8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

December 21, 2007

ALEXANDER’S, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	No. 001-06064	No. 51-0100517
(State or Other	(Commission	(IRS Employer
Jurisdiction of	File Number)	Identification No.)
Incorporation)

210 Route 4 East Paramus, New Jersey	07652
(Address of Principal Executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (201) 587-8541

Former name or former address, if changed since last report: N/A

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing

obligation of the registrant under any of the following provisions (see General Instructions A.2.):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01Entry into a Material Definitive Agreement.

On December 21, 2007, a wholly-owned subsidiary of Alexander’s, Inc. (the “Company”), closed a construction loan providing up to $350,000,000 to finance its Rego Park project, a development consisting of a 600,000 square foot shopping center on four levels and a parking deck containing approximately 1,400 spaces. The loan has an interest rate of LIBOR plus 1.20% and a term of three years with a one-year extension option. A copy of the Building Loan Agreement and related documents are attached hereto as Exhibit 10.1 through 10.8 and are incorporated by reference.

A press release describing the transaction was issued by the Company on December 21, 2007. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference.

Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The disclosure contained in Item 1.01 above, is incorporated by reference herein into this Item 2.03.

Item 9.01Financial Statements and Exhibits.

10.1	Building Loan Agreement, dated as of December 21, 2007, among Alexander’s of Rego Park II, Inc., as Borrower, PB Capital Corporation, as Lender, Norddeutsche Landesbank Girozentrale, New York Branch, as Lender, Wells Fargo Bank, National Association, as Lender, Landesbank Baden-Wurttemberg, New York Branch, as Lender, Bank of Ireland, Connecticut Branch, as Lender, PB Capital Corporation, as Administrative Agent, PB Capital Corporation and Norddeutsche Landesbank Girozentrale, New York Branch, as Co-Arrangers.
10.2	Project Loan Agreement, dated as of December 21, 2007, among Alexander’s of Rego Park II, Inc., as Borrower, PB Capital Corporation, as Lender, Norddeutsche Landesbank Girozentrale, New York Branch, as Lender, Wells Fargo Bank, National Association, as Lender, Landesbank Baden-Wurttemberg, New York Branch, as Lender, Bank of Ireland, Connecticut Branch, as Lender, PB Capital Corporation, as Administrative Agent, PB Capital Corporation and Norddeutsche Landesbank Girozentrale, New York Branch, as Co-Arrangers.
10.3	Series I Building Loan Mortgage, Assignment of Leases and Rents and Security Agreement, dated as of December 21, 2007, from Alexander’s of Rego Park II, Inc., as Mortgagor, to PB Capital Corporation, as Administrative Agent for the Lenders.
10.4	Series II Building Loan Mortgage, Assignment of Leases and Rents and Security Agreement, dated as of December 21, 2007, from Alexander’s of Rego Park II, Inc., as Mortgagor, to PB Capital Corporation, as Administrative Agent for the Lenders.
10.5	Series I Project Loan Mortgage, Assignment of Leases and Rents and Security Agreement, dated as of December 21, 2007, from Alexander’s of Rego Park II, Inc., as Mortgagor, to PB Capital Corporation, as Administrative Agent for the Lenders.
10.6	Series II Project Loan Mortgage, Assignment of Leases and Rents and Security Agreement, dated as of December 21, 2007, from Alexander’s of Rego Park II, Inc., as Mortgagor, to PB Capital Corporation, as Administrative Agent for the Lenders.
10.7	Guaranty of Completion, dated as of December 21, 2007, executed by Alexander’s, Inc. for the benefit of PB Capital Corporation, as Administrative Agent for itself and the other Lenders
10.8	Guaranty of Payment, dated as of December 21, 2007, executed by Alexander’s, Inc. for the benefit of PB Capital Corporation, as Administrative Agent for itself and the other Lenders.
99.1	Press Release issued on December 21, 2007.

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ALEXANDER’S, INC.
(Registrant)
	By:	/s/ Joseph Macnow
	Name:	Joseph Macnow
	Title:	Executive Vice President and Chief Financial Officer

Date: December 28, 2007

4

EX-10

Exhibit 10.1

BUILDING LOAN AGREEMENT

Dated as of December 21, 2007

ALEXANDER’S OF REGO PARK II, INC.
a Delaware Corporation
As Borrower

PB CAPITAL CORPORATION

As Lender

NORDDEUTSCHE LANDESBANK GIROZENTRALE
New York Branch

As Lender

WELLS FARGO BANK
National Association

As Lender

LANDESBANK BADEN-WURTEMBERG
New York Branch

As Lender

BANK OF IRELAND
Connecticut Branch

As Lender

PB CAPITAL CORPORATION

As Administrative Agent

PB CAPITAL CORPORATION and
NORDDEUTSCHE LANDESBANK GIROZENTRALE
New York Branch

As Co-Arrangers

LOCATION OF PREMISES
Block:	2080
Lot:	101
County:	Queens
Address:	31-01 / 61-27 Junction Boulevard
	Queens, New York

BUILDING LOAN AGREEMENT ("this Agreement") dated as of December 21, 2007 by and among ALEXANDER'S OF REGO PARK II, INC., a Delaware corporation ("Borrower"), PB CAPITAL CORPORATION (in its individual capacity and not as Administrative Agent, "PB Capital"), NORDDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH ("NordLB"), WELLS FARGO BANK, NATIONAL ASSOCIATION ("Wells Fargo"), LANDESBANK BADEN-WÜRTTEMBERG, NEW YORK BRANCH ("LBBW") and BANK OF IRELAND, CONNECTICUT BRANCH ("Bank of Ireland"; PB Capital, NordLB, Wells Fargo, LBBW, Bank of Ireland and each other lender who may become a Lender pursuant to Section 3.05, Section 7.20 or Section 8.13, each, a "Lender" and collectively, "Lenders") and PB CAPITAL CORPORATION, as Administrative Agent for Lenders (together with its successors in such capacity, "Administrative Agent").

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

NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained, Borrower, Administrative Agent and Lenders hereby agree as follows:

ARTICLE I

PARTICULAR TERMS, DEFINITIONS AND RULES OF CONSTRUCTION

Particular Terms. As used in this Agreement, the following terms shall have the respective meanings indicated opposite each of them.

"Aggregate Change Order Amount" -- $5,000,000.

"Borrower's Architects" -- ¹ SCLE Architects, LLP.

"Borrower's Interest in the Premises" - Fee.

"Change Order Amount" -- $2,000,000.

"Completion Date" -- (i) With respect to that portion of the Improvements constituting "Pre-Possession Work" under the Lease with Home Depot (the "Home Depot Lease"), June 30, 2009, (ii) with respect to that portion of the Improvements constituting "Pre-Possession Work" under the Lease with Kohl's (the "Kohl's Lease") required to be completed by October 1, 2009, October 1, 2009, (iii) with respect to that portion of the Improvements constituting "Pre-Possession Work" under the Lease with Century 21 (the "Century 21 Lease"), June 30, 2009 and (iv) with respect to that portion of the Improvements constituting "Post-Possession Work" under any of the Home Depot Lease, the Kohl's Lease or the Century 21 Lease and, with respect to the balance of the Improvements not otherwise described above, the earliest date required for completion of "Post-Possession Work" under any of such Leases, but in no event later than December 31, 2009, in each case, subject to the extension by one day for each day a Force Majeure Event exists so long as during the period of any such extension the failure to complete does not give rise to (x) the right of any of Century 21, Home Depot or Kohl's under its Lease to cancel its Lease and/or (y) penalties and/or damages being owed by Borrower to any of Century 21, Home Depot or Kohl's under its Lease (whether as a direct payment obligation, an offset or otherwise) and subject, further, to the provisions of Section 9.04(b).

"Construction Consultant" -- Inspection & Valuation International, Inc., or other firm designated by Administrative Agent.

"Construction Manager" -- Bovis Lend Lease LMB, Inc. and any successors thereof as selected by Borrower and reasonably approved by Administrative Agent.

"Guarantor" (of Payment and Completion Costs) -- Jointly and severally, Alexander's, Inc. and any other Person(s) who may hereafter become a guarantor of any or all of Borrower's obligations in respect of the Loan and the Other Loan.

"Improvements" -- A retail center containing approximately 618,000 rentable square feet in an approximately 1,281,000 gross square foot building, together with a parking garage containing approximately 1,391 parking spots and a vehicular and pedestrian bridge over 62nd Drive.

"Loan Amount" -- $251,785,000.

"Maturity Date" -- December 21, 2010, subject to the extension option contained in Section 9.04.

_________________________

¹ architects and/or engineers responsible for preparing the Plans and supervising construction of the Improvements, and any successor engaged with Administrative Agent's consent.

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

"Additional Costs" -- Any out-of-pocket costs, losses or expenses actually incurred by any Lender which it determines are attributable to its making or maintaining its Pro Rata Share of the Loan, or its obligation to make any Loan advances, or any reduction in any amount receivable by any Lender under the Loan or its Note.

"Administrative Agent" -- Has the meaning specified in the preamble.

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

"Affected Lender" -- Has the meaning specified in Section 3.05.

"Affiliate" -- With respect to any Person, any other Person:

(A) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such Person; or

(B) which, directly or indirectly, beneficially owns or holds five percent (5%) or more of any class of stock or any other ownership interest in such Person (but specifically excluding limited partners); or

(C) five percent (5%) or more of the direct or indirect ownership of which is beneficially owned or held by such Person (but specifically excluding limited partners); or

(D) which is a member of the family (as defined in Section 267(c)(4) of the Code) of such Person or which is a trust or estate, the beneficial owners of which are members of the family (as defined in Section 267(c)(4) of the Code) of such Person; or

(E) which directly or indirectly is a general partner (but specifically excluding limited partners), controlling shareholder, managing member or director of such Person.

For purposes of this definition, the term "control" (and its correlative meanings) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of stock, by contract or otherwise.

"Agreement" -- Has the meaning specified in the preamble.

"Agreement Regarding Instructions" -- The Agreement Regarding Instructions Given by Telephone, Email or Facsimile between Borrower and Administrative Agent, dated the date hereof.

"Applicable Lending Office" -- For each Lender and for its Base Rate Loan or LIBOR Loan, as applicable, the lending office of such Lender (or of an affiliate of such Lender) designated as such on the signature page hereof or in the applicable Assignment and Assumption Agreement, or such other office of such Lender (or of an affiliate of such Lender) as such Lender may from time to time specify to Administrative Agent and Borrower as the office by which its Base Rate Loan or LIBOR Loan, as applicable, is to be made and maintained.

"Approved Lease" and "Approved Leases" -- Any Lease with respect to space in the Improvements which (i) is fully subordinate by its terms to the lien of the Mortgage and the Other Mortgage or with respect to which a subordination and attornment agreement with the tenant under said Lease, in form and substance reasonably acceptable to Administrative Agent has been fully executed and delivered to Administrative Agent, subject to the requirement that Administrative Agent grant non-disturbance in accordance with Section 6.02(e), (ii) complies with the leasing parameters set forth in a letter agreement of even date herewith between Borrower and Administrative Agent (the "Leasing Parameters Letter") for "Non-Major Leases", (iii) provides for an initial term of at least ten (10) years, (iv) does not have a free rent period of more than seven (7) months, unless Administrative Agent agrees otherwise (such agreement not to be unreasonably withheld, conditioned or delayed), (v) with respect to a Lease for space of 25,000 square feet or more, is with a tenant (A) having a credit standing reasonably acceptable to Administrative Agent, provided, however, that a senior long term unsecured debt credit rating, as published by Moody's Investors Service, Inc. (or other comparable rating agency), of "Baa" (or comparable rating from such other rating agency) or higher shall be deemed an acceptable credit standing, or (B) having a net worth reasonably estimated to be ten (10) times such tenant's annual rent obligations, (vi) has as a tenant a Person which is not Borrower, any Guarantor or an Affiliate of any thereof and (vii) is executed on Borrower's standard lease forms approved by Administrative Agent and attached as exhibits to the Initial Advance Open Items Letter as such forms may be modified from time to time with Administrative Agent's approval (such approval not to be unreasonably withheld, conditioned or delayed) or, if

such tenant is a national retailer, on such tenant's standard form, in each case with such changes thereto as are commercially reasonable given the then market conditions.

"Assignee" -- Has the meaning specified in Section 8.13.

"Assignment and Assumption Agreement" -- An Assignment and Assumption Agreement, substantially in the form of Exhibit B attached hereto, pursuant to which a Lender assigns and an Assignee assumes rights and obligations in accordance with Sections 3.05 and 8.13.

"Assignment of Leasing Agreement" -- The Assignment, Consent and Subordination Retention Agreement from Borrower and Vornado Realty L.P. for the benefit of Administrative Agent dated of even date herewith.

"Assignment of Management Agreement" -- The Assignment, Consent and Subordination of Management Agreement from Borrower and Vornado Realty L.P. for the benefit of Administrative Agent dated of even date herewith.

"Authorized Representative" -- Means each individual identified in the Requisition Authorization Statement as an authorized signatory of Borrower.

"Base Rate" -- The rate of interest per annum equal to the higher of (1) the Federal Funds Rate plus 1/2 of 1% or (2) the Prime Rate.

"Base Rate Loan" -- The portion of a Lender's share of the Loan bearing interest at a rate per annum equal to the Base Rate plus the Base Rate Margin.

"Base Rate Margin" -- 0.5% per annum.

"Borrower" -- Has the meaning specified in the preamble.

"Building Loan Trust Account" -- A separate non-interest bearing bank account with the Depositary Bank which shall not be drawn upon except to pay Hard and Soft Costs approved by Administrative Agent or the Construction Consultant in accordance with the terms and provisions of this Agreement.

"Business Day" -- Any day (other than a Saturday or Sunday) on which commercial banks are not authorized or required to close in New York City; and, whenever such day relates to a LIBOR Loan, an Interest Period with respect to a LIBOR Loan, or notice with respect to a LIBOR Loan, any such day in which dealings in Dollar deposits are also carried out in the London interbank market and banks are also open for business in London.

"Century 21" -- Has the meaning specified in Section 4.01(e)(25).

"Certain Changes" -- Has the meaning specified in Section 4.02(c).

"Change Orders" -- Any amendments or modifications (of whatever nature or form, including any "change bulletin") to the Plans and Specifications, Construction Management Agreement or Major Trade Contracts.

"Code" -- The Internal Revenue Code of 1986, as amended.

"Condominium" -- In the event that Borrower elects to so convert the ownership of the Premises and Improvements constructed or to be constructed thereon, a condominium form of ownership in accordance with the Condominium Act.

"Condominium Act" -- Article 9-B of the Real Property Law of the State of New York (§ 339-d et seq.), and all regulations with respect thereto, now or hereafter promulgated.

"Condominium Documents" -- All documents, as required by the Condominium Act and otherwise, necessary for establishing condominium ownership of the Premises and Improvements and creating the Residential Unit and the Retail Unit and no others, including, but not limited to, a declaration of condominium (the "Declaration"), an offering plan (if applicable) accepted for filing by the New York Department of Law including all amendments thereto or a "no action letter" issued by the New York Department of Law (if applicable), tax lot drawings ("Tax Lot Drawings"), management agreement and all exhibits to the Declaration, including, without limitation, the definitions, the articles of incorporation (if applicable), bylaws and the rules and regulations.

"Construction Cost Statement" -- A statement, in form approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed), setting forth, by category, the costs of completion of the Improvements and the Loan Budget Amounts in respect of the Hard Costs Loan and Soft Costs Loan.

"Construction Management Agreement" -- Any contract (together with all riders, addenda and other instruments referred to therein as "contract documents") between Borrower and the Construction Manager or any other Person which requires the Construction Manager or such other Person to provide, or supervise or manage the procurement of, substantially all labor and materials needed for completion of the Improvements.

"Control" -- The ownership, directly or indirectly, in the aggregate of more than fifty percent (50%) of the beneficial ownership interest of an entity and the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of an entity, whether through the ability to exercise voting power, the ownership of beneficial interests, by contract or otherwise, and "Controlled", "Controlling" and "under common control with" shall have the correlative meanings.

"Debt Service" -- The greatest of (each annualized) (x) the aggregate of the actual interest and letter of credit fees charged and payable by Borrower on the Total Commitment (or in the event the Maturity Date has been extended pursuant to Section 9.04, as the same may be reduced in connection with such extension) during the preceding or succeeding, as applicable, Measurement Period(s) in question, (y) the sum of all interest payments that would be payable over such Measurement Period(s) with respect to a loan in an amount equal to the Total Commitment (or in the event the Maturity Date has been extended pursuant to Section 9.04, as the same may be reduced in connection with such extension), assuming an interest rate per annum equal to 6% per annum and (z) the sum of all principal and interest payments that would be payable over such Measurement Period(s) with respect to a loan in an amount equal to the Total Commitment (or in the event the Maturity Date has been extended pursuant to Section 9.04, as the same may be reduced in connection with such extension), based upon a thirty (30) year mortgage-style amortization schedule, assuming an interest rate per annum equal to 1.25% above the yield on United States Treasury Securities with a term of ten (10) years in effect at the time in question, as published in the Federal Reserve Statistical Release ("Release") seven (7) Business Days prior to the date of determination, all as calculated by Borrower, subject, however, to the reasonable approval of Administrative Agent. If the Release is no longer published, a reasonable equivalent substitute therefor as reasonably selected by Administrative Agent in its discretion shall be utilized, and further provided that if the Release is not published seven (7) Business Days prior to the date of determination, then the Release as published on the most recent date prior thereto shall be utilized.

"Debt Service Coverage Ratio" -- As of any date of determination thereof, the ratio of Net Operating Income to Debt Service.

"Declaration" -- Has the meaning specified in the definition of "Condominium Documents".

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

"Default Rate" -- The rate(s) of interest per annum then in effect under this Agreement plus, in each case, 5% and in no event, however, to exceed the maximum rate permitted by Law.

"Delinquency Amount"; "Delinquency Notice"; "Delinquent Lender" -- Have the respective meanings specified in Section 7.16.

"Depositary Bank" -- JPMorgan Chase Bank, N.A.

"Distribution" -- Any distributions, payments, dividends, proceeds, disbursements or other consideration arising from or to be made in connection with any direct or indirect membership or other equity interest in Borrower.

"Dollars" and "$" -- Lawful money of the United States.

"Draft Mapping Agreement" -- Has the meaning specified in Section 9.06.

"Electing Lender"; "Election Notice"; "Election Period" -- Have the respective meanings specified in Section 7.16.

"Eligible Lender" -- (i) A real estate investment trust, bank, savings and loan association, investment bank, financial institution, insurance company, trust company, commercial credit corporation, commercial bank (either organized (A) under the laws of the United States or any state thereof or (B) under the laws of any other country that is a member of the Organization for Economic Cooperation and Development, or a political subdivision of such country, including any landesbank or hypothenkenbank), pension plan, pension fund or pension advisory firm, mutual fund or government entity or plan, (ii) investment company or money management firm, (iii) an investment fund, limited liability company, limited partnership or general partnership (a "Permitted Investment Fund") where an Eligible Lender or a Permitted Fund Manager acts as the general partner, managing member or fund manager and at least fifty percent (50%) of the equity interests in such Permitted Investment Fund are owned, directly or indirectly, by an Eligible Lender, (iv) a commercial paper conduit which satisfies the following criteria: (A) an independent third

party irrevocably provides the conduit with credit enhancement in the form of liquidity support to satisfy the conduit's obligations, which liquidity support provider is otherwise an Eligible Lender and (B) the conduit is directly administrated by a Person that is otherwise an Eligible Lender or Controlled by an Eligible Lender, (v) a Person substantially similar to any of the foregoing entities described in clauses (i) or (ii) of this definition, and as to each of Persons described in clauses (i), (ii) or (v) provided such Person has total assets (in name or under management) in excess of $600,000,000 and (except with respect to a pension advisory firm or similar fiduciary) capital/statutory surplus or shareholder's equity of $250,000,000 or (vi) any Lender.

