

     

    “UCC” – Paragraph 7 of
the granting clause

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    MORTGAGE
AND SECURITY AGREEMENT

     

    THIS
MORTGAGE AND SECURITY AGREEMENT (this “Mortgage”) is dated
as of October 9, 2002 and is given by URBAN DEVELOPMENT PARTNERS (61), LLC, a
Connecticut limited liability company, as mortgagor (“Mortgagor”), whose
address is 457 Madison Avenue, New York, New York 10022, to DEUTSCHE BANC
MORTGAGE CAPITAL, L.L.C., a Delaware limited liability company, as mortgagee,
and its successors and/or assigns (“Mortgagee”), whose
address is 31 West 52nd Street, 10th Floor, New York, New York
10019.

     

    W I T N E
S S E T H:

     

    In order
to secure:

     

    (A)           The
debt evidenced by that certain Promissory Note (such Promissory Note, together
with any and all renewals, amendments, modifications, consolidations and
extensions thereof, is hereinafter referred to as the “Note”) of even date
with this Mortgage, made by Mortgagor payable to the order of Mortgagee in the
principal face amount of FIFTEEN MILLION EIGHT HUNDRED FIFTY THOUSAND AND NO/100
DOLLARS ($15,850,000.00), together with interest as therein
provided;

     

    (B)           The
full and prompt payment and performance of all of the provisions, agreements,
covenants and obligations herein contained and contained in any other
agreements, documents or instruments now or hereafter evidencing, securing or
otherwise relating to the Debt (the Note, this Mortgage, and such other
agreements, documents and instruments, together with any and all renewals,
amendments, extensions and modifications thereof, are hereinafter collectively
referred to as the “Loan Documents”) and
the payment of all other sums herein or therein covenanted to be
paid;

     

    (C)           Any
and all additional advances made by Mortgagee to protect or preserve the
Mortgaged Property or the lien or security interest created hereby on the
Mortgaged Property, or for any other purpose provided herein or in the other
Loan Documents (whether or not the original Mortgagor remains the owner of the
Mortgaged Property at the time of such advances); and

     

    (D)           Any
and all other indebtedness now owing or which may hereafter be owing by
Mortgagor to Mortgagee, however and whenever incurred or evidenced, whether
express or implied, direct or indirect, absolute or contingent, or due or to
become due.

     

    (All of
the sums and covenants referred to in Paragraphs (A) through
(D) above are herein referred to as the “Debt” or the “Loan”);

     

    And in
consideration of the Debt and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor hereby irrevocably
mortgages, grants, bargains, sells, conveys, transfers, pledges, sets over and
assigns to Mortgagee, with power of sale, and creates a security interest in,
all of Mortgagor’s estate, right, title and interest in, to and under any and
all of the following described property, whether now owned or hereafter acquired
by Mortgagor (collectively, the “Mortgaged
Property”):

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (1)           All
that certain real property situated in the County of New York, State of New
York, more particularly described in Exhibit A attached hereto (the “Premises”), together
with all of the easements, rights and appurtenances now or hereafter in any way
appertaining thereto, either at law or in equity, whether now owned or hereafter
acquired by Mortgagor;

     

    (2)           All
structures, buildings and improvements of every kind and description now or at
any time hereafter located on the Premises (the “Improvements”);

     

    (3)           All
easements, rights-of-way, strips and gores of land, vaults, streets, ways,
alleys, passages, sewer rights, and other emblements now or hereafter located on
the Premises or under or above the same or any part thereof, and all estates,
rights, interests and appurtenances, reversions and remainders whatsoever, in
any way belonging or appertaining to the Mortgaged Property or any part thereof,
whether now owned or hereafter acquired by Mortgagor;

     

    (4)           All
water, ditches, wells, reservoirs and drains and all water, ditch, well,
reservoir and drainage rights which are appurtenant to, located on, under or
above or used in connection with the Premises or the Improvements, or any part
thereof, whether now existing or hereafter created or acquired by
Mortgagor;

     

    (5)           All
minerals, crops, timber, trees, shrubs, flowers and landscaping features now or
hereafter located on, under or above the Premises;

     

    (6)           All
building materials, supplies and equipment now or hereafter placed on the
Premises or in the Improvements;

     

    (7)           All
furniture, furnishings, fixtures, goods, equipment, inventory or personal
property owned by Mortgagor and now or hereafter located on, attached to or used
in and about the Improvements, including, but not limited to, all machines,
engines, boilers, dynamos, elevators, stokers, tanks, cabinets, awnings and all
appliances, communication, plumbing, heating, air conditioning, lighting,
ventilating, refrigerating, disposal and incinerating equipment, and sprinkler
and fire and theft protection equipment, and all fixtures and appurtenances
thereto, and such other goods and chattels and personal property owned by
Mortgagor as are now or hereafter used or furnished in operating the
Improvements, or the activities conducted therein, and all building materials
and equipment hereafter situated on or about the Premises or Improvements, and
all warranties and guaranties relating thereto, and all additions thereto and
substitutions and replacements therefor (exclusive of any of the foregoing owned
or leased by tenants of space in the Improvements and in which Mortgagor does
not hold an interest) (collectively, the “Equipment”).  To
the extent any portion of the Equipment is not deemed real property or Fixtures
under applicable law, it shall be deemed to be personal property, and this
Mortgage shall be deemed to constitute a security agreement for the purposes of
creating a security interest therein in favor of Mortgagee under the Uniform
Commercial Code of the state in which the Premises are located (the “UCC”);

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (8)           All
leases (including, without limitation, oil, gas and mineral leases, if any),
licenses, concessions and occupancy agreements of all or any part of the
Premises or the Improvements (each, a “Lease” and
collectively, “Leases”), whether
written or oral, now or hereafter entered into and all rents, royalties, issues,
profits, bonus money, revenue, income, rights and other benefits (collectively,
the “Rents and
Profits”) of the Premises or the Improvements, now or hereafter arising
from the use or enjoyment of all or any portion thereof or from any present or
future Lease or other agreement pertaining thereto or any of the General
Intangibles and all cash or securities deposited to secure performance by the
tenants, lessees or licensees (each, a “Tenant” and
collectively, “Tenants”), as
applicable, of their obligations under any such Leases, whether said cash or
securities are to be held until the expiration of the terms of said Leases or
applied to one or more of the installments of rent coming due prior to the
expiration of said terms, subject, however, to the provisions contained in Section 6.1
hereinbelow;

     

    (9)           All
contracts and agreements now or hereafter entered into covering any part of the
Premises or the Improvements (collectively, the “Contracts”) and all
revenue, income and other benefits thereof, including, without limitation,
management agreements, service contracts, maintenance contracts, equipment
leases, personal property leases and any contracts or documents relating to
construction on any part of the Premises or the Improvements (including all
architectural renderings, models, specifications, plans, drawings, surveys,
tests, reports, data, bonds and governmental approvals) or to the management or
operation of any part of the Premises or the Improvements;

     

    (10)           All
water taps, sewer taps, certificates of occupancy, permits, licenses,
franchises, certificates, consents, approvals and other rights and privileges
now or hereafter obtained in connection with the Premises or the Improvements
and all present and future warranties and guaranties relating to the
Improvements or to any equipment, fixtures, furniture, furnishings, personal
property or components of any of the foregoing now or hereafter located or
installed on the Premises or the Improvements;

     

    (11)           All
present and future funds, accounts, instruments, accounts receivable, documents,
claims, general intangibles (including, without limitation, trademarks, trade
names, service marks and symbols now or hereafter used in connection with any
part of the Premises or the Improvements, all names by which the Premises or the
Improvements may be operated or known, all rights to carry on business under
such names, and all rights, interest and privileges which Mortgagor has or may
have as developer or declarant under any covenants, restrictions or declarations
now or hereafter relating to the Premises or the Improvements) (collectively,
the “General
Intangibles”);

     

    (12)           All
insurance policies or binders now or hereafter relating to the Mortgaged
Property, including any unearned premiums thereon;

     

    (13)           All
cash funds, deposit accounts and other rights and evidence of rights to cash,
now or hereafter created or held by Mortgagee pursuant to this Mortgage or any
other of the Loan Documents, including, without limitation, all funds now or
hereafter on deposit in the Impound Account, the Payment Reserve, the Rent
Abatement Reserve, the Replacement Reserve, the Rollover Reserve, the Cash Sweep
Reserve and the Repair and Remediation Reserve and all notes or chattel paper
now or hereafter arising from or by virtue of any transactions related to the
Premises or the Improvements;

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (14)           All
present and future monetary deposits given by Mortgagor to any public or private
utility with respect to utility services furnished to any part of the Premises
or the Improvements;

     

    (15)           All
proceeds, products, substitutions and accessions (including claims and demands
therefor) of the conversion, voluntary or involuntary, of any of the foregoing
into cash or liquidated claims, including, without limitation, proceeds of
insurance and condemnation awards; and

     

    (16)           All
other or greater rights and interests of every nature in the Premises and the
Improvements and in the possession or use thereof and income therefrom, whether
now owned or hereafter acquired by Mortgagor.

     

    TO HAVE
AND TO HOLD the Mortgaged Property unto Mortgagee, its successors and assigns
forever, and Mortgagor does hereby bind itself, its successors and assigns, to
WARRANT AND FOREVER DEFEND the title to the Mortgaged Property, subject only to
the Permitted Encumbrances, to Mortgagee against every person whomsoever may
lawfully claim the same or any part thereof;

     

    PROVIDED,
HOWEVER, that if the Debt shall have been paid and performed in full, then, in
such case, the liens, security interests, estates and rights granted by this
Mortgage shall be satisfied and the estate, right, title and interest of
Mortgagee in the Mortgaged Property shall cease, and upon payment to Mortgagee
of all costs and expenses incurred for the preparation of the release
hereinafter referenced and all recording costs if allowed by law, Mortgagee
shall promptly satisfy and release this Mortgage of record and the lien hereof
by proper instrument or, at Mortgagor’s option and at Mortgagor’s sole cost and
expense, this Mortgage shall be assigned (without recourse, representation or
warranty) to another mortgagee.

     

    For the
purpose of further securing the Debt for so long as the Debt or any part thereof
remains incomplete or unpaid, Mortgagor covenants and agrees as
follows:

     

    ARTICLE
I

     

    TAXES AND
UTILITIES

     

    1.1           Payment of
Taxes.  Mortgagor shall pay or cause to be paid, except to the
extent provision is actually made therefor pursuant to Section 1.2 below, all
taxes and assessments which are or may become a lien on any portion of, or
interest in, the Mortgaged Property or which are assessed against or imposed
upon any portion of, or interest in the Mortgaged Property.  Unless
taxes have been paid pursuant to Section 1.2 below, Mortgagor shall furnish
Mortgagee with receipts (or if receipts are not immediately available, with
copies of canceled checks evidencing payment with receipts to follow promptly
after they become available) showing payment of such taxes and assessments at
least fifteen (15) days prior to the applicable delinquency date
therefor.  Notwithstanding the foregoing, Mortgagor may, in good
faith, by appropriate proceedings and upon notice to Mortgagee, contest the
validity, applicability or amount of any asserted tax or assessment so long as
(a) such contest is diligently pursued, (b) Mortgagee determines, in its
subjective opinion, that such contest suspends the obligation to pay the tax and
that nonpayment of such tax or assessment will not result in the sale, loss,
forfeiture or diminution of the Mortgaged Property or any part thereof or any
interest of Mortgagee therein and (c) prior to the earlier of the commencement
of such contest or the delinquency date of the asserted tax or assessment,
Mortgagor deposits in the Impound Account an amount determined by Mortgagee to
be adequate to cover the payment of such tax or assessment and an additional sum
sufficient in the sole judgment of Mortgagee to cover possible interest, costs
and penalties; provided, however, that taxes, assessments, interest, costs and
penalties owing shall be paid by Mortgagor prior to the date any writ or order
is issued under which the Mortgaged Property may be sold, lost or
forfeited.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    1.2           Tax and Insurance Impound
Account.  Mortgagor shall establish and maintain at all times
while this Mortgage continues in effect an impound account (the “Impound
Account”) with Mortgagee for payment of real estate taxes and assessments and
insurance on the Mortgaged Property and as additional security for the
Debt.  Simultaneously with the execution hereof, Mortgagor shall
deposit in the Impound Account an amount equal to $151,628.58 (which amount has
been escrowed solely for real estate taxes), which amount has been reasonably
determined by Mortgagee.  Commencing on the first Payment Date under
the Note and continuing thereafter on each subsequent Payment Date, Mortgagor
shall pay to Mortgagee, concurrently with and in addition to the monthly payment
due under the Note and until the Debt is fully paid and performed, deposits in
an amount equal to one-twelfth (1/12) of the amount of the annual real estate
taxes and assessments that will next become due and payable on the Mortgaged
Property, plus one-twelfth (1/12) of the amount of the annual premiums that will
next become due and payable on insurance policies which Mortgagor is required to
maintain hereunder, each as estimated and determined by Mortgagee.  So
long as no Event of Default has occurred and is continuing, and no event has
occurred or failed to occur which with the passage of time, the giving of
notice, or both would constitute an Event of Default (a “Default”), all sums
in the Impound Account shall be held by Mortgagee in the Impound Account to pay
said taxes, assessments and insurance premiums before the same become
delinquent.  Mortgagor shall be responsible for ensuring the receipt
by Mortgagee, at least thirty (30) days prior to the respective due date for
payment thereof, of all bills, invoices and statements for all taxes,
assessments and insurance premiums to be paid from the Impound Account, and so
long as no Event of Default has occurred and is continuing, Mortgagee shall pay
the governmental authority or other party entitled thereto directly to the
extent funds are available for such purpose in the Impound
Account.  No interest on funds contained in the Impound Account, if
any, shall be paid by Mortgagee to Mortgagor.

     

    1.3           Payment of Utilities,
Assessments, Charges, Etc.  Mortgagor shall pay when due and
payable all utility charges which are incurred by Mortgagor or which may become
a charge or lien against any portion of the Mortgaged Property for gas,
electricity, water and sewer services furnished to the Premises and/or the
Improvements and all other assessments or charges of a similar nature, or
assessments payable pursuant to any restrictive covenants, whether public or
private, affecting the Premises and/or the Improvements or any portion thereof,
whether or not such assessments or charges are or may become liens
thereon.

     

    1.4           Additional
Taxes.  In the event of the enactment after the date hereof of
any law 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 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
adversely affect this Mortgage or the Debt 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, (a) it might be unlawful to require
Mortgagor to make such payment or (b) the making of such payment might result in
the imposition of interest beyond the maximum amount permitted by law, then and
in either such event, Mortgagee may elect, by notice in writing given to
Mortgagor, to declare all of the Debt to be and become due and payable in full
one hundred twenty (120) days from the giving of such notice, and, in connection
with such payment of the Debt, no prepayment premium or fee shall be
due.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    ARTICLE
II

     

    INSURANCE

     

    2.1           Insurance.  Mortgagor
shall, at Mortgagor’s expense, maintain in force and effect on the Mortgaged
Property at all times while this Mortgage continues in effect the following
insurance:

     

    (a)           Insurance
against loss or damage to the Mortgaged Property by fire, windstorm, lightning,
tornado and hail and against loss and damage by such other, additional risks as
may be now or hereafter embraced by an “all-risk” form of insurance
policy.  The amount of such insurance shall be not less than one
hundred percent (100%) of the full replacement cost (insurable value) of the
Improvements (as established by an MAI appraisal), without reduction for
depreciation.  The determination of the replacement cost amount shall
be adjusted annually to comply with the requirements of the insurer issuing such
coverage or, at Mortgagee’s election, by reference to such indices, appraisals
or information as Mortgagee determines in its reasonable discretion in order to
reflect increased value due to inflation.  In addition, each policy
shall contain inflation guard coverage.  Full replacement cost, as
used herein, means, with respect to the Improvements, the cost of replacing the
Improvements without regard to deduction for depreciation, exclusive of the cost
of excavations, foundations and footings below the lowest basement
floor.  Mortgagor shall also maintain insurance against loss or damage
to furniture, furnishings, fixtures, equipment and other items (whether
personalty or fixtures) included in the Mortgaged Property and owned by
Mortgagor from time to time to the extent applicable.  Each policy
shall contain a replacement cost endorsement and either an agreed amount
endorsement (to avoid the operation of any co-insurance provisions) or a waiver
of co-insurance provisions, all subject to Mortgagee’s approval.  The
maximum deductible shall be $10,000, except as specified otherwise.

     

    (b)           Commercial
General Liability Insurance against claims for personal injury, bodily injury,
death and property damage occurring on, in or about the Premises or the
Improvements in amounts not less than $1,000,000 per occurrence and $2,000,000
in the aggregate plus umbrella coverage in an amount not less than
$2,000,000.  Mortgagee hereby retains the right to periodically review
the amount of said liability insurance and to require an increase in the amount
of said liability insurance should Mortgagee deem an increase to be reasonably
prudent under then existing circumstances.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (c)           Boiler
and machinery insurance (including explosion coverage), if steam boilers or
other pressure-fired vessels are in operation at the
Premises.  Minimum liability coverage per accident must equal the
greater of the replacement cost (insurable value) of the Improvements housing
such boiler or pressure-fired machinery or $2,000,000.  If one or more
HVAC units is in operation at the Premises, “Systems Breakdowns” coverage shall
be required, as determined by Mortgagee.  Minimum liability coverage
per accident must equal the replacement value of such unit(s).

     

    (d)           If
the Improvements or any part thereof is situated in an area designated by the
Federal Emergency Management Agency (“FEMA”) as a special
flood hazard area (Zone A or Zone V), flood insurance in an amount equal to the
lesser of:  (a) the minimum amount required, under the terms of
coverage, to compensate for any damage or loss on a replacement basis (or the
unpaid balance of the Debt if replacement cost coverage is not available for the
type of building insured), or (b) the maximum insurance available under the
appropriate National Flood Insurance Administration program.  The
maximum deductible shall be $10,000 per building or a higher minimum amount as
required by FEMA or other applicable law.

     

    (e)           During
the period of any construction, renovation or alteration of the existing
Improvements which exceeds the lesser of 10% of the principal amount of the Note
or $500,000, at Mortgagee’s request, a completed value, “All Risk” Builder’s
Risk form or “Course of Construction” insurance policy in non-reporting form, in
an amount approved by Mortgagee, may be required.  During the period
of any construction of any addition to the existing Improvements, a completed
value, “All Risk” Builder’s Risk form or “Course of Construction” insurance
policy in non-reporting form, in an amount approved by Mortgagee, shall be
required.

     

    (f)           Worker’s
Compensation and Employer’s Liability Insurance covering all appropriate
persons.

     

    (g)           Business
income (loss of rents) insurance in amounts sufficient to compensate Mortgagor
for the greater of (i) gross revenues for eighteen (18) months, or
(ii) eighteen (18) months of operating expenses including debt
service.  The amount of coverage shall be adjusted annually to reflect
the Rents and Profits or income payable during the succeeding eighteen (18)
month period.

     

    (h)           Earthquake
insurance for properties located in earthquake zones 3 and 4 with Probable
Maximum Loss (“PML”) in excess of
20%, as determined by seismic reports.  The amount of coverage shall
be based on the PML percentage times the replacement cost up to the full
replacement cost (insurable value).  Wind, sinkhole, and mine
subsidence coverage shall be required for properties located in areas prone to
those geological phenomena.  Maximum deductibles for these types of
coverages shall be the lowest deductible available in the area in which the
Mortgaged Property is located.

     

    (i)           Such
other insurance on the Mortgaged Property or on any replacements or
substitutions thereof or additions thereto as may from time to time be required
by Mortgagee against other insurable hazards or casualties which at the time are
commonly insured against in the case of property similarly situated including,
without limitation, sinkhole, mine subsidence, earthquake and environmental
insurance, due regard being given to the height and type of Improvements, their
construction, location, use and occupancy.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (j)           Insurance
coverage against loss or damage to persons and property by reason of any act of
terrorism, to the extent such coverage is commercially available and to the
extent prudent owners of, or prudent lenders making loans secured by,
institutional quality commercial real estate are then obtaining such insurance
for similarly situated properties.

     

    All such
insurance shall (i) be with insurers fully licensed and authorized to do
business in the state within which the Premises is located and which have and
maintain a rating of at least AA by S&P (as hereinafter defined) or
equivalent Rating Agency (as hereinafter defined), (ii) contain the complete
address of the Premises (or a complete legal description), (iii) be for
terms of at least one year, with premium prepaid, and (iv) be subject to the
approval of Mortgagee as to insurance companies, amounts, content, forms of
policies and expiration dates, and (v) include a standard, non-contributory,
mortgagee clause naming EXACTLY:

     

    DEUTSCHE
BANC MORTGAGE CAPITAL, L.L.C.,

    its
successors and assigns, ATIMA

    31 West
52nd Street

    10th
Floor

    New York,
New York 10019

     

    (k)           as
an additional
insured under all liability insurance policies, (b) as the first
mortgagee and loss payee on all property insurance policies and (c) as the loss
payee on all loss of rents or loss of business income insurance
policies.

     

    Mortgagor
shall, as of the date hereof, deliver to Mortgagee evidence that said insurance
policies have been prepaid as required above with original certificates signed
by an authorized agent of the applicable insurance companies evidencing such
insurance satisfactory to Mortgagee.  Certified copies of such
policies must be delivered to Mortgagee within thirty (30) days of the date
hereof.  Mortgagor shall renew all such insurance and deliver to
Mortgagee certificates and policies evidencing such renewals at least thirty
(30) days before any such insurance shall expire.  Mortgagor further
agrees that each such insurance policy:  (i) shall provide for at
least thirty (30) days’ prior written notice to Mortgagee prior to any policy
reduction or cancellation for any reason other than non-payment of premium and
at least ten (10) days’ prior written notice to Mortgagee prior to any
cancellation due to non-payment of premium; (ii) shall contain an endorsement or
agreement by the insurer that any loss shall be payable to Mortgagee in
accordance with the terms of such policy notwithstanding any act or negligence
of Mortgagor or any other person which might otherwise result in forfeiture of
such insurance; (iii) shall waive all rights of subrogation against Mortgagee;
(iv) in the event that the Premises or the Improvements constitutes a legal
non-conforming use under applicable building, zoning or land use laws or
ordinances, shall include an ordinance and law coverage endorsement which will
contain Coverage A:  “Loss Due to Operation of Law” (with a minimum
liability limit equal to Replacement Cost With Agreed Value Endorsement),
Coverage B:  “Demolition Cost” and Coverage C:  “Increased
Cost of Construction” coverages; (v) shall contain an endorsement or agreement
by the insurer that such policy shall not be materially changed (other than to
increase the coverage provided thereby) or canceled without at least thirty (30)
days’ prior written notice to Mortgagee and any other party named therein as an
additional insured; and (vi) may be in the form of a blanket policy, provided
that, Mortgagor hereby acknowledges and agrees that failure to pay any portion
of the premium therefor which is not allocable to the Mortgaged Property or any
other action not relating to the Mortgaged Property which would otherwise permit
the issuer thereof to cancel the coverage thereof, would require the
Mortgaged.  Property to be insured by a separate, single-property
policy and the blanket policy must properly identify and fully protect the
Mortgaged Property as if a separate policy were issued for one hundred percent
100% of Replacement Cost at the time of loss and otherwise meet all of
Mortgagee’s applicable insurance requirements set forth in this Section
2.1.  The delivery to Mortgagee of the insurance policies or the
certificates of insurance as provided above shall constitute an assignment of
all proceeds payable under such insurance policies relating to the Mortgaged
Property by Mortgagor to Mortgagee as further security for the
Debt.  In the event of the foreclosure of this Mortgage, or other
transfer of title to the Mortgaged Property in extinguishment in whole or in
part of the Debt, all right, title and interest of Mortgagor in and to all
proceeds payable under such policies then in force concerning the Mortgaged
Property shall thereupon vest in the purchaser at such foreclosure, or in
Mortgagee or other transferee in the event of such other transfer of
title.  Approval of any insurance by Mortgagee shall not be a
representation of the solvency of any insurer or the sufficiency of any amount
of insurance.  In the event Mortgagor fails to provide, maintain, keep
in force or deliver and furnish to Mortgagee the policies of insurance required
by this Mortgage or evidence of their replacement or renewal as required herein,
Mortgagee may, but shall not be obligated to, procure such insurance and
Mortgagor shall pay all amounts advanced by Mortgagee therefor, together with
interest thereon at the Default Interest Rate from and after the date advanced
by Mortgagee until actually repaid by Mortgagor, promptly upon demand by
Mortgagee.  Mortgagee shall not be responsible for nor incur any
liability for the failure of the insurer to perform, even though Mortgagee has
caused the insurance to be placed with the insurer after failure of Mortgagor to
furnish such insurance.  Mortgagor shall not obtain insurance for the
Mortgaged Property in addition to that required by Mortgagee without the prior
written consent of Mortgagee, which consent will not be unreasonably withheld
provided that (i) Mortgagee is a named insured on such insurance,
(ii) Mortgagee receives complete copies of all policies evidencing such
insurance, and (iii) such insurance complies with all of the applicable
requirements set forth herein.

     

    
      
        
        

      

      
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    ARTICLE
III

     

    CASUALTY AND
CONDEMNATION

     

    3.1           Casualty and
Condemnation.  Mortgagor shall give Mortgagee prompt written
notice of the occurrence of any casualty affecting, or the institution of any
proceedings for eminent domain or for the condemnation of, the Mortgaged
Property or any portion thereof.  All insurance proceeds on the
Mortgaged Property, and all causes of action, claims, compensation, awards and
recoveries for any damage, condemnation or taking of all or any part of the
Mortgaged Property or for any diminution in value of the Mortgaged Property, are
hereby assigned to and shall be paid to Mortgagee.  Mortgagee may
participate in any suits or proceedings relating to any such proceeds, causes of
action, claims, compensation, awards or recoveries, and Mortgagee is hereby
authorized, in its own name or in Mortgagor’s name, to adjust any loss covered
by insurance or any condemnation claim or cause of action, and to settle or
compromise any claim or cause of action in connection therewith, and Mortgagor
shall from time to time deliver to Mortgagee any instruments required to permit
such participation; provided, however, that, so long as no Default or Event of
Default shall have occurred and is continuing, Mortgagee shall not have the
right to participate in the adjustment of any loss which is not in excess of the
lesser of (i) five percent (5%) of the then outstanding principal balance of the
Note and (ii) $250,000.  Mortgagee shall apply any sums received by it
under this Section first to the payment of all of its costs and expenses
(including, but not limited to, reasonable legal fees and disbursements)
incurred in obtaining those sums, and then, as follows:

     

    
      
        
        

      

      
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    (a)           In
the event that less than fifteen percent (15%) of the Improvements located on
the Premises have been taken or less than twenty-five percent (25%) destroyed,
then if and so long as:

     

    
      	
               
      

            	
              (1)

            	
              no
      Default or Event of Default has occurred and is continuing hereunder or
      under any of the other Loan Documents,
and

            

    

     

    
      	
               
      

            	
              (2)

            	
              the
      Mortgaged Property can, in Mortgagee’s judgment, with diligent restoration
      or repair, be returned to a condition at least equal to the condition
      thereof that existed prior to the casualty or partial taking causing the
      loss or damage within the earlier to occur of (i) nine (9) months after
      the receipt of insurance proceeds or condemnation awards by either
      Mortgagor or Mortgagee, and (ii) sixty (60) days prior to the stated
      maturity date of the Note, and

            

    

     

    
      	
               
      

            	
              (3)

            	
              all
      necessary governmental approvals can be obtained to allow the rebuilding
      and re-occupancy of the Mortgaged Property as described in subsection (2)
      above, and

            

    

     

    
      	
               
      

            	
              (4)

            	
              there
      are sufficient sums available (through insurance proceeds or condemnation
      awards and contributions by Mortgagor, the full amount of which shall, at
      Mortgagee’s option, have been deposited with Mortgagee) for such
      restoration or repair (including, without limitation, for any costs and
      expenses of Mortgagee to be incurred in administering said restoration or
      repair) and for payment of principal and interest to become due and
      payable under the Note during such restoration or repair,
    and

            

    

     

    
      	
               
      

            	
              (5)

            	
              the
      economic feasibility of the Improvements after such restoration or repair
      will be such that income from their operation is reasonably anticipated to
      be sufficient to pay operating expenses of the Mortgaged Property and debt
      service on the Debt in full with the same coverage ratio considered by
      Mortgagee in its determination to make the loan secured hereby,
      and

            

    

     

    
      
        
        

      

      
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              (6)

            	
              in
      the event that the insurance proceeds or condemnation awards received as a
      result of such casualty or partial taking exceed the lesser of
      (i) five percent (5%) of the then outstanding principal balance of
      the Note and (ii) $250,000, Mortgagor shall have delivered to Mortgagee,
      at Mortgagor’s sole cost and expense, an appraisal report from an
      appraiser satisfactory to Mortgagee in form and substance satisfactory to
      Mortgagee appraising the value of the Mortgaged Property as proposed to be
      restored or repaired to be not less than the appraised value of the
      Mortgaged Property considered by Mortgagee in its determination to make
      the loan secured hereby, and

            

    

     

    
      	
               
      

            	
              (7)

            	
              Mortgagor
      so elects by written notice delivered to Mortgagee within five (5) days
      after settlement of the aforesaid insurance or condemnation claim, then,
      Mortgagee shall, solely for the purposes of such restoration or repair,
      advance so much of the remainder of such sums as may be required for such
      restoration or repair, and any funds deposited by Mortgagor therefor, to
      Mortgagor in the manner and upon such terms and conditions as would be
      required by a prudent interim construction lender, including, but not
      limited to, the prior approval by Mortgagee of plans and specifications,
      contractors and form of construction contracts and the furnishing to
      Mortgagee of permits, bonds, lien waivers, invoices, receipts and
      affidavits from contractors and subcontractors, in form and substance
      satisfactory to Mortgagee in its discretion, with any remainder being
      applied by Mortgagee for payment of the Debt in whatever order Mortgagee
      directs in its absolute discretion.

            

    

     

    
      
        
        

      

      
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    (b)           In
all other cases, namely, in the event that more than fifteen percent (15%) of
the Improvements located on the Premises have been taken or more than
twenty-five percent (25%) destroyed or Mortgagor does not elect to restore or
repair the Mortgaged Property pursuant to clause (a) above or
otherwise fails to meet the requirements of clause (a) above,
then, in any of such events, Mortgagee may elect, in Mortgagee’s absolute
discretion and without regard to the adequacy of Mortgagee’s security, to do
either of the following:  (1) accelerate the maturity date of the Note
and declare any and all of the Debt to be immediately due and payable and apply
the remainder of such sums received pursuant to this Section to the payment of
the Debt in whatever order Mortgagee directs in its absolute discretion, with
any remainder being paid to Mortgagor, or (2) notwithstanding that Mortgagor may
have elected not to restore or repair the Mortgaged Property pursuant to the
provisions of Section
3.1(a)(7) above, require Mortgagor to restore or repair the Mortgaged
Property in the manner and upon such terms and conditions as would be required
by a prudent interim construction lender, including, but not limited to, the
deposit by Mortgagor with Mortgagee, within thirty (30) days after demand
therefor, of any deficiency reasonably determined by Mortgagee to be necessary
in order to assure the availability of sufficient funds to pay for such
restoration or repair, including Mortgagee’s costs and expenses to be incurred
in connection therewith, the prior approval by Mortgagee of plans and
specifications, contractors and form of construction contracts and the
furnishing to Mortgagee of permits, bonds, lien waivers, invoices, receipts and
affidavits from contractors and subcontractors, in form and substance
satisfactory to Mortgagee in its discretion, and apply the remainder of such
sums toward such restoration and repair, with any balance thereafter remaining
being applied by Mortgagee for payment of the Debt in whatever order Mortgagee
directs in its absolute discretion.

     

    Any
reduction in the Debt resulting from Mortgagee’s application of any sums
received by it hereunder shall take effect only when Mortgagee actually receives
such sums and elects to apply such sums to the Debt and, in any event, the
unpaid portion of the Debt shall remain in full force and effect and Mortgagor
shall not be excused in the payment thereof.  Partial payments
received by Mortgagee, as described in the preceding sentence, shall be applied
first to the final payment due under the Note and thereafter to installments due
under the Note in the inverse order of their due date.  If Mortgagor
elects or Mortgagee directs Mortgagor to restore or repair the Mortgaged
Property after the occurrence of a casualty or partial taking of the Mortgaged
Property as provided above, Mortgagor shall promptly and diligently, at
Mortgagor’s sole cost and expense and regardless of whether the insurance
proceeds or condemnation award, as appropriate, shall be sufficient for such
purpose, restore, repair, replace and rebuild the Mortgaged Property as nearly
as possible to its value, condition and character immediately prior to such
casualty or partial taking in accordance with the foregoing provisions and
Mortgagor shall pay to Mortgagee all costs and expenses of Mortgagee incurred in
administering said rebuilding, restoration or repair.  Mortgagor
agrees to execute and deliver from time to time such further instruments as may
be requested by Mortgagee to confirm the assignment to Mortgagee of any award,
damage, insurance proceeds, payment or other compensation.  Mortgagee
is hereby irrevocably constituted and appointed the attorney-in-fact of
Mortgagor, with full power of substitution, subject to the terms of this
Section, to settle for, collect and receive any such awards, damages, insurance
proceeds, payments or other compensation from the parties or authorities making
the same, to appear in and prosecute any proceedings therefor and to give
receipts and acquittances therefor.

     

    
      
        
        

      

      
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    ARTICLE
IV

     

    ENVIRONMENTAL
MATTERS

     

    4.1           Hazardous Waste and Other
Substances.

     

    (a)           Mortgagor
hereby represents and warrants to Mortgagee that, as of the date
hereof:  (i) except as otherwise expressly set forth in that certain
Phase I Environmental Site Assessment dated August 16, 2002 and prepared by
National Assessment Corporation (the “Environmental
Report”) and to the best of Mortgagor’s knowledge, information and
belief, none of Mortgagor nor the Mortgaged Property nor any Tenant at the
Premises nor the operations conducted thereon has at any time been or presently
is in direct or indirect violation of or otherwise exposed to any liability
under any local, state or federal law, rule or regulation or common law duty
pertaining to human health, natural resources or the environment (collectively,
“Environmental
Laws”), including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.) (“CERCLA”), the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.), the Federal
Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Clean Air
Act (42 U.S.C. § 7401 et seq.), the Emergency
Planning and Community-Right-to-Know Act (42 U.S.C. § 11001 et seq.), the Endangered
Species Act (16 U.S.C. § 1531 et seq.), the Toxic
Substances Control Act (15 U.S.C. § 2601 et seq.), the
Occupational Safety and Health Act (29 U.S.C. § 651 et seq.) or the
Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), or any
regulations promulgated pursuant to said laws, all as amended from time to time;
(ii) no hazardous, toxic or harmful substances, wastes, materials, pollutants or
contaminants (including, without limitation, asbestos or asbestos-containing
materials, lead based paint, polychlorinated biphenyls, petroleum or petroleum
products or byproducts, flammable explosives, radioactive materials, infectious
substances or raw materials which include hazardous constituents) or any other
substances or materials which are included under or regulated by Environmental
Laws (collectively, “Hazardous
Substances”) are located on, in or under or have been handled, generated,
stored, processed or disposed of on or released or discharged from the Mortgaged
Property (including underground contamination), except for those substances used
by Mortgagor or any Tenant in the ordinary course of their respective businesses
and in compliance with all Environmental Laws (“Permitted
Materials”); (iii) the Mortgaged Property is not subject to any private
or governmental lien arising under Environmental Laws; (iv) there is no pending,
nor, to Mortgagor’s knowledge, information or belief, threatened litigation
arising under Environmental Laws affecting Mortgagor or the Mortgaged Property;
there are no and have been no existing or closed underground storage tanks or
other underground storage receptacles for Hazardous Substances or landfills or
dumps on the Mortgaged Property; (v) Mortgagor has received no notice of, and to
the best of Mortgagor’s knowledge and belief, there exists no investigation,
action, proceeding or claim by any agency, authority or unit of government or by
any third party which could result in any liability, penalty, sanction or
judgment under any Environmental Laws with respect to any condition, use or
operation of the Mortgaged Property, nor does Mortgagor know of any basis for
such an investigation, action, proceeding or claim; and (vi) Mortgagor has
received no notice of and, to the best of Mortgagor’s knowledge and belief,
there has been no claim by any party that any use, operation or condition of the
Mortgaged Property has caused any nuisance or any other liability or adverse
condition on any other property, nor does Mortgagor know of any basis for such
an investigation, action, proceeding or claim.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (b)           Mortgagor
has not received nor, to the best of Mortgagor’s knowledge, information and
belief has there been issued, any notice, notification, demand, request for
information, citation, summons, or order in any way relating to any actual,
alleged or potential violation or liability arising under Environmental Laws
with respect to Mortgagor or the Mortgaged Property.

     

    (c)           Neither
the Mortgaged Property, nor to the best of Mortgagor’s knowledge, information
and belief, any property to which Mortgagor has, in connection with the
maintenance or operation of the Mortgaged Property, directly or indirectly
transported or arranged for the transportation of any Hazardous Substances is
listed or, to the best of Mortgagor’s knowledge, information and belief,
proposed for listing on the National Priorities List promulgated pursuant to
CERCLA, on CERCLIS (as defined in CERCLA) or on any similar federal or state
list of sites requiring environmental investigation or clean-up.

     

    (d)           Mortgagor
shall comply with all applicable Environmental Laws.  Mortgagor shall
keep or cause the Mortgaged Property to be kept free from Hazardous Substances
(except Permitted Materials).

     

    (e)           Mortgagor
shall promptly notify Mortgagee of (i) the actual or potential existence of any
Hazardous Substances on the Mortgaged Property other than Permitted Materials,
(ii) any direct or indirect violation relating to the Mortgaged Property of, or
other exposure to liability under, any Environmental Laws, (iii) any lien,
action or notice affecting the Mortgaged Property or Mortgagor resulting from
any violation or alleged violation of or liability or alleged liability under
any Environmental Laws arising from any condition or activity on the Mortgaged
Property, (iv) the institution of any investigation, inquiry or proceeding
concerning Mortgagor or the Mortgaged Property pursuant to any Environmental
Laws or otherwise relating to Hazardous Substances, or (v) the discovery of any
occurrence, condition or state of facts which would render any representation or
warranty contained in Section 4.1 of this Mortgage incorrect in any respect if
made at the time of such discovery.  Immediately upon receipt of same,
Mortgagor shall deliver to Mortgagee copies of any and all requests for
information, complaints, citations, summonses, orders, notices, reports or other
communications, documents or instruments in any way relating to any actual,
alleged or potential violation or liability of any nature whatsoever arising
under Environmental Laws and relating to the Mortgaged Property or to
Mortgagor.  Mortgagor shall remedy or cause to be remedied in a timely
manner (and in any event within the time period permitted by applicable
Environmental Laws) any violation of Environmental Laws or any condition that
could give rise to liability under Environmental Laws.  Without
limiting the foregoing, Mortgagor shall, promptly and regardless of the source
of the contamination or threat to the environment or human health, at its own
expense, take all actions as shall be necessary or prudent, for the clean-up of
any and all portions of the Mortgaged Property or other affected property,
including, without limitation, all investigative, monitoring, removal,
containment and remedial actions in accordance with all applicable Environmental
Laws and shall further pay or cause to be paid, at no expense to Mortgagee, all
clean-up, administrative and enforcement costs of applicable governmental
agencies which may be asserted against the Mortgaged Property.  In the
event Mortgagor fails to do so, Mortgagee may, but shall not be obligated to,
cause the Mortgaged Property or other affected property to be freed from any
Hazardous Substances or otherwise brought into conformance with Environmental
Laws.  Mortgagor hereby grants to Mortgagee and its agents and
employees access to the Mortgaged Property and a license to remove any items
deemed by Mortgagee to be Hazardous Substances and to do all things Mortgagee
shall deem necessary to bring the Mortgaged Property into conformance with
Environmental Laws.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (f)           Mortgagor
covenants and agrees, at Mortgagor’s sole cost and expense, to indemnify, defend
(at trial and appellate levels, and with attorneys, consultants and experts
reasonably acceptable to Mortgagee), and hold Mortgagee harmless from and
against any and all liens, damages (including without limitation, punitive or
exemplary damages), losses, liabilities (including, without limitation, strict
liability), obligations, settlement payments, penalties, fines, assessments,
citations, directives, claims, litigation, demands, defenses, judgments, suits,
proceedings, costs, disbursements or expenses of any kind or of any nature
whatsoever (including, without limitation, reasonable attorneys’, consultants’
and experts’ fees and disbursements actually incurred in investigating,
defending, settling or prosecuting any claim, litigation or proceeding) which
may at any time be imposed upon, incurred by or asserted or awarded against
Mortgagee or the Mortgaged Property, and arising directly or indirectly from or
out of:  (i) any violation or alleged violation of, or liability or
alleged liability under, any Environmental Law; (ii) the presence, release or
threat of release of or exposure to any Hazardous Substances on, in, under or
affecting all or any portion of the Mortgaged Property or any surrounding areas,
regardless of whether or not caused by or within the control of Mortgagor; (iii)
any transport, treatment, recycling, storage, disposal or arrangement therefor
of Hazardous Substances whether on the Mortgaged Property, originating from the
Mortgaged Property, or otherwise associated with Mortgagor or any operations
conducted on the Mortgaged Property at any time; (iv) the failure by Mortgagor
to comply fully with the terms and conditions of this Section 4.1; (v) the
breach of any representation or warranty contained in this Section 4.1; and (vi)
the enforcement of this Section
4.1.  The indemnity set forth in this Section 4.1 shall
also include any diminution in the value of the security afforded by the
Mortgaged Property or any future reduction in the sales price of the Mortgaged
Property by reason of any matter set forth in this Section
4.1.  Mortgagee’s rights under this Section shall survive
payment in full of the Debt and shall be in addition to all other rights of
Mortgagee under this Mortgage, the Note and the other Loan
Documents.

     

    (g)           Upon
Mortgagee’s request, at any time after the occurrence and during the continuance
of an Event of Default or at such other time as Mortgagee has reasonable grounds
to believe that Hazardous Substances are or have been released, stored or
disposed of on the Mortgaged Property, or on property affecting the Mortgaged
Property, or that the Mortgaged Property may be in violation of the
Environmental Laws, Mortgagor shall perform or cause to be performed, at
Mortgagor’s sole cost and expense and in scope, form and substance satisfactory
to Mortgagee, an inspection or audit of the Mortgaged Property prepared by a
hydrogeologist or environmental engineer or other appropriate consultant
approved by Mortgagee indicating the presence or absence of Hazardous Substances
on the Mortgaged Property, the compliance or non-compliance status of the
Mortgaged Property and the operations conducted thereon with applicable
Environmental Laws, or an inspection or audit of the Mortgaged Property prepared
by an engineering or consulting firm approved by Mortgagee indicating the
presence or absence of friable asbestos or substances containing asbestos or
lead or substances containing lead or lead based paint (“Lead Based Paint”) on
the Mortgaged Property.  If Mortgagor fails to provide reports of such
inspection or audit within thirty (30) days after such request, Mortgagee may
order the same at Mortgagor’s expense, and Mortgagor hereby grants to Mortgagee
and its employees and agents access to the Mortgaged Property and an irrevocable
license to undertake such inspection or audit.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (h)           Reference
is made to that certain Environmental Indemnity Agreement of even date herewith
from Mortgagor, Philip R. Carter and Allan C. Schwartz for the benefit of
Mortgagee (the “Environmental Indemnity
Agreement”).  The provisions of this Mortgage and the
Environmental Indemnity Agreement shall be read together to maximize the
coverage with respect to the subject matter thereof, as determined by
Mortgagee.

     

    (i)           If
the Environmental Report disclosed asbestos containing materials (“ACM’s”) at the
Mortgaged Property or if at any time hereafter ACM’s are detected at the
Mortgaged Property, Mortgagor covenants and agrees to institute, within thirty
(30) days after the date hereof, an operations and maintenance program (the
“Maintenance
Program”) designed by an environmental consultant, satisfactory to
Mortgagee, with respect to asbestos containing materials (“ACM’s”), consistent
with “Guidelines for Controlling Asbestos-Containing Materials in Buildings”
(USEPA, 1985) and other relevant guidelines, and such Maintenance Program will
hereafter continuously remain in effect until the Debt secured hereby is repaid
in full.  In furtherance of the foregoing, Mortgagor shall inspect and
maintain all ACM’s on a regular basis and ensure that all ACM’s shall be
maintained in a condition that prevents exposure of occupants to ACM’s at all
times.  Without limiting the generality of the preceding sentence,
Mortgagee may require (i) periodic notices or reports to Mortgagee in form,
substance and at such intervals as Mortgagee may specify, (ii) an amendment to
such operations and maintenance program to address changing circumstances, laws
or other matters, (iii) at Mortgagor’s sole expense, supplemental examination of
the Mortgaged Property by consultants specified by Mortgagee, and (iv) variation
of the operations and maintenance program in response to the reports provided by
any such consultants.

     

    (j)           If,
prior to the date hereof, it was determined that the Mortgaged Property contains
Lead Based Paint, Mortgagor had prepared an assessment report describing the
location and condition of the Lead Based Paint (a “Lead Based Paint
Report”).  If, at any time hereafter, Lead Based Paint is
suspected of being present on the Mortgaged Property, Mortgagor agrees, at its
sole cost and expense and within twenty (20) days thereafter, to cause to be
prepared a Lead Based Paint Report prepared by an expert, and in form, scope and
substance, acceptable to Mortgagee.

     

    (k)           Mortgagor
agrees that if it has been, or if at any time hereafter it is, determined that
the Mortgaged Property contains Lead Based Paint, on or before thirty (30) days
following (i) the date hereof, if such determination was made prior to the date
hereof or (ii) such determination, if such determination is hereafter made, as
applicable, Mortgagor shall, at its sole cost and expenses, develop and
implement, and thereafter diligently and continuously carry out (or cause to be
developed and implemented and thereafter diligently and continually to be
carried out), an operations, abatement and maintenance plan for the Lead Based
Paint on the Mortgaged Property, which plan shall be prepared by an expert, and
be in form, scope and substance, acceptable to Mortgagee (together with any Lead
Based Paint Report, the “O&M
Plan”).  If an O&M Plan has been prepared prior to the date
hereof, Mortgagor agrees to diligently and continually carry out (or cause to be
carried out) the provisions thereof.  Compliance with the O&M Plan
shall require or be deemed to require, without limitation, the proper
preparation and maintenance of all records, papers and forms required under the
Environmental Laws.

     

    
      
        
        

      

      
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    ARTICLE
V

     

    RESERVES

     

    5.1           Payment
Reserve.

     

    (a)           Contemporaneously
with the execution hereof, Mortgagor has established with Mortgagee a reserve in
the amount of one installment of the Monthly Payment and deposits for any
applicable reserves or escrow accounts required under the terms of this Mortgage
or the other Loan Documents as calculated by Mortgagee (the “Payment
Reserve”).  Mortgagor understands and agrees that,
notwithstanding the establishment of the Payment Reserve as herein required, all
of the proceeds of the Note have been, and shall be considered, fully disbursed
and shall bear interest and be payable on the terms provided
therein.  No interest on funds contained in the Payment Reserve shall
be paid by Mortgagee to Mortgagor.

     

    (b)           For
so long as no Event of Default has occurred and is continuing hereunder or under
any of the other Loan Documents, Mortgagee shall, on the first monthly Payment
Date under the Note, advance from the Payment Reserve to itself the amount of
the monthly installment due and payable by Mortgagor under the Note on such
Payment Date and shall also advance from the Payment Reserve into the Impound
Account the amount of any deposit for taxes and insurance premiums and into the
Replacement Reserve the amount of any deposit for Replacements and into any
other reserve account the amount of any deposit in accordance with the terms of
any other Loan Document required to be paid by Mortgagor concurrently with each
such monthly installment pursuant to the terms hereof and
thereof.  Provided no Default or Event of Default has occurred and is
continuing, after the final scheduled disbursement from the Payment Reserve, any
amounts then remaining in the Payment Reserve shall be paid to
Mortgagor.  Nothing contained herein, including, without limitation,
the existence of the Payment Reserve, shall release Mortgagor from its
obligation to make payments under the Note, this Mortgage or the other Loan
Documents strictly in accordance with the terms hereof or thereof and, in this
regard, without limiting the generality of the foregoing, should the amounts
contained in the Payment Reserve not be sufficient to pay in full the Monthly
Payment and the Impound Account, Replacement Reserve and any other applicable
reserve account deposits referenced above in this subparagraph, Mortgagor shall
be responsible for paying such deficiency on the Payment Date of such monthly
installment.

     

    
      
        
        

      

      
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    5.2           Replacement
Reserve.

