Document:

AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT

      This AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT is made March 15,
2007, by and between DVL, INC., a Delaware corporation having its principal
place of business at 70 East 55th Street, 7th Floor, New York, New York 10022
(the "Borrower"), and PEMMIL FUNDING LLC, a New York limited liability company
(the "Lender").

                                  WITNESSETH:

      WHEREAS, the Lender previously made a loan to the Borrower in the original
principal amount of $2,500,000 pursuant to the terms of that certain Loan and
Security Agreement, dated December 27, 2005, between the Borrower and the Lender
(the "Loan Agreement") and evidenced by that certain Term Note made by the
Borrower in favor of the Lender (the "Term Note");

      WHEREAS, the Borrower has requested that the Lender make an additional
loan advance to the Borrower;

      NOW, THEREFORE, the parties hereto hereby agree as follows:

      1. Capitalized Terms. Capitalized terms used herein and not otherwise
defined shall have the respective meanings ascribed thereto in the Loan
Agreement.

      2. Outstanding Balances. The Borrower and the Lender agree that the
outstanding amounts due under the Loan Agreement and the Term Note, prior to
giving effect to the additional advance being made simultaneously herewith,
through and including March 15, 2007 are as follows:

                    Principal       $ 1,189,792.82
                    Interest        $   115,810.91

The Borrower acknowledges and agrees that the accrued and unpaid interest
outstanding at March 15, 2007 shall be added to principal effective upon the
execution of this Agreement.

      3. Additional Advance. In consideration of the agreements provided for
herein and subject to the Borrower executing and delivering to Lender an Amended
and Restated Term Note in the form of Exhibit A hereto, the Lender hereby agrees
to advance to the Borrower the sum of $650,000.

      4. Amendments to Loan Agreement. The Loan Agreement is hereby amended as
follows:

            a. By deleting "$2,500,000" from the definition of "Loan Amount" in
      Section 1.1 thereof and inserting "$1,955,603.73" in lieu thereof.

<PAGE>

            b. By adding at the end of the definition of "Loan Documents" the
      following;

                  "and any all amendments, modifications, replacements,
            restatements, and substitutions thereto."

            c. By deleting the definition of "Note" in Section 1.1 thereof and
      inserting the following in lieu thereof;

                  "Note -- the Amended and Restated Term Note, dated March 15,
            2007, from Borrower to Lender in the original principal amount of
            $1,955,603.73, together with any and all amendments, modifications,
            replacements, restatements, and substitutions thereto."

      5. Representation and Warranties. The Borrower hereby represents and
warrants to the Lender as follows:

            a. The execution and delivery of this Agreement by the Borrower, and
      the performance by the Borrower of its obligations and agreements under
      this Agreement, are within the corporate authority of the Borrower, have
      been duly authorized by all necessary corporate proceedings on behalf of
      the Borrower, and do not and will not contravene any provision of law,
      statute, rule or regulation to which the Borrower is subject or its
      Certificate of Incorporation or By-laws, or any provision or any amendment
      thereof or of any agreement or other instrument binding upon the Borrower.

            b. This Agreement, and all other documents, instruments and
      agreements relating thereto, as same may be amended hereby, constitute the
      legal, valid and binding obligations of the Borrower, enforceable in
      accordance with their respective terms except as such may be limited by
      the application of bankruptcy, moratorium, reorganization and other laws
      affecting the rights of creditors generally or by general equitable
      principles.

            c. The representations and warranties made by the Borrower in the
      Loan Documents are true and correct in all material respects on and as of
      the date of this Agreement as though made at and as of such date (except
      to the extent that such representations and warranties expressly relate to
      an earlier date and except to the extent that variations therefrom are
      permitted under the terms of the Loan Documents or have otherwise been
      approved in writing by the Lender). Except as previously disclosed to the
      Lender in writing, no material adverse change has occurred in the assets,
      liabilities, financial condition, business or prospects of the Borrower.

            d. The Borrower has performed and complied in all material respects
      with all terms and conditions herein required to be performed or complied
      with by

<PAGE>

      the Borrower prior to or at the time hereof, and no Event of Default has
      occurred and is continuing under the Loan Documents.

            e. The Borrower has read and understands each of the terms and
      conditions of this Agreement and is entering into this Agreement freely
      and voluntarily, without duress, after having had an opportunity for
      consultation with independent counsel of its own selection, and not in
      reliance upon any representations, warranties, or agreements made by the
      Lender and not set forth in this Agreement.

      6. Miscellaneous. (a) Except as modified hereby, the Loan Agreement
remains in full force and effect and the provisions thereof are hereby ratified
and confirmed.

            (b) All references in the Loan Agreement to "this Agreement",
"hereunder", "hereto" or similar references, and all references in all other
documents to the Loan Agreement shall hereinafter be deemed references to the
Loan Agreement as amended hereby.

            (c) This Agreement may be executed in one or more counterparts, all
of which together shall for all purposes constitute one amendment, binding on
all parties hereto, notwithstanding that the parties have not signed the same
counterparts.

      IN WITNESS WHEREOF, this Amendment has been executed as of the date and
year first above written.

                                   LENDER:

                                           PEMMIL FUNDING LLC

                                           By /s/ Jay Chazanoff
                                              ------------------------
                                              Jay Chazanoff
                                              Administrative Member

                                   BORROWER:

                                           DVL, INC.

                                           By /s/ Henry Swain
                                              ------------------------
                                           Name: Henry Swain
                                           Title: CFOCONDITIONAL REDEVELOPER AGREEMENT

                              FOR A PORTION OF THE

                        PASSAIC AVENUE REDEVELOPMENT AREA

                IN THE TOWN OF KEARNY, HUDSON COUNTY, NEW JERSEY

                                 BY AND BETWEEN

                               THE TOWN OF KEARNY
                        Acting as a Redevelopment Entity

                                       AND

                                    DVL, INC.
                             Conditional Redeveloper

                             DATED: OCTOBER 16, 2006

<PAGE>

      THIS AGREEMENT ("Agreement") made this ______ day of October, 2006,

      by and between

      THE TOWN OF KEARNY, a body corporate and politic of the State of New
      Jersey, County of Hudson, having an address of 402 Kearny Avenue, Kearny,
      New Jersey 07032 (hereinafter referred to as the "Town") acting pursuant
      to the Redevelopment Law;

      and

      DVL, INC., a corporation of the State of Delaware, having an address of 70
      East 55th Street, New York, New York 10022 (hereinafter referred to as the
      "Conditional Redeveloper").