"Embargoed Person" -- Has the meaning specified in Section 5.22(a).

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

"ERISA" -- The Employee Retirement Income Security Act of 1974, including the rules and regulations promulgated thereunder.

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

"Event of Default" -- Has the meaning given to such term in the Mortgage.

"Federal Funds Rate" -- For any period, a fluctuating interest rate per annum (based on a 360 day year) equal, for each day of such period, to the rate of interest quoted at 11:00 a.m. New York time charged on overnight federal funds transactions with member banks of the Federal Reserve System, as published by the Federal Reserve Bank of New York.

"Financial Statements" -- Statements of the assets, liabilities (direct and contingent), income, expenses and cash flow and a detailed balance sheet of Borrower and Guarantor, prepared in accordance with GAAP, which shall be unaudited unless otherwise specified herein.

"Force Majeure Event" -- An act of God, strike, lockout, explosion, act of sabotage, riot, civil commotion, act of war, fire, other casualty, a shortage of materials or any other cause beyond the reasonable control of Borrower which shall delay the progress of construction of the Improvements, provided that Borrower shall notify Administrative Agent within a reasonable period of time following the commencement of the Force Majeure Event. For the purposes of this definition of "Force Majeure Event", the following are expressly excluded as a Force Majeure Event: (i) a shortage of funds by Borrower or any party to the Construction Management Agreement, any Subcontract or any other instrument, document and rights relating to the design, construction and development of the Improvements; and (ii) the insolvency of Borrower or any member of Borrower.

"GAAP" -- Those generally accepted accounting principles and practices which are recognized as such by the American Institute of Certified Public Accountants or by the Financial Accounting Standards Board or through appropriate boards or committees of that Board after the date of this Agreement, and which are consistently applied for all periods, so as to properly reflect the financial position of a Person, except that any accounting principle or practice required or permitted to be changed by the American Institute of Certified Public Accountants or the Financial Accounting Standards Board (or other appropriate board or committee of that Board) in order to continue as a generally accepted accounting principle or practice may be so changed only so long as such required or permitted change with all related changes shall not have the effect of permitting Borrower's compliance with any financial covenants or performance tests contained in this Agreement when without such change and related changes, Borrower would not so comply.

"Governmental Authorities" -- The United States, the State of New York and any political subdivision, agency, department, commission, board, bureau or instrumentality of either of them, including any local authorities, which exercises jurisdiction over Borrower, Guarantor, the Premises or the Improvements and any foreign jurisdiction which exercises jurisdiction over Lenders or Postbank.

"Governmental Blacklist" -- (i) The Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control, United States Department of the Treasury, or (ii) any other list of terrorists, terrorist organizations or narcotics traffickers maintained pursuant to any of the rules and regulations of the Office of Foreign Assets Control, United States Department of the Treasury, or (iii) any similar list maintained by the United States

Department of State, the United States Department of Commerce or pursuant to any Executive Order of the President of the United States.

"Guaranty" -- The guaranty(ies) of the performance of all or part of Borrower's obligations, as indicated in Section 1.01, to be executed by Guarantor.

"Hard Costs" or "Direct Costs" -- The aggregate costs of all labor, materials, equipment and fixtures necessary for completion of construction of the Improvements.

"Hard Costs Loan"; "Soft Costs Loan" -- That portion of the Loan Amount applicable and equal to the sum of the Loan Budget Amounts for Hard Costs and Soft Costs, respectively, shown on the Construction Cost Statement.

"Hazardous Materials" -- Has the meaning given to such term in the Mortgage.

"Home Depot" -- Has the meaning given to such term in Section 4.01(e)(25).

"ICIP" -- Has the meaning given to such term in Section 6.27.

"Illegal Proceeds" -- Any proceeds (1) derived from Money Laundering Activities and/or Racketeering Activities; (2) procured in violation of applicable anti-bribery or Foreign Corrupt Practices Act related laws; and/or (3) derived from an Illegal Source.

"Illegal Source" -- Any individual or entity on a Governmental Blacklist.

"Indemnity" -- An agreement from Borrower and Guarantor, whereby, among other things, Administrative Agent and Lenders are indemnified regarding Hazardous Materials.

"Individual Loan Commitment" -- With respect to each Lender, the amount set forth below opposite the name of such Lender (subject to change in accordance with the terms of this Agreement):

Lender	Individual Loan Commitment
PB Capital	$	61,147,786
NordLB	$	53,953,928
Wells Fargo	$	28,775,428
LBBW	$	71,938,572
Bank of Ireland	$	35,969,286

"Initial Advance" -- The first advance of Loan proceeds to be made hereunder.

"Initial Advance Open Items Letter" -- Has the meaning given to such term in Section 4.01(e).

"Interest Payment Date" -- The first Business Day of the first calendar month following the date of the Initial Advance and the first Business Day of each calendar month thereafter until the Notes are repaid in full.

"Interest Period" -- (i) With respect to any Base Rate Loan, the period commencing on each Interest Payment Date and ending on the day immediately preceding the next succeeding Interest Payment Date and (ii) with respect to any LIBOR Loan, the period commencing on the borrowing or conversion date, as the case may be, with respect to such LIBOR Loan and ending one (1), two (2), three (3), or, if available, six (6) or twelve (12) months thereafter, as selected by Borrower in its Rate Request; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

(a)  if any Interest Period pertaining to a LIBOR Loan would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

(b)  any Interest Period pertaining to a LIBOR Loan that would otherwise extend beyond the Maturity Date shall end on the Maturity Date; and

(c)  any Interest Period pertaining to a LIBOR Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.

"Kohl's" -- Has the meaning given to such term in Section 4.01(e)(25).

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

"Lease" -- Any present or future lease, use agreement, occupancy agreement, license or other similar instrument of all or any portion of the Improvements.

"Lease Letter of Credit" -- A letter of credit issued for the benefit of Borrower as security for the payment and performance of a tenant's obligation under its Lease.

"Leasing Parameters Letter" -- Has the meaning specified in the definition of "Approved Lease".

"Lender" and "Lenders" -- Has the meaning specified in the preamble.

"Lender Reply Period" -- Has the meaning specified in Section 8.12.

"Lenders' Counsel" -- Schiff Hardin LLP, 900 Third Avenue, 23rd Floor, New York, New York 10022.

"LIBO Rate" -- With respect to any Interest Period pertaining to a LIBOR Loan, the average rate of interest per annum, rounded to the nearest whole multiple of one ten-thousandth of one percent (0.0001%) of interbank offered rates for United States dollar deposits in an amount comparable to the amount of the LIBOR Loan to be outstanding during such Interest Period in the London interbank market as set forth on Bloomberg Screen, code BBAM, meaning the "British Bankers Association LIBOR Rates code" on the monitor of the money rates of the Bloomberg service or any successor code as may replace code BBAM in said service for the purposes of display of the interbank interest rates offered on the London market (London Interbank Offered Rates/LIBOR) at approximately 11:00 a.m. (London time) two (2) Business Days before the first day of the applicable Interest Period for a period of time comparable to the applicable Interest Period.

"LIBO Rate Request Amount" -- The amount, to be specified by Borrower in each Rate Request with respect to a LIBOR Loan, which Borrower desires to bear interest as a LIBOR Loan and which shall in no event be less than $250,000, except in the case of the last advance of the Loan.

"LIBOR Loan" -- All of any portion (as the context requires) of any Lender's share of the Loan or the Other Loan which shall accrue interest at a rate of interest per annum determined in accordance with the following formula:

LIBO Rate

———————————————— + LIBOR Margin.

1.00 - Reserve Requirements

"LIBOR Margin" -- 1.2% per annum, subject to adjustment in accordance with Section 2.19.

"Lien Law"; "Lien Law Statement" -- The Lien Law of the State of New York; the verified statement of Borrower, annexed hereto as Exhibit A, required by the Lien Law.

"Loan" -- The Hard Costs Loan and Soft Costs Loan, collectively, and in an amount initially equal to the Loan Amount.

"Loan Balancing LC" -- Has the meaning specified in Section 8.01.

"Loan Budget Amounts" -- The portion of the Loan Amount set forth in Column D on the Construction Cost Statement to be advanced for each category of Hard and Soft Costs.

"Loan Documents" -- This Agreement, the Notes, the Mortgage, the Guaranty, the Indemnity, the Lockbox Agreement, the Assignment of Management Agreement, the Initial Advance Open Items Letter, the Assignment of Leasing Agreement, the Requisition Authorization Statement, the Agreement Regarding Instructions, the assignment of interest rate hedging agreement as and when required hereby, Uniform Commercial Code financing statements in respect of the Mortgaged Property and any other collateral given as security for the Loan, and any other documents which evidence or secure the Loan.

"Lockbox Agreement" -- The cash management, security, pledge and assignment agreement between Borrower and Administrative Agent.

"Major Building Materials" -- Has the meaning specified in Section 2.05(c).

"Major Lease" -- Any Lease for space in excess of 45,000 square feet in the Improvements.

"Major Trade Contract"; "Major Trade Contractor" -- Any Trade Contract in which the aggregate contract price is equal to or greater than $2,500,000, whether pursuant to one contract or agreement or multiple contracts or agreements, after taking into account all Change Orders; the Trade Contractor under such Trade Contract.

"Material Adverse Effect" -- Any material adverse effect upon (a) the business operations, economic performance, assets or condition (financial or otherwise) of Borrower, Guarantor or the Mortgaged Property, (b) the ability of any Borrower or Guarantor to perform, in all material respects, its obligations under each of the Loan Documents to which it is a party, (c) the enforceability or validity of any Loan Document or the perfection or priority of any lien or security interest created under any Loan Document, (d) the value of, or cash flow from, the Mortgaged Property or the operations thereof or (e) the rights, interests and remedies of Administrative Agent or any Lender under the Loan Documents.

"Measurement Period"; "Measurement Periods" -- Three (3) consecutive full calendar months or multiples of three (3) consecutive full calendar months.

"Money Laundering Activities" -- Funds which are (a) proceeds of crime in violation of Federal law or (b) derived or potentially derived from any Illegal Source.

"Mortgage" -- Individually and collectively, the Series I Mortgage and the Series II Mortgage.

"Mortgaged Property" -- The Premises and other property constituting the "Mortgaged Property", as said quoted term is defined in the Mortgage.

"Multiemployer Plan" -- Any plan defined as such in Section 3(37) of ERISA.

"Net Operating Income" -- For any date of determination, annualized based upon the preceding or succeeding, as applicable, Measurement Period(s) in question the excess of revenues over operating expenses determined in accordance with GAAP, with the following modifications: (1) revenues from Leases (including, but not limited to, base rent and reimbursements for reimbursable expenses in accordance with the terms of such Leases) that have been approved by Administrative Agent or are otherwise deemed approved in accordance with this Agreement and in respect of which the tenants are in occupancy, open for business and paying base rent, as well as other revenues (including, but not limited to, parking and other recurring revenue and reimbursements of expenses included in this definition of "Net Operating Income"), shall be included in the calculation of revenues; (2) there shall be excluded from the calculation of revenue, revenue payable under any such Lease (A) which will expire within one hundred eighty (180) days from the date of determination unless the tenant has executed an extension of such Lease, (B) which is in default of rent obligations beyond the applicable cure period or (C) which, in the case of a bankruptcy, insolvency, reorganization or similar proceeding, has not been assumed by the tenant thereunder; (3) expenses shall include on an annualized basis (A) reserves for tenant improvements and capital expenditures in an amount of not less than $0.15 per rentable square foot of space, and (B) the greater of the actual management fees or 2% of revenues; and (4) expenses shall not include (A) depreciation, amortization and federal, state and local income taxes, (B) non-cash items, (C) all

capital items, including construction costs and professional fees and other expenses relating thereto and any amortization thereof, (D) costs of removal of Hazardous Materials or compliance with Laws applicable thereto, (E) leasing commissions, fees and other costs and expenses of placing tenants in possession of any portion of the Premises (including professional fees related thereto), (F) costs of repair or restoration after a casualty or condemnation, (G) interest on tenant security deposits, (H) security deposits returned to tenants, (I) debt service on the Total Loan, any other payments, fees or expenses due in connection with the Total Loan and any expenses incurred in connection with the making of the Total Loan or in connection with the recovery of insurance proceeds that are applied toward the repayment of the Total Loan, (J) any item of expense that would ordinarily be considered an operating expense but which is paid by a tenant, (K) general corporate overhead and administrative expenses of Borrower or any other Person, and (L) expenses related to the stock appreciation rights of Guarantor, all as reasonably determined by Borrower and approved by Administrative Agent (which approval shall not be unreasonably withheld, conditioned or delayed).

"Non-Delinquent Lender" -- Each Lender other than the Delinquent Lender(s).

"Non-Excluded Taxes" -- Has the meaning specified in Section 8.25.

"NordLB" -- Has the meaning specified in the preamble.

"Note"; "Notes" -- Have the respective meanings specified in Section 2.10.

"OFAC" -- Has the meaning specified in Section 5.22(b).

"Other Loan Documents" -- Has the meaning specified in Section 8.19.

"Other Notes"; "Other Loan"; "Other Mortgage" -- The notes, dated the date hereof, for an aggregate principal amount of $98,215,000, made by Borrower to Lenders; the loan in said amount by Lenders to Borrower for certain non-cost-of-improvement items with respect to the Premises evidenced thereby to be advanced under a Project Loan Agreement of even date herewith among Borrower, Lenders a party hereto and Administrative Agent (the "Project Loan Agreement"); and, collectively, the series I project loan mortgage, assignment of leases and rents and security agreement and the series II project loan mortgage, assignment of leases and rents and security agreement, each made to Administrative Agent to secure advances under the Project Loan Agreement and Borrower's other obligations in respect thereof.

"Participant"; "Participation" -- Have the respective meanings specified in Section 8.13.

"Patriot Act" -- The USA Patriot Act (Title III of Pub.L. 107-56 (signed into law October 26, 2001)).

"PB Capital" -- Has the meaning specified in the preamble.

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

"Permitted Debt" -- With respect to Borrower:

• the Loan and the Other Loan;

•    Trade Payables, customarily paid by Borrower within ninety (90) days of incurrence, which are incurred in the ordinary course of Borrower's use, maintenance, repair, ownership and operation of the Premises and Improvements and other Mortgaged Property, in amounts reasonable and customary for similar properties and taxes not yet due and payable;

•    written indemnities entered into in the ordinary course of business and on customary terms and conditions in connection with the acquisitions of goods or services;

•    financing leases incurred in the ordinary course of business in connection with the financing or purchase of equipment, automotive and other personal property used on the Premises and Improvements and other Mortgaged Property which are customarily utilized in similar buildings;

•    liabilities under the Leases approved or deemed approved by Administrative Agent in accordance with this Agreement and liabilities under the Construction Management Agreement, the Condominium Documents, any management agreements and any other agreements contemplated herein or necessary or appropriate for the conduct of the business; and

•    such other unsecured indebtedness approved by the Required Lenders (which approval may be granted or denied in the sole and absolute discretion of each Lender).

"Permitted Fund Manager" -- Any Person which is not subject to a bankruptcy proceeding and is a nationally-recognized manager of investment funds investing in debt or equity interests relating to commercial real estate which is investing through a fund which has committed capital of at least $250,000,000.

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

"Plans and Specifications" -- All final drawings, plans and specifications prepared by Borrower, Borrower's Architects, the Construction Manager or Major Trade Contractors, and approved by Administrative Agent and the Construction Consultant (which approval shall not be unreasonably withheld, conditioned or delayed), which describe and show the labor, materials, equipment, fixtures and furnishings necessary for the construction of the Improvements, including all amendments and modifications thereof, as the same may be amended or supplemented from time to time in accordance with the terms of this Agreement.

"Postbank" -- Deutsche Postbank AG.

"Premises" -- The real property described on Schedule A to the Mortgage and located as indicated on the cover hereof, upon all or part of which the Improvements are to be constructed, subject to the release provisions set forth in Section 9.02.

"Premises Documents" -- Has the meaning given to such term in the Mortgage.

"Prime Rate" -- The rate per annum listed in the "Money Rates" section of The Wall Street Journal as the "prime rate". If The Wall Street Journal ceases publication of such rate, then the Prime Rate shall mean the so-called prime rate or base rate as announced by Citibank, N.A., or its successor from time to time, or, if such rate is not published or available, then the so-called prime rate or base rate announced by J.P. Morgan Chase & Co. or its bank subsidiary. If none of such rates are available, then the Prime Rate shall mean such rate selected by Administrative Agent in its reasonable judgment as most nearly approximates the foregoing. Changes in the Prime Rate shall be effective simultaneously with the change in the "prime rate" as so published, announced or selected.

"Principal Amount" -- At any time, the aggregate outstanding principal amount of the Notes.

"Pro Rata Share" -- With respect to each Lender, the ratio of such Lender's Individual Loan Commitment to the Loan Amount. As of the date hereof, Lenders' respective Pro Rata Shares are as follows:

Lender	Pro Rata Share
PB Capital	24.285714286	%
NordLB	21.428571429	%
Wells Fargo	11.428571428	%
LBBW	28.571428571	%
Bank of Ireland	14.285714286	%

"Racketeering Activities" -- Involvement or affiliation with any organization, group or individual that engages in or encourages its members to engage in any illegal activities specified in Title 18 of the U.S. Code.

"Rate Request" -- Borrower's irrevocable telephonic notice (to be promptly confirmed in writing), to be received by Administrative Agent by 9:30 a.m. (New York time) three (3) Business Days prior to the date specified in the Rate Request for the commencement of the Interest Period (which specified date must be a Business Day), of (a) its intention to have (i) all or any portion of the Principal Amount or the outstanding principal amount under the Other Notes which is not then the subject of an Interest Period (other than an Interest Period which is terminating on the Business Day specified in the notice), and/or (ii) all or any portion of any advance of proceeds of the Loan or the

other Loan which is to be made on the Business Day specified in the notice, bear interest as either a Base Rate Loan or a LIBOR Loan and (b) the Interest Period desired by Borrower in respect of the amount specified whenever such notice is for LIBOR Loans, except that during the Syndications Period the Interest Period shall be one (1) month.

"Regulation D"; "Regulation U" -- Regulations D and U, respectively, of the Board of Governors of the Federal Reserve System.

"Regulatory Change" -- With respect to any Lender and the charging and collecting of interest on LIBOR Loans, any change after the date hereof in federal, state or foreign laws or regulations (including Regulation D) or the adoption or making after such date of any interpretations, directives or requests applying to a class of banks including such Lender under any federal, state or foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof, excluding any change the effect of which is reflected in a change in the interest rate for LIBOR Loans.

"Replacement Lender" -- Has the meaning specified in Section 7.20.

"Required Lenders" -- At any time, those Non-Delinquent Lenders holding a majority of that portion of the aggregate outstanding principal amount of the Notes held by the Non-Delinquent Lenders.