     

    (a)           As
additional security for the Debt, Mortgagor shall establish and maintain at all
times while this Mortgage continues in effect a capital improvement reserve (the
“Replacement
Reserve”) with Mortgagee for payment of costs and expenses incurred by
Mortgagor in connection with the performance of work which would normally be
treated as a capital improvement under generally accepted accounting principles
(collectively, the “Replacements”).  Commencing
on the first Payment Date under the Note and continuing on each Payment Date
thereafter, Mortgagor shall pay to Mortgagee, in addition to the monthly payment
due under the Note and until the Debt is fully paid and performed, a deposit to
the Replacement Reserve in an amount equal to $1,163 per month.  So
long as no Default or Event of Default has occurred and is continuing, Mortgagee
shall, to the extent funds are available for such purpose in the Replacement
Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in
performing Replacements within ten (10) days following:  (a) the
receipt by Mortgagee of a written request from Mortgagor for disbursement from
the Replacement Reserve and a certification by Mortgagor in a form approved in
writing by Mortgagee that the applicable item of Replacement has been completed;
(b) the delivery to Mortgagee of invoices, receipts or other evidence
satisfactory to Mortgagee, verifying the cost of performing the Replacements;
(c) for disbursement requests in excess of $25,000, the delivery to
Mortgagee of affidavits, lien waivers or other evidence reasonably satisfactory
to Mortgagee showing that all parties who might or could claim statutory or
common law liens and are furnishing or have furnished material or labor to the
Mortgaged Property have been paid all amounts due for labor and materials
furnished to the Mortgaged Property; (d) for disbursement requests in excess of
$25,000, delivery to Mortgagee of a certification from an inspecting architect
or other third party acceptable to Mortgagee describing the completed
Replacements and verifying the completion of the Replacements and the value of
the completed Replacements; and (e) for disbursement requests in excess of
$50,000, delivery to Mortgagee of a new certificate of occupancy for the portion
of the Improvements covered by such Replacements, if said new certificate of
occupancy is required by law, or a certification by Mortgagor that no new
certificate of occupancy is required.  Mortgagee shall not be required
to make advances from the Replacement Reserve more frequently than once in any
sixty (60) day period.  In making any payment from the Replacement
Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor
without any inquiry into the accuracy, validity or contestability of any such
amount.  Mortgagee may, at Mortgagor’s expense, make or cause to be
made during the term of this Mortgage an annual inspection of the Mortgaged
Property to determine the need, as determined by Mortgagee in its reasonable
judgment, for further Replacements of the Mortgaged Property; such inspection to
be no more frequent than once in any calendar year unless a Default or an Event
of Default shall have occurred and is continuing.  In the event that
such inspection reveals that further Replacements of the Mortgaged Property are
required, Mortgagee shall provide Mortgagor with a written description of the
required Replacements and Mortgagor shall complete such Replacements to the
reasonable satisfaction of Mortgagee within one hundred twenty (120) days after
the receipt of such description from Mortgagee, or such later date as may be
approved by Mortgagee in its sole discretion.

     

    (b)           Mortgagee
shall cause funds in the Replacement Reserve to be deposited into interest
bearing accounts of the type customarily maintained by Mortgagee or its
servicing agent for the investment of similar reserves, which accounts may not
yield the highest interest rate then available.  Interest payable on
such amounts shall be computed based on the daily outstanding balance in the
Replacement Reserve.  Such interest shall be calculated on a simple,
non-compounded interest basis based solely on contributions made to the
Replacement Reserve by Mortgagor.  All interest earned on amounts
contributed to the Replacement Reserve shall be retained by Mortgagee and
accumulated for the benefit of Mortgagor and added to the balance in the
Replacement Reserve and shall be disbursed for payment of the items for which
other funds in the Replacement Reserve are to be disbursed.

     

    
      
        
        

      

      
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    5.3           Repair and Remediation
Reserve.  Prior to the execution of this Mortgage, Mortgagee
has caused the Mortgaged Property to be inspected and such inspection has
revealed that the Mortgaged Property is in need of certain maintenance, repairs
and/or remedial or corrective work.  Contemporaneously with the
execution hereof, Mortgagor has established with the Mortgagee a reserve in the
amount of $6,000 (the “Repair and Remediation
Reserve”) by depositing such amount with Mortgagee.  Mortgagor
shall cause each of the items described in that certain Engineering Report (the
“Engineering
Report”) entitled Property Condition Report, dated August 16, 2002 and
prepared by National Assessment Corporation (the “Deferred
Maintenance”) to be completed, performed, remediated and corrected to the
satisfaction of Mortgagee and as necessary to bring the Mortgaged Property into
compliance with all applicable laws, ordinances, rules and regulations on or
before the expiration of six (6) months after the effective date hereof, as such
time period may be extended by Mortgagee in its sole discretion.  So
long as no Event of Default has occurred, all sums in the Repair and Remediation
Reserve shall be held by Mortgagee in the Repair and Remediation Reserve to pay
the costs and expenses of completing the Deferred Maintenance.  So
long as no Event of Default has occurred, Mortgagee shall, to the extent funds
are available for such purpose in the Repair and Remediation Reserve, disburse
to Mortgagor the amount paid or incurred by Mortgagor in completing, performing,
remediating or correcting the Deferred Maintenance upon (a) the receipt by
Mortgagee of a written request from Mortgagor for disbursement from the Repair
and Remediation Reserve and a certification by Mortgagor in a form as may be
required by Mortgagee that the applicable item of Deferred Maintenance has been
completed in accordance with the terms of this Mortgage, (b) delivery to
Mortgagee of invoices, receipts or other evidence satisfactory to Mortgagee
verifying the costs of the Deferred Maintenance to be reimbursed,
(c) delivery to Mortgagee of a certification from an inspecting architect,
engineer or other consultant reasonably acceptable to Mortgagee describing the
completed work, verifying the completion of the work and the value of the
completed work and, if applicable, certifying that the Mortgaged Property is, as
a result of such work, in compliance with all applicable laws, ordinances, rules
and regulations relating to the Deferred Maintenance so performed and
(d) delivery to Mortgagee of affidavits, lien waivers or other evidence
reasonably satisfactory to Mortgagee showing that all materialmen, laborers,
subcontractors and any other parties who might or could claim statutory or
common law liens and are furnishing or have furnished materials or labor to the
Mortgaged Property have been paid all amounts due for such labor and materials
furnished to the Mortgaged Property.  Mortgagee shall not be required
to make advances from the Repair and Remediation Reserve more frequently than
once in any sixty (60) day period.  In making any payment from
the Repair and Remediation Reserve, Mortgagee shall be entitled to rely on such
request from Mortgagor without any inquiry into the accuracy, validity or
contestability of any such amount.  No interest on the funds contained
in the Repair and Remediation Reserve shall be paid by Mortgagee to
Mortgagor.  Mortgagor hereby grants to Mortgagee a power-of-attorney,
coupled with an interest, to cause the Deferred Maintenance to be completed,
performed, remediated and corrected to the satisfaction of Mortgagee upon
Mortgagor’s failure to do so in accordance with the terms and conditions of this
Section 5.3, and to apply the amounts on deposit in the Repair and Remediation
Reserve to the costs associated therewith, all as Mortgagee may determine in its
sole and absolute discretion but without obligation to do so.

     

    
      
        
        

      

      
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    5.4           Rollover
Reserve.

     

    (a)           As
additional security for the Debt, Mortgagor shall establish and maintain at all
times while this Mortgage continues in effect a rollover reserve (the “Rollover Reserve”)
with Mortgagee for payment of costs and expenses incurred by Mortgagor in
connection with the payment of tenant improvements (“Tenant Improvements”)
and leasing commissions (“Leasing Commissions”)
with respect to the Mortgaged Property and the cost to Mortgagor of rent
abatements (“Future
Rent Abatements”) with respect to the Mortgaged Property not otherwise
reserved for pursuant to Section 5.5 of this Mortgage.  Commencing on
the first Payment Date under the Note and continuing on each Payment Date
thereafter, Mortgagor shall pay to Mortgagee, in addition to the monthly payment
due under the Note and until the Debt is fully paid and performed, a deposit to
the Rollover Reserve in an amount (the “Monthly Rollover
Deposit”) equal to $7,269.42 per month until such time as the amount on
deposit in the Rollover Reserve is equal to (a) prior to January 1, 2009,
$200,000 (the “Initial
Rollover Reserve Threshold”) or (b) on and after January 1, 2009,
$400,000 (the “Increased Rollover Reserve
Threshold”, and together with the Initial Rollover Reserve Threshold, the
“Rollover Reserve
Threshold”).  In the event that the amount on deposit in the
Rollover Reserve satisfies the applicable Rollover Reserve Threshold, but
thereafter such amount on deposit in the Rollover Reserve falls below such
Rollover Reserve Threshold, Borrower shall re-commence its payment of the
Monthly Rollover Deposit until such time as the amount on deposit in the
Rollover Reserve once again satisfies the applicable Rollover Reserve
Threshold.  Funds on deposit in the Rollover Reserve shall be held in
interest bearing accounts of the type customarily maintained by Mortgagee or its
servicing agent for similar reserves.  All interest earned shall be
retained by Mortgagee for the benefit of Mortgagor and shall be added to the
balance of the Rollover Reserve.

     

    (b)           So
long as no Default or Event of Default has occurred and is continuing, Mortgagee
shall, to the extent funds are available for such purpose in the Rollover
Reserve, disburse to Mortgagor amounts from the Rollover Reserve upon
satisfaction of the following conditions:

     

    (i)           Mortgagor
shall submit a certified requisition (“Requisition”),
reasonably satisfactory to Mortgagee.  For Tenant Improvements, the
Requisition shall provide such detail as Mortgagee may reasonably require,
showing percentage of completion, all work completed since the last Requisition,
and the amounts expended or incurred for work completed for the applicable
period.  For Leasing Commissions, the Requisition shall detail the
services rendered by the real estate broker and be accompanied by the broker’s
invoice showing the Leasing Commissions then due or paid in full by
Mortgagor.  Leasing Commissions will be disbursed directly to the real
estate broker (or paid to Mortgagor if reimbursement is sought), provided that a
valid release executed by the broker and Mortgagor is delivered to Mortgagee and
the terms of this Section 5.4(b) have otherwise been met, provided further, that
disbursement shall be made only with respect to Leasing Commissions payable to
unrelated non-affiliated third party brokers.  For Future Rent
Abatements, the Requisition shall provide such detail as Mortgagee may
reasonably require, including a written certification from Mortgagor in a form
as may be required by Mortgagee that each of the subject Future Rent Abatements
have expired.

     

    
      
        
        

      

      
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    (ii)           The
Requisition is supported by documentation, including (a) a detailed description
of the Tenant Improvements and/or Leasing Commissions, as applicable, (b) with
respect to Tenant Improvements, a certificate of completion by an architect
approved by Mortgagee providing that the applicable Tenant Improvements which
are the subject of the Requisition have been completed in accordance with the
requirements set forth herein, (c) with respect to Tenant Improvements, a line
item list of costs of Tenant Improvements certified as to its accuracy by
Mortgagor, (d) with respect to Tenant Improvements, and upon the final
Requisition therefor, a valid copy of the certificate of occupancy issued by the
appropriate governmental entity or a certification by Mortgagor that no new
certificate of occupancy is required for the lawful occupancy of the space in
which the Tenant Improvements have been performed, all in a manner satisfactory
to Mortgagee in its sole and absolute discretion and (e) with respect to Future
Rent Abatements, an estoppel certificate in a form acceptable to Mortgagee from
the tenant that has benefited from such Future Rent Abatement stating that there
such Future Rent Abatement has expired and is no longer outstanding under its
lease.

     

    (iii)           Mortgagor,
if requested by Mortgagee, will furnish evidence reasonably satisfactory to
Mortgagee and to any title company (including lien waivers, invoices and
receipts), confirming the priority of this Mortgage and proving all obligations
of Mortgagor to any contractor for labor or materials furnished in connection
with the Tenant Improvements as of the date of the Requisition have been
satisfied.  Further, if requested by Mortgagee such title company
shall have issued an endorsement to Mortgagee’s title insurance policy
confirming the priority of the Mortgage or a title bring-to-date showing that
title to the Mortgaged Property is free and clear of encumbrances other than
those in the form of title commitment accepted by Mortgagee at
closing.

     

    (iv)           Mortgagor
shall provide evidence that all completed Tenant Improvements comply with any
and all Applicable Laws and that all necessary permits, certificates,
certificates of occupancy, certificates of completion or other approvals of any
governmental authority having jurisdiction have been obtained and continue in
full force and effect.

     

    (v)           All
documents required by Mortgagee to be recorded or filed shall have been recorded
or filed.

     

    (vi)           With
the exception of the final Requisition, no request submitted by Mortgagor shall
be for an amount less than Two Thousand Five Hundred Dollars
($2,500).

     

    (vii)           At
the time of disbursement, payment shall have been made in full by Mortgagor of
all out-of-pocket expenses incurred by Mortgagee (including the fees and charges
of Mortgagee’s title company, counsel, architect, engineer and other
consultants) in connection with any such disbursement.  Mortgagee may,
at any time and from time to time, and without prior notice to Mortgagor,
withdraw funds deposited in the Rollover Reserve to pay all or any of such fees,
charges and expenses to Mortgagee or any such other parties as
necessary.  Further, and notwithstanding anything herein to the
contrary, all such fees, charges and expenses shall be payable by Mortgagor to
Mortgagee, at any time and from time to time, upon demand, and regardless of
whether Mortgagor has submitted a Requisition.

     

    
      
        
        

      

      
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    (viii)          Requisitions
may be submitted no more frequently than once every thirty (30) days up to six
(6) times a year.  Approval of any Requisition shall not constitute a
waiver of Mortgagee’s rights as to any defective work or material or any work
that fails to comply with the requirements therefor set out herein or the other
provisions hereof.

     

    In
addition to the foregoing disbursement conditions, Mortgagor shall also be
entitled to disbursements from the Rollover Reserve so long as (a) no Event of
Default has occurred and is continuing, (b) the conditions precedent to a
disbursement from the Cash Sweep Reserve have been met and (c) there are no
further amounts on deposit in the Cash Sweep Reserve.  The amounts
that may be disbursed from the Rollover Reserve pursuant to the immediately
preceding sentence shall be the same amounts as described in Section 5.6
hereof.

     

    (c)           Mortgagee,
by acceptance of the sums deposited in the Rollover Reserve, does not assume any
personal liability and Mortgagor hereby releases Mortgagee from any such
liability and no claim shall be made by Mortgagor upon Mortgagee for or on
account of any matter in excess of the balance of the sums remaining in the
Rollover Reserve.  Mortgagee shall be protected in acting upon any
notice, request, consent, demand, statement, note or other paper or document
believed by Mortgagee to be genuine and to have been signed by the party or
parties purporting to sign the same.  Furthermore, Mortgagor agrees
that Mortgagee is neither an agent for Mortgagor nor a trustee and Mortgagee
shall not incur any liability whatsoever in connection with those
capacities.  Mortgagee’s acceptance of and administration of, the
Rollover Reserve, shall not impose any responsibility on Mortgagee beyond the
payment and disbursement of funds in accordance herewith.

     

    5.5           Rent Abatement
Reserve.  Contemporaneously with the execution hereof,
Mortgagor has established with the Mortgagee a reserve in the amount of $85,000
(the “Rent Abatement
Reserve”) by depositing such amount with Mortgagee.  So long as
no Event of Default has occurred, Mortgagee shall, to the extent funds are
available for such purpose in the Rent Abatement Reserve, disburse to Mortgagor
all amounts on deposit in the Rent Abatement Reserve upon the receipt by
Mortgagee of (a) a written request from Mortgagor for disbursement of funds on
deposit in the Rent Abatement Reserve and a certification by Mortgagor in a form
as may be required by Mortgagee that each of the rent abatements identified on
Schedule 5.5 of
this Mortgage has expired and (b) an estoppel certificate in a form acceptable
to Mortgagee from each of the tenants identified on Schedule 5.5 of this
Mortgage stating that there are no further rent abatements outstanding under its
respective lease.  Funds on deposit in the Rent Abatement Reserve
shall be held in interest bearing accounts of the type customarily maintained by
Mortgagee or its servicing agent for similar reserves.  All interest
earned shall be retained by Mortgagee for the benefit of Mortgagor and shall be
added to the balance of the Rent Abatement Reserve.

     

    5.6           Cash Sweep
Reserve.

     

    (a)           Commencing
on the Payment Date beginning on September 1, 2009 and continuing on each
Payment Date thereafter, Mortgagor shall deposit with Mortgagee in a reserve
(the “Cash Sweep
Reserve”) all Excess Cash Flow until such time as the amount on deposit
in the Cash Sweep Reserve equals an amount that, when added with the amount then
on deposit in the Rollover Reserve, equals $1,164,916.00 (the “2011 Minimum Rollover
Threshold”), provided, however, that the 2011 Minimum Rollover Threshold
shall be reduced by the Allocable 2011 Rollover Amount (as hereinafter defined)
for the subject 2011 Rollover Space (as hereinafter defined) so long as the
conditions for disbursement of funds from the Cash Sweep Reserve described in
Section 5.6(b) below have been satisfied (irrespective of whether the
satisfaction of such conditions occurs prior to or after the establishment of
such Cash Sweep Reserve).  Notwithstanding the foregoing, in the event
that, following the achievement of the 2011 Minimum Rollover Threshold,
Mortgagor shall receive disbursements from the Rollover Reserve pursuant to and
in accordance with Section 5.4(b) hereof that do not relate to the renewing or
reletting of the 2011 Rollover Spaces, which disbursements result in the amount
on deposit in the Rollover Reserve and Cash Sweep Reserve being less than the
2011 Minimum Rollover Threshold, Mortgagor shall re-commence its monthly
deposits to the Cash Sweep Reserve of Excess Cash Flow until such time as the
2011 Minimum Rollover Threshold is once again satisfied.  For the
purposes of this Section 5.6 only, “Excess Cash Flow”
shall mean all gross revenue from the Mortgaged Property after payment of the
items set forth in Section 4(a)(i)-(vi) of that certain Cash Management
Agreement of even date herewith by and between Mortgagor and
Mortgagee.  Funds on deposit in the Cash Sweep Reserve shall be held
in interest bearing accounts of the type customarily maintained by Mortgagee or
its servicing agent for similar reserves.  All interest earned shall
be retained by Mortgagee for the benefit of Mortgagor and shall be added to the
balance of the Cash Sweep Reserve.

     

    
      
        
        

      

      
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    (b)           So
long as no Default or Event of Default has occurred and is continuing, Mortgagee
shall, to the extent funds are available for such purpose in the Cash Sweep
Reserve, disburse to Mortgagor amounts from the Cash Sweep Reserve upon
satisfaction of the following conditions:

     

    (i)           Mortgagee
shall have received written evidence from Mortgagor that, with respect to the
entirety of any one of the tenant spaces (the “2011 Rollover
Spaces”) identified on Schedule 5.6 of this Mortgage having leases on the
date hereof that expire in 2011, there are renewal or replacement leases in
place with terms and provisions that are acceptable to Lender; and

     

    (ii)           Mortgagee
shall have received an estoppel certificate in a form acceptable to Mortgagee
that states, among other things that Mortgagee may then require, that (A) the
lease pursuant to which such tenant is in possession of its respective 2011
Rollover Space is in full force and effect, (B) rental obligations under such
renewal or replacement lease have commenced and rent currently due and payable
has been paid and (C) there are no monies owed by Mortgagor to such tenant
relating to the reletting of such 2011 Rollover Space, including, without
limitation, for any tenant improvements, tenant allowances or leasing
commissions.

     

    In the
event that Mortgagor satisfies the conditions set forth in this Section 5.6(b),
and provided that there is no Event of Default then continuing, Mortgagee shall
disburse to Mortgagor an amount (the “Allocable 2011 Rollover
Amount”) equal to (1) in the event that the satisfaction of such
conditions to disbursement occurs prior to the time at which the 2011 Minimum
Rollover Reserve Threshold is satisfied, $16.85 per square foot for the subject
2011 Rollover Space; provided, however, that no disbursements shall be made from
the Cash Sweep Reserve (or Rollover Reserve, as the case may be) under this
clause (1) unless Mortgagee shall have received written evidence reasonably
satisfactory to Mortgagee that at the time of such disbursement, (a) there is an
occupancy rate at the Mortgaged Property equal to at least ninety percent (90%)
and (b) the debt service coverage ratio (as determined by Mortgagee in its sole
discretion) for the Mortgaged Property shall equal or exceed 1.25:1.00, or (2)
in the event that the satisfaction of such conditions to disbursement occurs on
or after the time at which the 2011 Minimum Rollover Reserve Threshold is
satisfied, the lesser of (x) the actual costs of tenant improvements, leasing
commissions and/or rent abatements incurred by Mortgagor in connection with the
renewal or re-letting of the subject 2011 Rollover Space or (y) that portion of
the Cash Sweep Reserve (or Rollover Reserve, as the case may be) allocated to
the subject 2011 Rollover Space as more particularly set forth on Schedule 5.6
of this Mortgage.

     

    
      
        
        

      

      
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    5.7           Reserves;
General.

     

    (a)           As
additional security for the payment and performance by Mortgagor of all duties,
responsibilities and obligations under the Note, this Mortgage and the other
Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns and
pledges to Mortgagee, and hereby grants to Mortgagee a security interest in, (i)
the Impound Account, the Payment Reserve, the Rent Abatement Reserve, the
Replacement Reserve, the Rollover Reserve, the Cash Sweep Reserve, the Repair
and Remediation Reserve and any other reserve or escrow account established
pursuant to the terms hereof or of any other Loan Document (collectively, the
“Reserves”),
(ii) all insurance on said accounts, (iii) all accounts, contract rights and
general intangibles or other rights and interests pertaining thereto, (iv) all
replacements, substitutions or proceeds thereof, (v) all instruments and
documents now or hereafter evidencing the Reserves or such accounts, (vi) all
powers, options, rights, privileges and immunities pertaining to the Reserves
(including the right to make withdrawals therefrom) and (vii) all replacements,
substitutions and all proceeds of the foregoing.  Mortgagor hereby
authorizes and consents to each account into which the Reserves have been
deposited being held in Mortgagee’s name or the name of any entity servicing the
loan evidenced by the Note for Mortgagee and hereby acknowledges and agrees that
Mortgagee, or at Mortgagee’s election, such servicing agent, shall have
exclusive control over each account.  Notice of the assignment and
security interest granted to Mortgagee herein may be delivered by Mortgagee at
any time to the financial institutions wherein the Reserves have been
established, and Mortgagee, or such servicing entity, shall have possession of
all passbooks or other evidences of such accounts.  Mortgagor hereby
assumes all risk of loss with respect to amounts on deposit in the Reserves
other than any such loss resulting solely from the willful misconduct of
Mortgagee as finally determined by a court of competent
jurisdiction.  Mortgagor hereby knowingly, voluntarily and
intentionally stipulates, acknowledges and agrees that the advancement of the
funds from the Reserves as set forth herein is at Mortgagor’s direction and is
not the exercise by Mortgagee of any right of set-off or other remedy upon a
Default or an Event of Default.  Mortgagor hereby waives all right to
withdraw funds from the Reserves except as provided for in this
Mortgage.  If an Event of Default shall occur and be continuing
hereunder or under any other of the Loan Documents, Mortgagee may, without
notice or demand on Mortgagor, at its option:  (A) withdraw any or all
of the funds (including, without limitation, interest) then remaining in the
Reserves and apply the same, after deducting all costs and expenses of
safekeeping, collection and delivery (including, but not limited to, reasonable
attorneys’ fees, costs and expenses) to the Debt or any other obligations of
Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem
appropriate in its sole discretion, and the excess, if any, shall be paid to
Mortgagor, (B) exercise any and all rights and remedies of a secured party under
any applicable Uniform Commercial Code or (C) exercise any other remedies
available at law or in equity.  No such use or application of the
funds contained in the Reserves shall be deemed to cure any Default or Event of
Default.

     

    
      
        
        

      

      
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    (b)           All
Reserves shall be held in Eligible Accounts and Mortgagor agrees that all
Reserves and such other funds held by Mortgagee as security for the loan may be
invested in Permitted Investments.

     

    “Eligible Accounts”
shall mean a separate and identifiable account from all other funds held by the
holding institution that is either (a) an account or accounts maintained with a
federal or state chartered depository institution or trust company which
complies with the definition of Eligible Institution or (b) a segregated trust
account or accounts maintained with a federal or state chartered depository
institution or trust company acting in its fiduciary capacity which, in the case
of a state chartered depository institution or trust company, is subject to
regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal and state authority.  An Eligible Account
will not be evidenced by a certificate of deposit, passbook or other
instrument.

     

    “Eligible Institution”
shall mean a depository institution or trust company insured by the Federal
Deposit Insurance Corporation, the short term unsecured debt obligations or
commercial paper of which are rated at least “A-1” by S&P, “P-1” by Moody’s
and “F-1+” by Fitch in the case of accounts in which funds are held for thirty
(30) days or less (or, in the case of accounts in which funds are held for more
than thirty (30) days, the long term unsecured debt obligations of which are
rated at least “AA” by Fitch and S&P and “Aa2” by Moody’s).

     

    “Permitted Investment”
shall mean any one or more of the following obligations or securities (including
obligations or securities of the trustee in any securitization of which this
Loan is a part if otherwise qualifying hereunder) acquired at a purchase price
of not greater than par, payable on demand or having a maturity date not later
than the business day immediately prior to the first monthly Payment Date
following the date of acquiring such investment:

     

    (i)           direct
obligations of, or obligations fully guaranteed as to timely payment of
principal and interest by, the United States or any agency or instrumentality
thereof, provided such obligations are backed by the full faith and credit of
the United States.  Such obligations must be limited to those
instruments that have a predetermined fixed dollar amount of principal due at
maturity that cannot vary or change.  If rated, such an obligation
must not have an “r” highlighter affixed to its rating by S&P. Interest may
either be fixed or variable, must be tied to a single interest rate index plus a
single fixed spread (if any) and must move proportionately with that
index.  Such investments should not be relied upon for a fixed
yield;

     

    (ii)           repurchase
obligations with respect to any security described in clause (i) above (having
original maturities of not more than 365 days), provided that the short-term
deposit or debt obligations of the party agreeing to repurchase such obligations
are rated in the highest short term rating category by each Rating Agency or
such lower rating as will not result in qualification, downgrading or withdrawal
of the rating then assigned to the certificates, as evidenced in writing by the
applicable Rating Agencies.  In addition, any such item must not have
an “r” highlighter affixed to its rating by S&P, and its terms should have a
predetermined fixed dollar amount of principal due at maturity that cannot vary
or change.  Interest may either be fixed or variable, must be tied to
a single interest rate index plus a single fixed spread (if any) and must move
proportionately with that index.  Such investments should not be
relied upon for a fixed yield;

     

    
      
        
        

      

      
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    (iii)           certificates
of deposit, time deposits, demand deposits and bankers’ acceptances of any bank
or trust company organized under the laws of the United States or any state
thereof (having original maturities of not more than 365 days), the short-term
obligations of which are rated in the highest short term rating category of each
of the Rating Agencies or such lower rating as will not result in qualification,
downgrading or withdrawal of the ratings then assigned to the certificates, as
evidenced in writing by the applicable Rating Agencies.  In addition,
any such item must not have an “r” highlighter affixed to its ratings by
S&P, and its terms should have a predetermined fixed dollar amount of
principal due at maturity that cannot vary or change.  Interest may
either be fixed or variable, must be tied to a single interest rate index plus a
single fixed spread (if any) and must move proportionately with that
index.  Such investments should not be relied upon for a fixed
yield;

     

    (iv)           commercial
paper (having original maturities of not more than 365 days) of any
corporation incorporated under the laws of the United States or any state
thereof (or if not so incorporated, the commercial paper is United States Dollar
denominated and amounts payable thereunder are not subject to any withholding
imposed by any non-United States jurisdiction) which is rated in the highest
short term rating category of each of the Rating Agencies or such lower rating
as will not result in qualification, downgrading or withdrawal of the ratings
then assigned to the certificates, as evidenced in writing by the applicable
Rating Agencies.  The commercial paper must not have an “r”
highlighter affixed to its rating by S&P and by its terms should have a
predetermined fixed dollar amount of principal due at maturity that cannot vary
or change.  Interest may either be fixed or variable, must be tied to
a single interest rate index plus a single fixed spread (if any), and must move
proportionately with that index.  Such investments should not be
relied upon for a fixed yield;

     

    (v)           units
of money market funds rated in the highest rating category of each of the Rating
Agencies (or such lower rating as will not result in qualification, downgrading
or withdrawal of the ratings then assigned to the certificates, as evidenced in
writing by the applicable Rating Agencies) and which seek to maintain a constant
net asset value;

     

    
      
        
        

      

      
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    (vi)           any
other security, obligation or investment acceptable to each Rating Agency,
evidenced of which acceptability shall be provided in writing by each Rating
Agency to the master servicer, the special servicer and the
trustee;

     

    provided
that no investment described in this Section 5.4 shall evidence either the right
to receive (x) only interest with respect to such investment (y) a yield to
maturity greater than 120% of the yield to maturity at par of the underlying
obligations.

     

    (c)           The
Reserves shall not, unless otherwise explicitly required by applicable law, be
or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in
Mortgagee’s discretion, may either be held in a separate account or be
commingled by Mortgagee with the general funds of Mortgagee.  Upon
assignment of this Mortgage by Mortgagee, any funds in the Reserves shall be
turned over to the assignee and any responsibility of Mortgagee, as assignor,
with respect thereto shall terminate.  If the funds in the applicable
Reserve shall exceed the amount of payments actually applied by Mortgagee for
the purposes and items for which the applicable Reserve is held, such excess may
be credited by Mortgagee on subsequent payments to be made hereunder or, at the
option of Mortgagee, refunded to Mortgagor.  If, however, the
applicable Reserve shall not contain sufficient funds to pay the sums required
by the dates on which such sums are required to be on deposit in such account,
Mortgagor shall, within ten (10) days after receipt of written notice thereof,
deposit with Mortgagee the full amount of any such deficiency.  If
Mortgagor shall fail to deposit with Mortgagee the full amount of such
deficiency as provided above, Mortgagee shall have the option, but not the
obligation, to make such deposit.

     

    ARTICLE
VI

     

    RENTS; LEASES;
ALIENATION

     

    6.1           Rents and
Profits.  As additional and collateral security for the payment
of the Debt and cumulative of any and all rights and remedies herein provided
for, Mortgagor hereby absolutely and presently assigns to Mortgagee all existing
and future Rents and Profits.  Mortgagor hereby grants to Mortgagee
the sole, exclusive and immediate right, without taking possession of the
Mortgaged Property, to demand, collect (by suit or otherwise), receive and give
valid and sufficient receipts for any and all of said Rents and Profits, for
which purpose Mortgagor does hereby irrevocably make, constitute and appoint
Mortgagee its attorney-in-fact with full power to appoint substitutes or a
trustee to accomplish such purpose.  Mortgagee shall be without
liability for any loss which may arise from a failure or inability to collect
Rents and Profits, proceeds or other payments.  However, until the
occurrence of an Event of Default under this Mortgage or under any other of the
Loan Documents, Mortgagor shall have a license to collect, receive, use and
enjoy the Rents and Profits when due and prepayments thereof for not more than
one (1) month prior to due date thereof.  The assignment of Rents and
Profits hereinabove granted shall continue in full force and effect during any
period of foreclosure or redemption with respect to the Mortgaged
Property.  Mortgagor has executed an Assignment of Leases and Rents
dated of even date herewith (the “Assignment”) in favor
of Mortgagee covering all of the right, title and interest of Mortgagor, as
landlord, lessor or licensor, in and to any Leases.  All rights and
remedies granted to Mortgagee under the Assignment shall be in addition to and
cumulative of all rights and remedies granted to Mortgagee
hereunder.

     

    
      
        
        

      

      
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    6.2           Leases.

     

    (a)           Mortgagor
covenants and agrees that it shall not enter into any Lease affecting the lesser
of (x) ten percent (10%) of the gross leaseable area of the Improvements and (y)
10,000 square feet or more of the Mortgaged Property or having a term of ten
(10) years or more without the prior written approval of Mortgagee, which
approval shall not be unreasonably withheld.  The request for approval
of each such proposed new Lease shall be made to Mortgagee in writing and
Mortgagor shall furnish to Mortgagee (and any loan servicer specified from time
to time by Mortgagee):  (i) such biographical and financial
information about the proposed Tenant as Mortgagee may require in conjunction
with its review, (ii) a copy of the proposed form of Lease and (iii) a summary
of the material terms of such proposed Lease (including, without limitation,
rental terms and the term of the proposed lease and any options).  It
is acknowledged that Mortgagee intends to include among its criteria for
approval of any such proposed Lease the following:  (i) such Lease
shall be with a bona-fide arm’s-length Tenant; (ii) the terms of such Lease
shall comply with the requirements set forth in paragraphs (b) and (c) below;
and (iii) such Lease shall provide that the Tenant pays for its
expenses.  Failure of Mortgagee to approve or disapprove any such
proposed Lease within fifteen (15) business days after receipt of such written
request and all the documents and information required to be furnished to
Mortgagee with such request shall be deemed approved, provided that the written
request for approval specifically mentioned the same.

     

    (b)           Prior
to execution of any Leases of space in the Improvements after the date hereof,
Mortgagor shall submit to Mortgagee, for Mortgagee’s prior approval, which
approval shall not be unreasonably withheld, a copy of the form Lease Mortgagor
plans to use in leasing space in the Improvements or at the Mortgaged
Property.  All such Leases of space at the Mortgaged Property shall be
at a rental and on terms consistent with the terms for similar leases in the
market area of the Premises.  Mortgagor shall also submit to Mortgagee
for Mortgagee’s approval, which approval shall not be unreasonably withheld,
prior to the execution thereof, any proposed Lease of the Improvements or any
portion thereof that differs materially and adversely from the aforementioned
form Lease.  Mortgagor shall not execute any Lease for all or a
substantial portion of the Mortgaged Property, except for an actual occupancy by
the Tenant, lessee or licensee thereunder, and shall at all times promptly and
faithfully perform, or cause to be performed, all of the covenants, conditions
and agreements contained in all Leases with respect to the Mortgaged Property,
now or hereafter existing, on the part of the landlord, lessor or licensor
thereunder to be kept and performed.  Mortgagor shall furnish to
Mortgagee, within ten (10) days after a request by Mortgagee to do so, but in
any event by January 1 of each year, a current Rent Roll, certified by Mortgagor
as being true and correct, containing the names of all Tenants with respect to
the Mortgaged Property, the terms of their respective Leases, the spaces
occupied and the rentals or fees payable thereunder and the amount of each
Tenant’s security deposit.  Upon the request of Mortgagee, Mortgagor
shall deliver to Mortgagee a copy of each such Lease.  Mortgagor shall
not do or suffer to be done any act, or omit to take any action, that might
result in a default by the landlord, lessor or licensor under any such Lease or
allow the Tenant thereunder to withhold payment of rent or cancel or terminate
same and shall not further assign any such Lease or any such Rents and
Profits.  Mortgagor, at no cost or expense to Mortgagee, shall
enforce, short of termination, the performance and observance of each and every
condition and covenant of each of the parties under such Leases and Mortgagor
shall not anticipate, discount, release, waive, compromise or otherwise
discharge any rent payable under any of the Leases.  Mortgagor shall
not, without the prior written consent of Mortgagee, modify any of the Leases,
terminate or accept the surrender of any Leases, waive or release any other
party from the performance or observance of any obligation or condition under
such Leases except, with respect only to Leases affecting less than the lesser
of (x) ten percent (10%) of the gross leaseable area of the Improvements and (y)
10,000 square feet and having a term of less than ten (10) years, in the normal
course of business in a manner which is consistent with sound and customary
leasing and management practices for similar properties in the community in
which the Mortgaged Property is located.  Mortgagor shall not permit
the prepayment of any rents under any of the Leases for more than one (1) month
prior to the due date thereof.

     

    
      
        
        

      

      
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    (c)           Each
Lease executed after the date hereof affecting any of the Premises or the
Improvements must provide, in a manner approved by Mortgagee, that the Lease is
subordinate to the lien of this Mortgage and that Tenant will recognize as its
landlord, lessor or licensor, as applicable, and attorn to any person succeeding
to the interest of Mortgagor upon any foreclosure of this Mortgage or deed in
lieu of foreclosure.  Each such Lease shall also provide that, upon
request of said successor-in-interest, the Tenant shall execute and deliver an
instrument or instruments confirming its attornment as provided for in this
Section; provided, however, that
neither Mortgagee nor any successor-in-interest shall be bound by any payment of
rent for more than one (1) month in advance, or any amendment or modification of
said Lease made without the express written consent of Mortgagee or said
successor-in-interest.

     

    6.3           Alienation and Further
Encumbrances.

     

    (a)           Mortgagor
acknowledges that Mortgagee has relied upon the principals of Mortgagor and
their experience in owning and operating the Mortgaged Property and properties
similar to the Mortgaged Property in connection with the closing of the loan
evidenced by the Note.  Accordingly, except as specifically allowed
hereinbelow in this Section and notwithstanding anything to the contrary
contained in Section
16.4 hereof, in the event that the Mortgaged Property or any part thereof
or direct or indirect interest therein shall be sold, conveyed, disposed of,
alienated, hypothecated, leased (except to Tenants of space in the Improvements
in accordance with the provisions of Section 6.2 hereof),
assigned, pledged, mortgaged, further encumbered or otherwise transferred or
Mortgagor shall be divested of its title to the Mortgaged Property or any
interest therein, in any manner or way, whether voluntarily or involuntarily,
without the prior written consent of Mortgagee being first obtained, which
consent may be withheld in Mortgagee’s sole discretion, then the same shall
constitute an Event of Default and Mortgagee shall have the right, at its
option, to declare any or all of the Debt, irrespective of the maturity date
specified in the Note, immediately due and payable and to otherwise exercise any
of its other rights and remedies contained in Article XV
hereof.  For the purposes of this Section, each of the following shall
be deemed to be a transfer of an interest in the Mortgaged
Property:  (i) in the event either Mortgagor or any of its
shareholders, partners or members is a corporation or trust, the direct or
indirect sale, conveyance, transfer, disposition, alienation, hypothecation or
encumbering of more than 49% (in one or more related transactions) of the issued
and outstanding capital stock of Mortgagor or any of its shareholders, partners
or members or of the beneficial interest of such trust (or the issuance of new
shares of capital stock of any of them (in one or a series of transactions) such
that, after giving effect to such issuance and any prior issuance, more than
forty-nine percent (49%) in the aggregate of the outstanding capital stock of
Mortgagor or any of its shareholders, partners or members is owned by any person
or entity and their affiliates unless such person or entity and their affiliates
owned more than forty-nine percent (49%) of the outstanding capital stock of
Mortgagor or such shareholder, partner or member as of the date hereof); and
(ii) in the event Mortgagor or any partner or member of Mortgagor is an
individual or an entity other than a corporation or trust, a direct or indirect
change in the ownership interests in Mortgagor or any partner, any joint
venturer or any member, either voluntarily, involuntarily or otherwise, or the
direct or indirect sale, conveyance, transfer, disposition, alienation,
hypothecation or encumbering of all or any portion of the interests of Mortgagor
or of any such partner, joint venturer or member in Mortgagor or of such partner
or member (whether in the form of a beneficial or partnership interest or in the
form of a power of direction, control or management, or
otherwise).  Notwithstanding the foregoing, however, (i) up to (but
not more than) 49% of the limited partner or non-managing member interests in
Mortgagor (but not interests held by a general partner or managing member) shall
be transferable without Mortgagee’s consent so long as, after giving effect to
such transfer and any prior transfers, no more than forty-nine percent (49%) in
the aggregate of such limited partner or non-managing member interests in
Mortgagor are owned by any person or entity and their affiliates unless such
person or entity and their affiliates owned more than a forty-nine percent (49%)
limited partner or non-managing member interest in Mortgagor as of the date
hereof (provided that if, after giving effect to any such transfer and all prior
transfers, more than forty-nine percent (49%) in the aggregate of such limited
partner or non-managing member interests in Mortgagor are owned by any person or
entity and their affiliates that owned less than a forty-nine percent (49%)
limited partner or non-managing member interest in Mortgagor as of the date
hereof, Mortgagee shall receive (x) a non-consolidation opinion acceptable to
Mortgagee and the Rating Agencies and (y) confirmation in writing from the
Rating Agencies that rate the securities issued with respect to a securitization
of the Loan to the effect that the transfer will not result in a qualification,
downgrade or withdrawal of any rating initially assigned or to be assigned to
the securities so issued), (ii) any involuntary transfer caused by the death of
any partner, shareholder, joint venturer or member of Mortgagor or beneficial
owner of a trust shall not be an Event of Default under this Mortgage so long as
Mortgagor is promptly reconstituted, if required, following such death and so
long as those persons responsible for the management of the Mortgaged Property
and Mortgagor remain unchanged as a result of such death or any replacement
management is approved by Mortgagee, and (iii) gifts for estate planning
purposes of any individual’s interests in Mortgagor or in any of Mortgagor’s
partners, members or joint venturers to the spouse or any lineal descendant of
such individual, or to a trust for the benefit of such spouse or lineal
descendant, shall not be an Event of Default under this Mortgage so long as
Mortgagor is promptly reconstituted, if required, following such gift and so
long as those persons responsible for the management of the Mortgaged Property
and Mortgagor remain unchanged following such gift or any replacement management
is approved by Mortgagee.

     

    
      
        
        

      

      
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    “Rating Agency” or
“Rating
Agencies” shall mean each of Standard & Poor’s Ratings Services, a
division of The McGraw-Hill Companies, Inc. (“S&P”), Moody’s
Investor Services, Inc. (“Moody’s”) and Fitch,
Inc. (“Fitch”),
or any other nationally-recognized statistical rating agency which has been
approved by Mortgagee.

     

    (b)           Notwithstanding
any other provisions of this Mortgage, Mortgagee shall consent to a one time
sale, conveyance or transfer of the Mortgaged Property in its entirety
(hereinafter, “Sale”) to any person
or entity provided that each of the following terms and conditions are
satisfied:

     

    
      	
               
      

            	
              (1)

            	
              No
      Default and no Event of Default has occurred and is continuing hereunder
      or under any of the other Loan
Documents;

            

    

     

    
      	
               
      

            	
              (2)

            	
              Mortgagor
      gives Mortgagee written notice of the terms of such prospective Sale not
      less than sixty (60) days before the date on which such Sale is scheduled
      to close and, concurrently therewith, gives Mortgagee all such information
      concerning the proposed transferee of the Mortgaged Property (hereinafter,
      “Buyer”)
      as Mortgagee would typically require in evaluating an initial extension of
      credit to a borrower and pays to Mortgagee a nonrefundable application fee
      in the amount of $5,000.  Mortgagee shall have the right to
      approve or disapprove the proposed Buyer.  In determining
      whether to give or withhold its approval of the proposed Buyer, Mortgagee
      shall consider the Buyer’s experience and track record in owning and
      operating facilities similar to the Mortgaged Property, the Buyer’s
      financial strength, the Buyer’s general business standing and the Buyer’s
      relationships and experience with contractors, vendors, tenants, lenders
      and other business entities; provided, however, that,
      notwithstanding Mortgagee’s agreement to consider the foregoing factors in
      determining whether to give or withhold such approval, such approval shall
      be given or withheld based on what Mortgagee determines to be commercially
      reasonable in Mortgagee’s sole discretion and, if given, may be given
      subject to such conditions as Mortgagee may deem
    appropriate;

            

    

     

    
      	
               
      

            	
              (3)

            	
              Mortgagor
      pays Mortgagee, concurrently with the closing of such Sale, a
      non-refundable assumption fee in an amount equal to all out-of-pocket
      costs and expenses, including, without limitation, reasonable attorneys’
      fees, incurred by Mortgagee in connection with the Sale, plus an amount
      equal to one percent (1.0%) of the then outstanding principal balance of
      the Note;

            

    

     

    
      
        
        

      

      
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              (4)

            	
              The
      Buyer executes, without any cost or expense to Mortgagee, such documents
      and agreements as Mortgagee shall reasonably require in connection with
      the Sale, including, but not limited to, an assumption agreement,
      financing statements, and guaranties or indemnities, all in form and
      substance satisfactory to Mortgagee.  The Buyer shall also
      deliver to Mortgagee such insurance policies and other documents and
      certificates as the Mortgagee may
require.

            

    

     

    
      	
               
      

            	
              (5)

            	
              Such
      Sale occurs no sooner than nine (9) months following the Loan
      closing.

            

    

     

    
      	
               
      

            	
              (6)

            	
              If
      required by Mortgagee, Mortgagee receives confirmation in writing from the
      Rating Agencies that rate the securities issued with respect to a
      securitization of the Loan to the effect that the transfer will not result
      in a qualification, downgrade or withdrawal of any rating initially
      assigned or to be assigned to the securities so
  issued.

            

    

     

    
      	
               
      

            	
              (7)

            	
              The
      Buyer, prior to such transfer, delivers a substantive non-consolidation
      opinion to Mortgagee, which opinion shall be in form, scope and substance
      acceptable in all respects to Mortgagee and the Rating
      Agencies.

            

    

     

    (c)           Such
Sale shall not be construed so as to relieve Mortgagor of any personal liability
under the Note or any of the other Loan Documents for any acts or events
occurring or obligations arising prior to or simultaneously with the closing of
such Sale, whether or not same is discovered prior or subsequent to the closing
of such Sale.  Mortgagor shall be released from and relieved of any
personal liability under the Note or any of the other Loan Documents for any
acts or events occurring or obligations arising after the closing of such Sale
which are not caused by or arising out of any acts or events occurring or
obligations arising prior to or simultaneously with the closing of such
Sale.

     

    6.4           Easements and
Rights-of-Way.  Mortgagor shall not grant any easement or
right-of-way with respect to all or any portion of the Premises or the
Improvements without the prior written consent of Mortgagee except those granted
in the ordinary course of business that would not be reasonably expected to
adversely affect the Mortgaged Property or Mortgagor’s ability to repay the Debt
in accordance with the Note, this Mortgage and the other Loan
Documents.  The purchaser at any foreclosure sale hereunder may, at
its discretion, disaffirm any easement or right-of-way granted in violation of
any of the provisions of this Mortgage and may take immediate possession of the
Mortgaged Property free from, and despite the terms of, such grant of easement
or right-of-way.  If Mortgagee consents to the grant of an easement or
right-of-way, Mortgagee agrees to grant such consent without charge to Mortgagor
other than expenses, including, without limitation, reasonable attorneys’ fees,
incurred by Mortgagee in the review of Mortgagor’s request and in the
preparation of documents effecting the subordination.

     

    
      
        
        

      

      
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    ARTICLE
VII

     

    PROPERTY
MANAGEMENT

     

    7.1           Management.  The
management of the Mortgaged Property shall be by
either:  (a) Mortgagor or an entity affiliated with Mortgagor
approved by Mortgagee for so long as Mortgagor or said affiliated entity is
managing the Mortgaged Property in a first class manner; or (b) a professional
property management company approved by Mortgagee.  Such management by
an affiliated entity or a professional property management company shall be
pursuant to a written agreement approved by Mortgagee.  Mortgagor
shall give Mortgagee prompt written notice of the occurrence of a default under
any management contract then in effect.  In no event shall any manager
be removed or replaced or the terms of any management agreement be modified or
amended without the prior written consent of Mortgagee; provided, that such
consent may, upon Mortgagee’s request, be conditioned upon Mortgagor delivering
a Rating Agency confirmation as to such new manager and management agreement
and, if such new manager is an affiliate of Mortgagor, upon delivery of a
non-consolidation opinion acceptable to the Rating Agencies.  After an
Event of Default or a default under any management contract then in effect,
which default is not cured within any applicable grace or cure period, Mortgagee
shall have the right to terminate, or to direct Mortgagor to terminate, such
management contract upon thirty (30) days’ notice and to retain, or to direct
Mortgagor to retain, a new management agent approved by
Mortgagee.  All Rents and Profits generated by or derived from the
Mortgaged Property shall first be utilized solely for current expenses directly
attributable to the ownership and operation of the Mortgaged Property,
including, without limitation, current expenses relating to Mortgagor’s
liabilities and obligations with respect to this Mortgage and the other Loan
Documents, and none of the Rents and Profits generated by or derived from the
Mortgaged Property shall be diverted by Mortgagor and utilized for any other
purposes unless all such expenses then due and payable and attributable to the
ownership and operation of the Mortgaged Property have been paid.

     

    ARTICLE
VIII

     

    INDEMNIFICATION

     

    8.1           Indemnification;
Subrogation.

     

    (a)           Mortgagor
shall indemnify, defend and hold Mortgagee harmless from and
against:  (i) any and all claims for brokerage, leasing, finders or
similar fees which may be made relating to the Mortgaged Property or the Debt
and (ii) any and all liability, obligations, losses, damages, penalties, claims,
actions, suits, costs and expenses (including Mortgagee’s reasonable attorneys’
fees and expenses) of whatever kind or nature which may be asserted against,
imposed on or incurred by Mortgagee in connection with the Debt, this Mortgage
and any other Loan Document, the Mortgaged Property, or any part thereof, or the
exercise by Mortgagee of any rights or remedies granted to it under this
Mortgage; provided, however, that nothing
herein shall be construed to obligate Mortgagor to indemnify, defend and hold
harmless Mortgagee from and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, suits, costs and expenses to the
extent enacted against, imposed on or incurred by Mortgagee solely by reason of
Mortgagee’s gross negligence or willful misconduct as finally determined by a
court of competent jurisdiction.

