Document:

a6093263ex10_10.htm

    EXHIBIT 10.10 

       

      STOCK
PURCHASE AGREEMENT

      

      THIS STOCK
PURCHASE AGREEMENT (this “Agreement”) dated as
of September 16, 2009 is between CreXus Investment Corp., a Maryland corporation
(the “Company”), and Annaly
Capital Management, Inc., a Maryland corporation (the “Purchaser”).

      

      RECITALS

      

      WHEREAS,
the Purchaser has a substantive, pre-existing relationship with the
Company;

      

      WHEREAS,
the Company has registered shares of its common stock, par value $0.01 per share
(“Common
Stock”), with the Securities and Exchange Commission pursuant to the
registration statement of the Company on Form S-11 (File No. 333-160254) (the
“Registration
Statement”) pursuant to which the Company intends to conduct a public
offering of shares of the Company’s Common Stock (the “Public Offering”);
and

      

      WHEREAS,
the Company desires to issue and sell shares of its Common Stock to the
Purchaser on the terms and conditions set forth herein.

      

      AGREEMENT

      

      NOW,
THEREFORE, in consideration of the foregoing recitals and the mutual promises
hereinafter set forth, and, other good and valuable consideration, the parties
hereto agree as follows:

      

      ARTICLE
1

      AUTHORIZATION,
SALE AND ISSUANCE OF SHARES AND OPTIONS

      Section
1.1                      Authorization.  Subject
to and concurrent with the consummation of the Public Offering, the Company
shall issue 4,527,778 shares of Common Stock of the Company (the “Shares”) at a
purchase price per share equal to the Public Offering price per share (the
“Share
Price”).

       

      Section
1.2                      Sale and Issuance of the
Shares.  Subject to the terms and conditions hereof, the
Company shall sell and Purchaser shall purchase the Shares at the Closing (as
defined below).

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      ARTICLE
2

       

      CLOSING

       

      Section
2.1                      Closing.  The
closing (“Closing”) shall only
occur immediately before, and shall be subject to, the closing of the Public
Offering.  Upon the Closing of this transaction, the Purchaser will
deliver to the Company a wire transfer of immediately available funds to
accounts specified by the Company or certified check in the amount equal to the
Share Price multiplied by the number of Shares.

       

      Section
2.2                      Delivery.  Subject
to the terms of this Agreement, within five (5) days of the Closing, the Company
will deliver to the Purchaser the certificates representing the Shares to be
purchased by the Purchaser from the Company.

       

      ARTICLE
3

       

      REPRESENTATIONS
AND WARRANTIES OF THE COMPANY

       

      Section
3.1                      Representations and
Warranties by the Company.  The Company hereby represents and
warrants to the Purchaser as of the Closing date as follows:

       

      (a)           The
Company has been duly formed and incorporated and is existing as a corporation
in good standing under the laws of the State of Maryland, is duly qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of property or assets or the
conduct of its business requires such qualification, except where the failure to
so qualify would not have a material adverse effect on the business, assets,
properties, prospects, financial condition or results of operation of the
Company taken as a whole (a “Material Adverse
Effect”), and has full corporate power and authority necessary to own,
hold, lease and/or operate its assets and properties, to conduct the business in
which it is engaged and to enter into and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby, and the
Company is in compliance in all material respects with the laws, orders, rules,
regulations and directives issued or administered by such
jurisdictions.

       

      (b)           The
authorized capital stock of the Company is 1,100,000,000 shares of stock,
consisting of 1,000,000,000 shares of Common Stock, of which 250,000 shares are
issued and outstanding as of the date hereof, and 100,000,000 shares of
preferred stock, par value $0.01 per share, of which none are issued and
outstanding.  All of the issued and outstanding shares of capital
stock have been duly and validly authorized and issued and are fully paid and
non-assessable, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right.

       

      (c)           The
Shares have been duly and validly authorized by the Company for issuance and
sale pursuant to this Agreement and, when issued and delivered against payment
therefor as provided herein, will be duly and validly issued and fully paid and
non-assessable, free and clear of any pledge, lien, encumbrance, security
interest or other claim.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (d)           The
certificates for the Shares are in due and proper form and the holders of the
Shares will not be subject to personal liability by reason of being such
holders.

       

      (e)           This
Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid and binding agreement of the Company enforceable in
accordance with its terms, except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency, reorganization or other laws affecting
enforcement of creditors’ rights or by general equitable
principles.

       

      (f)           The
management agreement (the “Management
Agreement”), dated as of August 31, 2009, between the Company and Fixed
Income Discount Advisory Company (the “Manager”), and any
amendments thereto, have been duly authorized, executed and delivered by the
Company and constitutes a valid and binding agreement of the Company enforceable
in accordance with its terms, except to the extent that enforcement thereof may
be limited by bankruptcy, insolvency, reorganization or other laws affecting
enforcement of creditors’ rights or by general equitable
principles.

       

      (g)           The
Company has no “significant subsidiaries” (as such term is defined in Rule 1-02
of Regulation S-X promulgated under the Securities Act of 1933, as amended (the
“Securities
Act”)) and does not own, directly or indirectly, any shares of stock or
any other equity or long-term debt securities of any corporation or have any
equity interest in any firm, partnership, joint venture, association or other
entity.  Complete and correct copies of the articles of incorporation
and of the bylaws of the Company and all amendments thereto have been delivered
to the Purchaser and, except as set forth in the forms of documents delivered to
the Purchaser, no changes therein will be made subsequent to the date hereof and
prior to the time of purchase.

       

      (h)           The
financial statements of the Company, together with the related schedules and
notes thereto, delivered to the Purchaser are accurate in all material respects
and fairly present the financial condition of the Company as of the dates
indicated and the results of operations, changes in financial position,
stockholders’ equity and cash flows for the periods therein specified are in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated
therein).  The selected financial and statistical data delivered to
the Purchaser present fairly the information shown therein and, to the extent
based upon or derived from the financial statements, have been compiled on a
basis consistent with the financial statements presented therein.

       

      (i)           The
Company is insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the
business in which it is engaged.  The Company has no reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not have a Material
Adverse Effect.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (j)           The
Company is not in breach of, or in default under (nor has any event occurred
which with notice, lapse of time, or both would result in any breach of, or
constitute a default under), (i) its articles of incorporation or bylaws or (ii)
any obligation, agreement, covenant or condition contained in any contract,
license, repurchase agreement, indenture, mortgage, deed of trust, bank loan or
credit agreement, note, lease or other evidence of indebtedness, or any lease,
contract or other agreement or instrument to which the Company is a party or by
which it or any of its assets or properties may be bound or affected, the effect
of which breach or default under clause (ii) above could have a Material Adverse
Effect.  The execution, delivery and performance of this Agreement,
the issuance and sale of the Shares and the consummation of the transactions
contemplated hereby will not conflict with, or result in any breach of,
constitute a default under or a Repayment Event (as defined below) under (nor
constitute any event which with notice, lapse of time, or both would result in
any breach of, constitute a default under or a Repayment Event under), (i) any
provision of the articles of incorporation or bylaws of the Company, (ii) any
provision of any contract, license, repurchase agreement, indenture, mortgage,
deed of trust, bank loan or credit agreement, note, lease or other evidence of
indebtedness, or any lease, contract or other agreement or instrument to which
the Company is a party or by which the Company or any of its assets or
properties may be bound or affected, the effect of which could have a Material
Adverse Effect, or (iii) under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the
Company.  As used herein, a “Repayment Event”
means any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any of its subsidiaries.

       

      (k)           There
are no actions, suits, claims, investigations, inquiries or proceedings pending
or, to the best of the Company’s knowledge, threatened to which the Company or
any of its officers or directors is a party or of which any of its properties or
other assets is subject at law or in equity, or before or by any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency which could result in a judgment, decree or order having a Material
Adverse Effect.

       

      (l)           No
approval, authorization, consent or order of or filing with any national, state
or local governmental or regulatory commission, board, body, authority or agency
is required in connection with the issuance and sale of the Shares or the
consummation by the Company of the transaction contemplated hereby other than
any necessary qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Company.

       

      (m)           The
Company has all necessary licenses, authorizations, consents and approvals and
has made all necessary filings required under any federal, state, local or
foreign law, regulation or rule, and has obtained all necessary permits,
authorizations, consents and approvals from other Persons (as defined below), in
order to conduct its business, except as such as could not have a Material
Adverse Effect.  The Company is not required by any applicable law to
obtain accreditation or certification from any governmental agency or authority
in order to provide the products and services which it currently provides or
which it proposes to provide except as such as could not have a Material Adverse
Effect.  The Company is not in violation of, or in default under, any
such license, permit, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order or judgment
applicable to the Company, the effect of which could have a Material Adverse
Effect.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (n)           The
Company has not incurred any liability for any finder’s fees or similar payments
in connection with the transactions herein contemplated.

       

      (o)           The
Company owns or possesses adequate license or other rights to use all patents,
trademarks, service marks, trade names, copyrights, software and design
licenses, trade secrets, manufacturing processes, other intangible property
rights and know-how (collectively, “Intangibles”)
necessary to entitle the Company to conduct its business, and the Company has
not received notice of infringement of or conflict with (and the Company knows
of no such infringement of or conflict with) asserted rights of others with
respect to any Intangibles which could have a Material Adverse
Effect.

       

      (p)           The
Company has filed all federal, state and foreign income and franchise tax
returns required to be filed on or prior to the date hereof and has paid taxes
shown as due thereon (or that are otherwise due and payable), other than taxes
which are being contested in good faith and for which adequate reserves have
been established in accordance with generally accepted accounting
principles.  The Company has no knowledge, after due inquiry, of any
tax deficiency which has been asserted or threatened against the
Company.  To the knowledge of the Company, there are no tax returns of
the Company that are currently being audited by federal, state or local taxing
authorities or agencies which would have a Material Adverse Effect.

       

      (q)           The
Company is not in violation, and has not received notice of any violation with
respect to, any applicable environmental, safety or similar law applicable to
the business of the Company.  The Company has received all permits,
licenses or other approvals required of them under applicable federal and state
occupational safety and health and environmental laws and regulations to conduct
its business, and the Company is in compliance with all terms and conditions of
any such permit, license or approval, except any such violation of law or
regulation, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals which could not, singly or in the aggregate, have a Material Adverse
Effect.

       

      (r)           There
are no existing or threatened labor disputes with the employees of the Company
which are likely to have individually or in the aggregate a Material Adverse
Effect.

       

      (s)           Neither
the Company nor any of its subsidiaries nor, to the Company’s knowledge, any
employee or agent of the Company or its subsidiaries has made any payment of
funds of the Company or its subsidiaries or received or retained any funds in
violation of any law, rule or regulation, except as disclosed to the
Purchaser.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (t)           Subsequent
to the respective dates as of which information is delivered to the Purchaser,
there has not been (i) any material adverse change, or any development which
would reasonably be expected to cause a material adverse change, in the
business, properties or assets, or the results of operations, condition
(financial or otherwise), net worth, business, prospects or operations of the
Company taken as a whole, (ii) any transaction which is material to the Company,
except transactions in the ordinary course of business, (iii) any obligation,
direct or contingent, which is material to the Company taken as a whole,
incurred by the Company, except obligations incurred in the ordinary course of
business, (iv) other than the Public Offering, any change in the capital stock
or, except in the ordinary course of business, outstanding indebtedness of the
Company, or (v) any dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock.  The Company has no
material contingent obligation which has not been disclosed to the
Purchaser.

       

      (u)           The
descriptions provided to the Purchaser of the legal or governmental proceedings,
contracts, leases and other legal documents therein described present fairly the
information shown, and there are no other legal or governmental proceedings,
contracts, leases, or other documents.  All agreements between the
Company and third parties delivered to the Purchaser are legal, valid and
binding obligations of the Company enforceable in accordance with their
respective terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and by general equitable principles.

       

      (v)           There
are no Persons with registration or other similar rights to have any equity or
debt securities, including securities which are convertible into or exchangeable
for equity securities, of the Company registered by the Company under the
Securities Act.

       

      (w)           No
person, as such term is defined in Rule 1-02 of Regulation S-X promulgated under
the Securities Act (each, a “Person”), has the
right, contractual or otherwise, to cause the Company to issue to it any shares
of capital stock or other securities of the Company upon the issue and sale of
the Shares hereunder, nor does any Person have preemptive rights, co-sale
rights, rights of first refusal or other rights to purchase or subscribe for any
of the Shares or any securities or obligations convertible into or exchangeable
for, or any contracts or commitments to issue or sell any of, the Shares or any
options, rights or convertible securities or obligations, other than those that
have been expressly waived prior to the date hereof.

       

      (x)           The
Company (i) does not have any issued or outstanding preferred stock or (ii) has
not defaulted on any installment on indebtedness for borrowed money or on any
rental on one or more long term leases, which defaults would have a Material
Adverse Effect on the financial position of the Company.

       

      (y)           Each
of the Company and its officers, directors and controlling Persons has not,
directly or indirectly, (i) taken any action designed to cause or to result in,
or that has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock to facilitate the
sale of the Shares, or (ii) except with respect to the Public Offering (A) sold,
bid for, purchased, or paid anyone any compensation for soliciting purchases of,
the Shares or (B) paid or agreed to pay to any Person any compensation for
soliciting another to purchase any other securities of the Company.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (z)           Neither
the Company nor any of its affiliates (i) is required to register as a “broker”
or “dealer” in accordance with the provisions of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) or
(ii) directly or indirectly through one or more intermediaries, controls or has
any other association with (within the meaning of Article I of the Bylaws of the
Financial Industry Regulatory Authority (“FINRA”)) any member
firm of the FINRA.

       

      (aa)           Any
certificate signed by any officer of the Company delivered to the Purchaser
pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company to the Purchaser as to the matters
covered thereby.

       

      (bb)           As
of the date of this Agreement, the Company has no plan or intention to
materially alter its capital investment policy or investment allocation
strategy, both as described to the Purchaser.  The Company has good
and marketable title to all of the properties and assets owned by it, in each
case free and clear of any security interests, liens, encumbrances, equities,
claims and other defects (except for any security interest, lien, encumbrance or
claim that may otherwise exist under any applicable repurchase agreement),
except such as do not have a Material Adverse Effect and do not interfere with
the use made or proposed to be made of such property or asset by the Company,
and except as described to the Purchaser.  The Company owns no real
property.  Any real property and buildings held under lease by the
Company are held under valid, existing and enforceable leases, with such
exceptions as are disclosed to the Purchaser or are not material and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company.

       

      (cc)           The
Company maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles as applied in the United States and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

       

      (dd)           The
Company has established and maintains disclosure controls and procedures (as
such term is defined in Rule 13a-14 and 15d-14 under the Exchange Act); such
disclosure controls and procedures are designed to ensure that material
information relating to the Company is made known to the Company’s Chief
Executive Officer and its Chief Financial Officer, and such disclosure controls
and procedures are effective to perform the functions for which they were
established; any significant material weaknesses in internal controls have been
identified for the Company’s Chief Executive Officer and its Chief Financial
Officer; and since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in internal
controls or in other factors that could significantly affect internal
controls.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (ee)           The
Company has not, directly or indirectly, including through any of its
subsidiaries, extended credit, arranged to extend credit, or renewed any
extension of credit, in the form of a personal loan, to or for any director or
executive officer of the Company, or to or for any family member or affiliate of
any director or executive officer of the Company.

       

      (ff)           The
Company is in compliance with all presently applicable provisions of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder
(the “Sarbanes-Oxley
Act”) and is actively taking steps to ensure that it will be in
compliance with other applicable provisions of the Sarbanes-Oxley Act upon the
effectiveness of such provisions.

       

      (gg)           Deloitte
& Touche LLP, are and, during the periods covered by their reports, were our
independent public accountants.

       

      (hh)           The
Company has been, and upon the sale of the Shares will continue to be, organized
and operated in conformity with the requirements for qualification and taxation
as a “real estate investment trust” (a “REIT”) under Sections
856 through 860 of the Internal Revenue Code of 1986, as amended, and the
regulations and published interpretations thereunder (collectively, the “Code”), for all
taxable years commencing with its taxable year ending on December 31,
2009.  The proposed method of operation of the Company as described to
the Purchaser will enable the Company to continue to meet the requirements for
qualification and taxation as a REIT under the Code, and no actions have been
taken (or not taken which are required to be taken) which would cause such
qualification to be lost.  The Company intends to continue to operate
in a manner which would permit it to qualify as a REIT under the
Code.  The Company has no intention of changing its operations or
engaging in activities which would cause it to fail to qualify, or make
economically undesirable its continued qualification, as a REIT.

       

      (ii)           The
Company is not and, after giving effect to the offering and sale of the Shares,
will not be an “investment company” or an entity “controlled” by an “investment
company,” as such terms are defined in the Investment Company Act of 1940, as
amended.

       

      (jj)           The
Company has a substantive, pre-existing relationship with the Purchaser and was
directly contacted by the Purchaser or its agents outside of the Public Offering
effort.  The Company (i) did not identify or contact the Purchaser
through the marketing of the Public Offering and (ii) was not independently
contacted by the Purchaser as a result of the general solicitation by means of
the Registration Statement.

       

      (kk)           No
representation or warranty made by the Company in this Agreement contains any
untrue statement of a material fact or omits to state a material fact necessary
to make any such representation or warranty, in light of the circumstances in
which it was made, not misleading.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      ARTICLE
4

      

      REPRESENTATIONS
AND WARRANTIES OF PURCHASER AND

      RESTRICTIONS
ON TRANSFER IMPOSED BY THE SECURITIES ACT

      

       

      Section
4.1                      Representations and
Warranties by the Purchaser.  The Purchaser represents and
warrants to the Company as of the day of Closing as follows:

       

      (a)           Investment
Intent.  The Purchaser is acquiring the Shares for investment
for the Purchaser’s own account, not as nominee or agent, and not with a view to
or for resale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act and applicable law. The Purchaser has
the requisite corporate power and authority to enter into and perform this
Agreement.

       

      (b)           Shares Not
Registered.  The Purchaser understands and acknowledges that
the offering of the Shares pursuant to this Agreement will not be registered
under the Securities Act on the grounds that the offering and sale of securities
contemplated by this Agreement are exempt from registration under the Securities
Act pursuant to Section 4(2) thereof and exempt from registration pursuant to
applicable state securities or blue sky laws, and that the Company’s reliance
upon such exemptions is predicated upon such Purchaser’s representations set
forth in this Agreement. The Purchaser acknowledges and understands that the
Shares must be held indefinitely unless the Shares are subsequently registered
under the Securities Act and qualified under state law or unless an exemption
from such registration and such qualification is available.

       

      (c)           No
Transfer.  Subject to the provisions of Section 5.2, the
Purchaser covenants that in no event will the Purchaser dispose of any of the
Shares (other than in conjunction with an effective registration statement for
the Shares under the Securities Act) unless and until (i) the Purchaser shall
have notified the Company of the proposed disposition and shall have furnished
the Company with a statement of the circumstances surrounding the proposed
disposition, and (ii) if reasonably requested by the Company, the Purchaser
shall have furnished the Company with an opinion of counsel satisfactory in form
and substance to the Company to the effect that (x) such disposition will not
require registration under the Securities Act, and (y) appropriate action
necessary for compliance with the Securities Act and any other applicable state,
local, or foreign law has been taken, and (iii) the Company has consented, which
consent shall not be unreasonably delayed or withheld.

       

      (d)           Authority.  This
Agreement has been duly authorized, executed and delivered by the Purchaser and
constitutes a valid and binding agreement of the Purchaser enforceable in
accordance with its terms, except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency, reorganization or other laws affecting
enforcement of creditors’ rights or by general equitable
principles.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (e)           No
Breach.  The execution, delivery and performance of this
Agreement by the Purchaser and the consummation of the transactions by the
Purchaser contemplated hereby will not conflict with, or result in any breach
of, constitute a default under (nor constitute any event which with notice,
lapse of time, or both would result in any breach of, or constitute a default
under), (i) any provision of the articles of incorporation or bylaws of the
Purchaser, (ii) any provision of any contract, license, repurchase agreement,
indenture, mortgage, deed of trust, bank loan or credit agreement, note, lease
or other evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Purchaser is a party or by which the Purchaser or any of
its assets or properties may be bound or affected, the effect of which could
have a Material Adverse Effect, or (iii) under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
the Purchaser.

       

      (f)           Knowledge and
Experience.  The Purchaser (i) has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of the Purchaser’s prospective investment in the Shares; (ii)
has the ability to bear the economic risks of the Purchaser’s prospective
investment; and (iii) has not been offered the Shares by any form of
advertisement, article, notice, or other communication published in any
newspaper, magazine, or similar medium; or broadcast over television or radio;
or any seminar or meeting whose attendees have been invited by any such
medium.

       

      (g)           Investigation.  The
Purchaser has carefully reviewed the representations concerning the Company
contained in this Agreement, and has made detailed inquiry concerning the
Company, its business and its personnel; the officers of the Company have made
available to the Purchaser any and all written information which it has
requested and have answered to the Purchaser’s satisfaction all inquiries made
by the Purchaser; and the Purchaser has sufficient business and financial
knowledge and experience so as to be capable of evaluating the merits and risks
of its investment in the Company.  The Purchaser has received a copy
of the Company’s articles of incorporation, as amended, the Company’s bylaws, as
amended, and this Agreement and has read and understands the respective contents
thereof.  The Purchaser has had the opportunity to ask questions of
the Company and has received answers to such questions from the
Company.  The Purchaser has carefully reviewed and evaluated these
documents and understands the risks and other considerations relating to the
investment.

       

      (h)           Qualified Institutional
Buyer.  The Purchaser is a “qualified institutional buyer” as
defined in Rule 144A, promulgated under the Securities Act.

       

      (i)           Accredited
Investor.  The Purchaser is an “accredited investor” as defined
in Rule 501(a)(8) of Regulation D, promulgated under the Securities
Act.

       

      (j)           Pre-existing
Relationship.  The Purchaser has a substantive, pre-existing
relationship with the Company and was directly contacted by the Company or its
agents outside of the Public Offering effort.  The Purchaser (i) was
not identified or contacted through the marketing of the Public Offering and
(ii) did not independently contact the Company as a result of the general
solicitation by means of the Registration Statement.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (k)           Finder’s
Fees.  The Purchaser has not incurred any liability for any
finder’s fees or similar payments in connection with the transactions herein
contemplated.

       

      Section
4.2                      Legends.  Each
certificate representing the Shares shall be endorsed with the following
legends:

       

      (a)           Federal
Legend.  The securities represented by this certificate have
not been registered under the Securities Act of 1933, as amended, and are
“restricted securities” as defined in Rule 144 promulgated under the Securities
Act. The securities may not be sold or offered for sale or otherwise distributed
except (i) in conjunction with an effective registration statement for the
shares under the Securities Act of 1933, as amended, or (ii) pursuant to an
opinion of counsel, satisfactory to the company, that such registration or
compliance is not required as to said sale, offer, or distribution.

       

      (b)           REIT
Legend.  THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO RESTRICTIONS ON BENEFICIAL AND CONSTRUCTIVE OWNERSHIP AND
TRANSFER.  SUBJECT TO CERTAIN FURTHER RESTRICTIONS AND EXCEPT AS
EXPRESSLY PROVIDED IN THE CORPORATION’S CHARTER, DURING THE PERIOD COMMENCING ON
THE INITIAL DATE AND PRIOR TO THE RESTRICTION TERMINATION DATE (I) NO PERSON MAY
BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF ANY CLASS OR SERIES OF THE CAPITAL
STOCK OF THE CORPORATION IN EXCESS OF NINE AND EIGHT-TENTHS PERCENT (9.8%) IN
VALUE OR IN NUMBER OF SHARES, WHICHEVER IS MORE RESTRICTIVE, OF ANY CLASS OR
SERIES OF CAPITAL STOCK OF THE CORPORATION UNLESS SUCH PERSON IS AN EXCEPTED
HOLDER (IN WHICH CASE THE EXCEPTED HOLDER LIMIT SHALL BE APPLICABLE); (II) NO
PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK THAT WOULD
RESULT IN THE CORPORATION BEING “CLOSELY HELD” UNDER SECTION 856(H) OF THE CODE;
AND (III) NO PERSON MAY TRANSFER SHARES OF CAPITAL STOCK THAT WOULD RESULT IN
THE CAPITAL STOCK OF THE CORPORATION BEING BENEFICIALLY OWNED BY LESS THAN ONE
HUNDRED (100) PERSONS (DETERMINED WITHOUT REFERENCE TO ANY RULES OF
ATTRIBUTION). ANY PERSON WHO BENEFICIALLY OR CONSTRUCTIVELY OWNS OR ATTEMPTS TO
BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK WHICH CAUSES OR WILL
CAUSE A PERSON TO BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK IN
EXCESS OR IN VIOLATION OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE
CORPORATION IN WRITING, OR IN THE CASE OF SUCH A PROPOSED OR ATTEMPTED
TRANSACTION, GIVE AT LEAST FIFTEEN (15) DAYS PRIOR WRITTEN NOTICE.  IF
ANY OF THE RESTRICTIONS ON TRANSFER OR OWNERSHIP IN (I), (II) AND (III) ABOVE
ARE VIOLATED, THE SHARES OF CAPITAL STOCK REPRESENTED HEREBY WILL BE
AUTOMATICALLY TRANSFERRED TO A TRUSTEE OF A CHARITABLE TRUST FOR THE BENEFIT OF
ONE OR MORE CHARITABLE BENEFICIARIES.  IF, NOTWITHSTANDING THE
FOREGOING SENTENCE, A TRANSFER TO THE CHARITABLE TRUST IS NOT EFFECTIVE FOR ANY
REASON TO PREVENT A VIOLATION OF THE RESTRICTIONS ON TRANSFER AND OWNERSHIP IN
(I), (II) AND (III) ABOVE, THEN THE ATTEMPTED TRANSFER OF THAT NUMBER OF SHARES
OF CAPITAL STOCK THAT OTHERWISE WOULD CAUSE ANY PERSON TO VIOLATE SUCH
RESTRICTIONS SHALL BE VOID AB INITIO.  IF ANY OF THE RESTRICTIONS ON
TRANSFER AND OWNERSHIP IN (IV) AND (V) ABOVE ARE VIOLATED, THEN THE ATTEMPTED
TRANSFER OF THAT NUMBER OF SHARES OF CAPITAL STOCK THAT OTHERWISE WOULD CAUSE
ANY PERSON TO VIOLATE SUCH RESTRICTIONS SHALL BE VOID AB INITIO.  IF,
NOTWITHSTANDING THE FOREGOING SENTENCE, A PURPORTED TRANSFER IS NOT TREATED AS
BEING VOID AB INITIO FOR ANY REASON, THEN THE SHARES TRANSFERRED IN SUCH
VIOLATION SHALL AUTOMATICALLY BE TRANSFERRED TO A CHARITABLE TRUST FOR THE
BENEFIT OF A CHARITABLE BENEFICIARY, AND THE PURPORTED OWNER OR TRANSFEREE WILL
ACQUIRE NO RIGHTS IN SUCH SHARES.  IN ADDITION, THE CORPORATION MAY
REDEEM SHARES UPON THE TERMS AND CONDITIONS SPECIFIED BY THE BOARD OF DIRECTORS
IN ITS SOLE DISCRETION IF THE BOARD OF DIRECTORS DETERMINES THAT OWNERSHIP OR A
TRANSFER OR OTHER EVENT MAY VIOLATE THE RESTRICTIONS DESCRIBED
ABOVE.  ALL CAPITALIZED TERMS IN THIS LEGEND HAVE THE MEANINGS DEFINED
IN THE CHARTER OF THE CORPORATION, AS THE SAME MAY BE AMENDED FROM TIME TO TIME,
A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER AND OWNERSHIP, WILL BE
FURNISHED TO EACH HOLDER OF CAPITAL STOCK OF THE CORPORATION ON REQUEST AND
WITHOUT CHARGE.  REQUESTS FOR SUCH A COPY MAY BE DIRECTED TO THE
SECRETARY OF THE CORPORATION AT ITS PRINCIPAL OFFICE.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c)           Other
Legends.  With respect to any other legends required by
applicable law, the Company need not register a transfer of legended Shares, and
may also instruct its transfer agent not to register the transfer of the Shares,
unless the conditions specified in such legend is satisfied.

       

      Section
4.3                      Rule
144.  The Purchaser is aware of the adoption of Rule 144 by the
SEC promulgated under the Securities Act, which permits limited public resale of
securities acquired in a nonpublic offering, subject to the satisfaction of
certain conditions. The Purchaser understands that under Rule 144, the
conditions include, among other things: the availability of certain, current
public information about the issuer and the resale occurring not less than one
year after the party has purchased and paid for the securities to be
sold.

       

      ARTICLE
5

      

      AFFIRMATIVE
COVENANTS OF THE PARTIES

      

      Section
5.1                      Reports.  The
Company hereby covenants and agrees as follows:  The Company will
furnish to the holders of the Shares copies of all annual or quarterly financial
statements the Company regularly provides to the banks or other lenders
extending credit to the Company as requested by the holders of the Shares as
would be required for a the holder of the Shares to make any resales of Shares
under Rule 144(b) of the Securities Act.  In addition, the Company
will furnish to the holders of the Shares such other information as may
reasonably be required by any holder of the Shares to furnish information
required by any governmental authority.

       

      ARTICLE
6

       

      CONDITIONS
TO CLOSING

       

      Section
6.1                      Conditions to the
Purchaser’s Obligations.  The obligations of the Purchaser to
purchase the Shares at the Closing are subject to the fulfillment to its
satisfaction, on or prior to the Closing, of the following conditions, any of
which may be waived:

       

      (a)           Representations and
Warranties Correct. The representations and warranties made by the
Company in Article 3 hereof shall be true and correct when made and at the
Closing. The Company’s business and assets shall not have been adversely
affected in any material way prior to the Closing. The Company shall have
performed in all material respects all obligations and conditions herein
required to be performed or observed by it on or prior to the
Closing.

       

      (b)           Public
Offering.  The Company shall complete the Public Offering (it
being agreed that this condition must be met and cannot be waived by either
party hereto).

       

      Section
6.2                      Conditions to Obligations of
the Company.  The Company’s obligation to sell the Shares at
the Closing is subject to the condition that the representations and warranties
made by the Purchaser in Article 4 hereof shall be true and correct when made,
and on the Closing.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      ARTICLE
7

       

      REGISTRATION
RIGHTS

       

      The
Purchaser is not entitled to any registration rights under this Agreement or
associated with the purchase of the Shares. The purchase shall be subject to
such private restrictions on the transfer of the Shares as are designated from
time to time by the Company or its investment bankers or
underwriters.

      ARTICLE
8

       

      MISCELLANEOUS

       

      Section
8.1                      Governing
Law.  This Agreement shall be governed in all respects by the
laws of the State of New York without regard to conflicts of law principles
contrary (with references to Section 5-1401 of the New York General Obligation
Law which by its terms applies to the this Agreement).

       

      Section
8.2                      Survival.  The
representations, warranties, covenants and agreements made herein shall survive
the Closing of the transactions contemplated hereby, notwithstanding any
investigation made by the Purchaser. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder as of the date of such certificate or instrument.

       

      Section
8.3                      Successors and
Assigns.  Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties
hereto.

       

      Section
8.4                      Entire
Agreement.  This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof and they
supersede, merge, and render void every other prior written and/or oral
understanding or agreement among or between the parties hereto.

       

      Section
8.5                      Notices,
etc.  All notices and other communications required or
permitted hereunder shall be in writing and shall be delivered personally,
mailed by first class mail, postage prepaid, or delivered by courier or
overnight delivery, addressed (a) if to the Purchaser, at such Purchaser’s
address as Purchaser shall have furnished to the Company in writing, or (b) if
to the Company, at such other address as the Company shall have furnished to the
Purchaser in writing. Notices that are mailed shall be deemed received five (5)
days after deposit in the United States mail. Notices sent by courier or
overnight delivery shall be deemed received two (2) days after they have been so
sent.

       

      Section
8.6                      Severability.  In
case any provision of this Agreement shall be found by a court of law to be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions of this Agreement shall not in any way be affected
or impaired thereby.

       

      Section
8.7                      Expenses.  The
Company and the Purchaser shall each bear their own expenses and legal fees in
connection with the consummation of this transaction.

       

      Section
8.8                      Titles and
Subtitles.  The titles of the sections and subsections of this
Agreement are for convenience of reference and are not to be considered in
construing this Agreement.

       

      Section
8.9                      Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one
instrument.

       

      Section
8.10                      Delays or Omissions.
No delay or omission to exercise any right, power, or remedy accruing to the
Company or to any holder of any securities issued or to be issued hereunder
shall impair any such right, power, or remedy of the Company or such holder, nor
shall it be construed to be a waiver of any breach or default under this
Agreement, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any failure to exercise any right, power, or
remedy or any waiver of any single breach or a waiver of any other right, power,
or remedy or breach or default theretofore or thereafter occurring. All
remedies, either under this Agreement, or by law or otherwise afforded to the
Company or any holder, shall be cumulative and not alternative.

       

      [Signature
Page Follows]

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

      

      

      
        	
                CREXUS
      INVESTMENT CORP.

              	
                ANNALY
      CAPITAL MANAGEMENT, INC.

              
	 
      	 
      
	
                By:       /s/ Kevin
      Riordan                                           

                Name:  Kevin
      Riordan

                Title:    CEO
      & President

              	
                By:       /s/ Michael A.J.
      Farrell                                           

                Name:  Michael
      A.J. Farrell

                Title:   Chairman,
      CEO & Presidenta6090622ex10-17.htm

    Exhibit
10.17

     

    
      	
              SECTION:

            	
              24.10

            

    

    
      	
              BLOCK:

            	
              1

            

    

    
      	
              LOTS:

            	
              1,
      1.2, 2 and 3

            

    

    
      	
              Premises:

            	
              Cortlandt
      Towne Center Shopping Center, Town of
  Cortlandt

            

    

    

    

    Date: As
of July 29, 2009

     

    MORTGAGE,
ASSIGNMENT OF LEASES

    AND RENTS
AND SECURITY AGREEMENT

    ("this
Mortgage")

    

    FROM

    

    ACADIA
CORTLANDT LLC,

    a limited
liability company organized and existing under the laws of Delaware

    ("Mortgagor")

    

    
      	
              
                Address
      and Chief

              

            	
               

            

    

    
    

    
      	
              
                Executive
      Office of Mortgagor:
 
    

            	
              
                c/o
      Acadia Realty Trust

              

              1311
      Mamaroneck Avenue, Suite 260

              
                White
      Plains, New York 10605

              

            

    

    
    

    

    TO

    

    BANK OF
AMERICA, N.A.,

    a national
banking association,

    as
Administrative Agent

    ("Mortgagee")

    
      

      
        	
                
                  Address
      of Mortgagee:

                

              	
                

                  
                    One
      Bryant Park, 35th Floor

                  

                  New
      York, New York 10036

                

              

      

      
      

      
      

      
      

    

     

    Mortgage
Amount:   $45,000,000

    
      

    

    

    This
instrument prepared by, and after recording please return to:

    Schiff
Hardin LLP

    900 Third
Avenue, 23rd Floor

    New York,
New York 10022

    Attention:   Paul
G. Mackey, Esq.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    THE AMOUNT
OF THIS MORTGAGE IS $45,000,000.

    

    

    MORTGAGE,
ASSIGNMENT OF

    LEASES AND RENTS, AND
SECURITY AGREEMENT

    

    THIS
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT (this
"Mortgage") is made as of the 29th day of July, 2009, by ACADIA CORTLANDT LLC, a
Delaware limited liability company, ("Mortgagor"), in favor of and for the
benefit of BANK OF AMERICA, N.A., a national banking association, as
Administrative Agent for itself and other lenders pursuant to the Loan Agreement
defined below (together with its successors and assigns,
"Mortgagee").

     

    ARTICLE
1

     

    Definitions; Granting
Clauses; Secured Indebtedness

     

    Section
1.1. Principal
Secured.  This Mortgage secures the aggregate principal amount
of up to $45,000,000 plus such additional amounts as Mortgagee may from time to
time advance subsequent to a default by Mortgagor pursuant to the terms and
conditions of this Mortgage, with respect to an obligation secured by a lien or
encumbrance prior to the lien of this Mortgage or for the protection of the lien
of this Mortgage, together with interest thereon.  In the event that
all or any part of the Premises is located in the State of New York, then,
notwithstanding the language in the Granting Clause and Section 2.2 or anything
else contained herein to the contrary, the maximum amount secured hereby at
execution or which under any contingency may become secured hereby at any time
hereafter is the Mortgage Amount and all interest, additional interest and late
payment and prepayment charges in respect thereof, plus all amounts expended by
Mortgagee following a default hereunder in respect of insurance premiums and
real estate taxes, and all legal costs or expenses of collection of the debt
secured hereby or of the defense or prosecution of the rights and lien created
hereby.

     

    Section
1.2. Definitions.

     

    (a) In
addition to other terms defined herein, each of the following terms shall have
the meaning assigned to it, such definitions to be applicable equally to the
singular and the plural forms of such terms and to all genders:

     

    "Additional
Interest":  Additional Interest as defined in the Loan
Agreement.

     

    "Loan
Agreement":  Loan Agreement dated of even date herewith between
Mortgagor and Mortgagee, as it may be from time to time amended, restated,
modified, extended or supplemented.

     

    "Mortgagor":  Acadia
Cortlandt LLC, a Delaware limited liability company, whose address is c/o Acadia
Realty Trust, 1311 Mamaroneck Avenue, Suite 260, White Plains, New York 10605,
and its permitted successors and assigns.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "Promissory
Note":  Collectively, the Initial Advance Notes, as defined in
the Loan Agreement.

     

    Capitalized
terms used herein which are not otherwise defined but which are defined in the
Loan Agreement shall have the meaning ascribed to them in the Loan
Agreement.

     

    Section
1.3. Granting
Clause.  In consideration of the provisions of this Mortgage
and of the sum of $10.00 cash in hand paid and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged by
the Mortgagor, Mortgagor does hereby GRANT, BARGAIN, SELL, CONVEY, TRANSFER,
ASSIGN, MORTGAGE, HYPOTHECATE, PLEDGE, DEPOSIT and SET OVER to Mortgagee, with
all estate, right, title and interest of Mortgagor in and to the Property (as
hereinafter defined), whether now owned or held or hereafter acquired by
Mortgagor, to have and hold the Property unto Mortgagee, its successors and
assigns forever; and to hold the Property unto Mortgagee in fee simple forever;
provided that Mortgagor may retain possession of the Property until the
occurrence of an Event of Default; (a) the real property described in Exhibit A which is
attached hereto and incorporated herein by reference (the "Land") together with:
(i) any and all buildings, structures, improvements, alterations or
appurtenances now or hereafter situated or to be situated on the Land
(collectively, the "Improvements"); and (ii) all right, title and interest of
Mortgagor, now owned or hereafter acquired, in and to (1) all streets, roads,
alleys, easements, rights-of-way, licenses, rights of ingress and egress,
vehicle parking rights and public places, existing or proposed, abutting,
adjacent, used in connection with or pertaining to the Land or the Improvements;
(2) any strips or gores between the Land and abutting or adjacent properties;
(3) all options to purchase or lease the Land or the Improvements or any portion
thereof or interest therein, and any greater estate in the Land or the
Improvements; and (4) all water and water rights, timber, crops and mineral
interests on or pertaining to the Land (the Land, Improvements and other rights,
titles and interests referred to in this clause (a) being herein sometimes
collectively called the "Premises"); (b)  all fixtures, equipment,
systems, machinery, furniture, furnishings, appliances, inventory, goods,
building and construction materials, supplies, and articles of personal
property, of every kind and character, tangible and intangible (including
software embedded therein), now owned or hereafter acquired by Mortgagor, which
are now or hereafter attached to or situated in, on or about the Land or the
Improvements, or used in or necessary to the complete and proper planning,
development, use, occupancy or operation thereof, or acquired (whether delivered
to the Land or stored elsewhere) for use or installation in or on the Land or
the Improvements, and all renewals and replacements of, substitutions for and
additions to the foregoing (the properties referred to in this clause (b) being
herein sometimes collectively called the "Accessories," all of which are hereby
declared to be permanent accessions to the Land); (c)  all (i) plans
and specifications for the Improvements; (ii) Mortgagor's rights, but not
liability for any breach by Mortgagor, under all commitments (including any
commitments for financing to pay any of the Secured Indebtedness, as defined
below), insurance policies (or additional or supplemental coverage related
thereto, including from an insurance provider meeting the requirements of the
Loan Documents or from or through any state or federal government sponsored
program or entity), Swap Transactions (as hereinafter defined), contracts and
agreements for the design, construction, operation or inspection of the
Improvements and other contracts and general intangibles (including but not
limited to payment intangibles, trademarks, trade names, goodwill, software and
symbols) related to the Premises or the Accessories or the operation thereof;
(iii) deposits and deposit accounts arising from or related to any transactions
related to the Premises or the Accessories

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (including
but not limited to Mortgagor's rights in tenants' security deposits, deposits
with respect to utility services to the Premises, and any deposits, deposit
accounts or reserves hereunder or under any other Loan Documents (hereinafter
defined) for taxes, insurance or otherwise), rebates or refunds of impact fees
or other taxes, assessments or charges, money, accounts (including deposit
accounts), instruments, documents, promissory notes and chattel paper (whether
tangible or electronic) arising from or by virtue of any transactions related to
the Premises or the Accessories, and any account or deposit account from which
Mortgagor may from time to time authorize Mortgagee to debit and/or credit
payments due with respect to the Loan or any Swap Transaction, all rights to the
payment of money from Mortgagee under any Swap Transaction, and all accounts,
deposit accounts and general intangibles, including payment intangibles,
described in any Swap Transaction; (iv) permits, licenses, franchises,
certificates, development rights, commitments and rights for utilities, and
other rights and privileges obtained in connection with the Premises or the
Accessories; (v) leases, rents, royalties, bonuses, issues, profits, revenues
and other benefits of the Premises and the Accessories (without derogation of
Article 3 hereof); (vi) as-extracted collateral produced from or allocated to
the Land including, without limitation, oil, gas and other hydrocarbons and
other minerals and all products processed or obtained therefrom, and the
proceeds thereof; and (vii) engineering, accounting, title, legal, and other
technical or business data concerning the Property which are in the possession
of Mortgagor or in which Mortgagor can otherwise grant a security interest; and
(d) all (i) accounts and proceeds (cash or non-cash and including payment
intangibles) of or arising from the properties, rights, titles and interests
referred to above in this Section 1.3, including but not limited to proceeds of
any sale, lease or other disposition thereof, proceeds of each policy of
insurance (or additional or supplemental coverage related thereto, including
from an insurance provider meeting the requirements of the Loan Documents or
from or through any state or federal government sponsored program or entity)
relating thereto (including premium refunds), proceeds of the taking thereof or
of any rights appurtenant thereto, including change of grade of streets, curb
cuts or other rights of access, by condemnation, eminent domain or transfer in
lieu thereof for public or quasi-public use under any law, and proceeds arising
out of any damage thereto; (ii) all letter-of-credit rights (whether or not the
letter of credit is evidenced by a writing) Mortgagor now has or hereafter
acquires relating to the properties, rights, titles and interests referred to in
this Section 1.3; (iii) all commercial tort claims Mortgagor now has or
hereafter acquires relating to the properties, rights, titles and interests
referred to in this Section 1.3; and (iv) other interests of every kind and
character which Mortgagor now has or hereafter acquires in, to or for the
benefit of the properties, rights, titles and interests referred to above in
this Section 1.3 and all property used or useful in connection therewith,
including but not limited to rights of ingress and egress and remainders,
reversions and reversionary rights or interests; and if the estate of Mortgagor
in any of the property referred to above in this Section 1.3 is a leasehold
estate, this conveyance shall include, and the lien and security interest
created hereby shall encumber and extend to, all other or additional title,
estates, interests or rights which are now owned or may hereafter be acquired by
Mortgagor in or to the property demised under the lease creating the leasehold
estate; TO HAVE AND TO HOLD the foregoing rights, interests and properties, and
all rights, estates, powers and privileges appurtenant thereto (herein
collectively called the "Property"), unto Mortgagee, its successors and assigns,
in trust, in fee simple forever, subject to the terms, provisions and conditions
herein set forth, to secure the obligations of Mortgagor under the Note and Loan
Documents (as hereinafter defined) and all other indebtedness and matters
defined as "Secured Indebtedness" in Section 1.5 of this Mortgage; PROVIDED,
HOWEVER, that if Mortgagor shall promptly pay or cause to be paid to Mortgagee
(as hereinafter defined) the principal sum, including all additional advances
and all other sums payable by Mortgagor to Mortgagee under the terms of the Loan
Documents and shall perform or cause to be performed all the other terms,
conditions, agreements and provisions contained in the Loan Documents, all
without fraud or delay or deduction or abatement of anything or for any reason,
then this Mortgage and the estate hereby granted shall cease, terminate and
become void.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Section
1.4. Security
Interest.  Mortgagor hereby grants to Mortgagee a security
interest in all of the Property which constitutes personal property or fixtures,
all proceeds and products thereof, and all supporting obligations ancillary to
or arising in any way in connection therewith (herein sometimes collectively
called the "Collateral") to secure the obligations of Mortgagor under the Note
and Loan Documents and all other indebtedness and matters defined as Secured
Indebtedness in Section 1.5 of this Mortgage.  In addition to its
rights hereunder or otherwise, Mortgagee shall have all of the rights of a
secured party under the New York Uniform Commercial Code, as in effect from time
to time, or under the Uniform Commercial Code in force, from time to time, in
any other state to the extent the same is applicable law.