                                    PREAMBLE

      WHEREAS, the Town of Kearny (the "Town") acting pursuant to the Local
Redevelopment and Housing Law, N.J.S.A. 40:A12A-et seq., has declared certain
designated areas in the Town to be in need of redevelopment as that term is used
in the statute; and

      WHEREAS, the parcels of land hereinafter referred to as the Property are
within and a part of the Passaic Avenue Redevelopment Area (the "Redevelopment
Area"); and

      WHEREAS, the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-8(f)
authorizes the Town to contract with a redeveloper for the planning,
construction or undertaking of any project or redevelopment work in an area
designated as an area in need of redevelopment; and

      WHEREAS, with respect to the Property, the Conditional Redeveloper has
expressed a willingness to implement the Redevelopment Plan on the Property; and

      WHEREAS, The Town has agreed to conditionally designate the Conditional

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<PAGE>

Redeveloper as conditional redeveloper of the Property.

      NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties, and
further, to implement the purposes of the Local Redevelopment and Housing Law
and the Redevelopment Plan, the parties hereto agree as follows:

ARTICLE I. DEFINED TERMS.

      In addition to the words and terms defined elsewhere in this Agreement,
which shall have the meanings herein given, the following words and terms as
used in this Agreement shall have the following meanings unless the context or
use otherwise requires:

      "Agreement" - refers to this Agreement between The Town and Conditional
Redeveloper for the redevelopment of a portion of the Passaic Avenue
Redevelopment Area within the Town of Kearny, Hudson County, New Jersey.

      "Concept Plans" - The Concept Plans dated January, 2006, on five (5)
sheets prepared by Conditional Redeveloper's planner Clarke Caton Hintz. The
sheets are attached as Exhibit A and are labeled: (1) "Overall Concept Plan",
(2) "Overall Concept Plan Key Plan and Non-Residential Parking Ratios", (3)
"Concept Diagram", (4) "Gateway Concepts", and (5) "Entry Node Concepts". The
Project Area is delineated as Section A and Section B on the sheet labeled
"Overall Concept Plan Key Plan and Non-Residential Parking Ratios"

      Conditional Redeveloper" -- DVL, Inc., a corporation of the State of
Delaware, having an address of 70 East 55th Street, New York, New York 10022.

      "Date of Agreement" -- the date upon which the last of the required
signatures are

                                       2
<PAGE>

affixed to this Agreement, irrespective of any other date(s) that may appear
herein.

      "Governmental Approvals" - any and all approvals, authorizations, permits,
licenses and certificates needed from governmental authorities having
jurisdiction, whether federal, state, county or local, to the extent necessary
to implement the Redevelopment Plan on the Property.

      "Hold Harmless" - to defend and indemnify from all liability, loss,
penalties, damages, costs, or expenses, including, but not limited to,
attorney's fees, causes of action, claims or judgments arising out of or related
to damages, as more particularly described in this Agreement.

      "Local Redevelopment and Housing Law" - N.J.S.A. 40A:12A-1 et seq.

      "Mayor and Council" - the governing body of the Town of Kearny, Hudson
County, New Jersey.

      "Planning Board" - the Planning Board of the Town of Kearny, Hudson
County, New Jersey.

      "Project" -- means the project generally described in Exhibit B and
depicted in Exhibit A, subject to Town approval pursuant to this Conditional
Redeveloper Agreement.

      "Property" - the Property located along Passaic Avenue which consists of
approximately 24.81 acres (the exact size of the Property to be verified by the
survey referenced in Section 5.01) comprising the land designated on the Town's
tax maps as follows: BLOCK 15, Lots 7A, 7B, 8, 8B, 8.02 and 22A

      "Redevelopment Area" -- The Passaic Avenue Redevelopment Area, as more
particularly described in the Passaic Avenue Redevelopment Plan.

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<PAGE>

      "Redevelopment Parcel" - the Property.

      "Redevelopment Plan" - the Redevelopment Plan for the Redevelopment Area,
and any amendments thereto, as prepared by Heyer Gruel & Associates.

      "Title Insurance Company" - a reputable title insurance company doing
business in the State of New Jersey, designated by the Redeveloper.

      "Town" - THE TOWN OF KEARNY, a municipal corporation of the County of
Hudson and State of New Jersey.

      "Transfer" - any sale, assignment, conveyance, lease or transfer, in any
mode or form, of the Property, or any part thereof, or interest therein.

ARTICLE II. TERM/OWNERSHIP/DUE DILIGENCE.

      2.01. Term of the Conditional Designation Period.

      The Conditional Designation shall continue in effect for a period (the
"Conditional Designation Period") commencing on the Date of Agreement and
terminating on the earliest of (A) January 15, 2007; or (B) the date of
execution and delivery by the Parties of the Redevelopment Agreement described
in Article VIII hereof (the "Redevelopment Agreement"). Under no circumstances
shall the Town have any obligation to (i) extend the Conditional Designation
Period; or (ii) enter into a Redevelopment Agreement.

      2.02. Acquisition of the Property/Ownership.

      (a) Conditional Redeveloper represents that it owns all of the Property
except for Block 15, Lot 7B ("Out Parcel") and Block 15, Lots 8B and 8.02 (the
"Osborne Parcels"). Conditional Redeveloper represents that its principals own
10% of the entity that holds title to the Osborne Parcels.

                                       4
<PAGE>

      (b) Upon execution of this Agreement, the Conditional Redeveloper, at its
sole cost and expense of the Redeveloper, shall begin bona fide negotiations
with the current owner of the Out Parcel to obtain a contract to acquire that
parcel. The Conditional Redeveloper shall furnish to the Town with written
notice of any access agreement or any contract it executes to acquire the Out
Parcel by negotiation.

      (C) During the Conditional Designation Period, Conditional Redeveloper
shall provide evidence, satisfactory to the Town, that it has a long-term lease
of the Osborne Parcels or otherwise sufficient control over the Osborne Parcels
in a manner that will allow it to implement those portions of the Project to be
undertaken on the Osborne Parcels.

      2.03. Due Diligence Period.

      (a) Conditional Redeveloper shall have the right, at any time prior to
December 15, 2006 ("Due Diligence Period") to terminate this Agreement if its
investigation of the Property during the Due Diligence Period proves to be
unsatisfactory to it for any reason.

      (b) Town shall, upon request by the Conditional Redeveloper, make
available at its offices copies of any reports and due diligence materials in
Town's possession relating to the Property for the Conditional Redeveloper's
inspection, review and copying during Town's regular business hours (and upon
reasonable prior notice to Town). Conditional Redeveloper shall, in addition,
analyze and determine whether existing private and public infrastructure,
including both within and outside the Property, will be adequate to service the
needs of, and traffic and sewage generated by, the Redevelopment Project.