"Requisition" -- A statement by or on behalf of Borrower in form approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed), setting forth the amount of the Loan advance requested in each instance, which, if requested by Administrative Agent, shall include:

(i) a Borrower's Requisition Spreadsheet in form approved by Administrative Agent;

(ii)  a completed Application and Certificate for Payment (AIA Document G702) or reasonable facsimile in form approved by Administrative Agent, executed by the Construction Manager and Borrower, accompanied by a letter from Borrower's Architects in a form approved by Administrative Agent;

(iii) a Borrowing Certificate in form approved by Administrative Agent;

(iv) Payment Receipts/Lien Releases in form approved by Administrative Agent from the Construction Manager and its direct contractors, suppliers and materialmen, evidencing that they have been paid in full upon receipt of the current requisition for all work performed and/or materials supplied to the date of the preceding advance, except for Retainage provided for in this Agreement;

(v)  current requisitions for payment from Trade Contractors and/or any of their subcontractors relating to the Improvements;

(vi) invoices, statements and such other information and documents as may be reasonably requested or required by Administrative Agent or the Construction Consultant with respect to the Hard Costs covered by such Requisition;

(vii)invoices, statements and such other information and documents as may be reasonably requested or required by Administrative Agent with respect to the incurrence of any Soft Costs covered by such Requisition;

(viii) evidence of the payment of all Soft Costs covered by a prior Requisition; and

(ix) an anticipated cost report from the Construction Manager in form approved by Administrative Agent, indicating the direct costs anticipated to complete the Improvements, after giving effect to costs incurred during the previous month and projected costs.

Any approvals by Administrative Agent in this definition shall not be unreasonably withheld, conditioned or delayed.

"Requisition Authorization Statement" -- A statement from Borrower to Administrative Agent in the form of Exhibit F setting forth, among other things, the name of each individual authorized to execute Requisitions hereunder on Borrower's behalf.

"Reserve Requirements" -- For any day as applied to a LIBOR Loan, the aggregate (without duplication) of the rates (expressed as a decimal fraction) of reserve requirements in effect on such day, if any (including without limitation supplemental, marginal and emergency reserves) under any regulations of the Board of Governors of the Federal Reserve System or other Governmental Authority having jurisdiction with respect thereto dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D) required to be maintained by the applicable Lender or its Participants, if any. Without limiting the effect of the

foregoing, the Reserve Requirement shall reflect any other reserves required to be maintained by any Lender or any Lender's respective Participants, if any, by reason of any Regulatory Change against (i) any category of liabilities which includes deposits by reference to which the LIBO Rate is to be determined as provided in this Agreement or (ii) any category of extensions of credit or other assets which includes loans the interest rate on which is determined on the basis of rates used in determining the LIBO Rate. Notwithstanding anything to the contrary contained herein, any increase in the reserve requirements described in this definition which arises subsequent to the date of this Agreement shall not be included within "Reserve Requirements" to the extent that the applicable Lender fails to notify Borrower of such increase within thirty (30) days after such Lender should reasonably have been aware of such increase.

"Residential Unit" -- The rental or for-sale residential unit to be constructed above the Retail Unit which is to be created pursuant to the Condominium Documents and upon the submission of the Premises to the Condominium Act, together with its appurtenant interest in the common elements.

"Retail Unit" -- The retail unit to be comprised of the Improvements, including the garage, which is to be created pursuant to the Condominium Documents and upon the submission of the Premises to the Condominium Act, together with its appurtenant interest in the common elements.

"Retainage" -- The total amount actually held back by Borrower or the Construction Manager, as the case may be, from the Construction Manager and each Trade Contractor with respect to the value of its work in place with respect to the Improvements, which shall not be less at any time (subject to the provisions of Section 2.04) than (a) 10% of the aggregate Hard Costs already incurred by Borrower with respect to the Construction Manager or such Trade Contractor for work in place in completing construction of the first 50% of the work to be performed by the Construction Manager or such Trade Contractor with respect to the Improvements, as verified from time to time by Construction Consultant pursuant to the provisions of this Agreement, and (b) 0% of the aggregate Hard Costs actually incurred by Borrower with respect to the Construction Manager or such Trade Contractor for work in place in completing construction of the last 50% of the work to be performed by the Construction Manager or such Trade Contractor, as verified from time to time by the Construction Consultant pursuant to the provisions of this Agreement.

"SEC" -- Has the meaning specified in Section 6.21(1).

"Security Deposit" -- Has the meaning specified in Section 6.28(1).

"Series I Mortgage" -- The series I building loan mortgage, assignment of leases and rents and security agreement dated as of the date hereof in the amount of $249,285,000 from Borrower to Administrative Agent for the benefit of Lenders to secure the payment and performance of Borrower's obligations under the Loan.

"Series II Mortgage" -- The series II building loan mortgage, assignment of leases and rents and security agreement dated as of the date hereof in the amount of $2,500,000 from Borrower to Administrative Agent for the benefit of Lenders to secure the payment and performance of Borrower's obligations under the Loan.

"Single-Purpose Entity" -- A Person which (a) is formed solely for the purpose of owning its interest in the Premises and the Improvements and such personal property as may be usable for the ownership, use, maintenance, repair or operation of the Premises and Improvements (collectively, the "Property") as well as developing, constructing, using, owning, operating, leasing and financing the Premises, (b) has not engaged and will not engage in any business unrelated to the Property or its interest in Borrower, as the case may be, (c) will not have any assets other than those related to the Property or its interest in Borrower, as the case may be, or any indebtedness, liabilities or indemnification obligations other than Permitted Debt, (d) will maintain books, records, accounts and financial statements separate and apart from those of any other Person, (e) will maintain its books, records, resolutions and agreements, (f) will be subject to and substantially comply with all of the limitations on powers and separateness requirements set forth as of the date hereof in its organizational documentation, (g) will hold itself out as being a Person separate and apart from each other Person, will conduct its business in its own name and will exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, (h) will not commingle its funds or assets with those of any other Person, and will continue to hold its assets in its own name (except for pursuant to cash management agency arrangements with Guarantor and/or Vornado Realty Trust, a Maryland real estate investment trust, or any of its Affiliates), (i) will maintain an arm's-length relationship with its affiliates and will not enter into a transaction with any of its affiliates other than on an arm's-length basis in the ordinary course of business, (j) will not guaranty or otherwise oblige itself with respect to the debts of any other Person or hold out its credit as being available to satisfy the obligations of any other Person, (k) will not pledge its assets for the benefit of any other Person or make any loans or advances to any other Person, and will not acquire the obligations or securities of its partners, members or shareholders, (l) intends to maintain adequate capital in light of its

contemplated business purposes, (m) will pay its own liabilities out of its own funds (except for pursuant to cash management agency arrangements with Guarantor and/or Vornado Realty Trust, a Maryland real estate investment trust, or any of its Affiliates) and reasonably allocate any overhead for shared office space, (n) will maintain a sufficient number of employees in light of its contemplated business operations, (o) in the case of a limited partnership, will observe all applicable limited partnership formalities in all material respects, has and will have at all times a general partner that is a Single-Purpose Entity, and for so long as the Loan is outstanding or the lending commitment hereunder is in effect, the limited partnership shall not (A) except with the unanimous consent of its partners, file or consent to the filing of a bankruptcy or insolvency petition, or consent to any general assignment for the benefit of creditors, or the institution of any other insolvency proceeding, or the seeking or consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for it, for a substantial portion of its property or for any other entity in which it has a direct or indirect legal or beneficial ownership interest; and (B) take or consent to the taking any of the following actions:

•    the dissolution, winding up, liquidation, consolidation, merger or sale of all or substantially all of its assets or the assets of any other entity in which it has a direct or indirect legal or beneficial ownership interest;

•    the engagement by it in any business other than the ownership, maintenance, repair, use and operation of the Property or the ownership of its interest in Borrower (as applicable);

•    the amendment or modification of any provision of its limited partnership agreement or certificate of limited partnership that affects any of the requirements for qualifying as a "Single-Purpose Entity",

(p) in the case of a limited liability company or corporation, will observe all applicable limited liability company or corporation formalities, as the case may be, in all material respects, and has and will have at all times (in the case of a limited liability company) one managing member that is a corporate or limited liability company Single-Purpose Entity, (q) in the case of a limited liability company, has organizational documents which provide that (A) the vote of the majority-in-interest of the remaining members is sufficient to continue its life in the event of a termination event, such as the bankruptcy of the managing member; and (B) if the vote of the majority-in-interest of the remaining members is not obtained to continue its life upon a termination event, the limited liability company may not liquidate collateral without the consent of the Required Lenders, and (r) for so long as all or any portion of the Loan and/or the Other Loan is outstanding or the lending commitment hereunder or under the Project Loan Agreement is in effect, shall not (A) except with the unanimous consent of its board of directors or the board of directors of its managing member, as the case may be, file or consent to the filing of a bankruptcy or insolvency petition, or consent to any general assignment for the benefit of creditors, the institution of any other insolvency proceeding or the seeking or consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official, for it, for a substantial portion of its property or for any other entity in which it has a direct or indirect legal or beneficial ownership interest; and (B) take or consent to the taking of any of the following actions:

•    the dissolution, winding up, liquidation, consolidation, merger or sale of all or substantially all of its assets or the assets of any other entity in which it has a direct or indirect legal or beneficial ownership interest;

•    the engagement by it in any business other than the ownership, maintenance, repair, use and operation of the Property or the ownership of its interest in Borrower (as applicable); and

•    any material amendment or modification of any provision of its organizational documents that affects any of the requirements for qualifying as a "Single-Purpose Entity".

"Soft Costs" or "Indirect Costs" -- Certain costs (other than Hard Costs) of completion of the Improvements, including, but not limited to, architects', engineers' and Administrative Agent's and/or Lenders' attorneys' fees (to the extent payable pursuant to the other provisions hereof), ground rents, interest and recording taxes and title charges in respect of building loan mortgages, real estate taxes, water and sewer rents, survey costs, loan commitment fees, insurance and bond premiums and such other non-construction costs as are part of the "cost of improvement", as such quoted term is defined in the Lien Law.

"Substitute Lender" and "Substitution Notice" -- Have the respective meanings specified in Section 3.05.

"Supplemental Fee Letter" -- That certain letter agreement, dated the date hereof, between PB Capital, NordLB and Borrower, providing for Borrower's payment to Administrative Agent and/or PB Capital on the date hereof and from time to time hereafter certain fees in connection with the Loan, each such fee to be for Administrative Agent's and/or PB Capital's own account.

"Syndications Period" -- The period between the date hereof and the earlier of the following dates: (a) the date on which each of the following has occurred, the Individual Loan Commitment of PB Capital has been reduced to $75,000,000 or such higher amount as PB Capital determines and is approved by Administrative Agent and the Individual Loan Commitment of NordLB has been reduced to $75,000,000 or such higher amount as NordLB determines and is approved by Administrative Agent; or (b) the date which is one hundred twenty (120) days after the date hereof.

"Tax Lot Drawings" -- Has the meaning specified in the definition of "Condominium Documents".

"Tenant Security Account" -- Has the meaning specified in Section 6.28(1).

"Tenant Security Bank" -- Has the meaning specified in Section 6.28(2).

"Title Insurer" -- Stewart Title Insurance Company and any other issuer(s), approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed), of the title insurance policy or policies insuring the Mortgage.

"Total Commitment" and "Total Loan" -- Have the respective meanings specified in Section 9.04.

"Trade Contract"; "Trade Contractor" -- Any agreement (other than the agreements with Borrower's Architects and the Construction Manager) entered into by Borrower or by the Construction Manager to provide labor and/or materials in connection with the construction of the Improvements; the contractor or vendor under such agreement.

"Trade Payables" -- Unsecured amounts payable by or on behalf of Borrower for or in respect of the operation, maintenance, repair, ownership and use of the Premises or Improvements in the ordinary course, including amounts payable to suppliers, vendors, contractors, mechanics, materialmen or other Persons providing property or services to Borrower or the Premises.

"Unit" -- Each individual interest (including any appurtenant interest in the common elements) in the Premises and Improvements created by the submission thereof to the provisions of the Condominium Act, including the Residential Unit and the Retail Unit.

"United States" and "U.S." -- The United States of America.

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

ARTICLE II

LOAN ADVANCES

Advances Generally. Subject to the provisions of this Agreement, each Lender will advance its Pro Rata Share of, and Borrower will accept, the Loan Amount in installments as follows:

The Initial Advance will be made upon the satisfaction of the applicable conditions set forth in Section 4.01, and all subsequent advances shall be made no more frequently than monthly thereafter, upon the satisfaction of the applicable conditions set forth in Section 4.02 (except that Administrative Agent, in its sole discretion, shall have the right but not the obligation to require Lenders to make additional advances per month for interest, fees and expenses due under the Loan Documents), in amounts which shall be equal to the aggregate of the Hard and Soft Costs incurred by Borrower through the end of the period covered by the Requisition less:

(a)  other than with respect to the Hard Costs Loan Budget Amounts for "CM Fee", "General Services" or "Construction Manager Insurance", Retainage; and

(b) the total of the Loan advances theretofore made;

and, at the election of Administrative Agent, less any combination of the following further amounts:

(c)  all or a portion of the amount by which any Hard or Soft Costs are or are reasonably estimated by Administrative Agent to be greater than the respective Loan Budget Amounts for such costs (subject to Sections 2.06 and 2.07); and/or

(d)  any costs covered by the Requisition not approved, certified or verified as provided in Section 2.02, any Soft Costs covered by a previous Requisition for which any requested proof of payment has not been received by Administrative Agent, and/or any Hard Costs covered by a previous Requisition for which any requested Payment Receipts/Lien Releases have not been received by Administrative Agent and the Construction Consultant.

Borrower shall use the proceeds of the Loan only for the payment of approved Hard and Soft Costs in accordance with the Construction Cost Statement and this Agreement. In no event shall proceeds of the Loan be used by Borrower, in whole or in part, for the purpose of purchasing or carrying "margin stock", as such quoted term is defined in Regulation U, or in violation of Regulation U or for any illegal purpose.

• Certification and Verification of Costs.

•    Hard Costs are to be certified by the Construction Manager or Borrower's supervisor of construction if there is no Construction Manager. Verification of the monthly progress and Hard Costs which have been incurred by Borrower from time to time, and the estimated total Hard Costs, shall be reasonably determined by the Construction Consultant, except that both Hard and Soft Costs are also subject to the reasonable approval and verification by Administrative Agent from time to time. No advances shall be made in respect of any Trade Contractor providing work or materials with respect to the Improvements unless such Trade Contractor is providing such work or materials under a signed Trade Contract, a copy of which has been delivered to Administrative Agent, and Administrative Agent has received any required will serve letter with respect thereto.

•    Each Requisition relating to Hard Costs shall be accompanied by a certificate or report of the Construction Consultant to Administrative Agent based upon a site observation of the Improvements made by the Construction Consultant not more than thirty (30) days prior to the date of the advance, in which the Construction Consultant shall in substance: (i) for the initial advance of Hard Costs for the Improvements only, indicate its review and acceptance of the Plans and Specifications; (ii) verify that the portion of the Improvements completed as of the date of such site observation have been completed substantially in accordance with the Plans and Specifications; and (iii) state its estimate of (1) the percentages of the construction of the Improvements completed as of the date of such site observation on the basis of work in place as part of the Improvements and the values set forth in the Construction Cost Statement, (2) the Hard Costs actually incurred for work in place as part of the Improvements as of the date of such site observation, (3) the sum necessary to complete construction of the Improvements in accordance with the Plans and Specifications and (4) the amount of time from the date of such inspection that will be required to achieve completion of the Improvements.

•    Borrower acknowledges that (i) the Construction Consultant has been retained by Administrative Agent, on behalf of Lenders, to act as a consultant and only as a consultant to Administrative Agent, on behalf of Lenders, in connection with the construction of the Improvements and has no duty to Borrower; (ii) the Construction Consultant shall in no event or under any circumstance have any power or authority to make any decision or to give any approval or consent or to do any other act or thing which is binding upon Administrative Agent or any of Lenders, and any such purported decision, approval, consent, act or thing by the Construction Consultant on behalf of Administrative Agent or any of Lenders shall be void and of no force or effect; (iii) Administrative Agent reserves the right to make any and all decisions required to be made by Administrative Agent under this Agreement and to give or refrain from giving any and all consents or approvals required to be given by Administrative Agent under this Agreement and to accept or not accept any matter or thing required to be accepted by Administrative Agent under this Agreement, without being bound or limited in any manner or under any circumstances whatsoever by any opinion expressed or not expressed, or any advice given or not given, or any information, certificate or report provided or not provided, by the Construction Consultant to Administrative Agent or any other Person with respect thereto; (iv) Administrative Agent reserves the right in its sole and absolute discretion to disregard or disagree, in whole or in part, with any opinion expressed, advice given or information, certificate or report furnished or provided by the Construction Consultant to Administrative Agent or to any other Person; and (v) Administrative Agent reserves the right in its sole and absolute discretion to replace the Construction Consultant with Valcon Construction Consultants, Inc. ("Valcon"), or if Valcon is not available, another reputable construction consultant experienced in construction projects of this type, at any time and without approval by or prior (but with subsequent prompt) notice to Borrower.

•    Notwithstanding the foregoing, provided no Event of Default exists, up to $2,000,000 at any time shall be available for funding from the budget for Hard Costs, at Borrower's request, for which the work may not be in place and for

•

which Administrative Agent shall not have received lien waivers or invoices, to be available for Construction Manager to pay Hard Costs during a month.

Procedures for Advances.

All advances to Borrower are to be made at Administrative Agent's Office. Borrower shall submit Requisitions to Administrative Agent no later than 10:00 a.m. (New York time) on the date which is eight (8) Business Days prior to the date the advance is to be made. Administrative Agent may reject any Requisition that is not signed by an Authorized Representative. Administrative Agent, no later than three (3) Business Days prior to the date a requested advance is to be made, shall (i) notify each Lender either by telephone or by facsimile of the amount requested by Borrower, the amount approved by Administrative Agent, the portion of such advance to be funded by such Lender and the proposed date of such advance and (ii) send to each Lender by facsimile the summary pages of Borrower's Requisition (without attachments except for Borrower's Requisition Spreadsheet). Not later than 10:00 a.m. (New York time) on the date of each advance, each Lender shall, through its Applicable Lending Office and subject to the conditions of this Agreement, make the amount to be advanced by it on such day available to Administrative Agent, at Administrative Agent's Office and in immediately available funds. The amount so received by Administrative Agent shall by 3:00 p.m. (New York time) on the same Business Day, subject to the conditions of this Agreement, be made available to Borrower, by Administrative Agent's depositing said amount by wire transfer of immediately available funds into the Building Loan Trust Account, which shall be subject to immediate withdrawal by Borrower. Subsequent to the making of an advance, Administrative Agent shall deliver to a Lender, within eight (8) Business Days of such Lender's request, such material relating to the Requisition for such advance as such Lender may reasonably request. If Borrower withdraws any Requisition submitted as contemplated above, Borrower shall pay, in addition to any amounts set forth in Section 3.03, promptly following demand therefor, all reasonable costs and expenses incurred by Lenders, Administrative Agent and by the Construction Consultant in connection with reviewing such Requisition in contemplation of an advance.

Borrower agrees that, by its acceptance of any advance of Loan proceeds under this Agreement, it shall be bound in all respects by the Requisition submitted on its behalf in connection therewith with the same force and effect as if Borrower had itself executed and submitted the Requisition and whether or not the Requisition is executed and/or submitted by an Authorized Representative.

Held-Back Amounts; Advances for Soft Costs After Completion.

The portion of Retainage that relates to work or materials supplied by any Trade Contractor in connection with the Improvements will upon request be disbursed to Borrower when (but will not be disbursed to Borrower until and unless), whether before or after the completion of the Improvements, (i) no Event of Default or material Default has occurred and is continuing; (ii) the Construction Consultant verifies to Administrative Agent that such Trade Contractor has completed 100% of its work for the Improvements not less than thirty (30) days prior to the release of such portion of Retainage and has supplied 100% of all materials in compliance with such Trade Contractor's Trade Contract and in conformity with the Plans and Specifications; (iii) such Trade Contractor will be paid in full for its work on the Improvements upon the release of such portion of the Retainage; (iv) such Trade Contractor executes and delivers all lien waivers that may be reasonably requested or required by Administrative Agent or by the Title Insurer to induce the Title Insurer to insure the lien of the Mortgage against any mechanic's or materialman's lien that may be filed against the Premises by such Trade Contractor or any Person claiming through such Trade Contractor; and (v) if required by Administrative Agent, such release of such portion of the Retainage shall be approved by any surety company that has issued a payment or performance bond with respect to such Trade Contractor. Any remaining Retainage not advanced to Borrower pursuant to the foregoing provisions of this Section shall be advanced in full upon the satisfaction of the conditions set forth in Section 4.03. Loan Budget Amounts for Soft Costs not advanced prior to substantial completion of construction of the Improvements shall be advanced until exhausted, not more frequently than monthly, for Soft Costs as incurred after such completion.