     

    Section
1.5. Secured Indebtedness, Note,
Loan Documents, Other Obligations.  This Mortgage is made to
secure and enforce the payment and performance of the following promissory
notes, obligations, indebtedness, duties and liabilities and all renewals,
extensions, supplements, increases, and modifications thereof in whole or in
part from time to time (collectively the "Secured Indebtedness"): (a) the
Promissory Note and all other promissory notes given in substitution therefor or
in modification, supplement, increase, renewal or extension thereof, in whole or
in part (such promissory note or promissory notes, whether one or more, as from
time to time renewed, extended, supplemented, increased or modified and all
other notes given in substitution therefor, or in modification, renewal or
extension thereof, in whole or in part, being hereinafter called the "Note", and
Mortgagee, or the subsequent Mortgagee at the time in question of the Note or
any of the Secured Indebtedness, as hereinafter defined, such Mortgagee
continuing to be defined herein as "Mortgagee"); and (b) all interest,
Additional Interest, indebtedness, liabilities, duties, covenants, promises and
other obligations whether joint or several, direct or indirect, fixed or
contingent, liquidated or unliquidated, and the cost of collection of all such
amounts, owed by Mortgagor to Mortgagee now or hereafter incurred or arising
pursuant to or permitted by the provisions of the Note, this Mortgage, the Loan
Agreement or any other document now or hereafter evidencing, governing,
guaranteeing, securing or otherwise executed in connection with the loan
evidenced by the Note, including but not limited to any loan or credit
agreement, letter of credit or reimbursement agreement, tri-party financing
agreement, Master Agreement relating to any Swap Transactions or other agreement
between Mortgagor and Mortgagee, or among Mortgagor, Mortgagee and any other
party or parties, pertaining to the repayment or use of the proceeds of the loan
evidenced by the Note (the Note, the Mortgage, the Loan Agreement, any Master
Agreement relating to any Swap Transactions and any such documents as they or
any of them may have been or may be from time to time renewed, extended,
supplemented, increased or modified, being herein sometimes collectively called
the "Loan Documents").  "Swap Transaction" means any agreement,
whether or not in writing, relating to any transaction that is a rate swap,
basis swap, forward rate transaction, commodity swap, commodity option, equity
or equity index swap or option, bond, note or bill option, interest rate option,
forward foreign exchange transaction, cap, collar or floor transaction, currency
swap, cross-currency rate swap, swap option currency option or any other,
similar transaction (including any option to enter into any of the foregoing) or
any combination of the foregoing, and, unless the context otherwise clearly
requires, any form of master agreement (the "Master Agreement") published by the
International Swaps and Derivatives Association, Inc., or any other master
agreement, entered into between Mortgagee (or its affiliates) and Mortgagor (or
its affiliates), together with any related schedules, as amended, supplemented,
superseded or replaced from time to time, relating to or governing any or all of
the foregoing.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    ARTICLE
2

     

    Representations, Warranties
and Covenants

     

    Section
2.1. Mortgagor
represents, warrants, and covenants as follows:

     

    (a) Payment and
Performance.  Mortgagor will make due and punctual payment of
the Secured Indebtedness. Mortgagor will timely and properly perform and comply
with all of the covenants, agreements, and conditions imposed upon it by this
Mortgage and the other Loan Documents and will not permit a default to occur
hereunder or thereunder.  Time shall be of the essence in this
Mortgage.

     

    (b) Title and Permitted
Encumbrances.  Mortgagor has, in Mortgagor's own right, and
Mortgagor covenants to maintain, lawful, good and marketable title to the
Property, is lawfully seized and possessed of the Property and every part
thereof, and has the right to convey the same, free and clear of all liens,
charges, claims, security interests, and encumbrances except for (i) the
matters, if any, set forth under the heading "Permitted Encumbrances" in Exhibit B hereto,
which are Permitted Encumbrances only to the extent the same are valid and
subsisting and affect the Property, (ii) the liens and security interests
evidenced by this Mortgage, (iii) statutory liens for real estate taxes and
assessments on the Property which are not yet delinquent, and (iv) other liens
and security interests (if any) in favor of Mortgagee (the matters described in
the foregoing clauses (i), (ii), (iii) and (iv) being herein called the
"Permitted Encumbrances").  Mortgagor, and Mortgagor's successors and
assigns, will warrant generally and forever defend title to the Property,
subject as aforesaid, to Mortgagee and his successors or substitutes and
assigns, against the claims and demands of all persons claiming or to claim the
same or any part thereof.  Mortgagor will punctually pay, perform,
observe and keep all covenants, obligations and conditions in or pursuant to any
Permitted Encumbrance and will not modify or permit modification of any
Permitted Encumbrance without the prior written consent of
Mortgagee.  Inclusion of any matter as a Permitted Encumbrance does
not constitute approval or waiver by Mortgagee of any existing or future
violation or other breach thereof by Mortgagor, by the Property or
otherwise.  No part of the Property constitutes all or any part of the
principal residence of Mortgagor if Mortgagor is an individual.  If
any right or interest of Mortgagee in the Property or any part thereof shall be
endangered or questioned or shall be attacked directly or indirectly, Mortgagee
and Mortgagee, or either of them (whether or not named as parties to legal
proceedings with respect thereto), are hereby authorized and empowered to take
such steps as in their discretion may be proper for the defense of any such
legal proceedings or the protection of such right or interest of Mortgagee,
including but not limited to the employment of independent counsel, the
prosecution or defense of litigation, and the compromise or discharge of adverse
claims.  All expenditures so made of every kind and character shall be
a demand obligation (which obligation Mortgagor hereby promises to pay) owing by
Mortgagor to Mortgagee or Mortgagee (as the case may be), and the party
(Mortgagee or Mortgagee, as the case may be) making such expenditures shall be
subrogated to all rights of the person receiving such payment.

     

    
      
        
        

      

      
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    (c) Taxes and Other
Impositions.  Mortgagor will pay, or cause to be paid, all
taxes, assessments and other charges or levies imposed upon or against or with
respect to the Property or the ownership, use, occupancy or enjoyment of any
portion thereof, or any utility service thereto, as the same become due and
payable, including but not limited to all real estate taxes assessed against the
Property or any part thereof, and shall deliver promptly to Mortgagee such
evidence of the payment thereof as Mortgagee may require.

     

    (d) Insurance.  Mortgagor
shall obtain and maintain at Mortgagor's sole expense: (1) mortgagee title
insurance issued to Mortgagee covering the Premises as required by Mortgagee,
without exception for mechanics' liens; (2) property insurance with respect to
all insurable Property, against loss or damage by fire, lightning, windstorm,
explosion, hail, tornado and such additional hazards as are presently included
in "Special Form" (also known as "all-risk") coverage and against any and all
acts of terrorism and such other insurable hazards as Mortgagee may require, in
an amount not less than 100% of the full replacement cost, including the cost of
debris removal, without deduction for depreciation and sufficient to prevent
Mortgagor and Mortgagee from becoming a coinsurer, such insurance to be in
"builder's risk" completed value (non-reporting) form during and with respect to
any construction (other than construction of customary tenant improvements in
existing buildings) on the Premises; (3) if and to the extent any portion of the
Improvements is, under the Flood Disaster Protection Act of 1973 ("FDPA"), as it
may be amended from time to time, in a Special Flood Hazard Area, within a Flood
Zone designated A or V in a participating community, a flood insurance policy in
an amount required by Mortgagee, but in no event less than the amount sufficient
to meet the requirements of applicable law and the FDPA, as such requirements
may from time to time be in effect; (4) general liability insurance, on an
"occurrence" basis, against claims for "personal injury" liability, including
bodily injury, death or property damage liability, for the benefit of Mortgagor
as named insured and Mortgagee as additional insured; (5) statutory workers'
compensation insurance with respect to any work on or about the Premises
(including employer's liability insurance, if required by Mortgagee), covering
all employees of Mortgagor and any contractor; (6) if there is a general
contractor, during and with respect to any construction (other than construction
of customary tenant improvements in existing buildings) on the Premises,
commercial general liability insurance, including products and completed
operations coverage, and in other respects similar to that described in clause
(4) above, for the benefit of the general contractor as named insured and
Mortgagor and Mortgagee as additional insureds, in addition to statutory
workers' compensation insurance with respect to any work on or about the
Premises (including employer's liability insurance, if required by Mortgagee),
covering all employees of the general contractor any contractor; and (7) such
other insurance on the Property and endorsements as may from time to time be
required by Mortgagee (including but not limited 

     

    
      
        
        

      

      
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    to soft
cost coverage, automobile liability insurance, business interruption insurance
or delayed rental insurance, boiler and machinery insurance, earthquake
insurance, wind insurance, sinkhole coverage, and/or permit to occupy
endorsement) and against other insurable hazards or casualties which at the time
are commonly insured against in the case of premises similarly situated, due
regard being given to the height, type, construction, location, use and
occupancy of buildings and improvements.  All insurance policies shall
be issued and maintained by insurers, in amounts, with deductibles, limits and
retentions, and in forms satisfactory to Mortgagee, and shall require not less
than ten (10) days' prior written notice to Mortgagee of any cancellation for
nonpayment of premiums, and not less than thirty (30) days' prior written notice
to Mortgagee of any other cancellation or any change of coverage.  All
insurance companies must be licensed to do business in the state in which the
Property is located and must have an A.M. Best Company financial and performance
ratings of A-:IX or better.  All insurance policies maintained, or
caused to be maintained, by Mortgagor with respect to the Property, except for
general liability insurance, shall provide that each such policy shall be
primary without right of contribution from any other insurance that may be
carried by Mortgagor or Mortgagee and that all of the provisions thereof, except
the limits of liability, shall operate in the same manner as if there were a
separate policy covering each insured.  If any insurer which has
issued a policy of title, hazard, liability or other insurance required pursuant
to this Mortgage or any other Loan Document becomes insolvent or the subject of
any petition, case, proceeding or other action pursuant to any Debtor Relief
Law, or if in Mortgagee's reasonable opinion the financial responsibility of
such insurer is or becomes inadequate, Mortgagor shall, in each instance
promptly upon its discovery thereof or upon the request of Mortgagee therefor,
and at Mortgagor's expense, promptly obtain and deliver to Mortgagee a like
policy (or, if and to the extent permitted by Mortgagee, acceptable evidence of
insurance) issued by another insurer, which insurer and policy meet the
requirements of this Mortgage or such other Loan Document, as the case may
be.  Without limiting the discretion of Mortgagee with respect to
required endorsements to insurance policies, all such policies for loss of or
damage to the Property shall contain a standard mortgagee clause (without
contribution) naming Mortgagee as mortgagee with loss proceeds payable to
Mortgagee notwithstanding (i) any act, failure to act or negligence of or
violation of any warranty, declaration or condition contained in any such policy
by any named or additional insured; (ii) the occupation or use of the Property
for purposes more hazardous than permitted by the terms of any such policy;
(iii) any foreclosure or other action by Mortgagee under the Loan Documents; or
(iv) any change in title to or ownership of the Property or any portion thereof,
such proceeds to be held for application as provided in the Loan
Documents.  The originals of each initial insurance policy (or to the
extent permitted by Mortgagee, a copy of the original policy and such evidence
of insurance acceptable to Mortgagee) shall be delivered to Mortgagee at the
time of execution of this Mortgage, with all premiums fully paid current, and
each renewal or substitute policy (or evidence of insurance) shall be delivered
to Mortgagee, with all premiums fully paid current, at least ten (10) days
before the termination of the policy it renews or replaces.  Mortgagor
shall pay all premiums on policies required hereunder as they become due and
payable and promptly deliver to Mortgagee evidence satisfactory to Mortgagee of
the timely payment thereof.  If any loss occurs at any time when
Mortgagor has failed to perform Mortgagor's covenants and agreements in this
paragraph with respect to any insurance payable because of loss sustained to any
part of the Property whether or not such insurance is required by Mortgagee,
Mortgagee shall nevertheless be entitled to the benefit of all insurance
covering the loss and held by or for Mortgagor, to the same extent as if it had
been made payable to Mortgagee.  Upon any foreclosure hereof or
transfer of title to the Property in extinguishment of the whole or any part of
the Secured Indebtedness, all of Mortgagor's right, title and interest in and to
the insurance policies referred to in this Section (including unearned premiums)
and all proceeds payable thereunder shall thereupon vest in 

     

    
      
        
        

      

      
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    the
purchaser at foreclosure or other such transferee, to the extent permissible
under such policies.  Mortgagee shall have the right (but not the
obligation) to make proof of loss for, settle and adjust any claim under, and
receive the proceeds of, all insurance for loss of or damage to the Property
where the loss is estimated by Mortgagee to be $1,000,000 or more, regardless of
whether or not such insurance policies are required by Mortgagee, and the
expenses incurred by Mortgagee in the adjustment and collection of insurance
proceeds shall be a part of the Secured Indebtedness and shall be due and
payable to Mortgagee on demand.  Mortgagee shall not be, under any
circumstances, liable or responsible for failure to collect or exercise
diligence in the collection of any of such proceeds or for the obtaining,
maintaining or adequacy of any insurance or for failure to see to the proper
application of any amount paid over to Mortgagor.  Any such proceeds
received by Mortgagee shall, after deduction therefrom of all reasonable
expenses actually incurred by Mortgagee, including attorneys' fees, at
Mortgagee's option be (1) released to Mortgagor, or (2) applied (upon compliance
with such terms and conditions as may be required by Mortgagee) to repair or
restoration, either partly or entirely, of the Property so damaged, or (3)
applied to the payment of the Secured Indebtedness in such order and manner as
Mortgagee, in its sole discretion, may elect, whether or not due.  In
any event, the unpaid portion of the Secured Indebtedness shall remain in full
force and effect and the payment thereof shall not be
excused.  Mortgagor shall at all times comply with the requirements of
the insurance policies required hereunder and of the issuers of such policies
and of any board of fire underwriters or similar body as applicable to or
affecting the Property.

     

    (e) Application of Insurance
Proceeds.   Notwithstanding anything to the contrary set
forth in the preceding Section 2.1(d), if the Property is damaged or destroyed
and Mortgagee determines that all of the conditions specified hereinafter in
this Section have been satisfied, then Mortgagee shall apply the proceeds of
insurance (i) first to reimbursing itself for all costs incurred by it in the
collection of such proceeds and (ii) second to reimbursing Mortgagor for such
actual costs as shall have been incurred by Mortgagor in restoring the Property
and shall be approved by Mortgagee.  Insurance proceeds shall be
applied to such restoration solely if (A) Mortgagee determines
that:  (i) the Property is capable of being suitably restored in
accordance with applicable Legal Requirements to the value, condition, character
and general utility existing prior to such damage or destruction, and, in any
event, to a Loan to Value Ratio of not greater than 70%, provided that this
clause (i) shall not apply to insurance proceeds relating to a casualty for
which the gross insurance proceeds do not exceed $1,000,000; (ii) sufficient
funds are unconditionally available (from proceeds of insurance and/or from
funds of Mortgagor) to enable Mortgagor promptly to commence, and thereafter
diligently to prosecute to completion, such restoration, provided that this
clause (ii) shall not apply to insurance proceeds relating to a casualty for
which the gross insurance proceeds do not exceed $1,000,000; (iii) Mortgagor is
not in default or in breach of any obligations under any Loan Document, no
uncured Default exists under any Loan Document and no facts or circumstances
exist that would constitute an Default with the passage of time or the giving of
notice or both; and (iv) neither the validity, enforceability nor priority of
the lien of this Mortgage shall be adversely affected; (B) Mortgagor has entered
into a written agreement, satisfactory in form and substance to Mortgagee,
containing such conditions to disbursements as are employed at the time by
Mortgagee for construction loans; (C) Mortgagor has delivered to Mortgagee such
security as Mortgagee might have reasonably required to assure completion of
restoration in accordance with the standards specified above; and (D) Mortgagor
has complied with such further reasonable requirements as Mortgagee might have
specified.

     

    
      
        
        

      

      
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    (f) Reserve for Insurance, Taxes
and Assessments.  Upon request of Mortgagee, to secure the
payment and performance of the Secured Indebtedness, but not in lieu of such
payment and performance, Mortgagor will deposit with Mortgagee a sum equal to
real estate taxes, assessments and charges (which charges for the purposes of
this paragraph shall include without limitation any recurring charge which could
result in a lien against the Property) against the Property for the current year
and the premiums for such policies of insurance for the current year, all as
estimated by Mortgagee and prorated to the end of the calendar month following
the month during which Mortgagee's request is made, and thereafter will deposit
with Mortgagee, on each date when an installment of principal and/or interest is
due on the Note, sufficient funds (as estimated from time to time by Mortgagee)
to permit Mortgagee to pay at least fifteen (15) days prior to the due date
thereof, the next maturing real estate taxes, assessments and charges and
premiums for such policies of insurance.  Mortgagee shall have the
right to rely upon tax information furnished by applicable taxing authorities in
the payment of such taxes or assessments and shall have no obligation to make
any protest of any such taxes or assessments.  Any excess over the
amounts required for such purposes shall be held by Mortgagee for future use,
applied to any Secured Indebtedness or refunded to Mortgagor, at Mortgagee's
option, and any deficiency in such funds so deposited shall be made up by
Mortgagor upon demand of Mortgagee.  All such funds so deposited shall
bear no interest, may be commingled with the general funds of Mortgagee and
shall be applied by Mortgagee toward the payment of such taxes, assessments,
charges and premiums when statements therefor are presented to Mortgagee by
Mortgagor (which statements shall be presented by Mortgagor to Mortgagee a
reasonable time before the applicable amount is due); provided, however, that,
if a Default shall have occurred hereunder, such funds may at Mortgagee's option
be applied to the payment of the Secured Indebtedness in the order determined by
Mortgagee in its sole discretion, and that Mortgagee may (but shall have no
obligation) at any time, in its discretion, apply all or any part of such funds
toward the payment of any such taxes, assessments, charges or premiums which are
past due, together with any penalties or late charges with respect
thereto.  The conveyance or transfer of Mortgagor's interest in the
Property for any reason (including without limitation the foreclosure of a
subordinate lien or security interest or a transfer by operation of law) shall
constitute an assignment or transfer of Mortgagor's interest in and rights to
such funds held by Mortgagee under this paragraph but subject to the rights of
Mortgagee hereunder.

     

    (g) Condemnation.  Mortgagor
shall notify Mortgagee immediately of any threatened or pending proceeding for
condemnation affecting the Property or arising out of damage to the Property,
and Mortgagor shall, at Mortgagor's expense, diligently prosecute any such
proceedings.  Mortgagee shall have the right (but not the obligation)
to participate in any such proceeding and to be represented by counsel of its
own choice.  Mortgagee shall be entitled to receive all sums which may
be awarded or become payable to Mortgagor for the condemnation of the Property,
or any part thereof, for public or quasi-public use, or by virtue of private
sale in lieu thereof, and any sums which may be awarded or become payable to
Mortgagor for injury or damage to the Property.  Mortgagor shall,
promptly upon request of Mortgagee, execute such additional assignments and
other documents as may be necessary from time to time to permit such
participation and to enable Mortgagee to collect and receipt for any such
sums.  All such sums are hereby assigned to Mortgagee, and shall,
after deduction therefrom of all reasonable expenses actually incurred by
Mortgagee, including attorneys' fees, at Mortgagee's option be (1) released to
Mortgagor, or (2) applied (upon compliance with such terms and conditions as may
be required by Mortgagee) to repair or restoration of the Property so affected,
or (3) applied to the payment of the Secured Indebtedness in such order and
manner as Mortgagee, in its sole discretion, may elect, whether or not
due.  In any event the unpaid portion of the Secured Indebtedness
shall remain in full force and effect and the payment thereof shall not be
excused.  Mortgagee shall not be, under any circumstances, liable or
responsible for failure to collect or to exercise diligence in the collection of
any such sum or for failure to see to the proper application of any amount paid
over to Mortgagor.  Mortgagee is hereby authorized, in the name of
Mortgagor, to execute and deliver valid acquittances for, and to appeal from,
any such award, judgment or decree.  All costs and expenses (including
but not limited to attorneys' fees) incurred by Mortgagee in connection with any
condemnation shall be a demand obligation owing by Mortgagor (which Mortgagor
hereby promises to pay) to Mortgagee pursuant to this Mortgage.

     

    
      
        
        

      

      
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    (h) Compliance with Legal
Requirements.  The Property and the use, operation and
maintenance thereof and all activities thereon do and shall at all times comply
with all applicable Legal Requirements (hereinafter defined).  The
Property is not, and shall not be, dependent on any other property or premises
or any interest therein other than the Property to fulfill any requirement of
any Legal Requirement.  Mortgagor shall not, by act or omission,
permit any building or other improvement not subject to the lien of this
Mortgage to rely on the Property or any interest therein to fulfill any
requirement of any Legal Requirement.  No improvement upon or use of
any part of the Property constitutes a nonconforming use under any zoning law or
similar law or ordinance.  Mortgagor has obtained and shall preserve
in force all requisite zoning, utility, building, health, environmental and
operating permits from the governmental authorities having jurisdiction over the
Property.

     

    If
Mortgagor receives a notice or claim from any person that the Property, or any
use, activity, operation or maintenance thereof or thereon, is not in compliance
with any Legal Requirement, Mortgagor will promptly furnish a copy of such
notice or claim to Mortgagee.  Mortgagor has received no notice and
has no knowledge of any such noncompliance.  As used in this
Mortgage:  (i) the term "Legal Requirement" means any Law (hereinafter
defined), agreement, covenant, restriction, easement or condition (including,
without limitation of the foregoing, any condition or requirement imposed by any
insurance or surety company), as any of the same now exists or may be changed or
amended or come into effect in the future; and (ii) the term "Law" means any
federal, state or local law, statute, ordinance, code, rule, regulation,
license, permit, authorization, decision, order, injunction or decree, domestic
or foreign.

     

    (i) Maintenance, Repair and
Restoration.  Mortgagor will keep the Property in first class
order, repair, operating condition and appearance, causing all necessary
repairs, renewals, replacements, additions and improvements to be promptly made,
and will not allow any of the Property to be misused, abused or wasted or to
deteriorate.  Notwithstanding the foregoing, Mortgagor will not,
without the prior written consent of Mortgagee, (i) remove from the Property any
fixtures or personal property covered by this Mortgage except such as is
replaced by Mortgagor by an article of equal suitability and value, owned by
Mortgagor, free and clear of any lien or security interest (except that created
by this Mortgage), or (ii) make any structural alteration to the Property or any
other alteration thereto which impairs the value thereof. If any act or
occurrence of any kind or nature (including any condemnation or any casualty for
which insurance was not obtained or obtainable) shall result in damage to or
loss or destruction of the Property, Mortgagor shall give prompt notice thereof
to Mortgagee and Mortgagor shall promptly, at Mortgagor's sole cost and expense
and regardless of whether insurance or condemnation proceeds (if any) shall be
available or sufficient for the purpose, secure the Property as necessary and
commence and continue diligently to completion to restore, repair, replace and
rebuild the Property as nearly as possible to its value, condition and character
immediately prior to the damage, loss or destruction.

     

    
      
        
        

      

      
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    (j) No Other
Liens.   Mortgagor will not, without the prior written
consent of Mortgagee, create, place or permit to be created or placed, or
through any act or failure to act, acquiesce in the placing of, or allow to
remain, any  mortgage, voluntary or involuntary lien, whether
statutory, constitutional or contractual, security interest, encumbrance or
charge, or conditional sale or other title retention document, against or
covering the Property, or any part thereof, other than the Permitted
Encumbrances, regardless of whether the same are expressly or otherwise
subordinate to the lien or security interest created in this Mortgage, and
should any of the foregoing become attached hereafter in any manner to any part
of the Property without the prior written consent of Mortgagee, Mortgagor will
cause the same to be promptly discharged and released.  Mortgagor will
own all parts of the Property and will not acquire any fixtures, equipment or
other property (including software embedded therein) forming a part of the
Property pursuant to a lease, license, security agreement or similar agreement,
whereby any party has or may obtain the right to repossess or remove same,
without the prior written consent of Mortgagee.  If Mortgagee consents
to the voluntary grant by Mortgagor of any mortgage, lien, security interest, or
other encumbrance (hereinafter called "Subordinate Lien") covering any of the
Property or if the foregoing prohibition is determined by a court of competent
jurisdiction to be unenforceable as to a Subordinate Lien, any such Subordinate
Lien shall contain express covenants to the effect that: (1) the Subordinate
Lien is unconditionally subordinate to this Mortgage and all Leases (hereinafter
defined); (2) if any action (whether judicial or pursuant to a power of sale)
shall be instituted to foreclose or otherwise enforce the Subordinate Lien, no
tenant of any of the Leases (hereinafter defined) shall be named as a party
defendant, and no action shall be taken that would terminate any occupancy or
tenancy without the prior written consent of Mortgagee; (3) Rents (hereinafter
defined), if collected by or for the Mortgagee of the Subordinate Lien, shall be
applied first to the payment of the Secured Indebtedness then due and expenses
incurred in the ownership, operation and maintenance of the Property in such
order as Mortgagee may determine, prior to being applied to any indebtedness
secured by the Subordinate Lien; (4) written notice of default under the
Subordinate Lien and written notice of the commencement of any action (whether
judicial or pursuant to a power of sale) to foreclose or otherwise enforce the
Subordinate Lien or to seek the appointment of a receiver for all or any part of
the Property shall be given to Mortgagee with or immediately after the
occurrence of any such default or commencement; and (5) neither the Mortgagee of
the Subordinate Lien, nor any purchaser at foreclosure thereunder, nor anyone
claiming by, through or under any of them shall succeed to any of Mortgagor's
rights hereunder without the prior written consent of Mortgagee.

     

    (k) Operation of
Property.  Mortgagor will operate the Property in a good and
workmanlike manner and in accordance with all Legal Requirements and will pay
all fees or charges of any kind in connection therewith.  Mortgagor
will keep the Property occupied so as not to impair the insurance carried
thereon.  Mortgagor will not use or occupy or conduct any activity on,
or allow the use or occupancy of or the conduct of any activity on, the Property
in any manner which violates any Legal Requirement or which constitutes a public
or private nuisance or which makes void, voidable or cancelable, or increases
the premium of, any insurance then in force with respect
thereto.  Mortgagor will not initiate or permit any zoning
reclassification of the Property or seek any variance under existing zoning
ordinances applicable to the Property or use or permit the use of the Property
in such a manner which would result in such use becoming a nonconforming use
under applicable zoning ordinances or other Legal
Requirement.  Mortgagor will not impose any easement, restrictive
covenant or encumbrance upon the Property, execute or file any subdivision plat
or condominium declaration affecting the Property or consent to the annexation
of the Property to any municipality, without the prior written consent of
Mortgagee.  Mortgagor will not do or suffer to be done any act whereby
the value of any part of the Property may be lessened.  Mortgagor will
preserve, protect, renew, extend and retain all material rights and privileges
granted for or applicable to the Property.  Without the prior written
consent of Mortgagee, there shall be no drilling or exploration for or
extraction, removal or production of any mineral, hydrocarbon, gas, natural
element, compound or substance (including sand and gravel) from the surface or
subsurface of the Land regardless of the depth thereof or the method of mining
or extraction thereof.  Mortgagor will cause all debts and liabilities
of any character (including without limitation all debts and liabilities for
labor, material and equipment (including software embedded therein) and all
debts and charges for utilities servicing the Property) incurred in the
construction, maintenance, operation and development of the Property to be
promptly paid.

     

    
      
        
        

      

      
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    (l) Financial
Matters.  Mortgagor is solvent after giving effect to all
borrowings contemplated by the Loan Documents and no proceeding under any Debtor
Relief Law (hereinafter defined) is pending (or, to Mortgagor's knowledge,
threatened) by or against Mortgagor, or any affiliate of Mortgagor, as a
debtor.  All reports, statements, plans, budgets, applications,
agreements and other data and information heretofore furnished or hereafter to
be furnished by or on behalf of Mortgagor to Mortgagee in connection with the
loan or loans evidenced by the Loan Documents (including, without limitation,
all financial statements and financial information) are and will be true,
correct and complete in all material respects as of their respective dates and
do not and will not omit to state any fact or circumstance necessary to make the
statements contained therein not misleading.  No material adverse
change has occurred since the dates of such reports, statements and other data
in the financial condition of Mortgagor or, to Mortgagor's knowledge, of any
tenant under any lease described therein.  For the purposes of this
paragraph, "Mortgagor" shall also include any person liable directly or
indirectly for the Secured Indebtedness or any part thereof and any joint
venturer or general partner of Mortgagor.

     

    (m) Status of Mortgagor; Suits
and Claims; Loan Documents.  If Mortgagor is a corporation,
partnership, limited liability company, or other legal entity, Mortgagor is and
will continue to be (i) duly organized, validly existing and in good standing
under the laws of its state of organization, (ii) authorized to do business in,
and in good standing in, each state in which the Property is located, and (iii)
possessed of all requisite power and authority to carry on its business and to
own and operate the Property.  Each Loan Document executed by
Mortgagor has been duly authorized, executed and delivered by Mortgagor, and the
obligations thereunder and the performance thereof by Mortgagor in accordance
with their terms are and will continue to be within Mortgagor's power and
authority (without the necessity of joinder or consent of any other person), are
not and will not be in contravention of any Legal Requirement or any other
document or agreement to which Mortgagor or the Property is subject, and do not
and will not result in the creation of any encumbrance against any assets or
properties of Mortgagor, or any other person liable, directly or indirectly, for
any of the Secured Indebtedness, except as expressly contemplated by the Loan
Documents.  

     

    
      
        
        

      

      
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    There is
no suit, action, claim, investigation, inquiry, proceeding or demand pending
(or, to Mortgagor's knowledge, threatened) against Mortgagor or against any
other person liable directly or indirectly for the Secured Indebtedness or which
affects the Property (including, without limitation, any which challenges or
otherwise pertains to Mortgagor's title to the Property) or the validity,
enforceability or priority of any of the Loan Documents.  There is no
judicial or administrative action, suit or proceeding pending (or, to
Mortgagor's knowledge, threatened) against Mortgagor, or against any other
person liable directly or indirectly for the Secured Indebtedness, except as has
been disclosed in writing to Mortgagee in connection with the loan evidenced by
the Note.  The Loan Documents constitute legal, valid and binding
obligations of Mortgagor enforceable in accordance with their terms, except as
the enforceability thereof may be limited by Debtor Relief Laws (hereinafter
defined) and except as the availability of certain remedies may be limited by
general principles of equity.  Mortgagor is not a "foreign person"
within the meaning of the Internal Revenue Code of 1986, as amended, Sections
1445 and 7701 (i.e. Mortgagor is not a non-resident alien, foreign corporation,
foreign partnership, foreign trust or foreign estate as those terms are defined
therein and in any regulations promulgated thereunder).  The loan
evidenced by the Note is solely for business and/or investment purposes, and is
not intended for personal, family, household or agricultural
purposes.  Mortgagor further warrants that the proceeds of the Note
shall be used for commercial purposes and stipulates that the loan evidenced by
the Note shall be construed for all purposes as a commercial
loan.  Mortgagor's exact legal name is correctly set forth at the end
of this Mortgage.  If Mortgagor is not an individual, Mortgagor is an
organization of the type and (if not an unregistered entity) is incorporated in
or organized under the laws of the state specified in the introductory paragraph
of this Mortgage. If Mortgagor is an unregistered entity (including, without
limitation, a general partnership) it is organized under the laws of the state
specified in the introductory paragraph of this Mortgage. Mortgagor will not
cause or permit any change to be made in its name, identity (including its trade
name or names), or corporate or partnership structure, unless Mortgagor shall
have notified Mortgagee in writing of such change at least thirty (30) days
prior to the effective date of such change, and shall have first taken all
action required by Mortgagee for the purpose of further perfecting or protecting
the lien and security interest of Mortgagee in the Property.  In
addition, Mortgagor shall not change its corporate or partnership structure
without first obtaining the prior written consent of
Mortgagee.  Mortgagor's principal place of business and chief
executive office, and the place where Mortgagor keeps its books and records,
including recorded data of any kind or nature, regardless of the medium of
recording including, without limitation, software, writings, plans,
specifications and schematics concerning the Property, has for the preceding
four months (or, if less, the entire period of the existence of Mortgagor) been
and will continue to be (unless Mortgagor notifies Mortgagee of any change in
writing at least thirty (30) days prior to the date of such change) the address
of Mortgagor set forth at the end of this Mortgage.  If Mortgagor is
an individual, Mortgagor's principal residence has for the preceding four months
been and will continue to be (unless Mortgagor notifies Mortgagee of any change
in writing at least thirty (30) days prior to the date of such change) the
address of the principal residence of Mortgagor set forth at the end of this
Mortgage.  Mortgagor's organizational identification number, if any,
assigned by the state of incorporation or organization is correctly set forth on
the first page of this Mortgage.  Mortgagor shall promptly notify
Mortgagee (i) of any change of its organizational identification number, or (ii)
if Mortgagor does not now have an organization identification number and later
obtains one, of such organizational identification number.

     

    
      
        
        

      

      
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    (n) Certain Environmental
Matters.  Mortgagor shall comply with the terms and covenants
of that certain Environmental Indemnity Agreement dated of even date herewith
(the "Environmental Agreement").

     

    (o) Further
Assurances.  Mortgagor will, promptly on request of Mortgagee,
(i) correct any defect, error or omission which may be discovered in the
contents, execution or acknowledgment of this Mortgage or any other Loan
Document; (ii) execute, acknowledge, deliver, procure and record and/or file
such further documents (including, without limitation, further mortgages of
trust, security agreements, and assignments of rents or leases) and do such
further acts as may be necessary, desirable or proper to carry out more
effectively the purposes of this Mortgage and the other Loan Documents, to more
fully identify and subject to the liens and security interests hereof any
property intended to be covered hereby (including specifically, but without
limitation, any renewals, additions, substitutions, replacements, or
appurtenances to the Property) or as deemed advisable by Mortgagee to protect
the lien or the security interest hereunder against the rights or interests of
third persons; and (iii) provide such certificates, documents, reports,
information, affidavits and other instruments and do such further acts as may be
necessary, desirable or proper in the reasonable determination of Mortgagee to
enable Mortgagee to comply with the requirements or requests of any agency
having jurisdiction over Mortgagee or any examiners of such agencies with
respect to the indebtedness secured hereby, Mortgagor or the
Property.  Mortgagor shall pay all costs connected with any of the
foregoing, which shall be a demand obligation owing by Mortgagor (which
Mortgagor hereby promises to pay) to Mortgagee pursuant to this
Mortgage.

     

    (p) Fees and
Expenses.  Without limitation of any other provision of this
Mortgage or of any other Loan Document and to the extent not prohibited by
applicable law, Mortgagor will pay, and will reimburse to Mortgagee and/or
Mortgagee on demand to the extent paid by Mortgagee and/or Mortgagee: (i) all
appraisal fees, filing, registration and recording fees, recordation, transfer
and other taxes, brokerage fees and commissions, abstract fees, title search or
examination fees, title policy and endorsement premiums and fees, uniform
commercial code search fees, judgment and tax lien search fees, escrow fees,
reasonable attorneys' fees, reasonable architect fees, reasonable engineer fees,
reasonable construction consultant fees, reasonable environmental inspection
fees, survey fees, and all other reasonable costs and expenses of every
character incurred by Mortgagor or Mortgagee and/or Mortgagee in connection with
the preparation of the Loan Documents, the evaluation, closing and funding of
the loan evidenced by the Loan Documents, and any and all amendments and
supplements to this Mortgage, the Note or any other Loan Documents or any
approval, consent, waiver, release or other matter requested or required
hereunder or thereunder, or otherwise attributable or chargeable to Mortgagor as
owner of the Property; and (ii) all costs and expenses, including reasonable
attorneys' fees and expenses, incurred or expended in connection with the
exercise of any right or remedy, or the defense of any right or remedy or the
enforcement of any obligation of Mortgagor, hereunder or under any other Loan
Document.

     

    (q) Indemnification.

     

    (i) Mortgagor
will indemnify and hold harmless Mortgagee  from and against, and
reimburse them on demand for, any and all Indemnified Matters (hereinafter
defined).  For purposes of this paragraph (p), the term
"Mortgagee"  shall include and any persons owned or controlled by,
owning or controlling, or under common control or affiliated with
Mortgagee.  Without limitation, the foregoing indemnities shall apply
to each indemnified person with respect to matters which in whole or in part are
caused by or arise out of the negligence of such (and/or any other) indemnified
person.  However, such indemnities shall not apply to a particular
indemnified person to the extent that the subject of the indemnification is
caused by or arises out of the gross negligence or willful misconduct of that
indemnified person.  Any amount to be paid under this paragraph (p) by
Mortgagor to Mortgagee  shall be a demand obligation owing by
Mortgagor (which Mortgagor hereby promises to pay) to
Mortgagee  pursuant to this Mortgage.  Nothing in this
paragraph, elsewhere in this Mortgage or in any other Loan Document shall limit
or impair any rights or remedies of Mortgagee (including without limitation any
rights of contribution or indemnification) against Mortgagor or any other person
under any other provision of this Mortgage, any other Loan Document, any other
agreement or any applicable Legal Requirement.