      (c) During the Due Diligence Period the Conditional Redeveloper's site
investigation of the physical condition of the Out Parcel shall be subject to
the express written consent

                                       5
<PAGE>

and approval of the owner of the Out Parcel. Conditional Redeveloper
acknowledges that the Town has not provided and undertakes no obligation to
obtain a right of access with respect to the Out Parcel. The Conditional
Redeveloper shall indemnify and hold Town harmless from and against any and all
claims, losses, damages, causes of action, suits and liability of every kind
(including reasonable attorney's fees, disbursements and court costs resulting
therefrom) for injury to or death of any persons or damage to any property
caused by the inspection of Out Parcel by the Conditional Redeveloper or its
agents, representatives, employees, contractors or subcontractors. The indemnity
obligation set forth in this Section shall survive the expiration or earlier
termination of the Conditional Designation and this Agreement. The Conditional
Redeveloper has represented to the Town that it is the owner in fee of all
properties with the exception of the Out Parcel, that it has the right to
undertake all site investigations on its own properties, and that it shall
provide the same indemnity and hold harmless protection to the Town as set forth
above with respect to the Out Parcel for site investigations on its own
properties.

      (d) The Conditional Redeveloper shall furnish to Town, promptly upon their
completion and at no charge to the Town, copies of all tests, studies,
engineering reports, surveys, title reports, and all other pertinent materials
prepared by or for the Conditional Redeveloper in its assessment of the
feasibility of construction of the Redevelopment Project. Town shall be entitled
to full use of all findings, studies, reports, and such other documents so
generated, subject only to the limitations contained in this Agreement as well
as any limitations set forth in such studies, reports or other documents and any
limitations imposed by the issuers thereof. The Conditional Redeveloper shall
use its best efforts to obtain an acknowledgment in the contracts for such
tests, studies and reports that Town

                                       6
<PAGE>

shall be entitled to rely on and use without restriction, and at no charge to
the Town, the information contained in such tests, studies and reports (other
than any customary and reasonable restrictions applicable for the particular
type of test, study or report which shall provide that parties other than the
Conditional Redeveloper and the Town cannot rely on the results therein).

      (e) Conditional Redeveloper Submissions. In addition to the other
submissions required herein, (i) by October 31, 2006, the Conditional
Redeveloper shall submit a copy of its organizational and operating documents;
(ii) by December 15, 2006, the Conditional Redeveloper shall submit (1) a title
report for the Property, (2) an updated development budget and pro-forma cash
flow projection, and (3) a market analysis and pricing plan for newly
constructed retail space; and (iii) By January 8, 2007, Conditional Redeveloper
will provide letters of interest from prospective tenants of newly constructed
retail space, provided however that the Parties will in good faith negotiate and
execute a confidentiality agreement, subject to the limitations of law in such
matters with respect to Town as a public entity, to restrict information
reasonably determined by Conditional Redeveloper to be proprietary.

ARTICLE III. REDEVELOPER RESPONSIBILITIES.

      3.01. Town Costs.

      The Conditional Redeveloper shall be responsible for and agrees to pay for
any and all out-of-pocket costs of whatever nature which may be reasonably
incurred by the Town in connection with the Property (the "Town's Costs") which
Town costs shall be paid out of the Escrow Account established pursuant to
Section 3.02 hereof. If the Escrow Account is

                                       7
<PAGE>

insufficient to pay Town Costs, the Redeveloper shall immediately pay any such
deficiency, and thereafter replenish the Escrow Fund pursuant to Section 3.02.
The Town's costs shall include, but not be limited to, legal fees at the
redevelopment rate of $175/hr, out of pocket disbursements, and consultants'
fees (including but not limited to appraisal, fiscal impact, planning, traffic,
real estate and environmental consultants) in connection with the designation of
the Conditional Redeveloper as redeveloper of the Property, the master planning
and coordination of traffic, parking or other studies affecting all or any
portion of the Redevelopment Area, the municipal Planning Board and any other
governmental approval process.

      3.02. Escrow.

      Upon the Date of Agreement, the Conditional Redeveloper shall deposit with
the Town the amount of Ten Thousand Dollars ($10,000.00) to be maintained in a
separate escrow account by the Town ("Escrow Account") to be drawn down to cover
the costs to be paid by the Conditional Redeveloper under Article II or Article
III. On a monthly basis, the Town shall provide the Redeveloper with invoice(s)
setting forth the amounts to be drawn against the Escrow Account and the Town
may pay such invoices out of the escrow account. If the costs to be paid by the
Redeveloper exceed the amount of the Escrow Account, the Redeveloper will pay
such costs upon ten (10) days written notice from the Town that such costs are
due.

      Upon the termination of this Agreement, except in the event of a
termination caused by the default of the Redeveloper, any amount remaining in
the Escrow Account shall be refunded to the Conditional Redeveloper. Conditional
Redeveloper shall not assign or

                                       8
<PAGE>

encumber the Escrow Account and the Town shall not be bound by any such
assignment or encumbrance.

      3.03. Planning. Design and Redevelopment of the Project. (a) The
Conditional Redeveloper agrees that upon the execution and delivery of this
Agreement, the Conditional Redeveloper will continue to plan and design the
Project in accordance with the Redevelopment Plan, this Agreement, and the
attached Plan provided by the Conditional Redeveloper to the Town. In that
regard, Conditional Redeveloper shall use reasonable efforts to design a Project
that eliminates the need for any amendments to the Redevelopment Plan.

      (b) Upon termination of this Agreement pursuant to any provisions hereof,
the Conditional Redeveloper shall (if it has not already done so) furnish to the
Town, and the Town shall have the right, subject to any limitations imposed by
the issuers of any of the following documents or reports, to use (in any manner
deemed appropriate by the Town), all surveys, engineering and architectural
studies, drawings and reports prepared by or for the Conditional Redeveloper
with respect to the Property or Project.

      3.04. Repairs and Maintenance. Conditional Redeveloper shall during the
term of this Agreement maintain those portions of the Property that it owns in
accordance with the Town's property maintenance codes and ordinances.
Conditional Redeveloper, at its sole cost and expense, shall keep any
Redevelopment Parcel to which Redeveloper takes title free and clear of all
debris and, as necessary, of snow and ice.

                                       9
<PAGE>

      3.05. Insurance. During the term of this Agreement the Redeveloper shall,
at its own cost and expense, provide and keep in force: (i) worker compensation
insurance coverage of the full statutory liability of the Redeveloper, (ii)
comprehensive general public liability insurance, including insurance to cover
the indemnity in Section 3.06, for the mutual benefit of the Town and
Redeveloper against claims for personal injury (including but not limited to
bodily injury or death of any person) or property damage occurring in or about
any Redevelopment Parcel to which Redeveloper has title directly or indirectly
with limits of not less than Ten Million ($10,000,000.00) Dollars for personal
injury (including but not limited to bodily injury or death) to any number of
persons, and property damage with limits of not less than Two Million
($2,000,000.00) Dollars.