Stored Materials.

Lenders shall in no event or under any circumstances have any obligation to make any disbursement of the Loan for materials which are stored off-site (other than Major Building Materials as provided in paragraph (c) of this Section)unless Administrative Agent agrees to the contrary in its sole and absolute discretion.

Lenders shall make Loan disbursements in accordance with this Agreement to pay for Hard Costs actually incurred by Borrower for materials not yet incorporated in the Improvements but stored on the Premises, which materials are required in connection with the construction of the Improvements, provided that (i) such materials are in accordance with the Plans and Specifications; (ii) such materials are securely stored on the Premises,

properly inventoried, and clearly stenciled or otherwise marked to indicate that they are the property of Borrower; (iii) the bills of sale and contracts under which such materials are being provided shall be in form and substance reasonably satisfactory to Administrative Agent and the Construction Consultant; (iv) such materials are insured against casualty, loss and theft in a manner reasonably satisfactory to Administrative Agent and Administrative Agent is named as a named insured and loss payee on such insurance policy with respect to said materials; (v) Borrower either owns or will, after the payment of the bills and invoices therefor (which payment in full shall occur promptly after the disbursement of the Loan for such materials), own such materials free and clear of all liens and encumbrances of any nature whatsoever, which ownership shall be established contemporaneously with or promptly after such disbursement by evidence reasonably satisfactory to Administrative Agent; (vi) Borrower executes and delivers to Administrative Agent such additional security documents as Administrative Agent shall deem necessary to create and perfect a first lien in such materials as additional security for the payment of the Loan; (vii) the aggregate amount of such disbursements for such materials shall in no event at any time exceed $2,500,000 as verified by the Construction Consultant pursuant to the provisions of this Agreement; (viii) all materials are reasonably anticipated to be incorporated into the Improvements within one hundred twenty (120) days of the disbursement therefor; and (ix) if required by Administrative Agent, Borrower's Architects or the Construction Consultant shall certify that it has inspected said materials and they are in good condition and suitable for use in connection with the Improvements.

•    Lenders shall from time to time make disbursements in accordance with the terms of this Agreement for the purchase of (or for deposits in connection with the ordering thereof reasonably approved by Administrative Agent) certain finally assembled, fully fabricated (except as otherwise provided in the parenthetical at the end of this sentence) major building materials (collectively, "Major Building Materials"), which are required in connection with construction of the Improvements but are stored at locations other than the Premises, prior to the delivery to the Premises or incorporation into the Improvements of such Major Building Materials and are in accordance with the Plans and Specifications; provided, however, that in the case of each such disbursement (other than those made in respect of a deposit or installment payment), the conditions contained in paragraph (b) of this Section have been satisfied with respect to such Major Building Materials, other than the requirement of clause (ii) contained therein with respect to the storage of such materials on the Premises, and Administrative Agent shall have received (A) a written statement from the manufacturer or storer of such Major Building Materials (or a provision in the purchase order therefor to such effect) that Administrative Agent, the Construction Consultant and either of their agents may fully inspect such Major Building Materials at all reasonable times on reasonable notice and (B) evidence that the aggregate amount of such disbursements for Major Building Materials not yet incorporated into the Improvements does not at any time exceed $30,000,000 (except that, at any time, up to $10,000,000 of such $30,000,000 shall be available for building materials which are in the course of being fabricated). Administrative Agent shall have the right in its sole discretion, but not the obligation, to request that Borrower deliver or cause to be delivered to Administrative Agent the following documents within five (5) Business Days after the date on which any advance for Major Building Materials is made: (i) bills of lading, warehouse receipts, delivery receipts or other documents of title with respect to Major Building Materials for which such advance is made, which shall be in form and substance reasonably satisfactory to Administrative Agent in all respects; (ii) except in respect of an advance in respect of building materials which are in the course of being fabricated and/or pursuant to the last sentence of this Section 2.05(c), a statement from the seller of such Major Building Materials to the effect that title thereto has passed to Borrower outright, subject only to Administrative Agent's lien thereon and security interest therein for the benefit of Lenders, and that no lien or security interest has or will be filed or claimed by the seller in connection therewith, in form and substance reasonably satisfactory to Administrative Agent in all respects; and (iii) except in respect of an advance in respect of building materials which are in the course of being fabricated and/or pursuant to the last sentence of this Section 2.05(c), a certificate of Borrower in form and substance acceptable to Administrative Agent in all respects to the effect that such Major Building Materials are owned by Borrower outright, free and clear of all liens, security interest and encumbrances, other than liens and security interests in favor of Administrative Agent, and that all of the terms of this paragraph (c) have been complied with. No advance for Major Building Materials shall be made unless the Major Building Materials covered thereby are stored at a location, other than the Premises, reasonably acceptable to Administrative Agent and the Construction Consultant, and, unless then being fabricated, are (i) stored in a designated and secure area of a bonded or insured warehouse, conspicuously marked to show that they are the subject of a security interest by Administrative Agent and said Major Building Materials will not be moved except in connection with their delivery to the Premises, the supplier's storage yard or to another bonded or insured warehouse; (ii) effectively segregated (to the extent reasonably possible) from all other materials of whatever kind located at the off-site location in question; and (iii) reasonably anticipated to be incorporated into the Improvements within two hundred seventy (270) days of the advance therefor. Once fabrication of any Major Building Materials has been completed, the foregoing provisions shall apply. In connection with any advance in respect of a deposit for the ordering of, or installment payment (other than the final installment) in respect of, Major Building Materials, the foregoing conditions shall not apply and the only condition to such advance shall be that Administrative Agent shall have received a copy of the executed agreement between Borrower and the manufacturer thereof which shall contain a description of the Major Building Materials, the contract price and anticipated delivery date.

•    Disbursements for all stored materials, whether or not stored on the Premises or in respect of deposits or building materials which are in fabrication, shall not exceed at any one time $32,500,000.

Contingency Advances

There shall be no advances of the Loan Budget Amounts for "Contingency" unless mutually agreed by Borrower and Administrative Agent; provided, however, that, following such time as the Improvements have been substantially completed, lien-free, Borrower shall be entitled to advances of said Loan Budget Amounts to the extent it has actually incurred and paid Hard or Soft Costs in respect of completion of the Improvements from its own funds and in excess of amounts advanced hereunder and has provided appropriate evidence of such payment to Administrative Agent. This Section 2.06 shall not affect reallocation of Contingency amounts in accordance with Section 2.07.

• Reallocation of Amounts on Construction Cost Statement.

•    Subject to the prior approval of Administrative Agent, which shall not be unreasonably withheld, conditioned or delayed, Borrower may revise the Construction Cost Statement from time to time to reallocate amounts available under the Hard CostsLoan Budget Amount denominated "Contingency" to other Hard Costs Loan Budget Amounts, and/or to reallocate amounts available under the Soft Costs Loan Budget Amount denominated "Contingency" to other Soft CostsLoan Budget Amounts.

•    If there are savings in a particular Loan Budget Amount, and if such savings are substantiated by evidence reasonably satisfactory to Administrative Agent, Borrower shall have the right, upon the prior approval of Administrative Agent, which approval shall not be unreasonably withheld, conditioned or delayed, to reallocate such savings to another Loan Budget Amount with respect to which additional costs have been or may be incurred; provided, however, that Borrower shall in no event or under any circumstances have the right to reallocate any portion of the Loan Budget Amount for "Interest on Loan", or to reallocate any savings in a Hard Costs Loan Budget Amount to other than another Hard Costs Loan Budget Amount, without in each instance obtaining the prior approval of Administrative Agent, which approval may be withheld in the sole and absolute discretion of Administrative Agent, or to cause a reallocation to occur that in the reasonable opinion of Administrative Agent, its counsel or the Title Insurer will be in contravention of the Lien Law, or that in the reasonable opinion of Administrative Agent, its counsel or the Title Insurer will adversely affect or impair in any manner whatsoever the lien or the priority of the lien of the Mortgage.

Certain Limitations on Advances.

Notwithstanding anything to the contrary contained herein, Lenders shall have no obligation to advance any portion of the Loan Budget Amount, if any, for (a) "Tenant Work" unless Administrative Agent shall have received and approved (for the avoidance of doubt, subject to the approval or deemed approval guidelines provided for elsewhere in this Agreement) copies, certified to be true and complete, of the leases for space in the Improvements to which such tenant work relates and (b) "Interest on Loan" if, when and to the extent that Administrative Agent, in its reasonable judgment, determines that the Improvements are generating, on a cash basis, positive cash flow in excess of Borrower's other expenses regarding the Premises and/or Improvements (which, for the avoidance of doubt, shall include any amounts disbursed therefor from any reserve accounts pursuant to the Lockbox Agreement).

Nature of Lenders' Obligations; Borrower's Rights and Obligations in Event a Lender Fails to Make an Advance.

The obligations of Lenders under this Agreement are several, and no Lender shall be responsible for the failure of any other Lender to fund the portion required to be funded by such other Lender of an advance of the Loan. In cases where a Delinquent Lender fails to fund the portion required to be funded by it of an advance and (x) none of the other Lenders elects to be an Electing Lender pursuant to Section 7.16 and to fund the Delinquent Lender's share of the advance and (y) Borrower is unable to procure a Replacement Lender in accordance with Section 7.20, the obligation of the Non-Delinquent Lenders to fund their respective portions of such advance and each subsequent advance shall be conditioned on (i) Borrower's or Guarantor's committing in writing to Lenders, prior to any such advance, that it will fund the entire Delinquency Amount and (ii) Borrower's submitting reasonably satisfactory evidence to Administrative Agent, at the time of each advance, that Borrower and/or Guarantor have paid, from their own funds, a portion of the Hard and Soft Costs that are the subject of such advance in an amount equal to the Delinquent Lender's portion of such advance.

Notes.

The Loan shall be evidenced by notes of Borrower in the form of Exhibit E, duly completed and executed by Borrower (one for each Lender in an amount equal to such Lender's Individual Loan Commitment, payable for the account of such Lender's Applicable Lending Office), in an aggregate principal amount equal to the Loan Amount (such notes, as the same may hereafter be amended, modified, extended, severed, assigned, substituted, renewed or restated from time to time (including, without limitation, any substitute notes pursuant to Section 3.05, 7.16, 7.20 or 8.13), each, a "Note" and collectively, the "Notes"). The Notes shall mature, and all outstanding principal and other sums thereunder shall be paid in full, on the Maturity Date, as the same may be accelerated or, pursuant to and in accordance with, Section 9.04 of this Agreement, extended.

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

Payments and Distributions; Certain Consequences of Delinquent Lender Status

Borrower shall make each payment under this Agreement and under the Notes not later than 11:00 a.m. (New York time) on the date when due to Administrative Agent at Administrative Agent's Office in immediately available funds. Administrative Agent will thereafter, on the day of its receipt of each such payment, cause to be distributed to each Lender such Lender's appropriate share (based upon the respective outstanding principal amounts of the Notes and the respective rates of interest thereunder) of the payments of principal and interest, and its appropriate share of the payments of other sums, in like funds for the account of such Lender's Applicable Lending Office. Payments by Borrower hereunder or under the Notes or other Loan Documents shall be made without setoff or counterclaim, it being understood that, unless Borrower and Administrative Agent have received valid certificates which evidence such Lender's exemption from withholding tax as set forth in Section 7.13, Borrower and Administrative Agent are permitted to withhold any tax, as required by Law.

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

Notwithstanding the foregoing provisions of this Section, (i) Administrative Agent shall make no payment to a Delinquent Lender until the Non-Delinquent Lenders have been paid in full all outstanding principal, accrued and unpaid interest and any other sums owing to them under the Loan Documents, it being understood that payments of interest on account of the outstanding principal amount of the Note held by the Delinquent Lender shall be held by Administrative Agent in a non-interest bearing account and not distributed to the Delinquent Lender until such time as all principal, interest and other sums due to the Non-Delinquent Lenders have been paid in full; (ii) any payments (other than interest, as provided in clause (i) above) which would otherwise be due a Delinquent Lender shall be distributed to the Non-Delinquent Lenders until such time as all principal, interest and other sums due to the Non-Delinquent Lenders have been paid in full (except that any such amounts otherwise due a Delinquent Lender received by Administrative Agent during an Election Period shall be retained by Administrative Agent until the expiration of the Election Period and either paid to the Delinquent Lender, if the delinquency is cured, or paid to the Non-Delinquent Lenders, if the delinquency is not cured); and (iii) Administrative Agent shall deduct, from amounts due (or, in the case of a Delinquent Lender, amounts that would otherwise be payable to such Delinquent Lender being held by Administrative Agent pursuant to clause (i) above) a Lender in default under its obligations under Section 7.05, the amount owing by such Lender pursuant to said Section 7.05 and pay the amount so deducted to itself, the other Lenders, or such other party as is entitled to such amount, as applicable. Notwithstanding anything contained in this Agreement to the contrary, the taking of the actions by Administrative Agent as contemplated above or pursuant to the terms and provisions of Section 7.16(a) shall not result in Borrower being obligated to pay to a Delinquent Lender any more than would otherwise be payable to any such Delinquent Lender in the absence of such actions by Administrative Agent.

Except as provided above in this Section and in Section 7.16, each Lender's interest in the Loan shall be of equal priority with the interest of each other Lender.

Interest.

Borrower shall pay interest to Administrative Agent for the account of Lenders on the Principal Amount, at a rate per annum as follows: for Base Rate Loans at a rate equal to the Base Rate plus the Base Rate Margin; and for LIBOR Loans at the rate set forth in the definition of "LIBOR Loan" in Section 1.02. Any principal amount not paid within five (5) Business Days

when due (when scheduled, at acceleration or otherwise) shall bear interest thereafter, payable on demand, at the Default Rate.

Interest (in the case of Base Rate Loans and LIBOR Loans) shall be calculated on the basis of a 360-day year for the actual number of days elapsed in the Interest Period, provided that the first day of the Interest Period shall be included and the last day of said Interest Period shall be excluded. If an advance is repaid on the same day on which it is made, one (1) day’s interest shall be paid on such an advance as well as any amounts payable pursuant to Section 3.03.

Interest, whether payable on a Base Rate Loan or a LIBOR Loan, shall be payable monthly in arrears on each Interest Payment Date. Interest at the Default Rate shall be payable on demand.

Any change in the Prime Rate or the Federal Funds Rate shall be automatically effective as of the day on which such change in rate occurs.

Each determination of an interest rate by Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on Borrower in the absence of manifest error.

Elections, Conversions and Continuations of Interest Rate.

Subject to the terms and conditions of this Agreement (including the provisions of Article III), Borrower shall have the option to have Principal Amount bear interest as Base Rate Loans or LIBOR Loans, as follows:

•    Borrower may elect pursuant to a Rate Request to have all or any portion of an advance of the Loan be Base Rate Loans or LIBOR Loans;

•    Borrower may elect pursuant to a Rate Request to convert all or any portion of the outstanding Base Rate Loans to LIBOR Loans, provided that no such conversion shall be permitted: (i) when any Default or Event of Default has occurred and is continuing and Administrative Agent has determined that such a conversion is not appropriate; or (ii) after the date that is one (1) month prior to the Maturity Date;

•    Borrower may elect pursuant to a Rate Request to convert all or any portion of the outstanding LIBOR Loans to Base Rate Loans; and

•    Any LIBOR Loan may be continued upon the expiration date of its then current Interest Period by Borrower pursuant to a Rate Request, provided that no LIBOR Loan may be continued: (i) when any Default or Event of Default has occurred and is continuing and Administrative Agent has determined that such a continuation is not appropriate; or (ii) after the date that is one (1) month prior to the Maturity Date.

If Borrower fails to submit a Rate Request with respect to the conversion or continuation of an existing LIBOR Loan to Administrative Agent in accordance with the provisions of this Agreement by 11:00 a.m. New York time three (3) Business Days prior to the last day of the Interest Period therefor, Administrative Agent reserves the right either to convert the outstanding LIBOR Loan to a Base Rate Loan or to continue the outstanding LIBOR Loan automatically as a LIBOR Loan with an Interest Period of one (1) month (unless such Interest Period would expire after the Maturity Date, in which case the outstanding LIBOR Loan shall automatically be converted to a Base Rate Loan).

Administrative Agent shall, upon its receipt of each Rate Request from Borrower (and upon its decision to convert or continue a LIBOR Loan pursuant to the immediately preceding paragraph), promptly notify each Lender either by telephone or by facsimile of the specified amount thereof and the amount of Lender's portion thereof, the Interest Period and date of commencement thereof, and the applicable interest rate.

Each Rate Request shall be applicable to the Notes in accordance with Lenders' respective Pro Rata Shares, so that, barring a conversion or suspension of LIBOR Loans by one or more, but not all, Lenders, pursuant to Article III, the outstanding principal amounts of each of the Notes shall contain segments representing Base Rate Loans and/or LIBOR Loans, each of which segments shall correspond to a proportional segment of the outstanding principal amount of every other Note. Notwithstanding the foregoing, if a Lender shall fail to fund the portion it is required to fund of any advance of the Loan and an Electing Lender shall commit to fund the Delinquency Amount pursuant to Section 7.16, then from and after the time of the first disbursement of the Delinquency Amount by the Electing Lender, (i) in the case of a Rate Request with respect to an advance, such Rate Request shall be applicable to the Notes in accordance with the respective portions of such advance made by Lenders; (ii) in the case of a Rate Request with respect to the conversion of Base Rate Loans to LIBOR Loans, such Rate Request shall be applicable to the Notes ratably in accordance with the amounts of the Base Rate Loans of the respective Lenders; and (iii) in the case of a Rate Request with respect to the conversion or continuation of existing LIBOR Loans

having the same Interest Period, such Rate Request shall be applicable ratably to all LIBOR Loans having such Interest Period.

Minimum Amounts and Maximum Number of Tranches.

With regard to the Total Loan as a whole, all elections, conversions and continuations of LIBOR Loans or Base Rate Loans shall be in a minimum amount of $250,000, except in the case of the last advance of the Loan. Borrower shall not have the right to have more than five (5) distinct Interest Periods, in the aggregate, in respect of LIBOR Loans in effect at any one time, whether or not there are any outstanding Base Rate Loans at the time.

Inapplicability of LIBOR Loans.

Any portion of the Principal Amount that is not bearing interest as, or cannot pursuant to the terms of this Agreement bear interest as, a LIBOR Loan shall bear interest as a Base Rate Loan.

Late Payment Premium.

Borrower shall pay to Administrative Agent, for the account of Lenders, a late payment premium in the amount of 5% of any payments of regular principal, interest, fees or other amounts payable under the Loan Documents made more than five (5) Business Days after the due date thereof, which late payment premium shall be due with any such late payment. The late payment premium is to cover administrative and related expenses incurred in handling delinquent payments.

The acceptance of a late payment premium shall not, except if it cures the Default or Event of Default, as applicable, constitute a waiver of any Default or Event of Default then existing or thereafter arising. Further, Administrative Agent's failure to collect a late payment premium at any time shall not constitute a waiver of Administrative Agent's or Lenders' right thereafter, at any time and from time to time (including, without limitation, upon acceleration of the Notes or upon payment in full of the Loan), to collect such previously uncollected late payment premiums or to collect subsequently accruing late payment premiums.