     

    
      
        
        

      

      
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    (ii) As used
herein, the term "Indemnified Matters" means any and all claims, demands,
liabilities (including strict liability), losses, damages (including
consequential damages), causes of action, judgments, penalties, fines, costs and
expenses (including without limitation, reasonable fees and expenses of
attorneys and other professional consultants and experts, and of the
investigation and defense of any claim, whether or not such claim is ultimately
defeated, and the settlement of any claim or judgment including all value paid
or given in settlement) of every kind, known or unknown, foreseeable or
unforeseeable, which may be imposed upon, asserted against or incurred or paid
by Mortgagee at any time and from time to time, whenever imposed, asserted or
incurred, because of, resulting from, in connection with, or arising out of any
transaction, act, omission, event or circumstance in any way connected with the
Property or with this Mortgage or any other Loan Document, including but not
limited to any bodily injury or death or property damage occurring in or upon or
in the vicinity of the Property through any cause whatsoever at any time on or
before the Release Date (hereinafter defined), any act performed or omitted to
be performed hereunder or under any other Loan Document, any breach by Mortgagor
of any representation, warranty, covenant, agreement or condition contained in
this Mortgage or in any other Loan Document, any default as defined herein, any
claim under or with respect to any Lease (hereinafter defined) or arising under
the Environmental Agreement.  The term "Release Date" as used herein
means the earlier of the following two dates: (i) the date on which the
indebtedness and obligations secured hereby have been paid and performed in full
and this Mortgage has been released, or (ii) the date on which the lien of this
Mortgage is fully and finally foreclosed or a conveyance by deed in lieu of such
foreclosure is fully and finally effective, and possession of the Property has
been given to the purchaser or grantee free of occupancy and claims to occupancy
by Mortgagor and Mortgagor's heirs, devisees, representatives, successors and
assigns; provided, that if such payment, performance, release, foreclosure or
conveyance is challenged, in bankruptcy proceedings or otherwise, the Release
Date shall be deemed not to have occurred until such challenge is rejected,
dismissed or withdrawn with prejudice.  The indemnities in this
paragraph (p) shall not terminate upon the Release Date or upon the release,
foreclosure or other termination of this Mortgage but will survive the Release
Date, foreclosure of this Mortgage or conveyance in lieu of foreclosure, the
repayment of the Secured Indebtedness, the termination of any and all Swap
Transactions, the discharge and release of this Mortgage and the other Loan
Documents, any bankruptcy or other debtor relief proceeding, and any other event
whatsoever.

     

    
      
        
        

      

      
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    (r) Records and Financial
Reports.  Mortgagor will keep accurate books and records in
accordance with sound accounting principles in which full, true and correct
entries shall be promptly made with respect to the Property and the operation
thereof, and will permit all such books and records, and all recorded data of
any kind or nature, regardless of the medium of recording including, without
limitation, all software, writings, plans, specifications and schematics to be
inspected and copied, and the Property to be inspected and photographed, by
Mortgagee and its representatives during normal business hours and at any other
reasonable times.  Without limitation of other or additional
requirements in any of the other Loan Documents, Mortgagor will furnish to
Mortgagee the financial statements required under the Loan
Agreement.  Mortgagor will furnish to Mortgagee at Mortgagor's expense
all evidence which Mortgagee may from time to time reasonably request as to
compliance with all provisions of the Loan Documents.  Any inspection
or audit of the Property or the books and records, including recorded data of
any kind or nature, regardless of the medium of recording including, without
limitation, software, writings, plans, specifications and schematics of
Mortgagor, or the procuring of documents and financial and other information, by
or on behalf of Mortgagee shall be for Mortgagee's protection only, and shall
not constitute any assumption of responsibility to Mortgagor or anyone else with
regard to the condition, construction, maintenance or operation of the Property
nor Mortgagee's approval of any certification given to Mortgagee nor relieve
Mortgagor of any of Mortgagor's obligations.  Mortgagee may from time
to time assign or grant participations in the Secured Indebtedness and Mortgagor
consents to the delivery by Mortgagee to any acquirer or prospective acquirer of
any interest or participation in or with respect to all or part of the Secured
Indebtedness such information as Mortgagee now or hereafter has relating to the
Property, Mortgagor, any party obligated for payment of any part of the Secured
Indebtedness, any tenant or guarantor under any lease affecting any part of the
Property and any agent or guarantor under any management agreement affecting any
part of the Property.

     

    (s) Taxes on Note or
Mortgage.  Mortgagor will promptly pay all income, franchise
and other taxes owing by Mortgagor and any stamp, documentary, recordation and
transfer taxes or other taxes (unless such payment by Mortgagor is prohibited by
law) which may be required to be paid with respect to the Note, this Mortgage or
any other instrument evidencing or securing any of the Secured
Indebtedness.  In the event of the enactment after this date of any
law of any governmental entity applicable to Mortgagee, the Note, the Property
or this Mortgage deducting from the value of property for the purpose of
taxation any lien or security interest thereon, or imposing upon Mortgagee the
payment of the whole or any part of the taxes or assessments or charges or liens
herein required to be paid by Mortgagor, or changing in any way the laws
relating to the taxation of deeds of trust or mortgages or security agreements
or debts secured by deeds of trust or mortgages or security agreements or the
interest of the mortgagee or secured party in the property covered thereby, or
the manner of collection of such taxes, so as to affect this Mortgage or the
Secured Indebtedness or Mortgagee, then, and in any such event, Mortgagor, upon
demand by Mortgagee, shall pay such taxes, assessments, charges or liens, or
reimburse Mortgagee therefor; provided, however, that if in the opinion of
counsel for Mortgagee (i) it might be unlawful to require Mortgagor to make such
payment or (ii) the making of such payment might result in the imposition of
interest beyond the maximum amount permitted by law, then and in such event,
Mortgagee may elect, by notice in writing given to Mortgagor, to declare all of
the Secured Indebtedness to be and become due and payable sixty (60) days from
the giving of such notice.

     

    
      
        
        

      

      
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    (t) Statement Concerning Note or
Mortgage.  Mortgagor shall at any time and from time to time
furnish within seven (7) days of request by Mortgagee a written statement in
such form as may be required by Mortgagee stating that (i) the Note, this
Mortgage and the other Loan Documents are valid and binding obligations of
Mortgagor, enforceable against Mortgagor in accordance with their terms; (ii)
the unpaid principal balance of the Note; (iii) the date to which interest on
the Note is paid; (iv) the Note, this Mortgage and the other Loan Documents have
not been released, subordinated or modified; and (v) there are no offsets or
defenses against the enforcement of the Note, this Mortgage or any other Loan
Document.  If any of the foregoing statements are untrue, Mortgagor
shall, alternatively, specify the reasons therefor.  Mortgagee shall
at any time and from time to time furnish within seven (7) days of request by
Mortgagor a written statement stating (i) the unpaid principal balance of the
Note and (ii) the date to which interest on the Note is paid.

     

    (u) Trust Fund; Lien
Laws.  Mortgagor will receive the advances secured hereby and
will hold the right to receive such advances as a trust fund to be applied first
for the purpose of paying the "cost of improvement", as such quoted term is
defined in the New York Lien Law) and will apply the same first to the payment
of such costs before using any part of the total of the same for any other
purpose and, will comply with Section 13 of the New York Lien
Law.  Mortgagor will indemnify and hold Mortgagee harmless against any
loss or liability, cost or expense, including, without limitation, any
judgments, reasonable attorney's fees, costs of appeal bonds and printing costs,
arising out of or relating to any proceeding instituted by any claimant alleging
a violation by Mortgagor of any applicable lien law including, without
limitation, any section of Article 3-A of the New York Lien Law.

     

    Section
2.2. Performance by Mortgagee on
Mortgagor's Behalf.  Mortgagor agrees that, if Mortgagor fails
to perform any act or to take any action which under any Loan Document Mortgagor
is required to perform or take, or to pay any money which under any Loan
Document Mortgagor is required to pay, and whether or not the failure then
constitutes a default hereunder or thereunder, and whether or not there has
occurred any default or defaults hereunder or the Secured Indebtedness has been
accelerated, Mortgagee, in Mortgagor's name or its own name, may, but shall not
be obligated to, perform or cause to be performed such act or take such action
or pay such money, and any expenses so incurred by Mortgagee, with interest
thereon at the Past Due Rate set forth in the Note, and any money so paid by
Mortgagee shall be a demand obligation owing by Mortgagor to Mortgagee (which
obligation Mortgagor hereby promises to pay), shall be a part of the
indebtedness secured hereby, and Mortgagee, upon making such payment, shall be
subrogated to all of the rights of the person, entity or body politic receiving
such payment.  Mortgagee and its designees shall have the right to
enter upon the Property at any time and from time to time for any such
purposes.  No such payment or performance by Mortgagee shall waive or
cure any default or waive any right, remedy or recourse of
Mortgagee.  Any such payment may be made by Mortgagee in reliance on
any statement, invoice or claim without inquiry into the validity or accuracy
thereof.  Each amount due and owing by Mortgagor to Mortgagee pursuant
to this Mortgage shall bear interest, from the date such amount becomes due
until paid, at the rate per annum provided in the Note for interest on past due
principal owed on the Note but never in excess of the maximum nonusurious amount
permitted by applicable law, which interest shall be payable to Mortgagee on
demand; and all such amounts, together with such interest thereon, shall
automatically and without notice be a part of the indebtedness secured
hereby.  The amount and nature of any expense by Mortgagee hereunder
and the time when paid shall be fully established by the certificate of
Mortgagee or any of Mortgagee's officers or agents.

     

    
      
        
        

      

      
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    Section
2.3. Absence of Obligations of
Mortgagee with Respect to Property.  Notwithstanding anything
in this Mortgage to the contrary, including, without limitation, the definition
of "Property" and/or the provisions of Article 3 hereof, (i) to the extent
permitted by applicable law, the Property is composed of Mortgagor's rights,
title and interests therein but not Mortgagor's obligations, duties or
liabilities pertaining thereto, (ii) Mortgagee neither assumes nor shall have
any obligations, duties or liabilities in connection with any portion of the
items described in the definition of "Property" herein, either prior to or after
obtaining title to such Property, whether by foreclosure sale, the granting of a
deed in lieu of foreclosure or otherwise, and (iii) Mortgagee may, at any time
prior to or after the acquisition of title to any portion of the Property as
above described, advise any party in writing as to the extent of Mortgagee's
interest therein and/or expressly disaffirm in writing any rights, interests,
obligations, duties and/or liabilities with respect to such Property or matters
related thereto.  Without limiting the generality of the foregoing, it
is understood and agreed that Mortgagee shall have no obligations, duties or
liabilities prior to or after acquisition of title to any portion of the
Property, as lessee under any lease or purchaser or seller under any contract or
option unless Mortgagee elects otherwise by written notification.

     

    Section
2.4. Authorization to File
Financing Statements; Power of Attorney.  Mortgagor hereby
authorizes Mortgagee at any time and from time to time to file any initial
financing statements, amendments thereto and continuation statements as
authorized by applicable law, required by Mortgagee to establish or maintain the
validity, perfection and priority of the security interests granted in this
Mortgage.  For purposes of such filings, Mortgagor agrees to furnish
any information requested by Mortgagee promptly upon request by
Mortgagee.  Mortgagor also ratifies its authorization for Mortgagee to
have filed any like initial financing statements, amendments thereto or
continuation statements if filed prior to the date of this
Mortgage.  Mortgagor hereby irrevocably constitutes and appoints
Mortgagee and any officer or agent of Mortgagee, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of Mortgagor or in Mortgagor's own
name to execute in Mortgagor's name any such documents and to otherwise carry
out the purposes of this Section 2.4, to the extent that Mortgagor's
authorization above is not sufficient.  To the extent permitted by
law, Mortgagor hereby ratifies all acts said attorney-in-fact shall lawfully do,
have done in the past or cause to be done in the future by virtue
hereof.  This power of attorney is a power coupled with an interest
and shall be irrevocable.

     

    
      
        
        

      

      
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    ARTICLE
3

     

    Assignment of Rents and
Leases

     

    Section
3.1. Assignment.  Mortgagor
hereby assigns to Mortgagee all Rents (hereinafter defined) and all of
Mortgagor's rights in and under all Leases (hereinafter defined).  So
long as no Default (hereinafter defined) has occurred, Mortgagor shall have a
license (which license shall terminate automatically and without further notice
upon the occurrence of a Default) to collect, but not prior to accrual, the
Rents under the Leases and, where applicable, subleases, such Rents to be held
in trust for Mortgagee, and to otherwise deal with all Leases as permitted by
this Mortgage.  Each month, provided no Default has occurred,
Mortgagor may retain such Rents as were collected that month and held in trust
for Mortgagee; provided, however, that all Rents collected by Mortgagor shall be
applied solely to the ordinary and necessary expenses of owning and operating
the Property or paid to Mortgagee.  Upon the revocation of such
license, all Rents shall be paid directly to Mortgagee and not through the
Mortgagor, all without the necessity of any further action by Mortgagee,
including, without limitation, any action to obtain possession of the Land,
Improvements or any other portion of the Property or any action for the
appointment of a receiver.  Mortgagor hereby authorizes and directs
the tenants under the Leases to pay Rents to Mortgagee upon written demand by
Mortgagee, without further consent of Mortgagor, without any obligation of such
tenants to determine whether a Default has in fact occurred and regardless of
whether Mortgagee has taken possession of any portion of the Property, and the
tenants may rely upon any written statement delivered by Mortgagee to the
tenants.  Any such payments to Mortgagee shall constitute payments to
Mortgagor under the Leases, and Mortgagor hereby irrevocably appoints Mortgagee
as its attorney-in-fact to do all things, after a Default, which Mortgagor might
otherwise do with respect to the Property and the Leases thereon, including,
without limitation, (i) collecting Rents with or without suit and applying the
same, less expenses of collection, to any of the obligations secured hereunder
or to expenses of operating and maintaining the Property (including reasonable
reserves for anticipated expenses), at the option of the Mortgagee, all in such
manner as may be determined by Mortgagee, or at the option of Mortgagee, holding
the same as security for the payment of the Secured Indebtedness, (ii) leasing,
in the name of Mortgagor, the whole or any part of the Property which may become
vacant, and (iii) employing agents therefor and paying such agents reasonable
compensation for their services.  The curing of such Default, unless
other Defaults also then exist, shall entitle Mortgagor to recover its aforesaid
license to do any such things which Mortgagor might otherwise do with respect to
the Property and the Leases thereon and to again collect such
Rents.  The powers and rights granted in this paragraph shall be in
addition to the other remedies herein provided for upon the occurrence of a
Default and may be exercised independently of or concurrently with any of said
remedies.  Nothing in the foregoing shall be construed to impose any
obligation upon Mortgagee to exercise any power or right granted in this
paragraph or to assume any liability under any Lease of any part of the Property
and no liability shall attach to Mortgagee for failure or inability to collect
any Rents under any such Lease.  The assignment contained in this
Section shall become null and void upon the release of this
Mortgage.  As used herein: (i) "Lease" means each existing or future
lease, sublease (to the extent of Mortgagor's rights thereunder) or other
agreement under the terms of which any person has or acquires any right to
occupy or use the Property, or any part thereof, or interest therein, and each
existing or future guaranty of payment or performance thereunder, and all
extensions, renewals, modifications and replacements of each such lease,
sublease, agreement or guaranty; and (ii) "Rents" means all of the rents,
revenue, income, profits and proceeds derived and to be derived from the
Property or arising from the use or enjoyment of any portion thereof or from any
Lease, including but not limited to the proceeds from any negotiated lease
termination or buyout of such Lease, liquidated damages following default under
any such Lease, all proceeds payable under any policy of insurance covering loss
of rents resulting from untenantability caused by damage to any part of the
Property, all of Mortgagor's rights to recover monetary amounts from any tenant
in bankruptcy including, without limitation, rights of recovery for use and
occupancy and damage claims arising out of Lease defaults, including rejections,
under any applicable Debtor Relief Law (hereinafter defined), together with any
sums of money that may now or at any time hereafter be or become due and payable
to Mortgagor by virtue of any and all royalties, overriding royalties, bonuses,
delay rentals and any other amount of any kind or character arising under any
and all present and all future oil, gas, mineral and mining leases covering the
Property or any part thereof, and all proceeds and other amounts paid or owing
to Mortgagor under or pursuant to any and all contracts and bonds relating to
the construction or renovation of the Property.

     

    
      
        
        

      

      
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    Section
3.2. Covenants, Representations
and Warranties Concerning Leases and Rents.  Mortgagor
covenants, represents and warrants that: (a) Mortgagor has good title to, and is
the owner of the entire landlord's interest in, the Leases and Rents hereby
assigned and authority to assign them; (b) all Leases are valid and enforceable,
and in full force and effect, and are unmodified except as stated therein; (c)
neither Mortgagor nor any tenant in the Property is in default under its Lease
(and no event has occurred which with the passage of time or notice or both
would result in a default under its Lease) or is the subject of any bankruptcy,
insolvency or similar proceeding; (d) unless otherwise stated in a Permitted
Encumbrance, no Rents or Leases  have been or will be assigned,
mortgaged, pledged or otherwise encumbered and no other person has or will
acquire any right, title or interest in such Rents or Leases; (e) no Rents have
been waived, released, discounted, set off or compromised; (f) except as stated
in the Leases, Mortgagor has not received any funds or deposits from any tenant
for which credit has not already been made on account of accrued Rents; (g)
Mortgagor shall perform all of its obligations under the Leases and enforce the
tenants' obligations under the Leases to the extent enforcement is prudent under
the circumstances; (h) Mortgagor will not without the prior written consent of
Mortgagee, enter into any Lease after the date hereof except in accordance with
the terms of Exhibit I to the Loan Agreement, or waive, release, discount, set
off, compromise, reduce or defer any Rent, receive or collect Rents more than
one (1) month in advance, grant any rent-free period to any tenant (except in
accordance with the terms of Exhibit I to the Loan Agreement), reduce any Lease
term or waive, release or otherwise modify any other material obligation under
any Lease, renew or extend any Lease except in accordance with the terms of
Exhibit I to the Loan Agreement or in accordance with a right of the tenant
thereto in such Lease, approve or consent to an assignment of a Lease or a
subletting of any part of the premises covered by a Lease (except with respect
to leases of 5,000 square feet of rentable space or less), or settle or
compromise any claim against a tenant under a Lease in bankruptcy or otherwise
(except with respect to leases of 5,000 square feet of rentable space or less);
(i) Mortgagor will not, without the prior written consent of Mortgagee,
terminate or consent to the cancellation or surrender of any Lease having an
unexpired term of one (1) year or more unless promptly after the cancellation or
surrender a new Lease of such premises is made with a new tenant having a credit
standing that is satisfactory to Mortgagee, in Mortgagee's judgment, on terms
not materially less favorable to lessor than the terms of the terminated or
cancelled Lease; (j) Mortgagor will not execute any Lease except in accordance
with the Loan Documents and for actual occupancy by the tenant thereunder; (k)
Mortgagor shall give prompt notice to Mortgagee, as soon as Mortgagor first
obtains notice, of any claim, or the commencement of any action, by any tenant
or subtenant under or with respect to a Lease regarding any claimed damage,
default, diminution of or offset against Rent, cancellation of the Lease, or
constructive eviction, excluding, however, notices of default under residential
Leases, and Mortgagor shall defend, at Mortgagor's expense, any proceeding
pertaining to any Lease, including, if Mortgagee so requests, any such
proceeding to which Mortgagee is a party; (l) Mortgagor shall as often as
requested by Mortgagee, within ten (10) days of each request, deliver to
Mortgagee a complete rent roll of the Property in such detail as Mortgagee may
require and financial statements of the tenants, subtenants and guarantors under
the Leases to the extent available to Mortgagor, and deliver to such of the
tenants and others obligated under the Leases specified by Mortgagee written
notice of the assignment in Section 3.1 hereof in form and content satisfactory
to Mortgagee; (m) promptly upon request by Mortgagee, Mortgagor shall deliver to
Mortgagee executed originals of all Leases and copies of all records in its
possession or control relating thereto; (n) there shall be no merger of the
leasehold estates, created by the Leases, with the fee estate of the Land
without the prior written consent of Mortgagee; and (o) Mortgagee may at any
time and from time to time by specific written instrument intended for the
purpose, unilaterally subordinate the lien of this Mortgage to any Lease,
without joinder or consent of, or notice to, Mortgagor, any tenant or any other
person, and notice is hereby given to each tenant under a Lease of such right to
subordinate.  No such subordination shall constitute a subordination
to any lien or other encumbrance, whenever arising, or improve the right of any
junior lien Mortgagee; and nothing herein shall be construed as subordinating
this Mortgage to any Lease.

     

    
      
        
        

      

      
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    Section
3.3. Estoppel
Certificates.  All Leases executed after the date hereof shall
require the tenant to execute and deliver to Mortgagee an estoppel certificate
in form and substance acceptable to Mortgagee not more than thirty (30) days
after notice from the Mortgagee.

     

    Section
3.4. No Liability of
Mortgagee.  Mortgagee's acceptance of this assignment shall not
be deemed to constitute Mortgagee a "mortgagee in possession," nor obligate
Mortgagee to appear in or defend any proceeding relating to any Lease or to the
Property, or to take any action hereunder, expend any money, incur any expenses,
or perform any obligation or liability under any Lease, or assume any obligation
for any deposit delivered to Mortgagor by any tenant and not as such delivered
to and accepted by Mortgagee.  Mortgagee shall not be liable for any
injury or damage to person or property in or about the Property, or for
Mortgagee's failure to collect or to exercise diligence in collecting Rents, but
shall be accountable only for Rents that it shall actually
receive.  Neither the assignment of Leases and Rents nor enforcement
of Mortgagee's rights regarding Leases and Rents (including collection of Rents)
nor possession of the Property by Mortgagee nor Mortgagee's consent to or
approval of any Lease (nor all of the same), shall render Mortgagee liable on
any obligation under or with respect to any Lease or constitute affirmation of,
or any subordination to, any Lease, occupancy, use or option.

     

    If
Mortgagee seeks or obtains any judicial relief regarding Rents or Leases, the
same shall in no way prevent the concurrent or subsequent employment of any
other appropriate rights or remedies nor shall same constitute an election of
judicial relief for any foreclosure or any other purpose.  Mortgagee
neither has nor assumes any obligations as lessor or landlord with respect to
any Lease.  The rights of Mortgagee under this Article 3 shall be
cumulative of all other rights of Mortgagee under the Loan Documents or
otherwise.

     

    Reference
is hereby made to Section 291-f of the Real Property Law of the State of New
York for the purpose of obtaining for Mortgagee the benefits of said Section in
connection herewith.

     

     

    
      
        
        

      

      
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    ARTICLE
4

     

    Default

     

    Section
4.1. Events of
Default.  The occurrence of any one of the following shall be a
default under this Mortgage ("default" or "Default"):

     

    (a) Failure to Pay
Indebtedness.  Any of the Secured Indebtedness or any
indebtedness evidenced by the other "Notes" (as defined in the Loan Agreement)
is not paid when due, regardless of how such amount may have become due and such
default shall have continued for a period of ten (10) days.

     

    (b) Nonperformance of
Covenants.  Any covenant, agreement or condition herein or in
any other Loan Document (other than covenants otherwise addressed in another
paragraph of this Section, such as covenants to pay the Secured Indebtedness) is
not fully and timely performed, observed or kept and such failure shall have
continued for a period of thirty (30) days after notice thereof shall have been
given to Mortgagor by Mortgagee (or such other cure period as may be specified
elsewhere in this Mortgage or the other Loan Documents with respect to specific
provisions), provided, however, if such default is not susceptible of being
cured within such thirty (30) day period and Mortgagor has commenced such cure
within such thirty (30) day period and is diligently pursuing such cure to
Mortgagee's satisfaction, such thirty (30) day cure period shall be extended,
but in no event shall such cure period exceed sixty (60) days, or, in the case
of such other documents, such shorter grace period, if any, as may be provided
for therein.

     

    (c) Default under other Loan
Documents.  The occurrence of a Default under any other Loan
Document, including an Early Termination Event as defined in any Master
Agreement relating to any Swap Transaction.

     

    (d) Representations.  Any
statement, representation or warranty in any of the Loan Documents, or in any
financial statement or any other writing heretofore or hereafter delivered to
Mortgagee in connection with the Secured Indebtedness is false, misleading or
erroneous in any material respect on the date hereof or on the date as of which
such statement, representation or warranty is made.

     

    (e) Bankruptcy or
Insolvency.  The owner of the Property or any person liable,
directly or indirectly, for any of the Secured Indebtedness (or any general
partner or joint venturer of such owner or other person):

     

    (i) (A)
Executes an assignment for the benefit of creditors, or takes any action in
furtherance thereof; or (B) admits in writing its inability to pay, or fails to
pay, its debts generally as they become due; or (C) as a debtor, files a
petition, case, proceeding or other action pursuant to, or voluntarily seeks the
benefit or benefits of, Title 11 of the United States Code as now or hereafter
in effect or any other federal, state or local law, domestic or foreign, as now
or hereafter in effect relating to bankruptcy, insolvency, liquidation,
receivership, reorganization, arrangement, composition, extension or adjustment
of debts, or similar laws affecting the rights of creditors (Title 11 of the
United States Code and such other laws being herein called "Debtor Relief
Laws"), or takes any action in furtherance thereof; or (D) seeks the appointment
of a receiver, trustee, custodian or liquidator of the Property or any part
thereof or of any significant portion of its other property; or

     

    
      
        
        

      

      
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    (ii) Suffers
the filing of a petition, case, proceeding or other action against it as a
debtor under any Debtor Relief Law or seeking appointment of a receiver,
trustee, custodian or liquidator of the Property or any part thereof or of any
significant portion of its other property, and (A) admits, acquiesces in or
fails to contest diligently the material allegations thereof, or (B) the
petition, case, proceeding or other action results in entry of any order for
relief or order granting relief sought against it, or (C) in a proceeding under
Debtor Relief Laws, the case is converted from one chapter to another, or (D)
fails to have the petition, case, proceeding or other action permanently
dismissed or discharged on or before the earlier of trial thereon or ninety (90)
days next following the date of its filing; or

     

    (iii) Conceals,
removes, or permits to be concealed or removed, any part of its property, with
intent to hinder, delay or defraud its creditors or any of them, or makes or
suffers a transfer of any of its property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law; or makes any transfer of its
property to or for the benefit of a creditor at a time when other creditors
similarly situated have not been paid; or suffers or permits, while insolvent,
any creditor to obtain a lien (other than as described in subparagraph (iv)
below) upon any of its property through legal proceedings which are not vacated
and such lien discharged prior to enforcement thereof and in any event within
sixty (60) days from the date thereof; or

     

    (iv) Fails to
have discharged within a period of thirty (30) days any attachment,
sequestration, or similar writ levied upon any of its property; or

     

    (v) Fails to
pay immediately any final money judgment against it.

     

    (f) Transfer of the
Property.  Any sale, lease, conveyance, assignment, pledge,
encumbrance, or transfer of all or any part of the Property or any interest
therein, voluntarily or involuntarily, whether by operation of law or otherwise,
except: (i) sales or transfers of items of the Accessories which have become
obsolete or worn beyond practical use and which have been replaced by adequate
substitutes, owned by Mortgagor, having a value equal to or greater than the
replaced items when new; and (ii) the grant, in the ordinary course of business,
of a leasehold interest in a part of the Improvements to a tenant for occupancy,
not containing a right or option to purchase and not in contravention of any
provision of this Mortgage or of any other Loan Document.  Mortgagee
may, in its sole discretion, waive a default under this paragraph, but it shall
have no obligation to do so, and any waiver may be conditioned upon such one or
more of the following (if any) which Mortgagee may require:  the
grantee's integrity, reputation, character, creditworthiness and management
ability being satisfactory to Mortgagee in its sole judgment and grantee
executing, prior to such sale or transfer, a written assumption agreement
containing such terms as Mortgagee may require, a principal paydown on the Note,
an increase in the rate of interest payable under the Note, a transfer fee, a
modification of the term of the Note, and any other modification of the Loan
Documents which Mortgagee may require.  :  NOTICE - THE DEBT
SECURED HEREBY IS SUBJECT TO CALL IN FULL AND ANY AND ALL SWAP TRANSACTIONS ARE
SUBJECT TO TERMINATION, OR THE TERMS THEREOF BEING MODIFIED IN THE EVENT OF SALE
OR CONVEYANCE OF THE PROPERTY CONVEYED.

     

    
      
        
        

      

      
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    (g) Transfer of
Assets.  Any sale, lease, conveyance, assignment, pledge,
encumbrance, or transfer of all or any part of the other assets of Mortgagor,
excluding the Property, voluntarily or involuntarily, whether by operation of
law or otherwise, except: (i) sales or transfers in the ordinary course of
Mortgagor's business; and (ii) sales or transfers for which Mortgagor receives
consideration substantially equivalent to the fair market value of the
transferred asset.

     

    (h) Transfer of Ownership of
Mortgagor.  Any of the following:

     

    (i) the sale,
pledge, encumbrance, assignment or transfer, voluntarily or involuntarily,
whether by operation of law or otherwise, of any interest in Mortgagor (if
Mortgagor is not a natural person but is a corporation, partnership, limited
liability company, trust or other legal entity), without the prior written
consent of Mortgagee (including, without limitation, if Mortgagor is a
partnership or joint venture, the withdrawal from or admission into it of any
general partner or joint venturer); or

     

    (ii) if
Mortgagor or Guarantor (or a general partner, member or co-venturer of either of
them) is a partnership, joint venture, limited liability company, trust or
closely-held corporation, any sale, conveyance, transfer or other disposition of
more than 10%, in the aggregate, of any class of the issued and outstanding
capital stock of such closely-held corporation or of the beneficial interest of
such partnership, venture, limited liability company or trust, or a change of
any general partner, joint venturer, member or beneficiary, as the case may be,
or, in the event Mortgagor or Guarantor (or a general partner, co-venturer,
member or beneficiary, as the case may be, of either of them) is a publicly-held
corporation, the sale, conveyance, transfer or other disposition of more than
10%, in the aggregate, of the stock-holdings of any of the five (5) individuals
or entities that own the greatest number of shares of each class of issued and
outstanding stock, or effectuates or permits a reduction in the aggregate direct
and indirect ownership interests of Guarantor in Mortgagor below 50.1%, or
effectuates or causes Acadia Realty Trust to fail to control the management of
Guarantor and Mortgagor.

     

    (i) Grant of Easement,
Etc.  Without the prior written consent of Mortgagee, Mortgagor
grants any easement or dedication, files any plat, condominium declaration, or
restriction, or otherwise encumbers the Property, or seeks or permits any zoning
reclassification or variance, unless such action is expressly permitted by the
Loan Documents or does not affect the Property.

     

    (j) Abandonment.  The
owner of the Property abandons any of the Property.

     

    
      
        
        

      

      
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    (k) Default Under Other
Lien.  A default or event of default occurs under any lien,
security interest or assignment covering the Property or any part thereof
(whether or not Mortgagee has consented, and without hereby implying Mortgagee's
consent, to any such lien, security interest or assignment not created
hereunder), or the Mortgagee of any such lien, security interest or assignment
declares a default or institutes foreclosure or other proceedings for the
enforcement of its remedies thereunder.

     

    (l) Destruction.  The
Property is so demolished, destroyed or damaged that, in the reasonable opinion
of Mortgagee, it cannot be restored or rebuilt with available funds to a
profitable condition within a reasonable period of time and in any event, prior
to the final maturity date of the Note.

     

    (m) Condemnation.  (i)
Any governmental authority shall require, or commence any proceeding for, the
demolition of any building or structure comprising a part of the Premises, or
(ii) there is commenced any proceeding to condemn or otherwise take pursuant to
the power of eminent domain, or a contract for sale or a conveyance in lieu of
such a taking is executed which provides for the transfer of, a material portion
of the Premises, including but not limited to the taking (or transfer in lieu
thereof) of any portion which would result in the blockage or substantial
impairment of access or utility service to the Improvements or which would cause
the Premises to fail to comply with any Legal Requirement.

     

    (n) Liquidation,
Etc.  The liquidation, termination, dissolution, merger,
consolidation or failure to maintain good standing in the State of New York
and/or the state of incorporation or organization, if different (or in the case
of an individual, the death or legal incapacity) of the Mortgagor, any owner of
the Property or any person obligated to pay any part of the Secured
Indebtedness.

     

    (o) Material, Adverse
Change.  In Mortgagee's reasonable opinion, the prospect of
payment of all or any part of the Secured Indebtedness has been impaired because
of a material, adverse change in the financial condition, results of operations,
business or properties of the Mortgagor, any owner of the Property or any person
liable, directly or indirectly, for any of the Secured Indebtedness, or of any
general partner or joint venturer thereof (if such owner or other person is a
partnership or joint venture).

     

    (p) Enforceability;
Priority.  Any Loan Document shall for any reason without
Mortgagee's specific written consent cease to be in full force and effect, or
shall be declared null and void or unenforceable in whole or in part, or the
validity or enforceability thereof, in whole or in part, shall be challenged or
denied by any party thereto other than Mortgagee; or the liens, mortgages or
security interests of Mortgagee in any of the Property become unenforceable in
whole or in part, or cease to be of the priority herein required, or the
validity or enforceability thereof, in whole or in part, shall be challenged or
denied by Mortgagor or any person obligated to pay any part of the Secured
Indebtedness.

     

    (q) Other
Indebtedness.  A default or event of default occurs under any
document executed and delivered in connection with any other indebtedness (to
Mortgagee or any other person or entity) of Mortgagor, the owner of the
Property, any person obligated to pay any part of the Secured Indebtedness, or
any person or entity which guarantees such other indebtedness.

     

    Section
4.2. Notice and
Cure.  If any provision of this Mortgage or any other Loan
Document provides for Mortgagee to give to Mortgagor any notice regarding a
default or incipient default, then if Mortgagee shall fail to give such notice
to Mortgagor as provided, the sole and exclusive remedy of Mortgagor for such
failure shall be to seek appropriate equitable relief to enforce the agreement
to give such notice and to have any acceleration of the maturity of the Note and
the Secured Indebtedness postponed or revoked and foreclosure proceedings in
connection therewith delayed or terminated pending or upon the curing of such
default in the manner and during the period of time permitted by such agreement,
if any, and Mortgagor shall have no right to damages or any other type of relief
not herein specifically set out against Mortgagee, all of which damages or other
relief are hereby waived by Mortgagor.  Nothing herein or in any other
Loan Document shall operate or be construed to add on or make cumulative any
cure or grace periods specified in any of the Loan Documents.

     

    
      
        
        

      

      
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    ARTICLE
5

     

    Remedies

     

    Section
5.1. Certain
Remedies.  If a Default shall occur, Mortgagee may (but shall
have no obligation to) exercise any one or more of the following remedies,
without notice (unless notice is required by applicable statute):

     

    (a) Acceleration.  Mortgagee
may at any time and from time to time declare any or all of the Secured
Indebtedness immediately due and payable and may terminate any and all Swap
Transactions.  Upon any such declaration, such Secured Indebtedness
shall thereupon be immediately due and payable, and such Swap Transactions shall
immediately terminate, without presentment, demand, protest, notice of protest,
notice of acceleration or of intention to accelerate or any other notice or
declaration of any kind, all of which are hereby expressly waived by
Mortgagor.  Without limitation of the foregoing, upon the occurrence
of a default described in clauses (A), (C) or (D) of subparagraph (i) of
paragraph (d) of Section 4.1, hereof, all of the Secured Indebtedness shall
thereupon be immediately due and payable, without presentment, demand, protest,
notice of protest, declaration or notice of acceleration or intention to
accelerate, or any other notice, declaration or act of any kind, all of which
are hereby expressly waived by Mortgagor.

     

    (b) Enforcement of Assignment of
Rents.  In addition to the rights of Mortgagee under Article 3
hereof, prior or subsequent to taking possession of any portion of the Property
or taking any action with respect to such possession, Mortgagee may: (1) collect
and/or sue for the Rents in Mortgagee's own name, give receipts and releases
therefor, and after deducting all expenses of collection, including attorneys'
fees and expenses, apply the net proceeds thereof to the Secured Indebtedness in
such manner and order as Mortgagee may elect and/or to the operation and
management of the Property, including the payment of management, brokerage and
attorney's fees and expenses; and  (2) require Mortgagor to transfer
all security deposits and records thereof to Mortgagee together with original
counterparts of the Leases.

     

    
      
        
        

      

      
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    (c) Mortgagee's Right to Enter
and Take Possession, Operate and Apply Income.

     

    (i) Mortgagee
may demand that Mortgagor surrender the actual possession of the Property and
upon such demand, Mortgagor shall forthwith surrender same to Mortgagee and, to
the extent permitted by law, Mortgagee itself, or by such officers or agents as
it may appoint, may enter and take possession of all of the Property and may
exclude Mortgagor and its agents and employees wholly therefrom.

     

    (ii) If
Mortgagor shall for any reason fail to surrender or deliver the Property or any
part thereof after Mortgagee's demand, Mortgagee may obtain a judgment or order
conferring on Mortgagee the right to immediate possession or requiring the
Mortgagor to deliver immediate possession to Mortgagee, to the entry of which
judgment or decree the Mortgagor hereby specifically consents.

     

    (iii) Mortgagee
may from time to time: (A) continue and complete construction of, hold, store,
use, operate, manage and control the Property and conduct the business thereof;
(B) make all reasonably necessary maintenance, repairs, renewals,
replacements, additions, betterments and improvements thereto and thereon and
purchase or otherwise acquire additional personal property; (C) insure or
keep the Property insured; (D) exercise all the rights and powers of the
Mortgagor in its name or otherwise with respect to the same; and (E) enter
into agreements with others (including, without limitation, new Leases or
amendments, extensions, or cancellations to existing Leases) all as Mortgagee
from time to time may determine in its sole discretion.  Mortgagor
hereby constitutes and irrevocably appoints Mortgagee its true and lawful
attorney-in-fact, which appointment is coupled with an interest, with full power
of substitution, and empowers said attorney or attorneys in the name of
Mortgagor, but at the option of said attorney-in-fact, to do any and all acts
and execute any and all agreements that Mortgagee may deem necessary or proper
to implement and perform any and all of the foregoing.

     

    (d) Uniform Commercial
Code.  Mortgagee may exercise any or all of its rights and
remedies under the Uniform Commercial Code as adopted by the State of New York
as in effect from time to time, (or under the Uniform Commercial Code in force
from time to time in any other state to the extent the same is applicable law)
or other applicable law as well as all other rights and remedies possessed by
Mortgagee, all of which shall be cumulative.  Mortgagee is hereby
authorized and empowered to enter the Property or other place where the
collateral may be located without legal process, and to take possession of such
personal property without notice or demand, which hereby are waived to the
maximum extent permitted by the laws of the State of New York.  Upon
demand by Mortgagee, Mortgagor shall make such personal property available to
Mortgagee at a place reasonably convenient to Mortgagee.  Mortgagee
may proceed under the Uniform Commercial Code as to all or any part of such
personal property, and in conjunction therewith may exercise all of the rights,
remedies and powers of a secured creditor under the Uniform Commercial
Code.  Any notification required by the Uniform Commercial Code shall
be deemed reasonably and properly given if sent in accordance with the Notice
provisions of this Mortgage at least ten (10) days before any sale or other
disposition of such personal property.   Mortgagee may choose to
dispose of some or all of the property, in any combination consisting of both
personal property and Property, in one or more public or private sales to be
held in accordance with the Law and procedures applicable to real property, as
permitted by Article 9 of the Uniform Commercial Code.  Mortgagor
agrees that such a sale of such personal property together with Property
constitutes a commercially reasonable sale of such personal
property.

     

    
      
        
        

      

      
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    (e) Lawsuits.  Mortgagee
may proceed by a suit or suits in equity or at law, whether for collection of
the indebtedness secured hereby, the specific performance of any covenant or
agreement herein contained or in aid of the execution of any power herein
granted, or for any foreclosure hereunder or for the sale of the Property under
the judgment or decree of any court or courts of competent
jurisdiction.  Mortgagor hereby assents to the passage of a decree for
the sale of the Property by any equity court having jurisdiction.

     

    (f) Foreclosure.
Mortgagee may:

     

    (1) sell the
Mortgaged Property to the extent permitted and pursuant to the procedures
provided by law (including, without limitation, in accordance with Article 14 of
the New York Real Property Actions and Proceedings Law, regarding which
Mortgagor hereby consents and agrees that notices thereunder (including notices
of sale) may be given to Mortgagor in any of the manners specified for the
giving of notices set forth in Section 6.13, and all estate, right, title and
interest, claim and demand thereof, at one (1) or more sales as an entity or in
parcels or parts, and at such time and place upon such terms and after such
notice thereof as may be required or permitted by law; or

     

    (2) institute
proceedings for the complete or partial foreclosure hereof; or

     

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

     

    Any sale
made hereunder may be as an entirety or in such parcels as Mortgagee may
request.  To the extent permitted by applicable law, any sale may be
adjourned by announcement at the time and place appointed for such sale without
further notice except as may be required by law.  If the proceeds of
such sale of less than the whole of the Property shall be less than the
aggregate of the Secured Indebtedness, this Mortgage and the lien hereof shall
remain in full force and effect as to the unsold portion of the Property just as
though no sale had been made and the rights of Mortgagee to foreclose hereunder
shall also apply to any future sales.  A sale may cover not only the
Property but also personal property and other interests which are a part of the
Property, or any part thereof, as a unit and as a part of a single sale, or the
sale may be of any part of the Property separately from the remainder of the
Property.  After each sale, the Mortgagee shall make to the purchaser
or purchasers at such sale good and sufficient conveyances, conveying the
property so sold to the purchaser or purchasers in fee simple, subject to the
Permitted Encumbrances (and to such leases and other matters, if any), and shall
receive the proceeds of said sale or sales and apply the same as herein
provided.  In the event any sale hereunder is not completed or is
defective in the opinion of Mortgagee, such sale shall not exhaust the rights
hereunder and Mortgagee shall have the right to cause a subsequent sale or sales
to be made hereunder. Any and all statements of fact or other recitals made in
any deed or deeds or other conveyances given by the Mortgagee as to nonpayment
of the Secured Indebtedness or as to the occurrence of any default, or as to
Mortgagee's having declared all of said indebtedness to be due and payable, or
as to the request to sell, or as to notice of time, place and terms of sale and
the properties to be sold having been duly given, or as to any other act or
thing having been duly done by Mortgagee shall be taken as prima facie evidence
of the truth of the facts so stated and recited.