      All liability insurance to be provided and kept in force by Conditional
Redeveloper under the provisions hereof shall name the Conditional Redeveloper
as the insured and the Town as "additional insured". All insurance shall be
maintained with insurers authorized to do business in the State of New Jersey
and which have at least an "A" rating by A.M. Best, a recognized rating
organization.

      All policies shall be for periods of not less than one (1) year and shall
contain a provision whereby the same cannot be canceled unless the Town is given
at least thirty (30) days prior written notice of such proposed cancellation.

      3.6. Indemnity. Conditional Redeveloper, for itself and its successors and
assigns, covenants and agrees, at its sole cost and expense, to indemnify and
hold harmless the Town, and its officers, agents, attorneys, consultants and
employees (as defined in N.J.S.A. Title 59) against and from any and all loss,
cost, expense or liability

                                       10
<PAGE>

from claims by third parties (unless caused by the negligence or willful
misconduct of the Town or any of its officers, agents, attorneys, consultants
and employees) arising from or in connection with:

      (a) the conduct or management of any work or thing whatsoever done by or
on behalf of the Conditional Redeveloper in or on the Redevelopment Parcel or in
connection with the Project;

      (b) any act or negligence of the Conditional Redeveloper, or any of its
agents, contractors, servants, employees, or licensees, with respect to any
portion of the Redevelopment Parcel;

      (c) any accident, injury or damage whatsoever to any person, firm or
corporation occurring during the term of this Agreement, in or on the Project.
If any action or proceeding is brought against the Town by reason of any claim
covered by the foregoing indemnity, then the Conditional Redeveloper shall pay
the reasonable costs and expenses actually paid or incurred by or on behalf of
the Town in resisting or defending such action or proceeding, including
reasonable attorneys' fees.

      37. Taxes. Conditional Redeveloper shall pay all real estate and other
taxes or impositions lawfully due on any Redevelopment Parcel from the date that
Redeveloper has taken title thereto. Conditional Redeveloper agrees not to seek
any tax abatements or exemptions with respect to the Project or Property.

      3.8. Covenants. The Conditional Redeveloper covenants to the Town that:

      (i) the Conditional Redeveloper shall indemnify and hold harmless the Town
against any liability, cost and expense (including reasonable attorneys' fees,
disbursements and court costs) that may arise in connection with the Conditional

                                       11
<PAGE>

Redeveloper's relationship with any Broker in connection with the Conditional
Redeveloper's participation in the Redevelopment Project. The provisions of this
Section shall survive expiration or earlier termination of the Conditional
Designation and/or this Agreement;

      (ii) the Conditional Redeveloper shall provide background questionnaire
information, as reasonably necessary, and cooperate with any background
investigation of the Conditional Redeveloper, its principals and of all present
or future shareholder/partners/members of the Conditional Redeveloper and its
principals. Execution of this Agreement shall be subject to background
information clearance of the Conditional Redeveloper, the principals and its
partners/members and their principals by the necessary governmental authority.
The Conditional Redeveloper understands and agrees that the Town may terminate
the Conditional Designation and this Agreement, if the Town determines, in its
sole reasonable discretion, that the Conditional Redeveloper, its principals, or
any of its shareholders/partners/members are within a category of persons or
entities with whom or which the Town or the State will not generally do business
due to a criminal conviction, criminal indictment, pending criminal
investigation, material default on a payment obligation to a governmental unit
or material adverse financial condition of such person or entity;

      (iii) the Conditional Redeveloper, its principals, affiliates and agents
(collectively referred to in this Section as "parties") shall obtain the prior
approval of the Town, which approval shall not be unreasonably withheld,
delayed, or conditioned for any and all press conferences, ceremonies, or other
public events held by the Conditional Redeveloper or

                                       12
<PAGE>

such parties and for any publicity announcements, advertisements, releases or
other literature intended for public dissemination issued by the Conditional
Redeveloper or such parties which relate to the Redevelopment Project. Officials
of the Town have the right to participate in any such press conferences,
ceremonies or other public events that relate to the Redevelopment Project; and

      (iv) the Conditional Redeveloper shall in good faith negotiate the terms
of the Redevelopment Agreement described in Article VIII such that the
Redevelopment Agreement may be executed within the Conditional Designation
Period if the Town, at its sole discretion, chooses to enter into a final
Redevelopment Agreement with the Conditional Redeveloper.

      (v) Financing Commitment. By January 8, 2007, Conditional Redeveloper
shall provide Kearny with a letter of interest from proposed lending and/or
equity sources detailing the approximate amount of the contemplated borrowing
and/or equity investment, terms then under consideration, and setting forth, in
general terms, the lender's and/or investor's due diligence requirements which
must be satisfied before the lender and/or investor may issue a commitment,
including fees payable therefor, if any.

      (vi) Concept Plan. By November 16, 2006 the Conditional Redeveloper shall
submit a revised Concept Plan to Kearny such that the Conditional Redeveloper
and Kearny can agree on a substantially final Concept Plan within fifteen (15)
days of receipt of such revised Concept Plan.

      (vii) Approvals. By October 31, 2006, the Conditional Redeveloper shall
provide

                                       13
<PAGE>

the Town with a list of all public actions and approvals the Conditional
Redeveloper believes will be required to proceed with the Redevelopment Project
together with a proposed schedule for the preparation and submission of
applications for agency and public review.

      (viii) Development Schedule. By November 16, 2006, the Conditional
Redeveloper shall provide Kearny with a development schedule for the period
commencing upon the execution of the Redevelopment Agreement which reflects the
Conditional Redeveloper's reasonable estimates of: (1) Out Parcel acquisition,
through private negotiations or, alternately, through condemnation by Kearny;
(2) relocation of business occupants, if necessary; (3) site demolition and
clearance; (4) construction commencement and completion of all Redevelopment
Project improvements, including, but not limited to, new buildings, facade
improvements to existing buildings, parking lot construction and upgrades,
infrastructure improvements, streetscape, landscape, and gateway improvements in
the Project Area and Passaic Avenue; and (5) leasing and occupancy of new
buildings.

ARTICLE IV. EXPIRATION AND TERMINATION.

      4.01. Termination. This Agreement shall terminate if, after receiving
written notice by the Town and failing to cure same within seven (7) days of the
receipt thereof: (A) any of the payments required to be made by the Conditional
Redeveloper hereunder are not made in the time periods set forth herein, (B) the
Conditional Redeveloper has made any material misrepresentations in this
Agreement, or (C) the Conditional Redeveloper has

                                       14
<PAGE>

failed to perform any of its non-monetary obligations under this Agreement that
are capable of being cured by the Conditional Redeveloper within a time period
reasonably acceptable to the Town (which time period shall not be less than
fifteen (15) days). This Agreement shall terminate on seven (7) days written
notice from the Conditional Redeveloper to the Town if the Conditional
Redeveloper reasonably determines, following completion of its investigation and
due diligence reviews provided for in this Agreement, that the geotechnical
and/or environmental conditions at the Project Area render the project
infeasible.