     

    
      
        
        

      

      
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    (b)           Mortgagor
hereby indemnifies and holds Mortgagee harmless from and against all loss, cost
and expenses with respect to any Event of Default hereof, any liens (i.e.,
judgments, mechanics’ and materialmen’s liens, or otherwise), charges and
encumbrances filed against the Mortgaged Property, and from any claims and
demands for damages or injury, including claims for property damage, personal
injury or wrongful death, arising out of or in connection with any accident or
fire or other casualty on the Premises or the Improvements or any nuisance made
or suffered thereon, except to the extent due solely to Mortgagee’s gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction, including, without limitation, in any case, reasonable attorneys’
fees, costs and expenses as aforesaid, whether at pretrial, trial or appellate
level, and such indemnity shall survive payment in full of the
Debt.  This Section shall not be construed to require Mortgagee to
incur any expenses, make any appearances or take any actions.

     

    (c)           If
Mortgagee is made a party defendant to any litigation or any claim is threatened
or brought against Mortgagee concerning the Debt, this Mortgage, the Mortgaged
Property, or any part thereof, or any interest therein, or the construction,
maintenance, operation or occupancy or use thereof, then Mortgagor shall
indemnify, defend and hold Mortgagee harmless from and against all liability by
reason of said litigation or claims, including reasonable attorneys’ fees and
expenses incurred by Mortgagee in any such litigation or claim, whether or not
any such litigation or claim is prosecuted to judgment.  If Mortgagee
commences an action against Mortgagor to enforce any of the terms hereof or to
prosecute any breach by Mortgagor of any of the terms hereof or to recover any
sum secured hereby, Mortgagor shall pay to Mortgagee the reasonable attorneys’
fees and expenses incurred by Mortgagee in connection therewith.  The
right to such attorneys’ fees and expenses shall be deemed to have accrued on
the commencement of such action, and shall be enforceable whether or not such
action is prosecuted to judgment.  If Mortgagor breaches any term of
this Mortgage or any other Loan Document, Mortgagee may engage the services of
an attorney or attorneys to protect its rights hereunder, and in the event of
such engagement following any breach by Mortgagor, Mortgagor shall pay Mortgagee
reasonable attorneys’ fees and expenses incurred by Mortgagee, whether or not an
action is actually commenced against Mortgagor by reason of such
breach.  All references to “attorneys” in this
Subsection and elsewhere in this Mortgage shall include, without limitation, any
attorney or law firm engaged by Mortgagee and Mortgagee’s in-house counsel, and
all references to “fees and expenses” in
this Subsection and elsewhere in this Mortgage shall include, without
limitation, any fees of such attorney or law firm, any appellate counsel fees,
if applicable, and any allocation charges and allocation costs of Mortgagee’s
in-house counsel.

     

    (d)           A
waiver of subrogation shall be obtained by Mortgagor from its insurance carrier
and, consequently, Mortgagor waives any and all right to claim or recover
against Mortgagee, its officers, employees, agents and representatives, for loss
of or damage to Mortgagor, the Mortgaged Property, Mortgagor’s property or the
property of others under Mortgagor’s control from any cause insured against or
required to be insured against by the provisions of this Mortgage.

     

    
      
        
        

      

      
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    ARTICLE
IX

     

    REPORTING

     

    9.1           Access Privileges and
Inspections.  Mortgagee and the agents, representatives and
employees of Mortgagee shall, subject to the rights of Tenants, have full and
free access to the Premises and the Improvements and any other location where
books and records concerning the Mortgaged Property are kept at all reasonable
times and, except in the event of an emergency, upon not less than 24 hours
prior notice (which notice may be telephonic) for the purposes of inspecting the
Mortgaged Property and of examining, copying and making extracts from the books
and records of Mortgagor relating to the Mortgaged
Property.  Mortgagor shall lend assistance to all such agents,
representatives and employees of Mortgagee.

     

    9.2           Financial Statements and
Books and Records.  Mortgagor shall keep accurate books and
records of account of the Mortgaged Property and its own financial affairs
sufficient to permit the preparation of financial statements therefrom in
accordance with generally accepted accounting principles.  Mortgagee
and its duly authorized representatives shall have the right to examine, copy
and audit Mortgagor’s records and books of account at all reasonable
times.  So long as this Mortgage continues in effect, Mortgagor shall
provide to Mortgagee, in addition to any other financial statements required
hereunder or under any of the other Loan Documents, the following financial
statements and information, all of which shall be in the form and substance
acceptable to Mortgagee and all of which must be certified to Mortgagee as being
true and correct by Mortgagor or the person or entity to which they pertain, as
applicable.  With respect to the financial statements and information
set forth in subsection (d) hereof as it relates to Mortgagor or the Mortgaged
Property, the same must be prepared by an independent certified public
accountant in accordance with generally accepted accounting principles
consistently applied and, if the original principal amount of the Note is
$15,000,000 or more, be audited by such accountants:

     

    (a)           copies
of all tax returns filed by Mortgagor, within thirty (30) days after the date of
filing;

     

    (b)           quarterly
operating statements for the Mortgaged Property, stated on a month-by-month
basis including Rent Rolls and physical occupancy statements, within twenty (20)
days after the end of the quarter during which the closing occurs, and after the
end of each March, June, September and December commencing with the first (1st)
of such months to occur following the date hereof;

     

    (c)           annual
balance sheets for the Mortgaged Property and annual financial statements and
federal tax returns for Mortgagor, and each general partner or managing member
in Mortgagor within ninety (90) days after the end of each calendar
year;

     

    (d)           such
other information with respect to the Mortgaged Property, Mortgagor, the
principals or general partners in Mortgagor, and each Indemnitor, which may be
reasonably requested from time to time by Mortgagee, within a reasonable time
after the applicable request; and

     

    
      
        
        

      

      
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    (e)           monthly
operating statements and Rent Roll for the Mortgaged Property, by the tenth
business day of the first full month following the closing of the Loan and by
the tenth business day of each month thereafter until such time as Mortgagee
securitizes the Loan.

     

    In the
event of any failure of Mortgagor to provide any of the statements or other
materials referred to above in this Section 9.2 within
twenty (20) days after the date due, Mortgagor shall, in Mortgagee’s sole and
absolute discretion, be subject to a charge in the amount of One Thousand Five
Hundred and 00/100 Dollars ($1,500.00) which amount shall be paid to Mortgagee,
together with interest thereon at the Default Interest Rate from the date that
the applicable statement or other material was required to be delivered to
Mortgagee until the date such amount is paid to it, immediately on demand by
Mortgagee.  In addition, in the event of (i) any failure to provide
any of the statements or other materials referred to above in this Section 9.2 within
thirty (30) days after the date due, or (ii) in the event any such statements or
other materials shall be materially inaccurate or false, or (iii) in the event
of the failure of Mortgagor to permit Mortgagee or its representatives to
inspect said books and records upon request, an Event of Default shall
automatically exist hereunder without any notice to, or right to cure by,
Mortgagor.

     

    ARTICLE
X

     

    WARRANTIES AND
COVENANTS

     

    10.1           Warranties of
Mortgagor.  Mortgagor, for itself and its successors and
assigns, does hereby represent, warrant and covenant to and with Mortgagee, its
successors and assigns, that:

     

    (a)           Mortgagor
has good, marketable and indefeasible fee simple title to the Mortgaged
Property, subject only to those matters expressly set forth as exceptions to
title or subordinate matters in the title insurance policy insuring the lien of
this Mortgage which Mortgagee has agreed to accept (such items being the “Permitted
Encumbrances”), and has full power and lawful authority to mortgage its
interest in the Mortgaged Property in the manner and form hereby done or
intended.  Mortgagor will preserve its interest in and title to the
Mortgaged Property and will forever warrant and defend the same to Mortgagee
against any and all claims whatsoever and will forever warrant and defend the
validity and priority of the lien and security interest created herein against
the claims of all persons and parties whomsoever, subject to the Permitted
Encumbrances.  The foregoing warranty of title shall survive the
foreclosure of this Mortgage and shall inure to the benefit of and be
enforceable by Mortgagee in the event Mortgagee acquires title to the Mortgaged
Property by foreclosure or otherwise;

     

    (b)           No
bankruptcy, reorganization or insolvency proceedings are pending or contemplated
either by Mortgagor or, to the best knowledge of Mortgagor, against Mortgagor
(or, if Mortgagor is a partnership or a limited liability company, any of its
general partners or members) or by or against any endorser or cosigner of the
Note or of any portion of the Debt, or any guarantor or indemnitor under any
guaranty or indemnity agreement executed in connection with the Note or the loan
evidenced thereby and secured hereby (an “Indemnitor”);

     

    
      
        
        

      

      
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    (c)           All
reports, certificates, affidavits, statements and other data furnished by or on
behalf of Mortgagor to Mortgagee in connection with the loan evidenced by the
Note are true and correct in all material respects and do not omit to state any
fact or circumstance necessary to make the statements contained therein not
misleading;

     

    (d)           The
execution, delivery and performance of this Mortgage, the Note and all of the
other Loan Documents have been duly authorized by all necessary action to be,
and are, binding and enforceable against Mortgagor in accordance with the
respective terms thereof (except as may be limited by (i) bankruptcy, insolvency
or other similar laws affecting the rights of creditors generally, and (ii)
general principles of equity (regardless of whether considered in a proceeding
in equity or at law)) and do not (i) contravene, result in a breach of or
constitute a default (nor upon the giving of notice or the passage of time or
both will the same constitute a default) under the organizational documents of
Mortgagor or any contract or agreement of any nature to which Mortgagor is a
party or by which Mortgagor or any of its property may be bound or (ii) violate
or contravene any law, order, decree, rule or regulation to which Mortgagor is
subject;

     

    (e)           There
are no judicial, administrative, mediation or arbitration actions, suits or
proceedings pending or threatened against or affecting Mortgagor (or, if
Mortgagor is a partnership or a limited liability company, any of its general
partners or members) or the Mortgaged Property which, if adversely determined,
would materially impair either the Mortgaged Property or Mortgagor’s ability to
perform the covenants or obligations required to be performed under the Loan
Documents;

     

    (f)           Mortgagor
possesses all franchises, patents, copyrights, trademarks, trade names, licenses
and permits (the “Licenses”) necessary
for the conduct of its business substantially as now conducted, all fees due and
payable in connection with such Licenses have been paid and Mortgagor’s
operation of the Premises complies with such Licenses;

     

    (g)           Mortgagor
is not a “foreign person” within the meaning of §1445(f)(3) of the Internal
Revenue Code of 1986, as amended, and the related Treasury Department
regulations, including temporary regulations;

     

    (h)           The
Premises and the Improvements and the current intended use thereof by Mortgagor
comply in all material respects with all applicable restrictive covenants,
zoning ordinances, subdivision and building codes, flood disaster laws, health
and environmental laws and regulations and all other ordinances, orders or
requirements issued by any state, federal or municipal authorities having or
claiming jurisdiction over the Mortgaged Property.  The Premises and
Improvements constitute one or more separate tax parcels for purposes of ad
valorem taxation.  The Premises and Improvements do not require any
rights over, or restrictions against, other property in order to comply with any
of the aforesaid governmental ordinances, orders or requirements;

     

    (i)           All
utility services necessary and sufficient for the use, occupancy, operation and
disposition of the Premises and the Improvements for their intended purposes are
available to the Mortgaged Property, including water, storm sewer, sanitary
sewer, gas, electric, cable and telephone facilities, through public
rights-of-way or perpetual private easements approved by Mortgagee;

     

    
      
        
        

      

      
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    (j)           All
streets, roads, highways, bridges, curb cuts, driveways and traffic signals and
waterways necessary for access to and use, occupancy, operation and disposition
of the Premises and the Improvements have been completed, have been dedicated to
and accepted by the appropriate municipal authority and are open and available
to the Premises and the Improvements without further condition or cost to
Mortgagor;

     

    (k)           The
Mortgaged Property is free from delinquent water charges, sewer rents, taxes and
assessments;

     

    (l)           As
of the date of this Mortgage, the Mortgaged Property is free from unrepaired
damage caused by fire, flood, accident or other casualty; all insurance required
by the terms of this Mortgage is in full force and effect and none of the
premiums payable therefor have been, nor at any time in the future will be
financed;

     

    (m)           As
of the date of this Mortgage, no part of the Premises or the Improvements has
been taken in condemnation, eminent domain or like proceeding nor is any such
proceeding pending or, to Mortgagor’s knowledge and belief, threatened or
contemplated;

     

    (n)           Except
as may otherwise be disclosed in the Engineering Report, the Improvements are
structurally sound, in good repair and free of defects in materials and
workmanship.  Except as may otherwise be disclosed in the Engineering
Report, all major building systems located within the Improvements, including,
without limitation, the heating and air conditioning systems and the electrical
and plumbing systems, are in good working order and condition;

     

    (o)           Mortgagor
has delivered to Mortgagee true, correct and complete copies of all Contracts
and all amendments thereto or modifications thereof;

     

    (p)           Each
Contract constitutes the legal, valid and binding obligation of Mortgagor and,
to the best of Mortgagor’s knowledge and belief, is enforceable against all
other parties thereto.  No default exists, or with the passing of time
or the giving of notice or both would exist, under any Contract or Contracts
which would, individually or in the aggregate, have a material adverse effect on
Mortgagor or the Mortgaged Property;

     

    (q)           No
Contract or Lease provides any party with the right to obtain a lien or
encumbrance upon the Mortgaged Property superior to the lien of this
Mortgage;

     

    (r)           Mortgagor
and the Mortgaged Property are free from any past due obligations for sales and
payroll taxes;

     

    (s)           There
are no security agreements or financing statements affecting all or any portion
of the Mortgaged Property other than (i) as disclosed in writing by Mortgagor to
Mortgagee prior to the date hereof and (ii) the security agreements and
financing statements created in favor of Mortgagee;

     

    
      
        
        

      

      
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    (t)           Mortgagor
has delivered to Mortgagee a true, correct and complete Rent Roll and true,
correct and complete copies of all Leases described in the Rent Roll (as used
herein the term “Rent
Roll” shall mean a schedule of all Leases affecting the Mortgaged
Property as of the date hereof, which accurately and completely sets forth in
all material respects for each such Lease the name of the Tenant, the Lease
expiration date, extension and renewal provisions, the base rent payable, the
security deposit held thereunder, the square footage of the leased premises, the
unit location of the leased premises, reimbursements due thereunder and any
other material provisions of such Lease);

     

    (u)           Each
Lease constitutes the legal, valid and binding obligation of Mortgagor and, to
the best of Mortgagor’s knowledge and belief, is enforceable against the Tenant
thereunder.  No default has been asserted or exists, or with the
passing of time or the giving of notice or both would exist, under any Lease
which would, in the aggregate, have a material adverse effect on Mortgagor or
the Mortgaged Property;

     

    (v)           No
Tenant under any Lease has, as of the date hereof, paid rent more than thirty
(30) days in advance, and the rents under such Leases have not been waived,
released, or otherwise discharged or compromised;

     

    (w)           All
work to be performed by Mortgagor under the Leases has been substantially
performed, all contributions to be made by Mortgagor to the Tenants thereunder
have been made and all other conditions precedent to each such Tenant’s
obligations thereunder have been satisfied;

     

    (x)           Except
for the tenancy of Eric Appel, which tenant is paying rent pursuant to a
currently effective lease but has not yet opened for business, each Tenant under
any Lease has entered into occupancy of the demised premises; and

     

    (y)           To
the best of Mortgagor’s knowledge and belief, each Tenant is free from
bankruptcy, reorganization, insolvency or arrangement proceedings or a general
assignment for the benefit of creditors.

     

    10.2           Waste; Alteration of
Improvements.  Mortgagor shall not commit, suffer or permit any
waste on the Mortgaged Property nor take or fail to take any actions that might
invalidate any insurance carried on the Mortgaged Property.  Mortgagor
shall maintain the Mortgaged Property in good condition and
repair.  No part of the Improvements may be removed, demolished or
materially altered, without the prior written consent of
Mortgagee.  Without the prior written consent of Mortgagee, Mortgagor
shall not commence construction of any improvements on the Premises other than
improvements required for the maintenance or repair of the Mortgaged
Property.

     

    10.3           Zoning.  Without
the prior written consent of Mortgagee, Mortgagor shall not make, suffer,
consent to or acquiesce in any change in the zoning or conditions of use of the
Premises or the Improvements.  Mortgagor shall comply with and make
all payments required under the provisions of any covenants, conditions or
restrictions affecting the Premises or the Improvements.  Mortgagor
shall comply with all existing and future requirements of all governmental
authorities having jurisdiction over the Mortgaged
Property.  Mortgagor shall keep all licenses, permits, franchises and
other approvals necessary for the operation of the Mortgaged Property in full
force and effect.  Mortgagor shall operate the Mortgaged Property as
an office building/show room for so long as the Debt is
outstanding.  If, under applicable zoning provisions, the use of all
or any part of the Premises or the Improvements is or becomes a nonconforming
use, Mortgagor shall not cause or permit such use to be discontinued or
abandoned without the prior written consent of Mortgagee.  Further,
without Mortgagee’s prior written consent, Mortgagor shall not file or subject
any part of the Premises or the Improvements to any declaration of condominium
or co-operative or convert any part of the Premises or the Improvements to a
condominium, co-operative or other form of multiple ownership and
governance.

     

    
      
        
        

      

      
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    10.4           Covenants with Respect to
Indebtedness, Operations, Fundamental Changes of
Mortgagor.  Mortgagor hereby represents, warrants and covenants
as of the date hereof and until such time as the Debt is paid in full, that
Mortgagor:

     

    (a)           will
not, nor will any partner, limited or general, member or shareholder thereof, as
applicable, amend, modify or otherwise change its partnership certificate,
partnership agreement, articles of incorporation, by-laws, operating agreement,
articles of organization or other formation agreement or document, as
applicable, in any material way or manner, or in a manner which adversely
affects Mortgagor’s existence as a single purpose entity;

     

    (b)           will
not liquidate or dissolve (or suffer any liquidation or dissolution), or enter
into any transaction of merger or consolidation, and has not acquired and will
not acquire by purchase or otherwise all or substantially all or any part of the
business or assets of, or any stock or other evidence of beneficial ownership of
any entity, and has not made and will not make any investment in any
entity;

     

    (c)           has
not and will not guarantee, or otherwise become liable on or in connection with,
any obligation of any other person or entity and will not pledge its assets for
the benefit of any other person or entity other than to Mortgagee to secure the
Loan and in the case of Mortgagor’s SPE Component Entity, serving as managing
member of Mortgagor;

     

    (d)           has
not owned and will not own any asset other than (i) in the case of Mortgagor,
the Mortgaged Property and in the case of Mortgagor’s SPE Component Entity, its
managing membership interest in Mortgagor, and (ii) incidental personal property
necessary for the operation of the Mortgaged Property;

     

    (e)           has
not engaged and will not engage, either directly or indirectly, in any business
other than in the case of Mortgagor, the ownership, management and operation of
the Mortgaged Property and in the case of Mortgagor’s SPE Component Entity,
serving as managing member of Mortgagor;

     

    (f)           has
not entered and will not enter into any contract or agreement with any general
partner, principal, affiliate or member of Mortgagor, as applicable, or any
affiliate of any general partner, principal or member of Mortgagor, except upon
terms and conditions that are substantially similar to those that would be
available on an arms-length basis with unrelated third parties;

     

    
      
        
        

      

      
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    (g)           has
not incurred (that will not otherwise be paid in full upon receipt of the Loan)
and will not incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than in the case of Mortgagor (i)
the Debt, (ii) advances from affiliates, partners or members, as applicable, of
Mortgagor, provided the same are fully subordinated to the payment in full of
the Debt in a manner acceptable to Mortgagee and (iii) trade payables or
accrued expenses incurred in the ordinary course of the business of operating
the Mortgaged Property, and no debt other than the Debt will be secured (senior,
subordinate or pari passu) by the Mortgaged Property;

     

    (h)           has
not made and will not make any loans or advances to any other person or entity
(including any affiliate);

     

    (i)           has
been, is and will be solvent and pay its debts and expenses only from its assets
as the same shall become due;

     

    (j)           has
done or caused to be done and will do all things necessary to preserve its
existence, and will observe all organizational formalities applicable to
it;

     

    (k)           has
conducted and operated and will conduct and operate its business solely in its
own name and as presently conducted and operated;

     

    (l)           has
maintained and will maintain financial statements, books and records and bank
accounts separate from those of its affiliates, including, without limitation,
its general partners or members, as applicable;

     

    (m)           has
been, will be, and at all times will hold itself out to the public as, a legal
entity separate and distinct from any other entity (including, without
limitation, any affiliate, general partner, or member, as applicable, or any
affiliate of any general partner or member of Mortgagor, as applicable) and has
corrected and will correct any known misunderstanding regarding its separate
identity;

     

    (n)           has
filed and will file its own tax returns separate from those of any other
entity;

     

    (o)           has
maintained and will maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations;

     

    (p)           has
established and will continue to maintain an office through which its business
will be conducted separate and apart from those of its affiliates or, if it
shares office space with its affiliates, has allocated and shall allocate fairly
and reasonably any overhead expenses shared with an affiliate, including for
shared office space and for services performed by employees of an
affiliate;

     

    (q)           has
not commingled and will not commingle the funds and other assets of Mortgagor
with those of any general partner, member, affiliate, principal or any other
person;

     

    
      
        
        

      

      
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    (r)           has
maintained and will maintain its assets in such a manner that it is not costly
or difficult to segregate, ascertain or identify its individual assets from
those of any affiliate or any other person;

     

    (s)           has
not, does not and will not hold itself out to be responsible for the debts or
obligations of any other person;

     

    (t)           has
maintained and will maintain a sufficient number of employees in light of its
contemplated business operations;

     

    (u)           has
paid and will pay any liabilities including salaries of its employees, if any,
out of its own funds and not funds of any affiliate;

     

    (v)           has
used and will use stationery, invoices, and checks separate from its affiliates
and bearing its own name;

     

    (w)           will
not, if Mortgagor is a partnership or limited liability company, without the
unanimous written consent of all of its partners or members, as applicable, and
the written consent of 100% of the directors (including, without limitation, the
independent director) of each SPE Component Entity (as hereinafter defined), (a)
file or consent to the filing of any petition, either voluntary or involuntary,
to take advantage of any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, conservatorship,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to its debts or debtors, (b) seek or consent to the
appointment of a receiver, liquidator or any similar official, (c) take any
action that might cause such entity to become insolvent, or (d) make an
assignment for the benefit of creditors;

     

    (x)           has
not acquired and will not acquire obligations or securities of its partners,
members, shareholders or other affiliates, as applicable; and

     

    (y)           will,
at all times during which any portion of the Debt remains outstanding, have an
SPE Component Entity that owns at least a 0.5% interest in Mortgagor and that at
all times maintains at least one independent director as set forth in the
organizational documents of Mortgagor’s SPE Component Entity at the time of the
making of the Loan.

     

    (z)           has
not had and will not have its assets listed on the financial statement of any
other entity; provided, however, that its assets may be included in a
consolidated financial statement of its affiliate provided that (i) appropriate
notation shall be made on such consolidated financial statements to indicate its
separateness from such affiliate and to indicate that its assets and credit are
not available to satisfy the debts and other obligations of such affiliate or of
any other Person and (ii) such assets shall be listed on its own separate
balance sheet;

     

    (aa)           has
not bought or held and will not buy or hold evidence of indebtedness issued by
any other person or entity (other than cash and investment-grade
securities);

     

    (bb)           has
not identified and will not identify itself as a division of any other person or
entity; and

     

    
      
        
        

      

      
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    (cc)           has
not formed, acquired or held and will not form, acquire or hold any subsidiary
or own any equity interest in any other entity, except that Mortgagor’s SPE
Component Entity may hold its interest in Mortgagor.

     

    10.5           Additional Covenants with
Respect to Mortgagor.  If Mortgagor is a partnership or limited
liability company, each general partner of Mortgagor in the case of a general or
limited partnership, or the managing member of Mortgagor in the case of a
limited liability company (each an “SPE Component
Entity”), as applicable, shall be a corporation whose sole asset is its
interest in Mortgagor.  Each SPE Component Entity (i) will at all
times comply with each of the covenants, terms and provisions contained in
Section 10.4 and this Section 10.5, as if such representation, warranty or
covenant was made directly by such SPE Component Entity; (ii) will not
engage in any business or activity other than owning an interest in Mortgagor;
(iii) will not acquire or own any assets other than its partnership,
membership, or other equity interest in Mortgagor; (iv) will not incur any debt,
secured or unsecured, direct or contingent (including guaranteeing any
obligation); and (v) will cause Mortgagor to comply with the provisions of
Section 10.4 of this Security Instrument.  Prior to the withdrawal or
the disassociation of any SPE Component Entity from Mortgagor, Mortgagor shall
immediately appoint a new general partner or managing member whose articles of
incorporation are substantially similar to those of such SPE Component Entity
and, if an opinion letter pertaining to substantive consolidation was required
at closing, deliver a new opinion letter acceptable to Mortgagee and the Rating
Agencies with respect to the new SPE Component Entity and its equity
owners.  Notwithstanding the foregoing, to the extent Mortgagor is a
single member Delaware limited liability company, so long as Mortgagor maintains
such formation status in a manner acceptable to Mortgagee, no SPE Component
Entity shall be required and this Section 10.5 shall be
inapplicable.

     

    ARTICLE
XI

     

    FURTHER
ASSURANCES

     

    11.1           Defense of
Title.  If the title to the Mortgaged Property or the interest
of Mortgagee therein shall be directly or indirectly endangered, clouded or
adversely affected in any manner, Mortgagor, at Mortgagor’s expense, shall take
all necessary and proper steps for the defense of said title or interest,
including the employment of counsel approved by Mortgagee, the prosecution or
defense of litigation, and the compromise or discharge of claims made against
said title or interest.  Notwithstanding the foregoing, in the event
that Mortgagee determines that Mortgagor is not adequately performing its
obligations under this Section, Mortgagee may, without limiting or waiving any
other rights or remedies of Mortgagee hereunder, take such steps with respect
thereto as Mortgagee shall deem necessary or proper and any and all costs and
expenses incurred by Mortgagee in connection therewith, together with interest
thereon at the Default Interest Rate from the date incurred by Mortgagee until
actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and
shall be secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the Debt.

     

    11.2           Performance of
Obligations.  Mortgagor shall pay when due the principal of and
the interest on the Debt in accordance with the terms of the Note and this
Mortgage.  Mortgagor shall also pay all charges, fees and other sums
required to be paid by Mortgagor as provided in the Loan Documents, in
accordance with the terms of the Loan Documents, and shall observe, perform and
discharge all obligations, covenants and agreements to be observed, performed or
discharged by Mortgagor set forth in the Loan Documents in accordance with their
terms.  Further, Mortgagor shall promptly and strictly perform and
comply with all covenants, conditions, obligations and prohibitions required of
Mortgagor in connection with any other document or instrument affecting title to
the Mortgaged Property, or any part thereof, regardless of whether such document
or instrument is superior or subordinate to this Mortgage.

     

    
      
        
        

      

      
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    11.3           Construction
Liens.  Mortgagor shall pay when due all claims and demands of
mechanics, materialmen, laborers and others for any work performed or materials
delivered for the Premises or the Improvements; provided, however, that
Mortgagor shall have the right to contest in good faith any such claim or
demand, so long as it does so diligently, by appropriate proceedings and without
prejudice to Mortgagee and provided that neither the Mortgaged Property nor any
interest therein would be in any danger of sale, loss or forfeiture as a result
of such proceeding or contest.  In the event Mortgagor shall contest
any such claim or demand, Mortgagor shall promptly notify Mortgagee of such
contest and thereafter shall, upon Mortgagee’s request, promptly provide a bond,
cash deposit or other security satisfactory to Mortgagee to protect Mortgagee’s
interest and security should the contest be unsuccessful.  If
Mortgagor shall fail to immediately discharge or provide security against any
such claim or demand as aforesaid, Mortgagee may do so and any and all expenses
incurred by Mortgagee, together with interest thereon at the Default Interest
Rate from the date incurred by Mortgagee until actually paid by Mortgagor, shall
be immediately paid by Mortgagor on demand and shall be secured by this Mortgage
and by all of the other Loan Documents securing all or any part of the
Debt.

     

    11.4           Further
Documentation.  Mortgagor shall, on the request of Mortgagee
and at the expense of Mortgagor:  (a) promptly correct any defect,
error or omission which may be discovered in the contents of this Mortgage or in
the contents of any of the other Loan Documents; (b) promptly execute,
acknowledge, deliver and record or file such further instruments (including,
without limitation, further mortgages, deeds of trust, security deeds, security
agreements, financing statements, continuation statements and assignments of
rents or leases) and promptly 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 and to subject to the liens and security interests
hereof and thereof any property intended by the terms hereof and thereof to be
covered hereby and thereby, including specifically, but without limitation, any
renewals, additions, substitutions, replacements or appurtenances to the
Mortgaged Property; (c) promptly execute, acknowledge, deliver, procure and
record or file any document or instrument (including specifically, without
limitation, any financing statement) deemed advisable by Mortgagee to protect,
continue or perfect the liens or the security interests hereunder against the
rights or interests of third persons; and (d) promptly furnish to Mortgagee,
upon Mortgagee’s request, a duly acknowledged written statement and estoppel
certificate addressed to such party or parties as directed by Mortgagee and in
form and substance supplied by Mortgagee, setting forth all amounts due under
the Note, stating whether any Default or Event of Default has occurred
hereunder, stating whether any offsets or defenses exist against the Debt and
containing such other matters as Mortgagee may reasonably require.

     

    
      
        
        

      

      
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    11.5           Payment of Costs;
Mortgagee’s Right to Cure.  Mortgagor shall pay all costs and
expenses of every character reasonably incurred in connection with the closing
of the loan evidenced by the Note and secured hereby or otherwise attributable
or chargeable to Mortgagor as the owner of the Mortgaged Property, including,
without limitation, appraisal fees, recording fees, documentary, stamp, mortgage
or intangible taxes, brokerage fees and commissions, title policy premiums and
title search fees, uniform commercial code/tax lien/litigation search fees,
escrow fees and reasonable attorneys’ fees and disbursements.  If
Mortgagor defaults in any such payment, which default is not cured within any
applicable grace or cure period, Mortgagee may, at its option pay the same and
Mortgagor shall reimburse Mortgagee on demand for all such costs and expenses
incurred or paid by Mortgagee, together with such interest thereon at the
Default Interest Rate from and after the date of Mortgagee’s making such payment
until reimbursement thereof by Mortgagor.  Any such sums disbursed by
Mortgagee, together with such interest thereon, shall be additional indebtedness
of Mortgagor secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the Debt.  Further, Mortgagor shall
promptly notify Mortgagee in writing of any litigation or threatened litigation
affecting the Mortgaged Property, or any other demand or claim which, if
enforced, could impair or threaten to impair Mortgagee’s security
hereunder.  Without limiting or waiving any other rights and remedies
of Mortgagee hereunder, if Mortgagor fails to perform any of its covenants or
agreements contained in this Mortgage or in any of the other Loan Documents and
such failure is not cured within any applicable grace or cure period, or if any
action or proceeding of any kind (including, but not limited to, any bankruptcy,
insolvency, arrangement, reorganization or other debtor relief proceeding) is
commenced which might affect Mortgagee’s interest in the Mortgaged Property or
Mortgagee’s right to enforce its security, then Mortgagee may, at its option,
with or without notice to Mortgagor, make any appearances, disburse any sums and
take any actions as may be necessary or desirable to protect or enforce the
security of this Mortgage or to remedy the failure of Mortgagor to perform its
covenants and agreements (without, however, waiving any default of
Mortgagor).  Mortgagor agrees to pay on demand all expenses of
Mortgagee incurred with respect to the foregoing (including, but not limited to,
reasonable fees and disbursements of counsel), together with interest thereon at
the Default Interest Rate from and after the date on which Mortgagee incurs such
expenses until reimbursement thereof by Mortgagor.  Any such expenses
so incurred by Mortgagee, together with interest thereon as provided above,
shall be additional indebtedness of Mortgagor secured by this Mortgage and by
all of the other Loan Documents securing all or any part of the
Debt.  The necessity for any such actions and of the amounts to be
paid shall be determined by Mortgagee in its sole
discretion.  Mortgagee is hereby empowered to enter and to authorize
others to enter upon the Mortgaged Property or any part thereof for the purpose
of performing or observing any such defaulted term, covenant or condition
without thereby becoming liable to Mortgagor or any person in possession holding
under Mortgagor.  Mortgagor hereby acknowledges and agrees that the
remedies set forth in this Section 11.5 shall be exercisable by Mortgagee, and
any and all payments made or costs or expenses incurred by Mortgagee in
connection therewith shall be secured hereby and shall be, without demand,
immediately repaid by Mortgagor with interest thereon at the Default Interest
Rate, notwithstanding the fact that such remedies were exercised and such
payments made and costs incurred by Mortgagee after the filing by Mortgagor of a
voluntary case or the filing against Mortgagor of an involuntary case pursuant
to or within the meaning of the Title II, United States Code, as
amended, or after any similar action pursuant to any other debtor relief law
(whether statutory, common law, case law or otherwise) of any jurisdiction
whatsoever, now or hereafter in effect, which may be or become applicable to
Mortgagor, Mortgagee, any Indemnitor, the Debt or any of the Loan
Documents.

     

    
      
        
        

      

      
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    11.6           Compliance with
Laws.  Mortgagor shall at all times comply with all statutes,
ordinances, regulations and other governmental or quasi-governmental
requirements and private covenants now or hereafter relating to the ownership,
construction, use or operation of the Mortgaged Property, the non-compliance
with which would have a material adverse effect on the ownership, use or
operation of the Mortgaged Property or the ability of the Mortgagor to repay the
Debt in full, including, but not limited to, those concerning employment and
compensation of persons engaged in operation and maintenance of the Mortgaged
Property and any environmental or ecological requirements, even if such
compliance shall require structural changes to the Mortgaged Property; provided,
however, that, Mortgagor may, upon providing Mortgagee with security
satisfactory to Mortgagee, proceed diligently and in good faith to contest the
validity or applicability of any such statute, ordinance, regulation or
requirement so long as during such contest the Mortgaged Property shall not be
subject to any lien, charge, fine or other liability and shall not be in danger
of being forfeited, lost or closed.  Mortgagor shall not use or
occupy, or allow the use or occupancy of, the Mortgaged Property in any manner
which violates any Lease of or any other agreement applicable to the Mortgaged
Property or any applicable law, rule, regulation or order 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.

     

    11.7           Attorney-in-Fact
Provisions.  With respect to any provision of this Mortgage or
any other Loan Document whereby Mortgagor grants to Mortgagee a
power-of-attorney, (i) such power shall be deemed to be coupled with an
interest, shall not be revocable by Mortgagor so long as any portion of the Debt
is outstanding, shall survive the voluntary or involuntary dissolution of
Mortgagor and shall not be affected by any disability or incapacity suffered by
Mortgagor subsequent to the date hereof and (ii) provided no Default or Event of
Default has occurred under this Mortgage, Mortgagee shall first give Mortgagor
written notice at least three (3) days prior to acting under such power, which
notice shall demand that Mortgagor first take the proposed action within such
period and advising Mortgagor that if it fails to do so, Mortgagee will so act
under the power; provided, however, that, in the event that a Default or an
Event of Default has occurred and is continuing, or if necessary to prevent
imminent death, serious injury, damage, loss, forfeiture or diminution in value
to the Mortgaged Property or any surrounding property or to prevent any adverse
affect on Mortgagee’s interest in the Mortgaged Property, Mortgagee may act
immediately and without first giving such notice.  In such event,
Mortgagee will give Mortgagor notice of such action as soon thereafter as
reasonably practical.

     

    ARTICLE
XII

     

    PAYMENT; DEFEASANCE;
PREPAYMENT

     

    12.1           Payment of the
Notes.  Mortgagor shall duly and punctually pay or cause to be
paid, the principal of and the interest and premium, if any, on the Note in
accordance with the respective terms hereof and thereof, without demand therefor
or presentation of the Note, in lawful money of the United States of
America.

     

    
      
        
        

      

      
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    12.2           Computation of
Interest.  Interest shall be computed hereunder and under the
Note based on the actual number of days in a 360 day year.  Interest
due and payable for a period less than a full month shall be calculated by
multiplying the actual number of days elapsed in such period by a daily rate
based on said 360 day year.  Interest shall accrue from the date on
which funds are advanced under the Note (regardless of the time of day) through
and including the day on which funds are credited in accordance with the terms
of the Note.  Interest shall be payable hereunder and under the Note
at the Interest Rate (as defined in the Note).

     

    12.3           Application of
Payments.  So long as no Event of Default exists hereunder,
each Monthly Payment shall be applied first, to any amounts hereafter advanced
by Mortgagee under any Loan Document, second, to any late fees and other amounts
payable to Mortgagee, third, to the payment of accrued interest and last to
reduction of principal.

     

    12.4           Prepayment.

     

    (a)           The
Note may not be prepaid in whole or in part at the option of the Mortgagor
except as provided in Section 12.6
below.

     

    (b)           Partial
prepayments of the Note shall not be permitted, except for partial prepayments
resulting from Mortgagee’s election to apply insurance or condemnation proceeds
to reduce the outstanding principal balance of the Note as provided in Section 3.1(b)
hereof, in which event no prepayment fee or premium shall be due unless, at the
time of either Mortgagee’s receipt of such proceeds or the application of such
proceeds to the outstanding principal balance of the Note, an Event of Default
shall have occurred and is continuing, in which case, the provisions of Section 15.2 hereof
shall be controlling.

     

    (c)           If
the indebtedness evidenced by the Note shall have been declared due and payable
by Mortgagee pursuant to the terms thereof or the terms hereof or the provisions
of any other Loan Document due to a default by Mortgagor, then there shall also
then be immediately due and payable, a prepayment fee in an amount equal to the
greater of (A) one percent (1%) of the then outstanding principal balance of the
Note on the date of acceleration, and (B) an amount (if any) which, when added
to the then outstanding principal balance of the Note on the date of
acceleration, would be sufficient to purchase securities meeting the
requirements of Section 12.5(C)(2)
below.  In the event that any prepayment fee is due hereunder,
Mortgagee shall deliver to Mortgagor a statement setting forth the amount and
determination of the prepayment fee, and provided that Mortgagee shall have in
good faith applied the formula described above, Mortgagor shall not have the
right to challenge the calculation or the method of calculation set forth in any
such statement in the absence of manifest error.

     

    12.5           Defeasance.  Notwithstanding
any provision of this Mortgage to the contrary, at any time after the date which
(A) is two (2) years after the “startup day,” within the meaning of Section
860G(a)(9) of the Internal Revenue Code of 1986, as amended from time to time or
any successor statute (the “Code”), of a “real
estate mortgage investment conduit,” (“REMIC”) within the
meaning of Section 860D of the Code, that holds the Note and this Mortgage or
(B) four (4) years after the date hereof, whichever shall earlier occur,
and provided no Event of Default has occurred, Mortgagor may cause the release
of the Mortgaged Property from the lien of this Mortgage and the other Loan
Documents upon the satisfaction of the following conditions:

     

    
      
        
        

      

      
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    A.           not
less than sixty (60) days prior written notice shall be given to Mortgagee
specifying a Payment Date (the “Release Date”) on
which the Defeasance Collateral is to be delivered;

     

    B.           all
accrued and unpaid interest and all other sums due under this Mortgage, the Note
and under the other Loan Documents up to the Release Date, including, without
limitation, all costs and expenses incurred by Mortgagee or its agents in
connection with such release (including, without limitation, the review of the
proposed Defeasance Collateral and the preparation of the Defeasance Security
Agreement (as hereinafter defined) and related documentation), shall be paid in
full on or prior to the Release Date; and

     

    C.           Mortgagor
shall deliver to Mortgagee on or prior to the Release Date:

     

    
      	
               
      

            	
              (1)

            	
              a
      pledge and security agreement, in form and substance satisfactory to
      Mortgagee in its sole discretion, creating a first priority security
      interest in favor of Mortgagee in the Defeasance Collateral (the “Defeasance Security
      Agreement”), which shall provide, among other things, that any
      payments generated by the Defeasance Collateral shall be paid directly to
      Mortgagee and applied by Mortgagee in satisfaction of all amounts then due
      and payable hereunder and any excess received by Mortgagee from the
      Defeasance Collateral over the amounts payable by Mortgagor hereunder or
      under the Note shall be refunded to Mortgagor promptly after each Payment
      Date;

            

    

     

    
      	
               
      

            	
              (2)

            	
              direct,
      non-callable obligations of the United States of America that provide for
      payments prior, but as close as possible, to all successive Payment Dates
      occurring after the Release Date, with each such payment being equal to or
      greater than the amount of the corresponding installment of principal and
      interest required to be paid under the Note (provided that for all
      purposes of this Section 12.5(C)(2),
      all principal, accrued interest and other amounts payable under this
      Mortgage, the Note and the other Loan Documents shall be due and payable
      in full on the Maturity Date) (the “Defeasance
      Collateral”), each of which shall be duly endorsed by the holder
      thereof as directed by Mortgagee or accompanied by a written instrument of
      transfer in form and substance satisfactory to Mortgagee in its sole
      discretion (including, without limitation, such instruments as may be
      required by the depository institution holding such securities or the
      issuer thereof, as the case may be, to effectuate book-entry transfers and
      pledges through the book-entry facilities of such institution) in order to
      perfect upon the delivery of the Defeasance Security Agreement the first
      priority security interest in the Defeasance Collateral in favor of
      Mortgagee in conformity with all applicable state and federal laws
      governing granting of such security
interests;

            

    

     

    
      
        
        

      

      
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              (3)

            	
              a
      certificate of Mortgagor certifying that all of the requirements set forth
      in this Section
      12.5 have been satisfied;

            

    

     

    
      	
               
      

            	
              (4)

            	
              an
      opinion of counsel for Mortgagor in form and substance and delivered by
      counsel satisfactory to Mortgagee in its sole discretion stating, among
      other things, that (x) Mortgagee has a perfected first priority security
      interest in the Defeasance Collateral and that the Defeasance Security
      Agreement is enforceable against Mortgagor in accordance with its terms
      and (y) that any trust formed as a REMIC pursuant to a securitization will
      not fail to maintain its status as a REMIC as a result of such
      defeasance;

            

    

     

    
      	
               
      

            	
              (5)

            	
              in
      the event the Loan is held by a REMIC, the Mortgagee has received written
      confirmation from any Rating Agency rating any securities issued in
      connection with a securitization that substitution of the Defeasance
      Collateral will not result in a downgrade, withdrawal, or qualification of
      the ratings then assigned to any of the
  securities;

            

    

     

    
      	
               
      

            	
              (6)

            	
              a
      certificate of a public accounting firm reasonably acceptable to Mortgagee
      certifying that the Defeasance Collateral will generate monthly amounts
      equal to or greater than the amount of each corresponding installment of
      principal and interest required to be paid under the Note for all
      successive Payment Dates occurring after the Release
  Date;

            

    

     

    
      
        
        

      

      
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              (7)

            	
              a
      letter or other written evidence from any applicable Rating Agency that
      the defeasance will not result in the withdrawal, downgrade or
      qualification of the ratings assigned to any certificates issued in
      connection with a securitization of the Mortgaged Property, if applicable;
      and

            

    

     

    
      	
               
      

            	
              (8)

            	
              such
      other certificates, documents or instruments as Mortgagee may reasonably
      require.

            

    

     

    Upon
compliance with the requirements of this Section 12.5, the
Mortgaged Property shall be released from the lien of this Mortgage and the
other Loan Documents, and the Defeasance Collateral shall constitute collateral
which shall secure the Note and all other obligations under the Loan
Documents.  Mortgagee will, at Mortgagor’s expense, execute and
deliver any agreements reasonably requested by Mortgagor to release the lien of
the Mortgaged Instrument from the Mortgaged Property.  Upon the
release of the Mortgaged Property in accordance with this Section 12.5,
Mortgagor may assign all its obligations and rights under the Note, together
with the pledged Defeasance Collateral, to a successor entity designated by
Mortgagor and approved by Mortgagee in its sole discretion.  Such
successor entity shall execute an assumption agreement in form and substance
satisfactory to Mortgagee in its sole discretion pursuant to which it shall
assume Mortgagor’s obligations under the Note and the Defeasance Security
Agreement.  As conditions to such assignment and assumption, Mortgagor
shall (x) deliver to Mortgagee an opinion of counsel in form and substance
and delivered by counsel satisfactory to Mortgagee in its sole discretion
stating, among other things, that such assumption agreement is enforceable
against Mortgagor and such successor entity in accordance with its terms and
that the Note, the Defeasance Security Agreement and the other Loan Documents,
as so assumed, are enforceable against such successor entity in accordance with
their respective terms, (y) pay all costs and expenses incurred by Mortgagee or
its agents in connection with such assignment and assumption (including, without
limitation, the review of the proposed transferee and the preparation of the
assumption agreement and related documentation) and (z) deliver to Mortgagee a
non-consolidation opinion in form and substance satisfactory to Mortgagee and
the applicable Rating Agency.  Upon such assumption, Mortgagor shall
be relieved of its obligations hereunder, under the other Loan Documents and
under the Defeasance Security Agreement.

     

    ARTICLE
XIII

     

    SECURITY
PROVISIONS

     

    13.1           Security
Interest.  This Mortgage is also intended to encumber and
create a security interest in, and Mortgagor hereby grants to Mortgagee a
security interest in, all sums on deposit with Mortgagee pursuant to the
provisions of Section
1.2, Section
5.1, Section
5.2 and Section
5.3 hereof or any other Section hereof or of any other Loan Document and
all fixtures, chattels, accounts, equipment, inventory, contract rights, general
intangibles and other personal property included within the Mortgaged Property,
all renewals, replacements of any of the aforementioned items, or articles in
substitution therefor or in addition thereto or the proceeds thereof (said
property is hereinafter referred to collectively as the “Collateral”), whether
or not the same shall be attached to the Premises or the Improvements in any
manner.  It is hereby agreed that to the extent permitted by law, all
of the foregoing property is to be deemed and held to be a part of and affixed
to the Premises and the Improvements.  The foregoing security interest
shall also cover Mortgagor’s leasehold interest in any of the foregoing property
which is leased by Mortgagor.  Notwithstanding the foregoing, all of
the foregoing property shall be owned by Mortgagor and no leasing or installment
sales or other financing or title retention agreement in connection therewith
shall be permitted without the prior written approval of
Mortgagee.  Mortgagor shall, from time to time upon the request of
Mortgagee, supply Mortgagee with a current inventory of all of the property in
which Mortgagee is granted a security interest hereunder, in such detail as
Mortgagee may reasonably require.  Mortgagor shall promptly replace
all of the Collateral subject to the lien or security interest of this Mortgage
when worn or obsolete with Collateral comparable to the worn out or obsolete
Collateral when new and will not, without the prior written consent of
Mortgagee, remove from the Premises or the Improvements any of the Collateral
subject to the lien or security interest of this Mortgage except such as is
replaced by an article of equal suitability and value as above provided, owned
by Mortgagor free and clear of any lien or security interest except that created
by this Mortgage and the other Loan Documents.  All of the Collateral
shall be kept at the location of the Premises except as otherwise required by
the terms of the Loan Documents.  Mortgagor shall not use any of the
Collateral in violation of any applicable statute, ordinance or insurance
policy.

     

    
      
        
        

      

      
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    13.2           Security
Agreement.  This Mortgage constitutes a security agreement
between Mortgagor and Mortgagee with respect to the Collateral in which
Mortgagee is granted a security interest hereunder, and, cumulative of all other
rights and remedies of Mortgagee hereunder, Mortgagee shall have all of the
rights and remedies of a secured party under any applicable Uniform Commercial
Code.  Mortgagor hereby agrees to execute and deliver on demand and
hereby irrevocably constitutes and appoints Mortgagee the attorney-in-fact of
Mortgagor to execute and deliver and, if appropriate, to file with the
appropriate filing officer or office, such security agreements, financing
statements, continuation statements or other instruments as Mortgagee may
request or require in order to impose, perfect or continue the perfection of the
lien or security interest created hereby.  To the extent specifically
provided herein, Mortgagee shall have the right of possession of all cash,
securities, instruments, negotiable instruments, documents, certificates and any
other evidences of cash or other property or evidences of rights to cash rather
than property, which are now or hereafter a part of the Mortgaged Property, and
Mortgagor shall promptly deliver the same to Mortgagee, endorsed to Mortgagee,
without further notice from Mortgagee.  Mortgagor agrees to furnish
Mortgagee in writing with notice of any change in the name, identity,
organizational structure, residence, or principal place of business or mailing
address of Mortgagor thirty (30) days prior to the effective date of any such
change.  Expenses of retaking, holding, preparing for sale, selling or
the like (including, without limitation, Mortgagee’s reasonable attorneys’ fees
and legal expenses), together with interest thereon at the Default Interest Rate
from the date incurred by Mortgagee until actually paid by Mortgagor, shall be
paid by Mortgagor on demand and shall be secured by this Mortgage and by all of
the other Loan Documents securing all or any part of the
Debt.  Mortgagee shall have the right to enter upon the Premises and
the Improvements or any real property where any of the property which is the
subject of the security interest granted herein is located to take possession
of, assemble and collect the same or to render it unusable, or Mortgagor, upon
demand of Mortgagee, shall assemble such property and make it available to
Mortgagee at the Premises, or at a place which is mutually agreed upon or, if no
such place is agreed upon, at a place reasonably designated by Mortgagee to be
reasonably convenient to Mortgagee and Mortgagor.  If notice is
required by law, Mortgagee shall give Mortgagor at least ten (10) days’ prior
written notice of the time and place of any public sale of such property, or
adjournments thereof, or of the time of or after which any private sale or any
other intended disposition thereof is to be made, and if such notice is sent to
Mortgagor, as the same is provided for the mailing of notices herein, it is
hereby deemed that such notice shall be and is reasonable notice to
Mortgagor.  No such notice is necessary for any such property which is
perishable, threatens to decline speedily in value or is of a type customarily
sold on a recognized market.  Any sale made pursuant to the provisions
of this Section shall be deemed to have been a public sale conducted in a
commercially reasonable manner if held contemporaneously with a foreclosure sale
as provided in Section 15.1(e) hereof upon giving the same notice with respect
to the sale of the Mortgaged Property hereunder as is required under said
Section 15.1(e).