     

    
      
        
        

      

      
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    (g) Receiver. Mortgagee
may apply to any court of competent jurisdiction to have a receiver appointed to
enter upon and take possession of the Property, collect the Rents therefrom and
apply the same as the court may direct, such receiver to have all of the rights
and powers permitted under the laws of the State of New York.  To the
extent permitted by law, the right of the appointment of such receiver shall be
a matter of strict right without regard to the value or the occupancy of the
Property or the solvency or insolvency of Mortgagor.  The expenses,
including receiver's fees, attorneys' fees, costs and agent's commission
incurred pursuant to the powers herein contained, together with interest thereon
at the default rate under the Note, shall be secured hereby and shall be due and
payable by Mortgagor immediately without notice or
demand.   Notwithstanding the appointment of any receiver or
other custodian, Mortgagee shall be entitled as pledgee to the possession and
control of any cash or deposits at the time held by, payable, or deliverable
under the terms of this Mortgage to the Mortgagee, and the Mortgagee shall have
the right to offset the unpaid Secured Indebtedness against any such cash or
deposits in such order as Mortgagee may elect.

     

    (h) Termination of Commitment to
Lend.  Mortgagee may terminate any commitment or obligation to
lend or disburse funds under any Loan Document or enter into any other credit
arrangement to or for the benefit of Mortgagor.

     

    (i) Other Rights and
Remedies.  Mortgagee may exercise any and all other rights and
remedies which Mortgagee may have under the Loan Documents, or at law or in
equity or otherwise.

     

    Section
5.2. Application of
Proceeds.  Unless otherwise provided by applicable Law, all
proceeds from the sale of the Property or any part thereof pursuant to the
rights and remedies set forth in this Article 5 and any other proceeds received
by Mortgagee from the exercise of any of its other rights and remedies hereunder
or under the other Loan Documents shall be applied first to pay all Expenses and
next in reduction of the other Secured Indebtedness, in such manner and order as
Mortgagee may elect.

     

    Section
5.3. Remedies Cumulative and
Concurrent.  No right, power or remedy of Mortgagee as provided
in the Note, this Mortgage, or the other Loan Documents is intended to be
exclusive of any other right, power, or remedy of Mortgagee, but each and every
such right, power and remedy shall be cumulative and concurrent and in addition
to any other right, power or remedy available to Mortgagee now or hereafter
existing at law or in equity and may be pursued separately, successively or
together against Mortgagor, or any endorser, co-maker, surety or guarantor of
the Secured Indebtedness, or the Property or any part thereof, or any one or
more of them, at the sole discretion of Mortgagee.  The failure of
Mortgagee to exercise any such right, power or remedy shall in no event be
construed as a waiver or release thereof.

     

    
      
        
        

      

      
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    Section
5.4. Waiver, Delay or
Omission.  No waiver of any Default hereunder shall extend to
or affect any subsequent or any other Default then existing, or impair any
rights, powers or remedies consequent thereon, and no delay or omission of
Mortgagee to exercise any right, power or remedy shall be construed to waive any
such Default or to constitute acquiescence therein.

     

    Section
5.5. Credit of
Mortgagee.  To the maximum extent permitted by the laws of the
State of New York, upon any sale made under or by virtue of this Article,
Mortgagee may bid for and acquire the Property, or any part thereof, and in lieu
of paying cash therefor may apply to the purchase price, any portion of or all
of the unpaid Secured Indebtedness in such order as Mortgagee may
elect.

     

    Section
5.6. Sale.  Any
sale or sales made under or by virtue of this Article shall operate to divest
all the estate, right, title, interest, claim and demand whatsoever at law or in
equity, of the Mortgagor and all persons, except tenants pursuant to Leases
approved by Mortgagee, claiming by, through or under Mortgagor in and to the
properties and rights so sold, whether sold to Mortgagee or to
others.

     

    Section
5.7. Proofs of
Claim.  In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition, seizure of the
Property by any Governmental Authority, or other judicial proceedings affecting
the Mortgagor, any endorser, co-maker, surety, or guarantor of the Secured
Indebtedness, or any of their respective properties, the Mortgagee, to the
extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have its claim
allowed in such proceedings for the entire unpaid Secured Indebtedness at the
date of the institution of such proceedings, and for any additional amounts
which may become due and payable after such date.

     

    Section
5.8. Waiver of Redemption,
Notice, Marshalling, Etc.  Mortgagor hereby waives and
releases, for itself and anyone claiming through, by, or under it, to the
maximum extent permitted by the laws of the State of New York:

     

    (i) all
benefit that might accrue to Mortgagor by virtue of any present or future law
exempting the Property, or any part of the proceeds arising from any sale
thereof, from attachment, levy or sale on execution, or providing for any
appraisement, valuation, stay of execution, exemption from civil process,
redemption or extension of time for payment,

     

    (ii) unless
specifically required herein, all notices of default, or Mortgagee's actual
exercise of any option or remedy under the Loan Documents, or otherwise,
and

     

    (iii) any right
to have the Property marshaled.

     

    Section
5.9. Discontinuance of
Proceedings.  If Mortgagee shall have proceeded to enforce any
right under any Loan Document and such proceedings shall have been discontinued
or abandoned for any reason, then except as may be provided in any written
agreement between Mortgagor and Mortgagee providing for the discontinuance or
abandonment of such proceedings, Mortgagor and Mortgagee shall be restored to
their former positions and the rights, remedies and powers of Mortgagee shall
continue as if no such proceedings had been instituted.

     

    
      
        
        

      

      
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    Section
5.10. Mortgagee's
Actions.  Mortgagee may, at any time without notice to any
person and without consideration, do or refrain from doing any or all of the
following actions, and neither the Mortgagor, any endorser, co-maker, surety or
guarantor of the Secured Indebtedness, nor any other person (hereinafter in this
Section collectively referred to as the "Obligor") now or hereafter liable
for the payment and performance of the Secured Indebtedness shall be relieved
from the payment and performance thereof, unless specifically released in
writing by Mortgagee:  (a) renew, extend or modify the terms of
the Note, this Mortgage and the other Loan Documents, or any of them;
(b) forbear or extend the time for the payment or performance of any or all
of the Secured Indebtedness; (c) apply payments by any Obligor to the
reduction of the unpaid Secured Indebtedness in such manner, in such amounts,
and at such times and in such order and priority as Mortgagee may see fit;
(d) release any Obligor; (e) substitute or release in whole or in part
the Property or any other collateral or any portion thereof now or hereafter
held as security for the Secured Indebtedness without affecting, disturbing or
impairing in any manner whatsoever the validity and priority of the lien of this
Mortgage upon the Property which is not released or substituted, or the validity
and priority of any security interest of the Mortgagee in such other collateral
which is not released or substituted; (f) subordinate the lien of this
Mortgage or the lien of any other security interest in any other collateral now
or hereafter held as security for the Secured Indebtedness; (g) join in the
execution of a plat or replat of the Land (provided, however, notwithstanding
the foregoing, Mortgagee will join in such plat or replat of the Land so long as
such plat or replat is acceptable to Mortgagee); (h) join in and consent to
the filing of a declaration of condominium or declaration of restrictive
covenants regarding all or any part of the Land; (i) consent to the
granting of any easement on the Land; and (j) generally deal with any
obligor or any other party as Mortgagee may see fit.

     

    Section
5.11. Other
Remedies.  Mortgagee shall have the right from time to time to
protect, exercise and enforce any legal or equitable remedy against Mortgagor
provided under the Loan Documents or by applicable Laws.

     

    ARTICLE
6

     

    Miscellaneous

     

    Section
6.1. Scope of
Mortgage.  This Mortgage is a Mortgage of both real and
personal property, a security agreement, an assignment of rents and leases, a
financing statement and fixture filing and a collateral assignment, and also
covers proceeds and fixtures.

     

    Section
6.2. Effective as a Financing
Statement.  This Mortgage shall be effective as a financing
statement filed as a fixture filing with respect to all fixtures included within
the Property and is to be filed for record in the real estate records of each
county where any part of the Property (including said fixtures) is
situated.  This Mortgage shall also be effective as a financing
statement covering as-extracted collateral (including oil and gas), accounts and
general intangibles under the New York Uniform Commercial Code, as in effect
from time to time, and the Uniform Commercial Code, as in effect from time to
time, in any other state where the Property is situated which will be financed
at the wellhead or minehead of the wells or mines located on the Property and is
to be filed for record in the real estate records of each county where any part
of the Property is situated.  This Mortgage shall also be effective as
a financing statement covering any other Property and may be filed in any other
appropriate filing or recording office.  The mailing address of
Mortgagor and the Mortgagee are set forth in the preamble of this Mortgage and
the address of Mortgagee from which information concerning the security
interests hereunder may be obtained is the address of Mortgagee set forth at the
end of this Mortgage.  A carbon, photographic or other reproduction of
this Mortgage or of any financing statement relating to this Mortgage shall be
sufficient as a financing statement for any of the purposes referred to in this
Section.

     

    
      
        
        

      

      
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    Section
6.3. Notice to Account
Debtors.  In addition to the rights granted elsewhere in this
Mortgage, Mortgagee may at any time notify the account debtors or obligors of
any accounts, chattel paper, general intangibles, negotiable instruments or
other evidences of indebtedness included in the Collateral to pay Mortgagee
directly.

     

    Section
6.4. Waiver by
Mortgagee.  Mortgagee may at any time and from time to time by
a specific writing intended for the purpose: (a) waive compliance by Mortgagor
with any covenant herein made by Mortgagor to the extent and in the manner
specified in such writing; (b) consent to Mortgagor's doing any act which
hereunder Mortgagor is prohibited from doing, or to Mortgagor's failing to do
any act which hereunder Mortgagor is required to do, to the extent and in the
manner specified in such writing; (c) release any part of the Property or any
interest therein from the lien and security interest of this Mortgage, without
the joinder of Mortgagee; or (d) release any party liable, either directly or
indirectly, for the Secured Indebtedness or for any covenant herein or in any
other Loan Document, without impairing or releasing the liability of any other
party.  No such act shall in any way affect the rights or powers of
Mortgagee or Mortgagee hereunder except to the extent specifically agreed to by
Mortgagee in such writing.

     

    Section
6.5. No Impairment of
Security.  The lien, security interest and other security
rights of Mortgagee hereunder or under any other Loan Document shall not be
impaired by any indulgence, moratorium or release granted by Mortgagee
including, but not limited to, any renewal, extension or modification which
Mortgagee may grant with respect to any Secured Indebtedness, or any surrender,
compromise, release, renewal, extension, exchange or substitution which
Mortgagee may grant in respect of the Property, or any part thereof or any
interest therein, or any release or indulgence granted to any endorser,
guarantor or surety of any Secured Indebtedness.  The taking of
additional security by Mortgagee shall not release or impair the lien, security
interest or other security rights of Mortgagee hereunder or affect the liability
of Mortgagor or of any endorser, guarantor or surety, or improve the right of
any junior lien Mortgagee in the Property (without implying hereby Mortgagee's
consent to any junior lien).

     

    Section
6.6. Acts Not Constituting Waiver
by Mortgagee.  Mortgagee may waive any default without waiving
any other prior or subsequent default.  Mortgagee may remedy any
default without waiving the default remedied.  Neither failure by
Mortgagee to exercise, nor delay by Mortgagee in exercising, nor discontinuance
of the exercise of any right, power or remedy (including but not limited to the
right to accelerate the maturity of the Secured Indebtedness or any part
thereof) upon or after any default shall be construed as a waiver of such
default or as a waiver of the right to exercise any such right, power or remedy
at a later date.  No single or partial exercise by Mortgagee of any
right, power or remedy hereunder shall exhaust the same or shall preclude any
other or further exercise thereof, and every such right, power or remedy
hereunder may be exercised at any time and from time to time.  No
modification or waiver of any provision hereof nor consent to any departure by
Mortgagor therefrom shall in any event be effective unless the same shall be in
writing and signed by Mortgagee and then such waiver or consent shall be
effective only in the specific instance, for the purpose for which given and to
the extent therein specified.  No notice to nor demand on Mortgagor in
any case shall of itself entitle Mortgagor to any other or further notice or
demand in similar or other circumstances.  Remittances in payment of
any part of the Secured Indebtedness other than in the required amount in
immediately available U.S. funds shall not, regardless of any receipt or credit
issued therefor, constitute payment until the required amount is actually
received by Mortgagee in immediately available U.S. funds and shall be made and
accepted subject to the condition that any check or draft may be handled for
collection in accordance with the practice of the collecting bank or
banks.  Acceptance by Mortgagee of any payment in an amount less than
the amount then due on any Secured Indebtedness shall be deemed an acceptance on
account only and shall not in any way excuse the existence of a default
hereunder notwithstanding any notation on or accompanying such partial payment
to the contrary.

     

    
      
        
        

      

      
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    Section
6.7. Mortgagor's
Successors.  If the ownership of the Property or any part
thereof becomes vested in a person other than Mortgagor, Mortgagee may, without
notice to Mortgagor, deal with such successor or successors in interest with
reference to this Mortgage and to the Secured Indebtedness in the same manner as
with Mortgagor, without in any way vitiating or discharging Mortgagor's
liability hereunder or for the payment of the indebtedness or performance of the
obligations secured hereby.  No transfer of the Property, no
forbearance on the part of Mortgagee, and no extension of the time for the
payment of the Secured Indebtedness given by Mortgagee shall operate to release,
discharge, modify, change or affect, in whole or in part, the liability of
Mortgagor hereunder for the payment of the indebtedness or performance of the
obligations secured hereby or the liability of any other person hereunder for
the payment of the indebtedness secured hereby.  Each Mortgagor agrees
that it shall be bound by any modification of this Mortgage or any of the other
Loan Documents made by Mortgagee and any subsequent owner of the Property, with
or without notice to such Mortgagor, and no such modifications shall impair the
obligations of such Mortgagor under this Mortgage or any other Loan
Document.  Nothing in this Section or elsewhere in this Mortgage shall
be construed to imply Mortgagee's consent to any transfer of the
Property.

     

    Section
6.8. Place of
Payment.  All Secured Indebtedness which may be owing hereunder
at any time by Mortgagor shall be payable at the place designated in the Note
(or if no such designation is made, at the address of Mortgagee indicated at the
end of this Mortgage).

     

    Section
6.9. Subrogation to Existing
Liens; Vendor's Lien.  To the extent that proceeds of the Note
are used to pay indebtedness secured by any outstanding lien, security interest,
charge or prior encumbrance against the Property, such proceeds have been
advanced by Mortgagee at Mortgagor's request, and Mortgagee shall be subrogated
to any and all rights, security interests and liens owned by any owner or
Mortgagee of such outstanding liens, security interests, charges or
encumbrances, however remote, irrespective of whether said liens, security
interests, charges or encumbrances are released, and all of the same are
recognized as valid and subsisting and are renewed and continued and merged
herein to secure the Secured Indebtedness, but the terms and provisions of this
Mortgage shall govern and control the manner and terms of enforcement of the
liens, security interests, charges and encumbrances to which Mortgagee is
subrogated hereunder.  It is expressly understood that, in
consideration of the payment of such indebtedness by Mortgagee, Mortgagor hereby
waives and releases all demands and causes of action for offsets and payments in
connection with the said indebtedness.  If all or any portion of the
proceeds of the loan evidenced by the Note or of any other secured indebtedness
has been advanced for the purpose of paying the purchase price for all or a part
of the Property, no vendor's lien is waived; and Mortgagee shall have, and is
hereby granted, a vendor's lien on the Property as cumulative additional
security for the secured indebtedness.  Mortgagee may foreclose under
this Mortgage or under the vendor's lien without waiving the other or may
foreclose under both.

     

    
      
        
        

      

      
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    Section
6.10. Application of Payments to
Certain Indebtedness.  If any part of the Secured Indebtedness
cannot be lawfully secured by this Mortgage or if any part of the Property
cannot be lawfully subject to the lien and security interest hereof to the full
extent of such indebtedness, then all payments made shall be applied on said
indebtedness first in discharge of that portion thereof which is not secured by
this Mortgage.

     

    Section
6.11. Nature of Loan; Compliance
with Usury Laws.  The loan evidenced by the Note is being made
solely for the purpose of carrying on or acquiring a business or commercial
enterprise.  It is the intent of Mortgagor and Mortgagee and all other
parties to the Loan Documents to conform to and contract in strict compliance
with applicable usury law from time to time in effect.  All agreements
between Mortgagee and Mortgagor (or any other party liable with respect to any
indebtedness under the Loan Documents) are hereby limited by the provisions of
this Section which shall override and control all such agreements, whether now
existing or hereafter arising.  In no way, nor in any event or
contingency (including but not limited to prepayment, default, demand for
payment, or acceleration of the maturity of any obligation), shall the interest
taken, reserved, contracted for, charged, chargeable, or received under this
Mortgage, the Note or any other Loan Document or otherwise, exceed the maximum
nonusurious amount permitted by applicable law (the "Maximum
Amount").  If, from any possible construction of any document,
interest would otherwise be payable in excess of the Maximum Amount, any such
construction shall be subject to the provisions of this Section and such
document shall ipso facto be automatically reformed and the interest payable
shall be automatically reduced to the Maximum Amount, without the necessity of
execution of any amendment or new document.  If Mortgagee shall ever
receive anything of value which is characterized as interest under applicable
law and which would apart from this provision be in excess of the Maximum
Amount, an amount equal to the amount which would have been excessive interest
shall, without penalty, be applied to the reduction of the principal amount
owing on the Secured Indebtedness in the inverse order of its maturity and not
to the payment of interest, or refunded to Mortgagor or the other payor thereof
if and to the extent such amount which would have been excessive exceeds such
unpaid principal.  The right to accelerate maturity of the Note or any
other Secured Indebtedness does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and Mortgagee
does not intend to charge or receive any unearned interest in the event of
acceleration.  All interest paid or agreed to be paid to Mortgagee
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full stated term (including any renewal or
extension) of such indebtedness so that the amount of interest on account of
such indebtedness does not exceed the Maximum Amount.  As used in this
Section, the term "applicable law" shall mean the laws of the State of New York
or the federal laws of the United States applicable to this transaction,
whichever laws allow the greater interest, as such laws now exist or may be
changed or amended or come into effect in the future.

     

    
      
        
        

      

      
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    Section
6.12. Releases.

     

    (a) Release of
Mortgage.  If all of the Secured Indebtedness is paid as the
same becomes due and payable and all of the covenants, warranties, undertakings
and agreements made in this Mortgage are kept and performed, and all Swap
Transactions and all other obligations, if any, of Mortgagee for further
advances have been terminated, then, and in that event only, all rights under
this Mortgage shall terminate (except to the extent expressly provided herein
with respect to indemnifications, representations and warranties and other
rights which are to continue following the release hereof) and the Property
shall become wholly clear of the liens, security interests, conveyances and
assignments evidenced hereby, and such liens and security interests shall be
released by Mortgagee in due form at Mortgagor's cost.  Without
limitation, all provisions herein for indemnity of Mortgagee or Mortgagee shall
survive discharge of the Secured Indebtedness, the termination of any and all
Swap Transactions and any foreclosure, release or termination of this
Mortgage.

     

    (b) Partial Releases; No Release
in Default.  Partial releases of the lien of this Mortgage
shall be made in accordance with the terms and provisions of Exhibit C attached
hereto and by this reference made a part hereof, or in accordance with such
other terms and conditions as may subsequently be agreed to by
Mortgagee.  If no such Exhibit C is attached
hereto, then there are no terms and provisions for partial releases, to which
Mortgagee and Mortgagor have agreed at this time.  In any event, no
partial release shall be sought, requested or required if any Default has
occurred which has not been cured.

     

    (c) Effect of Partial
Release.  Mortgagee may, regardless of consideration, cause the
release of any part of the Property from the lien of this Mortgage without in
any manner affecting or impairing the lien or priority of this Mortgage as to
the remainder of the Property.

     

    (d) Release
Fee.  If permitted by applicable law Mortgagor shall pay to
Mortgagee, at the time of each partial or complete release of the lien of this
Mortgage, a release fee in the amount of $25.00 if the release instrument is
delivered to Mortgagee for execution or $50.00, if Mortgagee is required to
prepare the release instrument.  In addition, Mortgagor shall pay to
Mortgagee a fee in the amount of $25.00 for each other document or instrument
which Mortgagor requires the Mortgagee to execute.

     

    Section
6.13. Notices.  All
notices, requests, consents, demands and other communications required or which
any party desires to give hereunder or under any other Loan Document shall be in
writing and, unless otherwise specifically provided in such other Loan Document,
shall be deemed sufficiently given or furnished if delivered by personal
delivery, by nationally recognized overnight courier service, or by registered
or certified United States mail, postage prepaid, addressed to the party to whom
directed at the addresses specified in this Mortgage (unless changed by similar
notice in writing given by the particular party whose address is to be changed)
or by facsimile.  Any such notice or communication shall be deemed to
have been given either at the time of personal delivery or, in the case of
courier or mail, as of the date of first attempted delivery at the address and
in the manner provided herein, or, in the case of facsimile, upon receipt;
provided that, service of a notice required by any applicable statute shall be
considered complete when the requirements of that statute are
met.  Notwithstanding the foregoing, no notice of change of address
shall be effective except upon receipt.  This Section shall not be
construed in any way to affect or impair any waiver of notice or demand provided
in any Loan Document or to require giving of notice or demand to or upon any
person in any situation or for any reason.

     

    
      
        
        

      

      
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    Section
6.14. Invalidity of Certain
Provisions.  A determination that any provision of this
Mortgage is unenforceable or invalid shall not affect the enforceability or
validity of any other provision and the determination that the application of
any provision of this Mortgage to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances.

     

    Section
6.15. Gender; Titles;
Construction.  Within this Mortgage, words of any gender shall
be held and construed to include any other gender, and words in the singular
number shall be held and construed to include the plural, unless the context
otherwise requires.  Titles appearing at the beginning of any
subdivisions hereof are for convenience only, do not constitute any part of such
subdivisions, and shall be disregarded in construing the language contained in
such subdivisions.  The use of the words "herein," "hereof,"
"hereunder" and other similar compounds of the word "here" shall refer to this
entire Mortgage and not to any particular Article, Section, paragraph or
provision.  The term "person" and words importing persons as used in
this Mortgage shall include firms, associations, partnerships (including limited
partnerships), joint ventures, trusts, corporations, limited liability companies
and other legal entities, including public or governmental bodies, agencies or
instrumentalities, as well as natural persons.

     

    Section
6.16. Reporting
Compliance.  Mortgagor agrees to comply with any and all
reporting requirements applicable to the transaction evidenced by the Note and
secured by this Mortgage which are set forth in any law, statute, ordinance,
rule, regulation, order or determination of any governmental authority,
including but not limited to The International Investment Survey Act of 1976,
The Agricultural Foreign Investment Disclosure Act of 1978, The Foreign
Investment in Real Property Tax Act of 1980 and the Tax Reform Act of 1984 and
further agrees upon request of Mortgagee to furnish Mortgagee with evidence of
such compliance.

     

    Section
6.17. Mortgagee's
Consent.  Except where otherwise expressly provided herein, in
any instance hereunder where the approval, consent or the exercise of judgment
of Mortgagee is required or requested, (a) the granting or denial of such
approval or consent and the exercise of such judgment shall be within the sole
discretion of Mortgagee, and Mortgagee shall not, for any reason or to any
extent, be required to grant such approval or consent or exercise such judgment
in any particular manner, regardless of the reasonableness of either the request
or Mortgagee's judgment, and (b) no approval or consent of Mortgagee shall be
deemed to have been given except by a specific writing intended for the purpose
and executed by an authorized representative of Mortgagee.

     

    Section
6.18. Mortgagor.  Unless
the context clearly indicates otherwise, as used in this Mortgage, "Mortgagor"
means the Mortgagors named in Section 1.1 hereof or any of them.  The
obligations of Mortgagor hereunder shall be joint and several.  If any
Mortgagor, or any signatory who signs on behalf of any Mortgagor, is a
corporation, partnership or other legal entity, Mortgagor and any such
signatory, and the person or persons signing for it, represent and warrant to
Mortgagee that this instrument is executed, acknowledged and delivered by
Mortgagor's duly authorized representatives.  If Mortgagor is an
individual, no power of attorney granted by Mortgagor herein shall terminate on
Mortgagor's disability.

     

    
      
        
        

      

      
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    Section
6.19. Execution;
Recording.  This Mortgage has been executed in several
counterparts, all of which are identical, and all of which counterparts together
shall constitute one and the same instrument.  The date or dates
reflected in the acknowledgments hereto indicate the date or dates of actual
execution of this Mortgage, but such execution is as of the date shown on the
first page hereof, and for purposes of identification and reference the date of
this Mortgage shall be deemed to be the date reflected on the first page
hereof.  Mortgagor will cause this Mortgage and all amendments and
supplements thereto and substitutions therefor and all financing statements and
continuation statements relating thereto to be recorded, filed, re-recorded and
refiled in such manner and in such places as  or Mortgagee shall
reasonably request and will pay all such recording, filing, re-recording and
refiling taxes, fees and other charges.

     

    Section
6.20. Successors and
Assigns.  The terms, provisions, covenants and conditions
hereof shall be binding upon Mortgagor, and the heirs, devisees,
representatives, successors and assigns of Mortgagor, and shall inure to the
benefit of Mortgagee and shall constitute covenants running with the
Land.  All references in this Mortgage to Mortgagor shall be deemed to
include all such heirs, devisees, representatives, successors and assigns of
Mortgagor.

     

    Section
6.21. Modification or
Termination.  The Loan Documents may only be modified or
terminated by a written instrument or instruments intended for that purpose and
executed by the party against which enforcement of the modification or
termination is asserted.  Any alleged modification or termination
which is not so documented shall not be effective as to any party.

     

    Section
6.22. No Partnership,
Etc.  The relationship between Mortgagee and Mortgagor is
solely that of mortgagee and mortgagor.  Mortgagee has no fiduciary or
other special relationship with Mortgagor.  Nothing contained in the
Loan Documents is intended to create any partnership, joint venture, association
or special relationship between Mortgagor and Mortgagee or in any way make
Mortgagee a co-principal with Mortgagor with reference to the Property. All
agreed contractual duties between or among Mortgagee and Mortgagor
and  are set forth herein and in the other Loan Documents and any
additional implied covenants or duties are hereby disclaimed.  Any
inferences to the contrary of any of the foregoing are hereby expressly
negated.

     

    Section
6.23. Intentionally
Omitted.

     

    Section
6.24. Applicable
Law.  THIS MORTGAGE, AND ITS VALIDITY, ENFORCEMENT AND
INTERPRETATION, SHALL BE GOVERNED BY NEW YORK LAW AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH AND PURSUANT TO THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES
FEDERAL LAW, EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND
EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION
OTHER THAN THE STATE OF NEW YORK ARE GOVERNED BY THE LAWS OF SUCH OTHER
JURISDICTION.

     

    
      
        
        

      

      
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    Section
6.25. Entire
Agreement.  The Loan Documents constitute the entire
understanding and agreement between Mortgagor and Mortgagee with respect to the
transactions arising in connection with the Secured Indebtedness and supersede
all prior written or oral understandings and agreements between Mortgagor and
Mortgagee with respect to the matters addressed in the Loan
Documents.  Mortgagor hereby acknowledges that, except as incorporated
in writing in the Loan Documents, there are not, and were not, and no persons
are or were authorized by Mortgagee to make, any representations,
understandings, stipulations, agreements or promises, oral or written, with
respect to the matters addressed in the Loan Documents.

     

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

     

    Section
6.27. WAIVER OF JURY
TRIAL.  WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES'
AGREEMENT TO ARBITRATE ANY DISPUTE AS SET FORTH IN THIS MORTGAGE, TO THE EXTENT
ANY DISPUTE IS NOT SUBMITTED TO ARBITRATION OR IS DEEMED BY THE ARBITRATOR OR BY
ANY COURT WITH JURISDICTION TO BE NOT ARBITRABLE OR NOT REQUIRED TO BE
ARBITRATED, MORTGAGOR AND MORTGAGEE WAIVE TRIAL BY JURY IN RESPECT OF ANY SUCH
DISPUTE AND ANY ACTION ON SUCH DISPUTE.  THIS WAIVER IS KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY MORTGAGOR AND MORTGAGEE , AND MORTGAGOR AND
MORTGAGEE HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN
MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT.  THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THE LOAN
DOCUMENTS.  MORTGAGOR AND MORTGAGEE ARE EACH HEREBY AUTHORIZED TO FILE
A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER
OF JURY TRIAL.  MORTGAGOR FURTHER REPRESENTS AND WARRANTS THAT IT HAS
BEEN REPRESENTED IN THE SIGNING OF THIS MORTGAGE AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE
REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT
IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    Section
6.28. Cross-Default.  The
Loan shall be cross-defaulted with all other loans which Mortgagor shall have
from Lenders during the term of the Loan, whether existing as of the date of
this Agreement subsequently made.  A default under any of the
above-described loans shall constitute a Default under the Loan.  A
Default under the Loan shall constitute a Default under the above-described
other loans.  To the extent not prohibited by applicable law, if
Mortgagee, at its option, avails itself of this cross-default provision,
Mortgagee shall have the option to pursue its remedies in any combinations and
against any or all of Mortgagee's security for the aforesaid loans, whether
successively, concurrently or otherwise.

     

    Section
6.29. Substitute
Mortgages.  Mortgagor and Mortgagee shall, upon their mutual
agreement to do so, execute such documents as may be necessary in order to
effectuate the modification hereof, including the execution of substitute
mortgages, so as to create two (2) or more liens on the Mortgaged Property in
such amounts as may be mutually agreed upon but in no event to exceed, in the
aggregate, the Mortgage Amount; in such event, Mortgagor covenants and agrees to
pay the reasonable fees and expenses of Mortgagee and its counsel in connection
with any such modification.

     

    Section
6.30. Satisfaction or Assignment
of Mortgage.  Upon payment in full of all sums, and the
performance of all obligations, secured hereby in accordance with the terms and
conditions of this Mortgage and the other Loan documents, Mortgagee shall
deliver a satisfaction or release of this Mortgage or, at Mortgagor's option to
be exercised in writing, an assignment hereof, in either case in proper form of
recording.  As a condition to any such satisfaction or assignment,
Mortgagor covenants and agrees to pay Mortgagee's reasonable fees and expenses
(including attorneys' fees and expenses) in connection
therewith.  Upon any such satisfaction or assignment, Mortgagee shall,
automatically and without the need for any other further documentation, be
absolutely and unconditionally released from any and all claims or liabilities
in connection with the Loan.  In addition, Mortgagor hereby
indemnifies and agrees to hold Mortgagee harmless from and against any and all
claims and liabilities arising out of the satisfaction or assignment hereof,
such indemnification to survive any such satisfaction or
assignment.

     

    Section
6.31. New York
Provisions.  (a) Mortgagor hereby makes the following
statement:  "This Mortgage does not cover real property principally
improved or to be improved by one (1) or more structures containing in the
aggregate not more than six (6) residential dwelling, each having its own
separate cooking facilities."  and (b) the covenants and conditions
contained herein, other than those included in the New York Statutory Short Form
of Mortgage, shall be construed as affording to Mortgagee rights additional to,
and not exclusive of, the rights conferred under the provisions of Section 254
of the Real Property Law of the State of New York.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    IN WITNESS
WHEREOF, Mortgagor has executed this Mortgage as an instrument under seal as of
the date first written on page 1 hereof.

     

    
      
        	 	ACADIA
      CORTLANDT LLC, a Delaware limited liability company	 
	 	 	 	 
	
                 

              	
                
                  By

                

              	
                 

              	 
      
	 	 	
                Robert
      Masters

              	 
	 	 	
                Senior
      Vice President

              	 
	 	 	 	 

      

    

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
    

     

    
      	
              STATE
      OF NEW YORK

            	
              )

            	 	 
	 	
              :    ss.:

            	 	 
	
              COUNTY
      OF NEW YORK

            	
              )

            	 	 

    

     

    
 

     

    On the
29th day of July in the year 2009, before me, the undersigned, a notary public
in and for said state, personally appeared Robert Masters, personally known to
me or proved to me on the basis of satisfactory evidence to be the individual(s)
whose name(s) is (are) subscribed to the within instrument and acknowledged to
me that he/she/they executed the same in his/her/their capacity(ies), and that
by his/her/their signature(s) on the instrument, the individual(s), or the
person upon behalf of which the individual(s) acted, executed the
instrument.

     

    

    
      
         

        
          	 	 	 	 
	 	 	
                  Notary
      Public

                	 
	
                  My
      Commission Expires:

                	 	 	 
	 	 	 	 	 

        

         

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
EXHIBIT
A

    

    Land

    

    

    ALL THAT
CERTAIN PARCEL OF LAND SITUATE IN THE TOWN OF CORTLANDT, COUNTY OF WESTCHESTER
AND STATE OF NEW YORK THAT IS A PORTION OF THOSE LANDS DESIGNATED PARCEL 1,
PARCEL 2A AND PARCEL 2B ON THAT CERTAIN "RESUBDIVISION PLAT OF FILED MAP NO.
17837 SECTION 1 MID-WESTCHESTER INDUSTRIAL PARK, INC.," WHICH WAS FILED IN THE
WESTCHESTER COUNTY CLERK'S OFFICE ON OCTOBER 15, 1984 AS MAP NO. 21741 THAT IS
BOUNDED AND DESCRIBED AS FOLLOWS:

     

    BEGINNING
AT A POINT ON THE SOUTHEASTERLY LINE OF U.S. ROUTE 6 (AKA 5 MILE TURNPIKE AND/OR
EAST MAIN STREET AND/OR STATE HIGHWAY 1309) WHERE IT IS MET BY THE LINE DIVIDING
THE LANDS HEREIN DESCRIBED ON THE NORTHEAST FROM LANDS DESIGNATED LOT NO. 21 ON
THAT CERTAIN "MAP NO. 1 GULL MANOR..," WHICH WAS FILED IN THE WESTCHESTER COUNTY
CLERK'S OFFICE ON MARCH 25, 1954 AS MAP NO. 8930, WHICH POINT OCCUPIES
COORDINATE POSITION

     

    N
476,045.23 (Y)

    E
625,146.49 (X) OF THE NEW YORK STATE COORDINATE SYSTEM, EAST ZONE;

    

    THENCE
FROM THE SAID POINT OF BEGINNING NORTHEASTERLY ALONG THE SOUTHEASTERLY LINE OF
U.S. ROUTE 6 NORTH 31° 31' 51" EAST 202.41 FEET AND TO A POINT AT THE
SOUTHWESTERLY LINE OF LOT NO. 4 SHOWN ON THAT CERTAIN MAP ENTITLED "SECTION NO.
1 MID-WESTCHESTER INDUSTRIAL PARK" WHICH WAS FILED IN THE WESTCHESTER COUNTY
CLERK'S OFFICE ON OCTOBER 16, 1972 AS MAP NO. 17837;

     

    THENCE
ALONG THE SOUTHWESTERLY, SOUTHEASTERLY AND NORTHEASTERLY LINES OF LOT NO. 4
SHOWN ON FILED MAP NO. 17837 THE FOLLOWING COURSES:

     

    SOUTH 54°
41' 49" EAST 400.00 FEET;

    NORTH 35°
15' 51" EAST 200.00 FEET;

    NORTH 54°
41' 49" WEST 201.75 FEET TO A POINT AT THE LINE OF LANDS NOW OR FORMERLY OF
MOBIL CENTERS, INC;

    

    THENCE
ALONG THE SAID MOBIL CENTERS, INC. LANDS:

     

    NORTH 35°
15' 51" EAST 150.02 FEET AND;

    NORTH 54°
41' 49" WEST 174.98 FEET TO A POINT;

     

    THENCE
STILL ALONG THE SAID LANDS OF MOBIL CENTERS, INC. WESTERLY ON A TANGENT CURVE TO
THE LEFT, THE CENTRAL ANGLE OF WHICH IS 90° 02' 20", THE RADIUS OF WHICH 25.00
FEET FOR 39.29 FEET TO ANOTHER POINT ON THE SAID SOUTHEASTERLY LINE OF U.S.
ROUTE 6;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    THENCE
NORTHEASTERLY ONCE AGAIN ALONG THE SAID SOUTHEASTERLY LINE OF U.S. ROUTE
6;

     

    NORTH 35°
15' 51" EAST 103.05 FEET AND;

    NORTH 34°
16' 11" EAST 16.52 FEET TO A POINT AT THE LINE OF LANDS NOW OR FORMERLY OF W.W.
GEIS, JR.;

     

    THENCE
ALONG AND AROUND THE SAID W.W GEIS, JR. LANDS THE FOLLOWING, FIRST TURNING ABOUT
AND SOUTHERLY ON A TANGENT CURVE TO THE LEFT, THE CENTRAL ANGLE OF WHICH IS 88°
58' 00", THE RADIUS OF WHICH IS 25.00 FEET FOR 38.82 FEET AND THEN FOLLOWING
COURSES:

     

    SOUTH 54°
41' 49" EAST 187.41 FEET;

    SOUTH 87°
58' 31" EAST 50.19 FEET;

    NORTH 34°
14' 31" EAST 293.26 FEET AND;

    NORTH 55°
45' 29" WEST 248.82 FEET TO STILL ANOTHER POINT ON THE SOUTHEASTERLY LINE OF
U.S. ROUTE 6;

     

    THENCE
NORTHEASTERLY ONCE AGAIN ALONG THE SAID SOUTHEASTERLY LINE OF U.S. ROUTE
6;

     

    NORTH 38°
26' 11" EAST 91.89 FEET AND;

     

    NORTH 36°
40' 11" EAST 175.50 FEET TO A POINT AT THE LINE LAND NOW OR FORMERLY OF HOME
DEPOT U.S.A., INC. LANDS, THE FOLLOWING FIRST

     

    SOUTH 53°
24' 23' EAST 28.04 FEET

     

    THEN ON A
TANGENT CURVE TO THE RIGHT, THE CENTRAL ANGLE OF WHICH IS 44° 59' 45", THE
RADIUS OF WHICH IS 100.00 FEET FOR 78.53 FEET,

     

    THEN SOUTH
08° 24' 38" EAST 170.39 FEET

     

    THEN ON A
TANGENT CURVE TO THE RIGHT, THE CENTRAL ANGLE OF WHICH IS 42° 53' 52", THE
RADIUS OF WHICH IS 330.00 FEET FOR 245.35 FEET, AND THEN THE FOLLOWING
COURSES:

     

    SOUTH 34°
11' 14" WEST 7.14 FEET;

    SOUTH 42°
10' 35" EAST 571.35 FEET;

    NORTH 81°
40' 00" EAST 752.50 FEET;

    NORTH 42°
10' 35" WEST 546.00 FEET;

    SOUTH 47°
49' 25" WEST 12.00 FEET;

    NORTH 42°
10' 35" WEST 334.49 FEET;

    NORTH 47°
49' 25" EAST 64.36 FEET;

    NORTH 42°
10' 35" WEST 551.64 FEET TO A POINT ON THE SOUTHEASTERLY LINE OF U.S. ROUTE
6;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    THENCE
NORTHEASTERLY ALONG THE SOUTHEASTERLY LINE OF U.S. ROUTE 6 THE FOLLOWING
COURSES:

     

    NORTH 43°
07' 31" EAST 240.77 FEET;

    NORTH 46°
43' 08" EAST 200.86 FEET;

    NORTH 47°
51' 46" EAST 169.07 FEET;

    NORTH 54°
16' 42" EAST 77.64 FEET;

    NORTH 43°
47' 18" EAST 103.43 FEET;

    NORTH 06°
57' 25" EAST 7.49 FEET;

    NORTH 44°
52' 56" EAST 141.98 FEET;

    NORTH 56°
38' 06" EAST 194.10 FEET;

    NORTH 47°
40' 06" EAST 31.98 FEET TO A POINT AT THE LINE DIVIDING PARCEL NO. 2A, ON THE
SOUTHWEST FROM PARCEL NO. 1, ON THE NORTHEAST, BOTH AS SHOWN ON SAID FILED MAP
NO. 21741, WHICH POINT OCCUPIES COORDINATE POSITION

     

    N
478,107.32 (Y)

    E
626,930.25 (X) OF THE NEW YORK STATE COORDINATE SYSTEM, EAST ZONE;

     

    THENCE
STILL ALONG THE SOUTHEASTERLY LINE OF U.S. ROUTE 6 THE FOLLOWING
COURSES:

     

    NORTH 47°
40' 06" EAST 15.49 FEET;

    NORTH 57°
07' 47" EAST 41.34 FEET;

    NORTH 46°
37' 24" EAST 65.92 FEET;

    NORTH 60°
47' 16" EAST 135.27 FEET;

    NORTH 58°
29' 38" EAST 200.48 FEET;

    NORTH 76°
26' 07" EAST 65.57 FEET;

    NORTH 53°
06' 18" EAST 114.53 FEET;

    NORTH 59°
20' 46" EAST 157.01 FEET;

    NORTH 67°
37' 05" EAST 102.26 FEET;

    NORTH 39°
31' 22" EAST 47.05 FEET;

    NORTH 62°
09' 00" EAST 123.28 FEET;

    NORTH 59°
26' 00" EAST 57.40 FEET;

    NORTH 58°
13' 00" EAST 81.60 FEET;

    NORTH 61°
59' 00" EAST 41.60 FEET;

    NORTH 38°
58' 00" EAST 17.42 FEET;

    NORTH 61°
26' 39" EAST 147.75 FEET;

    NORTH 57°
24' 50" EAST 100.18 FEET;

    NORTH 63°
24' 40" EAST 64.74 FEET TO A POINT AT THE LINE OF LANDS NOW OR FORMERLY OF
BERKO, WHICH POINT OCCUPIES COORDINATE POSITION

    

    N
478.912.07 (Y)

    E
628,275.78 (X) OF THE NEW YORK STATE COORDINATE SYSTEM, EAST ZONE;

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    THENCE
SOUTHERLY ALONG THE SAID BERKO LANDS AND CONTINUING ALONG LANDS NOW OR FORMERLY
OF FELDMAN, NOW OR FORMERLY OF BERTINO, AND LANDS NOW OR FORMERLY OF MOHEGAN
REALTY CO., THE FOLLOWING FIVE (5) COURSES AND DISTANCES:

     

    SOUTH 8°
21' 49" EAST 184.14 FEET;

    SOUTH 7°
23' 59" EAST 204.45 FEET;

    SOUTH 8°
27' 49" EAST 457.05 FEET;

    SOUTH 7°
57' 49" EAST 226.72 FEET;

    SOUTH 8°
03' 49" EAST 841.87 FEET TO LANDS NOW OR FORMERLY OF BOGIN, WHICH POINT OCCUPIES
COORDINATE POSITION

     

    N
477,016.99 (Y)

    E
628,545.67 (X) OF THE NEW YORK STATE COORDINATE SYSTEM, EAST ZONE;

     

    THENCE
ALONG SAID LANDS ON A COURSE OF SOUTH 84° 45' 51" WEST FOR A DISTANCE OF 565.62
FEET TO A POINT THAT IS A CORNER THEREOF, WHICH POINT IS AT THE SOUTHEASTERLY
END OF THE LINE DIVIDING PARCEL NO. 2A, ON THE SOUTHWEST FROM PARCEL NO 1, ON
THE NORTHEAST, BOTH AS SHOWN ON SAID FILED MAP 21741, WHICH POINT OCCUPIES
COORDINATE POSITION

     

    N
476,965.38 (Y)

    E
627,982.41 (X) OF THE NEW YORK STATE COORDINATE SYSTEM, EAST ZONE;

     

    THENCE
CONTINUING ALONG LANDS NOW OR FORMERLY OF BOGIN AND DEANIN ON A COURSE OF SOUTH
8° 44' 49" EAST FOR A DISTANCE OF 775.84 FEET TO LANDS NOW OR FORMERLY OF
MCKEEL;

     

    THENCE
ALONG THE SAID MCKEEL LANDS AND IN PART ALONG THE ORIGINAL CENTER LINE OF A
BROOK AS THE SAID CENTER LINE APPEARS ON THAT CERTAIN MAP ENTITLED "SURVEY...
MIDWESTCHESTER INDUSTRIAL PARK INC...," WHICH WAS FILED IN THE WESTCHESTER
COUNTY CLERK'S OFFICE ON JANUARY 24, 1969 ON MAP NO. 16581 THE FOLLOWING COURSES
AND DISTANCES:

     

    SOUTH 83°
29' 51" WEST 1204.04 FEET;

    SOUTH 64°
31' 01" WEST 35.43 FEET;

    SOUTH 87°
29' 41" WEST 100.66 FEET;

    SOUTH 79°
30' 01" WEST 100.04 FEET;

    SOUTH 80°
21' 21" WEST 99.99 FEET;

    SOUTH 82°
37' 11" WEST 219.69 FEET;

    SOUTH 81°
10' 01" WEST 102.96 FEET;

    SOUTH 74°
14' 51" WEST 99.92 FEET;

    SOUTH 75°
42' 31" WEST 81.58 FEET;

    SOUTH 73°
18' 21" WEST 101.89 FEET;

    SOUTH 87°
12' 21" WEST 100.12 FEET;

    SOUTH 89°
38' 51" WEST 100.44 FEET;

    SOUTH 84°
23' 51" WEST 107.95 FEET;

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    SOUTH 81°
42' 51" WEST 119.29 FEET;

    SOUTH 58°
38' 31" WEST 47.83 FEET;

    SOUTH 48°
18' 59" WEST 109.79 FEET AND;

    NORTH 68°
22' 19" WEST 32.81 FEET TO A POINT AT THE LINE OF LANDS NOW OR FORMERLY OF
SHELBY-COLERIDGE HOLDING CORP;

     

    THENCE
ALONG THE SAID SHELBY-COLERIDGE HOLDING CORP. LANDS AND ALONG THE NORTHEASTERLY
LINES OF LOT NO. 19 AND LOT 21 AS SHOWN ON THE AFOREMENTIONED "MAP NO. 1 GULL
MANOR...'' FILED MAP NO. 8930, THE FOLLOWING COURSES:

     

    NORTH 68°
14' 09" WEST 17.28 FEET;

    SOUTH 89°
44' 51" WEST 61.00 FEET;

    NORTH 46°
00' 09" WEST 54.45 FEET;

    NORTH 61°
11' 09" WEST 72.08 FEET;

    NORTH 55°
43' 09" WEST 93.25 FEET TO THE AFOREMENTIONED SOUTHEASTERLY LINE OF U.S. ROUTE 6
AND THE POINT OR PLACE OF BEGINNING.