      4.02. Expiration. This Agreement shall automatically expire on January 15,
2007 without further notice or action. In the event that the Conditional
Designation Period expires without the execution of the Redevelopment Agreement
and other documents required for the development of the Redevelopment Project or
in the event that this Agreement is terminated by the Conditional Redeveloper
pursuant to this Agreement, the Parties hereby release and discharge the other
from any and all claims or demands based on the Conditional Designation of the
Conditional Redeveloper as set forth herein; provided, however, that this
release does not and shall not apply to obligations specified in this Agreement
to survive the expiration or termination of the Conditional Designation and this
Agreement. In the event that the Conditional Designation or this Agreement is
terminated by Kearny pursuant to this Agreement due to any breach of this
Agreement or any implied covenant of good faith or fair dealing by the
Conditional Redeveloper then in each instance the Town shall be entitled to
pursue any and all other remedies at law or in equity available to it.

                                       15
<PAGE>

ARTICLE V. TITLE TO THE PROPERTY.

      5.01. Title/Survey.

      (a) Immediately upon execution of this Agreement, the Conditional
Redeveloper shall cause an examination of title to be made as to the Property. A
copy of the title report(s) shall be provided to the Town upon Redeveloper's
receipt thereof, but in no event later than December 15, 2006. If the
examination of title discloses any objections or defects to title as to the Out
Parcel that cannot be removed by condemnation and which would render title
uninsurable at regular rates, the Redeveloper may cancel this Agreement on
written notice delivered to the Town no later than December 15, 2006.

      (b) During the Due Diligence Period, the Redeveloper shall, at its sole
cost and expense, also cause a survey to be prepared of the Property, which
survey shall be certified to the Town. A copy of the survey shall be provided to
the Town no later than December 15, 2006. If the Redeveloper's survey discloses
the existence of boundary line issues, gaps or issues that cannot be removed by
condemnation and which would render title uninsurable at regular rates, the
Redeveloper may cancel this Agreement by written notice no later than December
15, 2006.

ARTICLE VI. NON-DISCRIMINATION

      6.01. Covenant as to Non Discrimination. The Conditional Redeveloper
covenants and agrees, for itself and its successors and assigns that Redeveloper
and its successors and assigns will not discriminate upon the basis of race,
color, creed, sex, or national origin in employment in connection with the
Property.

                                       16
<PAGE>

ARTICLE VII. PROHIBITION AGAINST TRANSFER.

      Notwithstanding any provision herein to the contrary, the provisions of
this Article VII shall be applicable only in the event Conditional Redeveloper
and Town enter into a Redeveloper Agreement

      7.01. Prohibition Against Transfers of Property and Project. Because of
the importance of the redevelopment of the Redevelopment Area to the general
welfare of the community and the public benefits provided by law for the purpose
of making such redevelopment possible, the Conditional Redeveloper represents
and agrees that this Agreement, and each other undertaking of Redeveloper
pursuant to this Agreement, are and will be used for the purpose and development
of the Redevelopment Area and not for speculation in land holding or brokerage
activities. By way of illustration, and not limitation but subject to exceptions
(a) through (e) below, the Redeveloper represents and warrants that it is not
seeking to "flip", broker or otherwise sell its interests in any portion of the
Property. The Conditional Redeveloper represents and agrees for itself, its
successors and assigns that, prior to the completion of the Project or any
portion thereof, the Redeveloper has not made or created, and will not make or
create, or suffer to be made or created any sale, assignment, conveyance, lease
or transfer in any other mode or form (collectively, the "Transfers") of the
Property or the Project, or any part thereof or any interest therein, including
any contract for a sale of a portion of the Property without the prior written
approval of the Town which approval the Town may withhold for any reason or no
reason.

      7.02. Information As To Ownership Of Redeveloper. The Conditional

                                       17
<PAGE>

Redeveloper is a publicly owned company. In order to assist in the effectuation
of this Agreement and the statutory objectives generally, the Conditional
Redeveloper agrees that it shall not transfer more than ten (10%) percent of the
ownership or control of any interest in the Property which is the subject of
this Agreement. The Conditional Redeveloper shall, at such times as the Town may
request, furnish the Town with a complete statement subscribed and sworn to by
the President of the Conditional Redeveloper, setting forth all of its
shareholders who own more than 5% of the outstanding and issued common (voting)
stock of the Conditional Redeveloper, or other owners of equity interests of the
Conditional Redeveloper and the extent of their respective holdings, and in the
event any other parties have a beneficial interest in Conditional Redeveloper's
entity, their names and the extent of such interest.

ARTICLE VIII. REDEVELOPMENT AGREEMENT.

      8.01. Negotiation. During the Conditional Designation Period, the
Conditional Redeveloper and Town will negotiate the terms of the Redevelopment
Agreement for the Redevelopment Project. The Redevelopment Agreement shall, at a
minimum, include all of the following terms and any others deemed necessary by
the Town:

      (A) Phasing. The Redevelopment Project will be undertaken as a single
phase. To the extent that any key project element must be postponed or phased,
the construction of improvements along Passaic Avenue must precede the
construction of Building #2 (as identified in the Concept Plans).

      (B) Redevelopment Project Costs. The Conditional Redeveloper shall be
solely responsible for all Redevelopment Project costs, both ordinary and
extraordinary, including

                                       18
<PAGE>

but not limited to all predevelopment expenses, improvements outside of the
Project Area (including improvements to Passaic Avenue, infrastructure and a
contribution for the construction and maintenance of open space and a waterfront
park along a portion of the Passaic River), environmental remediation of the
Project Area as may be necessary, site work, building construction and
renovation and landlord contributions to tenant improvement and affordable
housing contributions. A more specific list of the infrastructure and other off
site improvement costs to be paid by the Conditional Redeveloper shall be
negotiated during the Conditional Designation Period to be included as part of
the Redeveloper Agreement if the same is executed.

      (C) Public Assistance. The Conditional Redeveloper agrees to not seek
either (1) a real estate tax abatement or reduction (other than exercising such
rights to challenge assessments as are generally available to any property
owner), or (2) grants from Kearny for capital or operating costs in connection
with the Redevelopment Project.