     

    
      
        
        

      

      
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    The name
and principal place of business of Mortgagor (as Debtor under any applicable
Uniform Commercial Code) are:

     

    URBAN
DEVELOPMENT PARTNERS (61), LLC

    457
Madison Avenue

    New York,
New York 10022

     

    The name
and principal place of business of Mortgagee (as Secured Party)
are:

     

    DEUTSCHE
BANC MORTGAGE CAPITAL, L.L.C.

    31 West
52nd Street

    10th
Floor

    New York,
New York 10019

     

    13.3           Secured
Indebtedness.  It is understood and agreed that this Mortgage
shall secure payment of not only the indebtedness evidenced by the Note but also
any and all substitutions, replacements, renewals and extensions of the Note,
any and all indebtedness and obligations arising pursuant to the terms hereof
and any and all indebtedness and obligations arising pursuant to the terms of
any of the other Loan Documents, all of which indebtedness is equally secured
with and has the same priority as any amounts advanced as of the date
hereof.  It is agreed that any future advances made by Mortgagee to or
for the benefit of Mortgagor from time to time under this Mortgage or the other
Loan Documents and whether or not such advances are obligatory or are made at
the option of Mortgagee, or otherwise, made for any purpose, within twenty (20)
years from the date hereof, and all interest accruing thereon, shall be equally
secured by this Mortgage and shall have the same priority as all amounts, if
any, advanced as of the date hereof and shall be subject to all of the terms and
provisions of this Mortgage.

     

    ARTICLE
XIV

     

    DEFAULT

     

    14.1           Events of
Default.  The occurrence of any of the following events shall
be an “Event of Default” hereunder:

     

    
      
        
        

      

      
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    (a)           Mortgagor
fails to make any payment under the Note when due, subject to any grace period
set forth therein, or any other payment on or before the date such payment is
due.

     

    (b)           Mortgagor
fails to provide insurance as required by Section 2.1 hereof or
fails to perform any covenant, agreement, obligation, term or condition set
forth in Section
4.1, Section
6.3 or Section
10.4 hereof.

     

    (c)           Mortgagor
fails to perform any other covenant, agreement, obligation, term or condition
set forth herein, other than those otherwise described in this Section 14.1, and, to
the extent such failure or default is susceptible of being cured, the
continuance of such failure or default for thirty (30) days after written notice
thereof from Mortgagee to Mortgagor; provided, however, that if such
default is susceptible of cure but such cure cannot be accomplished with
reasonable diligence within said period of time, and if Mortgagor commences to
cure such default promptly after receipt of notice thereof from Mortgagee, and
thereafter prosecutes the curing of such default with reasonable diligence, such
period of time shall be extended for such period of time as may be necessary to
cure such default with reasonable diligence, but not to exceed an additional
ninety (90) days.

     

    (d)           Any
representation or warranty made herein, in or in connection with any application
or commitment relating to the loan evidenced by the Note, or in any of the other
Loan Documents to Mortgagee by Mortgagor, by any principal, general partner,
manager or member in Mortgagor, or by any Indemnitor is determined by Mortgagee
to have been false or misleading in any material respect at the time
made.

     

    (e)           A
default occurs under any of the other Loan Documents which has not been cured
within any applicable grace or cure period therein provided.

     

    (f)           Mortgagor,
any principal, general partner or managing member in Mortgagor or any Indemnitor
becomes insolvent, or makes a transfer in fraud of creditors, or makes an
assignment for the benefit of creditors, or files a petition in bankruptcy, or
is voluntarily adjudicated insolvent or bankrupt or admits in writing the
inability to pay its debts as they mature, or petitions or applies to any
tribunal for or consents to or fails to contest the appointment of a receiver,
trustee, custodian or similar officer for Mortgagor, for any such principal,
general partner or managing member of Mortgagor or for any Indemnitor or for a
substantial part of the assets of Mortgagor, of any such principal, general
partner or managing member of Mortgagor or of any Indemnitor, or commences any
case, proceeding or other action under any bankruptcy, insolvency,
reorganization, arrangement, receivership or other debtor relief under any law
or statute of any jurisdiction, whether now or hereafter in effect.

     

    (g)           A
petition is filed or any case, proceeding or other action is commenced against
Mortgagor, against any principal, general partner or managing member of
Mortgagor or against any Indemnitor seeking to have an order for relief entered
against it as debtor or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts or other relief under
any law relating to bankruptcy, insolvency, arrangement, reorganization,
receivership or other debtor relief under any law or statute of any
jurisdiction, whether now or hereafter in effect, or a court of competent
jurisdiction enters an order for relief against Mortgagor, against any
principal, general partner or managing member of Mortgagor or against any
Indemnitor, as debtor, or an order, judgment or decree is entered appointing,
with or without the consent of Mortgagor, of any such principal, general partner
or managing member of Mortgagor or of any Indemnitor, a receiver, trustee,
custodian or similar officer for Mortgagor, for any such principal, general
partner or managing member of Mortgagor or for any Indemnitor, or for any
substantial part of any of the properties of Mortgagor, of any such principal,
general partner or managing member of Mortgagor or of any Indemnitor, and if any
such event shall occur, such petition, case, proceeding, action, order, judgment
or decree is not dismissed within sixty (60) days after being
commenced.

     

    
      
        
        

      

      
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    (h)           The
Mortgaged Property or any part thereof is taken on execution or other process of
law in any action against Mortgagor.

     

    (i)           Mortgagor
abandons all or a portion of the Mortgaged Property.

     

    (j)           The
holder of any lien or security interest on the Mortgaged Property (without
implying the consent of Mortgagee to the existence or creation of any such lien
or security interest), whether superior or subordinate to this Mortgage or any
of the other Loan Documents, declares a default and such default is not cured
within any applicable grace or cure period set forth in the applicable document
or such holder institutes foreclosure or other proceedings for the enforcement
of its remedies thereunder.

     

    (k)           The
Mortgaged Property, or any part thereof, is subjected to waste or to removal,
demolition or material alteration so that the value of the Mortgaged Property is
materially diminished thereby and Mortgagee determines that it is not adequately
protected from any loss, damage or risk associated therewith.

     

    (l)           Any
dissolution, termination, partial or complete liquidation, merger or
consolidation of Mortgagor, any of its principals, any general partner or any
managing member, or any Indemnitor.

     

    ARTICLE
XV

     

    REMEDIES

     

    15.1           Remedies
Available.  If there shall occur an Event of Default under this
Mortgage, then this Mortgage is subject to foreclosure as provided by law and
Mortgagee may, at its option and by or through a trustee, nominee, assignee or
otherwise, to the fullest extent permitted by law, exercise any or all of the
following rights, remedies and recourses, either successively or
concurrently:

     

    (a)           Acceleration.  Accelerate
the maturity date of the Note and declare any or all of the Debt to be
immediately due and payable without any presentment, demand, protest, notice or
action of any kind whatever (each of which is hereby expressly waived by
Mortgagor), whereupon the same shall become immediately due and
payable.  Upon any such acceleration, payment of such accelerated
amount shall constitute a prepayment of the principal balance of the Note and
any applicable prepayment fee provided for in the Note shall then be immediately
due and payable.

     

    
      
        
        

      

      
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    (b)           Entry on the Mortgaged
Property.  Either in person or by agent, with or without
bringing any action or proceeding, or by a receiver appointed by a court and
without regard to the adequacy of its security, enter upon and take possession
of the Mortgaged Property, or any part thereof, without force or with such force
as is permitted by law and without notice or process or with such notice or
process as is required by law, unless such notice and process is waivable, in
which case Mortgagor hereby waives such notice and process, and do any and all
acts and perform any and all work which may be desirable or necessary in
Mortgagee’s judgment to complete any unfinished construction on the Premises, to
preserve the value, marketability or rentability of the Mortgaged Property, to
increase the income therefrom, to manage and operate the Mortgaged Property or
to protect the security hereof, and all sums expended by Mortgagee therefor,
together with interest thereon at the Default Interest Rate, shall be
immediately due and payable to Mortgagee by Mortgagor on demand and shall be
secured hereby and by all of the other Loan Documents securing all or any part
of the Debt.

     

    (c)           Collect Rents and
Profits.  With or without taking possession of the Mortgaged
Property, sue or otherwise collect the Rents and Profits, including those past
due and unpaid.

     

    (d)           Appointment of
Receiver.  Upon, or at any time prior or after, initiating the
exercise of any power of sale, instituting any judicial foreclosure or
instituting any other foreclosure of the liens and security interests provided
for herein or any other legal proceedings hereunder, make application to a court
of competent jurisdiction for appointment of a receiver for all or any part of
the Mortgaged Property, as a matter of strict right and without notice to
Mortgagor and without regard to the adequacy of the Mortgaged Property for the
repayment of the Debt or the solvency of Mortgagor or any person or persons
liable for the payment of the Debt, and Mortgagor does hereby irrevocably
consent to such appointment, waive any and all notices of and defenses to such
appointment and agree not to oppose any application therefor by Mortgagee, but
nothing herein is to be construed to deprive Mortgagee of any other right,
remedy or privilege Mortgagee may now have under the law to have a receiver
appointed, provided, however, that the
appointment of such receiver, trustee or other appointee by virtue of any court
order, statute or regulation shall not impair or in any manner prejudice the
rights of Mortgagee to receive payment of the Rents and Profits pursuant to
other terms and provisions hereof.  Any such receiver shall have all
of the usual powers and duties of receivers in similar cases, including, without
limitation, the full power to hold, develop, rent, lease, manage, maintain,
operate and otherwise use or permit the use of the Mortgaged Property upon such
terms and conditions as said receiver may deem to be prudent and reasonable
under the circumstances as more fully set forth in Section 15.3
below.  Such receivership shall, at the option of Mortgagee, continue
until full payment of all of the Debt or until title to the Mortgaged Property
shall have passed by foreclosure sale under this Mortgage or deed in lieu of
foreclosure.

     

    (e)           Foreclosure.  Immediately
commence an action to foreclose this Mortgage or to specifically enforce its
provisions with respect to any of the Debt, pursuant to the statutes in such
case made and provided, and sell the Mortgaged Property or cause the Mortgaged
Property to be sold in accordance with the requirements and procedures provided
by said statutes in a single parcel or in several parcels at the option of
Mortgagee.  In the event foreclosure proceedings are instituted by
Mortgagee, all expenses incident to such proceedings, including, but not limited
to, reasonable attorneys’ fees and costs, shall be paid by Mortgagor and secured
by this Mortgage and by all of the other Loan Documents securing all or any part
of the Debt.  The Debt and all other obligations secured by this
Mortgage, including, without limitation, interest at the Default Interest Rate
any prepayment charge, fee or premium required to be paid under the Note in
order to prepay principal (to the extent permitted by applicable law),
reasonable attorneys’ fees and any other amounts due and unpaid to Mortgagee
under the Loan Documents, may be bid by Mortgagee in the event of a foreclosure
sale hereunder.  In the event of a judicial sale pursuant to a
foreclosure decree, it is understood and agreed that Mortgagee or its assigns
may become the purchaser of the Mortgaged Property or any part
thereof.

     

    
      
        
        

      

      
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    (f)           Judicial
Remedies.  Proceed by suit or suits, at law or in equity,
instituted by or on behalf of Mortgagee, to enforce the payment of the Debt or
the other obligations of Mortgagor hereunder or pursuant to the Loan Documents,
to foreclose the liens and security interests of this Mortgage as against all or
any part of the Mortgaged Property, and to have all or any part of the Mortgaged
Property sold under the judgment or decree of a court of competent
jurisdiction.  This remedy shall be cumulative of any other
non-judicial remedies available to Mortgagee with respect to the Loan
Documents.  Proceeding with the request or receiving a judgment for
legal relief shall not be or be deemed to be an election of remedies or bar any
available non-judicial remedy of Mortgagee.

     

    (g)           Other.  Exercise
any other right or remedy available hereunder, under any of the other Loan
Documents or at law or in equity.

     

    15.2           Application of
Proceeds.  To the fullest extent permitted by law, the proceeds
of any sale under this Mortgage shall be applied, to the extent funds are so
available, to the following items in such order as Mortgagee in its discretion
may determine:

     

    (a)           To
payment of the reasonable costs, expenses and fees of taking possession of the
Mortgaged Property, and of holding, operating, maintaining, using, leasing,
repairing, improving, marketing and selling the same and of otherwise enforcing
Mortgagee’s rights and remedies hereunder and under the other Loan Documents,
including, but not limited to, receivers’ fees, court costs, attorneys’,
accountants’, appraisers’, managers’ and other professional fees, title charges
and transfer taxes.

     

    (b)           To
payment of all sums expended by Mortgagee under the terms of any of the Loan
Documents and not yet repaid, together with interest on such sums at the Default
Interest Rate.

     

    (c)           To
payment of the Debt and all other obligations secured by this Mortgage,
including, without limitation, interest at the Default Interest Rate and, to the
extent permitted by applicable law, any prepayment fee, charge or premium
required to be paid under the Note in order to prepay principal, in any order
that Mortgagee chooses in its sole discretion.

     

    (d)           The
remainder, if any, of such funds shall be disbursed to Mortgagor or to the
person or persons legally entitled thereto.

     

    
      
        
        

      

      
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    15.3           Right and Authority of
Receiver or Mortgagee in the Event of Default; Power of
Attorney.  Upon the occurrence of an Event of Default, and
entry upon the Mortgaged Property pursuant to Section 15.1(b) hereof or
appointment of a receiver pursuant to Section 15.1(d) hereof, and under such
terms and conditions as may be prudent and reasonable under the circumstances in
Mortgagee’s or the receiver’s sole discretion, all at Mortgagor’s expense,
Mortgagee or said receiver, or such other persons or entities as they shall
hire, direct or engage, as the case may be, may do or permit one or more of the
following, successively or concurrently:  (a) enter upon and take
possession and control of any and all of the Mortgaged Property; (b) take and
maintain possession of all documents, books, records, papers and accounts
relating to the Mortgaged Property; (c) exclude Mortgagor and its agents,
servants and employees wholly from the Mortgaged Property; (d) manage and
operate the Mortgaged Property; (e) preserve and maintain the Mortgaged
Property; (f) make repairs and alterations to the Mortgaged Property;
(g) complete any construction or repair of the Improvements, with such
changes, additions or modifications of the plans and specifications or intended
disposition and use of the Improvements as Mortgagee may in its sole discretion
deem appropriate or desirable to place the Mortgaged Property in such condition
as will, in Mortgagee’s sole discretion, make it or any part thereof readily
marketable or rentable; (h) conduct a marketing or leasing program with respect
to the Mortgaged Property, or employ a marketing or leasing agent or agents to
do so, directed to the leasing or sale of the Mortgaged Property under such
terms and conditions as Mortgagee may in its sole discretion deem appropriate or
desirable; (i) employ such contractors, subcontractors, materialmen, architects,
engineers, consultants, managers, brokers, marketing agents, or other employees,
agents, independent contractors or professionals, as Mortgagee may in its sole
discretion deem appropriate or desirable to implement and effectuate the rights
and powers granted herein and in the other Loan Documents; (j) execute and
deliver, in the name of Mortgagee as attorney-in-fact and agent of Mortgagor or
in its own name as Mortgagee, such documents and instruments as are necessary or
appropriate to consummate authorized transactions; (k) enter into such leases,
whether of real or personal property, or tenancy agreements, under such terms
and conditions as Mortgagee may in its sole discretion deem appropriate or
desirable; (1) collect and receive the Rents and Profits from the Mortgaged
Property; (m) eject tenants or repossess personal property, as provided by law,
for breaches of the conditions of their leases or other agreements; (n) sue for
unpaid Rents and Profits, payments, income or proceeds in the name of Mortgagor
or Mortgagee; (o) maintain actions in forcible entry and detainer, ejectment for
possession and actions in distress for rent; (p) compromise or give
acquittance for Rents and Profits, payments, income or proceeds that may become
due; (q) delegate or assign any and all rights and powers given to Mortgagee by
this Mortgage; and (r) do any acts which Mortgagee or the receiver in its sole
discretion deems appropriate or desirable to protect the security hereof and use
such measures, legal or equitable, as Mortgagee or the receiver may in its sole
discretion deem appropriate or desirable to implement and effectuate the
provisions of this Mortgage.  This Mortgage shall constitute a
direction to and full authority to any Tenant, or other third party who has
heretofore dealt or contracted or may hereafter deal or contract with Mortgagor
or Mortgagee, at the request of Mortgagee, to pay all amounts owing under any
lease, contract, concession, license or other agreement to Mortgagee without
proof of the Event of Default relied upon.  Any such Tenant or third
party is hereby irrevocably authorized to rely upon and comply with (and shall
be fully protected by Mortgagor in so doing) any request, notice or demand by
Mortgagee for the payment to Mortgagee of any Rents and Profits or other sums
which may be or thereafter become due under its lease, contract, concession,
license or other agreement, or for the performance of any undertakings under any
such lease, contract, concession, license or other agreement, and shall have no
right or duty to inquire whether any Event of Default under this Mortgage or
under any of the other Loan Documents has actually occurred or is then
existing.  Mortgagor hereby irrevocably constitutes and appoints
Mortgagee, its assignees, successors, transferees and nominees, as Mortgagor’s
true and lawful attorney-in-fact and agent, with full power of substitution in
the Mortgaged Property, in Mortgagor’s name, place and stead, to do or permit
any one or more of the foregoing described rights, remedies, powers and
authorities, successively or concurrently.  Any money advanced by
Mortgagee in connection with any action taken under this Section 15.3,
together with interest thereon at the Default Interest Rate from the date of
making such advancement by Mortgagee until actually paid by Mortgagor, shall be
a demand obligation owing by Mortgagor to Mortgagee and shall be secured by this
Mortgage and by every other instrument securing all or any portion of the
Debt.

     

    
      
        
        

      

      
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    15.4           Occupancy After
Foreclosure.  In the event there is a foreclosure sale
hereunder and at the time of such sale, Mortgagor or Mortgagor’s
representatives, successors or assigns, or any other persons claiming any
interest in the Mortgaged Property by, through or under Mortgagor (except
Tenants under Leases entered into prior to the date hereof), are occupying or
using the Mortgaged Property, or any part thereof, then, to the extent not
prohibited by applicable law, each and all shall, at the option of Mortgagee or
the purchaser at such sale, as the case may be, immediately become the tenant of
the purchaser at such sale, which tenancy shall be a tenancy from day-to-day,
terminable at the will of either landlord or tenant, at a reasonable rental per
day based upon the higher of either (i) any rate provided in a lease then in
effect with Mortgagor or, if none exists, then (ii) the value of the Mortgaged
Property occupied or used, such rental to be due daily to the
purchaser.  Further, to the extent permitted by applicable law, in the
event the tenant fails to surrender possession of the Mortgaged Property upon
the termination of such tenancy, the purchaser shall be entitled to institute
and maintain an action for unlawful detainer of the Mortgaged Property in the
appropriate court of the county in which the Premises is located.

     

    15.5           Notice to Account
Debtors.  Mortgagee may, at any time after an Event of Default,
notify the account debtors and obligors of any accounts, chattel paper,
negotiable instruments or other evidences of indebtedness to Mortgagor included
in the Mortgaged Property to pay Mortgagee directly.  Mortgagor shall
at any time or from time to time upon the request of Mortgagee provide to
Mortgagee a current list of all such account debtors and obligors and their
addresses.

     

    15.6           Cumulative
Remedies.  All remedies contained in this Mortgage are
cumulative and Mortgagee shall also have all other remedies provided at law and
in equity or in any other Loan Documents.  Such remedies may be
pursued separately, successively or concurrently at the sole subjective
direction of Mortgagee and may be exercised in any order and as often as
occasion therefor shall arise.

     

    15.7           Payment of
Expenses.  Mortgagor shall pay on demand all of Mortgagee’s
expenses incurred in any efforts to enforce any terms of this Mortgage, whether
or not any lawsuit is filed and whether or not foreclosure is commenced but not
completed, including, but not limited to, reasonable legal fees and
disbursements, foreclosure costs and title charges, together with interest
thereon from and after the date incurred by Mortgagee until actually paid by
Mortgagor at the Default Interest Rate, and the same shall be secured by this
Mortgage and by all of the other Loan Documents securing all or any part of the
Debt.

     

    
      
        
        

      

      
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    15.8           Mortgagor’s
Waivers.  To the full extent permitted by law, Mortgagor agrees
that Mortgagor shall not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, moratorium or extension, or any law now or
hereafter in force providing for the reinstatement of the Debt prior to any sale
of the Mortgaged Property to be made pursuant to any provisions contained herein
or prior to the entering of any decree, judgment or order of any court of
competent jurisdiction, or any right under any statute to redeem all or any part
of the Mortgaged Property so sold.  Mortgagor, for Mortgagor and
Mortgagor’s successors and assigns, and for any and all persons ever claiming
any interest in the Mortgaged Property, to the full extent permitted by law,
hereby knowingly, intentionally and voluntarily, with and upon the advice of
competent counsel:  (a) waives, releases, relinquishes and
forever forgoes all rights of valuation, appraisement, stay of execution,
reinstatement and notice of election or intention to mature or declare due the
Debt (except such notices as are specifically provided for herein); (b) waives,
releases, relinquishes and forever forgoes all right to a marshaling of the
assets of Mortgagor, including the Mortgaged Property, to a sale in the inverse
order of alienation, or to direct the order in which any of the Mortgaged
Property shall be sold in the event of foreclosure of the liens and security
interests hereby created and agrees that any court having jurisdiction to
foreclose such liens and security interests may order the Mortgaged Property
sold as an entirety; and (c) waives, releases, relinquishes and forever forgoes
all rights and periods of redemption provided under applicable
law.  To the full extent permitted by law, Mortgagor shall not have or
assert any right under any statute or rule of law pertaining to the exemption of
homestead or other exemption under any federal, state or local law now or
hereafter in effect, the administration of estates of decedents or other matters
whatever to defeat, reduce or affect the right of Mortgagee under the terms of
this Mortgage to a sale of the Mortgaged Property, for the collection of the
Debt without any prior or different resort for collection, or the right of
Mortgagee under the terms of this Mortgage to the payment of the Debt out of the
proceeds of sale of the Mortgaged Property in preference to every other claimant
whatever.  Furthermore, Mortgagor hereby knowingly, intentionally and
voluntarily, with and upon the advice of competent counsel, waives, releases,
relinquishes and forever forgoes all present and future statutes of limitations
as a defense to any action to enforce the provisions of this Mortgage or to
collect any of the Debt to the fullest extent permitted by
law.  Mortgagor covenants and agrees that upon the commencement of a
voluntary or involuntary bankruptcy proceeding by or against Mortgagor,
Mortgagor shall not seek a supplemental stay or otherwise shall not seek
pursuant to 11 U.S.C. §105 or any other provision of Title II, United State
Code, as amended, or any other debtor relief law (whether statutory, common law,
case law, or otherwise) of any jurisdiction whatsoever, now or hereafter in
effect, which may be or become applicable, to stay, interdict, condition, reduce
or inhibit the ability of Mortgagee to enforce any rights of Mortgagee against
any guarantor or indemnitor of the secured obligations or any other party liable
with respect thereto by virtue of any indemnity, guaranty or
otherwise.

     

    15.9           Submission to Jurisdiction;
Waiver of Jury Trial.

     

    (a)           MORTGAGOR,
TO THE FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (i) SUBMITS TO
PERSONAL JURISDICTION IN THE STATE IN WHICH THE PREMISES IS LOCATED OVER ANY
SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THE NOTE,
THIS MORTGAGE OR ANY OTHER OF THE LOAN DOCUMENTS, (ii) AGREES THAT ANY SUCH
ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION SITTING IN THE COUNTY IN WHICH THE PREMISES IS LOCATED,
(iii) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND (iv) TO THE FULLEST EXTENT
PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING
IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF MORTGAGEE TO
BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM).

     

    
      
        
        

      

      
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    (b)           EACH
OF MORTGAGOR AND MORTGAGEE BY ITS ACCEPTANCE OF THIS MORTGAGE, TO THE FULL
EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH
AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER
FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,
ARISING OUT OF, OR IN ANY WAY RELATING TO THE DEBT OR ANY CONDUCT, ACT OR
OMISSION OF MORTGAGEE OR MORTGAGOR, OR ANY OF THEIR RESPECTIVE DIRECTORS,
OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER
PERSONS AFFILIATED WITH MORTGAGEE OR MORTGAGOR, IN EACH OR THE FOREGOING CASES,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  MORTGAGOR HEREBY
CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS,
IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING ARISING FROM OR RELATING TO
THE NOTE, THIS MORTGAGE OR ANY OF THE OTHER LOAN DOCUMENTS BY REGISTERED OR
CERTIFIED U.S. MAIL, POSTAGE PREPAID TO MORTGAGOR AT THE ADDRESS FOR NOTICES
DESCRIBED HEREINABOVE.

     

    ARTICLE
XVI

     

    MISCELLANEOUS TERMS AND
CONDITIONS

     

    16.1           Time of
Essence.  Time is of the essence with respect to all provisions
of this Mortgage.

     

    16.2           Release of
Mortgage.  If all of the Debt be paid, then and in that event
only, all rights under this Mortgage, except for those provisions hereof which
by their terms survive, shall terminate and the Mortgaged Property shall become
wholly clear of the liens, security interests, conveyances and assignments
evidenced hereby, which shall be promptly released of record by Mortgagee in due
form at Mortgagor’s cost.

     

    16.3           Notices.  All
notices, demands, requests or other communications to be sent by one party to
the other hereunder or required by law shall be in writing and shall be deemed
to have been validly given or served by delivery of the same in person to the
intended addressee, or by depositing the same with Federal Express or another
reputable private courier service for next business day delivery, or by
depositing the same in the United States mail, postage prepaid, registered or
certified mail, return receipt requested, in any event addressed to the intended
addressee at its address set forth on the first page of this Mortgage or at such
other address as may be designated by such party as herein
provided.  All notices, demands and requests shall be effective upon
such personal delivery, or one (1) business day after being deposited with the
private courier service, or three (3) business days after being deposited in the
United States mail as required above.  Rejection or other refusal to
accept or the inability to deliver because of changed address of which no notice
was given as herein required shall be deemed to be receipt of the notice, demand
or request sent.  By giving to the other party hereto at least fifteen
(15) days’ prior written notice thereof in accordance with the provisions
hereof, the parties hereto shall have the right from time to time to change
their respective addresses and each shall have the right to specify as its
address any other address within the United States of America.

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

     

    16.4           Successors and Assigns;
Joint and Several Liability.  The terms, provisions,
indemnities, covenants and conditions hereof shall be binding upon Mortgagor and
the successors and assigns of Mortgagor, including all successors in interest of
Mortgagor in and to all or any part of the Mortgaged Property, and shall inure
to the benefit of Mortgagee, its directors, officers, shareholders, employees
and agents and their respective successors and assigns and shall constitute
covenants running with the land.  The term “Mortgagee” as used
herein shall also mean and refer to any lawful holder or owner, including
pledgees and participants, of any of the Debt.  If more than one
person or entity is the “Mortgagor” hereunder, each is jointly and severally
liable to perform the obligations of Mortgagor hereunder and all
representations, warranties, covenants and agreements made by Mortgagor
hereunder are joint and several.

     

    16.5           Severability.  A
determination that any provision of this Mortgage is unenforceable or invalid
shall not affect the enforceability or validity of any other provision, and any
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 any other
persons or circumstances.

     

    16.6           Gender.  Within
this Mortgage, words of any gender shall be held and construed to include any
other gender, and words in the singular shall be held and construed to include
the plural, and vice versa, unless the context otherwise requires.

     

    16.7           Waiver; Discontinuance of
Proceedings.  Mortgagee may waive any single Event of Default
by Mortgagor hereunder without waiving any other prior or subsequent Event of
Default.  No waiver of an Event of Default shall be valid for any
purpose hereunder unless given in writing by Mortgagee.  Mortgagee may
cure any Event of Default by Mortgagor hereunder without waiving the Event of
Default remedied.  Neither the failure by Mortgagee to exercise, nor
the delay by Mortgagee in exercising, any right, power or remedy upon any Event
of Default by Mortgagor hereunder shall be construed as a waiver of such Event
of 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 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 and for the specific purpose
given.  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.  Acceptance by Mortgagee of any payment in an
amount less than the amount then due on any of the Debt shall be deemed an
acceptance on account only and shall not in any way affect the existence of an
Event of Default.  In case Mortgagee shall have proceeded to invoke
any right, remedy or recourse permitted hereunder or under the other Loan
Documents and shall thereafter elect to discontinue or abandon the same for any
reason, Mortgagee shall have the unqualified right to do so and, in such an
event, Mortgagor and Mortgagee shall be restored to their former positions with
respect to the Debt, the Loan Documents, the Mortgaged Property and otherwise,
and the rights, remedies, recourses and powers of Mortgagee shall continue as if
the same had never been invoked.

     

    
      
        
        

      

      
        60

        
          

        

      

      
        
        

      

    

     

    16.8           Section
Headings.  The headings of the sections and paragraphs of this
Mortgage are for convenience of reference only, are not to be considered a part
hereof and shall not limit or otherwise affect any of the terms
hereof.

     

    16.9           Governing
Law.  THIS MORTGAGE WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED WITHOUT
REGARD TO ITS CONFLICTS OF LAWS RULES.

     

    16.10                      Counting of
Days.  The term “days” when used herein shall mean calendar
days.  If any time period ends on a Saturday, Sunday or holiday
officially recognized by the state within which the Premises is located, the
period shall be deemed to end on the next succeeding business
day.  The term “business day” when used herein shall mean a weekday,
Monday through Friday, except a legal holiday or a day on which banking
institutions in the state in which the Premises are located and in New York, New
York are authorized by law to be closed.

     

    16.11                      Relationship of the
Parties.  The relationship between Mortgagor and Mortgagee is
that of a borrower and a lender only and neither of those parties is, nor shall
it hold itself out to be, the agent, employee, joint venturer or partner of the
other party.

     

    16.12                      Unsecured Portion of
Indebtedness.  If any part of the Debt cannot be lawfully
secured by this Mortgage or if any part of the Mortgaged 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 unsecured by this
Mortgage.

     

    16.13                      Cross
Default.  An Event of Default hereunder shall be a default
under each of the other Loan Documents.

     

    16.14                      Inconsistency with Other
Loan Documents.  In the event of any inconsistency between the
provisions hereof and the provisions in any of the other Loan Documents, it is
intended that the provisions of the Note shall control over the provisions of
this Mortgage, and that the provisions of this Mortgage shall control over the
provisions of the Assignment of Leases and Rents and Profits, the Environmental
Indemnity Agreement and the other Loan Documents.

     

    16.15                      No
Merger.  It is the desire and intention of the parties hereto
that this Mortgage and the lien hereof do not merge in fee simple title to the
Mortgaged Property.

     

    
      
        
        

      

      
        61

        
          

        

      

      
        
        

      

    

     

    16.16                      Rights With Respect to
Junior Encumbrances.  Without implying that any person or
entity has the right to do so, any person or entity purporting to have or to
take a junior mortgage or other lien upon the Mortgaged Property or any interest
therein shall be subject to the rights of Mortgagee to amend, modify, increase,
vary, alter or supplement this Mortgage, the Note or any of the other Loan
Documents, and to extend the maturity date of the Debt, and to increase the
amount of the Debt, and to waive or forebear the exercise of any of its rights
and remedies hereunder or under any of the other Loan Documents and to release
any collateral or security for the Debt, in each and every case without
obtaining the consent of the holder of such junior lien and without the lien or
security interest of this Mortgage losing its priority over the rights of any
such junior lien.

     

    16.17                      Mortgagee May File Proofs of
Claim.  In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
proceedings affecting Mortgagor or the principals, general partners or managing
members in Mortgagor, or their respective creditors or property, 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 the claims of
Mortgagee allowed in such proceedings for the entire Debt at the date of the
institution of such proceedings and for any additional amount which may become
due and payable by Mortgagor hereunder after such date.

     

    16.18                      Fixture
Filing.  This Mortgage shall be effective from the date of its
recording as a financing statement filed as a fixture filing with respect to all
goods constituting part of the Mortgaged Property which are or are to become
fixtures.  This Mortgage shall also be effective as a financing
statement covering minerals or the like (including oil and gas) and is to be
filed for record in the real estate records of the county where the Premises is
situated.

     

    16.19                      Counterparts.  This
Mortgage may be executed in any number of counterparts, each of which shall be
effective only upon delivery and thereafter shall be deemed an original, and all
of which shall be taken to be one and the same instrument, for the same effect
as if the signatory(s) hereto had signed the same signature page.

     

    16.20                      Recording and
Filing.  Mortgagor will cause the Loan Documents and all
amendments and supplements thereto and substitutions therefor to be recorded,
filed, re-recorded and re-filed in such manner and in such places as Mortgagee
shall reasonably request, and will pay on demand all such recording, filing,
re-recording and re-filing taxes, fees and other charges.  Mortgagor
shall reimburse Mortgagee, or its servicing agent, for the costs incurred in
obtaining a tax service company to verify the status of payment of taxes and
assessments on the Mortgaged Property.

     

    16.21                      Entire Agreement and
Modifications.  This Mortgage and the other Loan Documents
contain the entire agreements between the parties relating to the subject matter
hereof and thereof and all prior agreements relative hereto and thereto which
are not contained herein or therein are terminated.  This Mortgage and
the other Loan Documents may not be amended, revised, waived, discharged,
released or terminated orally but only by a written instrument or instruments
executed by the party against which enforcement of the amendment, revision,
waiver, discharge, release or termination is asserted.

     

    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    

     

    16.22                      Maximum
Interest.  The provisions of this Mortgage and of all
agreements between Mortgagor and Mortgagee, whether now existing or hereafter
arising and whether written or oral, are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of demand or acceleration of
the maturity of the Note or otherwise, shall the amount paid, or agreed to be
paid (“Interest”) to
Mortgagee for the use, forbearance or retention of the money loaned under the
Note exceed the maximum amount permissible under applicable law.  If,
from any circumstance whatsoever, performance or fulfillment of any provision
hereof or of any agreement between Mortgagor and Mortgagee shall, at the time
performance or fulfillment of such provision shall be due, exceed the limit for
Interest prescribed by law or otherwise transcend the limit of validity
prescribed by applicable law, then, ipso facto, the obligation to be performed
or fulfilled shall be reduced to such limit, and if, from any circumstance
whatsoever, Mortgagee shall ever receive anything of value deemed Interest by
applicable law in excess of the maximum lawful amount, an amount equal to any
excessive Interest shall be applied to the reduction of the principal balance
owing under the Note in the inverse order of its maturity (whether or not then
due) or, at the option of Mortgagee, be paid over to Mortgagor, and not to the
payment of Interest.  All Interest (including any amounts or payments
deemed to be 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 period until payment in full of the principal balance of the
Note so that the Interest thereon for such full period will not exceed the
maximum amount permitted by applicable law.  This Section will control
all agreements between Mortgagor and Mortgagee.

     

    16.23                      Certain Matters Relating to
Mortgaged Property Located in the State of New York.  With
respect to the Mortgaged Property which is located in the State of New York,
notwithstanding anything contained herein to the contrary:

     

    (a)           Multi-Use
Property.  Mortgagor represents that this Mortgage does not
encumber real property principally improved or to be improved by one or more
structures containing in the aggregate more than six residential dwelling units,
each having its own separate cooking facilities.

     

    (b)           Maximum Principal
Indebtedness.  Notwithstanding anything to the contrary
contained herein, the maximum amount of principal indebtedness secured by the
Mortgage or which under any contingency may be secured by the Mortgage is
$15,850,000.

     

    (c)           Insurance
Proceeds.  In the event of any conflict, inconsistency or
ambiguity between the provisions of Article II hereof and the provisions of
subsection 4 of Section 254 of the Real Property Law of New York covering the
insurance of buildings against loss by fire, the provisions of Article II hereof
shall control.

     

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

     

    
      
        
        

      

      
        63

        
          

        

      

      
        
        

      

    

     

    (e)           Section 291-f
Agreement.  Section 6.1 and Section 6.2 of this
Mortgage are intended to be, and shall operate as, the agreement described in
Section 291-f of the Real Property Law of the State of New York and shall be
entitled to the benefits afforded thereby.  Mortgagor shall (unless
such notice is contained in such tenant’s Lease) deliver notice of such sections
of this Mortgage in form and substance reasonably acceptable to Mortgagee, to
all present and future holders of any interest in any Lease, by assignment or
otherwise, and shall take such other action as may now or hereafter be
reasonably required to afford Mortgagee the full protections and benefits of
Section 291-f.  Mortgagor shall request the recipient of any such
notice to acknowledge the receipt thereof.

     

    (f)           Limitation on
Liability.  Notwithstanding anything to the contrary contained
in this Mortgage, the liability of Mortgagor and its present and future
officers, directors, general partners, managers, members and principals for the
indebtedness secured hereby and for the performance of the other agreements,
covenants and obligations contained herein and in the Loan Documents shall be
strictly limited as set forth in the Note.

     

    [THE
BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        64

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, Mortgagor has executed this Mortgage on the day and year first
written above.

     

    
      
        	 	
                MORTGAGOR:

              	 
	 	 	 
	 	
                URBAN
      DEVELOPMENT PARTNERS (61), LLC, 

                a
      Connecticut limited liability company

              	 
	 	 	 	 
	
              	
                By:
      

              	Urban
      (61), Inc., a Connecticut corporation	 

      

    

     

    
      
        	
                 

              	
                By:
      

              	    	 
	 	 	
                Name:  Philip
      R. Carter

              	 
	 	 	
                Title:  President

              	 

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      State
of                              )

                                                 
ss.:

      County
of                  
       )

    

     

    On the
______ day of____________, 2002, before me, the undersigned, a Notary Public in
and for said State, personally appeared ________________________, 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

              	 

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

     

    Legal
Description

     

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

     

    BEGINNING
at a point on the southerly side of 61st Street
distant 125 feet easterly from the corner formed by the intersection of the
southerly side of 61st Street
and the easterly side of Second Avenue;

     

    RUNNING
THENCE easterly along the southerly side of 61st Street,
110 feet 6 inches to the westerly side of the land taken by the City of New York
for the Queensborough Bridge approach;

     

    THENCE
southerly along the westerly side of said land and parallel with the easterly
side of Second Avenue, 102 feet 10 inches;

     

    THENCE
westerly and parallel with the southerly side of 61st Street,
60 feet 6 inches;

     

    THENCE
northerly and parallel with the easterly side of Second Avenue, 2 feet 5 inches
to the centre line of the block;

     

    THENCE
westerly and along centre line of the block and parallel with the southerly side
of 61st
Street, 50 feet;

     

    THENCE
northerly and parallel with the easterly side of Second Avenue, 100 feet 5
inches to the point or place of BEGINNING.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
5.5

     

    Rent
Abatements

     

    
      	
              Tenant

            	 	
              Rent Abatement Period

            
	
              1.           Amy
      Perlin Expansion

            	 	
              November,
      2006 and December, 2006

            
	
              2.           Lee
      Calicchio

            	 	
              February,
      2003

            
	
              3.           Suzanne
      Golden Antiques

            	 	
              February,
      2003

            
	
              4.           Robert
      Altman

            	 	
              August,
      2003

            
	
              5.           Lisa
      Jackson

            	 	
              February,
      2003

            
	
              6.           Eric
      Appel LLC

            	 	
              November,
      2002 and October, 2003

            
	
              7.           Solar
      Antique Tiles

            	 	
              February,
      2003

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
5.6

     

    2011
Rollover Spaces

     

    
      	
              2011 Rollover Space

              (identified
      by current occupant)

            	 	
              Square Footage

            	 	 	
              Allocable 2011 Rollover

              Amount

            	 
	
              1.           Bunny
      Williams, Inc.

            	 	 	9,200	 	 	$	247,797.17	 
	
              2.           Amy
      Perlin Expansion

            	 	 	5,000	 	 	$	134,672.37	 
	
              3.           Amy
      Perlin Antiques

            	 	 	4,500	 	 	$	121,205.13	 
	
              4.           Lee
      Calicchio

            	 	 	3,500	 	 	$	94,270.66	 
	
              5.           Sentimento

            	 	 	3,200	 	 	$	86,190.32	 
	
              6.           Suzanne
      Golden Antiques

            	 	 	2,500	 	 	$	67,336.18	 
	
              7.           Troubetzkoy
      Paintings

            	 	 	2,500	 	 	$	67,336.18	 
	
              8.           Jean
      Karajian Gallery

            	 	 	2,350	 	 	$	63,296.01	 
	
              9.           Robert
      Altman

            	 	 	2,200	 	 	$	59,255.84	 
	
              10.           Lisa
      Jackson

            	 	 	2,000	 	 	$	53,868.95	 
	
              11.           John
      Norwood

            	 	 	1,700	 	 	$	45,788.61	 
	
              12.           Eric
      Appel

            	 	 	1,700	 	 	$	45,788.61	 
	
              13.           Solar
      Antique Tiles

            	 	 	1,500	 	 	$	40,401.71	 
	
              14.           The
      Gazebo of NY Trading Company

            	 	 	1,400	 	 	$	37,708.26	 
	
              TOTAL

            	 	 	43,250	 	 	$	1,164,916.00Unassociated Document

    
      EXHIBIT 4.3

       

      
        

        

      

       

      URBAN
DEVELOPMENT PARTNERS (61), LLC,

       

    

    as
Mortgagor

     

    to

     

    DEUTSCHE
BANC MORTGAGE CAPITAL, L.L.C.,

     

    as
Mortgagee

     

    
      

    

     

    MORTGAGE
AND SECURITY AGREEMENT

     

    
      
 

    Date:  October
9, 2002

     

    PREPARED
BY AND UPON RECORDATION RETURN TO:

     

    Cadwalader,
Wickersham & Taft

     

    227 West
Trade Street

     

    Suite
2400

     

    Charlotte,
North Carolina 28202

     

    Attention:  Jeffrey
J. Lee, Esq.

     

    THIS
MORTGAGE DOES NOT COVER REAL PROPERTY PRINCIPALLY IMPROVED BY ONE OR MORE
STRUCTURES CONTAINING IN THE AGGREGATE NOT MORE THAN SIX RESIDENTIAL DWELLING
UNITS, EACH DWELLING UNIT HAVING ITS OWN SEPARATE COOKING
FACILITIES.

     

    
      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    TABLE OF
CONTENTS

    

      
        	 
      	 	 
      	
                Page

              
	
                ARTICLE
      I

                 

                TAXES
      AND UTILITIES

              
	 	 	 	 
	
                1.1

              	 	
                Payment
      of Taxes

              	
                7

              
	
                1.2

              	 	
                Tax
      and Insurance Impound Account

              	
                8

              
	
                1.3

              	 	
                Payment
      of Utilities, Assessments, Charges, Etc

              	
                8

              
	
                1.4

              	 	
                Additional
      Taxes

              	
                8

              
	 	 	 	 
	
                ARTICLE
      II

                 

                INSURANCE

              
	 	 	 	 
	
                2.1

              	 	
                Insurance

              	
                9

              
	 	 	 	 
	
                ARTICLE
      III

                 

                CASUALTY
      AND CONDEMNATION

              
	 	 	 	 
	
                3.1

              	 	
                Casualty
      and Condemnation

              	
                12

              
	 
	
                ARTICLE
      IV

                 

                ENVIRONMENTAL
      MATTERS

              
	 
	
                4.1

              	 	
                Hazardous
      Waste and Other Substances.

              	
                14

              
	 
	
                ARTICLE
      V

                 

                RESERVES

              
	 
	
                5.1

              	 	
                Payment
      Reserve

              	
                18

              
	
                5.2

              	 	
                Replacement
      Reserve

              	
                18

              
	
                5.3

              	 	
                Repair
      and Remediation Reserve

              	
                19

              
	
                5.4

              	 	
                Rollover
      Reserve

              	
                20

              
	
                5.5

              	 	
                Rent
      Abatement Reserve

              	
                22

              
	
                5.6

              	 	
                Cash
      Sweep Reserve

              	
                22

              
	
                5.7

              	 	
                Reserves;
      General

              	
                24

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
      VI

                 

                RENTS;
      LEASES; ALIENATION

              
	 
	
                6.1

              	 	
                Rents
      and Profits

              	
                27

              
	
                6.2

              	 	
                Leases

              	
                27

              
	
                6.3

              	 	
                Alienation
      and Further Encumbrances

              	
                29

              
	
                6.4

              	 	
                Easements
      and Rights-of-Way

              	
                30

              
	 
	
                ARTICLE
      VII

                 

                PROPERTY
      MANAGEMENT

              
	 
	
                7.1

              	 	
                Management

              	
                31

              
	 
	
                ARTICLE
      VIII

                 

                INDEMNIFICATION

              
	 
	
                8.1

              	 	
                Indemnification;
      Subrogation

              	
                32

              
	 
	
                ARTICLE
      IX

                 

                REPORTING

              
	 
	
                9.1

              	 	
                Access
      Privileges and Inspections

              	
                33

              
	
                9.2

              	 	
                Financial
      Statements and Books and Records

              	
                33

              

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
      X

                 

                WARRANTIES
      AND COVENANTS

              
	 
	
                10.1

              	 	
                Warranties
      of Mortgagor

              	
                34

              
	
                10.2

              	 	
                Waste;
      Alteration of Improvements

              	
                37

              
	
                10.3

              	 	
                Zoning

              	
                37

              
	
                10.4

              	 	
                Covenants
      with Respect to Indebtedness, Operations, Fundamental Changes of
      Mortgagor

              	
                37

              
	
                10.5

              	 	
                Additional
      Covenants with Respect to Mortgagor

              	
                40

              
	 
	
                ARTICLE
      XI

                 

                FURTHER
      ASSURANCES

              
	 
	
                11.1

              	 	
                Defense
      of Title

              	
                40

              
	
                11.2

              	 	
                Performance
      of Obligations

              	
                40

              
	
                11.3

              	 	
                Construction
      Liens

              	
                40

              
	
                11.4

              	 	
                Further
      Documentation

              	
                41

              
	
                11.5

              	 	
                Payment
      of Costs; Mortgagee’s Right to Cure

              	
                41

              
	
                11.6

              	 	
                Compliance
      with Laws

              	
                42

              
	
                11.7

              	 	
                Attorney-in-Fact
      Provisions

              	
                42

              
	 
	
                ARTICLE
      XII

                 

                PAYMENT;
      DEFEASANCE; PREPAYMENT

              
	 
	
                12.1

              	 	
                Payment
      of the Notes

              	
                42

              
	
                12.2

              	 	
                Computation
      of Interest

              	
                42

              
	
                12.3

              	 	
                Application
      of Payments

              	
                42

              
	
                12.4

              	 	
                Prepayment.