     

    TOGETHER
WITH THE BENEFITS AND SUBJECT TO THE BURDENS OF THE GRANT OF SANITARY SEWER
EASEMENT MADE BY AND BETWEEN HARDEE'S AND MID-WESTCHESTER INDUSTRIAL PARK, INC.
RECORDED IN LIBER 7137 PAGE 92.

     

    TOGETHER
WITH THE BENEFITS OF THE EASEMENT RECORDED IN THE WESTCHESTER COUNTY CLERK'S
LIBER 7099 OF DEEDS AT PAGE 228 AND REPEATED IN LIBER 7143 OF DEEDS AT PAGE 449
AND LIBER 7235 OF DEEDS AT PAGE 88.

     

    TOGETHER
WITH THE BENEFITS OF THE DECLARATION AND GRANT OF RECIPROCAL EASEMENTS MADE BY
CORTLANDT TOWN CENTER LIMITED PARTNERSHIP AND RECORDED IN THE WESTCHESTER COUNTY
CLERK'S LIBER 11673 OF DEEDS AT PAGE 78.

     

    TOGETHER
WITH THE BENEFITS OF THE RECIPROCAL EASEMENT AND OPERATION AGREEMENT MADE BY
BETWEEN CORTLANDT TOWN CENTER LIMITED PARTNERSHIP AND HOME DEPOT U.S.A. INC. AND
RECORDED IN THE WESTCHESTER COUNTY CLERK'S LIBER 11618 OF DEEDS AT PAGE
1.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    EXHIBIT
B

    

    Permitted
Encumbrances

    

    

    Those
exceptions set forth in Schedule B of that certain title insurance policy issued
by First American Title Insurance Company of New York under their title no.
3008-272268 insuring the lien of this Mortgage.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    EXHIBIT
C

    

    Partial
Release

    

    

    NONE

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [Initial
Advance]

    
      
        NOTE

        

         

        
          	$45,000,000	July 29,
      2009

        

        
 

        FOR VALUE
RECEIVED, ACADIA CORTLANDT LLC, a Delaware limited liability company
("Borrower", whether one or more) hereby promises to pay to the order of Bank of
America, N.A. ("Lender") under that certain Loan Agreement (defined below) among
Borrower and Bank of America N.A., a national banking association and
administrative agent (together with any and all of its successors and assigns,
"Administrative Agent") for the benefit of Lenders from time to time a party to
that certain Loan Agreement (the "Loan Agreement") of even date herewith,
without offset, in immediately available funds in lawful money of the United
States of America, at Administrative Agent's Office as defined in the Loan
Agreement, the principal sum of Forty-Five Million Dollars ($45,000,000) (or the
unpaid balance of all principal advanced against this Note, if that amount is
less), together with interest on the unpaid principal balance of this Note from
day to day outstanding as hereinafter provided.

         

        1. Note; Interest; Payment
Schedule and Maturity Date.  This Note is one of the Initial
Advance Notes referred to in Loan Agreement and is entitled to the benefits
thereof. The entire principal balance of this Note then unpaid shall be due and
payable at the times as set forth in the Loan Agreement.  Accrued
unpaid interest shall be due and payable at the times and at the interest rate
as set forth in the Loan Agreement until all principal and accrued interest
owing on this Note shall have been fully paid and satisfied.  Any
amount not paid when due and payable hereunder shall, to the extent permitted by
applicable Law, bear interest and if applicable a late charge as set forth in
the Loan Agreement.

         

        2. Security; Loan
Documents.  The security for this Note includes a Mortgage,
Assignment of Leases and Rents and Security Agreement in the amount of
$45,000,000 (which, as it may have been or may be amended, restated, modified or
supplemented from time to time, is herein called the "Mortgage") dated as of
July 29, 2009 from Borrower to Administrative Agent covering certain
property in the Town of Cortlandt, Westchester County, New York described
therein (the "Property").  This Note, the Mortgage, the Loan Agreement
and all other documents now or hereafter securing, guaranteeing or executed in
connection with the loan evidenced by this Note (the "Loan"), are, as the same
have been or may be amended, restated, modified or supplemented from time to
time, herein sometimes called individually a "Loan Document" and together the
"Loan Documents".

         

        3. Defaults.

         

        (a) It shall
be a default ("Default") under this Note and each of the other Loan Documents if
(i) any principal, interest or other amount of money due under this Note is not
paid in full when due, regardless of how such amount may have become due; (ii)
any covenant, agreement, condition, representation or warranty herein or in any
other Loan Documents is not fully and timely performed, observed or kept; or
(iii) there shall occur any default or event of default under the Mortgage or
any other Loan Document.  Upon the occurrence of a Default,
Administrative Agent on behalf of Lenders shall have the rights to declare the
unpaid principal balance and accrued but unpaid interest on this Note, and all
other amounts due hereunder and under the other Loan Documents, at once due and
payable (and upon such declaration, the same shall be at once due and payable),
to foreclose any liens and security interests securing payment hereof and to
exercise any of its other rights, powers and remedies under this Note, under any
other Loan Document, or at Law or in equity.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        (b) All of the
rights, remedies, powers and privileges (together, "Rights") of Administrative
Agent on behalf of Lenders provided for in this Note and in any other Loan
Document are cumulative of each other and of any and all other Rights at Law or
in equity.  The resort to any Right shall not prevent the concurrent
or subsequent employment of any other appropriate Right.  No single or
partial exercise of any Right shall exhaust it, or preclude any other or further
exercise thereof, and every Right may be exercised at any time and from time to
time.  No failure by Administrative Agent or Lenders to exercise, nor
delay in exercising any Right, including but not limited to the right to
accelerate the maturity of this Note, shall be construed as a waiver of any
Default or as a waiver of any Right.  Without limiting the generality
of the foregoing provisions, the acceptance by Lender from time to time of any
payment under this Note which is past due or which is less than the payment in
full of all amounts due and payable at the time of such payment, shall not (i)
constitute a waiver of or impair or extinguish the right of Administrative Agent
or Lenders to accelerate the maturity of this Note or to exercise any other
Right at the time or at any subsequent time, or nullify any prior exercise of
any such Right, or (ii) constitute a waiver of the requirement of punctual
payment and performance or a novation in any respect.

         

        (c) If any
holder of this Note retains an attorney in connection with any Default or at
maturity or to collect, enforce or defend this Note or any other Loan Document
in any lawsuit or in any probate, reorganization, bankruptcy, arbitration or
other proceeding, or if Borrower sues any holder in connection with this Note or
any other Loan Document and does not prevail, then Borrower agrees to pay to
each such holder, in addition to principal, interest and any other sums owing to
Lenders hereunder and under the other Loan Documents, all costs and expenses
incurred by such holder in trying to collect this Note or in any such suit or
proceeding, including, without limitation, attorneys' fees and expenses,
investigation costs and all court costs, whether or not suit is filed hereon,
whether before or after the Maturity Date, or whether in connection with
bankruptcy, insolvency or appeal, or whether collection is made against Borrower
or any guarantor or endorser or any other person primarily or secondarily liable
hereunder.

         

        4. Heirs, Successors and
Assigns.  The terms of this Note and of the other Loan
Documents shall bind and inure to the benefit of the heirs, devisees,
representatives, successors and assigns of the parties.  The foregoing
sentence shall not be construed to permit Borrower to assign the Loan except as
otherwise permitted under the Loan Documents.  As further provided in
the Loan Agreement, a Lender may, at any time, sell, transfer, or assign all or
a portion of its interest in this Note, the Mortgage and the other Loan
Documents, as set forth in the Loan Agreement.

         

        5. General
Provisions.  Time is of the essence with respect to Borrower's
obligations under this Note.  If more than one person or entity
executes this Note as Borrower, all of said parties shall be jointly and
severally liable for payment of the indebtedness evidenced
hereby.  Borrower and all sureties, endorsers, guarantors and any
other party now or hereafter liable for the payment of this Note in whole or in
part, hereby severally (a) waive demand, presentment for payment, notice of
dishonor and of nonpayment, protest, notice of protest, notice of intent to
accelerate, notice of acceleration and all other notices (except any notices
which are specifically required by this Note or any other Loan Document), filing
of suit and diligence in collecting this Note or enforcing any of the security
herefor; (b) agree to any substitution, subordination, exchange or release of
any such security or the release of any party primarily or secondarily liable
hereon; (c) agree that neither Administrative Agent nor any Lender shall be
required first to institute suit or exhaust its remedies hereon against Borrower
or others liable or to become liable hereon or to perfect or enforce its rights
against them or any security herefor; (d) consent to any extensions or
postponements of time of payment of this Note for any period or periods of time
and to any partial payments, before or after maturity, and to any other
indulgences with respect hereto, without notice thereof to any of them; and (e)
submit (and waive all rights to object) to non-exclusive personal jurisdiction
of any state or federal court sitting in the city and county, and venue in the
city or county, in which payment is to be made as specified in the first
paragraph of Page 1 of this Note, for the enforcement of any and all obligations
under this Note and the Loan Documents; (f) waive the benefit of all homestead
and similar exemptions as to this Note; (g) agree that their liability under
this Note shall not be affected or impaired by any determination that any
security interest or lien taken by Lender to secure this Note is invalid or
unperfected; and (h) hereby subordinate any and all rights against Borrower and
any of the security for the payment of this Note, whether by subrogation,
agreement or otherwise, until this Note is paid in full.  A
determination that any provision of this Note is unenforceable or invalid shall
not affect the enforceability or validity of any other provision and the
determination that the application of any provision of this Note to any person
or circumstance is illegal or unenforceable shall not affect the enforceability
or validity of such provision as it may apply to other persons or
circumstances.  This Note may not be amended except in a writing
specifically intended for such purpose and executed by the party against whom
enforcement of the amendment is sought.  Captions and headings in this
Note are for convenience only and shall be disregarded in construing
it.  THIS NOTE, AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION,
SHALL BE GOVERNED BY NEW YORK LAW (WITHOUT REGARD TO ANY CONFLICT OF LAWS
PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

         

        6. Notices.  Any
notice, request, or demand to or upon Borrower or Lender shall be deemed to have
been properly given or made when delivered in accordance with the Loan
Agreement.

         

        7. No
Usury.  It is expressly stipulated and agreed to be the intent
of Borrower, Administrative Agent and all Lenders at all times to comply with
applicable state Law or applicable United States federal Law (to the extent that
it permits a Lender to contract for, charge, take, reserve, or receive a greater
amount of interest than under state Law) and that this Section shall control
every other covenant and agreement in this Note and the other Loan
Documents.  If applicable state or federal Law should at any time be
judicially interpreted so as to render usurious any amount called for under this
Note or under any of the other Loan Documents, or contracted for, charged,
taken, reserved, or received with respect to the Loan, or if Administrative
Agent's exercise of the option to accelerate the Maturity Date, or if any
prepayment by Borrower results in Borrower having paid any interest in excess of
that permitted by applicable Law, then it is Administrative Agent's and each
Lender's express intent that all excess amounts theretofore collected by
Administrative Agent or any Lender shall be credited on the principal balance of
this Note and all other indebtedness and the provisions of this Note and the
other Loan Documents shall immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new documents, so as to comply with the applicable Law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder or thereunder.  All sums paid or agreed to be paid to
Lenders for the use, forbearance, or detention of the Loan shall, to the extent
permitted by applicable Law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the maximum
lawful rate from time to time in effect and applicable to the Loan for so long
as the Loan is outstanding.

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

         

        THE LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.

         

        THERE ARE
NO ORAL AGREEMENTS BETWEEN THE PARTIES.

         

        

        

        [Remainder
of page intentionally left blank]

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

        IN WITNESS
WHEREOF, Borrower has duly executed this Note under seal as of the date first
above written.

        
        

         

        
          	 	ACADIA CORTLANDT LLC,
      a Delaware limited liability company
	 	 	 
	 	 	 
	 	By 	 
	 	 	
                  Robert
      Masters

                  Senior
      Vice President

                

        

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                SECTION:

              	
                24.10

              

      

      
        	
                BLOCK:

              	
                1

              

      

      
        	
                LOTS:

              	
                1,
      1.2, 2 and 3

              

      

      
        	
                Premises:

              	
                Cortlandt
      Towne Center Shopping Center, Town of
Cortlandt

              

      

     

    
      
        
          

        

      

      

      Date:  As
of July 29, 2009

      

      MORTGAGE,
ASSIGNMENT OF LEASES

      AND RENTS
AND SECURITY AGREEMENT

      ("this
Mortgage")

      

      FROM

      

      ACADIA
CORTLANDT LLC,

      a limited
liability company organized and existing under the laws of Delaware

      ("Mortgagor")

      

      
        	
                
                  Address
      and Chief

                

              	
                 

              

      

      
      

      
        	
                
                  Executive
      Office of Mortgagor:
 
    

              	
                c/o
      Acadia Realty Trust

                1311
      Mamaroneck Avenue, Suite 260

                White Plains, New
      York 10605

              

      

      
      

      

      TO

      

      BANK OF
AMERICA, N.A.,

      a national
banking association,

      as
Administrative Agent

      ("Mortgagee")

      
        
          

          
            	
                    
                      

                        Address
      of Mortgagee:

                      

                    

                  	
                    

                      
                        
                          One
      Bryant Park, 35th Floor

                        

                        New
      York, New York 10036

                      

                    

                  

          

          
          

          
          

          
Mortgage
Amount:   $2,000,000

        

      

      

      

        
          

        

      This
instrument prepared by, and after recording please return to:

      Schiff
Hardin LLP

      900 Third
Avenue, 23rd Floor

      New York,
New York 10022

      Attention:   Paul
G. Mackey, Esq.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      THE AMOUNT
OF THIS MORTGAGE IS $2,000,000.

      

      

      MORTGAGE,
ASSIGNMENT OF

      LEASES AND RENTS, AND
SECURITY AGREEMENT

      

      THIS
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT (this
"Mortgage") is made as of the 29th day of July, 2009, by ACADIA CORTLANDT LLC, a
Delaware limited liability company, ("Mortgagor"), in favor of and for the
benefit of BANK OF AMERICA, N.A., a national banking association, as
Administrative Agent for itself and other lenders pursuant to the Loan Agreement
defined below (together with its successors and assigns,
"Mortgagee").

       

       

      ARTICLE
1

       

       

      Definitions; Granting
Clauses; Secured Indebtedness

       

      Section
1.1. Principal
Secured.  This Mortgage secures the aggregate principal amount
of up to $2,000,000 plus such additional amounts as Mortgagee may from time to
time advance subsequent to a default by Mortgagor pursuant to the terms and
conditions of this Mortgage, with respect to an obligation secured by a lien or
encumbrance prior to the lien of this Mortgage or for the protection of the lien
of this Mortgage, together with interest thereon.  In the event that
all or any part of the Premises is located in the State of New York, then,
notwithstanding the language in the Granting Clause and Section 2.2 or anything
else contained herein to the contrary, the maximum amount secured hereby at
execution or which under any contingency may become secured hereby at any time
hereafter is the Mortgage Amount and all interest, additional interest and late
payment and prepayment charges in respect thereof, plus all amounts expended by
Mortgagee following a default hereunder in respect of insurance premiums and
real estate taxes, and all legal costs or expenses of collection of the debt
secured hereby or of the defense or prosecution of the rights and lien created
hereby.

       

      Section
1.2. Definitions.

       

      (a) In
addition to other terms defined herein, each of the following terms shall have
the meaning assigned to it, such definitions to be applicable equally to the
singular and the plural forms of such terms and to all genders:

       

      "Additional
Interest":  Additional Interest as defined in the Loan
Agreement.

       

      "Loan
Agreement":  Loan Agreement dated of even date herewith between
Mortgagor and Mortgagee, as it may be from time to time amended, restated,
modified, extended or supplemented.

       

      "Mortgagor":  Acadia
Cortlandt LLC, a Delaware limited liability company, whose address is c/o Acadia
Realty Trust, 1311 Mamaroneck Avenue, Suite 260, White Plains, New York 10605,
and its permitted successors and assigns.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      "Promissory
Note":  Collectively, the Future Advance Notes, as defined in
the Loan Agreement.

       

      Capitalized
terms used herein which are not otherwise defined but which are defined in the
Loan Agreement shall have the meaning ascribed to them in the Loan
Agreement.

       

      Section
1.3. Granting
Clause.  In consideration of the provisions of this Mortgage
and of the sum of $10.00 cash in hand paid and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged by
the Mortgagor, Mortgagor does hereby GRANT, BARGAIN, SELL, CONVEY, TRANSFER,
ASSIGN, MORTGAGE, HYPOTHECATE, PLEDGE, DEPOSIT and SET OVER to Mortgagee, with
all estate, right, title and interest of Mortgagor in and to the Property (as
hereinafter defined), whether now owned or held or hereafter acquired by
Mortgagor, to have and hold the Property unto Mortgagee, its successors and
assigns forever; and to hold the Property unto Mortgagee in fee simple forever;
provided that Mortgagor may retain possession of the Property until the
occurrence of an Event of Default; (a) the real property described in Exhibit A which is
attached hereto and incorporated herein by reference (the "Land") together with:
(i) any and all buildings, structures, improvements, alterations or
appurtenances now or hereafter situated or to be situated on the Land
(collectively, the "Improvements"); and (ii) all right, title and interest of
Mortgagor, now owned or hereafter acquired, in and to (1) all streets, roads,
alleys, easements, rights-of-way, licenses, rights of ingress and egress,
vehicle parking rights and public places, existing or proposed, abutting,
adjacent, used in connection with or pertaining to the Land or the Improvements;
(2) any strips or gores between the Land and abutting or adjacent properties;
(3) all options to purchase or lease the Land or the Improvements or any portion
thereof or interest therein, and any greater estate in the Land or the
Improvements; and (4) all water and water rights, timber, crops and mineral
interests on or pertaining to the Land (the Land, Improvements and other rights,
titles and interests referred to in this clause (a) being herein sometimes
collectively called the "Premises"); (b)  all fixtures, equipment,
systems, machinery, furniture, furnishings, appliances, inventory, goods,
building and construction materials, supplies, and articles of personal
property, of every kind and character, tangible and intangible (including
software embedded therein), now owned or hereafter acquired by Mortgagor, which
are now or hereafter attached to or situated in, on or about the Land or the
Improvements, or used in or necessary to the complete and proper planning,
development, use, occupancy or operation thereof, or acquired (whether delivered
to the Land or stored elsewhere) for use or installation in or on the Land or
the Improvements, and all renewals and replacements of, substitutions for and
additions to the foregoing (the properties referred to in this clause (b) being
herein sometimes collectively called the "Accessories," all of which are hereby
declared to be permanent accessions to the Land); (c)  all (i) plans
and specifications for the Improvements; (ii) Mortgagor's rights, but not
liability for any breach by Mortgagor, under all commitments (including any
commitments for financing to pay any of the Secured Indebtedness, as defined
below), insurance policies (or additional or supplemental coverage related
thereto, including from an insurance provider meeting the requirements of the
Loan Documents or from or through any state or federal government sponsored
program or entity), Swap Transactions (as hereinafter defined), contracts and
agreements for the design, construction, operation or inspection of the
Improvements and other contracts and general intangibles (including but not
limited to payment intangibles, trademarks, trade names, goodwill, software and
symbols) related to the Premises or the Accessories or the operation thereof;
(iii) deposits and deposit accounts arising from or related to any transactions
related to the Premises or the Accessories (including but not limited to
Mortgagor's rights in tenants' security deposits, deposits with respect to
utility services to the Premises, and any deposits, deposit accounts or reserves
hereunder or under any other Loan Documents (hereinafter defined) for taxes,
insurance or otherwise), rebates or refunds of impact fees or other taxes,
assessments or charges, money, accounts (including deposit accounts),
instruments, documents, promissory notes and chattel paper (whether tangible or
electronic) arising from or by virtue of any transactions related to the
Premises or the Accessories, and any account or deposit account from which
Mortgagor may from time to time authorize Mortgagee to debit and/or credit
payments due with respect to the Loan or any Swap Transaction, all rights to the
payment of money from Mortgagee under any Swap Transaction, and all accounts,
deposit accounts and general intangibles, including payment intangibles,
described in any Swap Transaction;

       

      
        
          
          

        

        
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        (iv)
permits, licenses, franchises, certificates, development rights, commitments and
rights for utilities, and other rights and privileges obtained in connection
with the Premises or the Accessories; (v) leases, rents, royalties, bonuses,
issues, profits, revenues and other benefits of the Premises and the Accessories
(without derogation of Article 3 hereof); (vi) as-extracted collateral produced
from or allocated to the Land including, without limitation, oil, gas and other
hydrocarbons and other minerals and all products processed or obtained
therefrom, and the proceeds thereof; and (vii) engineering, accounting, title,
legal, and other technical or business data concerning the Property which are in
the possession of Mortgagor or in which Mortgagor can otherwise grant a security
interest; and (d) all (i) accounts and proceeds (cash or non-cash and including
payment intangibles) of or arising from the properties, rights, titles and
interests referred to above in this Section 1.3, including but not limited to
proceeds of any sale, lease or other disposition thereof, proceeds of each
policy of insurance (or additional or supplemental coverage related thereto,
including from an insurance provider meeting the requirements of the Loan
Documents or from or through any state or federal government sponsored program
or entity) relating thereto (including premium refunds), proceeds of the taking
thereof or of any rights appurtenant thereto, including change of grade of
streets, curb cuts or other rights of access, by condemnation, eminent domain or
transfer in lieu thereof for public or quasi-public use under any law, and
proceeds arising out of any damage thereto; (ii) all letter-of-credit rights
(whether or not the letter of credit is evidenced by a writing) Mortgagor now
has or hereafter acquires relating to the properties, rights, titles and
interests referred to in this Section 1.3; (iii) all commercial tort claims
Mortgagor now has or hereafter acquires relating to the properties, rights,
titles and interests referred to in this Section 1.3; and (iv) other interests
of every kind and character which Mortgagor now has or hereafter acquires in, to
or for the benefit of the properties, rights, titles and interests referred to
above in this Section 1.3 and all property used or useful in connection
therewith, including but not limited to rights of ingress and egress and
remainders, reversions and reversionary rights or interests; and if the estate
of Mortgagor in any of the property referred to above in this Section 1.3 is a
leasehold estate, this conveyance shall include, and the lien and security
interest created hereby shall encumber and extend to, all other or additional
title, estates, interests or rights which are now owned or may hereafter be
acquired by Mortgagor in or to the property demised under the lease creating the
leasehold estate; TO HAVE AND TO HOLD the foregoing rights, interests and
properties, and all rights, estates, powers and privileges appurtenant thereto
(herein collectively called the "Property"), unto Mortgagee, its successors and
assigns, in trust, in fee simple forever, subject to the terms, provisions and
conditions herein set forth, to secure the obligations of Mortgagor under the
Note and Loan Documents (as hereinafter defined) and all other indebtedness and
matters defined as "Secured Indebtedness" in Section 1.5 of this Mortgage;
PROVIDED, HOWEVER, that if Mortgagor shall promptly pay or cause to be paid to
Mortgagee (as hereinafter defined) the principal sum, including all additional
advances and all other sums payable by Mortgagor to Mortgagee under the terms of
the Loan Documents and shall perform or cause to be performed all the other
terms, conditions, agreements and provisions contained in the Loan Documents,
all without fraud or delay or deduction or abatement of anything or for any
reason, then this Mortgage and the estate hereby granted shall cease, terminate
and become void.

      

       

      
        
          
          

        

        
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      Section
1.4. Security
Interest.  Mortgagor hereby grants to Mortgagee a security
interest in all of the Property which constitutes personal property or fixtures,
all proceeds and products thereof, and all supporting obligations ancillary to
or arising in any way in connection therewith (herein sometimes collectively
called the "Collateral") to secure the obligations of Mortgagor under the Note
and Loan Documents and all other indebtedness and matters defined as Secured
Indebtedness in Section 1.5 of this Mortgage.  In addition to its
rights hereunder or otherwise, Mortgagee shall have all of the rights of a
secured party under the New York Uniform Commercial Code, as in effect from time
to time, or under the Uniform Commercial Code in force, from time to time, in
any other state to the extent the same is applicable law.

       

      Section
1.5. Secured Indebtedness, Note,
Loan Documents, Other Obligations.  This Mortgage is made to
secure and enforce the payment and performance of the following promissory
notes, obligations, indebtedness, duties and liabilities and all renewals,
extensions, supplements, increases, and modifications thereof in whole or in
part from time to time (collectively the "Secured Indebtedness"): (a) the
Promissory Note and all other promissory notes given in substitution therefor or
in modification, supplement, increase, renewal or extension thereof, in whole or
in part (such promissory note or promissory notes, whether one or more, as from
time to time renewed, extended, supplemented, increased or modified and all
other notes given in substitution therefor, or in modification, renewal or
extension thereof, in whole or in part, being hereinafter called the "Note", and
Mortgagee, or the subsequent Mortgagee at the time in question of the Note or
any of the Secured Indebtedness, as hereinafter defined, such Mortgagee
continuing to be defined herein as "Mortgagee"); and (b) all interest,
Additional Interest, indebtedness, liabilities, duties, covenants, promises and
other obligations whether joint or several, direct or indirect, fixed or
contingent, liquidated or unliquidated, and the cost of collection of all such
amounts, owed by Mortgagor to Mortgagee now or hereafter incurred or arising
pursuant to or permitted by the provisions of the Note, this Mortgage, the Loan
Agreement or any other document now or hereafter evidencing, governing,
guaranteeing, securing or otherwise executed in connection with the loan
evidenced by the Note, including but not limited to any loan or credit
agreement, letter of credit or reimbursement agreement, tri-party financing
agreement, Master Agreement relating to any Swap Transactions or other agreement
between Mortgagor and Mortgagee, or among Mortgagor, Mortgagee and any other
party or parties, pertaining to the repayment or use of the proceeds of the loan
evidenced by the Note (the Note, the Mortgage, the Loan Agreement, any Master
Agreement relating to any Swap Transactions and any such documents as they or
any of them may have been or may be from time to time renewed, extended,
supplemented, increased or modified, being herein sometimes collectively called
the "Loan Documents").  "Swap Transaction" means any agreement,
whether or not in writing, relating to any transaction that is a rate swap,
basis swap, forward rate transaction, commodity swap, commodity option, equity
or equity index swap or option, bond, note or bill option, interest rate option,
forward foreign exchange transaction, cap, collar or floor transaction, currency
swap, cross-currency rate swap, swap option currency option or any other,
similar transaction (including any option to enter into any of the foregoing) or
any combination of the foregoing, and, unless the context otherwise clearly
requires, any form of master agreement (the "Master Agreement") published by the
International Swaps and Derivatives Association, Inc., or any other master
agreement, entered into between Mortgagee (or its affiliates) and Mortgagor (or
its affiliates), together with any related schedules, as amended, supplemented,
superseded or replaced from time to time, relating to or governing any or all of
the foregoing.

       

      
        
          
          

        

        
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      ARTICLE
2

       

       

      Representations, Warranties
and Covenants

       

      Section
2.1. Mortgagor
represents, warrants, and covenants as follows:

       

      (a) Payment and
Performance.  Mortgagor will make due and punctual payment of
the Secured Indebtedness. Mortgagor will timely and properly perform and comply
with all of the covenants, agreements, and conditions imposed upon it by this
Mortgage and the other Loan Documents and will not permit a default to occur
hereunder or thereunder.  Time shall be of the essence in this
Mortgage.

       

      (b) Title and Permitted
Encumbrances.  Mortgagor has, in Mortgagor's own right, and
Mortgagor covenants to maintain, lawful, good and marketable title to the
Property, is lawfully seized and possessed of the Property and every part
thereof, and has the right to convey the same, free and clear of all liens,
charges, claims, security interests, and encumbrances except for (i) the
matters, if any, set forth under the heading "Permitted Encumbrances" in Exhibit B hereto,
which are Permitted Encumbrances only to the extent the same are valid and
subsisting and affect the Property, (ii) the liens and security interests
evidenced by this Mortgage, (iii) statutory liens for real estate taxes and
assessments on the Property which are not yet delinquent, and (iv) other liens
and security interests (if any) in favor of Mortgagee (the matters described in
the foregoing clauses (i), (ii), (iii) and (iv) being herein called the
"Permitted Encumbrances").  Mortgagor, and Mortgagor's successors and
assigns, will warrant generally and forever defend title to the Property,
subject as aforesaid, to Mortgagee and his successors or substitutes and
assigns, against the claims and demands of all persons claiming or to claim the
same or any part thereof.  Mortgagor will punctually pay, perform,
observe and keep all covenants, obligations and conditions in or pursuant to any
Permitted Encumbrance and will not modify or permit modification of any
Permitted Encumbrance without the prior written consent of
Mortgagee.  Inclusion of any matter as a Permitted Encumbrance does
not constitute approval or waiver by Mortgagee of any existing or future
violation or other breach thereof by Mortgagor, by the Property or
otherwise.  No part of the Property constitutes all or any part of the
principal residence of Mortgagor if Mortgagor is an individual.  If
any right or interest of Mortgagee in the Property or any part thereof shall be
endangered or questioned or shall be attacked directly or indirectly, Mortgagee
and Mortgagee, or either of them (whether or not named as parties to legal
proceedings with respect thereto), are hereby authorized and empowered to take
such steps as in their discretion may be proper for the defense of any such
legal proceedings or the protection of such right or interest of Mortgagee,
including but not limited to the employment of independent counsel, the
prosecution or defense of litigation, and the compromise or discharge of adverse
claims.  All expenditures so made of every kind and character shall be
a demand obligation (which obligation Mortgagor hereby promises to pay) owing by
Mortgagor to Mortgagee or Mortgagee (as the case may be), and the party
(Mortgagee or Mortgagee, as the case may be) making such expenditures shall be
subrogated to all rights of the person receiving such payment.

       

      
        
          
          

        

        
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      (c) Taxes and Other
Impositions.  Mortgagor will pay, or cause to be paid, all
taxes, assessments and other charges or levies imposed upon or against or with
respect to the Property or the ownership, use, occupancy or enjoyment of any
portion thereof, or any utility service thereto, as the same become due and
payable, including but not limited to all real estate taxes assessed against the
Property or any part thereof, and shall deliver promptly to Mortgagee such
evidence of the payment thereof as Mortgagee may require.

       

      (d) Insurance.  Mortgagor
shall obtain and maintain at Mortgagor's sole expense: (1) mortgagee title
insurance issued to Mortgagee covering the Premises as required by Mortgagee,
without exception for mechanics' liens; (2) property insurance with respect to
all insurable Property, against loss or damage by fire, lightning, windstorm,
explosion, hail, tornado and such additional hazards as are presently included
in "Special Form" (also known as "all-risk") coverage and against any and all
acts of terrorism and such other insurable hazards as Mortgagee may require, in
an amount not less than 100% of the full replacement cost, including the cost of
debris removal, without deduction for depreciation and sufficient to prevent
Mortgagor and Mortgagee from becoming a coinsurer, such insurance to be in
"builder's risk" completed value (non-reporting) form during and with respect to
any construction (other than construction of customary tenant improvements in
existing buildings) on the Premises; (3) if and to the extent any portion of the
Improvements is, under the Flood Disaster Protection Act of 1973 ("FDPA"), as it
may be amended from time to time, in a Special Flood Hazard Area, within a Flood
Zone designated A or V in a participating community, a flood insurance policy in
an amount required by Mortgagee, but in no event less than the amount sufficient
to meet the requirements of applicable law and the FDPA, as such requirements
may from time to time be in effect; (4) general liability insurance, on an
"occurrence" basis, against claims for "personal injury" liability, including
bodily injury, death or property damage liability, for the benefit of Mortgagor
as named insured and Mortgagee as additional insured; (5) statutory workers'
compensation insurance with respect to any work on or about the Premises
(including employer's liability insurance, if required by Mortgagee), covering
all employees of Mortgagor and any contractor; (6) if there is a general
contractor, during and with respect to any construction (other than construction
of customary tenant improvements in existing buildings) on the Premises,
commercial general liability insurance, including products and completed
operations coverage, and in other respects similar to that described in clause
(4) above, for the benefit of the general contractor as named insured and
Mortgagor and Mortgagee as additional insureds, in addition to statutory
workers' compensation insurance with respect to any work on or about the
Premises (including employer's liability insurance, if required by Mortgagee),
covering all employees of the general contractor any contractor; and (7) such
other insurance on the Property and endorsements as may from time to time be
required by Mortgagee (including but not limited to soft cost coverage,
automobile liability insurance, business interruption insurance or delayed
rental insurance, boiler and machinery insurance, earthquake insurance, wind
insurance, sinkhole coverage, and/or permit to occupy endorsement) and against
other insurable hazards or casualties which at the time are commonly insured
against in the case of premises similarly situated, due regard being given to
the height, type, construction, location, use and occupancy of buildings and
improvements.

       

      
        
          
          

        

        
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        All
insurance policies shall be issued and maintained by insurers, in amounts, with
deductibles, limits and retentions, and in forms satisfactory to Mortgagee, and
shall require not less than ten (10) days' prior written notice to Mortgagee of
any cancellation for nonpayment of premiums, and not less than thirty (30) days'
prior written notice to Mortgagee of any other cancellation or any change of
coverage.  All insurance companies must be licensed to do business in
the state in which the Property is located and must have an A.M. Best Company
financial and performance ratings of A-:IX or better.  All insurance
policies maintained, or caused to be maintained, by Mortgagor with respect to
the Property, except for general liability insurance, shall provide that each
such policy shall be primary without right of contribution from any other
insurance that may be carried by Mortgagor or Mortgagee and that all of the
provisions thereof, except the limits of liability, shall operate in the same
manner as if there were a separate policy covering each insured.  If
any insurer which has issued a policy of title, hazard, liability or other
insurance required pursuant to this Mortgage or any other Loan Document becomes
insolvent or the subject of any petition, case, proceeding or other action
pursuant to any Debtor Relief Law, or if in Mortgagee's reasonable opinion the
financial responsibility of such insurer is or becomes inadequate, Mortgagor
shall, in each instance promptly upon its discovery thereof or upon the request
of Mortgagee therefor, and at Mortgagor's expense, promptly obtain and deliver
to Mortgagee a like policy (or, if and to the extent permitted by Mortgagee,
acceptable evidence of insurance) issued by another insurer, which insurer and
policy meet the requirements of this Mortgage or such other Loan Document, as
the case may be.  Without limiting the discretion of Mortgagee with
respect to required endorsements to insurance policies, all such policies for
loss of or damage to the Property shall contain a standard mortgagee clause
(without contribution) naming Mortgagee as mortgagee with loss proceeds payable
to Mortgagee notwithstanding (i) any act, failure to act or negligence of or
violation of any warranty, declaration or condition contained in any such policy
by any named or additional insured; (ii) the occupation or use of the Property
for purposes more hazardous than permitted by the terms of any such policy;
(iii) any foreclosure or other action by Mortgagee under the Loan Documents; or
(iv) any change in title to or ownership of the Property or any portion thereof,
such proceeds to be held for application as provided in the Loan
Documents.  The originals of each initial insurance policy (or to the
extent permitted by Mortgagee, a copy of the original policy and such evidence
of insurance acceptable to Mortgagee) shall be delivered to Mortgagee at the
time of execution of this Mortgage, with all premiums fully paid current, and
each renewal or substitute policy (or evidence of insurance) shall be delivered
to Mortgagee, with all premiums fully paid current, at least ten (10) days
before the termination of the policy it renews or replaces.  Mortgagor
shall pay all premiums on policies required hereunder as they become due and
payable and promptly deliver to Mortgagee evidence satisfactory to Mortgagee of
the timely payment thereof.  If any loss occurs at any time when
Mortgagor has failed to perform Mortgagor's covenants and agreements in this
paragraph with respect to any insurance payable because of loss sustained to any
part of the Property whether or not such insurance is required by Mortgagee,
Mortgagee shall nevertheless be entitled to the benefit of all insurance
covering the loss and held by or for Mortgagor, to the same extent as if it had
been made payable to Mortgagee.  Upon any foreclosure hereof or
transfer of title to the Property in extinguishment of the whole or any part of
the Secured Indebtedness, all of Mortgagor's right, title and interest in and to
the insurance policies referred to in this Section (including unearned premiums)
and all proceeds payable thereunder shall thereupon vest in the purchaser at
foreclosure or other such transferee, to the extent permissible under such
policies.  Mortgagee shall have the right (but not the obligation) to
make proof of loss for, settle and adjust any claim under, and receive the
proceeds of, all insurance for loss of or damage to the Property where the loss
is estimated by Mortgagee to be $1,000,000 or more, regardless of whether or not
such insurance policies are required by Mortgagee, and the expenses incurred by
Mortgagee in the adjustment and collection of insurance proceeds shall be a part
of the Secured Indebtedness and shall be due and payable to Mortgagee on
demand.  Mortgagee shall not be, under any circumstances, liable or
responsible for failure to collect or exercise diligence in the collection of
any of such proceeds or for the obtaining, maintaining or adequacy of any
insurance or for failure to see to the proper application of any amount paid
over to Mortgagor.  Any such proceeds received by Mortgagee shall,
after deduction therefrom of all reasonable expenses actually incurred by
Mortgagee, including attorneys' fees, at Mortgagee's option be (1) released to
Mortgagor, or (2) applied (upon compliance with such terms and conditions as may
be required by Mortgagee) to repair or restoration, either partly or entirely,
of the Property so damaged, or (3) applied to the payment of the Secured
Indebtedness in such order and manner as Mortgagee, in its sole discretion, may
elect, whether or not due.  In any event, the unpaid portion of the
Secured Indebtedness shall remain in full force and effect and the payment
thereof shall not be excused.  Mortgagor shall at all times comply
with the requirements of the insurance policies required hereunder and of the
issuers of such policies and of any board of fire underwriters or similar body
as applicable to or affecting the Property.