      (D) Land Acquisition/Condemnation. The Conditional Redeveloper will, in
good faith, attempt to negotiate: (1)the private acquisition of the Out Parcel,
(2)the surrender of certain leases by tenant businesses currently occupying
space in structures to be demolished, and (3) the release of certain easements
in favor of one or more tenant businesses, all so as to facilitate the
Redevelopment Project. To the extent that the Conditional Redeveloper is not
successful in such negotiations, and the Town agrees that the Conditional
Redeveloper must secure such property rights in order to accomplish the
Redevelopment Project in furtherance of the public purpose of the Redevelopment
Plan and that condemnation may occur pursuant to applicable law, then the Town,
if requested

                                       19
<PAGE>

by Conditional Redeveloper, and subject to the provisions of the Eminent Domain
Act and all rules and regulations relating thereto, may exercise its power of
condemnation and convey its acquired interest to the Conditional Redeveloper.
The Conditional Redeveloper shall pay all such condemnation and related
expenses, including but not limited to attorneys fees and relocation costs, to
the Town, and shall post a letter of credit with the Town to secure any
potential condemnation and related expenses and relocation awards.

      (E) Project Performance. Conditional Redeveloper shall act diligently to
commence and complete the Redevelopment Project as the earliest feasible date
using commercially reasonable efforts. A principal of Conditional Redeveloper,
Alan E. Casnoff, will assume direct management of the project and provide a
guarantee of completion for the Redevelopment Project to the Town.

      (F) Provisions Concerning Applicable Law and Other Requirements. The
Redevelopment Project shall be undertaken in accordance with applicable laws and
all other applicable governmental requirements, including but not limited to any
requirements and restrictions of Hudson County, the State, the United States,
and the Town, including the Kearny Planning Board and Kearny Building Code; and
substantially in accordance with the final plans and specifications to be
prepared by the Conditional Redeveloper and approved by Kearny in accordance
with the Redevelopment Plan and the Redevelopment Agreement.

      (G) Provisions Concerning Conditional Redeveloper's Responsibility to
Obtain Certain Approvals. The Conditional Redeveloper shall be required to
secure all public

                                       20
<PAGE>

approvals, including but not limited to preliminary and final site plan
approval, in accordance with certain timeframes as established in the
Redevelopment Agreement.

      (H) Provisions Concerning First Source Employment. Subject to all
applicable anti-discrimination laws, rules and ordinances, the Conditional
Redeveloper shall make good faith efforts to employ, and shall provide in its
contracts with its contractors and subcontractors that they must make good faith
efforts to employ, qualified residents of Kearny in the construction of the
Redevelopment Project. In addition, consistent with market wages and to the
greatest extent feasible, the Conditional Redeveloper shall make good faith
efforts that residents of Kearny are employed in the operation of the
Redevelopment Project. The Conditional Redeveloper will cooperate with Kearny
(a) in developing a plan to coordinate training programs and employment
recruitment efforts for Kearny residents, (b) to recruit Kearny residents for
all employment opportunities in connection with the Redevelopment Project, and
(c) to cause its contractors and subcontractors, when first engaged for the
Redevelopment Project to provide an initial hire report to Kearny concerning its
training, recruitment and employment efforts. Inclusion of this requirement in
Conditional Redeveloper's contractor and subcontractor agreements shall fully
satisfy the obligation of the Conditional Redeveloper under this subsection.

      (I) Provisions Concerning Completion Guaranty. Alan E. Casnoff shall
absolutely and irrevocably guaranty Conditional Redeveloper's completion
obligation under the Redevelopment Agreement upon the execution by the
Conditional Redeveloper of the Redevelopment Agreement. The form of such
guaranty of completion shall be reasonably satisfactory to Kearny. The
parameters of the guaranty shall be negotiated during the

                                       21
<PAGE>

Conditional Designation Period to be included as part of the Redeveloper
Agreement if the same is executed.

      (J) Provisions Concerning Governmental Permit and Related Fees. The
Conditional Redeveloper shall pay the full amount of all fees for permits
required by the Town (in accordance with standard fees provided in the town's
ordinances) and any other governmental body (including extension, connection,
user or service fees) for the construction and development of the Redevelopment
Project.

      (K) Certain Other Provisions. Without limiting the generality of the
foregoing, the Redevelopment Agreement shall provide for certain provisions
typically included in a redevelopment agreement including, but not limited to,
provisions concerning representations, warranties and covenants of the
Conditional Redeveloper, provisions required by the Redevelopment Law,
indemnification provisions, default and remedy provisions, provisions regarding
mortgage financing and the rights of mortgagees, notice provisions,
anti-discrimination provisions, provisions prohibiting speculative development,
provisions restricting transfers, provisions concerning progress meetings,
oversight and reporting requirements, and provisions regarding the payment of
administrative fees.

ARTICLE IX. REMEDIES.

      9.01. In General: Right To Cure. Except as otherwise provided in this
Agreement, in the event of any default in or breach of this Agreement or any of
its terms or conditions by any party hereto or any successor to such party, such
party (or successor), shall proceed to commence to cure or remedy such default
or breach. In case such action is not taken or not diligently pursued, or the
default or breach shall not be cured or remedied

                                       22
<PAGE>

within the periods set forth in this Agreement, the party declaring the Default
may institute such proceedings as may be necessary or desirable in its opinion
to cure and remedy such default or breach, including, but not limited to,
proceedings to compel specific performance by the party in default or in breach
of its obligations.

      9.02. Other Rights And Remedies: No Waiver. The parties shall have the
right to institute such actions or proceedings as they may deem desirable for
effectuating the purposes of this Agreement. Any delay in instituting or
prosecuting any such actions, proceedings or otherwise asserting rights under
this Agreement shall not operate as a waiver of such rights or to deprive any
party of or limit its rights in any way. It is the intent of this provision that
a party should not be constrained to exercise such remedy at a time when it may
still hope to otherwise resolve the problems caused by the default. Any waiver
in fact made by any party with respect to a specific default under this
Agreement shall not be considered or treated as a waiver of rights of that party
with respect to any other defaults by that party, except to the extent
specifically waived in writing.

      9.03. Rights and Remedies Cumulative. The rights and remedies of the
parties to this Agreement, whether provided by law or by the Agreement, shall be
cumulative, and the exercise by either party of any one or more of such remedies
shall not preclude the exercise by it, at the same or different times, of any
other such remedies for the same default or breach, or of any of its remedies
for any other default or breach by the other party. Notwithstanding the
foregoing or any other provision of this Agreement, neither the Conditional
Redeveloper nor the Town shall have any rights against or liability to the other
for consequential damages.

                                       23
<PAGE>

ARTICLE X. REPRESENTATIONS.