              	
                43

              
	
                12.5

              	 	
                Defeasance

              	
                43

              
	 
	
                ARTICLE
      XIII

                 

                SECURITY
      PROVISIONS

              
	 
	
                13.1

              	 	
                Security
      Interest

              	
                45

              
	
                13.2

              	 	
                Security
      Agreement

              	
                45

              
	
                13.3

              	 	
                Secured
      Indebtedness

              	
                46

              

      

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
      XIV

                 

                DEFAULT

              
	 
	
                14.1

              	 	
                Events
      of Default

              	
                46

              
	 
	
                ARTICLE
      XV

                 

                REMEDIES

              
	 
	
                15.1

              	 	
                Remedies
      Available

              	
                48

              
	
                15.2

              	 	
                Application
      of Proceeds

              	
                49

              
	
                15.3

              	 	
                Right
      and Authority of Receiver or Mortgagee in the Event of Default; Power of
      Attorney

              	
                50

              
	
                15.4

              	 	
                Occupancy
      After Foreclosure

              	
                50

              
	
                15.5

              	 	
                Notice
      to Account Debtors

              	
                51

              
	
                15.6

              	 	
                Cumulative
      Remedies

              	
                51

              
	
                15.7

              	 	
                Payment
      of Expenses

              	
                51

              
	
                15.8

              	 	
                Mortgagor’s
      Waivers

              	
                51

              
	
                15.9

              	 	
                Submission
      to Jurisdiction; Waiver of Jury Trial

              	
                52

              
	 
	
                ARTICLE
      XVI

                 

                MISCELLANEOUS
      TERMS AND CONDITIONS

              
	 
	
                16.1

              	 	
                Time
      of Essence

              	
                52

              
	
                16.2

              	 	
                Release
      of Mortgage

              	
                
                  52

                

              
	
                16.3

              	 	
                Notices

              	
                
                  52

                

              
	
                16.4

              	 	
                Successors
      and Assigns; Joint and Several Liability

              	
                53

              
	
                16.5

              	 	
                Severability

              	
                
                  53

                

              
	
                16.6

              	 	
                Gender

              	
                
                  53

                

              
	
                16.7

              	 	
                Waiver;
      Discontinuance of Proceedings

              	
                
                  53

                

              
	
                16.8

              	 	
                Section
      Headings

              	
                
                  53

                

              
	
                16.9

              	 	
                Governing
      Law

              	
                
                  53

                

              
	
                16.1

              	 	
                Counting
      of Days

              	
                54

              
	
                16.11

              	 	
                Relationship
      of the Parties

              	
                
                  54

                

              
	
                16.12

              	 	
                Unsecured
      Portion of Indebtedness

              	
                
                  54

                

              
	
                16.13

              	 	
                Cross
      Default

              	
                
                  54

                

              
	
                16.14

              	 	
                Inconsistency
      with Other Loan Documents

              	
                
                  54

                

              
	
                16.15

              	 	
                No
      Merger

              	
                
                  54

                

              
	
                16.16

              	 	
                Rights
      With Respect to Junior Encumbrances

              	
                
                  54

                

              
	
                16.17

              	 	
                Mortgagee
      May File Proofs of Claim

              	
                
                  54

                

              
	
                16.18

              	 	
                Fixture
      Filing

              	
                
                  54

                

              
	
                16.19

              	 	
                Counterparts

              	
                55

              
	
                16.2

              	 	
                Recording
      and Filing

              	
                
                  55

                

              
	
                16.21

              	 	
                Entire
      Agreement and Modifications

              	
                
                  55

                

              
	
                16.22

              	 	
                Maximum
      Interest

              	
                
                  55

                

              
	
                16.23

              	 	
                Certain
      Matters Relating to Mortgaged Property Located in the State of New
      York

              	
                
                  55

                

              

      

       

    

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

    INDEX OF
DEFINITIONS

     

    “2011 Minimum Rollover
Threshold” – Section 5.6(a)

     

    “2011 Rollover Spaces”
– Section 5.6(b)

     

    “ACM’s”– Section
4.1(i)

     

    “All Future Payments”
–Section 12.4(c)

     

    “Allocable 2011 Rollover
Amount” – Section 5.6(b)

     

    “Assignment” – Section
6.1

     

    “Buyer” – Section
6.3(b)(2)

     

    “Cash Sweep Reserve” –
Section 5.6(a)

     

    “Code” – Section
12.5

     

    “CERCLA” – Section
4.1(a)

     

    “Collateral” – Section
13.1

     

    “Contracts” –
Paragraph 9 of the granting clause

     

    “Debt” – Last
paragraph of the securing clause

     

    “Default”–Section
1.2

     

    “Default Interest
Rate” – As defined in the Note

     

    “Defeasance
Collateral” – Section 12.5(c)(2)

     

    “Defeasance Security
Agreement” – Section 12.5(c)(1)

     

    “Deferred Maintenance”
– Section 5.3

     

    “Eligible Accounts” –
Section 5.7(b)

     

    “Eligible Institution”
– Section 5.7(b)

     

    “Engineering Report” –
Section 5.3

     

    “Environmental Indemnity
Agreement” – Section 4.1

     

    “Environmental Laws” –
Section 4.1(a)

     

    “Future Rent
Abatements” – Section 5.4(a)

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “General Intangibles”
– Paragraph 11 of the granting clause

     

    “Hazardous Substances”
– Section 4.1(a)

     

    “Impound Account” –
Section 1.2

     

    “Improvements” –
Paragraph 2 of the granting clause

     

    “Increased Rollover Reserve
Threshold” – Section 5.4(a)

     

    “Indemnitor” – Section
10.1(b)

     

    “Initial Rollover Reserve
Threshold” – Section 5.4(a)

     

    “Interest” – Section
16.22

     

    “Lead Based Paint” –
Section 4.1(g)

     

    “Lead Based Paint
Report” – Section 4.1(j)

     

    “Lease; Leases” –
Paragraph 8 of the granting clause

     

    “Loan” – Last
paragraph of the securing clause

     

    “Licenses” – Section
10.1(f)

     

    “Loan Documents” –
Paragraph B of the securing clause & Section 6.5

     

    “Maintenance Program”
– Section 4.1(i)

     

    “Maturity Date” – As
defined in the Note

     

    “Monthly Payment” – As
defined in the Note

     

    “Monthly Rollover
Deposit” – Section 5.4(a)

     

    “Mortgaged Property” –
First paragraph of the granting clause

     

    “Note” – Paragraph A
of the securing clause

     

    “O&M Plan” –
Section 4.1(k)

     

    “Payment Dates” – As
defined in the Note

     

    “Payment Reserve” –
Section 5.1(a)

     

    “Permitted
Encumbrances” – Section 10.1(a)

     

    “Permitted
Investments” – Section 5.7(b)

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Permitted Materials”
– Section 4.1(a)

     

    “Premises” – Paragraph
1 of the granting clause

     

    “Rating Agency” or
“Rating
Agencies” – Section 6.3(a)

     

    “Release Date” –
Section 12.5(A)

     

    “REMIC” –Section
12.5

     

    “Rent Abatement
Reserve” – Section 5.5

     

    “Rent Roll” – Section
10.1(t)

     

    “Rents and Profits” –
Paragraph 8 of the granting clause

     

    “Repair and Remediation
Reserve” – Section 5.3

     

    “Replacement Reserve”
– Section 5.2(a)

     

    “Replacements” –
Section 5.2(a)

     

    “Reserves” – Section
5.7(a)

     

    “Rollover Reserve” –
Section 5.4(a)

     

    “Rollover Reserve
Threshold” – Section 5.4(a)

     

    “Sale”–Section
6.3(b)

     

    “SPE Component Entity”
– Section 10.5

     

    “Stub Interest” – As
defined in the Note

     

    “Tenant; Tenants” –
Paragraph 8 of the granting clause

     

    “UCC” – Paragraph 7 of
the granting clause

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    MORTGAGE
AND SECURITY AGREEMENT

     

    THIS
MORTGAGE AND SECURITY AGREEMENT (this “Mortgage”) is dated
as of October 9, 2002 and is given by URBAN DEVELOPMENT PARTNERS (61), LLC, a
Connecticut limited liability company, as mortgagor (“Mortgagor”), whose
address is 457 Madison Avenue, New York, New York 10022, to DEUTSCHE BANC
MORTGAGE CAPITAL, L.L.C., a Delaware limited liability company, as mortgagee,
and its successors and/or assigns (“Mortgagee”), whose
address is 31 West 52nd Street, 10th Floor, New York,
New York 10019.

     

    W I T N E
S S E T H:

     

    In order
to secure:

     

    (A)           The
debt evidenced by that certain Promissory Note (such Promissory Note, together
with any and all renewals, amendments, modifications, consolidations and
extensions thereof, is hereinafter referred to as the “Note”) of even date
with this Mortgage, made by Mortgagor payable to the order of Mortgagee in the
principal face amount of FIFTEEN MILLION EIGHT HUNDRED FIFTY THOUSAND AND
NO/100 DOLLARS ($15,850,000.00), together with interest as therein
provided;

     

    (B)           The
full and prompt payment and performance of all of the provisions, agreements,
covenants and obligations herein contained and contained in any other
agreements, documents or instruments now or hereafter evidencing, securing or
otherwise relating to the Debt (the Note, this Mortgage, and such other
agreements, documents and instruments, together with any and all renewals,
amendments, extensions and modifications thereof, are hereinafter collectively
referred to as the “Loan Documents”) and
the payment of all other sums herein or therein covenanted to be
paid;

     

    (C)           Any
and all additional advances made by Mortgagee to protect or preserve the
Mortgaged Property or the lien or security interest created hereby on the
Mortgaged Property, or for any other purpose provided herein or in the other
Loan Documents (whether or not the original Mortgagor remains the owner of the
Mortgaged Property at the time of such advances); and

     

    (D)           Any
and all other indebtedness now owing or which may hereafter be owing by
Mortgagor to Mortgagee, however and whenever incurred or evidenced, whether
express or implied, direct or indirect, absolute or contingent, or due or to
become due.

     

    (All of
the sums and covenants referred to in Paragraphs (A) through
(D) above are herein referred to as the “Debt” or the “Loan”);

     

    And in
consideration of the Debt and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor hereby irrevocably
mortgages, grants, bargains, sells, conveys, transfers, pledges, sets over and
assigns to Mortgagee, with power of sale, and creates a security interest in,
all of Mortgagor’s estate, right, title and interest in, to and under any and
all of the following described property, whether now owned or hereafter acquired
by Mortgagor (collectively, the “Mortgaged
Property”):

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (1)           All
that certain real property situated in the County of New York, State of New
York, more particularly described in Exhibit A attached hereto (the “Premises”), together
with all of the easements, rights and appurtenances now or hereafter in any way
appertaining thereto, either at law or in equity, whether now owned or hereafter
acquired by Mortgagor;

     

    (2)           All
structures, buildings and improvements of every kind and description now or at
any time hereafter located on the Premises (the “Improvements”);

     

    (3)           All
easements, rights-of-way, strips and gores of land, vaults, streets, ways,
alleys, passages, sewer rights, and other emblements now or hereafter located on
the Premises or under or above the same or any part thereof, and all estates,
rights, interests and appurtenances, reversions and remainders whatsoever, in
any way belonging or appertaining to the Mortgaged Property or any part thereof,
whether now owned or hereafter acquired by Mortgagor;

     

    (4)           All
water, ditches, wells, reservoirs and drains and all water, ditch, well,
reservoir and drainage rights which are appurtenant to, located on, under or
above or used in connection with the Premises or the Improvements, or any part
thereof, whether now existing or hereafter created or acquired by
Mortgagor;

     

    (5)           All
minerals, crops, timber, trees, shrubs, flowers and landscaping features now or
hereafter located on, under or above the Premises;

     

    (6)           All
building materials, supplies and equipment now or hereafter placed on the
Premises or in the Improvements;

     

    (7)           All
furniture, furnishings, fixtures, goods, equipment, inventory or personal
property owned by Mortgagor and now or hereafter located on, attached to or used
in and about the Improvements, including, but not limited to, all machines,
engines, boilers, dynamos, elevators, stokers, tanks, cabinets, awnings and all
appliances, communication, plumbing, heating, air conditioning, lighting,
ventilating, refrigerating, disposal and incinerating equipment, and sprinkler
and fire and theft protection equipment, and all fixtures and appurtenances
thereto, and such other goods and chattels and personal property owned by
Mortgagor as are now or hereafter used or furnished in operating the
Improvements, or the activities conducted therein, and all building materials
and equipment hereafter situated on or about the Premises or Improvements, and
all warranties and guaranties relating thereto, and all additions thereto and
substitutions and replacements therefor (exclusive of any of the foregoing owned
or leased by tenants of space in the Improvements and in which Mortgagor does
not hold an interest) (collectively, the “Equipment”).  To
the extent any portion of the Equipment is not deemed real property or Fixtures
under applicable law, it shall be deemed to be personal property, and this
Mortgage shall be deemed to constitute a security agreement for the purposes of
creating a security interest therein in favor of Mortgagee under the Uniform
Commercial Code of the state in which the Premises are located (the “UCC”);

     

    (8)           All
leases (including, without limitation, oil, gas and mineral leases, if any),
licenses, concessions and occupancy agreements of all or any part of the
Premises or the Improvements (each, a “Lease” and
collectively, “Leases”), whether
written or oral, now or hereafter entered into and all rents, royalties, issues,
profits, bonus money, revenue, income, rights and other benefits (collectively,
the “Rents and
Profits”) of the Premises or the Improvements, now or hereafter arising
from the use or enjoyment of all or any portion thereof or from any present or
future Lease or other agreement pertaining thereto or any of the General
Intangibles and all cash or securities deposited to secure performance by the
tenants, lessees or licensees (each, a “Tenant” and
collectively, “Tenants”), as
applicable, of their obligations under any such Leases, whether said cash or
securities are to be held until the expiration of the terms of said Leases or
applied to one or more of the installments of rent coming due prior to the
expiration of said terms, subject, however, to the provisions contained in Section 6.1
hereinbelow;

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (9)           All
contracts and agreements now or hereafter entered into covering any part of the
Premises or the Improvements (collectively, the “Contracts”) and all
revenue, income and other benefits thereof, including, without limitation,
management agreements, service contracts, maintenance contracts, equipment
leases, personal property leases and any contracts or documents relating to
construction on any part of the Premises or the Improvements (including all
architectural renderings, models, specifications, plans, drawings, surveys,
tests, reports, data, bonds and governmental approvals) or to the management or
operation of any part of the Premises or the Improvements;

     

    (10)           All
water taps, sewer taps, certificates of occupancy, permits, licenses,
franchises, certificates, consents, approvals and other rights and privileges
now or hereafter obtained in connection with the Premises or the Improvements
and all present and future warranties and guaranties relating to the
Improvements or to any equipment, fixtures, furniture, furnishings, personal
property or components of any of the foregoing now or hereafter located or
installed on the Premises or the Improvements;

     

    (11)           All
present and future funds, accounts, instruments, accounts receivable, documents,
claims, general intangibles (including, without limitation, trademarks, trade
names, service marks and symbols now or hereafter used in connection with any
part of the Premises or the Improvements, all names by which the Premises or the
Improvements may be operated or known, all rights to carry on business under
such names, and all rights, interest and privileges which Mortgagor has or may
have as developer or declarant under any covenants, restrictions or declarations
now or hereafter relating to the Premises or the Improvements) (collectively,
the “General
Intangibles”);

     

    (12)           All
insurance policies or binders now or hereafter relating to the Mortgaged
Property, including any unearned premiums thereon;

     

    (13)           All
cash funds, deposit accounts and other rights and evidence of rights to cash,
now or hereafter created or held by Mortgagee pursuant to this Mortgage or any
other of the Loan Documents, including, without limitation, all funds now or
hereafter on deposit in the Impound Account, the Payment Reserve, the Rent
Abatement Reserve, the Replacement Reserve, the Rollover Reserve, the Cash Sweep
Reserve and the Repair and Remediation Reserve and all notes or chattel paper
now or hereafter arising from or by virtue of any transactions related to the
Premises or the Improvements;

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (14)           All
present and future monetary deposits given by Mortgagor to any public or private
utility with respect to utility services furnished to any part of the Premises
or the Improvements;

     

    (15)           All
proceeds, products, substitutions and accessions (including claims and demands
therefor) of the conversion, voluntary or involuntary, of any of the foregoing
into cash or liquidated claims, including, without limitation, proceeds of
insurance and condemnation awards; and

     

    (16)           All
other or greater rights and interests of every nature in the Premises and the
Improvements and in the possession or use thereof and income therefrom, whether
now owned or hereafter acquired by Mortgagor.

     

    TO HAVE
AND TO HOLD the Mortgaged Property unto Mortgagee, its successors and assigns
forever, and Mortgagor does hereby bind itself, its successors and assigns, to
WARRANT AND FOREVER DEFEND the title to the Mortgaged Property, subject only to
the Permitted Encumbrances, to Mortgagee against every person whomsoever may
lawfully claim the same or any part thereof;

     

    PROVIDED,
HOWEVER, that if the Debt shall have been paid and performed in full, then, in
such case, the liens, security interests, estates and rights granted by this
Mortgage shall be satisfied and the estate, right, title and interest of
Mortgagee in the Mortgaged Property shall cease, and upon payment to Mortgagee
of all costs and expenses incurred for the preparation of the release
hereinafter referenced and all recording costs if allowed by law, Mortgagee
shall promptly satisfy and release this Mortgage of record and the lien hereof
by proper instrument or, at Mortgagor’s option and at Mortgagor’s sole cost and
expense, this Mortgage shall be assigned (without recourse, representation or
warranty) to another mortgagee.

     

    For the
purpose of further securing the Debt for so long as the Debt or any part thereof
remains incomplete or unpaid, Mortgagor covenants and agrees as
follows:

     

    ARTICLE
I

     

    TAXES AND
UTILITIES

     

    1.1           Payment of
Taxes.  Mortgagor shall pay or cause to be paid, except to the
extent provision is actually made therefor pursuant to Section 1.2 below, all
taxes and assessments which are or may become a lien on any portion of, or
interest in, the Mortgaged Property or which are assessed against or imposed
upon any portion of, or interest in the Mortgaged Property.  Unless
taxes have been paid pursuant to Section 1.2 below, Mortgagor shall furnish
Mortgagee with receipts (or if receipts are not immediately available, with
copies of canceled checks evidencing payment with receipts to follow promptly
after they become available) showing payment of such taxes and assessments at
least fifteen (15) days prior to the applicable delinquency date
therefor.  Notwithstanding the foregoing, Mortgagor may, in good
faith, by appropriate proceedings and upon notice to Mortgagee, contest the
validity, applicability or amount of any asserted tax or assessment so long as
(a) such contest is diligently pursued, (b) Mortgagee determines, in its
subjective opinion, that such contest suspends the obligation to pay the tax and
that nonpayment of such tax or assessment will not result in the sale, loss,
forfeiture or diminution of the Mortgaged Property or any part thereof or any
interest of Mortgagee therein and (c) prior to the earlier of the commencement
of such contest or the delinquency date of the asserted tax or assessment,
Mortgagor deposits in the Impound Account an amount determined by Mortgagee to
be adequate to cover the payment of such tax or assessment and an additional sum
sufficient in the sole judgment of Mortgagee to cover possible interest, costs
and penalties; provided, however, that taxes, assessments, interest, costs and
penalties owing shall be paid by Mortgagor prior to the date any writ or order
is issued under which the Mortgaged Property may be sold, lost or
forfeited.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    1.2           Tax and Insurance Impound
Account.  Mortgagor shall establish and maintain at all times
while this Mortgage continues in effect an impound account (the “Impound
Account”) with Mortgagee for payment of real estate taxes and assessments and
insurance on the Mortgaged Property and as additional security for the
Debt.  Simultaneously with the execution hereof, Mortgagor shall
deposit in the Impound Account an amount equal to $151,628.58 (which amount has
been escrowed solely for real estate taxes), which amount has been reasonably
determined by Mortgagee.  Commencing on the first Payment Date under
the Note and continuing thereafter on each subsequent Payment Date, Mortgagor
shall pay to Mortgagee, concurrently with and in addition to the monthly payment
due under the Note and until the Debt is fully paid and performed, deposits in
an amount equal to one-twelfth (1/12) of the amount of the annual real estate
taxes and assessments that will next become due and payable on the Mortgaged
Property, plus one-twelfth (1/12) of the amount of the annual premiums that will
next become due and payable on insurance policies which Mortgagor is required to
maintain hereunder, each as estimated and determined by Mortgagee.  So
long as no Event of Default has occurred and is continuing, and no event has
occurred or failed to occur which with the passage of time, the giving of
notice, or both would constitute an Event of Default (a “Default”), all sums
in the Impound Account shall be held by Mortgagee in the Impound Account to pay
said taxes, assessments and insurance premiums before the same become
delinquent.  Mortgagor shall be responsible for ensuring the receipt
by Mortgagee, at least thirty (30) days prior to the respective due date for
payment thereof, of all bills, invoices and statements for all taxes,
assessments and insurance premiums to be paid from the Impound Account, and so
long as no Event of Default has occurred and is continuing, Mortgagee shall pay
the governmental authority or other party entitled thereto directly to the
extent funds are available for such purpose in the Impound
Account.  No interest on funds contained in the Impound Account, if
any, shall be paid by Mortgagee to Mortgagor.

     

    1.3           Payment of Utilities,
Assessments, Charges, Etc.  Mortgagor shall pay when due and
payable all utility charges which are incurred by Mortgagor or which may become
a charge or lien against any portion of the Mortgaged Property for gas,
electricity, water and sewer services furnished to the Premises and/or the
Improvements and all other assessments or charges of a similar nature, or
assessments payable pursuant to any restrictive covenants, whether public or
private, affecting the Premises and/or the Improvements or any portion thereof,
whether or not such assessments or charges are or may become liens
thereon.

     

    1.4           Additional
Taxes.  In the event of the enactment after the date hereof of
any law 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 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
adversely affect this Mortgage or the Debt 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, (a) it might be unlawful to require
Mortgagor to make such payment or (b) the making of such payment might result in
the imposition of interest beyond the maximum amount permitted by law, then and
in either such event, Mortgagee may elect, by notice in writing given to
Mortgagor, to declare all of the Debt to be and become due and payable in full
one hundred twenty (120) days from the giving of such notice, and, in connection
with such payment of the Debt, no prepayment premium or fee shall be
due.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    ARTICLE
II

     

    INSURANCE

     

    2.1           Insurance.  Mortgagor
shall, at Mortgagor’s expense, maintain in force and effect on the Mortgaged
Property at all times while this Mortgage continues in effect the following
insurance:

     

    (a)           Insurance
against loss or damage to the Mortgaged Property by fire, windstorm, lightning,
tornado and hail and against loss and damage by such other, additional risks as
may be now or hereafter embraced by an “all-risk” form of insurance
policy.  The amount of such insurance shall be not less than one
hundred percent (100%) of the full replacement cost (insurable value) of the
Improvements (as established by an MAI appraisal), without reduction for
depreciation.  The determination of the replacement cost amount shall
be adjusted annually to comply with the requirements of the insurer issuing such
coverage or, at Mortgagee’s election, by reference to such indices, appraisals
or information as Mortgagee determines in its reasonable discretion in order to
reflect increased value due to inflation.  In addition, each policy
shall contain inflation guard coverage.  Full replacement cost, as
used herein, means, with respect to the Improvements, the cost of replacing the
Improvements without regard to deduction for depreciation, exclusive of the cost
of excavations, foundations and footings below the lowest basement
floor.  Mortgagor shall also maintain insurance against loss or damage
to furniture, furnishings, fixtures, equipment and other items (whether
personalty or fixtures) included in the Mortgaged Property and owned by
Mortgagor from time to time to the extent applicable.  Each policy
shall contain a replacement cost endorsement and either an agreed amount
endorsement (to avoid the operation of any co-insurance provisions) or a waiver
of co-insurance provisions, all subject to Mortgagee’s approval.  The
maximum deductible shall be $10,000, except as specified otherwise.

     

    (b)           Commercial
General Liability Insurance against claims for personal injury, bodily injury,
death and property damage occurring on, in or about the Premises or the
Improvements in amounts not less than $1,000,000 per occurrence and $2,000,000
in the aggregate plus umbrella coverage in an amount not less than
$2,000,000.  Mortgagee hereby retains the right to periodically review
the amount of said liability insurance and to require an increase in the amount
of said liability insurance should Mortgagee deem an increase to be reasonably
prudent under then existing circumstances.

     

    (c)           Boiler
and machinery insurance (including explosion coverage), if steam boilers or
other pressure-fired vessels are in operation at the
Premises.  Minimum liability coverage per accident must equal the
greater of the replacement cost (insurable value) of the Improvements housing
such boiler or pressure-fired machinery or $2,000,000.  If one or more
HVAC units is in operation at the Premises, “Systems Breakdowns” coverage shall
be required, as determined by Mortgagee.  Minimum liability coverage
per accident must equal the replacement value of such unit(s).

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (d)           If
the Improvements or any part thereof is situated in an area designated by the
Federal Emergency Management Agency (“FEMA”) as a special
flood hazard area (Zone A or Zone V), flood insurance in an amount equal to the
lesser of:  (a) the minimum amount required, under the terms of
coverage, to compensate for any damage or loss on a replacement basis (or the
unpaid balance of the Debt if replacement cost coverage is not available for the
type of building insured), or (b) the maximum insurance available under the
appropriate National Flood Insurance Administration program.  The
maximum deductible shall be $10,000 per building or a higher minimum amount as
required by FEMA or other applicable law.

     

    (e)           During
the period of any construction, renovation or alteration of the existing
Improvements which exceeds the lesser of 10% of the principal amount of the Note
or $500,000, at Mortgagee’s request, a completed value, “All Risk” Builder’s
Risk form or “Course of Construction” insurance policy in non-reporting form, in
an amount approved by Mortgagee, may be required.  During the period
of any construction of any addition to the existing Improvements, a completed
value, “All Risk” Builder’s Risk form or “Course of Construction” insurance
policy in non-reporting form, in an amount approved by Mortgagee, shall be
required.

     

    (f)           Worker’s
Compensation and Employer’s Liability Insurance covering all appropriate
persons.

     

    (g)           Business
income (loss of rents) insurance in amounts sufficient to compensate Mortgagor
for the greater of (i) gross revenues for eighteen (18) months, or
(ii) eighteen (18) months of operating expenses including debt
service.  The amount of coverage shall be adjusted annually to reflect
the Rents and Profits or income payable during the succeeding eighteen (18)
month period.

     

    (h)           Earthquake
insurance for properties located in earthquake zones 3 and 4 with Probable
Maximum Loss (“PML”) in excess of
20%, as determined by seismic reports.  The amount of coverage shall
be based on the PML percentage times the replacement cost up to the full
replacement cost (insurable value).  Wind, sinkhole, and mine
subsidence coverage shall be required for properties located in areas prone to
those geological phenomena.  Maximum deductibles for these types of
coverages shall be the lowest deductible available in the area in which the
Mortgaged Property is located.

     

    (i)           Such
other insurance on the Mortgaged Property or on any replacements or
substitutions thereof or additions thereto as may from time to time be required
by Mortgagee against other insurable hazards or casualties which at the time are
commonly insured against in the case of property similarly situated including,
without limitation, sinkhole, mine subsidence, earthquake and environmental
insurance, due regard being given to the height and type of Improvements, their
construction, location, use and occupancy.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (j)           Insurance
coverage against loss or damage to persons and property by reason of any act of
terrorism, to the extent such coverage is commercially available and to the
extent prudent owners of, or prudent lenders making loans secured by,
institutional quality commercial real estate are then obtaining such insurance
for similarly situated properties.

     

    All such
insurance shall (i) be with insurers fully licensed and authorized to do
business in the state within which the Premises is located and which have and
maintain a rating of at least AA by S&P (as hereinafter defined) or
equivalent Rating Agency (as hereinafter defined), (ii) contain the complete
address of the Premises (or a complete legal description), (iii) be for
terms of at least one year, with premium prepaid, and (iv) be subject to the
approval of Mortgagee as to insurance companies, amounts, content, forms of
policies and expiration dates, and (v) include a standard, non-contributory,
mortgagee clause naming EXACTLY:

     

    DEUTSCHE
BANC MORTGAGE CAPITAL, L.L.C.,

    its
successors and assigns, ATIMA

    31 West
52nd Street

    10th
Floor

    New York,
New York 10019

     

    (k)           as
an additional
insured under all liability insurance policies, (b) as the first
mortgagee and loss payee on all property insurance policies and (c) as the loss
payee on all loss of rents or loss of business income insurance
policies.

     

    Mortgagor
shall, as of the date hereof, deliver to Mortgagee evidence that said insurance
policies have been prepaid as required above with original certificates signed
by an authorized agent of the applicable insurance companies evidencing such
insurance satisfactory to Mortgagee.  Certified copies of such
policies must be delivered to Mortgagee within thirty (30) days of the date
hereof.  Mortgagor shall renew all such insurance and deliver to
Mortgagee certificates and policies evidencing such renewals at least thirty
(30) days before any such insurance shall expire.  Mortgagor further
agrees that each such insurance policy:  (i) shall provide for at
least thirty (30) days’ prior written notice to Mortgagee prior to any policy
reduction or cancellation for any reason other than non-payment of premium and
at least ten (10) days’ prior written notice to Mortgagee prior to any
cancellation due to non-payment of premium; (ii) shall contain an endorsement or
agreement by the insurer that any loss shall be payable to Mortgagee in
accordance with the terms of such policy notwithstanding any act or negligence
of Mortgagor or any other person which might otherwise result in forfeiture of
such insurance; (iii) shall waive all rights of subrogation against Mortgagee;
(iv) in the event that the Premises or the Improvements constitutes a legal
non-conforming use under applicable building, zoning or land use laws or
ordinances, shall include an ordinance and law coverage endorsement which will
contain Coverage A:  “Loss Due to Operation of Law” (with a minimum
liability limit equal to Replacement Cost With Agreed Value Endorsement),
Coverage B:  “Demolition Cost” and Coverage C:  “Increased
Cost of Construction” coverages; (v) shall contain an endorsement or agreement
by the insurer that such policy shall not be materially changed (other than to
increase the coverage provided thereby) or canceled without at least thirty (30)
days’ prior written notice to Mortgagee and any other party named therein as an
additional insured; and (vi) may be in the form of a blanket policy, provided
that, Mortgagor hereby acknowledges and agrees that failure to pay any portion
of the premium therefor which is not allocable to the Mortgaged Property or any
other action not relating to the Mortgaged Property which would otherwise permit
the issuer thereof to cancel the coverage thereof, would require the
Mortgaged.  Property to be insured by a separate, single-property
policy and the blanket policy must properly identify and fully protect the
Mortgaged Property as if a separate policy were issued for one hundred percent
100% of Replacement Cost at the time of loss and otherwise meet all of
Mortgagee’s applicable insurance requirements set forth in this Section
2.1.  The delivery to Mortgagee of the insurance policies or the
certificates of insurance as provided above shall constitute an assignment of
all proceeds payable under such insurance policies relating to the Mortgaged
Property by Mortgagor to Mortgagee as further security for the
Debt.  In the event of the foreclosure of this Mortgage, or other
transfer of title to the Mortgaged Property in extinguishment in whole or in
part of the Debt, all right, title and interest of Mortgagor in and to all
proceeds payable under such policies then in force concerning the Mortgaged
Property shall thereupon vest in the purchaser at such foreclosure, or in
Mortgagee or other transferee in the event of such other transfer of
title.  Approval of any insurance by Mortgagee shall not be a
representation of the solvency of any insurer or the sufficiency of any amount
of insurance.  In the event Mortgagor fails to provide, maintain, keep
in force or deliver and furnish to Mortgagee the policies of insurance required
by this Mortgage or evidence of their replacement or renewal as required herein,
Mortgagee may, but shall not be obligated to, procure such insurance and
Mortgagor shall pay all amounts advanced by Mortgagee therefor, together with
interest thereon at the Default Interest Rate from and after the date advanced
by Mortgagee until actually repaid by Mortgagor, promptly upon demand by
Mortgagee.  Mortgagee shall not be responsible for nor incur any
liability for the failure of the insurer to perform, even though Mortgagee has
caused the insurance to be placed with the insurer after failure of Mortgagor to
furnish such insurance.  Mortgagor shall not obtain insurance for the
Mortgaged Property in addition to that required by Mortgagee without the prior
written consent of Mortgagee, which consent will not be unreasonably withheld
provided that (i) Mortgagee is a named insured on such insurance,
(ii) Mortgagee receives complete copies of all policies evidencing such
insurance, and (iii) such insurance complies with all of the applicable
requirements set forth herein.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

    

    ARTICLE
III

     

    CASUALTY AND
CONDEMNATION

     

    3.1           Casualty and
Condemnation.  Mortgagor shall give Mortgagee prompt written
notice of the occurrence of any casualty affecting, or the institution of any
proceedings for eminent domain or for the condemnation of, the Mortgaged
Property or any portion thereof.  All insurance proceeds on the
Mortgaged Property, and all causes of action, claims, compensation, awards and
recoveries for any damage, condemnation or taking of all or any part of the
Mortgaged Property or for any diminution in value of the Mortgaged Property, are
hereby assigned to and shall be paid to Mortgagee.  Mortgagee may
participate in any suits or proceedings relating to any such proceeds, causes of
action, claims, compensation, awards or recoveries, and Mortgagee is hereby
authorized, in its own name or in Mortgagor’s name, to adjust any loss covered
by insurance or any condemnation claim or cause of action, and to settle or
compromise any claim or cause of action in connection therewith, and Mortgagor
shall from time to time deliver to Mortgagee any instruments required to permit
such participation; provided, however, that, so long as no Default or Event of
Default shall have occurred and is continuing, Mortgagee shall not have the
right to participate in the adjustment of any loss which is not in excess of the
lesser of (i) five percent (5%) of the then outstanding principal balance of the
Note and (ii) $250,000.  Mortgagee shall apply any sums received by it
under this Section first to the payment of all of its costs and expenses
(including, but not limited to, reasonable legal fees and disbursements)
incurred in obtaining those sums, and then, as follows:

     

    (a)           In
the event that less than fifteen percent (15%) of the Improvements located on
the Premises have been taken or less than twenty-five percent (25%) destroyed,
then if and so long as:

     

    
      	
               
      

            	
              (1)

            	
              no
      Default or Event of Default has occurred and is continuing hereunder or
      under any of the other Loan Documents,
and

            

    

     

    
      	
               
      

            	
              (2)

            	
              the
      Mortgaged Property can, in Mortgagee’s judgment, with diligent restoration
      or repair, be returned to a condition at least equal to the condition
      thereof that existed prior to the casualty or partial taking causing the
      loss or damage within the earlier to occur of (i) nine (9) months after
      the receipt of insurance proceeds or condemnation awards by either
      Mortgagor or Mortgagee, and (ii) sixty (60) days prior to the stated
      maturity date of the Note, and

            

    

     

    
      	
               
      

            	
              (3)

            	
              all
      necessary governmental approvals can be obtained to allow the rebuilding
      and re-occupancy of the Mortgaged Property as described in subsection (2)
      above, and

            

    

     

    
      	
               
      

            	
              (4)

            	
              there
      are sufficient sums available (through insurance proceeds or condemnation
      awards and contributions by Mortgagor, the full amount of which shall, at
      Mortgagee’s option, have been deposited with Mortgagee) for such
      restoration or repair (including, without limitation, for any costs and
      expenses of Mortgagee to be incurred in administering said restoration or
      repair) and for payment of principal and interest to become due and
      payable under the Note during such restoration or repair,
    and

            

    

     

    
      	
               
      

            	
              (5)

            	
              the
      economic feasibility of the Improvements after such restoration or repair
      will be such that income from their operation is reasonably anticipated to
      be sufficient to pay operating expenses of the Mortgaged Property and debt
      service on the Debt in full with the same coverage ratio considered by
      Mortgagee in its determination to make the loan secured hereby,
      and

            

    

     

    
      	
               
      

            	
              (6)

            	
              in
      the event that the insurance proceeds or condemnation awards received as a
      result of such casualty or partial taking exceed the lesser of
      (i) five percent (5%) of the then outstanding principal balance of
      the Note and (ii) $250,000, Mortgagor shall have delivered to Mortgagee,
      at Mortgagor’s sole cost and expense, an appraisal report from an
      appraiser satisfactory to Mortgagee in form and substance satisfactory to
      Mortgagee appraising the value of the Mortgaged Property as proposed to be
      restored or repaired to be not less than the appraised value of the
      Mortgaged Property considered by Mortgagee in its determination to make
      the loan secured hereby, and

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (7)

            	
              Mortgagor
      so elects by written notice delivered to Mortgagee within five (5) days
      after settlement of the aforesaid insurance or condemnation claim, then,
      Mortgagee shall, solely for the purposes of such restoration or repair,
      advance so much of the remainder of such sums as may be required for such
      restoration or repair, and any funds deposited by Mortgagor therefor, to
      Mortgagor in the manner and upon such terms and conditions as would be
      required by a prudent interim construction lender, including, but not
      limited to, the prior approval by Mortgagee of plans and specifications,
      contractors and form of construction contracts and the furnishing to
      Mortgagee of permits, bonds, lien waivers, invoices, receipts and
      affidavits from contractors and subcontractors, in form and substance
      satisfactory to Mortgagee in its discretion, with any remainder being
      applied by Mortgagee for payment of the Debt in whatever order Mortgagee
      directs in its absolute discretion.

            

    

     

    (b)           In
all other cases, namely, in the event that more than fifteen percent (15%) of
the Improvements located on the Premises have been taken or more than
twenty-five percent (25%) destroyed or Mortgagor does not elect to restore or
repair the Mortgaged Property pursuant to clause (a) above or
otherwise fails to meet the requirements of clause (a) above,
then, in any of such events, Mortgagee may elect, in Mortgagee’s absolute
discretion and without regard to the adequacy of Mortgagee’s security, to do
either of the following:  (1) accelerate the maturity date of the Note
and declare any and all of the Debt to be immediately due and payable and apply
the remainder of such sums received pursuant to this Section to the payment of
the Debt in whatever order Mortgagee directs in its absolute discretion, with
any remainder being paid to Mortgagor, or (2) notwithstanding that Mortgagor may
have elected not to restore or repair the Mortgaged Property pursuant to the
provisions of Section
3.1(a)(7) above, require Mortgagor to restore or repair the Mortgaged
Property in the manner and upon such terms and conditions as would be required
by a prudent interim construction lender, including, but not limited to, the
deposit by Mortgagor with Mortgagee, within thirty (30) days after demand
therefor, of any deficiency reasonably determined by Mortgagee to be necessary
in order to assure the availability of sufficient funds to pay for such
restoration or repair, including Mortgagee’s costs and expenses to be incurred
in connection therewith, the prior approval by Mortgagee of plans and
specifications, contractors and form of construction contracts and the
furnishing to Mortgagee of permits, bonds, lien waivers, invoices, receipts and
affidavits from contractors and subcontractors, in form and substance
satisfactory to Mortgagee in its discretion, and apply the remainder of such
sums toward such restoration and repair, with any balance thereafter remaining
being applied by Mortgagee for payment of the Debt in whatever order Mortgagee
directs in its absolute discretion.

     

    Any
reduction in the Debt resulting from Mortgagee’s application of any sums
received by it hereunder shall take effect only when Mortgagee actually receives
such sums and elects to apply such sums to the Debt and, in any event, the
unpaid portion of the Debt shall remain in full force and effect and Mortgagor
shall not be excused in the payment thereof.  Partial payments
received by Mortgagee, as described in the preceding sentence, shall be applied
first to the final payment due under the Note and thereafter to installments due
under the Note in the inverse order of their due date.  If Mortgagor
elects or Mortgagee directs Mortgagor to restore or repair the Mortgaged
Property after the occurrence of a casualty or partial taking of the Mortgaged
Property as provided above, Mortgagor shall promptly and diligently, at
Mortgagor’s sole cost and expense and regardless of whether the insurance
proceeds or condemnation award, as appropriate, shall be sufficient for such
purpose, restore, repair, replace and rebuild the Mortgaged Property as nearly
as possible to its value, condition and character immediately prior to such
casualty or partial taking in accordance with the foregoing provisions and
Mortgagor shall pay to Mortgagee all costs and expenses of Mortgagee incurred in
administering said rebuilding, restoration or repair.  Mortgagor
agrees to execute and deliver from time to time such further instruments as may
be requested by Mortgagee to confirm the assignment to Mortgagee of any award,
damage, insurance proceeds, payment or other compensation.  Mortgagee
is hereby irrevocably constituted and appointed the attorney-in-fact of
Mortgagor, with full power of substitution, subject to the terms of this
Section, to settle for, collect and receive any such awards, damages, insurance
proceeds, payments or other compensation from the parties or authorities making
the same, to appear in and prosecute any proceedings therefor and to give
receipts and acquittances therefor.

     

    
      
        
        

      

      
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    ARTICLE
IV

     

    ENVIRONMENTAL
MATTERS

     

    4.1           Hazardous Waste and Other
Substances.

     

    (a)           Mortgagor
hereby represents and warrants to Mortgagee that, as of the date
hereof:  (i) except as otherwise expressly set forth in that certain
Phase I Environmental Site Assessment dated August 16, 2002 and prepared by
National Assessment Corporation (the “Environmental
Report”) and to the best of Mortgagor’s knowledge, information and
belief, none of Mortgagor nor the Mortgaged Property nor any Tenant at the
Premises nor the operations conducted thereon has at any time been or presently
is in direct or indirect violation of or otherwise exposed to any liability
under any local, state or federal law, rule or regulation or common law duty
pertaining to human health, natural resources or the environment (collectively,
“Environmental
Laws”), including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.) (“CERCLA”), the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.), the Federal
Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Clean Air
Act (42 U.S.C. § 7401 et seq.), the Emergency
Planning and Community-Right-to-Know Act (42 U.S.C. § 11001 et seq.), the Endangered
Species Act (16 U.S.C. § 1531 et seq.), the Toxic
Substances Control Act (15 U.S.C. § 2601 et seq.), the
Occupational Safety and Health Act (29 U.S.C. § 651 et seq.) or the
Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), or any
regulations promulgated pursuant to said laws, all as amended from time to time;
(ii) no hazardous, toxic or harmful substances, wastes, materials, pollutants or
contaminants (including, without limitation, asbestos or asbestos-containing
materials, lead based paint, polychlorinated biphenyls, petroleum or petroleum
products or byproducts, flammable explosives, radioactive materials, infectious
substances or raw materials which include hazardous constituents) or any other
substances or materials which are included under or regulated by Environmental
Laws (collectively, “Hazardous
Substances”) are located on, in or under or have been handled, generated,
stored, processed or disposed of on or released or discharged from the Mortgaged
Property (including underground contamination), except for those substances used
by Mortgagor or any Tenant in the ordinary course of their respective businesses
and in compliance with all Environmental Laws (“Permitted
Materials”); (iii) the Mortgaged Property is not subject to any private
or governmental lien arising under Environmental Laws; (iv) there is no pending,
nor, to Mortgagor’s knowledge, information or belief, threatened litigation
arising under Environmental Laws affecting Mortgagor or the Mortgaged Property;
there are no and have been no existing or closed underground storage tanks or
other underground storage receptacles for Hazardous Substances or landfills or
dumps on the Mortgaged Property; (v) Mortgagor has received no notice of, and to
the best of Mortgagor’s knowledge and belief, there exists no investigation,
action, proceeding or claim by any agency, authority or unit of government or by
any third party which could result in any liability, penalty, sanction or
judgment under any Environmental Laws with respect to any condition, use or
operation of the Mortgaged Property, nor does Mortgagor know of any basis for
such an investigation, action, proceeding or claim; and (vi) Mortgagor has
received no notice of and, to the best of Mortgagor’s knowledge and belief,
there has been no claim by any party that any use, operation or condition of the
Mortgaged Property has caused any nuisance or any other liability or adverse
condition on any other property, nor does Mortgagor know of any basis for such
an investigation, action, proceeding or claim.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (b)           Mortgagor
has not received nor, to the best of Mortgagor’s knowledge, information and
belief has there been issued, any notice, notification, demand, request for
information, citation, summons, or order in any way relating to any actual,
alleged or potential violation or liability arising under Environmental Laws
with respect to Mortgagor or the Mortgaged Property.

     

    (c)           Neither
the Mortgaged Property, nor to the best of Mortgagor’s knowledge, information
and belief, any property to which Mortgagor has, in connection with the
maintenance or operation of the Mortgaged Property, directly or indirectly
transported or arranged for the transportation of any Hazardous Substances is
listed or, to the best of Mortgagor’s knowledge, information and belief,
proposed for listing on the National Priorities List promulgated pursuant to
CERCLA, on CERCLIS (as defined in CERCLA) or on any similar federal or state
list of sites requiring environmental investigation or clean-up.

     

    (d)           Mortgagor
shall comply with all applicable Environmental Laws.  Mortgagor shall
keep or cause the Mortgaged Property to be kept free from Hazardous Substances
(except Permitted Materials).

     

    (e)           Mortgagor
shall promptly notify Mortgagee of (i) the actual or potential existence of any
Hazardous Substances on the Mortgaged Property other than Permitted Materials,
(ii) any direct or indirect violation relating to the Mortgaged Property of, or
other exposure to liability under, any Environmental Laws, (iii) any lien,
action or notice affecting the Mortgaged Property or Mortgagor resulting from
any violation or alleged violation of or liability or alleged liability under
any Environmental Laws arising from any condition or activity on the Mortgaged
Property, (iv) the institution of any investigation, inquiry or proceeding
concerning Mortgagor or the Mortgaged Property pursuant to any Environmental
Laws or otherwise relating to Hazardous Substances, or (v) the discovery of any
occurrence, condition or state of facts which would render any representation or
warranty contained in Section 4.1 of this Mortgage incorrect in any respect if
made at the time of such discovery.  Immediately upon receipt of same,
Mortgagor shall deliver to Mortgagee copies of any and all requests for
information, complaints, citations, summonses, orders, notices, reports or other
communications, documents or instruments in any way relating to any actual,
alleged or potential violation or liability of any nature whatsoever arising
under Environmental Laws and relating to the Mortgaged Property or to
Mortgagor.  Mortgagor shall remedy or cause to be remedied in a timely
manner (and in any event within the time period permitted by applicable
Environmental Laws) any violation of Environmental Laws or any condition that
could give rise to liability under Environmental Laws.  Without
limiting the foregoing, Mortgagor shall, promptly and regardless of the source
of the contamination or threat to the environment or human health, at its own
expense, take all actions as shall be necessary or prudent, for the clean-up of
any and all portions of the Mortgaged Property or other affected property,
including, without limitation, all investigative, monitoring, removal,
containment and remedial actions in accordance with all applicable Environmental
Laws and shall further pay or cause to be paid, at no expense to Mortgagee, all
clean-up, administrative and enforcement costs of applicable governmental
agencies which may be asserted against the Mortgaged Property.  In the
event Mortgagor fails to do so, Mortgagee may, but shall not be obligated to,
cause the Mortgaged Property or other affected property to be freed from any
Hazardous Substances or otherwise brought into conformance with Environmental
Laws.  Mortgagor hereby grants to Mortgagee and its agents and
employees access to the Mortgaged Property and a license to remove any items
deemed by Mortgagee to be Hazardous Substances and to do all things Mortgagee
shall deem necessary to bring the Mortgaged Property into conformance with
Environmental Laws.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (f)           Mortgagor
covenants and agrees, at Mortgagor’s sole cost and expense, to indemnify, defend
(at trial and appellate levels, and with attorneys, consultants and experts
reasonably acceptable to Mortgagee), and hold Mortgagee harmless from and
against any and all liens, damages (including without limitation, punitive or
exemplary damages), losses, liabilities (including, without limitation, strict
liability), obligations, settlement payments, penalties, fines, assessments,
citations, directives, claims, litigation, demands, defenses, judgments, suits,
proceedings, costs, disbursements or expenses of any kind or of any nature
whatsoever (including, without limitation, reasonable attorneys’, consultants’
and experts’ fees and disbursements actually incurred in investigating,
defending, settling or prosecuting any claim, litigation or proceeding) which
may at any time be imposed upon, incurred by or asserted or awarded against
Mortgagee or the Mortgaged Property, and arising directly or indirectly from or
out of:  (i) any violation or alleged violation of, or liability or
alleged liability under, any Environmental Law; (ii) the presence, release or
threat of release of or exposure to any Hazardous Substances on, in, under or
affecting all or any portion of the Mortgaged Property or any surrounding areas,
regardless of whether or not caused by or within the control of Mortgagor; (iii)
any transport, treatment, recycling, storage, disposal or arrangement therefor
of Hazardous Substances whether on the Mortgaged Property, originating from the
Mortgaged Property, or otherwise associated with Mortgagor or any operations
conducted on the Mortgaged Property at any time; (iv) the failure by Mortgagor
to comply fully with the terms and conditions of this Section 4.1; (v) the
breach of any representation or warranty contained in this Section 4.1; and (vi)
the enforcement of this Section
4.1.  The indemnity set forth in this Section 4.1 shall
also include any diminution in the value of the security afforded by the
Mortgaged Property or any future reduction in the sales price of the Mortgaged
Property by reason of any matter set forth in this Section
4.1.  Mortgagee’s rights under this Section shall survive
payment in full of the Debt and shall be in addition to all other rights of
Mortgagee under this Mortgage, the Note and the other Loan
Documents.