      

       

      
        
          
          

        

        
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      (e) Application of Insurance
Proceeds.   Notwithstanding anything to the contrary set
forth in the preceding Section 2.1(d), if the Property is damaged or destroyed
and Mortgagee determines that all of the conditions specified hereinafter in
this Section have been satisfied, then Mortgagee shall apply the proceeds of
insurance (i) first to reimbursing itself for all costs incurred by it in the
collection of such proceeds and (ii) second to reimbursing Mortgagor for such
actual costs as shall have been incurred by Mortgagor in restoring the Property
and shall be approved by Mortgagee.  Insurance proceeds shall be
applied to such restoration solely if (A) Mortgagee determines
that:  (i) the Property is capable of being suitably restored in
accordance with applicable Legal Requirements to the value, condition, character
and general utility existing prior to such damage or destruction, and, in any
event, to a Loan to Value Ratio of not greater than 70%, provided that this
clause (i) shall not apply to insurance proceeds relating to a casualty for
which the gross insurance proceeds do not exceed $1,000,000; (ii) sufficient
funds are unconditionally available (from proceeds of insurance and/or from
funds of Mortgagor) to enable Mortgagor promptly to commence, and thereafter
diligently to prosecute to completion, such restoration, provided that this
clause (ii) shall not apply to insurance proceeds relating to a casualty for
which the gross insurance proceeds do not exceed $1,000,000; (iii) Mortgagor is
not in default or in breach of any obligations under any Loan Document, no
uncured Default exists under any Loan Document and no facts or circumstances
exist that would constitute an Default with the passage of time or the giving of
notice or both; and (iv) neither the validity, enforceability nor priority of
the lien of this Mortgage shall be adversely affected; (B) Mortgagor has entered
into a written agreement, satisfactory in form and substance to Mortgagee,
containing such conditions to disbursements as are employed at the time by
Mortgagee for construction loans; (C) Mortgagor has delivered to Mortgagee such
security as Mortgagee might have reasonably required to assure completion of
restoration in accordance with the standards specified above; and (D) Mortgagor
has complied with such further reasonable requirements as Mortgagee might have
specified.

       

      
        
          
          

        

        
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      (f) Reserve for Insurance, Taxes
and Assessments.  Upon request of Mortgagee, to secure the
payment and performance of the Secured Indebtedness, but not in lieu of such
payment and performance, Mortgagor will deposit with Mortgagee a sum equal to
real estate taxes, assessments and charges (which charges for the purposes of
this paragraph shall include without limitation any recurring charge which could
result in a lien against the Property) against the Property for the current year
and the premiums for such policies of insurance for the current year, all as
estimated by Mortgagee and prorated to the end of the calendar month following
the month during which Mortgagee's request is made, and thereafter will deposit
with Mortgagee, on each date when an installment of principal and/or interest is
due on the Note, sufficient funds (as estimated from time to time by Mortgagee)
to permit Mortgagee to pay at least fifteen (15) days prior to the due date
thereof, the next maturing real estate taxes, assessments and charges and
premiums for such policies of insurance.  Mortgagee shall have the
right to rely upon tax information furnished by applicable taxing authorities in
the payment of such taxes or assessments and shall have no obligation to make
any protest of any such taxes or assessments.  Any excess over the
amounts required for such purposes shall be held by Mortgagee for future use,
applied to any Secured Indebtedness or refunded to Mortgagor, at Mortgagee's
option, and any deficiency in such funds so deposited shall be made up by
Mortgagor upon demand of Mortgagee.  All such funds so deposited shall
bear no interest, may be commingled with the general funds of Mortgagee and
shall be applied by Mortgagee toward the payment of such taxes, assessments,
charges and premiums when statements therefor are presented to Mortgagee by
Mortgagor (which statements shall be presented by Mortgagor to Mortgagee a
reasonable time before the applicable amount is due); provided, however, that,
if a Default shall have occurred hereunder, such funds may at Mortgagee's option
be applied to the payment of the Secured Indebtedness in the order determined by
Mortgagee in its sole discretion, and that Mortgagee may (but shall have no
obligation) at any time, in its discretion, apply all or any part of such funds
toward the payment of any such taxes, assessments, charges or premiums which are
past due, together with any penalties or late charges with respect
thereto.  The conveyance or transfer of Mortgagor's interest in the
Property for any reason (including without limitation the foreclosure of a
subordinate lien or security interest or a transfer by operation of law) shall
constitute an assignment or transfer of Mortgagor's interest in and rights to
such funds held by Mortgagee under this paragraph but subject to the rights of
Mortgagee hereunder.

       

      (g) Condemnation.  Mortgagor
shall notify Mortgagee immediately of any threatened or pending proceeding for
condemnation affecting the Property or arising out of damage to the Property,
and Mortgagor shall, at Mortgagor's expense, diligently prosecute any such
proceedings.  Mortgagee shall have the right (but not the obligation)
to participate in any such proceeding and to be represented by counsel of its
own choice.  Mortgagee shall be entitled to receive all sums which may
be awarded or become payable to Mortgagor for the condemnation of the Property,
or any part thereof, for public or quasi-public use, or by virtue of private
sale in lieu thereof, and any sums which may be awarded or become payable to
Mortgagor for injury or damage to the Property.  Mortgagor shall,
promptly upon request of Mortgagee, execute such additional assignments and
other documents as may be necessary from time to time to permit such
participation and to enable Mortgagee to collect and receipt for any such
sums.  All such sums are hereby assigned to Mortgagee, and shall,
after deduction therefrom of all reasonable expenses actually incurred by
Mortgagee, including attorneys' fees, at Mortgagee's option be (1) released to
Mortgagor, or (2) applied (upon compliance with such terms and conditions as may
be required by Mortgagee) to repair or restoration of the Property so affected,
or (3) applied to the payment of the Secured Indebtedness in such order and
manner as Mortgagee, in its sole discretion, may elect, whether or not
due.  In any event the unpaid portion of the Secured Indebtedness
shall remain in full force and effect and the payment thereof shall not be
excused.  Mortgagee shall not be, under any circumstances, liable or
responsible for failure to collect or to exercise diligence in the collection of
any such sum or for failure to see to the proper application of any amount paid
over to Mortgagor.  Mortgagee is hereby authorized, in the name of
Mortgagor, to execute and deliver valid acquittances for, and to appeal from,
any such award, judgment or decree.  All costs and expenses (including
but not limited to attorneys' fees) incurred by Mortgagee in connection with any
condemnation shall be a demand obligation owing by Mortgagor (which Mortgagor
hereby promises to pay) to Mortgagee pursuant to this Mortgage.

       

      
        
          
          

        

        
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      (h) Compliance with Legal
Requirements.  The Property and the use, operation and
maintenance thereof and all activities thereon do and shall at all times comply
with all applicable Legal Requirements (hereinafter defined).  The
Property is not, and shall not be, dependent on any other property or premises
or any interest therein other than the Property to fulfill any requirement of
any Legal Requirement.  Mortgagor shall not, by act or omission,
permit any building or other improvement not subject to the lien of this
Mortgage to rely on the Property or any interest therein to fulfill any
requirement of any Legal Requirement.  No improvement upon or use of
any part of the Property constitutes a nonconforming use under any zoning law or
similar law or ordinance.  Mortgagor has obtained and shall preserve
in force all requisite zoning, utility, building, health, environmental and
operating permits from the governmental authorities having jurisdiction over the
Property.

       

      If
Mortgagor receives a notice or claim from any person that the Property, or any
use, activity, operation or maintenance thereof or thereon, is not in compliance
with any Legal Requirement, Mortgagor will promptly furnish a copy of such
notice or claim to Mortgagee.  Mortgagor has received no notice and
has no knowledge of any such noncompliance.  As used in this
Mortgage:  (i) the term "Legal Requirement" means any Law (hereinafter
defined), agreement, covenant, restriction, easement or condition (including,
without limitation of the foregoing, any condition or requirement imposed by any
insurance or surety company), as any of the same now exists or may be changed or
amended or come into effect in the future; and (ii) the term "Law" means any
federal, state or local law, statute, ordinance, code, rule, regulation,
license, permit, authorization, decision, order, injunction or decree, domestic
or foreign.

       

      (i) Maintenance, Repair and
Restoration.  Mortgagor will keep the Property in first class
order, repair, operating condition and appearance, causing all necessary
repairs, renewals, replacements, additions and improvements to be promptly made,
and will not allow any of the Property to be misused, abused or wasted or to
deteriorate.  Notwithstanding the foregoing, Mortgagor will not,
without the prior written consent of Mortgagee, (i) remove from the Property any
fixtures or personal property covered by this Mortgage except such as is
replaced by Mortgagor by an article of equal suitability and value, owned by
Mortgagor, free and clear of any lien or security interest (except that created
by this Mortgage), or (ii) make any structural alteration to the Property or any
other alteration thereto which impairs the value thereof. If any act or
occurrence of any kind or nature (including any condemnation or any casualty for
which insurance was not obtained or obtainable) shall result in damage to or
loss or destruction of the Property, Mortgagor shall give prompt notice thereof
to Mortgagee and Mortgagor shall promptly, at Mortgagor's sole cost and expense
and regardless of whether insurance or condemnation proceeds (if any) shall be
available or sufficient for the purpose, secure the Property as necessary and
commence and continue diligently to completion to restore, repair, replace and
rebuild the Property as nearly as possible to its value, condition and character
immediately prior to the damage, loss or destruction.

       

      
        
          
          

        

        
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      (j) No Other
Liens.   Mortgagor will not, without the prior written
consent of Mortgagee, create, place or permit to be created or placed, or
through any act or failure to act, acquiesce in the placing of, or allow to
remain, any  mortgage, voluntary or involuntary lien, whether
statutory, constitutional or contractual, security interest, encumbrance or
charge, or conditional sale or other title retention document, against or
covering the Property, or any part thereof, other than the Permitted
Encumbrances, regardless of whether the same are expressly or otherwise
subordinate to the lien or security interest created in this Mortgage, and
should any of the foregoing become attached hereafter in any manner to any part
of the Property without the prior written consent of Mortgagee, Mortgagor will
cause the same to be promptly discharged and released.  Mortgagor will
own all parts of the Property and will not acquire any fixtures, equipment or
other property (including software embedded therein) forming a part of the
Property pursuant to a lease, license, security agreement or similar agreement,
whereby any party has or may obtain the right to repossess or remove same,
without the prior written consent of Mortgagee.  If Mortgagee consents
to the voluntary grant by Mortgagor of any mortgage, lien, security interest, or
other encumbrance (hereinafter called "Subordinate Lien") covering any of the
Property or if the foregoing prohibition is determined by a court of competent
jurisdiction to be unenforceable as to a Subordinate Lien, any such Subordinate
Lien shall contain express covenants to the effect that: (1) the Subordinate
Lien is unconditionally subordinate to this Mortgage and all Leases (hereinafter
defined); (2) if any action (whether judicial or pursuant to a power of sale)
shall be instituted to foreclose or otherwise enforce the Subordinate Lien, no
tenant of any of the Leases (hereinafter defined) shall be named as a party
defendant, and no action shall be taken that would terminate any occupancy or
tenancy without the prior written consent of Mortgagee; (3) Rents (hereinafter
defined), if collected by or for the Mortgagee of the Subordinate Lien, shall be
applied first to the payment of the Secured Indebtedness then due and expenses
incurred in the ownership, operation and maintenance of the Property in such
order as Mortgagee may determine, prior to being applied to any indebtedness
secured by the Subordinate Lien; (4) written notice of default under the
Subordinate Lien and written notice of the commencement of any action (whether
judicial or pursuant to a power of sale) to foreclose or otherwise enforce the
Subordinate Lien or to seek the appointment of a receiver for all or any part of
the Property shall be given to Mortgagee with or immediately after the
occurrence of any such default or commencement; and (5) neither the Mortgagee of
the Subordinate Lien, nor any purchaser at foreclosure thereunder, nor anyone
claiming by, through or under any of them shall succeed to any of Mortgagor's
rights hereunder without the prior written consent of Mortgagee.

       

      (k) Operation of
Property.  Mortgagor will operate the Property in a good and
workmanlike manner and in accordance with all Legal Requirements and will pay
all fees or charges of any kind in connection therewith.  Mortgagor
will keep the Property occupied so as not to impair the insurance carried
thereon.  Mortgagor will not use or occupy or conduct any activity on,
or allow the use or occupancy of or the conduct of any activity on, the Property
in any manner which violates any Legal Requirement or which constitutes a public
or private nuisance or which makes void, voidable or cancelable, or increases
the premium of, any insurance then in force with respect
thereto.  Mortgagor will not initiate or permit any zoning
reclassification of the Property or seek any variance under existing zoning
ordinances applicable to the Property or use or permit the use of the Property
in such a manner which would result in such use becoming a nonconforming use
under applicable zoning ordinances or other Legal
Requirement.  Mortgagor will not impose any easement, restrictive
covenant or encumbrance upon the Property, execute or file any subdivision plat
or condominium declaration affecting the Property or consent to the annexation
of the Property to any municipality, without the prior written consent of
Mortgagee.  Mortgagor will not do or suffer to be done any act whereby
the value of any part of the Property may be lessened.  Mortgagor will
preserve, protect, renew, extend and retain all material rights and privileges
granted for or applicable to the Property.  Without the prior written
consent of Mortgagee, there shall be no drilling or exploration for or
extraction, removal or production of any mineral, hydrocarbon, gas, natural
element, compound or substance (including sand and gravel) from the surface or
subsurface of the Land regardless of the depth thereof or the method of mining
or extraction thereof.  Mortgagor will cause all debts and liabilities
of any character (including without limitation all debts and liabilities for
labor, material and equipment (including software embedded therein) and all
debts and charges for utilities servicing the Property) incurred in the
construction, maintenance, operation and development of the Property to be
promptly paid.

       

      
        
          
          

        

        
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      (l) Financial
Matters.  Mortgagor is solvent after giving effect to all
borrowings contemplated by the Loan Documents and no proceeding under any Debtor
Relief Law (hereinafter defined) is pending (or, to Mortgagor's knowledge,
threatened) by or against Mortgagor, or any affiliate of Mortgagor, as a
debtor.  All reports, statements, plans, budgets, applications,
agreements and other data and information heretofore furnished or hereafter to
be furnished by or on behalf of Mortgagor to Mortgagee in connection with the
loan or loans evidenced by the Loan Documents (including, without limitation,
all financial statements and financial information) are and will be true,
correct and complete in all material respects as of their respective dates and
do not and will not omit to state any fact or circumstance necessary to make the
statements contained therein not misleading.  No material adverse
change has occurred since the dates of such reports, statements and other data
in the financial condition of Mortgagor or, to Mortgagor's knowledge, of any
tenant under any lease described therein.  For the purposes of this
paragraph, "Mortgagor" shall also include any person liable directly or
indirectly for the Secured Indebtedness or any part thereof and any joint
venturer or general partner of Mortgagor.

       

      (m) Status of Mortgagor; Suits
and Claims; Loan Documents.  If Mortgagor is a corporation,
partnership, limited liability company, or other legal entity, Mortgagor is and
will continue to be (i) duly organized, validly existing and in good standing
under the laws of its state of organization, (ii) authorized to do business in,
and in good standing in, each state in which the Property is located, and (iii)
possessed of all requisite power and authority to carry on its business and to
own and operate the Property.  Each Loan Document executed by
Mortgagor has been duly authorized, executed and delivered by Mortgagor, and the
obligations thereunder and the performance thereof by Mortgagor in accordance
with their terms are and will continue to be within Mortgagor's power and
authority (without the necessity of joinder or consent of any other person), are
not and will not be in contravention of any Legal Requirement or any other
document or agreement to which Mortgagor or the Property is subject, and do not
and will not result in the creation of any encumbrance against any assets or
properties of Mortgagor, or any other person liable, directly or indirectly, for
any of the Secured Indebtedness, except as expressly contemplated by the Loan
Documents.  There is no suit, action, claim, investigation, inquiry,
proceeding or demand pending (or, to Mortgagor's knowledge, threatened) against
Mortgagor or against any other person liable directly or indirectly for the
Secured Indebtedness or which affects the Property (including, without
limitation, any which challenges or otherwise pertains to Mortgagor's title to
the Property) or the validity, enforceability or priority of any of the Loan
Documents.

       

      
        
          
          

        

        
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        There is
no judicial or administrative action, suit or proceeding pending (or, to
Mortgagor's knowledge, threatened) against Mortgagor, or against any other
person liable directly or indirectly for the Secured Indebtedness, except as has
been disclosed in writing to Mortgagee in connection with the loan evidenced by
the Note.  The Loan Documents constitute legal, valid and binding
obligations of Mortgagor enforceable in accordance with their terms, except as
the enforceability thereof may be limited by Debtor Relief Laws (hereinafter
defined) and except as the availability of certain remedies may be limited by
general principles of equity.  Mortgagor is not a "foreign person"
within the meaning of the Internal Revenue Code of 1986, as amended, Sections
1445 and 7701 (i.e. Mortgagor is not a non-resident alien, foreign corporation,
foreign partnership, foreign trust or foreign estate as those terms are defined
therein and in any regulations promulgated thereunder).  The loan
evidenced by the Note is solely for business and/or investment purposes, and is
not intended for personal, family, household or agricultural
purposes.  Mortgagor further warrants that the proceeds of the Note
shall be used for commercial purposes and stipulates that the loan evidenced by
the Note shall be construed for all purposes as a commercial
loan.  Mortgagor's exact legal name is correctly set forth at the end
of this Mortgage.  If Mortgagor is not an individual, Mortgagor is an
organization of the type and (if not an unregistered entity) is incorporated in
or organized under the laws of the state specified in the introductory paragraph
of this Mortgage. If Mortgagor is an unregistered entity (including, without
limitation, a general partnership) it is organized under the laws of the state
specified in the introductory paragraph of this Mortgage. Mortgagor will not
cause or permit any change to be made in its name, identity (including its trade
name or names), or corporate or partnership structure, unless Mortgagor shall
have notified Mortgagee in writing of such change at least thirty (30) days
prior to the effective date of such change, and shall have first taken all
action required by Mortgagee for the purpose of further perfecting or protecting
the lien and security interest of Mortgagee in the Property.  In
addition, Mortgagor shall not change its corporate or partnership structure
without first obtaining the prior written consent of
Mortgagee.  Mortgagor's principal place of business and chief
executive office, and the place where Mortgagor keeps its books and records,
including recorded data of any kind or nature, regardless of the medium of
recording including, without limitation, software, writings, plans,
specifications and schematics concerning the Property, has for the preceding
four months (or, if less, the entire period of the existence of Mortgagor) been
and will continue to be (unless Mortgagor notifies Mortgagee of any change in
writing at least thirty (30) days prior to the date of such change) the address
of Mortgagor set forth at the end of this Mortgage.  If Mortgagor is
an individual, Mortgagor's principal residence has for the preceding four months
been and will continue to be (unless Mortgagor notifies Mortgagee of any change
in writing at least thirty (30) days prior to the date of such change) the
address of the principal residence of Mortgagor set forth at the end of this
Mortgage.  Mortgagor's organizational identification number, if any,
assigned by the state of incorporation or organization is correctly set forth on
the first page of this Mortgage.  Mortgagor shall promptly notify
Mortgagee (i) of any change of its organizational identification number, or (ii)
if Mortgagor does not now have an organization identification number and later
obtains one, of such organizational identification number.

      

       

      
        
          
          

        

        
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      (n) Certain Environmental
Matters.  Mortgagor shall comply with the terms and covenants
of that certain Environmental Indemnity Agreement dated of even date herewith
(the "Environmental Agreement").

       

      (o) Further
Assurances.  Mortgagor will, promptly on request of Mortgagee,
(i) correct any defect, error or omission which may be discovered in the
contents, execution or acknowledgment of this Mortgage or any other Loan
Document; (ii) execute, acknowledge, deliver, procure and record and/or file
such further documents (including, without limitation, further mortgages of
trust, security agreements, and assignments of rents or leases) and do such
further acts as may be necessary, desirable or proper to carry out more
effectively the purposes of this Mortgage and the other Loan Documents, to more
fully identify and subject to the liens and security interests hereof any
property intended to be covered hereby (including specifically, but without
limitation, any renewals, additions, substitutions, replacements, or
appurtenances to the Property) or as deemed advisable by Mortgagee to protect
the lien or the security interest hereunder against the rights or interests of
third persons; and (iii) provide such certificates, documents, reports,
information, affidavits and other instruments and do such further acts as may be
necessary, desirable or proper in the reasonable determination of Mortgagee to
enable Mortgagee to comply with the requirements or requests of any agency
having jurisdiction over Mortgagee or any examiners of such agencies with
respect to the indebtedness secured hereby, Mortgagor or the
Property.  Mortgagor shall pay all costs connected with any of the
foregoing, which shall be a demand obligation owing by Mortgagor (which
Mortgagor hereby promises to pay) to Mortgagee pursuant to this
Mortgage.

       

      (p) Fees and
Expenses.  Without limitation of any other provision of this
Mortgage or of any other Loan Document and to the extent not prohibited by
applicable law, Mortgagor will pay, and will reimburse to Mortgagee and/or
Mortgagee on demand to the extent paid by Mortgagee and/or Mortgagee: (i) all
appraisal fees, filing, registration and recording fees, recordation, transfer
and other taxes, brokerage fees and commissions, abstract fees, title search or
examination fees, title policy and endorsement premiums and fees, uniform
commercial code search fees, judgment and tax lien search fees, escrow fees,
reasonable attorneys' fees, reasonable architect fees, reasonable engineer fees,
reasonable construction consultant fees, reasonable environmental inspection
fees, survey fees, and all other reasonable costs and expenses of every
character incurred by Mortgagor or Mortgagee and/or Mortgagee in connection with
the preparation of the Loan Documents, the evaluation, closing and funding of
the loan evidenced by the Loan Documents, and any and all amendments and
supplements to this Mortgage, the Note or any other Loan Documents or any
approval, consent, waiver, release or other matter requested or required
hereunder or thereunder, or otherwise attributable or chargeable to Mortgagor as
owner of the Property; and (ii) all costs and expenses, including reasonable
attorneys' fees and expenses, incurred or expended in connection with the
exercise of any right or remedy, or the defense of any right or remedy or the
enforcement of any obligation of Mortgagor, hereunder or under any other Loan
Document.

       

      (q) Indemnification.

       

      (i) Mortgagor
will indemnify and hold harmless Mortgagee  from and against, and
reimburse them on demand for, any and all Indemnified Matters (hereinafter
defined).  For purposes of this paragraph (p), the term
"Mortgagee"  shall include and any persons owned or controlled by,
owning or controlling, or under common control or affiliated with
Mortgagee.  Without limitation, the foregoing indemnities shall apply
to each indemnified person with respect to matters which in whole or in part are
caused by or arise out of the negligence of such (and/or any other) indemnified
person.  However, such indemnities shall not apply to a particular
indemnified person to the extent that the subject of the indemnification is
caused by or arises out of the gross negligence or willful misconduct of that
indemnified person.  Any amount to be paid under this paragraph (p) by
Mortgagor to Mortgagee  shall be a demand obligation owing by
Mortgagor (which Mortgagor hereby promises to pay) to
Mortgagee  pursuant to this Mortgage.  Nothing in this
paragraph, elsewhere in this Mortgage or in any other Loan Document shall limit
or impair any rights or remedies of Mortgagee (including without limitation any
rights of contribution or indemnification) against Mortgagor or any other person
under any other provision of this Mortgage, any other Loan Document, any other
agreement or any applicable Legal Requirement.

       

      
        
          
          

        

        
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      (ii) As used
herein, the term "Indemnified Matters" means any and all claims, demands,
liabilities (including strict liability), losses, damages (including
consequential damages), causes of action, judgments, penalties, fines, costs and
expenses (including without limitation, reasonable fees and expenses of
attorneys and other professional consultants and experts, and of the
investigation and defense of any claim, whether or not such claim is ultimately
defeated, and the settlement of any claim or judgment including all value paid
or given in settlement) of every kind, known or unknown, foreseeable or
unforeseeable, which may be imposed upon, asserted against or incurred or paid
by Mortgagee at any time and from time to time, whenever imposed, asserted or
incurred, because of, resulting from, in connection with, or arising out of any
transaction, act, omission, event or circumstance in any way connected with the
Property or with this Mortgage or any other Loan Document, including but not
limited to any bodily injury or death or property damage occurring in or upon or
in the vicinity of the Property through any cause whatsoever at any time on or
before the Release Date (hereinafter defined), any act performed or omitted to
be performed hereunder or under any other Loan Document, any breach by Mortgagor
of any representation, warranty, covenant, agreement or condition contained in
this Mortgage or in any other Loan Document, any default as defined herein, any
claim under or with respect to any Lease (hereinafter defined) or arising under
the Environmental Agreement.  The term "Release Date" as used herein
means the earlier of the following two dates: (i) the date on which the
indebtedness and obligations secured hereby have been paid and performed in full
and this Mortgage has been released, or (ii) the date on which the lien of this
Mortgage is fully and finally foreclosed or a conveyance by deed in lieu of such
foreclosure is fully and finally effective, and possession of the Property has
been given to the purchaser or grantee free of occupancy and claims to occupancy
by Mortgagor and Mortgagor's heirs, devisees, representatives, successors and
assigns; provided, that if such payment, performance, release, foreclosure or
conveyance is challenged, in bankruptcy proceedings or otherwise, the Release
Date shall be deemed not to have occurred until such challenge is rejected,
dismissed or withdrawn with prejudice.  The indemnities in this
paragraph (p) shall not terminate upon the Release Date or upon the release,
foreclosure or other termination of this Mortgage but will survive the Release
Date, foreclosure of this Mortgage or conveyance in lieu of foreclosure, the
repayment of the Secured Indebtedness, the termination of any and all Swap
Transactions, the discharge and release of this Mortgage and the other Loan
Documents, any bankruptcy or other debtor relief proceeding, and any other event
whatsoever.

       

      
        
          
          

        

        
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      (r) Records and Financial
Reports.  Mortgagor will keep accurate books and records in
accordance with sound accounting principles in which full, true and correct
entries shall be promptly made with respect to the Property and the operation
thereof, and will permit all such books and records, and all recorded data of
any kind or nature, regardless of the medium of recording including, without
limitation, all software, writings, plans, specifications and schematics to be
inspected and copied, and the Property to be inspected and photographed, by
Mortgagee and its representatives during normal business hours and at any other
reasonable times.  Without limitation of other or additional
requirements in any of the other Loan Documents, Mortgagor will furnish to
Mortgagee the financial statements required under the Loan
Agreement.  Mortgagor will furnish to Mortgagee at Mortgagor's expense
all evidence which Mortgagee may from time to time reasonably request as to
compliance with all provisions of the Loan Documents.  Any inspection
or audit of the Property or the books and records, including recorded data of
any kind or nature, regardless of the medium of recording including, without
limitation, software, writings, plans, specifications and schematics of
Mortgagor, or the procuring of documents and financial and other information, by
or on behalf of Mortgagee shall be for Mortgagee's protection only, and shall
not constitute any assumption of responsibility to Mortgagor or anyone else with
regard to the condition, construction, maintenance or operation of the Property
nor Mortgagee's approval of any certification given to Mortgagee nor relieve
Mortgagor of any of Mortgagor's obligations.  Mortgagee may from time
to time assign or grant participations in the Secured Indebtedness and Mortgagor
consents to the delivery by Mortgagee to any acquirer or prospective acquirer of
any interest or participation in or with respect to all or part of the Secured
Indebtedness such information as Mortgagee now or hereafter has relating to the
Property, Mortgagor, any party obligated for payment of any part of the Secured
Indebtedness, any tenant or guarantor under any lease affecting any part of the
Property and any agent or guarantor under any management agreement affecting any
part of the Property.

       

      (s) Taxes on Note or
Mortgage.  Mortgagor will promptly pay all income, franchise
and other taxes owing by Mortgagor and any stamp, documentary, recordation and
transfer taxes or other taxes (unless such payment by Mortgagor is prohibited by
law) which may be required to be paid with respect to the Note, this Mortgage or
any other instrument evidencing or securing any of the Secured
Indebtedness.  In the event of the enactment after this date of any
law of any governmental entity applicable to Mortgagee, the Note, the Property
or this Mortgage deducting from the value of property for the purpose of
taxation any lien or security interest thereon, or imposing upon Mortgagee the
payment of the whole or any part of the taxes or assessments or charges or liens
herein required to be paid by Mortgagor, or changing in any way the laws
relating to the taxation of deeds of trust or mortgages or security agreements
or debts secured by deeds of trust or mortgages or security agreements or the
interest of the mortgagee or secured party in the property covered thereby, or
the manner of collection of such taxes, so as to affect this Mortgage or the
Secured Indebtedness or Mortgagee, then, and in any such event, Mortgagor, upon
demand by Mortgagee, shall pay such taxes, assessments, charges or liens, or
reimburse Mortgagee therefor; provided, however, that if in the opinion of
counsel for Mortgagee (i) it might be unlawful to require Mortgagor to make such
payment or (ii) the making of such payment might result in the imposition of
interest beyond the maximum amount permitted by law, then and in such event,
Mortgagee may elect, by notice in writing given to Mortgagor, to declare all of
the Secured Indebtedness to be and become due and payable sixty (60) days from
the giving of such notice.

       

      
        
          
          

        

        
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      (t) Statement Concerning Note or
Mortgage.  Mortgagor shall at any time and from time to time
furnish within seven (7) days of request by Mortgagee a written statement in
such form as may be required by Mortgagee stating that (i) the Note, this
Mortgage and the other Loan Documents are valid and binding obligations of
Mortgagor, enforceable against Mortgagor in accordance with their terms; (ii)
the unpaid principal balance of the Note; (iii) the date to which interest on
the Note is paid; (iv) the Note, this Mortgage and the other Loan Documents have
not been released, subordinated or modified; and (v) there are no offsets or
defenses against the enforcement of the Note, this Mortgage or any other Loan
Document.  If any of the foregoing statements are untrue, Mortgagor
shall, alternatively, specify the reasons therefor.  Mortgagee shall
at any time and from time to time furnish within seven (7) days of request by
Mortgagor a written statement stating (i) the unpaid principal balance of the
Note and (ii) the date to which interest on the Note is paid.

       

      (u) Trust Fund; Lien
Laws.  Mortgagor will receive the advances secured hereby and
will hold the right to receive such advances as a trust fund to be applied first
for the purpose of paying the "cost of improvement", as such quoted term is
defined in the New York Lien Law) and will apply the same first to the payment
of such costs before using any part of the total of the same for any other
purpose and, will comply with Section 13 of the New York Lien
Law.  Mortgagor will indemnify and hold Mortgagee harmless against any
loss or liability, cost or expense, including, without limitation, any
judgments, reasonable attorney's fees, costs of appeal bonds and printing costs,
arising out of or relating to any proceeding instituted by any claimant alleging
a violation by Mortgagor of any applicable lien law including, without
limitation, any section of Article 3-A of the New York Lien Law.

       

      Section
2.2. Performance by Mortgagee on
Mortgagor's Behalf.  Mortgagor agrees that, if Mortgagor fails
to perform any act or to take any action which under any Loan Document Mortgagor
is required to perform or take, or to pay any money which under any Loan
Document Mortgagor is required to pay, and whether or not the failure then
constitutes a default hereunder or thereunder, and whether or not there has
occurred any default or defaults hereunder or the Secured Indebtedness has been
accelerated, Mortgagee, in Mortgagor's name or its own name, may, but shall not
be obligated to, perform or cause to be performed such act or take such action
or pay such money, and any expenses so incurred by Mortgagee, with interest
thereon at the Past Due Rate set forth in the Note, and any money so paid by
Mortgagee shall be a demand obligation owing by Mortgagor to Mortgagee (which
obligation Mortgagor hereby promises to pay), shall be a part of the
indebtedness secured hereby, and Mortgagee, upon making such payment, shall be
subrogated to all of the rights of the person, entity or body politic receiving
such payment.  Mortgagee and its designees shall have the right to
enter upon the Property at any time and from time to time for any such
purposes.  No such payment or performance by Mortgagee shall waive or
cure any default or waive any right, remedy or recourse of
Mortgagee.  Any such payment may be made by Mortgagee in reliance on
any statement, invoice or claim without inquiry into the validity or accuracy
thereof.  Each amount due and owing by Mortgagor to Mortgagee pursuant
to this Mortgage shall bear interest, from the date such amount becomes due
until paid, at the rate per annum provided in the Note for interest on past due
principal owed on the Note but never in excess of the maximum nonusurious amount
permitted by applicable law, which interest shall be payable to Mortgagee on
demand; and all such amounts, together with such interest thereon, shall
automatically and without notice be a part of the indebtedness secured
hereby.  The amount and nature of any expense by Mortgagee hereunder
and the time when paid shall be fully established by the certificate of
Mortgagee or any of Mortgagee's officers or agents.

       

      
        
          
          

        

        
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      Section
2.3. Absence of Obligations of
Mortgagee with Respect to Property.  Notwithstanding anything
in this Mortgage to the contrary, including, without limitation, the definition
of "Property" and/or the provisions of Article 3 hereof, (i) to the extent
permitted by applicable law, the Property is composed of Mortgagor's rights,
title and interests therein but not Mortgagor's obligations, duties or
liabilities pertaining thereto, (ii) Mortgagee neither assumes nor shall have
any obligations, duties or liabilities in connection with any portion of the
items described in the definition of "Property" herein, either prior to or after
obtaining title to such Property, whether by foreclosure sale, the granting of a
deed in lieu of foreclosure or otherwise, and (iii) Mortgagee may, at any time
prior to or after the acquisition of title to any portion of the Property as
above described, advise any party in writing as to the extent of Mortgagee's
interest therein and/or expressly disaffirm in writing any rights, interests,
obligations, duties and/or liabilities with respect to such Property or matters
related thereto.  Without limiting the generality of the foregoing, it
is understood and agreed that Mortgagee shall have no obligations, duties or
liabilities prior to or after acquisition of title to any portion of the
Property, as lessee under any lease or purchaser or seller under any contract or
option unless Mortgagee elects otherwise by written notification.

       

      Section
2.4. Authorization to File
Financing Statements; Power of Attorney.  Mortgagor hereby
authorizes Mortgagee at any time and from time to time to file any initial
financing statements, amendments thereto and continuation statements as
authorized by applicable law, required by Mortgagee to establish or maintain the
validity, perfection and priority of the security interests granted in this
Mortgage.  For purposes of such filings, Mortgagor agrees to furnish
any information requested by Mortgagee promptly upon request by
Mortgagee.  Mortgagor also ratifies its authorization for Mortgagee to
have filed any like initial financing statements, amendments thereto or
continuation statements if filed prior to the date of this
Mortgage.  Mortgagor hereby irrevocably constitutes and appoints
Mortgagee and any officer or agent of Mortgagee, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of Mortgagor or in Mortgagor's own
name to execute in Mortgagor's name any such documents and to otherwise carry
out the purposes of this Section 2.4, to the extent that Mortgagor's
authorization above is not sufficient.  To the extent permitted by
law, Mortgagor hereby ratifies all acts said attorney-in-fact shall lawfully do,
have done in the past or cause to be done in the future by virtue
hereof.  This power of attorney is a power coupled with an interest
and shall be irrevocable.

       

      ARTICLE
3

       

      Assignment of Rents and
Leases

       

      Section
3.1. Assignment.  Mortgagor
hereby assigns to Mortgagee all Rents (hereinafter defined) and all of
Mortgagor's rights in and under all Leases (hereinafter defined).

       

      
        
          
          

        

        
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        So long as
no Default (hereinafter defined) has occurred, Mortgagor shall have a license
(which license shall terminate automatically and without further notice upon the
occurrence of a Default) to collect, but not prior to accrual, the Rents under
the Leases and, where applicable, subleases, such Rents to be held in trust for
Mortgagee, and to otherwise deal with all Leases as permitted by this
Mortgage.  Each month, provided no Default has occurred, Mortgagor may
retain such Rents as were collected that month and held in trust for Mortgagee;
provided, however, that all Rents collected by Mortgagor shall be applied solely
to the ordinary and necessary expenses of owning and operating the Property or
paid to Mortgagee.  Upon the revocation of such license, all Rents
shall be paid directly to Mortgagee and not through the Mortgagor, all without
the necessity of any further action by Mortgagee, including, without limitation,
any action to obtain possession of the Land, Improvements or any other portion
of the Property or any action for the appointment of a
receiver.  Mortgagor hereby authorizes and directs the tenants under
the Leases to pay Rents to Mortgagee upon written demand by Mortgagee, without
further consent of Mortgagor, without any obligation of such tenants to
determine whether a Default has in fact occurred and regardless of whether
Mortgagee has taken possession of any portion of the Property, and the tenants
may rely upon any written statement delivered by Mortgagee to the
tenants.  Any such payments to Mortgagee shall constitute payments to
Mortgagor under the Leases, and Mortgagor hereby irrevocably appoints Mortgagee
as its attorney-in-fact to do all things, after a Default, which Mortgagor might
otherwise do with respect to the Property and the Leases thereon, including,
without limitation, (i) collecting Rents with or without suit and applying the
same, less expenses of collection, to any of the obligations secured hereunder
or to expenses of operating and maintaining the Property (including reasonable
reserves for anticipated expenses), at the option of the Mortgagee, all in such
manner as may be determined by Mortgagee, or at the option of Mortgagee, holding
the same as security for the payment of the Secured Indebtedness, (ii) leasing,
in the name of Mortgagor, the whole or any part of the Property which may become
vacant, and (iii) employing agents therefor and paying such agents reasonable
compensation for their services.  The curing of such Default, unless
other Defaults also then exist, shall entitle Mortgagor to recover its aforesaid
license to do any such things which Mortgagor might otherwise do with respect to
the Property and the Leases thereon and to again collect such
Rents.  The powers and rights granted in this paragraph shall be in
addition to the other remedies herein provided for upon the occurrence of a
Default and may be exercised independently of or concurrently with any of said
remedies.  Nothing in the foregoing shall be construed to impose any
obligation upon Mortgagee to exercise any power or right granted in this
paragraph or to assume any liability under any Lease of any part of the Property
and no liability shall attach to Mortgagee for failure or inability to collect
any Rents under any such Lease.  The assignment contained in this
Section shall become null and void upon the release of this
Mortgage.  As used herein: (i) "Lease" means each existing or future
lease, sublease (to the extent of Mortgagor's rights thereunder) or other
agreement under the terms of which any person has or acquires any right to
occupy or use the Property, or any part thereof, or interest therein, and each
existing or future guaranty of payment or performance thereunder, and all
extensions, renewals, modifications and replacements of each such lease,
sublease, agreement or guaranty; and (ii) "Rents" means all of the rents,
revenue, income, profits and proceeds derived and to be derived from the
Property or arising from the use or enjoyment of any portion thereof or from any
Lease, including but not limited to the proceeds from any negotiated lease
termination or buyout of such Lease, liquidated damages following default under
any such Lease, all proceeds payable under any policy of insurance covering loss
of rents resulting from untenantability caused by damage to any part of the
Property, all of Mortgagor's rights to recover monetary amounts from any tenant
in bankruptcy including, without limitation, rights of recovery for use and
occupancy and damage claims arising out of Lease defaults, including rejections,
under any applicable Debtor Relief Law (hereinafter defined), together with any
sums of money that may now or at any time hereafter be or become due and payable
to Mortgagor by virtue of any and all royalties, overriding royalties, bonuses,
delay rentals and any other amount of any kind or character arising under any
and all present and all future oil, gas, mineral and mining leases covering the
Property or any part thereof, and all proceeds and other amounts paid or owing
to Mortgagor under or pursuant to any and all contracts and bonds relating to
the construction or renovation of the Property.