      10.01. Mutual Representations. The Conditional Redeveloper and Town each
hereby makes the following representations and covenants, as such relates to the
other:

      (a) They have the legal capacity to enter into this Agreement and perform
each of its undertakings herein set forth and as set forth in the Redevelopment
Plan existing on the date of this Agreement.

      (b) Town is duly organized and is a validly existing legal entity under
the laws of the State of New Jersey. Conditional Developer is duly organized and
is a validly existing legal entity under the laws of the State of Delaware, and
is authorized to transact business in the State of New Jersey. The parties
represent that all necessary resolutions have been duly adopted, authorizing the
execution and delivery of this Agreement and authorizing and directing the
persons executing this Agreement to do so for and on their behalf.
Simultaneously with the execution of this Agreement, the Conditional Redeveloper
shall provide to the Town a copy of the corporate resolution(s) authorizing the
execution of this Agreement.

      (c) To the best of their respective knowledge, there is no action,
proceeding or investigation now pending, nor any basis therefor, known or
believed to exist which questions the validity of this Agreement or any action
or act taken or to be taken by them pursuant to this Agreement.

      (d) The execution and delivery of this Agreement and the performance
hereunder by each party will not constitute a violation of any partnership
agreement, articles of incorporation, limited liability company operating
agreement, and/or stockholder

                                       24
<PAGE>

agreement of such entity, or of any entity which holds an ownership interest
therein, or of any agreement, mortgage, indenture, instrument or judgment, to
which it is a party.

      (e) Each will use its best efforts to assure the completion of the
Projects as specified in this Agreement including, but not limited to, executing
any and all other or further instruments or documents necessary or appropriate
to implement this Agreement or effectuate its purpose.

      1O.2 Additional Representations by Conditional Redeveloper. The
Conditional Redeveloper further represents and warrants to Town that:

      (a) the execution and delivery of this Agreement by the Conditional
Redeveloper does not, and the performance by the Conditional Redeveloper of its
obligations under this Agreement will not: (a) conflict with or result in a
violation or breach of any of the terms, conditions or provisions of the
organizational documents of the Conditional Redeveloper; (b) conflict with or
result in a violation or breach of any term or provision of any applicable law;
or (c) result in a breach of, or default under (or give rise to right of
termination, cancellation or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, agreement, lease or
other similar instrument or obligation to which the Conditional Redeveloper may
be bound or its property subject or which are necessary for Kearny to enforce
the terms of this Agreement against the Conditional Redeveloper;

      (b) no consent, approval or action of, filing with or notice to any
governmental authority, third party or other persons is required in connection
with the execution, delivery

                                       25
<PAGE>

and performance of this Agreement by the Conditional Redeveloper;

      (c) there is no action, proceeding or investigation now pending, nor any
basis therefore, known or believed to exist which (a) questions the authority of
the Conditional Redeveloper to enter into this Agreement or any action or act
taken or to be taken by the Conditional Redeveloper pursuant to this Agreement,
or (b) is likely to result in a material adverse change in the Conditional
Redeveloper's property, assets, liabilities or condition which will materially
and substantially impair its ability to perform its obligations pursuant to the
terms of this Agreement and, if entered into, the subsequent redevelopment
agreement between Kearny and the Conditional Redeveloper (the "Redevelopment
Agreement");

      (d) the Conditional Redeveloper has never been disqualified from
participating in any request for proposals by a public entity including the Town
or the State of New Jersey (the "State");

      (e) the Conditional Redeveloper has not filed for protection under the
insolvency laws of any jurisdiction or had an involuntary filing made against
it;

      (f) the Conditional Redeveloper intends, and has the financial capacity
to, secure the financing and fund the reasonably anticipated expenses necessary
to undertake the Redevelopment Project generally in the manner and pursuant to
the timetables and milestones contemplated herein. The Conditional Redeveloper
acknowledges that none of Kearny and the State has agreed to provide any capital
or operating subsidies for the Redevelopment Project;

      (g) the Conditional Redeveloper (a) has not dealt with any broker or
person

                                       26
<PAGE>

acting in a similar capacity ("Broker") in connection with the Conditional
Redeveloper's participation in the Redevelopment Project, and (b) does not owe
and will not owe any fees, commissions, costs or expenses to any Broker in
connection with the Conditional Redeveloper's participation in the Redevelopment
Project; and

      (h) the Conditional Redeveloper is not aware, at the time of execution of
this Agreement, of any condition that would materially impair its ability to
satisfy the conditions, requirements and time frames set forth in this
Agreement.

ARTICLE XI. EFFECT OF BANKRUPTCY

      11.01. Bankruptcy. Conditional Redeveloper agrees that if any proceedings
under the Bankruptcy Act or any amendment thereto shall be commenced by or
against it, and if such proceedings shall not be dismissed before either
adjudication in bankruptcy or the confirmation of a composition, arrangement, or
plan or reorganization, or if Conditional Redeveloper is adjudged insolvent or
makes an assignment for the benefit of its creditors, or if a receiver is
appointed in any proceeding or action to which Conditional Redeveloper is a
party with authority to take possession or control of the demised premises or
the business conducted thereon by Conditional Redeveloper, and such receiver is
not discharged within a period of thirty (30) days after his appointment, any
such event shall be deemed to constitute a breach of this Agreement by
Redeveloper and shall, at the election of the Town, but not otherwise, terminate
this Agreement and all rights of Redeveloper hereunder and all rights of any and
all persons claiming under Redeveloper.

ARTICLE XII. WAIVER.

      12.01. No Implied Waiver. No party shall be deemed to have waived any

                                       27
<PAGE>

provisions or condition of or any right under this Agreement unless such waiver
is expressly made in writing.

ARTICLE XIII. COOPERATION AND COMPLIANCE.

      13.01. Implementation of Agreement and Redevelopment Plan. The parties
hereto agree to cooperate with each other and to provide all necessary and
reasonable documentation, certificates, and consents in order to satisfy the
terms and conditions of this Agreement and the Redevelopment Plan and to achieve
compliance therewith.

ARTICLE XIV. NO JOINT VENTURE.

      14.01 Neither this Agreement nor any transaction contemplated herein or in
the furtherance thereof shall be construed as creating a partnership or joint
venture between the Conditional Redeveloper and Town.

ARTICLE XV. NOTICES AND DEMANDS.