     

    (g)           Upon
Mortgagee’s request, at any time after the occurrence and during the continuance
of an Event of Default or at such other time as Mortgagee has reasonable grounds
to believe that Hazardous Substances are or have been released, stored or
disposed of on the Mortgaged Property, or on property affecting the Mortgaged
Property, or that the Mortgaged Property may be in violation of the
Environmental Laws, Mortgagor shall perform or cause to be performed, at
Mortgagor’s sole cost and expense and in scope, form and substance satisfactory
to Mortgagee, an inspection or audit of the Mortgaged Property prepared by a
hydrogeologist or environmental engineer or other appropriate consultant
approved by Mortgagee indicating the presence or absence of Hazardous Substances
on the Mortgaged Property, the compliance or non-compliance status of the
Mortgaged Property and the operations conducted thereon with applicable
Environmental Laws, or an inspection or audit of the Mortgaged Property prepared
by an engineering or consulting firm approved by Mortgagee indicating the
presence or absence of friable asbestos or substances containing asbestos or
lead or substances containing lead or lead based paint (“Lead Based Paint”) on
the Mortgaged Property.  If Mortgagor fails to provide reports of such
inspection or audit within thirty (30) days after such request, Mortgagee may
order the same at Mortgagor’s expense, and Mortgagor hereby grants to Mortgagee
and its employees and agents access to the Mortgaged Property and an irrevocable
license to undertake such inspection or audit.

     

    
      
        
        

      

      
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    (h)           Reference
is made to that certain Environmental Indemnity Agreement of even date herewith
from Mortgagor, Philip R. Carter and Allan C. Schwartz for the benefit of
Mortgagee (the “Environmental Indemnity
Agreement”).  The provisions of this Mortgage and the
Environmental Indemnity Agreement shall be read together to maximize the
coverage with respect to the subject matter thereof, as determined by
Mortgagee.

     

    (i)           If
the Environmental Report disclosed asbestos containing materials (“ACM’s”) at the
Mortgaged Property or if at any time hereafter ACM’s are detected at the
Mortgaged Property, Mortgagor covenants and agrees to institute, within thirty
(30) days after the date hereof, an operations and maintenance program (the
“Maintenance
Program”) designed by an environmental consultant, satisfactory to
Mortgagee, with respect to asbestos containing materials (“ACM’s”), consistent
with “Guidelines for Controlling Asbestos-Containing Materials in Buildings”
(USEPA, 1985) and other relevant guidelines, and such Maintenance Program will
hereafter continuously remain in effect until the Debt secured hereby is repaid
in full.  In furtherance of the foregoing, Mortgagor shall inspect and
maintain all ACM’s on a regular basis and ensure that all ACM’s shall be
maintained in a condition that prevents exposure of occupants to ACM’s at all
times.  Without limiting the generality of the preceding sentence,
Mortgagee may require (i) periodic notices or reports to Mortgagee in form,
substance and at such intervals as Mortgagee may specify, (ii) an amendment to
such operations and maintenance program to address changing circumstances, laws
or other matters, (iii) at Mortgagor’s sole expense, supplemental examination of
the Mortgaged Property by consultants specified by Mortgagee, and (iv) variation
of the operations and maintenance program in response to the reports provided by
any such consultants.

     

    (j)           If,
prior to the date hereof, it was determined that the Mortgaged Property contains
Lead Based Paint, Mortgagor had prepared an assessment report describing the
location and condition of the Lead Based Paint (a “Lead Based Paint
Report”).  If, at any time hereafter, Lead Based Paint is
suspected of being present on the Mortgaged Property, Mortgagor agrees, at its
sole cost and expense and within twenty (20) days thereafter, to cause to be
prepared a Lead Based Paint Report prepared by an expert, and in form, scope and
substance, acceptable to Mortgagee.

     

    (k)           Mortgagor
agrees that if it has been, or if at any time hereafter it is, determined that
the Mortgaged Property contains Lead Based Paint, on or before thirty (30) days
following (i) the date hereof, if such determination was made prior to the date
hereof or (ii) such determination, if such determination is hereafter made, as
applicable, Mortgagor shall, at its sole cost and expenses, develop and
implement, and thereafter diligently and continuously carry out (or cause to be
developed and implemented and thereafter diligently and continually to be
carried out), an operations, abatement and maintenance plan for the Lead Based
Paint on the Mortgaged Property, which plan shall be prepared by an expert, and
be in form, scope and substance, acceptable to Mortgagee (together with any Lead
Based Paint Report, the “O&M
Plan”).  If an O&M Plan has been prepared prior to the date
hereof, Mortgagor agrees to diligently and continually carry out (or cause to be
carried out) the provisions thereof.  Compliance with the O&M Plan
shall require or be deemed to require, without limitation, the proper
preparation and maintenance of all records, papers and forms required under the
Environmental Laws.

     

    
      
        
        

      

      
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    ARTICLE
V

     

    RESERVES

     

    5.1           Payment
Reserve.

     

    (a)           Contemporaneously
with the execution hereof, Mortgagor has established with Mortgagee a reserve in
the amount of one installment of the Monthly Payment and deposits for any
applicable reserves or escrow accounts required under the terms of this Mortgage
or the other Loan Documents as calculated by Mortgagee (the “Payment
Reserve”).  Mortgagor understands and agrees that,
notwithstanding the establishment of the Payment Reserve as herein required, all
of the proceeds of the Note have been, and shall be considered, fully disbursed
and shall bear interest and be payable on the terms provided
therein.  No interest on funds contained in the Payment Reserve shall
be paid by Mortgagee to Mortgagor.

     

    (b)           For
so long as no Event of Default has occurred and is continuing hereunder or under
any of the other Loan Documents, Mortgagee shall, on the first monthly Payment
Date under the Note, advance from the Payment Reserve to itself the amount of
the monthly installment due and payable by Mortgagor under the Note on such
Payment Date and shall also advance from the Payment Reserve into the Impound
Account the amount of any deposit for taxes and insurance premiums and into the
Replacement Reserve the amount of any deposit for Replacements and into any
other reserve account the amount of any deposit in accordance with the terms of
any other Loan Document required to be paid by Mortgagor concurrently with each
such monthly installment pursuant to the terms hereof and
thereof.  Provided no Default or Event of Default has occurred and is
continuing, after the final scheduled disbursement from the Payment Reserve, any
amounts then remaining in the Payment Reserve shall be paid to
Mortgagor.  Nothing contained herein, including, without limitation,
the existence of the Payment Reserve, shall release Mortgagor from its
obligation to make payments under the Note, this Mortgage or the other Loan
Documents strictly in accordance with the terms hereof or thereof and, in this
regard, without limiting the generality of the foregoing, should the amounts
contained in the Payment Reserve not be sufficient to pay in full the Monthly
Payment and the Impound Account, Replacement Reserve and any other applicable
reserve account deposits referenced above in this subparagraph, Mortgagor shall
be responsible for paying such deficiency on the Payment Date of such monthly
installment.

     

    5.2           Replacement
Reserve.

     

    (a)           As
additional security for the Debt, Mortgagor shall establish and maintain at all
times while this Mortgage continues in effect a capital improvement reserve (the
“Replacement
Reserve”) with Mortgagee for payment of costs and expenses incurred by
Mortgagor in connection with the performance of work which would normally be
treated as a capital improvement under generally accepted accounting principles
(collectively, the “Replacements”).  Commencing
on the first Payment Date under the Note and continuing on each Payment Date
thereafter, Mortgagor shall pay to Mortgagee, in addition to the monthly payment
due under the Note and until the Debt is fully paid and performed, a deposit to
the Replacement Reserve in an amount equal to $1,163 per month.  So
long as no Default or Event of Default has occurred and is continuing, Mortgagee
shall, to the extent funds are available for such purpose in the Replacement
Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in
performing Replacements within ten (10) days following:  (a) the
receipt by Mortgagee of a written request from Mortgagor for disbursement from
the Replacement Reserve and a certification by Mortgagor in a form approved in
writing by Mortgagee that the applicable item of Replacement has been completed;
(b) the delivery to Mortgagee of invoices, receipts or other evidence
satisfactory to Mortgagee, verifying the cost of performing the Replacements;
(c) for disbursement requests in excess of $25,000, the delivery to
Mortgagee of affidavits, lien waivers or other evidence reasonably satisfactory
to Mortgagee showing that all parties who might or could claim statutory or
common law liens and are furnishing or have furnished material or labor to the
Mortgaged Property have been paid all amounts due for labor and materials
furnished to the Mortgaged Property; (d) for disbursement requests in excess of
$25,000, delivery to Mortgagee of a certification from an inspecting architect
or other third party acceptable to Mortgagee describing the completed
Replacements and verifying the completion of the Replacements and the value of
the completed Replacements; and (e) for disbursement requests in excess of
$50,000, delivery to Mortgagee of a new certificate of occupancy for the portion
of the Improvements covered by such Replacements, if said new certificate of
occupancy is required by law, or a certification by Mortgagor that no new
certificate of occupancy is required.  Mortgagee shall not be required
to make advances from the Replacement Reserve more frequently than once in any
sixty (60) day period.  In making any payment from the Replacement
Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor
without any inquiry into the accuracy, validity or contestability of any such
amount.  Mortgagee may, at Mortgagor’s expense, make or cause to be
made during the term of this Mortgage an annual inspection of the Mortgaged
Property to determine the need, as determined by Mortgagee in its reasonable
judgment, for further Replacements of the Mortgaged Property; such inspection to
be no more frequent than once in any calendar year unless a Default or an Event
of Default shall have occurred and is continuing.  In the event that
such inspection reveals that further Replacements of the Mortgaged Property are
required, Mortgagee shall provide Mortgagor with a written description of the
required Replacements and Mortgagor shall complete such Replacements to the
reasonable satisfaction of Mortgagee within one hundred twenty (120) days after
the receipt of such description from Mortgagee, or such later date as may be
approved by Mortgagee in its sole discretion.

     

    
      
        
        

      

      
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    (b)           Mortgagee
shall cause funds in the Replacement Reserve to be deposited into interest
bearing accounts of the type customarily maintained by Mortgagee or its
servicing agent for the investment of similar reserves, which accounts may not
yield the highest interest rate then available.  Interest payable on
such amounts shall be computed based on the daily outstanding balance in the
Replacement Reserve.  Such interest shall be calculated on a simple,
non-compounded interest basis based solely on contributions made to the
Replacement Reserve by Mortgagor.  All interest earned on amounts
contributed to the Replacement Reserve shall be retained by Mortgagee and
accumulated for the benefit of Mortgagor and added to the balance in the
Replacement Reserve and shall be disbursed for payment of the items for which
other funds in the Replacement Reserve are to be disbursed.

     

    5.3           Repair and Remediation
Reserve.  Prior to the execution of this Mortgage, Mortgagee
has caused the Mortgaged Property to be inspected and such inspection has
revealed that the Mortgaged Property is in need of certain maintenance, repairs
and/or remedial or corrective work.  Contemporaneously with the
execution hereof, Mortgagor has established with the Mortgagee a reserve in the
amount of $6,000 (the “Repair and Remediation
Reserve”) by depositing such amount with Mortgagee.  Mortgagor
shall cause each of the items described in that certain Engineering Report (the
“Engineering
Report”) entitled Property Condition Report, dated August 16, 2002 and
prepared by National Assessment Corporation (the “Deferred
Maintenance”) to be completed, performed, remediated and corrected to the
satisfaction of Mortgagee and as necessary to bring the Mortgaged Property into
compliance with all applicable laws, ordinances, rules and regulations on or
before the expiration of six (6) months after the effective date hereof, as such
time period may be extended by Mortgagee in its sole discretion.  So
long as no Event of Default has occurred, all sums in the Repair and Remediation
Reserve shall be held by Mortgagee in the Repair and Remediation Reserve to pay
the costs and expenses of completing the Deferred Maintenance.  So
long as no Event of Default has occurred, Mortgagee shall, to the extent funds
are available for such purpose in the Repair and Remediation Reserve, disburse
to Mortgagor the amount paid or incurred by Mortgagor in completing, performing,
remediating or correcting the Deferred Maintenance upon (a) the receipt by
Mortgagee of a written request from Mortgagor for disbursement from the Repair
and Remediation Reserve and a certification by Mortgagor in a form as may be
required by Mortgagee that the applicable item of Deferred Maintenance has been
completed in accordance with the terms of this Mortgage, (b) delivery to
Mortgagee of invoices, receipts or other evidence satisfactory to Mortgagee
verifying the costs of the Deferred Maintenance to be reimbursed,
(c) delivery to Mortgagee of a certification from an inspecting architect,
engineer or other consultant reasonably acceptable to Mortgagee describing the
completed work, verifying the completion of the work and the value of the
completed work and, if applicable, certifying that the Mortgaged Property is, as
a result of such work, in compliance with all applicable laws, ordinances, rules
and regulations relating to the Deferred Maintenance so performed and
(d) delivery to Mortgagee of affidavits, lien waivers or other evidence
reasonably satisfactory to Mortgagee showing that all materialmen, laborers,
subcontractors and any other parties who might or could claim statutory or
common law liens and are furnishing or have furnished materials or labor to the
Mortgaged Property have been paid all amounts due for such labor and materials
furnished to the Mortgaged Property.  Mortgagee shall not be required
to make advances from the Repair and Remediation Reserve more frequently than
once in any sixty (60) day period.  In making any payment
from the Repair and Remediation Reserve, Mortgagee shall be entitled to rely on
such request from Mortgagor without any inquiry into the accuracy, validity or
contestability of any such amount.  No interest on the funds contained
in the Repair and Remediation Reserve shall be paid by Mortgagee to
Mortgagor.  Mortgagor hereby grants to Mortgagee a power-of-attorney,
coupled with an interest, to cause the Deferred Maintenance to be completed,
performed, remediated and corrected to the satisfaction of Mortgagee upon
Mortgagor’s failure to do so in accordance with the terms and conditions of this
Section 5.3, and to apply the amounts on deposit in the Repair and Remediation
Reserve to the costs associated therewith, all as Mortgagee may determine in its
sole and absolute discretion but without obligation to do so.

     

    
      
        
        

      

      
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    5.4           Rollover
Reserve.

     

    (a)           As
additional security for the Debt, Mortgagor shall establish and maintain at all
times while this Mortgage continues in effect a rollover reserve (the “Rollover Reserve”)
with Mortgagee for payment of costs and expenses incurred by Mortgagor in
connection with the payment of tenant improvements (“Tenant Improvements”)
and leasing commissions (“Leasing Commissions”)
with respect to the Mortgaged Property and the cost to Mortgagor of rent
abatements (“Future
Rent Abatements”) with respect to the Mortgaged Property not otherwise
reserved for pursuant to Section 5.5 of this Mortgage.  Commencing on
the first Payment Date under the Note and continuing on each Payment Date
thereafter, Mortgagor shall pay to Mortgagee, in addition to the monthly payment
due under the Note and until the Debt is fully paid and performed, a deposit to
the Rollover Reserve in an amount (the “Monthly Rollover
Deposit”) equal to $7,269.42 per month until such time as the amount on
deposit in the Rollover Reserve is equal to (a) prior to January 1, 2009,
$200,000 (the “Initial
Rollover Reserve Threshold”) or (b) on and after January 1, 2009,
$400,000 (the “Increased Rollover Reserve
Threshold”, and together with the Initial Rollover Reserve Threshold, the
“Rollover Reserve
Threshold”).  In the event that the amount on deposit in the
Rollover Reserve satisfies the applicable Rollover Reserve Threshold, but
thereafter such amount on deposit in the Rollover Reserve falls below such
Rollover Reserve Threshold, Borrower shall re-commence its payment of the
Monthly Rollover Deposit until such time as the amount on deposit in the
Rollover Reserve once again satisfies the applicable Rollover Reserve
Threshold.  Funds on deposit in the Rollover Reserve shall be held in
interest bearing accounts of the type customarily maintained by Mortgagee or its
servicing agent for similar reserves.  All interest earned shall be
retained by Mortgagee for the benefit of Mortgagor and shall be added to the
balance of the Rollover Reserve.

     

    (b)           So
long as no Default or Event of Default has occurred and is continuing, Mortgagee
shall, to the extent funds are available for such purpose in the Rollover
Reserve, disburse to Mortgagor amounts from the Rollover Reserve upon
satisfaction of the following conditions:

     

    (i)           Mortgagor
shall submit a certified requisition (“Requisition”),
reasonably satisfactory to Mortgagee.  For Tenant Improvements, the
Requisition shall provide such detail as Mortgagee may reasonably require,
showing percentage of completion, all work completed since the last Requisition,
and the amounts expended or incurred for work completed for the applicable
period.  For Leasing Commissions, the Requisition shall detail the
services rendered by the real estate broker and be accompanied by the broker’s
invoice showing the Leasing Commissions then due or paid in full by
Mortgagor.  Leasing Commissions will be disbursed directly to the real
estate broker (or paid to Mortgagor if reimbursement is sought), provided that a
valid release executed by the broker and Mortgagor is delivered to Mortgagee and
the terms of this Section 5.4(b) have otherwise been met, provided further,
that disbursement shall be made only with respect to Leasing Commissions payable
to unrelated non-affiliated third party brokers.  For Future Rent
Abatements, the Requisition shall provide such detail as Mortgagee may
reasonably require, including a written certification from Mortgagor in a form
as may be required by Mortgagee that each of the subject Future Rent Abatements
have expired.

     

    
      
        
        

      

      
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    (ii)           The
Requisition is supported by documentation, including (a) a detailed description
of the Tenant Improvements and/or Leasing Commissions, as applicable, (b) with
respect to Tenant Improvements, a certificate of completion by an architect
approved by Mortgagee providing that the applicable Tenant Improvements which
are the subject of the Requisition have been completed in accordance with the
requirements set forth herein, (c) with respect to Tenant Improvements, a line
item list of costs of Tenant Improvements certified as to its accuracy by
Mortgagor, (d)with respect to Tenant Improvements, and upon the final
Requisition therefor, a valid copy of the certificate of occupancy issued by the
appropriate governmental entity or a certification by Mortgagor that no new
certificate of occupancy is required for the lawful occupancy of the space in
which the Tenant Improvements have been performed, all in a manner satisfactory
to Mortgagee in its sole and absolute discretion and (e) with respect to Future
Rent Abatements, an estoppel certificate in a form acceptable to Mortgagee from
the tenant that has benefited from such Future Rent Abatement stating that there
such Future Rent Abatement has expired and is no longer outstanding under its
lease.

     

    (iii)           Mortgagor,
if requested by Mortgagee, will furnish evidence reasonably satisfactory to
Mortgagee and to any title company (including lien waivers, invoices and
receipts), confirming the priority of this Mortgage and proving all obligations
of Mortgagor to any contractor for labor or materials furnished in connection
with the Tenant Improvements as of the date of the Requisition have been
satisfied.  Further, if requested by Mortgagee such title company
shall have issued an endorsement to Mortgagee’s title insurance policy
confirming the priority of the Mortgage or a title bring-to-date showing that
title to the Mortgaged Property is free and clear of encumbrances other than
those in the form of title commitment accepted by Mortgagee at
closing.

     

    (iv)           Mortgagor
shall provide evidence that all completed Tenant Improvements comply with any
and all Applicable Laws and that all necessary permits, certificates,
certificates of occupancy, certificates of completion or other approvals of any
governmental authority having jurisdiction have been obtained and continue in
full force and effect.

     

    (v)           All
documents required by Mortgagee to be recorded or filed shall have been recorded
or filed.

     

    (vi)           With
the exception of the final Requisition, no request submitted by Mortgagor shall
be for an amount less than Two Thousand Five Hundred Dollars
($2,500).

     

    (vii)           At
the time of disbursement, payment shall have been made in full by Mortgagor of
all out-of-pocket expenses incurred by Mortgagee (including the fees and charges
of Mortgagee’s title company, counsel, architect, engineer and other
consultants) in connection with any such disbursement.  Mortgagee may,
at any time and from time to time, and without prior notice to Mortgagor,
withdraw funds deposited in the Rollover Reserve to pay all or any of such fees,
charges and expenses to Mortgagee or any such other parties as
necessary.  Further, and notwithstanding anything herein to the
contrary, all such fees, charges and expenses shall be payable by Mortgagor to
Mortgagee, at any time and from time to time, upon demand, and regardless of
whether Mortgagor has submitted a Requisition.

     

    
      
        
        

      

      
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    (viii)          Requisitions
may be submitted no more frequently than once every thirty (30) days up to six
(6) times a year.  Approval of any Requisition shall not constitute a
waiver of Mortgagee’s rights as to any defective work or material or any work
that fails to comply with the requirements therefor set out herein or the other
provisions hereof.

     

    In
addition to the foregoing disbursement conditions, Mortgagor shall also be
entitled to disbursements from the Rollover Reserve so long as (a) no Event of
Default has occurred and is continuing, (b) the conditions precedent to a
disbursement from the Cash Sweep Reserve have been met and (c) there are no
further amounts on deposit in the Cash Sweep Reserve.  The amounts
that may be disbursed from the Rollover Reserve pursuant to the immediately
preceding sentence shall be the same amounts as described in Section 5.6
hereof.

     

    (c)           Mortgagee,
by acceptance of the sums deposited in the Rollover Reserve, does not assume any
personal liability and Mortgagor hereby releases Mortgagee from any such
liability and no claim shall be made by Mortgagor upon Mortgagee for or on
account of any matter in excess of the balance of the sums remaining in the
Rollover Reserve.  Mortgagee shall be protected in acting upon any
notice, request, consent, demand, statement, note or other paper or document
believed by Mortgagee to be genuine and to have been signed by the party or
parties purporting to sign the same.  Furthermore, Mortgagor agrees
that Mortgagee is neither an agent for Mortgagor nor a trustee and Mortgagee
shall not incur any liability whatsoever in connection with those
capacities.  Mortgagee’s acceptance of and administration of, the
Rollover Reserve, shall not impose any responsibility on Mortgagee beyond the
payment and disbursement of funds in accordance herewith.

     

    5.5           Rent Abatement
Reserve.  Contemporaneously with the execution hereof,
Mortgagor has established with the Mortgagee a reserve in the amount of $85,000
(the “Rent Abatement
Reserve”) by depositing such amount with Mortgagee.  So long as
no Event of Default has occurred, Mortgagee shall, to the extent funds are
available for such purpose in the Rent Abatement Reserve, disburse to Mortgagor
all amounts on deposit in the Rent Abatement Reserve upon the receipt by
Mortgagee of (a) a written request from Mortgagor for disbursement of funds on
deposit in the Rent Abatement Reserve and a certification by Mortgagor in a form
as may be required by Mortgagee that each of the rent abatements identified on
Schedule 5.5 of
this Mortgage has expired and (b) an estoppel certificate in a form acceptable
to Mortgagee from each of the tenants identified on Schedule 5.5 of this
Mortgage stating that there are no further rent abatements outstanding under its
respective lease.  Funds on deposit in the Rent Abatement Reserve
shall be held in interest bearing accounts of the type customarily maintained by
Mortgagee or its servicing agent for similar reserves.  All interest
earned shall be retained by Mortgagee for the benefit of Mortgagor and shall be
added to the balance of the Rent Abatement Reserve.

     

    5.6           Cash Sweep
Reserve.

     

    (a)           Commencing
on the Payment Date beginning on September 1, 2009 and continuing on each
Payment Date thereafter, Mortgagor shall deposit with Mortgagee in a reserve
(the “Cash Sweep
Reserve”) all Excess Cash Flow until such time as the amount on deposit
in the Cash Sweep Reserve equals an amount that, when added with the amount then
on deposit in the Rollover Reserve, equals $1,164,916.00 (the “2011 Minimum Rollover
Threshold”), provided, however, that the 2011 Minimum Rollover Threshold
shall be reduced by the Allocable 2011 Rollover Amount (as hereinafter defined)
for the subject 2011 Rollover Space (as hereinafter defined) so long as the
conditions for disbursement of funds from the Cash Sweep Reserve described in
Section 5.6(b) below have been satisfied (irrespective of whether the
satisfaction of such conditions occurs prior to or after the establishment of
such Cash Sweep Reserve).  Notwithstanding the foregoing, in the event
that, following the achievement of the 2011 Minimum Rollover Threshold,
Mortgagor shall receive disbursements from the Rollover Reserve pursuant to and
in accordance with Section 5.4(b) hereof that do not relate to the renewing or
reletting of the 2011 Rollover Spaces, which disbursements result in the amount
on deposit in the Rollover Reserve and Cash Sweep Reserve being less than the
2011 Minimum Rollover Threshold, Mortgagor shall re-commence its monthly
deposits to the Cash Sweep Reserve of Excess Cash Flow until such time as the
2011 Minimum Rollover Threshold is once again satisfied.  For the
purposes of this Section 5.6 only, “Excess Cash Flow”
shall mean all gross revenue from the Mortgaged Property after payment of the
items set forth in Section 4(a)(i)-(vi) of that certain Cash Management
Agreement of even date herewith by and between Mortgagor and
Mortgagee.  Funds on deposit in the Cash Sweep Reserve shall be held
in interest bearing accounts of the type customarily maintained by Mortgagee or
its servicing agent for similar reserves.  All interest earned shall
be retained by Mortgagee for the benefit of Mortgagor and shall be added to the
balance of the Cash Sweep Reserve.

     

    
      
        
        

      

      
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    (b)           So
long as no Default or Event of Default has occurred and is continuing, Mortgagee
shall, to the extent funds are available for such purpose in the Cash Sweep
Reserve, disburse to Mortgagor amounts from the Cash Sweep Reserve upon
satisfaction of the following conditions:

     

    (i)           Mortgagee
shall have received written evidence from Mortgagor that, with respect to the
entirety of any one of the tenant spaces (the “2011 Rollover
Spaces”) identified on Schedule 5.6 of this Mortgage having leases on the
date hereof that expire in 2011, there are renewal or replacement leases in
place with terms and provisions that are acceptable to Lender; and

     

    (ii)           Mortgagee
shall have received an estoppel certificate in a form acceptable to Mortgagee
that states, among other things that Mortgagee may then require, that (A) the
lease pursuant to which such tenant is in possession of its respective 2011
Rollover Space is in full force and effect, (B) rental obligations under such
renewal or replacement lease have commenced and rent currently due and payable
has been paid and (C) there are no monies owed by Mortgagor to such tenant
relating to the reletting of such 2011 Rollover Space, including, without
limitation, for any tenant improvements, tenant allowances or leasing
commissions.

     

    In the
event that Mortgagor satisfies the conditions set forth in this Section 5.6(b),
and provided that there is no Event of Default then continuing, Mortgagee shall
disburse to Mortgagor an amount (the “Allocable 2011 Rollover
Amount”) equal to (1) in the event that the satisfaction of such
conditions to disbursement occurs prior to the time at which the 2011 Minimum
Rollover Reserve Threshold is satisfied, $16.85 per square foot for the subject
2011 Rollover Space; provided, however, that no disbursements shall be made from
the Cash Sweep Reserve (or Rollover Reserve, as the case may be) under this
clause (1) unless Mortgagee shall have received written evidence reasonably
satisfactory to Mortgagee that at the time of such disbursement, (a) there is an
occupancy rate at the Mortgaged Property equal to at least ninety percent (90%)
and (b) the debt service coverage ratio (as determined by Mortgagee in its sole
discretion) for the Mortgaged Property shall equal or exceed 1.25:1.00, or (2)
in the event that the satisfaction of such conditions to disbursement occurs on
or after the time at which the 2011 Minimum Rollover Reserve Threshold is
satisfied, the lesser of (x) the actual costs of tenant improvements, leasing
commissions and/or rent abatements incurred by Mortgagor in connection with the
renewal or re-letting of the subject 2011 Rollover Space or (y) that portion of
the Cash Sweep Reserve (or Rollover Reserve, as the case may be) allocated to
the subject 2011 Rollover Space as more particularly set forth on Schedule 5.6
of this Mortgage.

     

    
      
        
        

      

      
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    5.7           Reserves;
General.

     

    (a)           As
additional security for the payment and performance by Mortgagor of all duties,
responsibilities and obligations under the Note, this Mortgage and the other
Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns and
pledges to Mortgagee, and hereby grants to Mortgagee a security interest in, (i)
the Impound Account, the Payment Reserve, the Rent Abatement Reserve, the
Replacement Reserve, the Rollover Reserve, the Cash Sweep Reserve, the Repair
and Remediation Reserve and any other reserve or escrow account established
pursuant to the terms hereof or of any other Loan Document (collectively, the
“Reserves”),
(ii) all insurance on said accounts, (iii) all accounts, contract rights and
general intangibles or other rights and interests pertaining thereto, (iv) all
replacements, substitutions or proceeds thereof, (v) all instruments and
documents now or hereafter evidencing the Reserves or such accounts, (vi) all
powers, options, rights, privileges and immunities pertaining to the Reserves
(including the right to make withdrawals therefrom) and (vii) all replacements,
substitutions and all proceeds of the foregoing.  Mortgagor hereby
authorizes and consents to each account into which the Reserves have been
deposited being held in Mortgagee’s name or the name of any entity servicing the
loan evidenced by the Note for Mortgagee and hereby acknowledges and agrees that
Mortgagee, or at Mortgagee’s election, such servicing agent, shall have
exclusive control over each account.  Notice of the assignment and
security interest granted to Mortgagee herein may be delivered by Mortgagee at
any time to the financial institutions wherein the Reserves have been
established, and Mortgagee, or such servicing entity, shall have possession of
all passbooks or other evidences of such accounts.  Mortgagor hereby
assumes all risk of loss with respect to amounts on deposit in the Reserves
other than any such loss resulting solely from the willful misconduct of
Mortgagee as finally determined by a court of competent
jurisdiction.  Mortgagor hereby knowingly, voluntarily and
intentionally stipulates, acknowledges and agrees that the advancement of the
funds from the Reserves as set forth herein is at Mortgagor’s direction and is
not the exercise by Mortgagee of any right of set-off or other remedy upon a
Default or an Event of Default.  Mortgagor hereby waives all right to
withdraw funds from the Reserves except as provided for in this
Mortgage.  If an Event of Default shall occur and be continuing
hereunder or under any other of the Loan Documents, Mortgagee may, without
notice or demand on Mortgagor, at its option:  (A) withdraw any or all
of the funds (including, without limitation, interest) then remaining in the
Reserves and apply the same, after deducting all costs and expenses of
safekeeping, collection and delivery (including, but not limited to, reasonable
attorneys’ fees, costs and expenses) to the Debt or any other obligations of
Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem
appropriate in its sole discretion, and the excess, if any, shall be paid to
Mortgagor, (B) exercise any and all rights and remedies of a secured party under
any applicable Uniform Commercial Code or (C) exercise any other remedies
available at law or in equity.  No such use or application of the
funds contained in the Reserves shall be deemed to cure any Default or Event of
Default.

     

    (b)           All
Reserves shall be held in Eligible Accounts and Mortgagor agrees that all
Reserves and such other funds held by Mortgagee as security for the loan may be
invested in Permitted Investments.

     

    
      
        
        

      

      
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    “Eligible Accounts”
shall mean a separate and identifiable account from all other funds held by the
holding institution that is either (a) an account or accounts maintained with a
federal or state chartered depository institution or trust company which
complies with the definition of Eligible Institution or (b) a segregated trust
account or accounts maintained with a federal or state chartered depository
institution or trust company acting in its fiduciary capacity which, in the case
of a state chartered depository institution or trust company, is subject to
regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal and state authority.  An Eligible Account
will not be evidenced by a certificate of deposit, passbook or other
instrument.

     

    “Eligible Institution”
shall mean a depository institution or trust company insured by the Federal
Deposit Insurance Corporation, the short term unsecured debt obligations or
commercial paper of which are rated at least “A-1” by S&P, “P-1” by Moody’s
and “F-1+” by Fitch in the case of accounts in which funds are held for thirty
(30) days or less (or, in the case of accounts in which funds are held for more
than thirty (30) days, the long term unsecured debt obligations of which are
rated at least “AA” by Fitch and S&P and “Aa2” by Moody’s).

     

    “Permitted Investment”
shall mean any one or more of the following obligations or securities (including
obligations or securities of the trustee in any securitization of which this
Loan is a part if otherwise qualifying hereunder) acquired at a purchase price
of not greater than par, payable on demand or having a maturity date not later
than the business day immediately prior to the first monthly Payment Date
following the date of acquiring such investment:

     

    (i)           direct
obligations of, or obligations fully guaranteed as to timely payment of
principal and interest by, the United States or any agency or instrumentality
thereof, provided such obligations are backed by the full faith and credit of
the United States.  Such obligations must be limited to those
instruments that have a predetermined fixed dollar amount of principal due at
maturity that cannot vary or change.  If rated, such an obligation
must not have an “r” highlighter affixed to its rating by
S&P.  Interest may either be fixed or variable, must be tied to a
single interest rate index plus a single fixed spread (if any) and must move
proportionately with that index.  Such investments should not be
relied upon for a fixed yield;

     

    (ii)           repurchase
obligations with respect to any security described in clause (i) above (having
original maturities of not more than 365 days), provided that the short-term
deposit or debt obligations of the party agreeing to repurchase such obligations
are rated in the highest short term rating category by each Rating Agency or
such lower rating as will not result in qualification, downgrading or withdrawal
of the rating then assigned to the certificates, as evidenced in writing by the
applicable Rating Agencies.  In addition, any such item must not have
an “r” highlighter affixed to its rating by S&P, and its terms should have a
predetermined fixed dollar amount of principal due at maturity that cannot vary
or change.  Interest may either be fixed or variable, must be tied to
a single interest rate index plus a single fixed spread (if any) and must move
proportionately with that index.  Such investments should not be
relied upon for a fixed yield;

     

    
      
        
        

      

      
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    (iii)           certificates
of deposit, time deposits, demand deposits and bankers’ acceptances of any bank
or trust company organized under the laws of the United States or any state
thereof (having original maturities of not more than 365 days), the short-term
obligations of which are rated in the highest short term rating category of each
of the Rating Agencies or such lower rating as will not result in qualification,
downgrading or withdrawal of the ratings then assigned to the certificates, as
evidenced in writing by the applicable Rating Agencies.  In addition,
any such item must not have an “r” highlighter affixed to its ratings by
S&P, and its terms should have a predetermined fixed dollar amount of
principal due at maturity that cannot vary or change.  Interest may
either be fixed or variable, must be tied to a single interest rate index plus a
single fixed spread (if any) and must move proportionately with that
index.  Such investments should not be relied upon for a fixed
yield;

     

    (iv)           commercial
paper (having original maturities of not more than 365 days) of any
corporation incorporated under the laws of the United States or any state
thereof (or if not so incorporated, the commercial paper is United States Dollar
denominated and amounts payable thereunder are not subject to any withholding
imposed by any non-United States jurisdiction) which is rated in the highest
short term rating category of each of the Rating Agencies or such lower rating
as will not result in qualification, downgrading or withdrawal of the ratings
then assigned to the certificates, as evidenced in writing by the applicable
Rating Agencies.  The commercial paper must not have an “r”
highlighter affixed to its rating by S&P and by its terms should have a
predetermined fixed dollar amount of principal due at maturity that cannot vary
or change.  Interest may either be fixed or variable, must be tied to
a single interest rate index plus a single fixed spread (if any), and must move
proportionately with that index.  Such investments should not be
relied upon for a fixed yield;

     

    (v)           units
of money market funds rated in the highest rating category of each of the Rating
Agencies (or such lower rating as will not result in qualification, downgrading
or withdrawal of the ratings then assigned to the certificates, as evidenced in
writing by the applicable Rating Agencies) and which seek to maintain a constant
net asset value;

     

    (vi)           any
other security, obligation or investment acceptable to each Rating Agency,
evidenced of which acceptability shall be provided in writing by each Rating
Agency to the master servicer, the special servicer and the
trustee;

     

    provided
that no investment described in this Section 5.4 shall evidence either the right
to receive (x) only interest with respect to such investment (y) a yield to
maturity greater than 120% of the yield to maturity at par of the underlying
obligations.

     

    (c)           The
Reserves shall not, unless otherwise explicitly required by applicable law, be
or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in
Mortgagee’s discretion, may either be held in a separate account or be
commingled by Mortgagee with the general funds of Mortgagee.  Upon
assignment of this Mortgage by Mortgagee, any funds in the Reserves shall be
turned over to the assignee and any responsibility of Mortgagee, as assignor,
with respect thereto shall terminate.  If the funds in the applicable
Reserve shall exceed the amount of payments actually applied by Mortgagee for
the purposes and items for which the applicable Reserve is held, such excess may
be credited by Mortgagee on subsequent payments to be made hereunder or, at the
option of Mortgagee, refunded to Mortgagor.  If, however, the
applicable Reserve shall not contain sufficient funds to pay the sums required
by the dates on which such sums are required to be on deposit in such account,
Mortgagor shall, within ten (10) days after receipt of written notice
thereof, deposit with Mortgagee the full amount of any such
deficiency.  If Mortgagor shall fail to deposit with Mortgagee the
full amount of such deficiency as provided above, Mortgagee shall have the
option, but not the obligation, to make such deposit.

     

    
      
        
        

      

      
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    ARTICLE
VI

     

    RENTS; LEASES;
ALIENATION

     

    6.1           Rents and
Profits.  As additional and collateral security for the payment
of the Debt and cumulative of any and all rights and remedies herein provided
for, Mortgagor hereby absolutely and presently assigns to Mortgagee all existing
and future Rents and Profits.  Mortgagor hereby grants to Mortgagee
the sole, exclusive and immediate right, without taking possession of the
Mortgaged Property, to demand, collect (by suit or otherwise), receive and give
valid and sufficient receipts for any and all of said Rents and Profits, for
which purpose Mortgagor does hereby irrevocably make, constitute and appoint
Mortgagee its attorney-in-fact with full power to appoint substitutes or a
trustee to accomplish such purpose.  Mortgagee shall be without
liability for any loss which may arise from a failure or inability to collect
Rents and Profits, proceeds or other payments.  However, until the
occurrence of an Event of Default under this Mortgage or under any other of the
Loan Documents, Mortgagor shall have a license to collect, receive, use and
enjoy the Rents and Profits when due and prepayments thereof for not more than
one (1) month prior to due date thereof.  The assignment of Rents and
Profits hereinabove granted shall continue in full force and effect during any
period of foreclosure or redemption with respect to the Mortgaged
Property.  Mortgagor has executed an Assignment of Leases and Rents
dated of even date herewith (the “Assignment”) in favor
of Mortgagee covering all of the right, title and interest of Mortgagor, as
landlord, lessor or licensor, in and to any Leases.  All rights and
remedies granted to Mortgagee under the Assignment shall be in addition to and
cumulative of all rights and remedies granted to Mortgagee
hereunder.

     

    6.2           Leases.

     

    (a)           Mortgagor
covenants and agrees that it shall not enter into any Lease affecting the lesser
of (x) ten percent (10%) of the gross leaseable area of the Improvements and (y)
10,000 square feet or more of the Mortgaged Property or having a term of ten
(10) years or more without the prior written approval of Mortgagee, which
approval shall not be unreasonably withheld.  The request for approval
of each such proposed new Lease shall be made to Mortgagee in writing and
Mortgagor shall furnish to Mortgagee (and any loan servicer specified from time
to time by Mortgagee):  (i) such biographical and financial
information about the proposed Tenant as Mortgagee may require in conjunction
with its review, (ii) a copy of the proposed form of Lease and (iii) a summary
of the material terms of such proposed Lease (including, without limitation,
rental terms and the term of the proposed lease and any options).  It
is acknowledged that Mortgagee intends to include among its criteria for
approval of any such proposed Lease the following:  (i) such Lease
shall be with a bona-fide arm’s-length Tenant; (ii) the terms of such Lease
shall comply with the requirements set forth in paragraphs (b) and
(c) below; and (iii) such Lease shall provide that the Tenant pays for its
expenses.  Failure of Mortgagee to approve or disapprove any such
proposed Lease within fifteen (15) business days after receipt of such written
request and all the documents and information required to be furnished to
Mortgagee with such request shall be deemed approved, provided that the written
request for approval specifically mentioned the same.

     

    
      
        
        

      

      
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    (b)           Prior
to execution of any Leases of space in the Improvements after the date hereof,
Mortgagor shall submit to Mortgagee, for Mortgagee’s prior approval, which
approval shall not be unreasonably withheld, a copy of the form Lease Mortgagor
plans to use in leasing space in the Improvements or at the Mortgaged
Property.  All such Leases of space at the Mortgaged Property shall be
at a rental and on terms consistent with the terms for similar leases in the
market area of the Premises.  Mortgagor shall also submit to Mortgagee
for Mortgagee’s approval, which approval shall not be unreasonably withheld,
prior to the execution thereof, any proposed Lease of the Improvements or any
portion thereof that differs materially and adversely from the aforementioned
form Lease.  Mortgagor shall not execute any Lease for all or a
substantial portion of the Mortgaged Property, except for an actual occupancy by
the Tenant, lessee or licensee thereunder, and shall at all times promptly and
faithfully perform, or cause to be performed, all of the covenants, conditions
and agreements contained in all Leases with respect to the Mortgaged Property,
now or hereafter existing, on the part of the landlord, lessor or licensor
thereunder to be kept and performed.  Mortgagor shall furnish to
Mortgagee, within ten (10) days after a request by Mortgagee to do so, but in
any event by January 1 of each year, a current Rent Roll, certified by Mortgagor
as being true and correct, containing the names of all Tenants with respect to
the Mortgaged Property, the terms of their respective Leases, the spaces
occupied and the rentals or fees payable thereunder and the amount of each
Tenant’s security deposit.  Upon the request of Mortgagee, Mortgagor
shall deliver to Mortgagee a copy of each such Lease.  Mortgagor shall
not do or suffer to be done any act, or omit to take any action, that might
result in a default by the landlord, lessor or licensor under any such Lease or
allow the Tenant thereunder to withhold payment of rent or cancel or terminate
same and shall not further assign any such Lease or any such Rents and
Profits.  Mortgagor, at no cost or expense to Mortgagee, shall
enforce, short of termination, the performance and observance of each and every
condition and covenant of each of the parties under such Leases and Mortgagor
shall not anticipate, discount, release, waive, compromise or otherwise
discharge any rent payable under any of the Leases.  Mortgagor shall
not, without the prior written consent of Mortgagee, modify any of the Leases,
terminate or accept the surrender of any Leases, waive or release any other
party from the performance or observance of any obligation or condition under
such Leases except, with respect only to Leases affecting less than the lesser
of (x) ten percent (10%) of the gross leaseable area of the Improvements and (y)
10,000 square feet and having a term of less than ten (10) years, in the normal
course of business in a manner which is consistent with sound and customary
leasing and management practices for similar properties in the community in
which the Mortgaged Property is located.  Mortgagor shall not permit
the prepayment of any rents under any of the Leases for more than one (1) month
prior to the due date thereof.

     

    (c)           Each
Lease executed after the date hereof affecting any of the Premises or the
Improvements must provide, in a manner approved by Mortgagee, that the Lease is
subordinate to the lien of this Mortgage and that Tenant will recognize as its
landlord, lessor or licensor, as applicable, and attorn to any person succeeding
to the interest of Mortgagor upon any foreclosure of this Mortgage or deed in
lieu of foreclosure.  Each such Lease shall also provide that, upon
request of said successor-in-interest, the Tenant shall execute and deliver an
instrument or instruments confirming its attornment as provided for in this
Section; provided,
however, that neither Mortgagee nor any successor-in-interest shall be
bound by any payment of rent for more than one (1) month in advance, or any
amendment or modification of said Lease made without the express written consent
of Mortgagee or said successor-in-interest.

     

    
      
        
        

      

      
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    6.3           Alienation and Further
Encumbrances.

     

    (a)           Mortgagor
acknowledges that Mortgagee has relied upon the principals of Mortgagor and
their experience in owning and operating the Mortgaged Property and properties
similar to the Mortgaged Property in connection with the closing of the loan
evidenced by the Note.  Accordingly, except as specifically allowed
hereinbelow in this Section and notwithstanding anything to the contrary
contained in Section
16.4 hereof, in the event that the Mortgaged Property or any part thereof
or direct or indirect interest therein shall be sold, conveyed, disposed of,
alienated, hypothecated, leased (except to Tenants of space in the Improvements
in accordance with the provisions of Section 6.2 hereof),
assigned, pledged, mortgaged, further encumbered or otherwise transferred or
Mortgagor shall be divested of its title to the Mortgaged Property or any
interest therein, in any manner or way, whether voluntarily or involuntarily,
without the prior written consent of Mortgagee being first obtained, which
consent may be withheld in Mortgagee’s sole discretion, then the same shall
constitute an Event of Default and Mortgagee shall have the right, at its
option, to declare any or all of the Debt, irrespective of the maturity date
specified in the Note, immediately due and payable and to otherwise exercise any
of its other rights and remedies contained in Article XV
hereof.  For the purposes of this Section, each of the following shall
be deemed to be a transfer of an interest in the Mortgaged
Property:  (i) in the event either Mortgagor or any of its
shareholders, partners or members is a corporation or trust, the direct or
indirect sale, conveyance, transfer, disposition, alienation, hypothecation or
encumbering of more than 49% (in one or more related transactions) of the issued
and outstanding capital stock of Mortgagor or any of its shareholders, partners
or members or of the beneficial interest of such trust (or the issuance of new
shares of capital stock of any of them (in one or a series of transactions) such
that, after giving effect to such issuance and any prior issuance, more than
forty-nine percent (49%) in the aggregate of the outstanding capital stock of
Mortgagor or any of its shareholders, partners or members is owned by any person
or entity and their affiliates unless such person or entity and their affiliates
owned more than forty-nine percent (49%) of the outstanding capital stock of
Mortgagor or such shareholder, partner or member as of the date hereof); and
(ii) in the event Mortgagor or any partner or member of Mortgagor is an
individual or an entity other than a corporation or trust, a direct or indirect
change in the ownership interests in Mortgagor or any partner, any joint
venturer or any member, either voluntarily, involuntarily or otherwise, or the
direct or indirect sale, conveyance, transfer, disposition, alienation,
hypothecation or encumbering of all or any portion of the interests of Mortgagor
or of any such partner, joint venturer or member in Mortgagor or of such partner
or member (whether in the form of a beneficial or partnership interest or in the
form of a power of direction, control or management, or
otherwise).  Notwithstanding the foregoing, however, (i) up to (but
not more than) 49% of the limited partner or non-managing member interests in
Mortgagor (but not interests held by a general partner or managing member) shall
be transferable without Mortgagee’s consent so long as, after giving effect to
such transfer and any prior transfers, no more than forty-nine percent (49%) in
the aggregate of such limited partner or non-managing member interests in
Mortgagor are owned by any person or entity and their affiliates unless such
person or entity and their affiliates owned more than a forty-nine percent (49%)
limited partner or non-managing member interest in Mortgagor as of the date
hereof (provided that if, after giving effect to any such transfer and all prior
transfers, more than forty-nine percent (49%) in the aggregate of such limited
partner or non-managing member interests in Mortgagor are owned by any person or
entity and their affiliates that owned less than a forty-nine percent (49%)
limited partner or non-managing member interest in Mortgagor as of the date
hereof, Mortgagee shall receive (x) a non-consolidation opinion acceptable to
Mortgagee and the Rating Agencies and (y) confirmation in writing from the
Rating Agencies that rate the securities issued with respect to a securitization
of the Loan to the effect that the transfer will not result in a qualification,
downgrade or withdrawal of any rating initially assigned or to be assigned to
the securities so issued), (ii) any involuntary transfer caused by the death of
any partner, shareholder, joint venturer or member of Mortgagor or beneficial
owner of a trust shall not be an Event of Default under this Mortgage so long as
Mortgagor is promptly reconstituted, if required, following such death and so
long as those persons responsible for the management of the Mortgaged Property
and Mortgagor remain unchanged as a result of such death or any replacement
management is approved by Mortgagee, and (iii) gifts for estate planning
purposes of any individual’s interests in Mortgagor or in any of Mortgagor’s
partners, members or joint venturers to the spouse or any lineal descendant of
such individual, or to a trust for the benefit of such spouse or lineal
descendant, shall not be an Event of Default under this Mortgage so long as
Mortgagor is promptly reconstituted, if required, following such gift and so
long as those persons responsible for the management of the Mortgaged Property
and Mortgagor remain unchanged following such gift or any replacement management
is approved by Mortgagee.

     

    “Rating Agency” or
“Rating
Agencies” shall mean each of Standard & Poor’s Ratings Services, a
division of The McGraw-Hill Companies, Inc. (“S&P”), Moody’s
Investor Services, Inc. (“Moody’s”) and Fitch,
Inc. (“Fitch”),
or any other nationally-recognized statistical rating agency which has been
approved by Mortgagee.