         

        
          
            
            

          

          
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      Section
3.2. Covenants, Representations
and Warranties Concerning Leases and Rents.  Mortgagor
covenants, represents and warrants that: (a) Mortgagor has good title to, and is
the owner of the entire landlord's interest in, the Leases and Rents hereby
assigned and authority to assign them; (b) all Leases are valid and enforceable,
and in full force and effect, and are unmodified except as stated therein; (c)
neither Mortgagor nor any tenant in the Property is in default under its Lease
(and no event has occurred which with the passage of time or notice or both
would result in a default under its Lease) or is the subject of any bankruptcy,
insolvency or similar proceeding; (d) unless otherwise stated in a Permitted
Encumbrance, no Rents or Leases  have been or will be assigned,
mortgaged, pledged or otherwise encumbered and no other person has or will
acquire any right, title or interest in such Rents or Leases; (e) no Rents have
been waived, released, discounted, set off or compromised; (f) except as stated
in the Leases, Mortgagor has not received any funds or deposits from any tenant
for which credit has not already been made on account of accrued Rents; (g)
Mortgagor shall perform all of its obligations under the Leases and enforce the
tenants' obligations under the Leases to the extent enforcement is prudent under
the circumstances; (h) Mortgagor will not without the prior written consent of
Mortgagee, enter into any Lease after the date hereof except in accordance with
the terms of Exhibit I to the Loan Agreement, or waive, release, discount, set
off, compromise, reduce or defer any Rent, receive or collect Rents more than
one (1) month in advance, grant any rent-free period to any tenant (except in
accordance with the terms of Exhibit I to the Loan Agreement), reduce any Lease
term or waive, release or otherwise modify any other material obligation under
any Lease, renew or extend any Lease except in accordance with the terms of
Exhibit I to the Loan Agreement or in accordance with a right of the tenant
thereto in such Lease, approve or consent to an assignment of a Lease or a
subletting of any part of the premises covered by a Lease (except with respect
to leases of 5,000 square feet of rentable space or less), or settle or
compromise any claim against a tenant under a Lease in bankruptcy or otherwise
(except with respect to leases of 5,000 square feet of rentable space or less);
(i) Mortgagor will not, without the prior written consent of Mortgagee,
terminate or consent to the cancellation or surrender of any Lease having an
unexpired term of one (1) year or more unless promptly after the cancellation or
surrender a new Lease of such premises is made with a new tenant having a credit
standing that is satisfactory to Mortgagee, in Mortgagee's judgment, on terms
not materially less favorable to lessor than the terms of the terminated or
cancelled Lease; (j) Mortgagor will not execute any Lease except in accordance
with the Loan Documents and for actual occupancy by the tenant thereunder; (k)
Mortgagor shall give prompt notice to Mortgagee, as soon as Mortgagor first
obtains notice, of any claim, or the commencement of any action, by any tenant
or subtenant under or with respect to a Lease regarding any claimed damage,
default, diminution of or offset against Rent, cancellation of the Lease, or
constructive eviction, excluding, however, notices of default under residential
Leases, and Mortgagor shall defend, at Mortgagor's expense, any proceeding
pertaining to any Lease, including, if Mortgagee so requests, any such
proceeding to which Mortgagee is a party; (l) Mortgagor shall as often as
requested by Mortgagee, within ten (10) days of each request, deliver to
Mortgagee a complete rent roll of the Property in such detail as Mortgagee may
require and financial statements of the tenants, subtenants and guarantors under
the Leases to the extent available to Mortgagor, and deliver to such of the
tenants and others obligated under the Leases specified by Mortgagee written
notice of the assignment in Section 3.1 hereof in form and content satisfactory
to Mortgagee; (m) promptly upon request by Mortgagee, Mortgagor shall deliver to
Mortgagee executed originals of all Leases and copies of all records in its
possession or control relating thereto; (n) there shall be no merger of the
leasehold estates, created by the Leases, with the fee estate of the Land
without the prior written consent of Mortgagee; and (o) Mortgagee may at any
time and from time to time by specific written instrument intended for the
purpose, unilaterally subordinate the lien of this Mortgage to any Lease,
without joinder or consent of, or notice to, Mortgagor, any tenant or any other
person, and notice is hereby given to each tenant under a Lease of such right to
subordinate.  No such subordination shall constitute a subordination
to any lien or other encumbrance, whenever arising, or improve the right of any
junior lien Mortgagee; and nothing herein shall be construed as subordinating
this Mortgage to any Lease.

       

      
        
          
          

        

        
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      Section
3.3. Estoppel
Certificates.  All Leases executed after the date hereof shall
require the tenant to execute and deliver to Mortgagee an estoppel certificate
in form and substance acceptable to Mortgagee not more than thirty (30) days
after notice from the Mortgagee.

       

      Section
3.4. No Liability of
Mortgagee.  Mortgagee's acceptance of this assignment shall not
be deemed to constitute Mortgagee a "mortgagee in possession," nor obligate
Mortgagee to appear in or defend any proceeding relating to any Lease or to the
Property, or to take any action hereunder, expend any money, incur any expenses,
or perform any obligation or liability under any Lease, or assume any obligation
for any deposit delivered to Mortgagor by any tenant and not as such delivered
to and accepted by Mortgagee.  Mortgagee shall not be liable for any
injury or damage to person or property in or about the Property, or for
Mortgagee's failure to collect or to exercise diligence in collecting Rents, but
shall be accountable only for Rents that it shall actually
receive.  Neither the assignment of Leases and Rents nor enforcement
of Mortgagee's rights regarding Leases and Rents (including collection of Rents)
nor possession of the Property by Mortgagee nor Mortgagee's consent to or
approval of any Lease (nor all of the same), shall render Mortgagee liable on
any obligation under or with respect to any Lease or constitute affirmation of,
or any subordination to, any Lease, occupancy, use or option.

       

      If
Mortgagee seeks or obtains any judicial relief regarding Rents or Leases, the
same shall in no way prevent the concurrent or subsequent employment of any
other appropriate rights or remedies nor shall same constitute an election of
judicial relief for any foreclosure or any other purpose.  Mortgagee
neither has nor assumes any obligations as lessor or landlord with respect to
any Lease.  The rights of Mortgagee under this Article 3 shall be
cumulative of all other rights of Mortgagee under the Loan Documents or
otherwise.

       

      
        
          
          

        

        
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      Reference
is hereby made to Section 291-f of the Real Property Law of the State of New
York for the purpose of obtaining for Mortgagee the benefits of said Section in
connection herewith.

       

      ARTICLE
4

       

      Default

       

      Section
4.1. Events of
Default.  The occurrence of any one of the following shall be a
default under this Mortgage ("default" or "Default"):

       

      (a) Failure to Pay
Indebtedness.  Any of the Secured Indebtedness or any
indebtedness evidenced by the other "Notes" (as defined in the Loan Agreement)
is not paid when due, regardless of how such amount may have become due and such
default shall have continued for a period of ten (10) days.

       

      (b) Nonperformance of
Covenants.  Any covenant, agreement or condition herein or in
any other Loan Document (other than covenants otherwise addressed in another
paragraph of this Section, such as covenants to pay the Secured Indebtedness) is
not fully and timely performed, observed or kept and such failure shall have
continued for a period of thirty (30) days after notice thereof shall have been
given to Mortgagor by Mortgagee (or such other cure period as may be specified
elsewhere in this Mortgage or the other Loan Documents with respect to specific
provisions), provided, however, if such default is not susceptible of being
cured within such thirty (30) day period and Mortgagor has commenced such cure
within such thirty (30) day period and is diligently pursuing such cure to
Mortgagee's satisfaction, such thirty (30) day cure period shall be extended,
but in no event shall such cure period exceed sixty (60) days, or, in the case
of such other documents, such shorter grace period, if any, as may be provided
for therein.

       

      (c) Default under other Loan
Documents.  The occurrence of a Default under any other Loan
Document, including an Early Termination Event as defined in any Master
Agreement relating to any Swap Transaction.

       

      (d) Representations.  Any
statement, representation or warranty in any of the Loan Documents, or in any
financial statement or any other writing heretofore or hereafter delivered to
Mortgagee in connection with the Secured Indebtedness is false, misleading or
erroneous in any material respect on the date hereof or on the date as of which
such statement, representation or warranty is made.

       

      (e) Bankruptcy or
Insolvency.  The owner of the Property or any person liable,
directly or indirectly, for any of the Secured Indebtedness (or any general
partner or joint venturer of such owner or other person):

       

      (i) (A)
Executes an assignment for the benefit of creditors, or takes any action in
furtherance thereof; or (B) admits in writing its inability to pay, or fails to
pay, its debts generally as they become due; or (C) as a debtor, files a
petition, case, proceeding or other action pursuant to, or voluntarily seeks the
benefit or benefits of, Title 11 of the United States Code as now or hereafter
in effect or any other federal, state or local law, domestic or foreign, as now
or hereafter in effect relating to bankruptcy, insolvency, liquidation,
receivership, reorganization, arrangement, composition, extension or adjustment
of debts, or similar laws affecting the rights of creditors (Title 11 of the
United States Code and such other laws being herein called "Debtor Relief
Laws"), or takes any action in furtherance thereof; or (D) seeks the appointment
of a receiver, trustee, custodian or liquidator of the Property or any part
thereof or of any significant portion of its other property; or

       

      
        
          
          

        

        
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      (ii) Suffers
the filing of a petition, case, proceeding or other action against it as a
debtor under any Debtor Relief Law or seeking appointment of a receiver,
trustee, custodian or liquidator of the Property or any part thereof or of any
significant portion of its other property, and (A) admits, acquiesces in or
fails to contest diligently the material allegations thereof, or (B) the
petition, case, proceeding or other action results in entry of any order for
relief or order granting relief sought against it, or (C) in a proceeding under
Debtor Relief Laws, the case is converted from one chapter to another, or (D)
fails to have the petition, case, proceeding or other action permanently
dismissed or discharged on or before the earlier of trial thereon or ninety (90)
days next following the date of its filing; or

       

      (iii) Conceals,
removes, or permits to be concealed or removed, any part of its property, with
intent to hinder, delay or defraud its creditors or any of them, or makes or
suffers a transfer of any of its property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law; or makes any transfer of its
property to or for the benefit of a creditor at a time when other creditors
similarly situated have not been paid; or suffers or permits, while insolvent,
any creditor to obtain a lien (other than as described in subparagraph (iv)
below) upon any of its property through legal proceedings which are not vacated
and such lien discharged prior to enforcement thereof and in any event within
sixty (60) days from the date thereof; or

       

      (iv) Fails to
have discharged within a period of thirty (30) days any attachment,
sequestration, or similar writ levied upon any of its property; or

       

      (v) Fails to
pay immediately any final money judgment against it.

       

      (f) Transfer of the
Property.  Any sale, lease, conveyance, assignment, pledge,
encumbrance, or transfer of all or any part of the Property or any interest
therein, voluntarily or involuntarily, whether by operation of law or otherwise,
except: (i) sales or transfers of items of the Accessories which have become
obsolete or worn beyond practical use and which have been replaced by adequate
substitutes, owned by Mortgagor, having a value equal to or greater than the
replaced items when new; and (ii) the grant, in the ordinary course of business,
of a leasehold interest in a part of the Improvements to a tenant for occupancy,
not containing a right or option to purchase and not in contravention of any
provision of this Mortgage or of any other Loan Document.  Mortgagee
may, in its sole discretion, waive a default under this paragraph, but it shall
have no obligation to do so, and any waiver may be conditioned upon such one or
more of the following (if any) which Mortgagee may require:  the
grantee's integrity, reputation, character, creditworthiness and management
ability being satisfactory to Mortgagee in its sole judgment and grantee
executing, prior to such sale or transfer, a written assumption agreement
containing such terms as Mortgagee may require, a principal paydown on the Note,
an increase in the rate of interest payable under the Note, a transfer fee, a
modification of the term of the Note, and any other modification of the Loan
Documents which Mortgagee may require.  :  NOTICE - THE DEBT
SECURED HEREBY IS SUBJECT TO CALL IN FULL AND ANY AND ALL SWAP TRANSACTIONS ARE
SUBJECT TO TERMINATION, OR THE TERMS THEREOF BEING MODIFIED IN THE EVENT OF SALE
OR CONVEYANCE OF THE PROPERTY CONVEYED.

       

      
        
          
          

        

        
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      (g) Transfer of
Assets.  Any sale, lease, conveyance, assignment, pledge,
encumbrance, or transfer of all or any part of the other assets of Mortgagor,
excluding the Property, voluntarily or involuntarily, whether by operation of
law or otherwise, except: (i) sales or transfers in the ordinary course of
Mortgagor's business; and (ii) sales or transfers for which Mortgagor receives
consideration substantially equivalent to the fair market value of the
transferred asset.

       

      (h) Transfer of Ownership of
Mortgagor.  Any of the following:

       

      (i) the sale,
pledge, encumbrance, assignment or transfer, voluntarily or involuntarily,
whether by operation of law or otherwise, of any interest in Mortgagor (if
Mortgagor is not a natural person but is a corporation, partnership, limited
liability company, trust or other legal entity), without the prior written
consent of Mortgagee (including, without limitation, if Mortgagor is a
partnership or joint venture, the withdrawal from or admission into it of any
general partner or joint venturer); or

       

      (ii) if
Mortgagor or Guarantor (or a general partner, member or co-venturer of either of
them) is a partnership, joint venture, limited liability company, trust or
closely-held corporation, any sale, conveyance, transfer or other disposition of
more than 10%, in the aggregate, of any class of the issued and outstanding
capital stock of such closely-held corporation or of the beneficial interest of
such partnership, venture, limited liability company or trust, or a change of
any general partner, joint venturer, member or beneficiary, as the case may be,
or, in the event Mortgagor or Guarantor (or a general partner, co-venturer,
member or beneficiary, as the case may be, of either of them) is a publicly-held
corporation, the sale, conveyance, transfer or other disposition of more than
10%, in the aggregate, of the stock-holdings of any of the five (5) individuals
or entities that own the greatest number of shares of each class of issued and
outstanding stock, or effectuates or permits a reduction in the aggregate direct
and indirect ownership interests of Guarantor in Mortgagor below 50.1%, or
effectuates or causes Acadia Realty Trust to fail to control the management of
Guarantor and Mortgagor.

       

      (i) Grant of Easement,
Etc.  Without the prior written consent of Mortgagee, Mortgagor
grants any easement or dedication, files any plat, condominium declaration, or
restriction, or otherwise encumbers the Property, or seeks or permits any zoning
reclassification or variance, unless such action is expressly permitted by the
Loan Documents or does not affect the Property.

       

      (j) Abandonment.  The
owner of the Property abandons any of the Property.

       

      
        
          
          

        

        
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      (k) Default Under Other
Lien.  A default or event of default occurs under any lien,
security interest or assignment covering the Property or any part thereof
(whether or not Mortgagee has consented, and without hereby implying Mortgagee's
consent, to any such lien, security interest or assignment not created
hereunder), or the Mortgagee of any such lien, security interest or assignment
declares a default or institutes foreclosure or other proceedings for the
enforcement of its remedies thereunder.

       

      (l) Destruction.  The
Property is so demolished, destroyed or damaged that, in the reasonable opinion
of Mortgagee, it cannot be restored or rebuilt with available funds to a
profitable condition within a reasonable period of time and in any event, prior
to the final maturity date of the Note.

       

      (m) Condemnation.  (i)
Any governmental authority shall require, or commence any proceeding for, the
demolition of any building or structure comprising a part of the Premises, or
(ii) there is commenced any proceeding to condemn or otherwise take pursuant to
the power of eminent domain, or a contract for sale or a conveyance in lieu of
such a taking is executed which provides for the transfer of, a material portion
of the Premises, including but not limited to the taking (or transfer in lieu
thereof) of any portion which would result in the blockage or substantial
impairment of access or utility service to the Improvements or which would cause
the Premises to fail to comply with any Legal Requirement.

       

      (n) Liquidation,
Etc.  The liquidation, termination, dissolution, merger,
consolidation or failure to maintain good standing in the State of New York
and/or the state of incorporation or organization, if different (or in the case
of an individual, the death or legal incapacity) of the Mortgagor, any owner of
the Property or any person obligated to pay any part of the Secured
Indebtedness.

       

      (o) Material, Adverse
Change.  In Mortgagee's reasonable opinion, the prospect of
payment of all or any part of the Secured Indebtedness has been impaired because
of a material, adverse change in the financial condition, results of operations,
business or properties of the Mortgagor, any owner of the Property or any person
liable, directly or indirectly, for any of the Secured Indebtedness, or of any
general partner or joint venturer thereof (if such owner or other person is a
partnership or joint venture).

       

      (p) Enforceability;
Priority.  Any Loan Document shall for any reason without
Mortgagee's specific written consent cease to be in full force and effect, or
shall be declared null and void or unenforceable in whole or in part, or the
validity or enforceability thereof, in whole or in part, shall be challenged or
denied by any party thereto other than Mortgagee; or the liens, mortgages or
security interests of Mortgagee in any of the Property become unenforceable in
whole or in part, or cease to be of the priority herein required, or the
validity or enforceability thereof, in whole or in part, shall be challenged or
denied by Mortgagor or any person obligated to pay any part of the Secured
Indebtedness.

       

      (q) Other
Indebtedness.  A default or event of default occurs under any
document executed and delivered in connection with any other indebtedness (to
Mortgagee or any other person or entity) of Mortgagor, the owner of the
Property, any person obligated to pay any part of the Secured Indebtedness, or
any person or entity which guarantees such other indebtedness.

       

      
        
          
          

        

        
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      Section
4.2. Notice and
Cure.  If any provision of this Mortgage or any other Loan
Document provides for Mortgagee to give to Mortgagor any notice regarding a
default or incipient default, then if Mortgagee shall fail to give such notice
to Mortgagor as provided, the sole and exclusive remedy of Mortgagor for such
failure shall be to seek appropriate equitable relief to enforce the agreement
to give such notice and to have any acceleration of the maturity of the Note and
the Secured Indebtedness postponed or revoked and foreclosure proceedings in
connection therewith delayed or terminated pending or upon the curing of such
default in the manner and during the period of time permitted by such agreement,
if any, and Mortgagor shall have no right to damages or any other type of relief
not herein specifically set out against Mortgagee, all of which damages or other
relief are hereby waived by Mortgagor.  Nothing herein or in any other
Loan Document shall operate or be construed to add on or make cumulative any
cure or grace periods specified in any of the Loan Documents.

       

      ARTICLE
5

       

      Remedies

       

      Section
5.1. Certain
Remedies.  If a Default shall occur, Mortgagee may (but shall
have no obligation to) exercise any one or more of the following remedies,
without notice (unless notice is required by applicable statute):

       

      (a) Acceleration.  Mortgagee
may at any time and from time to time declare any or all of the Secured
Indebtedness immediately due and payable and may terminate any and all Swap
Transactions.  Upon any such declaration, such Secured Indebtedness
shall thereupon be immediately due and payable, and such Swap Transactions shall
immediately terminate, without presentment, demand, protest, notice of protest,
notice of acceleration or of intention to accelerate or any other notice or
declaration of any kind, all of which are hereby expressly waived by
Mortgagor.  Without limitation of the foregoing, upon the occurrence
of a default described in clauses (A), (C) or (D) of subparagraph (i) of
paragraph (d) of Section 4.1, hereof, all of the Secured Indebtedness shall
thereupon be immediately due and payable, without presentment, demand, protest,
notice of protest, declaration or notice of acceleration or intention to
accelerate, or any other notice, declaration or act of any kind, all of which
are hereby expressly waived by Mortgagor.

       

      (b) Enforcement of Assignment of
Rents.  In addition to the rights of Mortgagee under Article 3
hereof, prior or subsequent to taking possession of any portion of the Property
or taking any action with respect to such possession, Mortgagee may: (1) collect
and/or sue for the Rents in Mortgagee's own name, give receipts and releases
therefor, and after deducting all expenses of collection, including attorneys'
fees and expenses, apply the net proceeds thereof to the Secured Indebtedness in
such manner and order as Mortgagee may elect and/or to the operation and
management of the Property, including the payment of management, brokerage and
attorney's fees and expenses; and  (2) require Mortgagor to transfer
all security deposits and records thereof to Mortgagee together with original
counterparts of the Leases.

       

      
        
          
          

        

        
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      (c) Mortgagee's Right to Enter
and Take Possession, Operate and Apply Income.

       

      (i) Mortgagee
may demand that Mortgagor surrender the actual possession of the Property and
upon such demand, Mortgagor shall forthwith surrender same to Mortgagee and, to
the extent permitted by law, Mortgagee itself, or by such officers or agents as
it may appoint, may enter and take possession of all of the Property and may
exclude Mortgagor and its agents and employees wholly therefrom.

       

      (ii) If
Mortgagor shall for any reason fail to surrender or deliver the Property or any
part thereof after Mortgagee's demand, Mortgagee may obtain a judgment or order
conferring on Mortgagee the right to immediate possession or requiring the
Mortgagor to deliver immediate possession to Mortgagee, to the entry of which
judgment or decree the Mortgagor hereby specifically consents.

       

      (iii) Mortgagee
may from time to time: (A) continue and complete construction of, hold, store,
use, operate, manage and control the Property and conduct the business thereof;
(B) make all reasonably necessary maintenance, repairs, renewals,
replacements, additions, betterments and improvements thereto and thereon and
purchase or otherwise acquire additional personal property; (C) insure or
keep the Property insured; (D) exercise all the rights and powers of the
Mortgagor in its name or otherwise with respect to the same; and (E) enter
into agreements with others (including, without limitation, new Leases or
amendments, extensions, or cancellations to existing Leases) all as Mortgagee
from time to time may determine in its sole discretion.  Mortgagor
hereby constitutes and irrevocably appoints Mortgagee its true and lawful
attorney-in-fact, which appointment is coupled with an interest, with full power
of substitution, and empowers said attorney or attorneys in the name of
Mortgagor, but at the option of said attorney-in-fact, to do any and all acts
and execute any and all agreements that Mortgagee may deem necessary or proper
to implement and perform any and all of the foregoing.

       

      (d) Uniform Commercial
Code.  Mortgagee may exercise any or all of its rights and
remedies under the Uniform Commercial Code as adopted by the State of New York
as in effect from time to time, (or under the Uniform Commercial Code in force
from time to time in any other state to the extent the same is applicable law)
or other applicable law as well as all other rights and remedies possessed by
Mortgagee, all of which shall be cumulative.  Mortgagee is hereby
authorized and empowered to enter the Property or other place where the
collateral may be located without legal process, and to take possession of such
personal property without notice or demand, which hereby are waived to the
maximum extent permitted by the laws of the State of New York.  Upon
demand by Mortgagee, Mortgagor shall make such personal property available to
Mortgagee at a place reasonably convenient to Mortgagee.  Mortgagee
may proceed under the Uniform Commercial Code as to all or any part of such
personal property, and in conjunction therewith may exercise all of the rights,
remedies and powers of a secured creditor under the Uniform Commercial
Code.  Any notification required by the Uniform Commercial Code shall
be deemed reasonably and properly given if sent in accordance with the Notice
provisions of this Mortgage at least ten (10) days before any sale or other
disposition of such personal property.   Mortgagee may choose to
dispose of some or all of the property, in any combination consisting of both
personal property and Property, in one or more public or private sales to be
held in accordance with the Law and procedures applicable to real property, as
permitted by Article 9 of the Uniform Commercial Code.  Mortgagor
agrees that such a sale of such personal property together with Property
constitutes a commercially reasonable sale of such personal
property.

       

      
        
          
          

        

        
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      (e) Lawsuits.  Mortgagee
may proceed by a suit or suits in equity or at law, whether for collection of
the indebtedness secured hereby, the specific performance of any covenant or
agreement herein contained or in aid of the execution of any power herein
granted, or for any foreclosure hereunder or for the sale of the Property under
the judgment or decree of any court or courts of competent
jurisdiction.  Mortgagor hereby assents to the passage of a decree for
the sale of the Property by any equity court having jurisdiction.

       

      (f) Foreclosure.
Mortgagee may:

       

      (1) sell the
Mortgaged Property to the extent permitted and pursuant to the procedures
provided by law (including, without limitation, in accordance with Article 14 of
the New York Real Property Actions and Proceedings Law, regarding which
Mortgagor hereby consents and agrees that notices thereunder (including notices
of sale) may be given to Mortgagor in any of the manners specified for the
giving of notices set forth in Section 6.13, and all estate, right, title and
interest, claim and demand thereof, at one (1) or more sales as an entity or in
parcels or parts, and at such time and place upon such terms and after such
notice thereof as may be required or permitted by law; or

       

      (2) institute
proceedings for the complete or partial foreclosure hereof; or

       

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

       

      Any sale
made hereunder may be as an entirety or in such parcels as Mortgagee may
request.  To the extent permitted by applicable law, any sale may be
adjourned by announcement at the time and place appointed for such sale without
further notice except as may be required by law.  If the proceeds of
such sale of less than the whole of the Property shall be less than the
aggregate of the Secured Indebtedness, this Mortgage and the lien hereof shall
remain in full force and effect as to the unsold portion of the Property just as
though no sale had been made and the rights of Mortgagee to foreclose hereunder
shall also apply to any future sales.  A sale may cover not only the
Property but also personal property and other interests which are a part of the
Property, or any part thereof, as a unit and as a part of a single sale, or the
sale may be of any part of the Property separately from the remainder of the
Property.  After each sale, the Mortgagee shall make to the purchaser
or purchasers at such sale good and sufficient conveyances, conveying the
property so sold to the purchaser or purchasers in fee simple, subject to the
Permitted Encumbrances (and to such leases and other matters, if any), and shall
receive the proceeds of said sale or sales and apply the same as herein
provided.  In the event any sale hereunder is not completed or is
defective in the opinion of Mortgagee, such sale shall not exhaust the rights
hereunder and Mortgagee shall have the right to cause a subsequent sale or sales
to be made hereunder. Any and all statements of fact or other recitals made in
any deed or deeds or other conveyances given by the Mortgagee as to nonpayment
of the Secured Indebtedness or as to the occurrence of any default, or as to
Mortgagee's having declared all of said indebtedness to be due and payable, or
as to the request to sell, or as to notice of time, place and terms of sale and
the properties to be sold having been duly given, or as to any other act or
thing having been duly done by Mortgagee shall be taken as prima facie evidence
of the truth of the facts so stated and recited.

       

      
        
          
          

        

        
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      (g) Receiver. Mortgagee
may apply to any court of competent jurisdiction to have a receiver appointed to
enter upon and take possession of the Property, collect the Rents therefrom and
apply the same as the court may direct, such receiver to have all of the rights
and powers permitted under the laws of the State of New York.  To the
extent permitted by law, the right of the appointment of such receiver shall be
a matter of strict right without regard to the value or the occupancy of the
Property or the solvency or insolvency of Mortgagor.  The expenses,
including receiver's fees, attorneys' fees, costs and agent's commission
incurred pursuant to the powers herein contained, together with interest thereon
at the default rate under the Note, shall be secured hereby and shall be due and
payable by Mortgagor immediately without notice or
demand.   Notwithstanding the appointment of any receiver or
other custodian, Mortgagee shall be entitled as pledgee to the possession and
control of any cash or deposits at the time held by, payable, or deliverable
under the terms of this Mortgage to the Mortgagee, and the Mortgagee shall have
the right to offset the unpaid Secured Indebtedness against any such cash or
deposits in such order as Mortgagee may elect.

       

      (h) Termination of Commitment to
Lend.  Mortgagee may terminate any commitment or obligation to
lend or disburse funds under any Loan Document or enter into any other credit
arrangement to or for the benefit of Mortgagor.

       

      (i) Other Rights and
Remedies.  Mortgagee may exercise any and all other rights and
remedies which Mortgagee may have under the Loan Documents, or at law or in
equity or otherwise.

       

      Section
5.2. Application of
Proceeds.  Unless otherwise provided by applicable Law, all
proceeds from the sale of the Property or any part thereof pursuant to the
rights and remedies set forth in this Article 5 and any other proceeds received
by Mortgagee from the exercise of any of its other rights and remedies hereunder
or under the other Loan Documents shall be applied first to pay all Expenses and
next in reduction of the other Secured Indebtedness, in such manner and order as
Mortgagee may elect.

       

      Section
5.3. Remedies Cumulative and
Concurrent.  No right, power or remedy of Mortgagee as provided
in the Note, this Mortgage, or the other Loan Documents is intended to be
exclusive of any other right, power, or remedy of Mortgagee, but each and every
such right, power and remedy shall be cumulative and concurrent and in addition
to any other right, power or remedy available to Mortgagee now or hereafter
existing at law or in equity and may be pursued separately, successively or
together against Mortgagor, or any endorser, co-maker, surety or guarantor of
the Secured Indebtedness, or the Property or any part thereof, or any one or
more of them, at the sole discretion of Mortgagee.  The failure of
Mortgagee to exercise any such right, power or remedy shall in no event be
construed as a waiver or release thereof.

       

      
        
          
          

        

        
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      Section
5.4. Waiver, Delay or
Omission.  No waiver of any Default hereunder shall extend to
or affect any subsequent or any other Default then existing, or impair any
rights, powers or remedies consequent thereon, and no delay or omission of
Mortgagee to exercise any right, power or remedy shall be construed to waive any
such Default or to constitute acquiescence therein.

       

      Section
5.5. Credit of
Mortgagee.  To the maximum extent permitted by the laws of the
State of New York, upon any sale made under or by virtue of this Article,
Mortgagee may bid for and acquire the Property, or any part thereof, and in lieu
of paying cash therefor may apply to the purchase price, any portion of or all
of the unpaid Secured Indebtedness in such order as Mortgagee may
elect.

       

      Section
5.6. Sale.  Any
sale or sales made under or by virtue of this Article shall operate to divest
all the estate, right, title, interest, claim and demand whatsoever at law or in
equity, of the Mortgagor and all persons, except tenants pursuant to Leases
approved by Mortgagee, claiming by, through or under Mortgagor in and to the
properties and rights so sold, whether sold to Mortgagee or to
others.

       

      Section
5.7. Proofs of
Claim.  In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition, seizure of the
Property by any Governmental Authority, or other judicial proceedings affecting
the Mortgagor, any endorser, co-maker, surety, or guarantor of the Secured
Indebtedness, or any of their respective properties, the Mortgagee, to the
extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have its claim
allowed in such proceedings for the entire unpaid Secured Indebtedness at the
date of the institution of such proceedings, and for any additional amounts
which may become due and payable after such date.

       

      Section
5.8. Waiver of Redemption,
Notice, Marshalling, Etc.  Mortgagor hereby waives and
releases, for itself and anyone claiming through, by, or under it, to the
maximum extent permitted by the laws of the State of New York:

       

      (i) all
benefit that might accrue to Mortgagor by virtue of any present or future law
exempting the Property, or any part of the proceeds arising from any sale
thereof, from attachment, levy or sale on execution, or providing for any
appraisement, valuation, stay of execution, exemption from civil process,
redemption or extension of time for payment,

       

      (ii) unless
specifically required herein, all notices of default, or Mortgagee's actual
exercise of any option or remedy under the Loan Documents, or otherwise,
and

       

      (iii) any right
to have the Property marshaled.

       

      Section
5.9. Discontinuance of
Proceedings.  If Mortgagee shall have proceeded to enforce any
right under any Loan Document and such proceedings shall have been discontinued
or abandoned for any reason, then except as may be provided in any written
agreement between Mortgagor and Mortgagee providing for the discontinuance or
abandonment of such proceedings, Mortgagor and Mortgagee shall be restored to
their former positions and the rights, remedies and powers of Mortgagee shall
continue as if no such proceedings had been instituted.

       

      
        
          
          

        

        
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      Section
5.10. Mortgagee's
Actions.  Mortgagee may, at any time without notice to any
person and without consideration, do or refrain from doing any or all of the
following actions, and neither the Mortgagor, any endorser, co-maker, surety or
guarantor of the Secured Indebtedness, nor any other person (hereinafter in this
Section collectively referred to as the "Obligor") now or hereafter liable
for the payment and performance of the Secured Indebtedness shall be relieved
from the payment and performance thereof, unless specifically released in
writing by Mortgagee:  (a) renew, extend or modify the terms of
the Note, this Mortgage and the other Loan Documents, or any of them;
(b) forbear or extend the time for the payment or performance of any or all
of the Secured Indebtedness; (c) apply payments by any Obligor to the
reduction of the unpaid Secured Indebtedness in such manner, in such amounts,
and at such times and in such order and priority as Mortgagee may see fit;
(d) release any Obligor; (e) substitute or release in whole or in part
the Property or any other collateral or any portion thereof now or hereafter
held as security for the Secured Indebtedness without affecting, disturbing or
impairing in any manner whatsoever the validity and priority of the lien of this
Mortgage upon the Property which is not released or substituted, or the validity
and priority of any security interest of the Mortgagee in such other collateral
which is not released or substituted; (f) subordinate the lien of this
Mortgage or the lien of any other security interest in any other collateral now
or hereafter held as security for the Secured Indebtedness; (g) join in the
execution of a plat or replat of the Land (provided, however, notwithstanding
the foregoing, Mortgagee will join in such plat or replat of the Land so long as
such plat or replat is acceptable to Mortgagee); (h) join in and consent to
the filing of a declaration of condominium or declaration of restrictive
covenants regarding all or any part of the Land; (i) consent to the
granting of any easement on the Land; and (j) generally deal with any
obligor or any other party as Mortgagee may see fit.

       

      Section
5.11. Other
Remedies.  Mortgagee shall have the right from time to time to
protect, exercise and enforce any legal or equitable remedy against Mortgagor
provided under the Loan Documents or by applicable Laws.

       

      ARTICLE
6

       

      Miscellaneous

       

      Section
6.1. Scope of
Mortgage.  This Mortgage is a Mortgage of both real and
personal property, a security agreement, an assignment of rents and leases, a
financing statement and fixture filing and a collateral assignment, and also
covers proceeds and fixtures.

       

      Section
6.2. Effective as a Financing
Statement.  This Mortgage shall be effective as a financing
statement filed as a fixture filing with respect to all fixtures included within
the Property and is to be filed for record in the real estate records of each
county where any part of the Property (including said fixtures) is
situated.  This Mortgage shall also be effective as a financing
statement covering as-extracted collateral (including oil and gas), accounts and
general intangibles under the New York Uniform Commercial Code, as in effect
from time to time, and the Uniform Commercial Code, as in effect from time to
time, in any other state where the Property is situated which will be financed
at the wellhead or minehead of the wells or mines located on the Property and is
to be filed for record in the real estate records of each county where any part
of the Property is situated.  This Mortgage shall also be effective as
a financing statement covering any other Property and may be filed in any other
appropriate filing or recording office.  The mailing address of
Mortgagor and the Mortgagee are set forth in the preamble of this Mortgage and
the address of Mortgagee from which information concerning the security
interests hereunder may be obtained is the address of Mortgagee set forth at the
end of this Mortgage.  A carbon, photographic or other reproduction of
this Mortgage or of any financing statement relating to this Mortgage shall be
sufficient as a financing statement for any of the purposes referred to in this
Section.

       

      
        
          
          

        

        
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      Section
6.3. Notice to Account
Debtors.  In addition to the rights granted elsewhere in this
Mortgage, Mortgagee may at any time notify the account debtors or obligors of
any accounts, chattel paper, general intangibles, negotiable instruments or
other evidences of indebtedness included in the Collateral to pay Mortgagee
directly.

       

      Section
6.4. Waiver by
Mortgagee.  Mortgagee may at any time and from time to time by
a specific writing intended for the purpose: (a) waive compliance by Mortgagor
with any covenant herein made by Mortgagor to the extent and in the manner
specified in such writing; (b) consent to Mortgagor's doing any act which
hereunder Mortgagor is prohibited from doing, or to Mortgagor's failing to do
any act which hereunder Mortgagor is required to do, to the extent and in the
manner specified in such writing; (c) release any part of the Property or any
interest therein from the lien and security interest of this Mortgage, without
the joinder of Mortgagee; or (d) release any party liable, either directly or
indirectly, for the Secured Indebtedness or for any covenant herein or in any
other Loan Document, without impairing or releasing the liability of any other
party.  No such act shall in any way affect the rights or powers of
Mortgagee or Mortgagee hereunder except to the extent specifically agreed to by
Mortgagee in such writing.

       

      Section
6.5. No Impairment of
Security.  The lien, security interest and other security
rights of Mortgagee hereunder or under any other Loan Document shall not be
impaired by any indulgence, moratorium or release granted by Mortgagee
including, but not limited to, any renewal, extension or modification which
Mortgagee may grant with respect to any Secured Indebtedness, or any surrender,
compromise, release, renewal, extension, exchange or substitution which
Mortgagee may grant in respect of the Property, or any part thereof or any
interest therein, or any release or indulgence granted to any endorser,
guarantor or surety of any Secured Indebtedness.  The taking of
additional security by Mortgagee shall not release or impair the lien, security
interest or other security rights of Mortgagee hereunder or affect the liability
of Mortgagor or of any endorser, guarantor or surety, or improve the right of
any junior lien Mortgagee in the Property (without implying hereby Mortgagee's
consent to any junior lien).

       

      Section
6.6. Acts Not Constituting Waiver
by Mortgagee.  Mortgagee may waive any default without waiving
any other prior or subsequent default.  Mortgagee may remedy any
default without waiving the default remedied.  Neither failure by
Mortgagee to exercise, nor delay by Mortgagee in exercising, nor discontinuance
of the exercise of any right, power or remedy (including but not limited to the
right to accelerate the maturity of the Secured Indebtedness or any part
thereof) upon or after any default shall be construed as a waiver of such
default or as a waiver of the right to exercise any such right, power or remedy
at a later date.  No single or partial exercise by Mortgagee of any
right, power or remedy hereunder shall exhaust the same or shall preclude any
other or further exercise thereof, and every such right, power or remedy
hereunder may be exercised at any time and from time to time.  No
modification or waiver of any provision hereof nor consent to any departure by
Mortgagor therefrom shall in any event be effective unless the same shall be in
writing and signed by Mortgagee and then such waiver or consent shall be
effective only in the specific instance, for the purpose for which given and to
the extent therein specified.  No notice to nor demand on Mortgagor in
any case shall of itself entitle Mortgagor to any other or further notice or
demand in similar or other circumstances.  Remittances in payment of
any part of the Secured Indebtedness other than in the required amount in
immediately available U.S. funds shall not, regardless of any receipt or credit
issued therefor, constitute payment until the required amount is actually
received by Mortgagee in immediately available U.S. funds and shall be made and
accepted subject to the condition that any check or draft may be handled for
collection in accordance with the practice of the collecting bank or
banks.  Acceptance by Mortgagee of any payment in an amount less than
the amount then due on any Secured Indebtedness shall be deemed an acceptance on
account only and shall not in any way excuse the existence of a default
hereunder notwithstanding any notation on or accompanying such partial payment
to the contrary.

       

      
        
          
          

        

        
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      Section
6.7. Mortgagor's
Successors.  If the ownership of the Property or any part
thereof becomes vested in a person other than Mortgagor, Mortgagee may, without
notice to Mortgagor, deal with such successor or successors in interest with
reference to this Mortgage and to the Secured Indebtedness in the same manner as
with Mortgagor, without in any way vitiating or discharging Mortgagor's
liability hereunder or for the payment of the indebtedness or performance of the
obligations secured hereby.  No transfer of the Property, no
forbearance on the part of Mortgagee, and no extension of the time for the
payment of the Secured Indebtedness given by Mortgagee shall operate to release,
discharge, modify, change or affect, in whole or in part, the liability of
Mortgagor hereunder for the payment of the indebtedness or performance of the
obligations secured hereby or the liability of any other person hereunder for
the payment of the indebtedness secured hereby.  Each Mortgagor agrees
that it shall be bound by any modification of this Mortgage or any of the other
Loan Documents made by Mortgagee and any subsequent owner of the Property, with
or without notice to such Mortgagor, and no such modifications shall impair the
obligations of such Mortgagor under this Mortgage or any other Loan
Document.  Nothing in this Section or elsewhere in this Mortgage shall
be construed to imply Mortgagee's consent to any transfer of the
Property.

       

      Section
6.8. Place of
Payment.  All Secured Indebtedness which may be owing hereunder
at any time by Mortgagor shall be payable at the place designated in the Note
(or if no such designation is made, at the address of Mortgagee indicated at the
end of this Mortgage).

       

      Section
6.9. Subrogation to Existing
Liens; Vendor's Lien.  To the extent that proceeds of the Note
are used to pay indebtedness secured by any outstanding lien, security interest,
charge or prior encumbrance against the Property, such proceeds have been
advanced by Mortgagee at Mortgagor's request, and Mortgagee shall be subrogated
to any and all rights, security interests and liens owned by any owner or
Mortgagee of such outstanding liens, security interests, charges or
encumbrances, however remote, irrespective of whether said liens, security
interests, charges or encumbrances are released, and all of the same are
recognized as valid and subsisting and are renewed and continued and merged
herein to secure the Secured Indebtedness, but the terms and provisions of this
Mortgage shall govern and control the manner and terms of enforcement of the
liens, security interests, charges and encumbrances to which Mortgagee is
subrogated hereunder.  It is expressly understood that, in
consideration of the payment of such indebtedness by Mortgagee, Mortgagor hereby
waives and releases all demands and causes of action for offsets and payments in
connection with the said indebtedness.  If all or any portion of the
proceeds of the loan evidenced by the Note or of any other secured indebtedness
has been advanced for the purpose of paying the purchase price for all or a part
of the Property, no vendor's lien is waived; and Mortgagee shall have, and is
hereby granted, a vendor's lien on the Property as cumulative additional
security for the secured indebtedness.  Mortgagee may foreclose under
this Mortgage or under the vendor's lien without waiving the other or may
foreclose under both.

       

      
        
          
          

        

        
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      Section
6.10. Application of Payments to
Certain Indebtedness.  If any part of the Secured Indebtedness
cannot be lawfully secured by this Mortgage or if any part of the Property
cannot be lawfully subject to the lien and security interest hereof to the full
extent of such indebtedness, then all payments made shall be applied on said
indebtedness first in discharge of that portion thereof which is not secured by
this Mortgage.