Voluntary Prepayments.

Borrower, on not less than ten (10) Business Days' prior notice to Administrative Agent, may prepay the Principal Amount, in whole or in part, without premium or penalty, provided that Borrower gives a notice of such prepayment which shall specify: (i) the date and amount of the prepayment; (ii) whether the prepayment is of LIBOR Loans, Base Rate Loans or a combination thereof, and, if a combination thereof, the amount allocable to each; and (iii) in the case of prepayment of LIBOR Loans, the expiration date of the applicable Interest Period. Prepayment of all or any portion of the Principal Amount may be made in accordance with this Section provided that: (i) the principal amount prepaid is not less than $1,000,000, unless the prepayment would result in the prepayment of the Loan in full; (ii) all accrued and unpaid interest to and including the date of such prepayment on the amount being prepaid is then paid; and (iii) any amounts payable pursuant to Article III, to the extent then due, are then paid. Any such notice of prepayment may be withdrawn by Borrower in a notice to Administrative Agent on or prior to the date on which such prepayment was to occur, so long as, in connection with such withdrawal, all reasonable out-of-pocket expenses incurred by Administrative Agent in connection with the withdrawn notice of prepayment and any amounts owed pursuant to Article III, if any, are paid simultaneously with such withdrawal or, if later, promptly following being presented with a statement therefor from Administrative Agent or any Lenders. Amounts prepaid may not be reborrowed. Notwithstanding anything in this Agreement to the contrary, none of the payments made pursuant to this Section 2.17 shall be duplicative of any payments required to be made pursuant to Section 3.03 of this Agreement. Administrative Agent and Lenders acknowledge the terms and provisions of Section 3.14 of the Mortgage and agree to perform the actions and undertakings imposed on Administrative Agent and Lenders in such Section.

• Acceleration of Advances.

•    Lenders may, in their absolute discretion, advance or accelerate the advance of all or any portion of the amounts to be advanced hereunder without regard to Borrower's satisfaction of the conditions to its entitlement to Loan proceeds and no Person dealing with Borrower or the Construction Manager or any other Person shall have standing to demand any different performance from Lenders, provided, however, that if Borrower chooses to deposit with each Lender such Lender's Pro Rata Share of the amount of any Loan advances in excess of the amount which Borrower would be entitled

•

to pursuant to Section 2.01, Lenders shall give Borrower a credit against the interest due on the Notes equal to the interest which would accrue on the amount so deposited as if such amount deposited bore interest at the interest rate that would be applicable thereto under the Notes.

•    CONTRACTORS, SUBCONTRACTORS, LABORERS, MATERIALMEN and SUPPLIERS are cautioned that if Loan advances are made under the alternative set forth in paragraph (a) above, proceeds of the Loan remaining to be advanced at the time of the completion of the Improvements, or any time prior thereto, may be inadequate to pay all lienable claims incurred by Borrower and unpaid at that time. All potential lienors are therefore cautioned to exercise sound business judgment in the extension of credit to Borrower and should not expect Lenders to make Loan advances in such amounts and at such times that it will not be necessary for said parties to exercise such judgment for themselves. Moreover, they are reminded that subdivision (3) of Section 13 of the Lien Law provides that "Nothing in this subdivision shall be considered as imposing upon the lender any obligation to see to the proper application of such advances by the owner," and Lenders have no intention of voluntarily imposing such obligation on themselves.

LIBOR Margin Reduction.

Provided there exists no Event of Default, monetary Default or non-monetary material Default, at such time as (i) tenants are in occupancy, have commenced paying base rent and are open for business for not less than 90% of the net rentable square feet in the Improvements pursuant to Leases which are Approved Leases or have been approved or deemed approved by Administrative Agent and (ii) the Debt Service Coverage Ratio for the immediately preceding Measurement Period is at least 1.00 to 1.00, the LIBOR Margin shall be reduced to 1.0% per annum.

ARTICLE III

YIELD MAINTENANCE ETC.

Additional Costs and Other Effects of Regulatory Changes; Taxes.

Borrower shall pay directly to a Lender, promptly upon demand, such amounts as are necessary to compensate such Lender for Additional Costs resulting from any Regulatory Change, without duplication for payments made in respect of Non-Excluded Taxes pursuant to Section 8.25, which (i) subjects such Lender to any tax, duty or other charge with respect to the Loan or its Note, or changes the basis of taxation of any amounts payable to such Lender under the Loan or its Note (other than taxes (including branch profit taxes) imposed on the overall net income of such Lender or of its Applicable Lending Office by the jurisdiction in which such Lender's principal office or such Applicable Lending Office is located (or taxes imposed in lieu of income taxes) and other than taxes described in Section 8.25 and taxes imposed by reason of a failure by such Lender to provide Borrower with an appropriate certification where providing such certification would avoid imposition of such taxes), (ii) imposes, modifies or deems applicable any reserve, special deposit or similar requirements relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, such Lender, (iii) imposes on such Lender or, in the case of LIBOR Loans, on the London interbank market, any other condition affecting the Loan or its Note, or any of such extensions of credit or liabilities or (iv) imposes any capital adequacy requirements on such Lender by virtue of the Loan or the Notes. Such Lender will notify Borrower (with a copy to Administrative Agent) of any event occurring after the date hereof which would entitle it to compensation pursuant to this paragraph as promptly as practicable after it obtains knowledge thereof and determines to request such compensation, and will use reasonable efforts to mitigate such Additional Costs, including designating a different Applicable Lending Office for those portions of the Loan affected by such event if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in such Lender's sole opinion, be disadvantageous to it, provided that such Lender shall have no obligation to so designate an Applicable Lending Office located in the United States, provided, however, that, in order for any such notice to be effective to impose on Borrower the obligation to pay any such amount, such notice must be delivered by Lender in question within thirty (30) days after such Lender should reasonably have been aware of the event giving rise to its entitlement to compensation.

Without limiting the effect of the immediately preceding paragraph, in the event that, by reason of any Regulatory Change, (i) a Lender incurs Additional Costs based on or measured by the excess above a specified level of the amount of (1) a category of deposits or other liabilities of such Lender which includes deposits by reference to which the LIBO Rate is determined as provided in this Agreement and/or (2) a category of extensions of credit or other assets of such Lender which includes loans the interest on which is determined on the basis of rates referred to in the definition of "LIBO Rate" in Section 1.02, (ii) a Lender becomes subject to restrictions on the amount of such a category of liabilities or assets which it may hold or (iii) it shall be unlawful or impossible for a Lender to make or maintain a LIBOR Loan, then such Lender's obligation to

make or maintain a LIBOR Loan (and Borrower's right to request the same) shall be suspended and such Lender shall give notice thereof to Borrower (with a copy to Administrative Agent) and, upon the giving of such notice, interest payable on the affected Note shall be converted to the rate for Base Rate Loans, unless such Lender may lawfully continue to maintain its LIBOR Loan (or any portion thereof) to the end of the current Interest Period(s), at which time the interest rate on the affected Note shall convert to the rate for Base Rate Loans. If subsequent to any conversion to Base Rate Loans as provided above such Lender determines that such Regulatory Change has ceased to be in effect, such Lender will so notify Borrower (with a copy to Administrative Agent), and Borrower may convert the affected Base Rate Loan to a LIBOR Loan by submitting a Rate Request in respect thereof and otherwise complying with the provisions of this Agreement with respect thereto.

Determinations by each Lender of the existence or effect of any Regulatory Change on its costs of making or maintaining a LIBOR Loan, or on amounts receivable by it in respect thereof, and of the additional amounts required to compensate such Lender in respect of Additional Costs, shall be conclusive, so long as made on a reasonable basis and absent manifest error.

Limitations on Availability of LIBOR Loans.

Anything herein to the contrary notwithstanding, if, at the time of or prior to the determination of the LIBO Rate in respect of any LIBO Rate Request Amount as provided in this Agreement, (i) Administrative Agent determines (which determination shall be conclusive, so long as made on a reasonable basis) that by reason of circumstances affecting the London interbank market generally, adequate and fair means do not or will not exist for determining the LIBO Rate applicable to the Interest Period specified in the Rate Request in question or (ii) a Lender determines (which determination shall be conclusive, so long as made on a reasonable basis) that the LIBO Rate will not accurately reflect the cost to such Lender of making or maintaining a LIBOR Loan for the applicable Interest Period, then Administrative Agent, in the case of the circumstances described in clause (i) above, or such Lender, in the case of the circumstances described in clause (ii) above, shall give Borrower prompt notice thereof (with a copy to Administrative Agent in the case of the notice from such Lender), and the LIBO Rate Request Amount in question, in the case of the circumstances described in clause (i) above, or such Lender's portion thereof, in the case of the circumstances described in clause (ii) above, shall bear interest, or continue to bear interest, as the case may be, as a Base Rate Loan. If at any time subsequent to Administrative Agent's or such Lender's giving of such notice, Administrative Agent or such Lender, as the case may be, determines that because of a change in circumstances LIBOR Loans are again available to Borrower, Administrative Agent or such Lender, as the case may be, shall so notify Borrower (with a copy to Administrative Agent, in the case of the notice from such Lender) and Borrower may convert the Base Rate Loans or the affected Base Rate Loans, as the case may be, to LIBOR Loans by submitting a Rate Request in respect thereof and otherwise complying with the provisions of this Agreement with respect thereto.

Certain Compensation

Borrower shall pay directly to a Lender, immediately upon request and notwithstanding contrary provisions contained in the Mortgage or other Loan Documents, such amounts as shall, in the judgment of such Lender (which shall be conclusive so long as made on a reasonable basis and absent manifest error), compensate it for any out-of-pocket loss, cost or expense incurred by it as a result of (i) any failure by Borrower to make a borrowing of, conversion into or continuation of a LIBOR Loan after Borrower has given a notice requesting the same in accordance with this Agreement, (ii) any failure by Borrower to make any prepayment after Borrower has given notice thereof in accordance with the provisions of this Agreement (subject to Section 2.17), (iii) the making of any payment or prepayment (under any circumstances whatsoever, whether voluntary or involuntary) of any LIBOR Loan on a date other than the last day of an applicable Interest Period, (iv) the conversion (for any reason whatsoever, whether voluntary or involuntary) of a LIBOR Loan to a Base Rate Loan on a date other than the last day of an applicable Interest Period, or (v) the early termination of any swap or other interest rate hedging arrangements. In the cases of clauses (i) through (iv) above, such amounts shall include, without limitation, an amount equal to the present value (using as a discount rate the rate at which interest is computed pursuant to clause (y) below) of the excess, if any, of (x) the amount of interest that would have accrued on the amount so prepaid, converted, not borrowed, not continued, not converted or not prepaid, as the case may be, for the period from the date of occurrence to the last day of the applicable Interest Period at the applicable rate of interest provided for herein (excluding, however, the LIBOR Margin) over (y) the amount of interest (as reasonably determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the London interbank market. In the case of clause (v) above, such amounts shall include, without limitation, any out-of-pocket loss, cost or expense arising from the re-employment of funds obtained by the affected Lender, from fees payable to terminate the deposits from which such funds were obtained or from reversing any swap or other interest rate hedging arrangements.

"Lender" to Include Participants

For purposes of this Article III and of the definitions of "Additional Costs", "Regulatory Change" and "Reserve Requirements" in Section 1.02, the term "Lender" shall be deemed to include Postbank. For purposes of this Article III and of the definition of "Additional Costs" in Section 1.02, the term "Lender" shall, at each Lender's option, be deemed to include such Lender's present and future Participants in the Loan to the extent of each such Participant's actual Additional Costs or other out-of-pocket losses, costs or expenses payable pursuant to this Article III. With respect to any Participant or Assignee under Section 8.13, "Regulatory Change" shall be determined based on the law at the time such Participant or Assignee became a party to this Agreement, and not based on the law as of the date hereof.

Substitution of Lenders.

If any Lender (an "Affected Lender") (i) makes demand upon Borrower for (or if Borrower is otherwise required to pay) Additional Costs pursuant to Section 3.01 or (ii) gives notice to Borrower that such Lender is unable to make or maintain its Pro Rata Share of the Loan at the LIBO Based Rate as a result of a condition described in clause (ii) of Section 3.02 or in the second paragraph of Section 3.01, Borrower may, within one hundred eighty (180) days of receipt of such demand or notice, as the case may be, give notice (a "Substitution Notice") to Administrative Agent and to each Lender of its intention to replace such Affected Lender with another Eligible Lender (the "Substitute Lender") designated in such Substitution Notice. If the Substitute Lender is not then a Lender, Administrative Agent shall notify Borrower and each Lender within fifteen (15) days after receipt of such Substitution Notice if such Eligible Lender is, in Administrative Agent's reasonable judgment, reasonably satisfactory as a lender hereunder (provided any existing Lender shall be satisfactory). If, in the case the Substitute Lender is not a Lender, within ten (10) days after notice from Administrative Agent to Borrower and each Lender that such Eligible Lender is reasonably satisfactory or in the case the Substitute Lender is a Lender, within ten (10) days after Borrower delivers its Substitution Notice to Administrative Agent and each Lender, the Affected Lender shall not agree to waive the payment of the Additional Costs in question or the effect of the circumstances described in clause (ii) of Section 3.02 or in the second paragraph of Section 3.01, then the Affected Lender shall, so long as no Event of Default shall exist, assign its Note and all of its rights and obligations under this Agreement to the Substitute Lender, and the Substitute Lender shall assume all of the Affected Lender's rights and obligations, pursuant to an Assignment and Assumption Agreement, executed by the Affected Lender and the Substitute Lender. It shall be a condition to any such assignment and assumption that, concurrently therewith, the Affected Lender also assigns, and the Substitute Lender assumes, the proportionate part of the Affected Lender's rights and obligations under the Other Loan. In connection with such assignment and assumption, the Substitute Lender shall pay to the Affected Lender an amount equal to the outstanding principal amount under the Affected Lender's Note plus all interest accrued thereon, plus all other amounts, if any (other than the Additional Costs in question), then due and payable to the Affected Lender with respect to the Loan; provided, however, that prior to or simultaneously with any such assignment and assumption, Borrower shall have paid (or caused to be paid) to such Affected Lender all amounts properly demanded and unreimbursed under this Article III. Upon the effective date of such assignment and assumption and the payment by the Substitute Lender to Administrative Agent of a fee, for Administrative Agent's own account, in the amount of $3,500, the Substitute Lender shall become a party to this Agreement and shall have all the rights and obligations of a Lender as set forth in such Assignment and Assumption Agreement, and the Affected Lender shall be released from its obligations hereunder, and no further consent or action by any party shall be required. Upon the consummation of any assignment pursuant to this Section, a note shall be issued to the Substitute Lender by Borrower, in substitution for the Affected Lender's Note, and the Affected Lender shall return its Note to Borrower. Such substitute note shall constitute a "Note", and the obligations evidenced by such substitute note shall be secured by the Mortgage. In connection with Borrower's execution of such substitute note as aforesaid, Borrower shall deliver to Administrative Agent such evidence of the due authorization, execution and delivery of the substitute note and any related documents as Administrative Agent may reasonably request. If the Substitute Lender is not incorporated under the Laws of the United States or a state thereof, it shall, prior to the first date on which interest or fees are payable hereunder for its account, deliver to Borrower and Administrative Agent certification as to exemption from deduction or withholding of any United States federal income taxes in accordance with Section 7.13.

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

ARTICLE IV

CONDITIONS PRECEDENT

Conditions Precedent to Initial Advance.

Lenders shall not be obligated to make the Initial Advance until the following conditions shall have been satisfied:

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

•    The representations and warranties made to Administrative Agent or Lenders herein, in the other Loan Documents and in any other document, certificate or statement executed or delivered by Borrower and/or Guarantor to Administrative Agent or Lenders in connection with the Loan (except those that are as of a specific date) shall be true and correct in all material respects on and as of the date of the Initial Advance with the same effect as if made on such date;

• Intentionally Omitted;

•    The Improvements, if any, shall not have been materially injured or damaged by fire or other casualty unless Administrative Agent shall have received, for the account of Lenders, insurance proceeds (and/or other cash held by Administrative Agent or creditworthy commitments assigned to Administrative Agent) sufficient in the judgment of the Construction Consultant to effect the satisfactory restoration of the Improvements and to permit completion of the Improvements prior to the Completion Date;

• Administrative Agent shall have received and approved each of the following:

•Fees and Expenses. (i) Those fees required by the Supplemental Fee Letter to be paid on or before the date hereof, to be retained by Administrative Agent and/or PB Capital for its own account; and (ii) all reasonable fees and expenses incurred by Administrative Agent (including, without limitation, the reasonable fees and expenses of Lenders' Counsel, the Construction Consultant, Administrative Agent's environmental and insurance consultants, and the preparer of the appraisal required by paragraph (4) below);

•Loan Documents and Supplemental Fee Letter. This Agreement, each of the other Loan Documents and the Supplemental Fee Letter, duly executed by the parties thereto, and, where applicable, duly acknowledged and in proper form for recording or filing, as the case may be, and all necessary or desirable recordings and filings shall have been duly made;

•Financial Statements. Current Financial Statements and such other financial data (including, without limitation, current financial statements of tenants under leases in respect of the Premises and of parties to any of the Premises Documents, and of the guarantor(s), if any, of any such tenants or parties, all to the extent available) as Administrative Agent shall reasonably require;

•Appraisal. An independent FIRREA appraisal of the Premises and Improvements (exclusive of any residential component or air or development rights in respect thereof) commissioned by Administrative Agent and produced by an MAI real estate appraiser, certified in the jurisdiction(s) in which the Premises are located in accordance with the current Uniform Standards of Professional Appraisal Practice (USPAP) as promulgated by the Appraisal Foundation showing the stabilized appraised value as a retail property of not less than $500,000,000;

•Insurance Policies. The policies of insurance required by the Mortgage, together with evidence of the payment of the premiums therefor;

•Hazardous Materials Report/Reliance Letter. A detailed report, in form reasonably satisfactory to Administrative Agent, by a properly qualified engineer, which shall include, interalia, a certification that such engineer has obtained and examined a list of prior owners, tenants and other users of all or any portion of the Premises or the improvements thereon, and has made an on-site physical examination of the Premises, and a visual observation of the surrounding areas, together with, if required by Administrative Agent, a "reliance letter" addressed to Administrative Agent with respect to such report (including (i) a Phase I Environmental Assessment in accordance with ASTM Standard 1527-05, (ii) if

recommended by the Phase I, a Phase II Environmental Assessment and (iii) if adverse environmental conditions are identified, a remediation plan which has been approved by Administrative Agent and its environmental consultant (such approval not to be unreasonably withheld, conditioned or delayed) and which costs therefor are in the Construction Cost Statement);

•Title Policy. A paid title insurance policy (or policies), in the amount of the Mortgage, in ALTA 2006 Loan Policy form (with New York endorsements) or other form approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed), issued by the Title Insurer, which shall insure the Mortgage to be a valid lien on Borrower's Interest in the Premises free and clear of all defects and encumbrances except those previously received and approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed), and shall contain:

• full coverage against mechanics' liens (filed and inchoate),

•    a reference to the survey but no survey exceptions except those theretofore approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed),

•    such affirmative insurance and endorsements as Administrative Agent may reasonably require, and

•    a pending disbursements clause substantially in the form of Exhibit D attached hereto; and, if any such policy is dated earlier than the date of the Initial Advance, a written continuation of or endorsement to such policy, in a form approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed), conforming to the requirements of said Exhibit Dand setting forth no additional exceptions except those approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed),

and shall be accompanied by such co-insurance and/or reinsurance agreements between the Title Insurer and title companies approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed), in ALTA 1994 facultative form, as Administrative Agent may reasonably require;

•Survey. A current survey of the Premises certified to Administrative Agent and the Title Insurer showing:

• the location of the perimeter of the Premises by courses and distances,

•    all easements, rights-of-way, and utility lines referred to in the title policy required by this Agreement or which actually service or cross the Premises,

•    the lines of the streets abutting the Premises and the width thereof, and any established building and setback lines,

• encroachments and the extent thereof upon the Premises,

•    the Improvements to the extent constructed, and the relationship of the Improvements by distances to the perimeter of the Premises, established building, setback and street lines,

•    if the Premises are described as being on a filed map, a legend relating the survey to said map, and

• all flood zone designations in respect of the Premises;

•Leases and Premises Documents. Certified copies of all Leases in respect of the Premises, accompanied by, in the case of Major Leases and any other Leases specified by Administrative Agent, estoppel certificates from the tenants thereunder and executed notice-of-assignment letters in the form of Exhibit Cattached hereto in respect thereof; executed subordination, non-disturbance and attornment agreements, in Administrative Agent's usual form or, if the tenant is a major national retailer, such tenant's usual form (with, in the case of either form, such commercially reasonable changes to such form as are requested by the party not providing the form and as are agreed to by the party providing the form), in respect of such Leases as Administrative Agent may reasonably require; a certified copy of the standard form of lease Borrower will use in connection with the leasing of space in the Improvements; and

certified copies of all Premises Documents, together with, if reasonably required by Administrative Agent, estoppel certificates from the parties thereto;

•Counsel Opinions. An opinion of Borrower's counsel to such effects as are reasonably required by Administrative Agent;

•Organizational Documents. If Borrower, the mortgagor under the Mortgage (if different from Borrower), Guarantor or any general partner or member of any of them is a corporation, current copies of the following documents with respect to each (unless otherwise indicated):

•    a good-standing certificate from the jurisdiction of its incorporation and, as to Borrower and the mortgagor under the Mortgage (if different from Borrower) only, a certificate from the State of New York evidencing such entity's authorization to do business in the State of New York,

•    a copy of such Person's articles of incorporation as filed in the jurisdiction of its incorporation and certified by the Secretary of State of such jurisdiction, together with a copy of the bylaws of such Person,

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

•    a certificate of the corporate secretary as to the incumbency of the officers executing any of the documents required hereby and attaching copies of the documents described above, certified by such corporate secretary as being true, correct and complete copies thereof,

and, if Borrower, the mortgagor under the Mortgage (if different from Borrower), Guarantor or any general partner or member of any of them is a partnership, venture, limited liability company or trust:

•    a good-standing certificate from the jurisdiction of its incorporation and, as to Borrower and the mortgagor under the Mortgage (if different from Borrower) only, a certificate from the State of New York evidencing such entity's authorization to do business in the State of New York,

•    the entity's organizational agreement and all amendments and attachments thereto, certified by a general partner, venturer, member or trustee to be true and complete,

•    any certificates filed or required to be filed by the entity in the jurisdictions of its formation and in the State of New York in order for it to do business in those jurisdictions,

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

•    a certificate of the general partner or managing member attaching copies of the documents described above, certifying same to be true, correct and complete copies thereof;

•Funding Statement. A Funding Statement, duly executed by Borrower, in Administrative Agent's standard form, with regard to the disbursement of the Initial Advance;

•Requisition. A Requisition for the Initial Advance, together with, if requested by Administrative Agent, proof of payment of, and invoices, bills or statements of amounts owed with respect to, any Soft Costs included therein;

•Permits and Approvals. Copies of any and all authorizations (including plot plan and subdivision approvals, zoning variances, a full building permit, water, sewer and other permits) required by Governmental Authorities or otherwise necessary for the construction, use, occupancy and operation of the Premises and/or Improvements for the purposes contemplated by the Plans and Specifications in

accordance with all applicable Laws, together with evidence that revised plans have been filed with or submitted to the City Planning Commission ("CPC") and the Department of Buildings for approval to reflect the differences between the plans approved by CPC and the Department of Buildings and the Plans and Specifications and further that such revised plans have been approved by the Community Board for the Premises;

•Development, Management and Leasing Contracts. Certified copies of all agreements providing for or relating to the development, management, maintenance, operation or leasing of the Premises or Improvements, together with, in each case, such assignment and subordination agreements in respect thereof as Administrative Agent may reasonably require;

•Chattel Searches. UCC, United States federal and state tax lien, judgment, pending litigation and bankruptcy searches against Borrower, the mortgagor under the Mortgage (if different from Borrower), Guarantor or any general partner or member of any of them and advice from the Title Insurer to the effect that searches of proper public records disclose no leases of personalty or financing statements filed or recorded against the Premises, Borrower or other owner of any Mortgaged Property;

•Plans and Specifications, Etc. A complete set of the Plans and Specifications; a schedule certified by Borrower and Borrower's Architects of the Plans and Specifications delivered to Administrative Agent, setting forth sheet number, title, date and revised date; and copies of a soil-engineer's report, a site plan (showing all necessary approvals, utility connections and site improvements) and all inspection and test records and reports made by or for Borrower or Borrower's Architects;

•Consultant's Report. A report from the Construction Consultant to the effect that (i) it has received and approved the items required by paragraph (f) below, (ii) the Plans and Specifications have been approved by all applicable Governmental Authorities, (iii) the Improvements as shown by the Plans and Specifications will comply with applicable zoning and other Laws, (iv) a Construction Management Agreement and/or Trade Contracts are in effect which satisfactorily provide for the construction of the Improvements, subject, however, to the provisions of Section 4.01(e)(19) regarding signed Trade Contracts, (v) all roads and utilities necessary for the full utilization of the Improvements for their intended purposes have been completed, or the presently installed and proposed roads and utilities will be sufficient for the full utilization of the Improvements for their intended purpose and will be available to and servicing the Premises upon completion of the Improvements, (vi) the construction of the Improvements theretofore performed, if any, was performed in accordance with the Plans and Specifications and (vii) construction of the Improvements, along with all necessary roads and utilities, will be finished on or before the Completion Date; and to such other effects as Administrative Agent may reasonably request;

•Construction Contracts, Will-Serve Letters and Bids. Copies of the Construction Management Agreement, the Trade Contracts to the extent then required to be executed hereunder (it being understood that while copies of all such Trade Contracts shall be delivered to Administrative Agent, only Major Trade Contracts and Trade Contracts for those Trade Contractors specifically identified below shall be subject to Administrative Agent's approval, not to be unreasonably withheld, conditioned or delayed), Borrower's agreement with Borrower's Architects and Borrower's agreement(s) with engineer(s), in each case certified by Borrower to be true and complete, together with "will-serve" letters from Borrower's Architects, engineer(s) and the Construction Manager in forms approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed), and "will-serve" letters also in form approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed) from all Major Trade Contractors and those Trade Contractors specifically identified below; a copy of the standard form of contract and/or subcontract to be used by the Construction Manager, which standard form shall be approved by Administrative Agent (such approval shall not be unreasonably withheld, conditioned or delayed); and if, in the reasonable judgment of Administrative Agent and the Construction Consultant, all Trade Contracts and the Construction Management Agreement do not cover all of the work necessary for completion of construction of the Improvements, Borrower shall cause to be furnished firm bids from responsible parties, or estimates and other information reasonably satisfactory to Administrative Agent, for the work not so covered, to enable Administrative Agent to ascertain the total estimated cost of all work done and to be done (In no event, unless otherwise agreed by Administrative Agent, shall the Initial Advance be made unless at least 80% of the Hard Costs (excluding general conditions and Construction Manager expenses) for the Improvements shall be subject to signed Trade Contracts and unless the Trade Contracts for superstructure, mechanical, plumbing, electrical and exterior facade shall have been executed and approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed);

•Bonds. Payment and performance bonds naming Administrative Agent as co-obligee and labor and materials payment bonds, each in AIA Document No. A-312 (1984 Edition) form, for penal sums equal to the amounts of each Major Trade Contract;

•Progress Schedule. A progress schedule or chart showing the interval of time over which each item of Hard Cost is projected to be incurred or paid;

• Construction Cost Statement. The Construction Cost Statement;

Equity Contribution.Evidence of Borrower's equity of at least $157,081,642 (of which not more than $90,000,000 may be in the form of imputed land value, such land valued pursuant to the appraisal delivered pursuant to Section 4.01(e)(4) (none of which equity shall be reimbursed from proceeds of the Loan or the Other Loan);

•Organizational Chart. An organizational chart of Borrower and its sole shareholder, including any information reasonably requested by Administrative Agent to enable it to comply with its obligations under the Patriot Act;

Required Leases.A fully executed lease with (i) Century Rego Realty LLC ("Century 21"), with the tenant's obligations guarantied by Century 21 Department Stores, LLC, a New York limited liability company, (ii) Home Depot U.S.A., Inc. ("Home Depot") and (iii) Kohl's Department Stores, Inc. ("Kohl's");

•W-9. Two W-9 Forms for Borrower with original signatures, its United States federal Tax I.D. Number and its registered address under its documents of formation;

ICIP.Evidence that the Premises meets the eligibility requirements for ICIP, including, without limitation, as to location and the minimum required expenditure target, together with copies of the Preliminary Application for Certificate of Eligibility and the notice to be delivered to the ICIP Unit fifteen (15) Business Days prior to commencement of construction; and

•Additional Documentation. Such other approvals, opinions or documents as Administrative Agent may reasonably request, provided the same does not constitute an additional material condition to the advance; and

•    The Construction Consultant shall have received and approved (such approval not to be unreasonably withheld, conditioned or delayed) each of the following:

•Related Documents. Copies of the items required by paragraphs (6), (8), (14), (17), (19), (20), (21) and (22) of Section 4.01(e), together with copies of any Major Leases or Premises Documents which contain any requirements or specifications in respect of construction of the Improvements;

•Title Documents. Copies of any documents listed as exceptions to title in the title policy required hereby which are relevant to the construction or use of the Improvements; and

•Requisition. If the Initial Advance consists in whole or in part of advances for Hard Costs, a copy of the Requisition therefor.

Borrower acknowledges that Lender and Administrative Agent have agreed to make the Initial Advance notwithstanding that not all conditions of Sections 4.01(e) and (f) have been satisfied in full. In connection therewith, Borrower and Administrative Agent have entered into a letter agreement of even date herewith (the "Initial Advance Open Items Letter") which specifies which of the foregoing conditions of said Sections 4.01(e) and (f) remain to be satisfied and the time period within which Borrower must satisfy any such condition and also attaches forms of documents which have been approved by Administrative Agent.

Conditions to Advances After the Initial Advance.

Lenders' obligation to make advances of proceeds of the Loan after the Initial Advance shall be subject to the satisfaction of the following conditions:

•    All conditions of Section 4.01, subject to the Initial Advance Open Items Letter, shall continue to be satisfied as of the date of the advance;

•    There shall exist no Event of Default or monetary or bankruptcy-related Default, and no Event of Default would result from the making of the advance;

•    The representations and warranties made to Administrative Agent and/or Lenders herein, in the other Loan Documents and in any other document, certificate or statement executed or delivered by Borrower and/or Guarantor to Administrative Agent and/or Lenders in connection with the Loan, except for those that are of a specific date, shall be true and correct on and as of the date of the advance with the same effect as if made on such date except for changes that (i) do not, or will not, in the reasonable opinion of Administrative Agent, result in a Material Adverse Effect, (ii) are theretofore disclosed to Administrative Agent and which Administrative otherwise approves or (iii) are the result of actions required or permitted to be taken by Borrower under the terms hereof (clauses (i) through (iii), collectively herein referred to as "Certain Changes");

•    Administrative Agent shall have received a written continuation report of or endorsement to the title policy insuring the Mortgage to the date of such advance, in the form approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed), substantially conforming to the pending disbursements clause set forth in Exhibit D and setting forth no additional exceptions (including survey exceptions) except those approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed);

•    If reasonably required by Administrative Agent, it shall have received a survey of the Premises certified to it and the Title Insurer, updated, with respect to all relevant requirements and information, to within ten (10) days of the Requisition;

•    Borrower shall have delivered to Administrative Agent and the Construction Consultant copies of (i) the Major Trade Contracts then executed and not previously delivered to Administrative Agent and Construction Consultant, which shall be reasonably satisfactory to Administrative Agent and the Construction Consultant in all respects, together with the payment and performance bonds described in Section 4.01(e)(20), if required, (ii) all other Trade Contracts then executed and not previously delivered to Administrative Agent and (iii) the payment and performance bonds described in Section 4.01(e)(20) then in effect and not previously delivered to Administrative Agent;

•    Administrative Agent and the Construction Consultant shall have received a Requisition for the advance, together with such other documentation and information as either of them customarily and may reasonably require; and

•    Lenders and Administrative Agent have agreed to hold the Series II Mortgage and to not, at this time, record same, subject to the terms and provisions hereof. Lenders shall not be obligated to make any advance which when aggregated with all Loan advances theretofore made would exceed the principal amount of the Series I Mortgage, unless prior thereto the Series II Mortgage shall have been delivered to the Title Company for recording with the Office of City Register, Queens County and all mortgage recording taxes and fees shall have been duly paid by Borrower and the Title Company shall have issued for the benefit of Administrative Agent an endorsement to the Title Policy insuring the Series II Mortgage, which endorsement shall be reasonably satisfactory in form and substance to Administrative Agent. Administrative Agent agrees that it shall deliver the Series II Mortgage to the Title Company in order to secure an advance of Loan proceeds then being made. Borrower, Administrative Agent and the Lenders agree that the Series I Mortgage and the Series II Mortgage will be recorded in the order that corresponds to the numerical designation of such Mortgages, which is to say that no advance will be made in respect of Series II Mortgage until the aggregate of the advances hereunder equals the principal amount of the Series I Mortgage. Administrative Agent shall hold the Series II Mortgage and will record it as necessary as described above, provided, however, that Borrower agrees that Administrative Agent may at any time record the Series II Mortgage held by it and not then recorded, whether or not the Series II Mortgage is necessary to secure an advance of Loan proceeds then being made and without further consent or authorization of Borrower, provided, further, however, that Administrative Agent agrees that if Administrative Agent intends to record the Series II Mortgage pursuant to the provisions of the immediately preceding proviso, it shall give Borrower written notice of such intention at least ten (10) days prior to the recording of the Series II Mortgage during which ten (10) day period Borrower shall be entitled to reduce the unfunded portion of the Loan (pursuant to documentation reasonably satisfactory in form and substance to Administrative Agent) by an amount which Borrower and Administrative Agent agree will leave the Loan "in-balance" and in connection therewith (i) Borrower shall execute and/or deliver a replacement Series II Mortgage reflecting the reduced principal amount and otherwise in the same form as the Series II Mortgage delivered on the date hereof, (ii) the Title Company shall raise no additional exception to title as a result

•

of the replacement of the Series II Mortgage delivered on the date hereof, (iii) Administrative Agent shall have received (1) an opinion of counsel to such effects as are reasonably required by Administrative Agent with respect to the replacement Series II Mortgage, (2) resolutions, consents or authorizations from Borrower with respect to such replacement, which shall be reasonably satisfactory in form and substance to Administrative Agent, (3) a reaffirmation and modification by Guarantor of its obligations under those of the Loan Documents to which it is a party, which shall be reasonably satisfactory in form and substance to Administrative Agent and (4) such additional documents or instruments as are reasonably requested by Administrative Agent in connection with such replacement and so long as, in the reasonable opinion of Administrative Agent, Lenders' Counsel and the Title Insurer that the execution and delivery of such replacement Series II Mortgage will not be in contravention of the Lien Law and will not adversely affect or impair in any manner whatsoever the lien or the priority of the lien of the replacement Series II Mortgage, when recorded. In the absence of the satisfaction of the foregoing provisions of the last proviso of the immediately preceding sentence as and when required thereby, Administrative Agent shall be entitled to record the Series II Mortgage then in its possession. Borrower agrees to execute and deliver such documents, instruments and/or affidavits as are required by the Title Company, if any, in order to record the Series II Mortgage. Borrower hereby irrevocably directs and authorizes Administrative Agent, without further direction or authorization of Borrower, to make advances hereunder for payment of all mortgage recording taxes, recording fees, title insurance premiums and attorneys' fees in connection with the foregoing.

Conditions to Last Hard Costs Advance.

In addition to the requirements of Section 4.02, in the case of the last Hard Costs Loan advance as provided in Section 2.04, Administrative Agent shall also have received and approved (such approval not to be unreasonably withheld, conditioned or delayed) the following items:

•    A report from the Construction Consultant to the effect that construction of the Improvements (other than work to be performed by the Tenants under their respective Leases) has been substantially completed, and any necessary utilities and roads have been finished and made available for use, in accordance with the Plans and Specifications and that it has received reasonably satisfactory evidence of the approval by all Governmental Authorities of the Improvements in their entirety, including, without limitation, that all base building systems such as the sprinkler system, heating, ventilation and air conditioning system, all vertical pipes, mains and risers of plumbing and sanitary systems, electrical systems and life safety, fire alarm and security systems are in place and operational (such as a core and shell temporary certificate of occupancy with respect to retail building, a temporary certificate of occupancy for the garage which permits the use thereof and a temporary certificate of occupancy for the vehicular and pedestrian bridge over and across 62nd Drive which permits the use thereof for its intended purposes), except in each case, where such work is to be performed by the Tenants under their respective Leases; and, if requested by Administrative Agent, certificates from the Construction Manager and Borrower's Architects to the effect that the Improvements have been substantially completed in accordance with the Plans and Specifications;

•    Final Unconditional Lien Waivers and Releases and Payment Receipts in form approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed) from the Construction Manager and all contractors, subcontractors, suppliers and materialmen, evidencing that they have been paid in full (or will be paid in full upon the release of its respective portion of the Retainage) for all work performed and/or materials supplied;

•    A current final survey of the Premises, certified to Administrative Agent and the Title Insurer, showing the completed Improvements;

•    To the extent any tenants under Major Leases or any parties to the Premises Documents have rights of approval with respect to construction of the Improvements, Borrower shall have used commercially reasonable efforts to obtain certificates by such tenants or parties, to the effect that, for purposes of the Major Leases and Premises Documents, respectively, the Improvements have been substantially completed to the level of completion required thereby; and

•    Evidence reasonably satisfactory to Administrative Agent that applicable requirements of the Premises Documents have been satisfied in full.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Administrative Agent and Lenders that:

Due Formation, Power and Authority.

Each of Borrower and Guarantor is a corporation, is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation, is authorized to do business (if required) in the State of New York, and has full power and authority to consummate the transactions contemplated hereby and to execute, deliver and perform this Agreement and any other Loan Document to which it is a party.

Legally Enforceable Agreements.

TheSupplemental Fee Letter and each Loan Document to which Borrower or Guarantor is a party is a legal, valid and binding obligation of such party, enforceable against Borrower or Guarantor, as the case may be, in accordance with its terms, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency and other similar Laws affecting creditors' rights generally and general equity principles and an implied covenant of good faith and fair dealing.

Financial Statements.

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

Compliance With Laws; Payment of Taxes.

Borrowerand Guarantor are in compliance with, and the transactions contemplated hereby and by the other Loan Documents do not and will not violate any provision of, or require any filing (except for the Loan Documents and except under securities reporting laws and rules), registration, consent or approval under, any Law presently in effect having applicability to Borrower or Guarantor, except where failure to do so would not result in a Material Adverse Effect; Borrower has filed all tax returns (United States federal, state and local) required to be filed and has paid all taxes, assessments and governmental charges and levies shown to be due and payable under such tax returns, assessments and governmental charges (including those in respect of the Premises), including any interest and penalties, other than taxes being contested in good faith or where the failure to so file or pay would not cause a Material Adverse Effect.

Litigation.