      15.01. Notices And Demands. A notice, demand or other communication under
this Agreement by any party to the other shall be sufficiently given or
delivered if dispatched by United States Registered or Certified Mail, postage
prepaid and return receipt requested, or delivered by overnight courier or
delivered personally (and receipt acknowledged) to the parties at their
respective addresses set forth herein, or at such other address or addresses
with respect to the parties or their counsel as any party may, from time to
time, designate in writing and forward to the others as provided herein. The
addresses for the parties are as follows:

        Town of Kearny
        402 Kearny Avenue
        Kearny, NJ 07032
        Attn: Mayor Alberto Santos

                                       28
<PAGE>

with a copy addressed to its attorney:

        Gregory J. Castano, Esq.
        Castano Quigley LLC
        1120 Bloomfield Avenue
        West Caldwell, NJ 07007

        and to:

        DVL Inc.
        70 East 55th Street
        New York, NY 10022
        Attn: Alan Casnoff

        with a copy addressed to its attorney:

        L. Stephen Pastor, Esquire
        Hill Wallack
        202 Carnegie Center
        Princeton, NJ 08543

ARTICLE XVI. TITLES OF ARTICLES/RULES OF CONSTRUCTION.

      16.01. Titles For Convenience. The titles of the several Articles of this
Agreement, as set forth at the heads of said Articles, are inserted for
convenience of reference only and shall be disregarded in construing or
interpreting any of its provisions.

      16.02. Rules of Construction. This Agreement was prepared by the parties
hereto with the assistance of counsel, and no rule of construction against the
draftsman shall be applied to either party in construing any provision of this
Agreement.

ARTICLE XVII. SEVERABILITY.

      17.01. Severability. The validity of any article, section, clause or
provision of this Agreement shall not affect the validity of the remaining
articles, sections, clauses or provisions hereof.

                                       29
<PAGE>

ARTICLE XVIII. SUCCESSORS BOUND.

      18.01. Successors Bound. The Agreement shall run with the land and be
binding upon the respective parties hereto and their successors and assigns.

ARTICLE XIX. GOVERNING LAW.

      19.01. Governing Law. This Agreement shall be governed by and construed by
the laws of the State of New Jersey and all litigation arising out of this
Agreement shall be venued in the State Court located in Hudson County. All
parties submit to the jurisdiction of that Court.

ARTICLE XX. COUNTERPARTS

      20.01 Counterparts. This Agreement may be executed in counterparts. All
such counterparts shall be deemed to be originals and together shall constitute
but one and the same instrument.

ARTICLE XXI. ENTIRE AGREEMENT

      21.01. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the Project and supersedes all prior
oral and written agreement between the parties with respect to the subject
matter hereof except as otherwise provided herein.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
properly executed and their corporate seals affixed and attested to this 16 day
of October, 2006.

                                       30
<PAGE>

WITNESS OR ATTEST:                      THE TOWN OF KEARNY

                                        BY: /s/ Alberto G. Santos
-------------------------------             --------------------------------
                                        Alberto G. Santos, Mayor

                                        DVL, INC.

                                        BY: /s/ Alan Casnoff
-------------------------------             --------------------------------
                                            Alan Casnoff, President

                                       31
<PAGE>

                                    EXHIBIT A

                                  CONCEPT PLANS

                                       32
<PAGE>

                                  [MAP OMITTED]

Concept Diagram

--------------------------------------------------------------------------------

Passaic Avenue Redevelopment Plan                       Charles Caton Hintz
Kearny, NJ - January 2006                               Architects
                                                        Planners
                                                        Landscape Architects
<PAGE>

                                  [MAP OMITTED]

TYPICAL SECTION CONCEPT

Entry Node Concepts

--------------------------------------------------------------------------------

Passaic Avenue Redevelopment Plan                       Charles Caton Hintz
Kearny, NJ - January 2006                               Architects
                                                        Planners
                                                        Landscape Architects
<PAGE>

                                  [MAP OMITTED]

TYPICAL GATEWAY NODE CONCEPT

Gateway Concept

--------------------------------------------------------------------------------

Passaic Avenue Redevelopment Plan                       Charles Caton Hintz
Kearny, NJ - January 2006                               Architects
                                                        Planners
                                                        Landscape Architects

<PAGE>

                                  [MAP OMITTED]

Overall Concept Plan
--------------------
[LOGO]

--------------------------------------------------------------------------------

Passaic Avenue Redevelopment Plan                       Charles Caton Hintz
Kearny, NJ - January 2006                               Architects
                                                        Planners
                                                        Landscape Architects

<PAGE>

                                  [MAP OMITTED]

Overall Concept Plan
--------------------
[LOGO]

Key Plan                                          Non-Residential Parking Ratios

--------------------------------------------------------------------------------

Passaic Avenue Redevelopment Plan                       Charles Caton Hintz
Kearny, NJ - January 2006                               Architects
                                                        Planners
                                                        Landscape Architects

<PAGE>

                                    EXHIBIT B

                             DESCRIPTION OF PROJECT

The Redevelopment Project consists of the following components (as further
depicted on the Concept Plans, but with square footage as set forth below),
subject to revision as may be agreed upon by the Parties following completion of
Conditional Redeveloper's due diligence, further review by Kearny, and subject
also to obtaining the necessary governmental approvals and permits, including
but not limited to, site plan approval.

      (A) Building # 1: new construction of approximately 40,000 square feet
("sf") of retail space oriented in an east-west configuration on Passaic Avenue
at the south of the Project Area. Building # 1 would be occupied by at least two
retail tenants, unless otherwise approved by Kearny.

      (B) Building # 2: new construction of approximately 62,250 sf of retail
space oriented in a north-south configuration located to the north and east of
Building #1. Building #2 would be occupied by at least two retail tenants.

      (C) Building # 3: new construction of approximately 12,920 sf of retail
space on Passaic Avenue located to the north and west of Building # 2 and to the
north of Building #1.

      (D) Building # 4: new construction of approximately 9,160 sf of retail
space in an east-west configuration to be located on Passaic Avenue at the
northwestern corner of the Project Area at Bergen Avenue Building #4 would
include one or more sit-down restaurant establishments.

      (E) Upgrade to the facade of the existing Modell's/Dress Barn building,
and upgrade to facade of the existing Kmart building (as permitted by the
existing lease between Conditional Redeveloper and Kmart or as Conditional
Redeveloper may negotiate with Kmart).

      (F) New landscaped parking lot of approximately 480 spaces for retail
tenants of Building #1, Building #2 and Building #3.

      (G) Improvements to existing 694 space parking lot for Kmart and
Modell's/Dress Barn, including the introduction of landscaping.

                                       33
<PAGE>

      (H) Streetscape and landscaping improvements on Passaic Avenue along full
length of Project Area.

      (I) Three entrance drives to Project Area, the southern-most drive to be
shared with the existing supermarket located to the south of the Project Area.

      (J) Construction of a "gateway" entrance with decorative paving at Passaic
Avenue and Bergen Avenue.

      (K) Construction of one or more pedestrian crossings of Passaic Avenue to
link the Redevelopment Project to pathways to a waterfront park along a portion
of the Passaic River.

      (L) Such other components as the Parties may agree upon.

                                       34

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