       

      Section
6.11. Nature of Loan; Compliance
with Usury Laws.  The loan evidenced by the Note is being made
solely for the purpose of carrying on or acquiring a business or commercial
enterprise.  It is the intent of Mortgagor and Mortgagee and all other
parties to the Loan Documents to conform to and contract in strict compliance
with applicable usury law from time to time in effect.  All agreements
between Mortgagee and Mortgagor (or any other party liable with respect to any
indebtedness under the Loan Documents) are hereby limited by the provisions of
this Section which shall override and control all such agreements, whether now
existing or hereafter arising.  In no way, nor in any event or
contingency (including but not limited to prepayment, default, demand for
payment, or acceleration of the maturity of any obligation), shall the interest
taken, reserved, contracted for, charged, chargeable, or received under this
Mortgage, the Note or any other Loan Document or otherwise, exceed the maximum
nonusurious amount permitted by applicable law (the "Maximum
Amount").  If, from any possible construction of any document,
interest would otherwise be payable in excess of the Maximum Amount, any such
construction shall be subject to the provisions of this Section and such
document shall ipso facto be automatically reformed and the interest payable
shall be automatically reduced to the Maximum Amount, without the necessity of
execution of any amendment or new document.  If Mortgagee shall ever
receive anything of value which is characterized as interest under applicable
law and which would apart from this provision be in excess of the Maximum
Amount, an amount equal to the amount which would have been excessive interest
shall, without penalty, be applied to the reduction of the principal amount
owing on the Secured Indebtedness in the inverse order of its maturity and not
to the payment of interest, or refunded to Mortgagor or the other payor thereof
if and to the extent such amount which would have been excessive exceeds such
unpaid principal.  The right to accelerate maturity of the Note or any
other Secured Indebtedness does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and Mortgagee
does not intend to charge or receive any unearned interest in the event of
acceleration.  All interest paid or agreed to be paid to Mortgagee
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full stated term (including any renewal or
extension) of such indebtedness so that the amount of interest on account of
such indebtedness does not exceed the Maximum Amount.  As used in this
Section, the term "applicable law" shall mean the laws of the State of New York
or the federal laws of the United States applicable to this transaction,
whichever laws allow the greater interest, as such laws now exist or may be
changed or amended or come into effect in the future.

       

      
        
          
          

        

        
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      Section
6.12. Releases.

       

      (a) Release of
Mortgage.  If all of the Secured Indebtedness is paid as the
same becomes due and payable and all of the covenants, warranties, undertakings
and agreements made in this Mortgage are kept and performed, and all Swap
Transactions and all other obligations, if any, of Mortgagee for further
advances have been terminated, then, and in that event only, all rights under
this Mortgage shall terminate (except to the extent expressly provided herein
with respect to indemnifications, representations and warranties and other
rights which are to continue following the release hereof) and the Property
shall become wholly clear of the liens, security interests, conveyances and
assignments evidenced hereby, and such liens and security interests shall be
released by Mortgagee in due form at Mortgagor's cost.  Without
limitation, all provisions herein for indemnity of Mortgagee or Mortgagee shall
survive discharge of the Secured Indebtedness, the termination of any and all
Swap Transactions and any foreclosure, release or termination of this
Mortgage.

       

      (b) Partial Releases; No Release
in Default.  Partial releases of the lien of this Mortgage
shall be made in accordance with the terms and provisions of Exhibit C attached
hereto and by this reference made a part hereof, or in accordance with such
other terms and conditions as may subsequently be agreed to by
Mortgagee.  If no such Exhibit C is attached
hereto, then there are no terms and provisions for partial releases, to which
Mortgagee and Mortgagor have agreed at this time.  In any event, no
partial release shall be sought, requested or required if any Default has
occurred which has not been cured.

       

      (c) Effect of Partial
Release.  Mortgagee may, regardless of consideration, cause the
release of any part of the Property from the lien of this Mortgage without in
any manner affecting or impairing the lien or priority of this Mortgage as to
the remainder of the Property.

       

      (d) Release
Fee.  If permitted by applicable law Mortgagor shall pay to
Mortgagee, at the time of each partial or complete release of the lien of this
Mortgage, a release fee in the amount of $25.00 if the release instrument is
delivered to Mortgagee for execution or $50.00, if Mortgagee is required to
prepare the release instrument.  In addition, Mortgagor shall pay to
Mortgagee a fee in the amount of $25.00 for each other document or instrument
which Mortgagor requires the Mortgagee to execute.

       

      Section
6.13. Notices.  All
notices, requests, consents, demands and other communications required or which
any party desires to give hereunder or under any other Loan Document shall be in
writing and, unless otherwise specifically provided in such other Loan Document,
shall be deemed sufficiently given or furnished if delivered by personal
delivery, by nationally recognized overnight courier service, or by registered
or certified United States mail, postage prepaid, addressed to the party to whom
directed at the addresses specified in this Mortgage (unless changed by similar
notice in writing given by the particular party whose address is to be changed)
or by facsimile.  Any such notice or communication shall be deemed to
have been given either at the time of personal delivery or, in the case of
courier or mail, as of the date of first attempted delivery at the address and
in the manner provided herein, or, in the case of facsimile, upon receipt;
provided that, service of a notice required by any applicable statute shall be
considered complete when the requirements of that statute are
met.  Notwithstanding the foregoing, no notice of change of address
shall be effective except upon receipt.  This Section shall not be
construed in any way to affect or impair any waiver of notice or demand provided
in any Loan Document or to require giving of notice or demand to or upon any
person in any situation or for any reason.

       

      
        
          
          

        

        
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      Section
6.14. Invalidity of Certain
Provisions.  A determination that any provision of this
Mortgage is unenforceable or invalid shall not affect the enforceability or
validity of any other provision and the determination that the application of
any provision of this Mortgage to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances.

       

      Section
6.15. Gender; Titles;
Construction.  Within this Mortgage, words of any gender shall
be held and construed to include any other gender, and words in the singular
number shall be held and construed to include the plural, unless the context
otherwise requires.  Titles appearing at the beginning of any
subdivisions hereof are for convenience only, do not constitute any part of such
subdivisions, and shall be disregarded in construing the language contained in
such subdivisions.  The use of the words "herein," "hereof,"
"hereunder" and other similar compounds of the word "here" shall refer to this
entire Mortgage and not to any particular Article, Section, paragraph or
provision.  The term "person" and words importing persons as used in
this Mortgage shall include firms, associations, partnerships (including limited
partnerships), joint ventures, trusts, corporations, limited liability companies
and other legal entities, including public or governmental bodies, agencies or
instrumentalities, as well as natural persons.

       

      Section
6.16. Reporting
Compliance.  Mortgagor agrees to comply with any and all
reporting requirements applicable to the transaction evidenced by the Note and
secured by this Mortgage which are set forth in any law, statute, ordinance,
rule, regulation, order or determination of any governmental authority,
including but not limited to The International Investment Survey Act of 1976,
The Agricultural Foreign Investment Disclosure Act of 1978, The Foreign
Investment in Real Property Tax Act of 1980 and the Tax Reform Act of 1984 and
further agrees upon request of Mortgagee to furnish Mortgagee with evidence of
such compliance.

       

      Section
6.17. Mortgagee's
Consent.  Except where otherwise expressly provided herein, in
any instance hereunder where the approval, consent or the exercise of judgment
of Mortgagee is required or requested, (a) the granting or denial of such
approval or consent and the exercise of such judgment shall be within the sole
discretion of Mortgagee, and Mortgagee shall not, for any reason or to any
extent, be required to grant such approval or consent or exercise such judgment
in any particular manner, regardless of the reasonableness of either the request
or Mortgagee's judgment, and (b) no approval or consent of Mortgagee shall be
deemed to have been given except by a specific writing intended for the purpose
and executed by an authorized representative of Mortgagee.

       

      Section
6.18. Mortgagor.  Unless
the context clearly indicates otherwise, as used in this Mortgage, "Mortgagor"
means the Mortgagors named in Section 1.1 hereof or any of them.  The
obligations of Mortgagor hereunder shall be joint and several.  If any
Mortgagor, or any signatory who signs on behalf of any Mortgagor, is a
corporation, partnership or other legal entity, Mortgagor and any such
signatory, and the person or persons signing for it, represent and warrant to
Mortgagee that this instrument is executed, acknowledged and delivered by
Mortgagor's duly authorized representatives.  If Mortgagor is an
individual, no power of attorney granted by Mortgagor herein shall terminate on
Mortgagor's disability.

       

      
        
          
          

        

        
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      Section
6.19. Execution;
Recording.  This Mortgage has been executed in several
counterparts, all of which are identical, and all of which counterparts together
shall constitute one and the same instrument.  The date or dates
reflected in the acknowledgments hereto indicate the date or dates of actual
execution of this Mortgage, but such execution is as of the date shown on the
first page hereof, and for purposes of identification and reference the date of
this Mortgage shall be deemed to be the date reflected on the first page
hereof.  Mortgagor will cause this Mortgage and all amendments and
supplements thereto and substitutions therefor and all financing statements and
continuation statements relating thereto to be recorded, filed, re-recorded and
refiled in such manner and in such places as  or Mortgagee shall
reasonably request and will pay all such recording, filing, re-recording and
refiling taxes, fees and other charges.

       

      Section
6.20. Successors and
Assigns.  The terms, provisions, covenants and conditions
hereof shall be binding upon Mortgagor, and the heirs, devisees,
representatives, successors and assigns of Mortgagor, and shall inure to the
benefit of Mortgagee and shall constitute covenants running with the
Land.  All references in this Mortgage to Mortgagor shall be deemed to
include all such heirs, devisees, representatives, successors and assigns of
Mortgagor.

       

      Section
6.21. Modification or
Termination.  The Loan Documents may only be modified or
terminated by a written instrument or instruments intended for that purpose and
executed by the party against which enforcement of the modification or
termination is asserted.  Any alleged modification or termination
which is not so documented shall not be effective as to any party.

       

      Section
6.22. No Partnership,
Etc.  The relationship between Mortgagee and Mortgagor is
solely that of mortgagee and mortgagor.  Mortgagee has no fiduciary or
other special relationship with Mortgagor.  Nothing contained in the
Loan Documents is intended to create any partnership, joint venture, association
or special relationship between Mortgagor and Mortgagee or in any way make
Mortgagee a co-principal with Mortgagor with reference to the Property. All
agreed contractual duties between or among Mortgagee and Mortgagor
and  are set forth herein and in the other Loan Documents and any
additional implied covenants or duties are hereby disclaimed.  Any
inferences to the contrary of any of the foregoing are hereby expressly
negated.

       

      Section
6.23. Priority of
Lien.  This Mortgage shall be, and shall at all times remain,
subject and subordinate to the Mortgage, Assignment of Leases and Rents and
Security Agreement from Mortgagor to Mortgagee in the amount of $45,000,000
dated as of the date hereof, as the same may be modified, amended and/or
restated from time to time and  the lien imposed by such
mortgage.

       

      
        
          
          

        

        
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      Section
6.24. Applicable
Law.  THIS MORTGAGE, AND ITS VALIDITY, ENFORCEMENT AND
INTERPRETATION, SHALL BE GOVERNED BY NEW YORK LAW AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH AND PURSUANT TO THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES
FEDERAL LAW, EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND
EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION
OTHER THAN THE STATE OF NEW YORK ARE GOVERNED BY THE LAWS OF SUCH OTHER
JURISDICTION.

       

      Section
6.25. Entire
Agreement.  The Loan Documents constitute the entire
understanding and agreement between Mortgagor and Mortgagee with respect to the
transactions arising in connection with the Secured Indebtedness and supersede
all prior written or oral understandings and agreements between Mortgagor and
Mortgagee with respect to the matters addressed in the Loan
Documents.  Mortgagor hereby acknowledges that, except as incorporated
in writing in the Loan Documents, there are not, and were not, and no persons
are or were authorized by Mortgagee to make, any representations,
understandings, stipulations, agreements or promises, oral or written, with
respect to the matters addressed in the Loan Documents.

       

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

       

      Section
6.27. WAIVER OF JURY
TRIAL.  WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES'
AGREEMENT TO ARBITRATE ANY DISPUTE AS SET FORTH IN THIS MORTGAGE, TO THE EXTENT
ANY DISPUTE IS NOT SUBMITTED TO ARBITRATION OR IS DEEMED BY THE ARBITRATOR OR BY
ANY COURT WITH JURISDICTION TO BE NOT ARBITRABLE OR NOT REQUIRED TO BE
ARBITRATED, MORTGAGOR AND MORTGAGEE WAIVE TRIAL BY JURY IN RESPECT OF ANY SUCH
DISPUTE AND ANY ACTION ON SUCH DISPUTE.  THIS WAIVER IS KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY MORTGAGOR AND MORTGAGEE , AND MORTGAGOR AND
MORTGAGEE HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN
MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT.  THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THE LOAN
DOCUMENTS.  MORTGAGOR AND MORTGAGEE ARE EACH HEREBY AUTHORIZED TO FILE
A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER
OF JURY TRIAL.  MORTGAGOR FURTHER REPRESENTS AND WARRANTS THAT IT HAS
BEEN REPRESENTED IN THE SIGNING OF THIS MORTGAGE AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE
REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT
IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

       

      
        
          
          

        

        
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      Section
6.28. Cross-Default.  The
Loan shall be cross-defaulted with all other loans which Mortgagor shall have
from Lenders during the term of the Loan, whether existing as of the date of
this Agreement subsequently made.  A default under any of the
above-described loans shall constitute a Default under the Loan.  A
Default under the Loan shall constitute a Default under the above-described
other loans.  To the extent not prohibited by applicable law, if
Mortgagee, at its option, avails itself of this cross-default provision,
Mortgagee shall have the option to pursue its remedies in any combinations and
against any or all of Mortgagee's security for the aforesaid loans, whether
successively, concurrently or otherwise.

       

      Section
6.29. Substitute
Mortgages.  Mortgagor and Mortgagee shall, upon their mutual
agreement to do so, execute such documents as may be necessary in order to
effectuate the modification hereof, including the execution of substitute
mortgages, so as to create two (2) or more liens on the Mortgaged Property in
such amounts as may be mutually agreed upon but in no event to exceed, in the
aggregate, the Mortgage Amount; in such event, Mortgagor covenants and agrees to
pay the reasonable fees and expenses of Mortgagee and its counsel in connection
with any such modification.

       

      Section
6.30. Satisfaction or Assignment
of Mortgage.  Upon payment in full of all sums, and the
performance of all obligations, secured hereby in accordance with the terms and
conditions of this Mortgage and the other Loan documents, Mortgagee shall
deliver a satisfaction or release of this Mortgage or, at Mortgagor's option to
be exercised in writing, an assignment hereof, in either case in proper form of
recording.  As a condition to any such satisfaction or assignment,
Mortgagor covenants and agrees to pay Mortgagee's reasonable fees and expenses
(including attorneys' fees and expenses) in connection
therewith.  Upon any such satisfaction or assignment, Mortgagee shall,
automatically and without the need for any other further documentation, be
absolutely and unconditionally released from any and all claims or liabilities
in connection with the Loan.  In addition, Mortgagor hereby
indemnifies and agrees to hold Mortgagee harmless from and against any and all
claims and liabilities arising out of the satisfaction or assignment hereof,
such indemnification to survive any such satisfaction or
assignment.

       

      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      

       

      Section
6.31. New York
Provisions.  (a) Mortgagor hereby makes the following
statement:  "This Mortgage does not cover real property principally
improved or to be improved by one (1) or more structures containing in the
aggregate not more than six (6) residential dwelling, each having its own
separate cooking facilities."  and (b) the covenants and conditions
contained herein, other than those included in the New York Statutory Short Form
of Mortgage, shall be construed as affording to Mortgagee rights additional to,
and not exclusive of, the rights conferred under the provisions of Section 254
of the Real Property Law of the State of New York.

       

      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      

       

      IN WITNESS
WHEREOF, Mortgagor has executed this Mortgage as an instrument under seal as of
the date first written on page 1 hereof.

      
      

       

      
        	 	ACADIA CORTLANDT LLC,
      a Delaware limited liability company
	 	 	 
	 	 	 
	 	By 	 
	 	 	
                Robert
      Masters

                Senior
      Vice President

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          	STATE OF NEW
      YORK 	)
	 	
                  :    ss.:

                
	COUNTY OF NEW
      YORK 	)

        

         

      

       

      On the
29th day of July in the year 2009, before me, the undersigned, a notary public
in and for said state, personally appeared Robert Masters, personally known to
me or proved to me on the basis of satisfactory evidence to be the individual(s)
whose name(s) is (are) subscribed to the within instrument and acknowledged to
me that he/she/they executed the same in his/her/their capacity(ies), and that
by his/her/their signature(s) on the instrument, the individual(s), or the
person upon behalf of which the individual(s) acted, executed the
instrument.

      

      

       

      
        	 	 
	 	
                Notary
      Public

              
	 	 
	My Commission
      Expires: 	 
	 	 
	 	 
	 	 

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
A

      

      Land

      

      

      ALL THAT
CERTAIN PARCEL OF LAND SITUATE IN THE TOWN OF CORTLANDT, COUNTY OF WESTCHESTER
AND STATE OF NEW YORK THAT IS A PORTION OF THOSE LANDS DESIGNATED PARCEL 1,
PARCEL 2A AND PARCEL 2B ON THAT CERTAIN "RESUBDIVISION PLAT OF FILED MAP NO.
17837 SECTION 1 MID-WESTCHESTER INDUSTRIAL PARK, INC.," WHICH WAS FILED IN THE
WESTCHESTER COUNTY CLERK'S OFFICE ON OCTOBER 15, 1984 AS MAP NO. 21741 THAT IS
BOUNDED AND DESCRIBED AS FOLLOWS:

       

      BEGINNING
AT A POINT ON THE SOUTHEASTERLY LINE OF U.S. ROUTE 6 (AKA 5 MILE TURNPIKE AND/OR
EAST MAIN STREET AND/OR STATE HIGHWAY 1309) WHERE IT IS MET BY THE LINE DIVIDING
THE LANDS HEREIN DESCRIBED ON THE NORTHEAST FROM LANDS DESIGNATED LOT NO. 21 ON
THAT CERTAIN "MAP NO. 1 GULL MANOR..," WHICH WAS FILED IN THE WESTCHESTER COUNTY
CLERK'S OFFICE ON MARCH 25, 1954 AS MAP NO. 8930, WHICH POINT OCCUPIES
COORDINATE POSITION

       

      N
476,045.23 (Y)

      E
625,146.49 (X) OF THE NEW YORK STATE COORDINATE SYSTEM, EAST ZONE;

      

      THENCE
FROM THE SAID POINT OF BEGINNING NORTHEASTERLY ALONG THE SOUTHEASTERLY LINE OF
U.S. ROUTE 6 NORTH 31° 31' 51" EAST 202.41 FEET AND TO A POINT AT THE
SOUTHWESTERLY LINE OF LOT NO. 4 SHOWN ON THAT CERTAIN MAP ENTITLED "SECTION NO.
1 MID-WESTCHESTER INDUSTRIAL PARK" WHICH WAS FILED IN THE WESTCHESTER COUNTY
CLERK'S OFFICE ON OCTOBER 16, 1972 AS MAP NO. 17837;

       

      THENCE
ALONG THE SOUTHWESTERLY, SOUTHEASTERLY AND NORTHEASTERLY LINES OF LOT NO. 4
SHOWN ON FILED MAP NO. 17837 THE FOLLOWING COURSES:

       

      SOUTH 54°
41' 49" EAST 400.00 FEET;

      NORTH 35°
15' 51" EAST 200.00 FEET;

      NORTH 54°
41' 49" WEST 201.75 FEET TO A POINT AT THE LINE OF LANDS NOW OR FORMERLY OF
MOBIL CENTERS, INC;

      

      THENCE
ALONG THE SAID MOBIL CENTERS, INC. LANDS:

       

      NORTH 35°
15' 51" EAST 150.02 FEET AND;

      NORTH 54°
41' 49" WEST 174.98 FEET TO A POINT;

       

      THENCE
STILL ALONG THE SAID LANDS OF MOBIL CENTERS, INC. WESTERLY ON A TANGENT CURVE TO
THE LEFT, THE CENTRAL ANGLE OF WHICH IS 90° 02' 20", THE RADIUS OF WHICH 25.00
FEET FOR 39.29 FEET TO ANOTHER POINT ON THE SAID SOUTHEASTERLY LINE OF U.S.
ROUTE 6;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      THENCE
NORTHEASTERLY ONCE AGAIN ALONG THE SAID SOUTHEASTERLY LINE OF U.S. ROUTE
6;

       

      NORTH 35°
15' 51" EAST 103.05 FEET AND;

      NORTH 34°
16' 11" EAST 16.52 FEET TO A POINT AT THE LINE OF LANDS NOW OR FORMERLY OF W.W.
GEIS, JR.;

       

      THENCE
ALONG AND AROUND THE SAID W.W GEIS, JR. LANDS THE FOLLOWING, FIRST TURNING ABOUT
AND SOUTHERLY ON A TANGENT CURVE TO THE LEFT, THE CENTRAL ANGLE OF WHICH IS 88°
58' 00", THE RADIUS OF WHICH IS 25.00 FEET FOR 38.82 FEET AND THEN FOLLOWING
COURSES:

       

      SOUTH 54°
41' 49" EAST 187.41 FEET;

      SOUTH 87°
58' 31" EAST 50.19 FEET;

      NORTH 34°
14' 31" EAST 293.26 FEET AND;

      NORTH 55°
45' 29" WEST 248.82 FEET TO STILL ANOTHER POINT ON THE SOUTHEASTERLY LINE OF
U.S. ROUTE 6;

       

      THENCE
NORTHEASTERLY ONCE AGAIN ALONG THE SAID SOUTHEASTERLY LINE OF U.S. ROUTE
6;

       

      NORTH 38°
26' 11" EAST 91.89 FEET AND;

       

      NORTH 36°
40' 11" EAST 175.50 FEET TO A POINT AT THE LINE LAND NOW OR FORMERLY OF HOME
DEPOT U.S.A., INC. LANDS, THE FOLLOWING FIRST

       

      SOUTH 53°
24' 23' EAST 28.04 FEET

       

      THEN ON A
TANGENT CURVE TO THE RIGHT, THE CENTRAL ANGLE OF WHICH IS 44° 59' 45", THE
RADIUS OF WHICH IS 100.00 FEET FOR 78.53 FEET,

       

      THEN SOUTH
08° 24' 38" EAST 170.39 FEET

       

      THEN ON A
TANGENT CURVE TO THE RIGHT, THE CENTRAL ANGLE OF WHICH IS 42° 53' 52", THE
RADIUS OF WHICH IS 330.00 FEET FOR 245.35 FEET, AND THEN THE FOLLOWING
COURSES:

       

      SOUTH 34°
11' 14" WEST 7.14 FEET;

      SOUTH 42°
10' 35" EAST 571.35 FEET;

      NORTH 81°
40' 00" EAST 752.50 FEET;

      NORTH 42°
10' 35" WEST 546.00 FEET;

      SOUTH 47°
49' 25" WEST 12.00 FEET;

      NORTH 42°
10' 35" WEST 334.49 FEET;

      NORTH 47°
49' 25" EAST 64.36 FEET;

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      NORTH 42°
10' 35" WEST 551.64 FEET TO A POINT ON THE SOUTHEASTERLY LINE OF U.S. ROUTE
6;

       

      THENCE
NORTHEASTERLY ALONG THE SOUTHEASTERLY LINE OF U.S. ROUTE 6 THE FOLLOWING
COURSES:

       

      NORTH 43°
07' 31" EAST 240.77 FEET;

      NORTH 46°
43' 08" EAST 200.86 FEET;

      NORTH 47°
51' 46" EAST 169.07 FEET;

      NORTH 54°
16' 42" EAST 77.64 FEET;

      NORTH 43°
47' 18" EAST 103.43 FEET;

      NORTH 06°
57' 25" EAST 7.49 FEET;

      NORTH 44°
52' 56" EAST 141.98 FEET;

      NORTH 56°
38' 06" EAST 194.10 FEET;

      NORTH 47°
40' 06" EAST 31.98 FEET TO A POINT AT THE LINE DIVIDING PARCEL NO. 2A, ON THE
SOUTHWEST FROM PARCEL NO. 1, ON THE NORTHEAST, BOTH AS SHOWN ON SAID FILED MAP
NO. 21741, WHICH POINT OCCUPIES COORDINATE POSITION

       

      N
478,107.32 (Y)

      E
626,930.25 (X) OF THE NEW YORK STATE COORDINATE SYSTEM, EAST ZONE;

       

      THENCE
STILL ALONG THE SOUTHEASTERLY LINE OF U.S. ROUTE 6 THE FOLLOWING
COURSES:

       

      NORTH 47°
40' 06" EAST 15.49 FEET;

      NORTH 57°
07' 47" EAST 41.34 FEET;

      NORTH 46°
37' 24" EAST 65.92 FEET;

      NORTH 60°
47' 16" EAST 135.27 FEET;

      NORTH 58°
29' 38" EAST 200.48 FEET;

      NORTH 76°
26' 07" EAST 65.57 FEET;

      NORTH 53°
06' 18" EAST 114.53 FEET;

      NORTH 59°
20' 46" EAST 157.01 FEET;

      NORTH 67°
37' 05" EAST 102.26 FEET;

      NORTH 39°
31' 22" EAST 47.05 FEET;

      NORTH 62°
09' 00" EAST 123.28 FEET;

      NORTH 59°
26' 00" EAST 57.40 FEET;

      NORTH 58°
13' 00" EAST 81.60 FEET;

      NORTH 61°
59' 00" EAST 41.60 FEET;

      NORTH 38°
58' 00" EAST 17.42 FEET;

      NORTH 61°
26' 39" EAST 147.75 FEET;

      NORTH 57°
24' 50" EAST 100.18 FEET;

      NORTH 63°
24' 40" EAST 64.74 FEET TO A POINT AT THE LINE OF LANDS NOW OR FORMERLY OF
BERKO, WHICH POINT OCCUPIES COORDINATE POSITION

      

      N
478.912.07 (Y)

      E
628,275.78 (X) OF THE NEW YORK STATE COORDINATE SYSTEM, EAST ZONE;

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      THENCE
SOUTHERLY ALONG THE SAID BERKO LANDS AND CONTINUING ALONG LANDS NOW OR FORMERLY
OF FELDMAN, NOW OR FORMERLY OF BERTINO, AND LANDS NOW OR FORMERLY OF MOHEGAN
REALTY CO., THE FOLLOWING FIVE (5) COURSES AND DISTANCES:

       

      SOUTH 8°
21' 49" EAST 184.14 FEET;

      SOUTH 7°
23' 59" EAST 204.45 FEET;

      SOUTH 8°
27' 49" EAST 457.05 FEET;

      SOUTH 7°
57' 49" EAST 226.72 FEET;

      SOUTH 8°
03' 49" EAST 841.87 FEET TO LANDS NOW OR FORMERLY OF BOGIN, WHICH POINT OCCUPIES
COORDINATE POSITION

       

      N
477,016.99 (Y)

      E
628,545.67 (X) OF THE NEW YORK STATE COORDINATE SYSTEM, EAST ZONE;

       

      THENCE
ALONG SAID LANDS ON A COURSE OF SOUTH 84° 45' 51" WEST FOR A DISTANCE OF 565.62
FEET TO A POINT THAT IS A CORNER THEREOF, WHICH POINT IS AT THE SOUTHEASTERLY
END OF THE LINE DIVIDING PARCEL NO. 2A, ON THE SOUTHWEST FROM PARCEL NO 1, ON
THE NORTHEAST, BOTH AS SHOWN ON SAID FILED MAP 21741, WHICH POINT OCCUPIES
COORDINATE POSITION

       

      N
476,965.38 (Y)

      E
627,982.41 (X) OF THE NEW YORK STATE COORDINATE SYSTEM, EAST ZONE;

       

      THENCE
CONTINUING ALONG LANDS NOW OR FORMERLY OF BOGIN AND DEANIN ON A COURSE OF SOUTH
8° 44' 49" EAST FOR A DISTANCE OF 775.84 FEET TO LANDS NOW OR FORMERLY OF
MCKEEL;

       

      THENCE
ALONG THE SAID MCKEEL LANDS AND IN PART ALONG THE ORIGINAL CENTER LINE OF A
BROOK AS THE SAID CENTER LINE APPEARS ON THAT CERTAIN MAP ENTITLED "SURVEY...
MIDWESTCHESTER INDUSTRIAL PARK INC...," WHICH WAS FILED IN THE WESTCHESTER
COUNTY CLERK'S OFFICE ON JANUARY 24, 1969 ON MAP NO. 16581 THE FOLLOWING COURSES
AND DISTANCES:

       

      SOUTH 83°
29' 51" WEST 1204.04 FEET;

      SOUTH 64°
31' 01" WEST 35.43 FEET;

      SOUTH 87°
29' 41" WEST 100.66 FEET;

      SOUTH 79°
30' 01" WEST 100.04 FEET;

      SOUTH 80°
21' 21" WEST 99.99 FEET;

      SOUTH 82°
37' 11" WEST 219.69 FEET;

      SOUTH 81°
10' 01" WEST 102.96 FEET;

      SOUTH 74°
14' 51" WEST 99.92 FEET;

      SOUTH 75°
42' 31" WEST 81.58 FEET;

      SOUTH 73°
18' 21" WEST 101.89 FEET;

      SOUTH 87°
12' 21" WEST 100.12 FEET;

      SOUTH 89°
38' 51" WEST 100.44 FEET;

      SOUTH 84°
23' 51" WEST 107.95 FEET;

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      SOUTH 81°
42' 51" WEST 119.29 FEET;

      SOUTH 58°
38' 31" WEST 47.83 FEET;

      SOUTH 48°
18' 59" WEST 109.79 FEET AND;

      NORTH 68°
22' 19" WEST 32.81 FEET TO A POINT AT THE LINE OF LANDS NOW OR FORMERLY OF
SHELBY-COLERIDGE HOLDING CORP;

       

      THENCE
ALONG THE SAID SHELBY-COLERIDGE HOLDING CORP. LANDS AND ALONG THE NORTHEASTERLY
LINES OF LOT NO. 19 AND LOT 21 AS SHOWN ON THE AFOREMENTIONED "MAP NO. 1 GULL
MANOR...'' FILED MAP NO. 8930, THE FOLLOWING COURSES:

       

      NORTH 68°
14' 09" WEST 17.28 FEET;

      SOUTH 89°
44' 51" WEST 61.00 FEET;

      NORTH 46°
00' 09" WEST 54.45 FEET;

      NORTH 61°
11' 09" WEST 72.08 FEET;

      NORTH 55°
43' 09" WEST 93.25 FEET TO THE AFOREMENTIONED SOUTHEASTERLY LINE OF U.S. ROUTE 6
AND THE POINT OR PLACE OF BEGINNING.

       

      TOGETHER
WITH THE BENEFITS AND SUBJECT TO THE BURDENS OF THE GRANT OF SANITARY SEWER
EASEMENT MADE BY AND BETWEEN HARDEE'S AND MID-WESTCHESTER INDUSTRIAL PARK, INC.
RECORDED IN LIBER 7137 PAGE 92.

       

      TOGETHER
WITH THE BENEFITS OF THE EASEMENT RECORDED IN THE WESTCHESTER COUNTY CLERK'S
LIBER 7099 OF DEEDS AT PAGE 228 AND REPEATED IN LIBER 7143 OF DEEDS AT PAGE 449
AND LIBER 7235 OF DEEDS AT PAGE 88.

       

      TOGETHER
WITH THE BENEFITS OF THE DECLARATION AND GRANT OF RECIPROCAL EASEMENTS MADE BY
CORTLANDT TOWN CENTER LIMITED PARTNERSHIP AND RECORDED IN THE WESTCHESTER COUNTY
CLERK'S LIBER 11673 OF DEEDS AT PAGE 78.

       

      TOGETHER
WITH THE BENEFITS OF THE RECIPROCAL EASEMENT AND OPERATION AGREEMENT MADE BY
BETWEEN CORTLANDT TOWN CENTER LIMITED PARTNERSHIP AND HOME DEPOT U.S.A. INC. AND
RECORDED IN THE WESTCHESTER COUNTY CLERK'S LIBER 11618 OF DEEDS AT PAGE
1.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
B

      

      Permitted
Encumbrances

      

      

      Those
exceptions set forth in Schedule B of that certain title insurance policy issued
by First American Title Insurance Company of New York under their title no.
3008-272268 insuring the lien of this Mortgage.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
C

      

      Partial
Release

      

      

      NONE

      
 

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

    

    
      [Future
Advance]

      NOTE

       

       

      
        	$2,000,000	July 29,
      2009

      

       

      

      FOR VALUE
RECEIVED, ACADIA CORTLANDT LLC, a Delaware limited liability company
("Borrower", whether one or more) hereby promises to pay to the order of Bank of
America, N.A. ("Lender") under that certain Loan Agreement (defined below) among
Borrower and Bank of America N.A., a national banking association and
administrative agent (together with any and all of its successors and assigns,
"Administrative Agent") for the benefit of Lenders from time to time a party to
that certain Loan Agreement (the "Loan Agreement") of even date herewith,
without offset, in immediately available funds in lawful money of the United
States of America, at Administrative Agent's Office as defined in the Loan
Agreement, the principal sum of Two Million Dollars ($2,000,000) (or the unpaid
balance of all principal advanced against this Note, if that amount is less),
together with interest on the unpaid principal balance of this Note from day to
day outstanding as hereinafter provided.

       

      1. Note; Interest; Payment
Schedule and Maturity Date.  This Note is one of the Future
Advance Notes referred to in Loan Agreement and is entitled to the benefits
thereof. The entire principal balance of this Note then unpaid shall be due and
payable at the times as set forth in the Loan Agreement.  Accrued
unpaid interest shall be due and payable at the times and at the interest rate
as set forth in the Loan Agreement until all principal and accrued interest
owing on this Note shall have been fully paid and satisfied.  Any
amount not paid when due and payable hereunder shall, to the extent permitted by
applicable Law, bear interest and if applicable a late charge as set forth in
the Loan Agreement.

       

      2. Security; Loan
Documents.  The security for this Note includes a Mortgage,
Assignment of Leases and Rents and Security Agreement in the amount of
$2,000,000 (which, as it may have been or may be amended, restated, modified or
supplemented from time to time, is herein called the "Mortgage") dated as of
July 29, 2009 from Borrower to Administrative Agent covering certain
property in the Town of Cortlandt, Westchester County, New York described
therein (the "Property").  This Note, the Mortgage, the Loan Agreement
and all other documents now or hereafter securing, guaranteeing or executed in
connection with the loan evidenced by this Note (the "Loan"), are, as the same
have been or may be amended, restated, modified or supplemented from time to
time, herein sometimes called individually a "Loan Document" and together the
"Loan Documents".

       

      3. Defaults.

       

      (a) It shall
be a default ("Default") under this Note and each of the other Loan Documents if
(i) any principal, interest or other amount of money due under this Note is not
paid in full when due, regardless of how such amount may have become due; (ii)
any covenant, agreement, condition, representation or warranty herein or in any
other Loan Documents is not fully and timely performed, observed or kept; or
(iii) there shall occur any default or event of default under the Mortgage or
any other Loan Document.  Upon the occurrence of a Default,
Administrative Agent on behalf of Lenders shall have the rights to declare the
unpaid principal balance and accrued but unpaid interest on this Note, and all
other amounts due hereunder and under the other Loan Documents, at once due and
payable (and upon such declaration, the same shall be at once due and payable),
to foreclose any liens and security interests securing payment hereof and to
exercise any of its other rights, powers and remedies under this Note, under any
other Loan Document, or at Law or in equity.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b) All of the
rights, remedies, powers and privileges (together, "Rights") of Administrative
Agent on behalf of Lenders provided for in this Note and in any other Loan
Document are cumulative of each other and of any and all other Rights at Law or
in equity.  The resort to any Right shall not prevent the concurrent
or subsequent employment of any other appropriate Right.  No single or
partial exercise of any Right shall exhaust it, or preclude any other or further
exercise thereof, and every Right may be exercised at any time and from time to
time.  No failure by Administrative Agent or Lenders to exercise, nor
delay in exercising any Right, including but not limited to the right to
accelerate the maturity of this Note, shall be construed as a waiver of any
Default or as a waiver of any Right.  Without limiting the generality
of the foregoing provisions, the acceptance by Lender from time to time of any
payment under this Note which is past due or which is less than the payment in
full of all amounts due and payable at the time of such payment, shall not (i)
constitute a waiver of or impair or extinguish the right of Administrative Agent
or Lenders to accelerate the maturity of this Note or to exercise any other
Right at the time or at any subsequent time, or nullify any prior exercise of
any such Right, or (ii) constitute a waiver of the requirement of punctual
payment and performance or a novation in any respect.

       

      (c) If any
holder of this Note retains an attorney in connection with any Default or at
maturity or to collect, enforce or defend this Note or any other Loan Document
in any lawsuit or in any probate, reorganization, bankruptcy, arbitration or
other proceeding, or if Borrower sues any holder in connection with this Note or
any other Loan Document and does not prevail, then Borrower agrees to pay to
each such holder, in addition to principal, interest and any other sums owing to
Lenders hereunder and under the other Loan Documents, all costs and expenses
incurred by such holder in trying to collect this Note or in any such suit or
proceeding, including, without limitation, attorneys' fees and expenses,
investigation costs and all court costs, whether or not suit is filed hereon,
whether before or after the Maturity Date, or whether in connection with
bankruptcy, insolvency or appeal, or whether collection is made against Borrower
or any guarantor or endorser or any other person primarily or secondarily liable
hereunder.

       

      4. Heirs, Successors and
Assigns.  The terms of this Note and of the other Loan
Documents shall bind and inure to the benefit of the heirs, devisees,
representatives, successors and assigns of the parties.  The foregoing
sentence shall not be construed to permit Borrower to assign the Loan except as
otherwise permitted under the Loan Documents.  As further provided in
the Loan Agreement, a Lender may, at any time, sell, transfer, or assign all or
a portion of its interest in this Note, the Mortgage and the other Loan
Documents, as set forth in the Loan Agreement.

       

      5. General
Provisions.  Time is of the essence with respect to Borrower's
obligations under this Note.  If more than one person or entity
executes this Note as Borrower, all of said parties shall be jointly and
severally liable for payment of the indebtedness evidenced
hereby.  Borrower and all sureties, endorsers, guarantors and any
other party now or hereafter liable for the payment of this Note in whole or in
part, hereby severally (a) waive demand, presentment for payment, notice of
dishonor and of nonpayment, protest, notice of protest, notice of intent to
accelerate, notice of acceleration and all other notices (except any notices
which are specifically required by this Note or any other Loan Document), filing
of suit and diligence in collecting this Note or enforcing any of the security
herefor; (b) agree to any substitution, subordination, exchange or release of
any such security or the release of any party primarily or secondarily liable
hereon; (c) agree that neither Administrative Agent nor any Lender shall be
required first to institute suit or exhaust its remedies hereon against Borrower
or others liable or to become liable hereon or to perfect or enforce its rights
against them or any security herefor; (d) consent to any extensions or
postponements of time of payment of this Note for any period or periods of time
and to any partial payments, before or after maturity, and to any other
indulgences with respect hereto, without notice thereof to any of them; and (e)
submit (and waive all rights to object) to non-exclusive personal jurisdiction
of any state or federal court sitting in the city and county, and venue in the
city or county, in which payment is to be made as specified in the first
paragraph of Page 1 of this Note, for the enforcement of any and all obligations
under this Note and the Loan Documents; (f) waive the benefit of all homestead
and similar exemptions as to this Note; (g) agree that their liability under
this Note shall not be affected or impaired by any determination that any
security interest or lien taken by Lender to secure this Note is invalid or
unperfected; and (h) hereby subordinate any and all rights against Borrower and
any of the security for the payment of this Note, whether by subrogation,
agreement or otherwise, until this Note is paid in full.  A
determination that any provision of this Note is unenforceable or invalid shall
not affect the enforceability or validity of any other provision and the
determination that the application of any provision of this Note to any person
or circumstance is illegal or unenforceable shall not affect the enforceability
or validity of such provision as it may apply to other persons or
circumstances.  This Note may not be amended except in a writing
specifically intended for such purpose and executed by the party against whom
enforcement of the amendment is sought.  Captions and headings in this
Note are for convenience only and shall be disregarded in construing
it.  THIS NOTE, AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION,
SHALL BE GOVERNED BY NEW YORK LAW (WITHOUT REGARD TO ANY CONFLICT OF LAWS
PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      6. Notices.  Any
notice, request, or demand to or upon Borrower or Lender shall be deemed to have
been properly given or made when delivered in accordance with the Loan
Agreement.

       

      7. No
Usury.  It is expressly stipulated and agreed to be the intent
of Borrower, Administrative Agent and all Lenders at all times to comply with
applicable state Law or applicable United States federal Law (to the extent that
it permits a Lender to contract for, charge, take, reserve, or receive a greater
amount of interest than under state Law) and that this Section shall control
every other covenant and agreement in this Note and the other Loan
Documents.  If applicable state or federal Law should at any time be
judicially interpreted so as to render usurious any amount called for under this
Note or under any of the other Loan Documents, or contracted for, charged,
taken, reserved, or received with respect to the Loan, or if Administrative
Agent's exercise of the option to accelerate the Maturity Date, or if any
prepayment by Borrower results in Borrower having paid any interest in excess of
that permitted by applicable Law, then it is Administrative Agent's and each
Lender's express intent that all excess amounts theretofore collected by
Administrative Agent or any Lender shall be credited on the principal balance of
this Note and all other indebtedness and the provisions of this Note and the
other Loan Documents shall immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new documents, so as to comply with the applicable Law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder or thereunder.  All sums paid or agreed to be paid to
Lenders for the use, forbearance, or detention of the Loan shall, to the extent
permitted by applicable Law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the maximum
lawful rate from time to time in effect and applicable to the Loan for so long
as the Loan is outstanding.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      THE LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.

       

      THERE ARE
NO ORAL AGREEMENTS BETWEEN THE PARTIES.

       

      

      

      [Remainder
of page intentionally left blank]

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      IN WITNESS
WHEREOF, Borrower has duly executed this Note under seal as of the date first
above written.

      
      

       

      
        	 	ACADIA CORTLANDT LLC,
      a Delaware limited liability company
	 	 	 
	 	 	 
	 	By 	 
	 	 	
                Robert
      Masters

                Senior
      Vice President

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