     

    
      
        
        

      

      
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    (b)           Notwithstanding
any other provisions of this Mortgage, Mortgagee shall consent to a one time
sale, conveyance or transfer of the Mortgaged Property in its entirety
(hereinafter, “Sale”) to any person
or entity provided that each of the following terms and conditions are
satisfied:

     

    
      	
               
      

            	
              (1)

            	
              No
      Default and no Event of Default has occurred and is continuing hereunder
      or under any of the other Loan
Documents;

            

    

     

    
      	
               
      

            	
              (2)

            	
              Mortgagor
      gives Mortgagee written notice of the terms of such prospective Sale not
      less than sixty (60) days before the date on which such Sale is scheduled
      to close and, concurrently therewith, gives Mortgagee all such information
      concerning the proposed transferee of the Mortgaged Property (hereinafter,
      “Buyer”)
      as Mortgagee would typically require in evaluating an initial extension of
      credit to a borrower and pays to Mortgagee a nonrefundable application fee
      in the amount of $5,000.  Mortgagee shall have the right to
      approve or disapprove the proposed Buyer.  In determining
      whether to give or withhold its approval of the proposed Buyer, Mortgagee
      shall consider the Buyer’s experience and track record in owning and
      operating facilities similar to the Mortgaged Property, the Buyer’s
      financial strength, the Buyer’s general business standing and the Buyer’s
      relationships and experience with contractors, vendors, tenants, lenders
      and other business entities; provided,
      however, that, notwithstanding Mortgagee’s agreement to consider
      the foregoing factors in determining whether to give or withhold such
      approval, such approval shall be given or withheld based on what Mortgagee
      determines to be commercially reasonable in Mortgagee’s sole discretion
      and, if given, may be given subject to such conditions as Mortgagee may
      deem appropriate;

            

    

     

    
      	
               
      

            	
              (3)

            	
              Mortgagor
      pays Mortgagee, concurrently with the closing of such Sale, a
      non-refundable assumption fee in an amount equal to all out-of-pocket
      costs and expenses, including, without limitation, reasonable attorneys’
      fees, incurred by Mortgagee in connection with the Sale, plus an amount
      equal to one percent (1.0%) of the then outstanding principal balance of
      the Note;

            

    

     

    
      	
               
      

            	
              (4)

            	
              The
      Buyer executes, without any cost or expense to Mortgagee, such documents
      and agreements as Mortgagee shall reasonably require in connection with
      the Sale, including, but not limited to, an assumption agreement,
      financing statements, and guaranties or indemnities, all in form and
      substance satisfactory to Mortgagee.  The Buyer shall also
      deliver to Mortgagee such insurance policies and other documents and
      certificates as the Mortgagee may
require.

            

    

     

    
      	
               
      

            	
              (5)

            	
              Such
      Sale occurs no sooner than nine (9) months following the Loan
      closing.

            

    

     

    
      	
               
      

            	
              (6)

            	
              If
      required by Mortgagee, Mortgagee receives confirmation in writing from the
      Rating Agencies that rate the securities issued with respect to a
      securitization of the Loan to the effect that the transfer will not result
      in a qualification, downgrade or withdrawal of any rating initially
      assigned or to be assigned to the securities so
  issued.

            

    

     

    
      	
               
      

            	
              (7)

            	
              The
      Buyer, prior to such transfer, delivers a substantive non-consolidation
      opinion to Mortgagee, which opinion shall be in form, scope and substance
      acceptable in all respects to Mortgagee and the Rating
      Agencies.

            

    

     

    (c)           Such
Sale shall not be construed so as to relieve Mortgagor of any personal liability
under the Note or any of the other Loan Documents for any acts or events
occurring or obligations arising prior to or simultaneously with the closing of
such Sale, whether or not same is discovered prior or subsequent to the closing
of such Sale.  Mortgagor shall be released from and relieved of any
personal liability under the Note or any of the other Loan Documents for any
acts or events occurring or obligations arising after the closing of such Sale
which are not caused by or arising out of any acts or events occurring or
obligations arising prior to or simultaneously with the closing of such
Sale.

     

    6.4           Easements and
Rights-of-Way.  Mortgagor shall not grant any easement or
right-of-way with respect to all or any portion of the Premises or the
Improvements without the prior written consent of Mortgagee except those granted
in the ordinary course of business that would not be reasonably expected to
adversely affect the Mortgaged Property or Mortgagor’s ability to repay the Debt
in accordance with the Note, this Mortgage and the other Loan
Documents.  The purchaser at any foreclosure sale hereunder may, at
its discretion, disaffirm any easement or right-of-way granted in violation of
any of the provisions of this Mortgage and may take immediate possession of the
Mortgaged Property free from, and despite the terms of, such grant of easement
or right-of-way.  If Mortgagee consents to the grant of an easement or
right-of-way, Mortgagee agrees to grant such consent without charge to Mortgagor
other than expenses, including, without limitation, reasonable attorneys’ fees,
incurred by Mortgagee in the review of Mortgagor’s request and in the
preparation of documents effecting the subordination.

     

    
      
        
        

      

      
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    ARTICLE
VII

     

    PROPERTY
MANAGEMENT

     

    7.1           Management.  The
management of the Mortgaged Property shall be by
either:  (a) Mortgagor or an entity affiliated with Mortgagor
approved by Mortgagee for so long as Mortgagor or said affiliated entity is
managing the Mortgaged Property in a first class manner; or (b) a professional
property management company approved by Mortgagee.  Such management by
an affiliated entity or a professional property management company shall be
pursuant to a written agreement approved by Mortgagee.  Mortgagor
shall give Mortgagee prompt written notice of the occurrence of a default under
any management contract then in effect.  In no event shall any manager
be removed or replaced or the terms of any management agreement be modified or
amended without the prior written consent of Mortgagee; provided, that such
consent may, upon Mortgagee’s request, be conditioned upon Mortgagor delivering
a Rating Agency confirmation as to such new manager and management agreement
and, if such new manager is an affiliate of Mortgagor, upon delivery of a
non-consolidation opinion acceptable to the Rating Agencies.  After an
Event of Default or a default under any management contract then in effect,
which default is not cured within any applicable grace or cure period, Mortgagee
shall have the right to terminate, or to direct Mortgagor to terminate, such
management contract upon thirty (30) days’ notice and to retain, or to direct
Mortgagor to retain, a new management agent approved by
Mortgagee.  All Rents and Profits generated by or derived from the
Mortgaged Property shall first be utilized solely for current expenses directly
attributable to the ownership and operation of the Mortgaged Property,
including, without limitation, current expenses relating to Mortgagor’s
liabilities and obligations with respect to this Mortgage and the other Loan
Documents, and none of the Rents and Profits generated by or derived from the
Mortgaged Property shall be diverted by Mortgagor and utilized for any other
purposes unless all such expenses then due and payable and attributable to the
ownership and operation of the Mortgaged Property have been paid.

     

    
      
        
        

      

      
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    ARTICLE
VIII

     

    INDEMNIFICATION

     

    8.1           Indemnification;
Subrogation.

     

    (a)           Mortgagor
shall indemnify, defend and hold Mortgagee harmless from and
against:  (i) any and all claims for brokerage, leasing, finders or
similar fees which may be made relating to the Mortgaged Property or the Debt
and (ii) any and all liability, obligations, losses, damages, penalties, claims,
actions, suits, costs and expenses (including Mortgagee’s reasonable attorneys’
fees and expenses) of whatever kind or nature which may be asserted against,
imposed on or incurred by Mortgagee in connection with the Debt, this Mortgage
and any other Loan Document, the Mortgaged Property, or any part thereof, or the
exercise by Mortgagee of any rights or remedies granted to it under this
Mortgage; provided, however, that nothing
herein shall be construed to obligate Mortgagor to indemnify, defend and hold
harmless Mortgagee from and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, suits, costs and expenses to the
extent enacted against, imposed on or incurred by Mortgagee solely by reason of
Mortgagee’s gross negligence or willful misconduct as finally determined by a
court of competent jurisdiction.

     

    (b)           Mortgagor
hereby indemnifies and holds Mortgagee harmless from and against all loss, cost
and expenses with respect to any Event of Default hereof, any liens
(i.e., judgments, mechanics’ and materialmen’s liens, or otherwise),
charges and encumbrances filed against the Mortgaged Property, and from any
claims and demands for damages or injury, including claims for property damage,
personal injury or wrongful death, arising out of or in connection with any
accident or fire or other casualty on the Premises or the Improvements or any
nuisance made or suffered thereon, except to the extent due solely to
Mortgagee’s gross negligence or willful misconduct as finally determined by a
court of competent jurisdiction, including, without limitation, in any case,
reasonable attorneys’ fees, costs and expenses as aforesaid, whether at
pretrial, trial or appellate level, and such indemnity shall survive payment in
full of the Debt.  This Section shall not be construed to require
Mortgagee to incur any expenses, make any appearances or take any
actions.

     

    (c)           If
Mortgagee is made a party defendant to any litigation or any claim is threatened
or brought against Mortgagee concerning the Debt, this Mortgage, the Mortgaged
Property, or any part thereof, or any interest therein, or the construction,
maintenance, operation or occupancy or use thereof, then Mortgagor shall
indemnify, defend and hold Mortgagee harmless from and against all liability by
reason of said litigation or claims, including reasonable attorneys’ fees and
expenses incurred by Mortgagee in any such litigation or claim, whether or not
any such litigation or claim is prosecuted to judgment.  If Mortgagee
commences an action against Mortgagor to enforce any of the terms hereof or to
prosecute any breach by Mortgagor of any of the terms hereof or to recover any
sum secured hereby, Mortgagor shall pay to Mortgagee the reasonable attorneys’
fees and expenses incurred by Mortgagee in connection therewith.  The
right to such attorneys’ fees and expenses shall be deemed to have accrued on
the commencement of such action, and shall be enforceable whether or not such
action is prosecuted to judgment.  If Mortgagor breaches any term of
this Mortgage or any other Loan Document, Mortgagee may engage the services of
an attorney or attorneys to protect its rights hereunder, and in the event of
such engagement following any breach by Mortgagor, Mortgagor shall pay Mortgagee
reasonable attorneys’ fees and expenses incurred by Mortgagee, whether or not an
action is actually commenced against Mortgagor by reason of such
breach.  All references to “attorneys” in this
Subsection and elsewhere in this Mortgage shall include, without limitation, any
attorney or law firm engaged by Mortgagee and Mortgagee’s in-house counsel, and
all references to “fees and expenses” in
this Subsection and elsewhere in this Mortgage shall include, without
limitation, any fees of such attorney or law firm, any appellate counsel fees,
if applicable, and any allocation charges and allocation costs of Mortgagee’s
in-house counsel.

     

    (d)           A
waiver of subrogation shall be obtained by Mortgagor from its insurance carrier
and, consequently, Mortgagor waives any and all right to claim or recover
against Mortgagee, its officers, employees, agents and representatives, for loss
of or damage to Mortgagor, the Mortgaged Property, Mortgagor’s property or the
property of others under Mortgagor’s control from any cause insured against or
required to be insured against by the provisions of this Mortgage.

     

    
      
        
        

      

      
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    ARTICLE
IX

     

    REPORTING

     

    9.1           Access Privileges and
Inspections.  Mortgagee and the agents, representatives and
employees of Mortgagee shall, subject to the rights of Tenants, have full and
free access to the Premises and the Improvements and any other location where
books and records concerning the Mortgaged Property are kept at all reasonable
times and, except in the event of an emergency, upon not less than 24 hours
prior notice (which notice may be telephonic) for the purposes of inspecting the
Mortgaged Property and of examining, copying and making extracts from the books
and records of Mortgagor relating to the Mortgaged
Property.  Mortgagor shall lend assistance to all such agents,
representatives and employees of Mortgagee.

     

    9.2           Financial Statements and
Books and Records.  Mortgagor shall keep accurate books and
records of account of the Mortgaged Property and its own financial affairs
sufficient to permit the preparation of financial statements therefrom in
accordance with generally accepted accounting principles.  Mortgagee
and its duly authorized representatives shall have the right to examine, copy
and audit Mortgagor’s records and books of account at all reasonable
times.  So long as this Mortgage continues in effect, Mortgagor shall
provide to Mortgagee, in addition to any other financial statements required
hereunder or under any of the other Loan Documents, the following financial
statements and information, all of which shall be in the form and substance
acceptable to Mortgagee and all of which must be certified to Mortgagee as being
true and correct by Mortgagor or the person or entity to which they pertain, as
applicable.  With respect to the financial statements and information
set forth in subsection (d) hereof as it relates to Mortgagor or the Mortgaged
Property, the same must be prepared by an independent certified public
accountant in accordance with generally accepted accounting principles
consistently applied and, if the original principal amount of the Note is
$15,000,000 or more, be audited by such accountants:

     

    (a)           copies
of all tax returns filed by Mortgagor, within thirty (30) days after the date of
filing;

     

    (b)           quarterly
operating statements for the Mortgaged Property, stated on a month-by-month
basis including Rent Rolls and physical occupancy statements, within
twenty (20) days after the end of the quarter during which the closing
occurs, and after the end of each March, June, September and December commencing
with the first (1st) of such months to occur following the date
hereof;

     

    (c)           annual
balance sheets for the Mortgaged Property and annual financial statements and
federal tax returns for Mortgagor, and each general partner or managing member
in Mortgagor within ninety (90) days after the end of each calendar
year;

     

    (d)           such
other information with respect to the Mortgaged Property, Mortgagor, the
principals or general partners in Mortgagor, and each Indemnitor, which may be
reasonably requested from time to time by Mortgagee, within a reasonable time
after the applicable request; and

     

    (e)           monthly
operating statements and Rent Roll for the Mortgaged Property, by the tenth
business day of the first full month following the closing of the Loan and by
the tenth business day of each month thereafter until such time as Mortgagee
securitizes the Loan.

     

    In the
event of any failure of Mortgagor to provide any of the statements or other
materials referred to above in this Section 9.2 within
twenty (20) days after the date due, Mortgagor shall, in Mortgagee’s sole and
absolute discretion, be subject to a charge in the amount of One Thousand Five
Hundred and 00/100 Dollars ($1,500.00) which amount shall be paid to Mortgagee,
together with interest thereon at the Default Interest Rate from the date that
the applicable statement or other material was required to be delivered to
Mortgagee until the date such amount is paid to it, immediately on demand by
Mortgagee.  In addition, in the event of (i) any failure to provide
any of the statements or other materials referred to above in this Section 9.2 within
thirty (30) days after the date due, or (ii) in the event any such statements or
other materials shall be materially inaccurate or false, or (iii) in the event
of the failure of Mortgagor to permit Mortgagee or its representatives to
inspect said books and records upon request, an Event of Default shall
automatically exist hereunder without any notice to, or right to cure by,
Mortgagor.

     

    
      
        
        

      

      
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    ARTICLE
X

     

    WARRANTIES AND
COVENANTS

     

    10.1           Warranties of
Mortgagor.  Mortgagor, for itself and its successors and
assigns, does hereby represent, warrant and covenant to and with Mortgagee, its
successors and assigns, that:

     

    (a)           Mortgagor
has good, marketable and indefeasible fee simple title to the Mortgaged
Property, subject only to those matters expressly set forth as exceptions to
title or subordinate matters in the title insurance policy insuring the lien of
this Mortgage which Mortgagee has agreed to accept (such items being the “Permitted
Encumbrances”), and has full power and lawful authority to mortgage its
interest in the Mortgaged Property in the manner and form hereby done or
intended.  Mortgagor will preserve its interest in and title to the
Mortgaged Property and will forever warrant and defend the same to Mortgagee
against any and all claims whatsoever and will forever warrant and defend the
validity and priority of the lien and security interest created herein against
the claims of all persons and parties whomsoever, subject to the Permitted
Encumbrances.  The foregoing warranty of title shall survive the
foreclosure of this Mortgage and shall inure to the benefit of and be
enforceable by Mortgagee in the event Mortgagee acquires title to the Mortgaged
Property by foreclosure or otherwise;

     

    (b)           No
bankruptcy, reorganization or insolvency proceedings are pending or contemplated
either by Mortgagor or, to the best knowledge of Mortgagor, against Mortgagor
(or, if Mortgagor is a partnership or a limited liability company, any of its
general partners or members) or by or against any endorser or cosigner of the
Note or of any portion of the Debt, or any guarantor or indemnitor under any
guaranty or indemnity agreement executed in connection with the Note or the loan
evidenced thereby and secured hereby (an “Indemnitor”);

     

    (c)           All
reports, certificates, affidavits, statements and other data furnished by or on
behalf of Mortgagor to Mortgagee in connection with the loan evidenced by the
Note are true and correct in all material respects and do not omit to state any
fact or circumstance necessary to make the statements contained therein not
misleading;

     

    (d)           The
execution, delivery and performance of this Mortgage, the Note and all of the
other Loan Documents have been duly authorized by all necessary action to be,
and are, binding and enforceable against Mortgagor in accordance with the
respective terms thereof (except as may be limited by (i) bankruptcy, insolvency
or other similar laws affecting the rights of creditors generally, and (ii)
general principles of equity (regardless of whether considered in a proceeding
in equity or at law)) and do not (i) contravene, result in a breach of or
constitute a default (nor upon the giving of notice or the passage of time or
both will the same constitute a default) under the organizational documents of
Mortgagor or any contract or agreement of any nature to which Mortgagor is a
party or by which Mortgagor or any of its property may be bound or (ii) violate
or contravene any law, order, decree, rule or regulation to which Mortgagor is
subject;

     

    (e)           There
are no judicial, administrative, mediation or arbitration actions, suits or
proceedings pending or threatened against or affecting Mortgagor (or, if
Mortgagor is a partnership or a limited liability company, any of its general
partners or members) or the Mortgaged Property which, if adversely determined,
would materially impair either the Mortgaged Property or Mortgagor’s ability to
perform the covenants or obligations required to be performed under the Loan
Documents;

     

    (f)           Mortgagor
possesses all franchises, patents, copyrights, trademarks, trade names, licenses
and permits (the “Licenses”) necessary
for the conduct of its business substantially as now conducted, all fees due and
payable in connection with such Licenses have been paid and Mortgagor’s
operation of the Premises complies with such Licenses;

     

    
      
        
        

      

      
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    (g)           Mortgagor
is not a “foreign person” within the meaning of §1445(f)(3) of the Internal
Revenue Code of 1986, as amended, and the related Treasury Department
regulations, including temporary regulations;

     

    (h)           The
Premises and the Improvements and the current intended use thereof by Mortgagor
comply in all material respects with all applicable restrictive covenants,
zoning ordinances, subdivision and building codes, flood disaster laws, health
and environmental laws and regulations and all other ordinances, orders or
requirements issued by any state, federal or municipal authorities having or
claiming jurisdiction over the Mortgaged Property.  The Premises and
Improvements constitute one or more separate tax parcels for purposes of ad
valorem taxation.  The Premises and Improvements do not require any
rights over, or restrictions against, other property in order to comply with any
of the aforesaid governmental ordinances, orders or requirements;

     

    (i)           All
utility services necessary and sufficient for the use, occupancy, operation and
disposition of the Premises and the Improvements for their intended purposes are
available to the Mortgaged Property, including water, storm sewer, sanitary
sewer, gas, electric, cable and telephone facilities, through public
rights-of-way or perpetual private easements approved by Mortgagee;

     

    (j)           All
streets, roads, highways, bridges, curb cuts, driveways and traffic signals and
waterways necessary for access to and use, occupancy, operation and disposition
of the Premises and the Improvements have been completed, have been dedicated to
and accepted by the appropriate municipal authority and are open and available
to the Premises and the Improvements without further condition or cost to
Mortgagor;

     

    (k)           The
Mortgaged Property is free from delinquent water charges, sewer rents, taxes and
assessments;

     

    (l)           As
of the date of this Mortgage, the Mortgaged Property is free from unrepaired
damage caused by fire, flood, accident or other casualty; all insurance required
by the terms of this Mortgage is in full force and effect and none of the
premiums payable therefor have been, nor at any time in the future will be
financed;

     

    (m)           As
of the date of this Mortgage, no part of the Premises or the Improvements has
been taken in condemnation, eminent domain or like proceeding nor is any such
proceeding pending or, to Mortgagor’s knowledge and belief, threatened or
contemplated;

     

    (n)           Except
as may otherwise be disclosed in the Engineering Report, the Improvements are
structurally sound, in good repair and free of defects in materials and
workmanship.  Except as may otherwise be disclosed in the Engineering
Report, all major building systems located within the Improvements, including,
without limitation, the heating and air conditioning systems and the electrical
and plumbing systems, are in good working order and condition;

     

    (o)           Mortgagor
has delivered to Mortgagee true, correct and complete copies of all Contracts
and all amendments thereto or modifications thereof;

     

    (p)           Each
Contract constitutes the legal, valid and binding obligation of Mortgagor and,
to the best of Mortgagor’s knowledge and belief, is enforceable against all
other parties thereto.  No default exists, or with the passing of time
or the giving of notice or both would exist, under any Contract or Contracts
which would, individually or in the aggregate, have a material adverse effect on
Mortgagor or the Mortgaged Property;

     

    (q)           No
Contract or Lease provides any party with the right to obtain a lien or
encumbrance upon the Mortgaged Property superior to the lien of this
Mortgage;

     

    
      
        
        

      

      
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    (r)           Mortgagor
and the Mortgaged Property are free from any past due obligations for sales and
payroll taxes;

     

    (s)           There
are no security agreements or financing statements affecting all or any portion
of the Mortgaged Property other than (i) as disclosed in writing by Mortgagor to
Mortgagee prior to the date hereof and (ii) the security agreements and
financing statements created in favor of Mortgagee;

     

    (t)           Mortgagor
has delivered to Mortgagee a true, correct and complete Rent Roll and true,
correct and complete copies of all Leases described in the Rent Roll (as used
herein the term “Rent
Roll” shall mean a schedule of all Leases affecting the Mortgaged
Property as of the date hereof, which accurately and completely sets forth in
all material respects for each such Lease the name of the Tenant, the Lease
expiration date, extension and renewal provisions, the base rent payable, the
security deposit held thereunder, the square footage of the leased premises, the
unit location of the leased premises, reimbursements due thereunder and any
other material provisions of such Lease);

     

    (u)           Each
Lease constitutes the legal, valid and binding obligation of Mortgagor and, to
the best of Mortgagor’s knowledge and belief, is enforceable against the Tenant
thereunder.  No default has been asserted or exists, or with the
passing of time or the giving of notice or both would exist, under any Lease
which would, in the aggregate, have a material adverse effect on Mortgagor or
the Mortgaged Property;

     

    (v)           No
Tenant under any Lease has, as of the date hereof, paid rent more than thirty
(30) days in advance, and the rents under such Leases have not been waived,
released, or otherwise discharged or compromised;

     

    (w)           All
work to be performed by Mortgagor under the Leases has been substantially
performed, all contributions to be made by Mortgagor to the Tenants thereunder
have been made and all other conditions precedent to each such Tenant’s
obligations thereunder have been satisfied;

     

    (x)           Except
for the tenancy of Eric Appel, which tenant is paying rent pursuant to a
currently effective lease but has not yet opened for business, each Tenant under
any Lease has entered into occupancy of the demised premises; and

     

    (y)           To
the best of Mortgagor’s knowledge and belief, each Tenant is free from
bankruptcy, reorganization, insolvency or arrangement proceedings or a general
assignment for the benefit of creditors.

     

    
      
        
        

      

      
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    10.2           Waste; Alteration of
Improvements.  Mortgagor shall not commit, suffer or permit any
waste on the Mortgaged Property nor take or fail to take any actions that might
invalidate any insurance carried on the Mortgaged Property.  Mortgagor
shall maintain the Mortgaged Property in good condition and
repair.  No part of the Improvements may be removed, demolished or
materially altered, without the prior written consent of
Mortgagee.  Without the prior written consent of Mortgagee, Mortgagor
shall not commence construction of any improvements on the Premises other than
improvements required for the maintenance or repair of the Mortgaged
Property.

     

    10.3           Zoning.  Without
the prior written consent of Mortgagee, Mortgagor shall not make, suffer,
consent to or acquiesce in any change in the zoning or conditions of use of the
Premises or the Improvements.  Mortgagor shall comply with and make
all payments required under the provisions of any covenants, conditions or
restrictions affecting the Premises or the Improvements.  Mortgagor
shall comply with all existing and future requirements of all governmental
authorities having jurisdiction over the Mortgaged
Property.  Mortgagor shall keep all licenses, permits, franchises and
other approvals necessary for the operation of the Mortgaged Property in full
force and effect.  Mortgagor shall operate the Mortgaged Property as
an office building/show room for so long as the Debt is
outstanding.  If, under applicable zoning provisions, the use of all
or any part of the Premises or the Improvements is or becomes a nonconforming
use, Mortgagor shall not cause or permit such use to be discontinued or
abandoned without the prior written consent of Mortgagee.  Further,
without Mortgagee’s prior written consent, Mortgagor shall not file or subject
any part of the Premises or the Improvements to any declaration of condominium
or co-operative or convert any part of the Premises or the Improvements to a
condominium, co-operative or other form of multiple ownership and
governance.

     

    10.4           Covenants with Respect to
Indebtedness, Operations, Fundamental Changes of
Mortgagor.  Mortgagor hereby represents, warrants and covenants
as of the date hereof and until such time as the Debt is paid in full, that
Mortgagor:

     

    (a)           will
not, nor will any partner, limited or general, member or shareholder thereof, as
applicable, amend, modify or otherwise change its partnership certificate,
partnership agreement, articles of incorporation, by-laws, operating agreement,
articles of organization or other formation agreement or document, as
applicable, in any material way or manner, or in a manner which adversely
affects Mortgagor’s existence as a single purpose entity;

     

    (b)           will
not liquidate or dissolve (or suffer any liquidation or dissolution), or enter
into any transaction of merger or consolidation, and has not acquired and will
not acquire by purchase or otherwise all or substantially all or any part of the
business or assets of, or any stock or other evidence of beneficial ownership of
any entity, and has not made and will not make any investment in any
entity;

     

    (c)           has
not and will not guarantee, or otherwise become liable on or in connection with,
any obligation of any other person or entity and will not pledge its assets for
the benefit of any other person or entity other than to Mortgagee to secure the
Loan and in the case of Mortgagor’s SPE Component Entity, serving as managing
member of Mortgagor;

     

    (d)           has
not owned and will not own any asset other than (i) in the case of Mortgagor,
the Mortgaged Property and in the case of Mortgagor’s SPE Component Entity, its
managing membership interest in Mortgagor, and (ii) incidental personal property
necessary for the operation of the Mortgaged Property;

     

    (e)           has
not engaged and will not engage, either directly or indirectly, in any business
other than in the case of Mortgagor, the ownership, management and operation of
the Mortgaged Property and in the case of Mortgagor’s SPE Component Entity,
serving as managing member of Mortgagor;

     

    (f)           has
not entered and will not enter into any contract or agreement with any general
partner, principal, affiliate or member of Mortgagor, as applicable, or any
affiliate of any general partner, principal or member of Mortgagor, except upon
terms and conditions that are substantially similar to those that would be
available on an arms-length basis with unrelated third parties;

     

    (g)           has
not incurred (that will not otherwise be paid in full upon receipt of the Loan)
and will not incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than in the case of Mortgagor (i)
the Debt, (ii) advances from affiliates, partners or members, as applicable, of
Mortgagor, provided the same are fully subordinated to the payment in full of
the Debt in a manner acceptable to Mortgagee and (iii) trade payables or
accrued expenses incurred in the ordinary course of the business of operating
the Mortgaged Property, and no debt other than the Debt will be secured (senior,
subordinate or pari passu) by the Mortgaged Property;

     

    
      
        
        

      

      
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    (h)           has
not made and will not make any loans or advances to any other person or entity
(including any affiliate);

     

    (i)           has
been, is and will be solvent and pay its debts and expenses only from its assets
as the same shall become due;

     

    (j)           has
done or caused to be done and will do all things necessary to preserve its
existence, and will observe all organizational formalities applicable to
it;

     

    (k)           has
conducted and operated and will conduct and operate its business solely in its
own name and as presently conducted and operated;

     

    (l)           has
maintained and will maintain financial statements, books and records and bank
accounts separate from those of its affiliates, including, without limitation,
its general partners or members, as applicable;

     

    (m)           has
been, will be, and at all times will hold itself out to the public as, a legal
entity separate and distinct from any other entity (including, without
limitation, any affiliate, general partner, or member, as applicable , or any
affiliate of any general partner or member of Mortgagor, as applicable) and has
corrected and will correct any known misunderstanding regarding its separate
identity;

     

    (n)           has
filed and will file its own tax returns separate from those of any other
entity;

     

    (o)           has
maintained and will maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations;

     

    (p)           has
established and will continue to maintain an office through which its business
will be conducted separate and apart from those of its affiliates or, if it
shares office space with its affiliates, has allocated and shall allocate fairly
and reasonably any overhead expenses shared with an affiliate, including for
shared office space and for services performed by employees of an
affiliate;

     

    (q)           has
not commingled and will not commingle the funds and other assets of Mortgagor
with those of any general partner, member, affiliate, principal or any other
person;

     

    (r)           has
maintained and will maintain its assets in such a manner that it is not costly
or difficult to segregate, ascertain or identify its individual assets from
those of any affiliate or any other person;

     

    
      
        
        

      

      
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    (s)           has
not, does not and will not hold itself out to be responsible for the debts or
obligations of any other person;

     

    (t)           has
maintained and will maintain a sufficient number of employees in light of its
contemplated business operations;

     

    (u)           has
paid and will pay any liabilities including salaries of its employees, if any,
out of its own funds and not funds of any affiliate;

     

    (v)           has
used and will use stationery, invoices, and checks separate from its affiliates
and bearing its own name;

     

    (w)           will
not, if Mortgagor is a partnership or limited liability company, without the
unanimous written consent of all of its partners or members, as applicable, and
the written consent of 100% of the directors (including, without limitation, the
independent director) of each SPE Component Entity (as hereinafter defined), (a)
file or consent to the filing of any petition, either voluntary or involuntary,
to take advantage of any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, conservatorship,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to its debts or debtors, (b) seek or consent to the
appointment of a receiver, liquidator or any similar official, (c) take any
action that might cause such entity to become insolvent, or (d) make an
assignment for the benefit of creditors;

     

    (x)           has
not acquired and will not acquire obligations or securities of its partners,
members, shareholders or other affiliates, as applicable; and

     

    (y)           will,
at all times during which any portion of the Debt remains outstanding, have an
SPE Component Entity that owns at least a 0.5% interest in Mortgagor and that at
all times maintains at least one independent director as set forth in the
organizational documents of Mortgagor’s SPE Component Entity at the time of the
making of the Loan.

     

    (z)           has
not had and will not have its assets listed on the financial statement of any
other entity; provided, however, that its assets may be included in a
consolidated financial statement of its affiliate provided that (i) appropriate
notation shall be made on such consolidated financial statements to indicate its
separateness from such affiliate and to indicate that its assets and credit are
not available to satisfy the debts and other obligations of such affiliate or of
any other Person and (ii) such assets shall be listed on its own separate
balance sheet;

     

    (aa)           has
not bought or held and will not buy or hold evidence of indebtedness issued by
any other person or entity (other than cash and investment-grade
securities);

     

    (bb)           has
not identified and will not identify itself as a division of any other person or
entity; and

     

    (cc)           has
not formed, acquired or held and will not form, acquire or hold any subsidiary
or own any equity interest in any other entity, except that Mortgagor’s SPE
Component Entity may hold its interest in Mortgagor.

     

    
      
        
        

      

      
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    10.5           Additional Covenants with
Respect to Mortgagor.  If Mortgagor is a partnership or limited
liability company, each general partner of Mortgagor in the case of a general or
limited partnership, or the managing member of Mortgagor in the case of a
limited liability company (each an “SPE Component
Entity”), as applicable, shall be a corporation whose sole asset is its
interest in Mortgagor.  Each SPE Component Entity (i) will at all
times comply with each of the covenants, terms and provisions contained in
Section 10.4 and this Section 10.5, as if such representation, warranty or
covenant was made directly by such SPE Component Entity; (ii) will not
engage in any business or activity other than owning an interest in Mortgagor;
(iii) will not acquire or own any assets other than its partnership,
membership, or other equity interest in Mortgagor; (iv) will not incur any debt,
secured or unsecured, direct or contingent (including guaranteeing any
obligation); and (v) will cause Mortgagor to comply with the provisions of
Section 10.4 of this Security Instrument.  Prior to the withdrawal or
the disassociation of any SPE Component Entity from Mortgagor, Mortgagor shall
immediately appoint a new general partner or managing member whose articles of
incorporation are substantially similar to those of such SPE Component Entity
and, if an opinion letter pertaining to substantive consolidation was required
at closing, deliver a new opinion letter acceptable to Mortgagee and the Rating
Agencies with respect to the new SPE Component Entity and its equity
owners.  Notwithstanding the foregoing, to the extent Mortgagor is a
single member Delaware limited liability company, so long as Mortgagor maintains
such formation status in a manner acceptable to Mortgagee, no SPE Component
Entity shall be required and this Section 10.5 shall be
inapplicable.

     

    ARTICLE
XI

     

    FURTHER
ASSURANCES

     

    11.1           Defense of
Title.  If the title to the Mortgaged Property or the interest
of Mortgagee therein shall be directly or indirectly endangered, clouded or
adversely affected in any manner, Mortgagor, at Mortgagor’s expense, shall take
all necessary and proper steps for the defense of said title or interest,
including the employment of counsel approved by Mortgagee, the prosecution or
defense of litigation, and the compromise or discharge of claims made against
said title or interest.  Notwithstanding the foregoing, in the event
that Mortgagee determines that Mortgagor is not adequately performing its
obligations under this Section, Mortgagee may, without limiting or waiving any
other rights or remedies of Mortgagee hereunder, take such steps with respect
thereto as Mortgagee shall deem necessary or proper and any and all costs and
expenses incurred by Mortgagee in connection therewith, together with interest
thereon at the Default Interest Rate from the date incurred by Mortgagee until
actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and
shall be secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the Debt.

     

    11.2           Performance of
Obligations.  Mortgagor shall pay when due the principal of and
the interest on the Debt in accordance with the terms of the Note and this
Mortgage.  Mortgagor shall also pay all charges, fees and other sums
required to be paid by Mortgagor as provided in the Loan Documents, in
accordance with the terms of the Loan Documents, and shall observe, perform and
discharge all obligations, covenants and agreements to be observed, performed or
discharged by Mortgagor set forth in the Loan Documents in accordance with their
terms.  Further, Mortgagor shall promptly and strictly perform and
comply with all covenants, conditions, obligations and prohibitions required of
Mortgagor in connection with any other document or instrument affecting title to
the Mortgaged Property, or any part thereof, regardless of whether such document
or instrument is superior or subordinate to this Mortgage.

     

    11.3           Construction
Liens.  Mortgagor shall pay when due all claims and demands of
mechanics, materialmen, laborers and others for any work performed or materials
delivered for the Premises or the Improvements; provided, however, that
Mortgagor shall have the right to contest in good faith any such claim or
demand, so long as it does so diligently, by appropriate proceedings and without
prejudice to Mortgagee and provided that neither the Mortgaged Property nor any
interest therein would be in any danger of sale, loss or forfeiture as a result
of such proceeding or contest.  In the event Mortgagor shall contest
any such claim or demand, Mortgagor shall promptly notify Mortgagee of such
contest and thereafter shall, upon Mortgagee’s request, promptly provide a bond,
cash deposit or other security satisfactory to Mortgagee to protect Mortgagee’s
interest and security should the contest be unsuccessful.  If
Mortgagor shall fail to immediately discharge or provide security against any
such claim or demand as aforesaid, Mortgagee may do so and any and all expenses
incurred by Mortgagee, together with interest thereon at the Default Interest
Rate from the date incurred by Mortgagee until actually paid by Mortgagor, shall
be immediately paid by Mortgagor on demand and shall be secured by this Mortgage
and by all of the other Loan Documents securing all or any part of the
Debt.

     

    
      
        
        

      

      
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    11.4           Further
Documentation.  Mortgagor shall, on the request of Mortgagee
and at the expense of Mortgagor:  (a) promptly correct any defect,
error or omission which may be discovered in the contents of this Mortgage or in
the contents of any of the other Loan Documents; (b) promptly execute,
acknowledge, deliver and record or file such further instruments (including,
without limitation, further mortgages, deeds of trust, security deeds, security
agreements, financing statements, continuation statements and assignments of
rents or leases) and promptly 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 and to subject to the liens and security interests
hereof and thereof any property intended by the terms hereof and thereof to be
covered hereby and thereby, including specifically, but without limitation, any
renewals, additions, substitutions, replacements or appurtenances to the
Mortgaged Property; (c) promptly execute, acknowledge, deliver, procure and
record or file any document or instrument (including specifically, without
limitation, any financing statement) deemed advisable by Mortgagee to protect,
continue or perfect the liens or the security interests hereunder against the
rights or interests of third persons; and (d) promptly furnish to Mortgagee,
upon Mortgagee’s request, a duly acknowledged written statement and estoppel
certificate addressed to such party or parties as directed by Mortgagee and in
form and substance supplied by Mortgagee, setting forth all amounts due under
the Note, stating whether any Default or Event of Default has occurred
hereunder, stating whether any offsets or defenses exist against the Debt and
containing such other matters as Mortgagee may reasonably require.

     

    11.5           Payment of Costs;
Mortgagee’s Right to Cure.  Mortgagor shall pay all costs and
expenses of every character reasonably incurred in connection with the closing
of the loan evidenced by the Note and secured hereby or otherwise attributable
or chargeable to Mortgagor as the owner of the Mortgaged Property, including,
without limitation, appraisal fees, recording fees, documentary, stamp, mortgage
or intangible taxes, brokerage fees and commissions, title policy premiums and
title search fees, uniform commercial code/tax lien/litigation search fees,
escrow fees and reasonable attorneys’ fees and disbursements.  If
Mortgagor defaults in any such payment, which default is not cured within any
applicable grace or cure period, Mortgagee may, at its option pay the same and
Mortgagor shall reimburse Mortgagee on demand for all such costs and expenses
incurred or paid by Mortgagee, together with such interest thereon at the
Default Interest Rate from and after the date of Mortgagee’s making such payment
until reimbursement thereof by Mortgagor.  Any such sums disbursed by
Mortgagee, together with such interest thereon, shall be additional indebtedness
of Mortgagor secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the Debt.  Further, Mortgagor shall
promptly notify Mortgagee in writing of any litigation or threatened litigation
affecting the Mortgaged Property, or any other demand or claim which, if
enforced, could impair or threaten to impair Mortgagee’s security
hereunder.  Without limiting or waiving any other rights and remedies
of Mortgagee hereunder, if Mortgagor fails to perform any of its covenants or
agreements contained in this Mortgage or in any of the other Loan Documents and
such failure is not cured within any applicable grace or cure period, or if any
action or proceeding of any kind (including, but not limited to, any bankruptcy,
insolvency, arrangement, reorganization or other debtor relief proceeding) is
commenced which might affect Mortgagee’s interest in the Mortgaged Property or
Mortgagee’s right to enforce its security, then Mortgagee may, at its option,
with or without notice to Mortgagor, make any appearances, disburse any sums and
take any actions as may be necessary or desirable to protect or enforce the
security of this Mortgage or to remedy the failure of Mortgagor to perform its
covenants and agreements (without, however, waiving any default of
Mortgagor).  Mortgagor agrees to pay on demand all expenses of
Mortgagee incurred with respect to the foregoing (including, but not limited to,
reasonable fees and disbursements of counsel), together with interest thereon at
the Default Interest Rate from and after the date on which Mortgagee incurs such
expenses until reimbursement thereof by Mortgagor.  Any such expenses
so incurred by Mortgagee, together with interest thereon as provided above,
shall be additional indebtedness of Mortgagor secured by this Mortgage and by
all of the other Loan Documents securing all or any part of the
Debt.  The necessity for any such actions and of the amounts to be
paid shall be determined by Mortgagee in its sole
discretion.  Mortgagee is hereby empowered to enter and to authorize
others to enter upon the Mortgaged Property or any part thereof for the purpose
of performing or observing any such defaulted term, covenant or condition
without thereby becoming liable to Mortgagor or any person in possession holding
under Mortgagor.  Mortgagor hereby acknowledges and agrees that the
remedies set forth in this Section 11.5 shall be exercisable by Mortgagee, and
any and all payments made or costs or expenses incurred by Mortgagee in
connection therewith shall be secured hereby and shall be, without demand,
immediately repaid by Mortgagor with interest thereon at the Default Interest
Rate, notwithstanding the fact that such remedies were exercised and such
payments made and costs incurred by Mortgagee after the filing by Mortgagor of a
voluntary case or the filing against Mortgagor of an involuntary case pursuant
to or within the meaning of the Title II, United States Code, as
amended, or after any similar action pursuant to any other debtor relief law
(whether statutory, common law, case law or otherwise) of any jurisdiction
whatsoever, now or hereafter in effect, which may be or become applicable to
Mortgagor, Mortgagee, any Indemnitor, the Debt or any of the Loan
Documents.

     

    
      
        
        

      

      
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    11.6           Compliance with
Laws.  Mortgagor shall at all times comply with all statutes,
ordinances, regulations and other governmental or quasi-governmental
requirements and private covenants now or hereafter relating to the ownership,
construction, use or operation of the Mortgaged Property, the non-compliance
with which would have a material adverse effect on the ownership, use or
operation of the Mortgaged Property or the ability of the Mortgagor to repay the
Debt in full, including, but not limited to, those concerning employment and
compensation of persons engaged in operation and maintenance of the Mortgaged
Property and any environmental or ecological requirements, even if such
compliance shall require structural changes to the Mortgaged Property; provided,
however, that, Mortgagor may, upon providing Mortgagee with security
satisfactory to Mortgagee, proceed diligently and in good faith to contest the
validity or applicability of any such statute, ordinance, regulation or
requirement so long as during such contest the Mortgaged Property shall not be
subject to any lien, charge, fine or other liability and shall not be in danger
of being forfeited, lost or closed.  Mortgagor shall not use or
occupy, or allow the use or occupancy of, the Mortgaged Property in any manner
which violates any Lease of or any other agreement applicable to the Mortgaged
Property or any applicable law, rule, regulation or order 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.

     

    11.7           Attorney-in-Fact
Provisions.  With respect to any provision of this Mortgage or
any other Loan Document whereby Mortgagor grants to Mortgagee a
power-of-attorney, (i) such power shall be deemed to be coupled with an
interest, shall not be revocable by Mortgagor so long as any portion of the Debt
is outstanding, shall survive the voluntary or involuntary dissolution of
Mortgagor and shall not be affected by any disability or incapacity suffered by
Mortgagor subsequent to the date hereof and (ii) provided no Default or Event of
Default has occurred under this Mortgage, Mortgagee shall first give Mortgagor
written notice at least three (3) days prior to acting under such power, which
notice shall demand that Mortgagor first take the proposed action within such
period and advising Mortgagor that if it fails to do so, Mortgagee will so act
under the power; provided, however, that, in the event that a Default or an
Event of Default has occurred and is continuing, or if necessary to prevent
imminent death, serious injury, damage, loss, forfeiture or diminution in value
to the Mortgaged Property or any surrounding property or to prevent any adverse
affect on Mortgagee’s interest in the Mortgaged Property, Mortgagee may act
immediately and without first giving such notice.  In such event,
Mortgagee will give Mortgagor notice of such action as soon thereafter as
reasonably practical.

     

    ARTICLE
XII

     

    PAYMENT; DEFEASANCE;
PREPAYMENT

     

    12.1           Payment of the
Notes.  Mortgagor shall duly and punctually pay or cause to be
paid, the principal of and the interest and premium, if any, on the Note in
accordance with the respective terms hereof and thereof, without demand therefor
or presentation of the Note, in lawful money of the United States of
America.

     

    12.2           Computation of
Interest.  Interest shall be computed hereunder and under the
Note based on the actual number of days in a 360 day year.  Interest
due and payable for a period less than a full month shall be calculated by
multiplying the actual number of days elapsed in such period by a daily rate
based on said 360 day year.  Interest shall accrue from the date on
which funds are advanced under the Note (regardless of the time of day) through
and including the day on which funds are credited in accordance with the terms
of the Note.  Interest shall be payable hereunder and under the Note
at the Interest Rate (as defined in the Note).

     

    12.3           Application of
Payments.  So long as no Event of Default exists hereunder,
each Monthly Payment shall be applied first, to any amounts hereafter advanced
by Mortgagee under any Loan Document, second, to any late fees and other amounts
payable to Mortgagee, third, to the payment of accrued interest and last to
reduction of principal.

     

    
      
        
        

      

      
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    12.4           Prepayment.

     

    (a)           The
Note may not be prepaid in whole or in part at the option of the Mortgagor
except as provided in Section 12.6
below.

     

    (b)           Partial
prepayments of the Note shall not be permitted, except for partial prepayments
resulting from Mortgagee’s election to apply insurance or condemnation proceeds
to reduce the outstanding principal balance of the Note as provided in Section 3.1(b)
hereof, in which event no prepayment fee or premium shall be due unless, at the
time of either Mortgagee’s receipt of such proceeds or the application of such
proceeds to the outstanding principal balance of the Note, an Event of Default
shall have occurred and is continuing, in which case, the provisions of Section 15.2 hereof
shall be controlling.

     

    (c)           If
the indebtedness evidenced by the Note shall have been declared due and payable
by Mortgagee pursuant to the terms thereof or the terms hereof or the provisions
of any other Loan Document due to a default by Mortgagor, then there shall also
then be immediately due and payable, a prepayment fee in an amount equal to the
greater of (A) one percent (1%) of the then outstanding principal balance of the
Note on the date of acceleration, and (B) an amount (if any) which, when added
to the then outstanding principal balance of the Note on the date of
acceleration, would be sufficient to purchase securities meeting the
requirements of Section 12.5(C)(2)
below.  In the event that any prepayment fee is due hereunder,
Mortgagee shall deliver to Mortgagor a statement setting forth the amount and
determination of the prepayment fee, and provided that Mortgagee shall have in
good faith applied the formula described above, Mortgagor shall not have the
right to challenge the calculation or the method of calculation set forth in any
such statement in the absence of manifest error.

     

    12.5           Defeasance.  Notwithstanding
any provision of this Mortgage to the contrary, at any time after the date which
(A) is two (2) years after the “startup day,” within the meaning of Section
860G(a)(9) of the Internal Revenue Code of 1986, as amended from time to time or
any successor statute (the “Code”), of a “real
estate mortgage investment conduit,” (“REMIC”) within the
meaning of Section 860D of the Code, that holds the Note and this Mortgage or
(B) four (4) years after the date hereof, whichever shall earlier occur,
and provided no Event of Default has occurred, Mortgagor may cause the release
of the Mortgaged Property from the lien of this Mortgage and the other Loan
Documents upon the satisfaction of the following conditions:

     

    A.           not
less than sixty (60) days prior written notice shall be given to Mortgagee
specifying a Payment Date (the “Release Date”) on
which the Defeasance Collateral is to be delivered;

     

    B.           all
accrued and unpaid interest and all other sums due under this Mortgage, the Note
and under the other Loan Documents up to the Release Date, including, without
limitation, all costs and expenses incurred by Mortgagee or its agents in
connection with such release (including, without limitation, the review of the
proposed Defeasance Collateral and the preparation of the Defeasance Security
Agreement (as hereinafter defined) and related documentation), shall be paid in
full on or prior to the Release Date; and

     

    C.           Mortgagor
shall deliver to Mortgagee on or prior to the Release Date:

     

    
      	
               
      

            	
              (1)

            	
              a
      pledge and security agreement, in form and substance satisfactory to
      Mortgagee in its sole discretion, creating a first priority security
      interest in favor of Mortgagee in the Defeasance Collateral (the “Defeasance Security
      Agreement”), which shall provide, among other things, that any
      payments generated by the Defeasance Collateral shall be paid directly to
      Mortgagee and applied by Mortgagee in satisfaction of all amounts then due
      and payable hereunder and any excess received by Mortgagee from the
      Defeasance Collateral over the amounts payable by Mortgagor hereunder or
      under the Note shall be refunded to Mortgagor promptly after each Payment
      Date;

            

    

     

    
      
        
        

      

      
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              (2)

            	
              direct,
      non-callable obligations of the United States of America that provide for
      payments prior, but as close as possible, to all successive Payment Dates
      occurring after the Release Date, with each such payment being equal to or
      greater than the amount of the corresponding installment of principal and
      interest required to be paid under the Note (provided that for all
      purposes of this Section 12.5(C)(2),
      all principal, accrued interest and other amounts payable under this
      Mortgage, the Note and the other Loan Documents shall be due and payable
      in full on the Maturity Date) (the “Defeasance
      Collateral”), each of which shall be duly endorsed by the holder
      thereof as directed by Mortgagee or accompanied by a written instrument of
      transfer in form and substance satisfactory to Mortgagee in its sole
      discretion (including, without limitation, such instruments as may be
      required by the depository institution holding such securities or the
      issuer thereof, as the case may be, to effectuate book-entry transfers and
      pledges through the book-entry facilities of such institution) in order to
      perfect upon the delivery of the Defeasance Security Agreement the first
      priority security interest in the Defeasance Collateral in favor of
      Mortgagee in conformity with all applicable state and federal laws
      governing granting of such security
interests;

            

    

     

    
      	
               
      

            	
              (3)

            	
              a
      certificate of Mortgagor certifying that all of the requirements set forth
      in this Section
      12.5 have been satisfied;

            

    

     

    
      	
               
      

            	
              (4)

            	
              an
      opinion of counsel for Mortgagor in form and substance and delivered by
      counsel satisfactory to Mortgagee in its sole discretion stating, among
      other things, that (x) Mortgagee has a perfected first priority security
      interest in the Defeasance Collateral and that the Defeasance Security
      Agreement is enforceable against Mortgagor in accordance with its terms
      and (y) that any trust formed as a REMIC pursuant to a securitization will
      not fail to maintain its status as a REMIC as a result of such
      defeasance;

            

    

     

    
      	
               
      

            	
              (5)

            	
              in
      the event the Loan is held by a REMIC, the Mortgagee has received written
      confirmation from any Rating Agency rating any securities issued in
      connection with a securitization that substitution of the Defeasance
      Collateral will not result in a downgrade, withdrawal, or qualification of
      the ratings then assigned to any of the
  securities;

            

    

     

    
      	
               
      

            	
              (6)

            	
              a
      certificate of a public accounting firm reasonably acceptable to Mortgagee
      certifying that the Defeasance Collateral will generate monthly amounts
      equal to or greater than the amount of each corresponding installment of
      principal and interest required to be paid under the Note for all
      successive Payment Dates occurring after the Release
  Date;

            

    

     

    
      	
               
      

            	
              (7)

            	
              a
      letter or other written evidence from any applicable Rating Agency that
      the defeasance will not result in the withdrawal, downgrade or
      qualification of the ratings assigned to any certificates issued in
      connection with a securitization of the Mortgaged Property, if applicable;
      and

            

    

     

    
      	
               
      

            	
              (8)

            	
              such
      other certificates, documents or instruments as Mortgagee may reasonably
      require.