There are no actions, suits or proceedings pending or, to Borrower's knowledge, threatened against or affecting it, Guarantor, the Premises, the validity or enforceability of the Mortgage or the priority of the lien thereof at law, in equity or before or by any Governmental Authorities except actions, suits or proceedings which have been disclosed to Administrative Agent and Lenders in writing and which are fully covered by insurance or would, if adversely determined, not materially impair the ability of Borrower or Guarantor to pay when due any amounts which may become payable under the Notes or Guaranty or to otherwise pay and perform their respective obligations in connection with the Loan; to Borrower's knowledge, neither it nor Guarantor is in default with respect to any order, writ, injunction, decree or demand of any court or Governmental Authorities which default would cause a Material Adverse Effect.

No Conflicts or Defaults

The consummation of the transactions contemplated hereby and the performance hereof and of the other Loan Documents have not resulted and will not result in any breach of, or constitute a default under, any mortgage, deed of trust, lease, bank

loan or credit agreement, corporate charter, bylaws, partnership agreement or other instrument to which Borrower or Guarantor is a party or by which either of them may be bound or affected which would cause a Material Adverse Effect.

Solvency.

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

Governmental Regulation.

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

Insurance.

Borrower has in force, and has paid, to the extent due, the premiums in respect of, all of the insurance required by the Mortgage.

ERISA

Neither Borrower nor Guarantor nor any other Person, including any fiduciary, has engaged in any prohibited transaction (as defined in Section 4975 of the Code or Section 406 of ERISA) which could subject Borrower or Guarantor or any Person whom they have an obligation to indemnify to any tax or penalty imposed under Section 4975 of the Code or Section 502 of ERISA; each Employee Benefit Plan is administered in all material respects in accordance with its terms and in material compliance with all applicable Laws, including any reporting requirements; each Pension Plan intending to qualify under Section 401(a) or 401(k) of the Code does so qualify; there is no lien outstanding or security interest given in connection with a Pension Plan; neither Borrower nor Guarantor nor any ERISA Affiliate has any liability with respect to an accumulated funding deficiency (whether or not waived) under Section 412 of the Code or Section 302 of ERISA; neither Borrower nor Guarantor has any liability for retiree medical or death benefits (contingent or otherwise) other than as required by Section 4980B of the Code; and no part of the funds to be used by Borrower or Guarantor in satisfaction of their respective obligations under this Agreement and the other Loan Documents constitute "plan assets" of any "employee benefit plan" within the meaning of ERISA or of any "plan" within the meaning of Section 4975(e)(1) of the Code, as interpreted by the Internal Revenue Service and the United States Department of Labor in rules, regulations, releases or bulletins or as interpreted under applicable case law.

Other Documents.

The Major Leases and Premises Documents are unmodified and in full force and effect, there are no material defaults (with respect to Borrower or related parties or, to the knowledge of Borrower, with respect to counterparties) (or events which with notice or the passage of time, or both, would constitute such a material default) under any thereof and all conditions to the effectiveness and continuing effectiveness thereof required to be satisfied as of the date hereof have been satisfied, except where failure to do so would not result in a Material Adverse Effect.

No Default.

There exists no Default or Event of Default.

Accuracy of Information; Full Disclosure.

None of the documents, financial statements, reports, notices, schedules, certificates, statements or other writings furnished by or on behalf of Borrower or Guarantor to Administrative Agent or Lenders in connection with the negotiation of this Agreement or the other Loan Documents or the consummation of the transactions contemplated hereby, or required herein or by the other Loan Documents to be furnished by or on behalf of Borrower or Guarantor, contains any untrue or misleading

statement of a material fact or, when taken together with all of the foregoing, omits a material fact necessary to make the statements therein not misleading as of the date hereof.

Separate Tax and Zoning Lot.

The Premises constitutes one or more distinct parcels for purposes of zoning and of taxes, assessments and impositions (public or private) and are not otherwise considered as part of a larger single lot for purposes of zoning or of taxes, assessments or impositions (public or private).

Requisition as Reaffirmation

Each Requisition submitted to Administrative Agent, and the receipt of the funds requested thereby, shall constitute an affirmation that the representations and warranties contained herein and in the other Loan Documents remain true and correct in all material respects as of the respective dates of such Requisitions (except those that are of a specific date and except for Certain Changes).

Plans and Specifications and Improvements.

The approved Plans and Specifications are as listed in the schedule required by paragraph (17)of Section 4.01(e), which schedule is hereby certified by Borrower to be true and correct, and are the same as the filed plans referred to in the building permits for the Improvements; the Plans and Specifications are satisfactory to it, have been reviewed and approved by (i) Guarantor (or Guarantor has been afforded adequate opportunity to review such Plans and Specifications), (ii) the Construction Manager, (iii) the tenants under any Major Leases to the extent any such Major Lease requires such review and approval, (iv) the parties to any Premises Documents which require approval of the Plans and Specifications, (v) Borrower's Architects and (vi) to the extent required by applicable Law or any restrictive covenant, by all United States federal and New York Governmental Authorities and the beneficiary of any such covenant; all construction, if any, already performed on the Improvements has been performed on the Premises in accordance with the Plans and Specifications approved by the Persons named above and with any restrictive covenants applicable thereto; to the best of Borrower's knowledge, there are no structural defects in the Improvements or any material violations of any requirement of any Governmental Authorities with respect thereto; the Improvements and the planned use thereof comply in all material respects with all applicable zoning and other Laws and restrictive covenants affecting the Premises; and all requirements for such use have been satisfied in all material respects.

Utility Services.

All utility services necessary for the construction of the Improvements and the operation thereof for their intended purposes are available at the boundaries of the Premises, including water supply, storm and sanitary sewer, gas, electric power and telephone facilities.

Creation of Liens.

Borrower has not entered into any contract or arrangement of any kind the performance of which by the other party thereto would give rise to a lien on the Mortgaged Property prior to the Mortgage except for the Premises Documents, the Mapping Agreement dated as of December 10, 1987 between Guarantor and The City of New York (as the same may be amended by the executed version of the Draft Mapping Agreement), its arrangements with Borrower's Architects, the Construction Manager, Trade Contractors and contractors or subcontractors who have filed lien waivers or signed Payment Receipts/Lien Releases in form approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed) for all payments due under said arrangements as of the end of the period covered by the last Requisition.

Roads.

All roads necessary for the full utilization of the Improvements for their intended purposes have either been completed or the necessary rights of way therefor have been acquired by appropriate Governmental Authorities or dedicated to public use and accepted by said Governmental Authorities, and all necessary steps have been taken by Borrower and said Governmental

Authorities to assure the complete construction and installation thereof no later than the Completion Date or any earlier date required by any Law, Premises Document or Major Lease (subject, in each case, to Section 9.06).

Construction Prior to Closing.

Borrower advised the Title Insurer in writing prior to the issuance of the title policy insuring the Mortgage whether any survey, soils-testing, site-development, excavation or other work related to construction of the Improvements was begun or done before the Mortgage was recorded.

Lien Law Statement.

Attached hereto as Exhibit A is the Lien Law Statement in conformity, as completed, with Section 22 of the Lien Law.

• Anti-Money Laundering; OFAC; Patriot Act.

•     (i) As of the date hereof none of the funds or other assets of Borrower or of any of its direct or, to the knowledge of Borrower, indirect owners constitute property of, or, to the knowledge of Borrower, are beneficially owned, directly or indirectly, by, any Person subject to trade restrictions under United States Law, including those who are covered by the International Emergency Economic Powers Act, 50 U.S.C. §§1701 etseq., The Trading with the Enemy Act, 50 U.S.C. App. 1 etseq., and any Executive Orders or regulations promulgated thereunder (an "Embargoed Person") with the result that the investment in Borrower (whether directly or, to Borrower's knowledge, indirectly) is prohibited by such applicable Law or the Loan is in violation of such Law; (ii) no Embargoed Person has any direct or, to the knowledge of Borrower, indirect interest of any nature whatsoever in Borrower with the result that the investment in Borrower (whether directly or indirectly) is prohibited by such applicable Law or the Loan is in violation of such Law; and (iii) none of the funds of Borrower have been derived, to the knowledge of Borrower, from any unlawful activity with the result that the investment in Borrower (whether directly or indirectly) is prohibited by such applicable Law or the Loan is in violation of such Law.

•    Neither Borrower nor any of its direct or, to the knowledge of Borrower, indirect owners is in violation of any order issued with respect to anti-money laundering by the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC"), or any other anti-money laundering Law.

•    Neither Borrower nor any if its direct or, to the knowledge of Borrower, indirect owners is a Person with whom United States Persons are restricted from doing business with under (a) regulations issued by OFAC (including those persons and entities named on OFAC's Specially Designated Nationals and Blocked Persons list) or under any United States Law (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) or (b) any other Law. Without limiting the foregoing, Borrower is not, to the knowledge of Borrower, presently funding its obligations hereunder with funds from any of the Persons referred to in this paragraph (c).

•    The organizational chart of Borrower heretofore delivered to Administrative Agent is true and correct as of the date hereof.

•    Amounts required to be delivered to or paid by Borrower under this Agreement or its membership agreement or the Loan Documents are not derived from Illegal Proceeds and/or from an Illegal Source.

ARTICLE VI

COVENANTS OF BORROWER

Borrower shall comply with the following covenants:

Compliance with Laws; Payment of Taxes.

Borrower shall promptly comply with all Laws applicable to it or the Mortgaged Property, or any part thereof, except where failure to comply would not result in a Material Adverse Effect such compliance to include, without limitation, paying before the same become delinquent all taxes, assessments and governmental charges (except those being disputed in good faith)

imposed on it or the Mortgaged Property, or any part thereof, and promptly furnish Administrative Agent with reports of any official searches made by Governmental Authorities and any claims of violations thereof.

• Leases and Premises Documents.

•    Borrower shall not enter into any Lease which is not a Major Lease unless such Lease meets the requirements of an Approved Lease.

•    Each (i) Major Lease (including the tenant thereunder) and (ii) other Lease that does not meet with the requirements of an Approved Lease executed after the date hereof shall require Administrative Agent's prior written approval, which approval shall not be unreasonably withheld, delayed or conditioned if the proposed tenant is creditworthy (as determined by Administrative Agent in its reasonable discretion) and such Lease complies with, or exceeds, the leasing parameters set forth in the Leasing Parameters Letter for "Major Leases". Administrative Agent shall notify Borrower of its approval or disapproval (in which case such notice shall contain a reasonably detailed explanation of the reasons for such disapproval) within ten (10) Business Days after Borrower's request for Administrative Agent's approval of such Lease, which request in order to be effective shall contain a copy of the Lease in question, together with a redline of such Lease against the standard form of lease previously approved by Administrative Agent if such Lease was based on such form, and an abstract of the material economic terms of such Lease. If Administrative Agent does not so notify Borrower of its approval or disapproval within such ten (10) Business Day period, Borrower may resubmit its request for approval, which shall note thereon in boldface type that such request constitutes the second request with respect to such Lease. If Administrative Agent does not notify Borrower of its approval or disapproval of the Lease in question (which in the case of disapproval shall contain a reasonably detailed explanation of the reasons for such disapproval) within five (5) Business Days after Borrower's second request, the Lease in question shall be deemed approved. Borrower shall not permit or consent to the assignment of any Major Lease without Administrative Agent's prior written consent (such consent shall not be unreasonably withheld, conditioned or delayed) unless and except to the extent the right to assign without Borrower's consent is already reserved to the tenant thereunder. Borrower may also submit memoranda, term sheets and similar documents in respect of proposed leases (collectively, a "Lease Term Sheet") for Administrative Agent's approval pursuant to this Section 6.02(b), which Administrative Agent shall review and approve or disapprove in accordance with the procedures and timelines set forth above. If any Lease Term Sheet is approved in accordance with the foregoing procedures, Borrower shall submit to Administrative Agent the form of Lease to be executed pursuant to any such approved Lease Term Sheet and if the economic terms of such Lease are substantially the same as those set forth in the Lease Term Sheet previously approved, such economic terms shall not require further approval from Administrative Agent.

•    Borrower shall not renew, amend, modify or supplement any Approved Lease (except to the extent required to do so under such Approved Lease) unless following such proposed renewal, amendment, modification or supplement such Approved Lease would continue to satisfy the requirements of an "Approved Lease". Any renewal, amendment, modification or supplement of any Major Lease, any Lease which was approved pursuant to the provisions of Section 6.02(b) or any Approved Lease which does not satisfy the requirements of the first sentence hereof shall require Administrative Agent's prior written approval, which approval shall not be unreasonably withheld, delayed or conditioned. Administrative Agent agrees that its approval of any such renewal, amendment, modification or supplement shall be subject to the same approval process as set forth in Section 6.02(b).

•    Upon execution of any Lease or any modification thereof or supplement thereto, Borrower shall furnish Agent with an executed copy of such Lease, modification or supplement, certified as true and complete by Borrower.

•    Administrative Agent agrees to execute a subordination, non-disturbance and attornment agreement for each Lease approved or deemed approved by Administrative Agent (including Approved Leases) so long as such agreement is in the form provided by Administrative Agent to Borrower from time to time, or, if the tenant under the Lease in question is a major national or regional retailer, such tenant's form, with such commercially reasonable changes as the party not providing the form requires and are reasonably agreed to by the party providing the form.

•    Borrower shall use all commercially reasonable efforts to promptly deliver to Administrative Agent (i) if requested by Administrative Agent, current financial statements of the tenants under any Leases and of the guarantor(s), if any, of such tenants (to the extent such tenants are obligated to deliver the same under their Leases), and (ii) estoppel certificates from the tenants thereunder. In the case of all Major Leases, a notice-of-assignment letter in the form of Exhibit C; in addition, Borrower shall promptly deliver to Administrative Agent certified copies of all Premises Documents and all amendments to any thereof and keep all Premises Documents in full force and effect.

•    Notwithstanding anything in this Agreement to the contrary, Borrower may terminate any Lease if the tenant thereunder has materially defaulted on its obligations under such Lease.

Continuing Accuracy of Representations and Warranties.

Borrower shall promptly cause all of the representations and warranties made to Administrative Agent or Lenders herein and in the other Loan Documents (other than those made as of a certain date) to be continuously true and correct in all material respects except for Certain Changes.

Covenants, Restrictions and Easements.

Borrower shall promptly comply in all material respects with all restrictions, covenants and easements affecting the Premises or the Improvements.

Inspection and Cooperation.

Borrowershall permit Administrative Agent, its representatives and the Construction Consultant to enter upon the Premises, on reasonable prior notice, during reasonable business hours and accompanied by a representative of Borrower, except that during an emergency the foregoing requirements shall not apply, inspect the Improvements and all materials to be used in the construction thereof and examine all detailed plans and shop drawings which are or may be kept at the construction site; cooperate and cause the Construction Manager and Major Trade Contractors to cooperate with the Construction Consultant to enable it to perform its functions hereunder; at the time of each inspection by the Construction Consultant, make available to said consultant, on demand, daily log sheets covering the period since the immediately preceding inspection showing the date, weather, subcontractors on the job, number of workers and status of construction.

Payment of Costs.

Borrower shall promptly pay when due and payable all costs and expenses required for completion of the Improvements and the satisfaction of the conditions hereof, including, without limitation:

•    all document and stamp taxes, recording and filing expenses and fees and commissions lawfully due to brokers in connection with the transactions contemplated hereby,

•    any taxes, insurance premiums, liens, security interests or other claims or charges against the Premises or Improvements, and

•    all costs of completion of the work to be performed by Borrower in space to be occupied in the Improvements (including public space) to permit the lawful occupancy thereof for the purposes contemplated by actual or prospective lessees of such space as set forth in the individual leases or subleases thereof or in detailed work letters or other agreements or letters of intent with respect thereto, or, in cases where there are no such leases, subleases, work letters or other documents as aforesaid, as set forth in Borrower's standard work letter or the standard form of lease, if any, required by paragraph (9) of Section 4.01(e), or, in cases where none of the foregoing exists, to the level of building standard in accordance with industry practices, as reasonably determined by the Construction Consultant.

Borrower's obligations under this Section 6.06 are subject to its rights under Section 1.07 of the Mortgage.

Brokers.

Borrower shall indemnify Administrative Agent and Lenders against claims of brokers arising by reason of the execution hereof or the consummation of the transactions contemplated hereby except if Administrative Agent or any Lender had engaged such party; provided that Administrative Agent and each Lender represents that it has not dealt with any broker, finder or other similar Person in connection herewith.

Construction of Improvements.

Borrower shall commence construction of the Improvements no later than thirty (30) days from the date hereof; submit a Requisition for the Initial Advance within thirty (30) days after such commencement and subsequent advances on a monthly basis thereafter; cause construction thus begun to be prosecuted with diligence and continuity in a good and workmanlike manner in accordance with the Plans and Specifications except during the existence of any Force Majeure Event; use only materials, fixtures, furnishings and equipment in connection with construction of the Improvements that are not used or

obsolete; and complete construction of the Improvements, and the installation of all necessary roads and utilities, in accordance with the Plans and Specifications, on or before the Completion Date free and clear of defects and liens or claims for liens for material supplied or labor or services performed in connection with the construction of the Improvements, other than liens or claims for liens which have been bonded over to the reasonable satisfaction of Administrative Agent and the Title Insurer; time being of the essence. For the purposes of this Section 6.08, the Improvements shall not be deemed to have been substantially completed until (i) the Improvements have, in the reasonable opinion of Administrative Agent and Construction Consultant, been completed (exclusive of punch list items) substantially in accordance with the Plans and Specifications and Borrower's Architect shall have so certified to Administrative Agent pursuant to a completed AIA Form G704 (Certificate of Substantial Completion) and shall have also certified that the Improvements (x) have been substantially completed in accordance with the Plans and Specifications and (y) comply with all applicable laws, regulations and rules of any Governmental Authority, except where failure to comply would not have a Material Adverse Effect, (ii) the Improvements shall contain all fixtures and equipment required for the operation of the Improvements, or which may be required by any Governmental Authority or by any law, regulation or rule of any Governmental Authority and are in all material respects in the case of the retail building, with respect to space covered by Leases, ready for delivery to such tenants in accordance with the requirements of such Leases and, with respect to space which is not then covered by a Lease, to the condition set forth in Borrower's standard work letter or standard form of lease, (iii) all permanent (or in lieu thereof temporary) certificates of occupancy (or their local equivalent) and all other certificates, licenses, consents and approvals required for the Improvements (including, without limitation, for the core and shell of the retail building, the garage and the bridge across 62nd Drive) shall have been issued by or obtained from the appropriate Governmental Authorities, (iv) all Direct Costs, Indirect Costs and other costs and expenses incurred in connection with the construction and equipping of the Improvements shall (subject to the following provisions of this paragraph) have been paid in full (other than Direct Costs and other costs and expenses which will be incurred in completing punch list work, landscaping and other minor work with respect to the Improvements and which in the aggregate will not in the reasonable opinion of Administrative Agent and Construction Consultant exceed $1,000,000, and the remaining balance of amounts not advanced pursuant to paragraph (a) of Section 2.01, if any), (v) an as-built survey of the Improvements reasonably acceptable to Administrative Agent has been provided to it and (vi) as built plans and specifications for the mechanical, plumbing and electrical systems for the Improvements have been provided to Construction Consultant. The requirements of clause (iv) of the preceding sentence of this paragraph shall be deemed satisfied notwithstanding the fact that Borrower shall be withholding payment with respect to work or materials supplied in connection with the construction of the Improvements which is associated with Retainage or which in the reasonable opinion of Borrower, Borrower's Architect, Administrative Agent and Construction Consultant were not performed or supplied in accordance with the standards specified in the contracts under which such work or materials were to be performed or supplied, or that there are unpaid claims for additional payments with respect to work or materials supplied in connection with the construction of the Improvements which in the reasonable opinion of Borrower, Borrower's Architect, Administrative Agent and Construction Consultant are excessive, invalid or unsubstantiated, provided that (i) Borrower is withholding such payment in good faith and has notified Administrative Agent thereof, and (ii) Borrower shall have paid all other Direct Costs, Indirect Costs and any other costs incurred (other than the remaining balance of amounts not advanced pursuant to paragraph (a) of Section 2.01, if any) in connection with the construction, equipping and completion of the Improvements in accordance with the provisions of this Agreement and shall have delivered evidence reasonably satisfactory to Administrative Agent of such payment. None of the foregoing is intended to relieve Borrower of its obligation, as soon as reasonably possible following such substantial completion, to cause any and all uncompleted work to be completed and to make payment therefor.