            

    

     

    Upon
compliance with the requirements of this Section 12.5, the
Mortgaged Property shall be released from the lien of this Mortgage and the
other Loan Documents, and the Defeasance Collateral shall constitute collateral
which shall secure the Note and all other obligations under the Loan
Documents.  Mortgagee will, at Mortgagor’s expense, execute and
deliver any agreements reasonably requested by Mortgagor to release the lien of
the Mortgaged Instrument from the Mortgaged Property.  Upon the
release of the Mortgaged Property in accordance with this Section 12.5,
Mortgagor may assign all its obligations and rights under the Note, together
with the pledged Defeasance Collateral, to a successor entity designated by
Mortgagor and approved by Mortgagee in its sole discretion.  Such
successor entity shall execute an assumption agreement in form and substance
satisfactory to Mortgagee in its sole discretion pursuant to which it shall
assume Mortgagor’s obligations under the Note and the Defeasance Security
Agreement.  As conditions to such assignment and assumption, Mortgagor
shall (x) deliver to Mortgagee an opinion of counsel in form and substance
and delivered by counsel satisfactory to Mortgagee in its sole discretion
stating, among other things, that such assumption agreement is enforceable
against Mortgagor and such successor entity in accordance with its terms and
that the Note, the Defeasance Security Agreement and the other Loan Documents,
as so assumed, are enforceable against such successor entity in accordance with
their respective terms, (y) pay all costs and expenses incurred by Mortgagee or
its agents in connection with such assignment and assumption (including, without
limitation, the review of the proposed transferee and the preparation of the
assumption agreement and related documentation) and (z) deliver to Mortgagee a
non-consolidation opinion in form and substance satisfactory to Mortgagee and
the applicable Rating Agency.  Upon such assumption, Mortgagor shall
be relieved of its obligations hereunder, under the other Loan Documents and
under the Defeasance Security Agreement.

     

    
      
        
        

      

      
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    ARTICLE
XIII

     

    SECURITY
PROVISIONS

     

    13.1           Security
Interest.  This Mortgage is also intended to encumber and
create a security interest in, and Mortgagor hereby grants to Mortgagee a
security interest in, all sums on deposit with Mortgagee pursuant to the
provisions of Section
1.2, Section
5.1, Section
5.2 and Section
5.3 hereof or any other Section hereof or of any other Loan Document and
all fixtures, chattels, accounts, equipment, inventory, contract rights, general
intangibles and other personal property included within the Mortgaged Property,
all renewals, replacements of any of the aforementioned items, or articles in
substitution therefor or in addition thereto or the proceeds thereof (said
property is hereinafter referred to collectively as the “Collateral”), whether
or not the same shall be attached to the Premises or the Improvements in any
manner.  It is hereby agreed that to the extent permitted by law, all
of the foregoing property is to be deemed and held to be a part of and affixed
to the Premises and the Improvements.  The foregoing security interest
shall also cover Mortgagor’s leasehold interest in any of the foregoing property
which is leased by Mortgagor.  Notwithstanding the foregoing, all of
the foregoing property shall be owned by Mortgagor and no leasing or installment
sales or other financing or title retention agreement in connection therewith
shall be permitted without the prior written approval of
Mortgagee.  Mortgagor shall, from time to time upon the request of
Mortgagee, supply Mortgagee with a current inventory of all of the property in
which Mortgagee is granted a security interest hereunder, in such detail as
Mortgagee may reasonably require.  Mortgagor shall promptly replace
all of the Collateral subject to the lien or security interest of this Mortgage
when worn or obsolete with Collateral comparable to the worn out or obsolete
Collateral when new and will not, without the prior written consent of
Mortgagee, remove from the Premises or the Improvements any of the Collateral
subject to the lien or security interest of this Mortgage except such as is
replaced by an article of equal suitability and value as above provided, owned
by Mortgagor free and clear of any lien or security interest except that created
by this Mortgage and the other Loan Documents.  All of the Collateral
shall be kept at the location of the Premises except as otherwise required by
the terms of the Loan Documents.  Mortgagor shall not use any of the
Collateral in violation of any applicable statute, ordinance or insurance
policy.

     

    13.2           Security
Agreement.  This Mortgage constitutes a security agreement
between Mortgagor and Mortgagee with respect to the Collateral in which
Mortgagee is granted a security interest hereunder, and, cumulative of all other
rights and remedies of Mortgagee hereunder, Mortgagee shall have all of the
rights and remedies of a secured party under any applicable Uniform Commercial
Code.  Mortgagor hereby agrees to execute and deliver on demand and
hereby irrevocably constitutes and appoints Mortgagee the attorney-in-fact of
Mortgagor to execute and deliver and, if appropriate, to file with the
appropriate filing officer or office, such security agreements, financing
statements, continuation statements or other instruments as Mortgagee may
request or require in order to impose, perfect or continue the perfection of the
lien or security interest created hereby.  To the extent specifically
provided herein, Mortgagee shall have the right of possession of all cash,
securities, instruments, negotiable instruments, documents, certificates and any
other evidences of cash or other property or evidences of rights to cash rather
than property, which are now or hereafter a part of the Mortgaged Property, and
Mortgagor shall promptly deliver the same to Mortgagee, endorsed to Mortgagee,
without further notice from Mortgagee.  Mortgagor agrees to furnish
Mortgagee in writing with notice of any change in the name, identity,
organizational structure, residence, or principal place of business or mailing
address of Mortgagor thirty (30) days prior to the effective date of any such
change.  Expenses of retaking, holding, preparing for sale, selling or
the like (including, without limitation, Mortgagee’s reasonable attorneys’ fees
and legal expenses), together with interest thereon at the Default Interest Rate
from the date incurred by Mortgagee until actually paid by Mortgagor, shall be
paid by Mortgagor on demand and shall be secured by this Mortgage and by all of
the other Loan Documents securing all or any part of the
Debt.  Mortgagee shall have the right to enter upon the Premises and
the Improvements or any real property where any of the property which is the
subject of the security interest granted herein is located to take possession
of, assemble and collect the same or to render it unusable, or Mortgagor, upon
demand of Mortgagee, shall assemble such property and make it available to
Mortgagee at the Premises, or at a place which is mutually agreed upon or, if no
such place is agreed upon, at a place reasonably designated by Mortgagee to be
reasonably convenient to Mortgagee and Mortgagor.  If notice is
required by law, Mortgagee shall give Mortgagor at least ten (10) days’ prior
written notice of the time and place of any public sale of such property, or
adjournments thereof, or of the time of or after which any private sale or any
other intended disposition thereof is to be made, and if such notice is sent to
Mortgagor, as the same is provided for the mailing of notices herein, it is
hereby deemed that such notice shall be and is reasonable notice to
Mortgagor.  No such notice is necessary for any such property which is
perishable, threatens to decline speedily in value or is of a type customarily
sold on a recognized market.  Any sale made pursuant to the provisions
of this Section shall be deemed to have been a public sale conducted in a
commercially reasonable manner if held contemporaneously with a foreclosure sale
as provided in Section 15.1(e) hereof upon giving the same notice with respect
to the sale of the Mortgaged Property hereunder as is required under said
Section 15.1(e).

     

    
      
        
        

      

      
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    The name
and principal place of business of Mortgagor (as Debtor under any applicable
Uniform Commercial Code) are:

     

    URBAN
DEVELOPMENT PARTNERS (61), LLC

    457
Madison Avenue

    New York,
New York 10022

     

    The name
and principal place of business of Mortgagee (as Secured Party)
are:

     

    DEUTSCHE
BANC MORTGAGE CAPITAL, L.L.C.

    31 West
52nd Street

    10th
Floor

    New York,
New York 10019

     

    13.3           Secured
Indebtedness.  It is understood and agreed that this Mortgage
shall secure payment of not only the indebtedness evidenced by the Note but also
any and all substitutions, replacements, renewals and extensions of the Note,
any and all indebtedness and obligations arising pursuant to the terms hereof
and any and all indebtedness and obligations arising pursuant to the terms of
any of the other Loan Documents, all of which indebtedness is equally secured
with and has the same priority as any amounts advanced as of the date
hereof.  It is agreed that any future advances made by Mortgagee to or
for the benefit of Mortgagor from time to time under this Mortgage or the other
Loan Documents and whether or not such advances are obligatory or are made at
the option of Mortgagee, or otherwise, made for any purpose, within twenty (20)
years from the date hereof, and all interest accruing thereon, shall be equally
secured by this Mortgage and shall have the same priority as all amounts, if
any, advanced as of the date hereof and shall be subject to all of the terms and
provisions of this Mortgage.

     

    ARTICLE
XIV

     

    DEFAULT

     

    14.1           Events of
Default.  The occurrence of any of the following events shall
be an “Event of Default” hereunder:

     

    (a)           Mortgagor
fails to make any payment under the Note when due, subject to any grace period
set forth therein, or any other payment on or before the date such payment is
due.

     

    (b)           Mortgagor
fails to provide insurance as required by Section 2.1 hereof or
fails to perform any covenant, agreement, obligation, term or condition set
forth in Section
4.1, Section
6.3 or Section
10.4 hereof.

     

    (c)           Mortgagor
fails to perform any other covenant, agreement, obligation, term or condition
set forth herein, other than those otherwise described in this Section 14.1, and, to
the extent such failure or default is susceptible of being cured, the
continuance of such failure or default for thirty (30) days after written notice
thereof from Mortgagee to Mortgagor; provided, however,
that if such default is susceptible of cure but such cure cannot be accomplished
with reasonable diligence within said period of time, and if Mortgagor commences
to cure such default promptly after receipt of notice thereof from Mortgagee,
and thereafter prosecutes the curing of such default with reasonable diligence,
such period of time shall be extended for such period of time as may be
necessary to cure such default with reasonable diligence, but not to exceed an
additional ninety (90) days.

     

    
      
        
        

      

      
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    (d)           Any
representation or warranty made herein, in or in connection with any application
or commitment relating to the loan evidenced by the Note, or in any of the other
Loan Documents to Mortgagee by Mortgagor, by any principal, general partner,
manager or member in Mortgagor, or by any Indemnitor is determined by Mortgagee
to have been false or misleading in any material respect at the time
made.

     

    (e)           A
default occurs under any of the other Loan Documents which has not been cured
within any applicable grace or cure period therein provided.

     

    (f)           Mortgagor,
any principal, general partner or managing member in Mortgagor or any Indemnitor
becomes insolvent, or makes a transfer in fraud of creditors, or makes an
assignment for the benefit of creditors, or files a petition in bankruptcy, or
is voluntarily adjudicated insolvent or bankrupt or admits in writing the
inability to pay its debts as they mature, or petitions or applies to any
tribunal for or consents to or fails to contest the appointment of a receiver,
trustee, custodian or similar officer for Mortgagor, for any such principal,
general partner or managing member of Mortgagor or for any Indemnitor or for a
substantial part of the assets of Mortgagor, of any such principal, general
partner or managing member of Mortgagor or of any Indemnitor, or commences any
case, proceeding or other action under any bankruptcy, insolvency,
reorganization, arrangement, receivership or other debtor relief under any law
or statute of any jurisdiction, whether now or hereafter in effect.

     

    (g)           A
petition is filed or any case, proceeding or other action is commenced against
Mortgagor, against any principal, general partner or managing member of
Mortgagor or against any Indemnitor seeking to have an order for relief entered
against it as debtor or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts or other relief under
any law relating to bankruptcy, insolvency, arrangement, reorganization,
receivership or other debtor relief under any law or statute of any
jurisdiction, whether now or hereafter in effect, or a court of competent
jurisdiction enters an order for relief against Mortgagor, against any
principal, general partner or managing member of Mortgagor or against any
Indemnitor, as debtor, or an order, judgment or decree is entered appointing,
with or without the consent of Mortgagor, of any such principal, general partner
or managing member of Mortgagor or of any Indemnitor, a receiver, trustee,
custodian or similar officer for Mortgagor, for any such principal, general
partner or managing member of Mortgagor or for any Indemnitor, or for any
substantial part of any of the properties of Mortgagor, of any such principal,
general partner or managing member of Mortgagor or of any Indemnitor, and if any
such event shall occur, such petition, case, proceeding, action, order, judgment
or decree is not dismissed within sixty (60) days after being
commenced.

     

    (h)           The
Mortgaged Property or any part thereof is taken on execution or other process of
law in any action against Mortgagor.

     

    (i)           Mortgagor
abandons all or a portion of the Mortgaged Property.

     

    (j)           The
holder of any lien or security interest on the Mortgaged Property (without
implying the consent of Mortgagee to the existence or creation of any such lien
or security interest), whether superior or subordinate to this Mortgage or any
of the other Loan Documents, declares a default and such default is not cured
within any applicable grace or cure period set forth in the applicable document
or such holder institutes foreclosure or other proceedings for the enforcement
of its remedies thereunder.

     

    (k)           The
Mortgaged Property, or any part thereof, is subjected to waste or to removal,
demolition or material alteration so that the value of the Mortgaged Property is
materially diminished thereby and Mortgagee determines that it is not adequately
protected from any loss, damage or risk associated therewith.

     

    (l)           Any
dissolution, termination, partial or complete liquidation, merger or
consolidation of Mortgagor, any of its principals, any general partner or any
managing member, or any Indemnitor.

     

    
      
        
        

      

      
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    ARTICLE
XV

     

    REMEDIES

     

    15.1           Remedies
Available.  If there shall occur an Event of Default under this
Mortgage, then this Mortgage is subject to foreclosure as provided by law and
Mortgagee may, at its option and by or through a trustee, nominee, assignee or
otherwise, to the fullest extent permitted by law, exercise any or all of the
following rights, remedies and recourses, either successively or
concurrently:

     

    (a)           Acceleration.  Accelerate
the maturity date of the Note and declare any or all of the Debt to be
immediately due and payable without any presentment, demand, protest, notice or
action of any kind whatever (each of which is hereby expressly waived by
Mortgagor), whereupon the same shall become immediately due and
payable.  Upon any such acceleration, payment of such accelerated
amount shall constitute a prepayment of the principal balance of the Note and
any applicable prepayment fee provided for in the Note shall then be immediately
due and payable.

     

    (b)           Entry on the Mortgaged
Property.  Either in person or by agent, with or without
bringing any action or proceeding, or by a receiver appointed by a court and
without regard to the adequacy of its security, enter upon and take possession
of the Mortgaged Property, or any part thereof, without force or with such force
as is permitted by law and without notice or process or with such notice or
process as is required by law, unless such notice and process is waivable, in
which case Mortgagor hereby waives such notice and process, and do any and all
acts and perform any and all work which may be desirable or necessary in
Mortgagee’s judgment to complete any unfinished construction on the Premises, to
preserve the value, marketability or rentability of the Mortgaged Property, to
increase the income therefrom, to manage and operate the Mortgaged Property or
to protect the security hereof, and all sums expended by Mortgagee therefor,
together with interest thereon at the Default Interest Rate, shall be
immediately due and payable to Mortgagee by Mortgagor on demand and shall be
secured hereby and by all of the other Loan Documents securing all or any part
of the Debt.

     

    (c)           Collect Rents and
Profits.  With or without taking possession of the Mortgaged
Property, sue or otherwise collect the Rents and Profits, including those past
due and unpaid.

     

    (d)           Appointment of
Receiver.  Upon, or at any time prior or after, initiating the
exercise of any power of sale, instituting any judicial foreclosure or
instituting any other foreclosure of the liens and security interests provided
for herein or any other legal proceedings hereunder, make application to a court
of competent jurisdiction for appointment of a receiver for all or any part of
the Mortgaged Property, as a matter of strict right and without notice to
Mortgagor and without regard to the adequacy of the Mortgaged Property for the
repayment of the Debt or the solvency of Mortgagor or any person or persons
liable for the payment of the Debt, and Mortgagor does hereby irrevocably
consent to such appointment, waive any and all notices of and defenses to such
appointment and agree not to oppose any application therefor by Mortgagee, but
nothing herein is to be construed to deprive Mortgagee of any other right,
remedy or privilege Mortgagee may now have under the law to have a receiver
appointed, provided, however, that the
appointment of such receiver, trustee or other appointee by virtue of any court
order, statute or regulation shall not impair or in any manner prejudice the
rights of Mortgagee to receive payment of the Rents and Profits pursuant to
other terms and provisions hereof.  Any such receiver shall have all
of the usual powers and duties of receivers in similar cases, including, without
limitation, the full power to hold, develop, rent, lease, manage, maintain,
operate and otherwise use or permit the use of the Mortgaged Property upon such
terms and conditions as said receiver may deem to be prudent and reasonable
under the circumstances as more fully set forth in Section 15.3
below.  Such receivership shall, at the option of Mortgagee, continue
until full payment of all of the Debt or until title to the Mortgaged Property
shall have passed by foreclosure sale under this Mortgage or deed in lieu of
foreclosure.

     

    
      
        
        

      

      
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    (e)           Foreclosure.  Immediately
commence an action to foreclose this Mortgage or to specifically enforce its
provisions with respect to any of the Debt, pursuant to the statutes in such
case made and provided, and sell the Mortgaged Property or cause the Mortgaged
Property to be sold in accordance with the requirements and procedures provided
by said statutes in a single parcel or in several parcels at the option of
Mortgagee.  In the event foreclosure proceedings are instituted by
Mortgagee, all expenses incident to such proceedings, including, but not limited
to, reasonable attorneys’ fees and costs, shall be paid by Mortgagor and secured
by this Mortgage and by all of the other Loan Documents securing all or any part
of the Debt.  The Debt and all other obligations secured by this
Mortgage, including, without limitation, interest at the Default Interest Rate
any prepayment charge, fee or premium required to be paid under the Note in
order to prepay principal (to the extent permitted by applicable law),
reasonable attorneys’ fees and any other amounts due and unpaid to Mortgagee
under the Loan Documents, may be bid by Mortgagee in the event of a foreclosure
sale hereunder.  In the event of a judicial sale pursuant to a
foreclosure decree, it is understood and agreed that Mortgagee or its assigns
may become the purchaser of the Mortgaged Property or any part
thereof.

     

    (f)           Judicial
Remedies.  Proceed by suit or suits, at law or in equity,
instituted by or on behalf of Mortgagee, to enforce the payment of the Debt or
the other obligations of Mortgagor hereunder or pursuant to the Loan Documents,
to foreclose the liens and security interests of this Mortgage as against all or
any part of the Mortgaged Property, and to have all or any part of the Mortgaged
Property sold under the judgment or decree of a court of competent
jurisdiction.  This remedy shall be cumulative of any other
non-judicial remedies available to Mortgagee with respect to the Loan
Documents.  Proceeding with the request or receiving a judgment for
legal relief shall not be or be deemed to be an election of remedies or bar any
available non-judicial remedy of Mortgagee.

     

    (g)           Other.  Exercise
any other right or remedy available hereunder, under any of the other Loan
Documents or at law or in equity.

     

    15.2           Application of
Proceeds.  To the fullest extent permitted by law, the proceeds
of any sale under this Mortgage shall be applied, to the extent funds are so
available, to the following items in such order as Mortgagee in its discretion
may determine:

     

    (a)           To
payment of the reasonable costs, expenses and fees of taking possession of the
Mortgaged Property, and of holding, operating, maintaining, using, leasing,
repairing, improving, marketing and selling the same and of otherwise enforcing
Mortgagee’s rights and remedies hereunder and under the other Loan Documents,
including, but not limited to, receivers’ fees, court costs, attorneys’,
accountants’, appraisers’, managers’ and other professional fees, title charges
and transfer taxes.

     

    (b)           To
payment of all sums expended by Mortgagee under the terms of any of the Loan
Documents and not yet repaid, together with interest on such sums at the Default
Interest Rate.

     

    (c)           To
payment of the Debt and all other obligations secured by this Mortgage,
including, without limitation, interest at the Default Interest Rate and, to the
extent permitted by applicable law, any prepayment fee, charge or premium
required to be paid under the Note in order to prepay principal, in any order
that Mortgagee chooses in its sole discretion.

     

    (d)           The
remainder, if any, of such funds shall be disbursed to Mortgagor or to the
person or persons legally entitled thereto.

     

    
      
        
        

      

      
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    15.3           Right and Authority of
Receiver or Mortgagee in the Event of Default; Power of
Attorney.  Upon the occurrence of an Event of Default, and
entry upon the Mortgaged Property pursuant to Section 15.1(b) hereof or
appointment of a receiver pursuant to Section 15.1(d) hereof, and under such
terms and conditions as may be prudent and reasonable under the circumstances in
Mortgagee’s or the receiver’s sole discretion, all at Mortgagor’s expense,
Mortgagee or said receiver, or such other persons or entities as they shall
hire, direct or engage, as the case may be, may do or permit one or more of the
following, successively or concurrently:  (a) enter upon and take
possession and control of any and all of the Mortgaged Property; (b) take and
maintain possession of all documents, books, records, papers and accounts
relating to the Mortgaged Property; (c) exclude Mortgagor and its agents,
servants and employees wholly from the Mortgaged Property; (d) manage and
operate the Mortgaged Property; (e) preserve and maintain the Mortgaged
Property; (f) make repairs and alterations to the Mortgaged Property;
(g) complete any construction or repair of the Improvements, with such
changes, additions or modifications of the plans and specifications or intended
disposition and use of the Improvements as Mortgagee may in its sole discretion
deem appropriate or desirable to place the Mortgaged Property in such condition
as will, in Mortgagee’s sole discretion, make it or any part thereof readily
marketable or rentable; (h) conduct a marketing or leasing program with respect
to the Mortgaged Property, or employ a marketing or leasing agent or agents to
do so, directed to the leasing or sale of the Mortgaged Property under such
terms and conditions as Mortgagee may in its sole discretion deem appropriate or
desirable; (i) employ such contractors, subcontractors, materialmen, architects,
engineers, consultants, managers, brokers, marketing agents, or other employees,
agents, independent contractors or professionals, as Mortgagee may in its sole
discretion deem appropriate or desirable to implement and effectuate the rights
and powers granted herein and in the other Loan Documents; (j) execute and
deliver, in the name of Mortgagee as attorney-in-fact and agent of Mortgagor or
in its own name as Mortgagee, such documents and instruments as are necessary or
appropriate to consummate authorized transactions; (k) enter into such leases,
whether of real or personal property, or tenancy agreements, under such terms
and conditions as Mortgagee may in its sole discretion deem appropriate or
desirable; (1) collect and receive the Rents and Profits from the Mortgaged
Property; (m) eject tenants or repossess personal property, as provided by law,
for breaches of the conditions of their leases or other agreements; (n) sue for
unpaid Rents and Profits, payments, income or proceeds in the name of Mortgagor
or Mortgagee; (o) maintain actions in forcible entry and detainer, ejectment for
possession and actions in distress for rent; (p) compromise or give
acquittance for Rents and Profits, payments, income or proceeds that may become
due; (q) delegate or assign any and all rights and powers given to Mortgagee by
this Mortgage; and (r) do any acts which Mortgagee or the receiver in its sole
discretion deems appropriate or desirable to protect the security hereof and use
such measures, legal or equitable, as Mortgagee or the receiver may in its sole
discretion deem appropriate or desirable to implement and effectuate the
provisions of this Mortgage.  This Mortgage shall constitute a
direction to and full authority to any Tenant, or other third party who has
heretofore dealt or contracted or may hereafter deal or contract with Mortgagor
or Mortgagee, at the request of Mortgagee, to pay all amounts owing under any
lease, contract, concession, license or other agreement to Mortgagee without
proof of the Event of Default relied upon.  Any such Tenant or third
party is hereby irrevocably authorized to rely upon and comply with (and shall
be fully protected by Mortgagor in so doing) any request, notice or demand by
Mortgagee for the payment to Mortgagee of any Rents and Profits or other sums
which may be or thereafter become due under its lease, contract, concession,
license or other agreement, or for the performance of any undertakings under any
such lease, contract, concession, license or other agreement, and shall have no
right or duty to inquire whether any Event of Default under this Mortgage or
under any of the other Loan Documents has actually occurred or is then
existing.  Mortgagor hereby irrevocably constitutes and appoints
Mortgagee, its assignees, successors, transferees and nominees, as Mortgagor’s
true and lawful attorney-in-fact and agent, with full power of substitution in
the Mortgaged Property, in Mortgagor’s name, place and stead, to do or permit
any one or more of the foregoing described rights, remedies, powers and
authorities, successively or concurrently.  Any money advanced by
Mortgagee in connection with any action taken under this Section 15.3,
together with interest thereon at the Default Interest Rate from the date of
making such advancement by Mortgagee until actually paid by Mortgagor, shall be
a demand obligation owing by Mortgagor to Mortgagee and shall be secured by this
Mortgage and by every other instrument securing all or any portion of the
Debt.

     

    15.4           Occupancy After
Foreclosure.  In the event there is a foreclosure sale
hereunder and at the time of such sale, Mortgagor or Mortgagor’s
representatives, successors or assigns, or any other persons claiming any
interest in the Mortgaged Property by, through or under Mortgagor (except
Tenants under Leases entered into prior to the date hereof), are occupying or
using the Mortgaged Property, or any part thereof, then, to the extent not
prohibited by applicable law, each and all shall, at the option of Mortgagee or
the purchaser at such sale, as the case may be, immediately become the tenant of
the purchaser at such sale, which tenancy shall be a tenancy from day-to-day,
terminable at the will of either landlord or tenant, at a reasonable rental per
day based upon the higher of either (i) any rate provided in a lease then in
effect with Mortgagor or, if none exists, then (ii) the value of the Mortgaged
Property occupied or used, such rental to be due daily to the
purchaser.  Further, to the extent permitted by applicable law, in the
event the tenant fails to surrender possession of the Mortgaged Property upon
the termination of such tenancy, the purchaser shall be entitled to institute
and maintain an action for unlawful detainer of the Mortgaged Property in the
appropriate court of the county in which the Premises is located.

     

    
      
        
        

      

      
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    15.5           Notice to Account
Debtors.  Mortgagee may, at any time after an Event of Default,
notify the account debtors and obligors of any accounts, chattel paper,
negotiable instruments or other evidences of indebtedness to Mortgagor included
in the Mortgaged Property to pay Mortgagee directly.  Mortgagor shall
at any time or from time to time upon the request of Mortgagee provide to
Mortgagee a current list of all such account debtors and obligors and their
addresses.

     

    15.6           Cumulative
Remedies.  All remedies contained in this Mortgage are
cumulative and Mortgagee shall also have all other remedies provided at law and
in equity or in any other Loan Documents.  Such remedies may be
pursued separately, successively or concurrently at the sole subjective
direction of Mortgagee and may be exercised in any order and as often as
occasion therefor shall arise.

     

    15.7           Payment of
Expenses.  Mortgagor shall pay on demand all of Mortgagee’s
expenses incurred in any efforts to enforce any terms of this Mortgage, whether
or not any lawsuit is filed and whether or not foreclosure is commenced but not
completed, including, but not limited to, reasonable legal fees and
disbursements, foreclosure costs and title charges, together with interest
thereon from and after the date incurred by Mortgagee until actually paid by
Mortgagor at the Default Interest Rate, and the same shall be secured by this
Mortgage and by all of the other Loan Documents securing all or any part of the
Debt.

     

    15.8           Mortgagor’s
Waivers.  To the full extent permitted by law, Mortgagor agrees
that Mortgagor shall not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, moratorium or extension, or any law now or
hereafter in force providing for the reinstatement of the Debt prior to any sale
of the Mortgaged Property to be made pursuant to any provisions contained herein
or prior to the entering of any decree, judgment or order of any court of
competent jurisdiction, or any right under any statute to redeem all or any part
of the Mortgaged Property so sold.  Mortgagor, for Mortgagor and
Mortgagor’s successors and assigns, and for any and all persons ever claiming
any interest in the Mortgaged Property, to the full extent permitted by law,
hereby knowingly, intentionally and voluntarily, with and upon the advice of
competent counsel:  (a) waives, releases, relinquishes and
forever forgoes all rights of valuation, appraisement, stay of execution,
reinstatement and notice of election or intention to mature or declare due the
Debt (except such notices as are specifically provided for herein); (b) waives,
releases, relinquishes and forever forgoes all right to a marshaling of the
assets of Mortgagor, including the Mortgaged Property, to a sale in the inverse
order of alienation, or to direct the order in which any of the Mortgaged
Property shall be sold in the event of foreclosure of the liens and security
interests hereby created and agrees that any court having jurisdiction to
foreclose such liens and security interests may order the Mortgaged Property
sold as an entirety; and (c) waives, releases, relinquishes and forever forgoes
all rights and periods of redemption provided under applicable
law.  To the full extent permitted by law, Mortgagor shall not have or
assert any right under any statute or rule of law pertaining to the exemption of
homestead or other exemption under any federal, state or local law now or
hereafter in effect, the administration of estates of decedents or other matters
whatever to defeat, reduce or affect the right of Mortgagee under the terms of
this Mortgage to a sale of the Mortgaged Property, for the collection of the
Debt without any prior or different resort for collection, or the right of
Mortgagee under the terms of this Mortgage to the payment of the Debt out of the
proceeds of sale of the Mortgaged Property in preference to every other claimant
whatever.  Furthermore, Mortgagor hereby knowingly, intentionally and
voluntarily, with and upon the advice of competent counsel, waives, releases,
relinquishes and forever forgoes all present and future statutes of limitations
as a defense to any action to enforce the provisions of this Mortgage or to
collect any of the Debt to the fullest extent permitted by
law.  Mortgagor covenants and agrees that upon the commencement of a
voluntary or involuntary bankruptcy proceeding by or against Mortgagor,
Mortgagor shall not seek a supplemental stay or otherwise shall not seek
pursuant to 11 U.S.C. §105 or any other provision of Title II, United State
Code, as amended, or any other debtor relief law (whether statutory, common law,
case law, or otherwise) of any jurisdiction whatsoever, now or hereafter in
effect, which may be or become applicable, to stay, interdict, condition, reduce
or inhibit the ability of Mortgagee to enforce any rights of Mortgagee against
any guarantor or indemnitor of the secured obligations or any other party liable
with respect thereto by virtue of any indemnity, guaranty or
otherwise.

     

    
      
        
        

      

      
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    15.9           Submission to Jurisdiction;
Waiver of Jury Trial.

     

    (a)           MORTGAGOR,
TO THE FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (i) SUBMITS TO
PERSONAL JURISDICTION IN THE STATE IN WHICH THE PREMISES IS LOCATED OVER ANY
SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THE NOTE,
THIS MORTGAGE OR ANY OTHER OF THE LOAN DOCUMENTS, (ii) AGREES THAT ANY SUCH
ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION SITTING IN THE COUNTY IN WHICH THE PREMISES IS LOCATED,
(iii) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND (iv) TO THE FULLEST EXTENT
PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING
IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF MORTGAGEE TO
BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM).

     

    (b)           EACH
OF MORTGAGOR AND MORTGAGEE BY ITS ACCEPTANCE OF THIS MORTGAGE, TO THE FULL
EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH
AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER
FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,
ARISING OUT OF, OR IN ANY WAY RELATING TO THE DEBT OR ANY CONDUCT, ACT OR
OMISSION OF MORTGAGEE OR MORTGAGOR, OR ANY OF THEIR RESPECTIVE DIRECTORS,
OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER
PERSONS AFFILIATED WITH MORTGAGEE OR MORTGAGOR, IN EACH OR THE FOREGOING CASES,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  MORTGAGOR HEREBY
CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS,
IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING ARISING FROM OR RELATING TO
THE NOTE, THIS MORTGAGE OR ANY OF THE OTHER LOAN DOCUMENTS BY REGISTERED OR
CERTIFIED U.S. MAIL, POSTAGE PREPAID TO MORTGAGOR AT THE ADDRESS FOR NOTICES
DESCRIBED HEREINABOVE.

     

    ARTICLE
XVI

     

    MISCELLANEOUS TERMS AND
CONDITIONS

     

    16.1           Time of
Essence.  Time is of the essence with respect to all provisions
of this Mortgage.

     

    16.2           Release of
Mortgage.  If all of the Debt be paid, then and in that event
only, all rights under this Mortgage, except for those provisions hereof which
by their terms survive, shall terminate and the Mortgaged Property shall become
wholly clear of the liens, security interests, conveyances and assignments
evidenced hereby, which shall be promptly released of record by Mortgagee in due
form at Mortgagor’s cost.

     

    16.3           Notices.  All
notices, demands, requests or other communications to be sent by one party to
the other hereunder or required by law shall be in writing and shall be deemed
to have been validly given or served by delivery of the same in person to the
intended addressee, or by depositing the same with Federal Express or another
reputable private courier service for next business day delivery, or by
depositing the same in the United States mail, postage prepaid, registered or
certified mail, return receipt requested, in any event addressed to the intended
addressee at its address set forth on the first page of this Mortgage or at such
other address as may be designated by such party as herein
provided.  All notices, demands and requests shall be effective upon
such personal delivery, or one (1) business day after being deposited with the
private courier service, or three (3) business days after being deposited in the
United States mail as required above.  Rejection or other refusal to
accept or the inability to deliver because of changed address of which no notice
was given as herein required shall be deemed to be receipt of the notice, demand
or request sent.  By giving to the other party hereto at least fifteen
(15) days’ prior written notice thereof in accordance with the provisions
hereof, the parties hereto shall have the right from time to time to change
their respective addresses and each shall have the right to specify as its
address any other address within the United States of America.

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    16.4           Successors and Assigns;
Joint and Several Liability.  The terms, provisions,
indemnities, covenants and conditions hereof shall be binding upon Mortgagor and
the successors and assigns of Mortgagor, including all successors in interest of
Mortgagor in and to all or any part of the Mortgaged Property, and shall inure
to the benefit of Mortgagee, its directors, officers, shareholders, employees
and agents and their respective successors and assigns and shall constitute
covenants running with the land.  The term “Mortgagee” as used
herein shall also mean and refer to any lawful holder or owner, including
pledgees and participants, of any of the Debt.  If more than one
person or entity is the “Mortgagor” hereunder, each is jointly and severally
liable to perform the obligations of Mortgagor hereunder and all
representations, warranties, covenants and agreements made by Mortgagor
hereunder are joint and several.

     

    16.5           Severability.  A
determination that any provision of this Mortgage is unenforceable or invalid
shall not affect the enforceability or validity of any other provision, and any
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 any other
persons or circumstances.

     

    16.6           Gender.  Within
this Mortgage, words of any gender shall be held and construed to include any
other gender, and words in the singular shall be held and construed to include
the plural, and vice versa, unless the context otherwise requires.

     

    16.7           Waiver; Discontinuance of
Proceedings.  Mortgagee may waive any single Event of Default
by Mortgagor hereunder without waiving any other prior or subsequent Event of
Default.  No waiver of an Event of Default shall be valid for any
purpose hereunder unless given in writing by Mortgagee.  Mortgagee may
cure any Event of Default by Mortgagor hereunder without waiving the Event of
Default remedied.  Neither the failure by Mortgagee to exercise, nor
the delay by Mortgagee in exercising, any right, power or remedy upon any Event
of Default by Mortgagor hereunder shall be construed as a waiver of such Event
of 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 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 and for the specific purpose
given.  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.  Acceptance by Mortgagee of any payment in an
amount less than the amount then due on any of the Debt shall be deemed an
acceptance on account only and shall not in any way affect the existence of an
Event of Default.  In case Mortgagee shall have proceeded to invoke
any right, remedy or recourse permitted hereunder or under the other Loan
Documents and shall thereafter elect to discontinue or abandon the same for any
reason, Mortgagee shall have the unqualified right to do so and, in such an
event, Mortgagor and Mortgagee shall be restored to their former positions with
respect to the Debt, the Loan Documents, the Mortgaged Property and otherwise,
and the rights, remedies, recourses and powers of Mortgagee shall continue as if
the same had never been invoked.

     

    16.8           Section
Headings.  The headings of the sections and paragraphs of this
Mortgage are for convenience of reference only, are not to be considered a part
hereof and shall not limit or otherwise affect any of the terms
hereof.

     

    16.9           Governing
Law.  THIS MORTGAGE WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED WITHOUT
REGARD TO ITS CONFLICTS OF LAWS RULES.

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    16.10         Counting of
Days.  The term “days” when used herein shall mean calendar
days.  If any time period ends on a Saturday, Sunday or holiday
officially recognized by the state within which the Premises is located, the
period shall be deemed to end on the next succeeding business
day.  The term “business day” when used herein shall mean a weekday,
Monday through Friday, except a legal holiday or a day on which banking
institutions in the state in which the Premises are located and in New York, New
York are authorized by law to be closed.

     

    16.11         Relationship of the
Parties.  The relationship between Mortgagor and Mortgagee is
that of a borrower and a lender only and neither of those parties is, nor shall
it hold itself out to be, the agent, employee, joint venturer or partner of the
other party.

     

    16.12         Unsecured Portion of
Indebtedness.  If any part of the Debt cannot be lawfully
secured by this Mortgage or if any part of the Mortgaged 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 unsecured by this
Mortgage.

     

    16.13         Cross
Default.  An Event of Default hereunder shall be a default
under each of the other Loan Documents.

     

    16.14         Inconsistency with Other
Loan Documents.  In the event of any inconsistency between the
provisions hereof and the provisions in any of the other Loan Documents, it is
intended that the provisions of the Note shall control over the provisions of
this Mortgage, and that the provisions of this Mortgage shall control over the
provisions of the Assignment of Leases and Rents and Profits, the Environmental
Indemnity Agreement and the other Loan Documents.

     

    16.15         No
Merger.  It is the desire and intention of the parties hereto
that this Mortgage and the lien hereof do not merge in fee simple title to the
Mortgaged Property.

     

    16.16        
Rights With Respect to
Junior Encumbrances.  Without implying that any person or
entity has the right to do so, any person or entity purporting to have or to
take a junior mortgage or other lien upon the Mortgaged Property or any interest
therein shall be subject to the rights of Mortgagee to amend, modify, increase,
vary, alter or supplement this Mortgage, the Note or any of the other Loan
Documents, and to extend the maturity date of the Debt, and to increase the
amount of the Debt, and to waive or forebear the exercise of any of its rights
and remedies hereunder or under any of the other Loan Documents and to release
any collateral or security for the Debt, in each and every case without
obtaining the consent of the holder of such junior lien and without the lien or
security interest of this Mortgage losing its priority over the rights of any
such junior lien.

     

    16.17         Mortgagee May File Proofs of
Claim.  In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
proceedings affecting Mortgagor or the principals, general partners or managing
members in Mortgagor, or their respective creditors or property, 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 the claims of
Mortgagee allowed in such proceedings for the entire Debt at the date of the
institution of such proceedings and for any additional amount which may become
due and payable by Mortgagor hereunder after such date.

     

    16.18         Fixture
Filing.  This Mortgage shall be effective from the date of its
recording as a financing statement filed as a fixture filing with respect to all
goods constituting part of the Mortgaged Property which are or are to become
fixtures.  This Mortgage shall also be effective as a financing
statement covering minerals or the like (including oil and gas) and is to be
filed for record in the real estate records of the county where the Premises is
situated.

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    16.19         Counterparts.  This
Mortgage may be executed in any number of counterparts, each of which shall be
effective only upon delivery and thereafter shall be deemed an original, and all
of which shall be taken to be one and the same instrument, for the same effect
as if the signatory(s) hereto had signed the same signature page.

     

    16.20         Recording and
Filing.  Mortgagor will cause the Loan Documents and all
amendments and supplements thereto and substitutions therefor to be recorded,
filed, re-recorded and re-filed in such manner and in such places as Mortgagee
shall reasonably request, and will pay on demand all such recording, filing,
re-recording and re-filing taxes, fees and other charges.  Mortgagor
shall reimburse Mortgagee, or its servicing agent, for the costs incurred in
obtaining a tax service company to verify the status of payment of taxes and
assessments on the Mortgaged Property.

     

    16.21         Entire Agreement and
Modifications.  This Mortgage and the other Loan Documents
contain the entire agreements between the parties relating to the subject matter
hereof and thereof and all prior agreements relative hereto and thereto which
are not contained herein or therein are terminated.  This Mortgage and
the other Loan Documents may not be amended, revised, waived, discharged,
released or terminated orally but only by a written instrument or instruments
executed by the party against which enforcement of the amendment, revision,
waiver, discharge, release or termination is asserted.

     

    16.22         Maximum
Interest.  The provisions of this Mortgage and of all
agreements between Mortgagor and Mortgagee, whether now existing or hereafter
arising and whether written or oral, are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of demand or acceleration of
the maturity of the Note or otherwise, shall the amount paid, or agreed to be
paid (“Interest”) to
Mortgagee for the use, forbearance or retention of the money loaned under the
Note exceed the maximum amount permissible under applicable law.  If,
from any circumstance whatsoever, performance or fulfillment of any provision
hereof or of any agreement between Mortgagor and Mortgagee shall, at the time
performance or fulfillment of such provision shall be due, exceed the limit for
Interest prescribed by law or otherwise transcend the limit of validity
prescribed by applicable law, then, ipso facto, the obligation to be performed
or fulfilled shall be reduced to such limit, and if, from any circumstance
whatsoever, Mortgagee shall ever receive anything of value deemed Interest by
applicable law in excess of the maximum lawful amount, an amount equal to any
excessive Interest shall be applied to the reduction of the principal balance
owing under the Note in the inverse order of its maturity (whether or not then
due) or, at the option of Mortgagee, be paid over to Mortgagor, and not to the
payment of Interest.  All Interest (including any amounts or payments
deemed to be 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 period until payment in full of the principal balance of the
Note so that the Interest thereon for such full period will not exceed the
maximum amount permitted by applicable law.  This Section will
control all agreements between Mortgagor and Mortgagee.

     

    16.23         Certain Matters Relating to
Mortgaged Property Located in the State of New York.  With
respect to the Mortgaged Property which is located in the State of New York,
notwithstanding anything contained herein to the contrary:

     

    (a)           Multi-Use
Property.  Mortgagor represents that this Mortgage does not
encumber real property principally improved or to be improved by one or more
structures containing in the aggregate more than six residential dwelling units,
each having its own separate cooking facilities.

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

     

    (b)           Maximum Principal
Indebtedness.  Notwithstanding anything to the contrary
contained herein, the maximum amount of principal indebtedness secured by the
Mortgage or which under any contingency may be secured by the Mortgage is
$15,850,000.

     

    (c)           Insurance
Proceeds.  In the event of any conflict, inconsistency or
ambiguity between the provisions of Article II hereof and the provisions of
subsection 4 of Section 254 of the Real Property Law of New York covering the
insurance of buildings against loss by fire, the provisions of Article II hereof
shall control.

     

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

     

    (e)           Section 291-f
Agreement.  Section 6.1 and Section 6.2 of this
Mortgage are intended to be, and shall operate as, the agreement described in
Section 291-f of the Real Property Law of the State of New York and shall be
entitled to the benefits afforded thereby.  Mortgagor shall (unless
such notice is contained in such tenant’s Lease) deliver notice of such sections
of this Mortgage in form and substance reasonably acceptable to Mortgagee, to
all present and future holders of any interest in any Lease, by assignment or
otherwise, and shall take such other action as may now or hereafter be
reasonably required to afford Mortgagee the full protections and benefits of
Section 291-f.  Mortgagor shall request the recipient of any such
notice to acknowledge the receipt thereof.

     

    (f)           Limitation on
Liability.  Notwithstanding anything to the contrary contained
in this Mortgage, the liability of Mortgagor and its present and future
officers, directors, general partners, managers, members and principals for the
indebtedness secured hereby and for the performance of the other agreements,
covenants and obligations contained herein and in the Loan Documents shall be
strictly limited as set forth in the Note.

     

    [THE
BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, Mortgagor has executed this Mortgage on the day and year first
written above.

     

    
      	
               
      

            	
              MORTGAGOR:

            

    

     

    
      	
               
      

            	
              URBAN
      DEVELOPMENT PARTNERS (61),  LLC,
      
a Connecticut limited liability company

            

    

     

    
      	
               
      

            	
              By:
      Urban (61), Inc., a Connecticut
corporation

            

    

     

    
      
        	 	 	 	 
	
              	
                By:
      

              	 	 
	 	 	
                Name:  Philip
      R. Carter

              	 
	 	 	
                Title:  President

              	 
	 	 	 	 

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        State
of                      
       )

                                                   
ss.:

        County
of                 
       )

      

       

    

    On the
___________ day of ___________, 2002, before me, the undersigned, a Notary
Public in and for said State, personally appeared __________________, 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

                	 

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
A

    

    Legal
Description

     

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

     

    BEGINNING
at a point on the southerly side of 61st Street
distant 125 feet easterly from the corner formed by the intersection of the
southerly side of 61st Street
and the easterly side of Second Avenue;

     

    RUNNING
THENCE easterly along the southerly side of 61st Street,
110 feet 6 inches to the westerly side of the land taken by the City of New York
for the Queensborough Bridge approach;

     

    THENCE
southerly along the westerly side of said land and parallel with the easterly
side of Second Avenue, 102 feet 10 inches;

     

    THENCE
westerly and parallel with the southerly side of 61st Street,
60 feet 6 inches;

     

    THENCE
northerly and parallel with the easterly side of Second Avenue, 2 feet 5 inches
to the centre line of the block;

     

    THENCE
westerly and along centre line of the block and parallel with the southerly side
of 61st
Street, 50 feet;

     

    THENCE
northerly and parallel with the easterly side of Second Avenue, 100 feet 5
inches to the point or place of BEGINNING.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
5.5

     

    Rent
Abatements

     

    
      	 
      	
              Tenant

            	 	
              Rent Abatement Period

            
	
              1.

            	
              Amy
      Perlin Expansion

            	 	
              November,
      2006 and December, 2006

            
	
              2.

            	
              Lee
      Calicchio

            	 	
              February,
      2003

            
	
              3.

            	
              Suzanne
      Golden Antiques

            	 	
              February,
      2003

            
	
              4.

            	
              Robert
      Altman

            	 	
              August,
      2003

            
	
              5.

            	
              Lisa
      Jackson

            	 	
              February,
      2003

            
	
              6.

            	
              Eric
      Appel LLC

            	 	
              November,
      2002 and October, 2003

            
	
              7.

            	
              Solar
      Antique Tiles

            	 	
              February,
      2003

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
5.6

     

    2011
Rollover Spaces

     

    
      	 	 	
              2011 Rollover Space

              (identified
      by current occupant)

            	 	
              Square Footage

            	 	 	
              Allocable 2011 Rollover

              Amount

            	 
	 	1.	 	
              Bunny
      Williams, Inc.

            	 	 	9,200	 	 	$	247,797.17	 
	 	2.	 	
              Amy
      Perlin Expansion

            	 	 	5,000	 	 	$	134,672.37	 
	 	3.	 	
              Amy
      Perlin Antiques

            	 	 	4,500	 	 	$	121,205.13	 
	 	4.	 	
              Lee
      Calicchio

            	 	 	3,500	 	 	$	94,270.66	 
	 	5.	 	
              Sentimento

            	 	 	3,200	 	 	$	86,190.32	 
	 	6.	 	
              Suzanne
      Golden Antiques

            	 	 	2,500	 	 	$	67,336.18	 
	 	7.	 	
              Troubetzkoy
      Paintings

            	 	 	2,500	 	 	$	67,336.18	 
	 	8.	 	
              Jean
      Karajian Gallery

            	 	 	2,350	 	 	$	63,296.01	 
	 	9.	 	
              Robert
      Altman

            	 	 	2,200	 	 	$	59,255.84	 
	 	10.	 	
              Lisa
      Jackson

            	 	 	2,000	 	 	$	53,868.95	 
	 	11.	 	
              John
      Norwood

            	 	 	1,700	 	 	$	45,788.61	 
	 	12.	 	
              Eric
      Appel

            	 	 	1,700	 	 	$	45,788.61	 
	 	13.	 	
              Solar
      Antique Tiles

            	 	 	1,500	 	 	$	40,401.71	 
	 	14.	 	
              The
      Gazebo of NY Trading Company

            	 	 	1,400	 	 	$	37,708.26	 
	
              TOTAL

            	 	 	43,250	 	 	$	1,164,916.00

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}]]