Project Sign.

Following the execution hereof, Borrower shall promptly place a sign, at its own expense, on the Premises at a location reasonably satisfactory to Administrative Agent indicating, among other things, that PB Capital is arranging the financing for construction of the Improvements.

Building Loan Trust Account.

Borrower shall receive in the Building Loan Trust Account all advances made hereunder; and hold the same and the right to receive the same as a trust fund for the purpose of paying only the "cost of improvement", as such quoted term is defined in the Lien Law, including payments for such purpose itemized on the Requisition.

Certain Materials to be Submitted.

Borrower shall promptly deliver to Administrative Agent and the Construction Consultant copies of all contracts, bills of sale, statements, receipted vouchers or agreements under which Borrower claims title to any materials, fixtures or articles incorporated in the Improvements or subject to the lien of the Mortgage, or under which it has incurred costs for which it is

entitled to an advance of proceeds of the Loan, and deliver to Administrative Agent such other data or documents in connection with the Improvements as Administrative Agent may from time to time reasonably request.

Correction of Defects and Departures from Plans and Specifications.

Upon demand of Administrative Agent, Borrower shall promptly correct any defects (including structural) in the Improvements (other than immaterial defects) or any material departures from the Plans and Specifications not previously approved by Administrative Agent in accordance herewith.

Change Orders.

Borrower shall not directly or indirectly, without the prior written consent of Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed) and (to the extent required by Law or any Premises Document) all Governmental Authorities (but not including foreign):

A.  modify or supplement the Plans and Specifications (except as provided in paragraph C below) or any permits granted to construct the Improvements in any respect;

B.   amend, supplement or otherwise modify its agreements with Borrower's Architects or the Construction Manager, or any Major Trade Contract or any of the Trade Contractors specifically identified in Section 4.01(e)(19), except as provided in paragraph C below, (1) to increase the amount payable by Borrower thereunder, (2) to lengthen the time for performance of any party thereto other than Borrower or (3) in any other way that could adversely affect in any material respect Administrative Agent and Lenders; or

C. direct or permit the performance of any work pursuant to any Change Order unless:

(i)  such Change Order will not materially change the usage of the Improvements or the gross square feet or the net rentable square feet of retail or garage space to be contained in the Improvements, or the basic layout of the Improvements, or involve the use of materials, furniture, fixtures and equipment that will not be at least equal in quality to the materials, furniture, fixtures and equipment originally specified in or required by the approved Plans and Specifications; and

(ii)  such Change Order shall, in a single instance, result in an increase or decrease in the cost of the Improvements of less than the Change Order Amount; provided, however, if the aggregate cost of all such Change Orders not approved by Administrative Agent at any given time shall result in an increase or decrease in the cost of the Improvements of more than the Aggregate Change Order Amount, then any and all subsequent Change Orders, regardless of amount, must be previously approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed).

Borrower shall submit to Administrative Agent and Construction Consultant copies of all Change Orders entered into with respect to the Improvements within fifteen (15) days after the same are entered into, irrespective of whether the same require the prior approval of Administrative Agent and the Construction Consultant pursuant to this Agreement. The approval of any Plans and Specifications or Change Order will not obligate Lenders to increase or advance any Loan Budget Amount on account of any such Plans and Specifications or Change Order.

Regarding Construction Contracts.

Borrower shall require covenants from the Construction Manager and Trade Contractors who have contracts directly with Borrower to the same effect as the covenant made by Borrower in the immediately preceding Section; and provide in every Construction Management Agreement that the Construction Manager will deliver to Administrative Agent or the Construction Consultant copies of all Major Trade Contracts, Change Orders and any other contract, purchase order or subcontract covering labor, materials, equipment or furnishings to or for the Improvements, and the names of all Persons with whom the Construction Manager has contracted or intends to contract for the construction of the Improvements or for the furnishing of labor or materials therefor.

Security of Site.

Borrower shall employ suitable means to protect from theft or vandalism all portions of the Improvements and all tools and building materials stored on the Premises.

• Intentionally Omitted.

Development, Management and Leasing of Premises.

Borrowershall cause Vornado Realty L.P. to serve as developer, property manager and leasing agent for the Premises and keep in full force and effect and not modify in any material respect the development, management and/or leasing agreement(s) approved pursuant to paragraph (15) of Section 4.01(e), without Administrative Agent's prior written consent (such consent not to be unreasonably withheld, conditioned or delayed). Notwithstanding the foregoing, Borrower shall be permitted (without the consent of Administrative Agent or any Lender) to enter into a management agreement substantially in the form as the management agreement attached as an exhibit to the Initial Advance Open Items Letter at any time; provided that (x) Borrower delivers an executed copy of such management agreement upon its execution, (y) simultaneously with such execution, the manager thereunder enters into an assignment and subordination of management agreement substantially in the same form as the Assignment of Management Agreement and (z) the Management Agreement (as defined in the Assignment of Management Agreement) is terminated.

Maintenance, Management, Service and Leasing Contracts.

Borrower shall promptly deliver to Administrative Agent, as and when executed, certified copies of all maintenance, management, service and leasing contracts and any parking agreement entered into with respect to the Premises, each of which shall be entered into with a party, and on terms and conditions, reasonably acceptable to Administrative Agent, provided, however, that maintenance and service contracts that are entered into on commercially reasonable terms and which are no longer than one-year renewable contracts, terminable by Borrower (or, at Borrower's election, the other party thereto) at the end of each such one year period, shall not require Administrative Agent's approval thereof, provided, further, however, that any Affiliate of Borrower shall be deemed acceptable to Administrative Agent; and contemporaneously with entering into each such management and leasing contract or parking agreement, at Administrative Agent's option, cause the manager, leasing agent and parking operator, as applicable, under each such contract to deliver to Administrative Agent an assignment and subordination thereof, on Administrative Agent's standard form with commercially reasonably changes therein requested by such party, pursuant to which such party shall undertake, inter alia, to continue performance on Lenders' behalf in the event of an Event of Default without additional cost (other than sums owed pursuant to such contract for services thereafter rendered to or for Administrative Agent or Lenders at its or their request). Administrative Agent shall notify Borrower of its approval or disapproval (in which case such notice shall contain a reasonably detailed explanation of the reasons for such disapproval) within ten (10) Business Days after Borrower's request for Administrative Agent's approval of any such maintenance, management, service and leasing contract or parking agreement, which request in order to be effective shall contain a copy of the contract or agreement in question. If Administrative Agent does not notify Borrower of its approval or disapproval of such contract or agreement in question (which in the case of disapproval shall contain a reasonably detailed explanation of the reasons for such disapproval) within seven (7) Business Days after Borrower's request, the contract or agreement in question shall be deemed approved. Notwithstanding the foregoing, in the case of any request for approval of a parking agreement, Borrower shall be required to submit a second request for approval if Administrative Agent does not approve or disapprove of the initial request within ten (10) Business Days, and if Administrative Agent does not notify Borrower of its approval or disapproval of such parking agreement (which in the case of a disapproval shall contain a reasonably detailed explanation of the reasons for such disapproval), within five (5) Business Days of such second request, such parking agreement shall be deemed approved.

Administration Fee.

Borrower shall pay to Administrative Agent, for its own account, an administration fee, payable in advance in monthly installments of $6,000, on the date hereof and on each Interest Payment Date hereafter until the Loan is repaid in full (it being understood that such monthly administration fee shall be non-refundable once paid).

•Fees Required by Supplemental Fee Letter. Borrower shall promptly pay to Administrative Agent, for its own account or that of PB Capital, as the case may be, the fees provided for, on the dates specified, in the Supplemental Fee Letter.

•Reporting Requirements. Borrower shall furnish to Administrative Agent (it being understood that Administrative Agent shall provide, promptly upon receipt, to each Lender):

(1)  Annual Financial Statements. As soon as available and in any event within ninety (90) days after the end of the respective fiscal years of Borrower and Guarantor, Financial Statements of Borrower and Guarantor, as of the end of and for such fiscal year, in reasonable detail, stating in comparative form the respective figures for the preceding fiscal year, which in the case of Borrower shall be certified by the principal financial or accounting officer of Borrower, and in the case of Guarantor shall be audited by a firm of independent certified public accountants which is then one of the four largest such firms practicing in the United States or another firm of independent certified public accountants approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed). Such requirement in the case of Guarantor may be satisfied by providing to Administrative Agent a copy of the Form 10-K which Guarantor files with the Securities and Exchange Commission ("SEC");

(2)  Quarterly Financial Statements. As soon as available and in any event within forty-five (45) days after the end of each fiscal quarter, unaudited Financial Statements of Guarantor, as of the end of and for such quarter (to include actual quarterly and year-to-date net operating income and net cash flow), in reasonable detail and stating in comparative form the respective figures for the corresponding date and period in the preceding fiscal year. Such requirement may be satisfied by providing to Administrative Agent a copy of the Form 10-Q which Guarantor has filed with the SEC;

(3)  Certificate of No Default. At the time of delivery of the quarterly statements under clause (2) above, a certificate of the principal financial or accounting officer of Borrower or of Guarantor, as the case may be, stating that such officer knows of no Default or Event of Default which has occurred and is continuing, or, if any such Default or Event of Default has occurred and is continuing, specifying the nature and period of existence thereof and what action Borrower has taken or proposes to take with respect thereto and in case of the certificate provided by such officer of Guarantor stating further that Guarantor is in compliance with the financial covenants of Guarantor in the Guaranty (together with the calculations necessary to confirm the same) and, commencing with the initial deposit of Rents (as defined in the Lockbox Agreement) into the Collection Account (as defined in the Lockbox Agreement) pursuant to the Lockbox Agreement, the certificate provided by such officer of Borrower shall in addition provide Borrower's calculations of Debt Service Coverage Ratio for the applicable Measurement Period;

(4)  Notice of Litigation. Promptly after the commencement and knowledge thereof, notice of all actions, suits and proceedings before any court or arbitrator or any Governmental Authorities, affecting Borrower, Guarantor or all or any part of the Mortgaged Property, which involves uninsured claims in excess of $1,000,000;

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

(6)  Leasing Reports and Property Information. Quarterly (i) within fifteen (15) days after the end of any fiscal quarter, a current leasing status report, and (ii) within forty-five (45) days after the end of any fiscal quarter, a certified rent roll containing the names of all lessees of the Premises, the expiration date of their respective leases, the spaces occupied and the rentals payable thereunder, together with an accounts receivable aging schedule, a tenant receivables report and a list of tenant defaults and together with copies, certified to be true and complete, of such Leases as may be requested by Administrative Agent (which were not previously provided) and a tenant sales report summary, provided, however, that upon substantial completion of the Improvements, Borrower shall, upon Administrative Agent's request, forward such leasing status reports more frequently than quarterly, but in no case, no more frequently than monthly;

(7)Budget.By December 31 of each calendar year, the operating and capital budget for the Premises, which shall be prepared and submitted in a form reasonably acceptable to Administrative Agent, and shall set forth in reasonable detail all budgeted items of income and expense (whether from operations, capital items or otherwise), including, without limitation, Borrower's good faith estimate of gross revenue and operating expenses, tenant improvement costs and capital expenditures for the next fiscal year. Administrative Agent agrees that, in lieu of the above, a draft may be submitted prior to December 31 so long as the final budget is submitted during the next ensuing January;

(8)Lease Completion Date Extensions.  Simultaneously with any notice delivered to, or received from, any tenant under any Lease which notifies a party to such Lease that the date by which Borrower is obligated to complete construction of improvements as required under any such Lease and/or to deliver possession of such tenant's space to such tenant has or is about to expire or requests an extension of any such date, a copy of any such notice; promptly following execution of an agreement with any tenant which extends any such completion and/or delivery date, a copy of such agreement; or, if any tenant specifically denies any request for extension of any such

date or purports to terminate or cancel its Lease as a result of the failure to complete or deliver possession by the date set forth in the Lease in question, a copy of any such notices delivered in connection therewith and thereafter such information as Administrative Agent shall reasonably request from time to time as to the status of such tenant's Lease; and

(9)  General Information. Promptly, such other information respecting the condition or operations, financial or otherwise, of Borrower, Guarantor or the Premises as Administrative Agent or any Lender may from time to time reasonably request.

Condominium Covenants.

In the event Borrower elects, at Borrower's sole and absolute discretion, to submit the Premises and Improvements constructed or to be constructed thereon to a form of condominium regime pursuant to the provisions of the Condominium Act to create the Residential Unit and the Retail Unit and no others, Borrower shall:

(a)  prior to such submission, have obtained Administrative Agent's written approval of the Condominium Documents (such approval not to be unreasonably withheld, conditioned or delayed), which review of the Condominium Documents by Administrative Agent shall be consistent with other construction lenders of commercial/retail projects involving condominiums;

(b)  satisfy all of the requirements of the Condominium Act and of any other applicable Law or restriction necessary to create a valid mixed-use condominium regime in respect of the Premises and Improvements;

(c)  duly perform or cause to be duly performed all obligations of the declarant or sponsor, as the case may be, under the Condominium Documents, and do or cause to be done all things necessary to operate and maintain the Premises and Improvements as a mixed-use condominium building, provided, however that Borrower will not record or file the Declaration and Tax Lot Drawings with the Office of the City Register of the City of New York without satisfying the requirements of Section 9.01 for subordination of the liens of the Mortgage and the Other Mortgage;

(d)  not amend or modify the Condominium Documents without the prior written consent of Administrative Agent, which consent shall not be unreasonably withheld, delayed or conditioned; and

(e)  upon its receipt, Borrower shall deliver to Administrative Agent a copy of the recorded Declaration and Tax Lot Drawings.

Hedging Product.

If at any time the LIBO Rate with an Interest Period of one month exceeds 6.25% for two (2) consecutive weeks, Borrower shall, no later than twenty (20) days thereafter, purchase at its own expense an interest rate hedging product reasonably acceptable to Administrative Agent with Administrative Agent or another entity having unsecured long-term debt rating from Standard & Poor's Ratings Services, Inc., a division of The McGraw Hill Companies, Inc., of at least A, having a term ending no earlier than the Maturity Date in an amount equal to the projected Total Commitment (based on the then outstanding principal balance of the Loan and the Other Loan and the contemplated draw schedule then in effect with respect to the Loan and the Other Loan) at a LIBO Rate of no more than 6.75% per annum. Any hedging instrument obtained by Borrower shall be collaterally assigned to Administrative Agent in a manner reasonably satisfactory to it with an acknowledgement of such collateral assignment by the counterparty. Any hedging product shall not be secured by all or any portion of the Mortgaged Property or Borrower's interest therein unless otherwise agreed by Administrative Agent or unless Administrative Agent or its affiliates is the counterparty.

Lockbox.

Borrower shall deposit all revenues from the Improvements in the account established pursuant to the Lockbox Agreement and disbursed therefrom as provided in the Lockbox Agreement.

Transfers.

Without Administrative Agent's and each Lender's consent (which consent may be granted or denied in the sole and absolute discretion of Administrative Agent and each Lender), Borrower shall (i) not transfer, sell, convey or otherwise dispose of, in any manner, either voluntarily or involuntarily, by operation of law or otherwise, the Property or any part thereof (including, without limitation, air or development rights), except the Residential Unit may be transferred as contemplated in this

agreement and (ii) not permit transfers, sales, conveyances, other dispositions, encumbrances or pledges of interests (or the proceeds thereof) of any of the direct or indirect ownership interests in Borrower or its members, in any manner, either voluntarily or involuntarily, by operation of law or otherwise, except that transfers of direct and indirect ownership interests in Borrower to any Person shall be permitted so long as (1) with respect to any transfer of a direct interest in Borrower, Borrower promptly informs Administrative Agent of the occurrence of any such transfer and (2) following any such transfer, unless otherwise consented to the contrary by Administrative Agent and each Lender, in their sole and absolute discretion, (x) Guarantor shall own not less than 51% of the beneficial interests in Borrower and (y) the business and operations of Borrower shall be controlled and managed, directly or indirectly, by Guarantor. Notwithstanding anything to the contrary contained herein, nothing in this Agreement shall be construed as restricting, in any way, the free transferability of direct or indirect ownership interests in Guarantor.

Financial Covenants.

Borrower shall cause Guarantor to comply with the financial covenants set forth in the Guaranty.

ICIP.

Borrower shall obtain the available partial exemption and/or abatement for real property taxes for the Improvements pursuant to the Industrial and Commercial Incentive Program under New York State Real Property Tax Law, Article 4 ("ICIP"). Borrower shall take all actions required in order to maintain eligibility under ICIP, including making timely filings as and when required by ICIP, including, without limitation, filing the Final ICIP Application contemplated in ICIP, interim construction reports, and shall diligently pursue all necessary corrective or remedial action if it receives notice that such exemption is not available. In the event Borrower does not obtain the ICIP (which shall not constitute a Default, subject to Borrower's compliance with the following provisions), a new appraisal showing the stabilized appraised value as a retail property (taking into account, to the extent applicable, the fact that certain leases are "triple net") without the benefit of ICIP shall be ordered and received by Administrative Agent and to the extent the ratio of the Total Commitment to the appraised value determined pursuant to such new appraisal exceeds 70%, Borrower, within ten (10) Business Days of Administrative Agent's notice to Borrower that the ratio exceeds 70% and which shall set forth the amount (the "ICIP Reduction Amount") by which it is necessary to reduce the Total Commitment such that the ratio equals 70%, shall (w) subject to the prepayment provisions set forth in this Agreement, prepay the Total Loan by the ICIP Reduction Amount or (x) deposit cash collateral in an amount equal to the ICIP Reduction Amount in an account under the sole dominion and control of Administrative Agent which is assigned, pledged and/or delivered to Administrative Agent pursuant to documentation in form and substance reasonably satisfactory to Administrative Agent or (y) deliver to Administrative Agent an irrevocable unconditional letter of credit issued by an Approved LC Bank in the ICIP Reduction Amount, which letter of credit shall name Administrative Agent as the beneficiary thereof, shall be available at sight and shall otherwise be in form and substance reasonably acceptable to Administrative Agent and which can be presented for payment in the Borough of Manhattan, New York (any such letter of credit, the "ICIP LC") or (z) reduce the undrawn amount of the Total Commitment by the ICIP Reduction Amount pursuant to documentation reasonably satisfactory in form and substance to Administrative Agent, so long as, in the case of this clause (z), Administrative Agent has reasonably determined that following any such reduction the Loan and the Other Loan will each then remain "in-balance". If an Event of Default shall occur and is continuing, Administrative Agent shall at the option of the Required Lenders, apply the amounts on deposit pursuant to clause (x) above or which are available under the ICIP LC in reduction of the principal and/or interest under the Loan and the Other Loan as Administrative Agent shall elect.

Security Deposits.

(1)Deposits into Tenant Security Account. - Borrower shall comply with all Laws and the requirements of any applicable Lease with respect to any security given under such Lease. Subject to the foregoing, Borrower shall deposit or cause to be deposited all cash deposits delivered by a tenant to (or for the benefit of) Borrower as security for the performance of such tenant's obligations under its Lease (other than Lease Letters of Credit) (a "Security Deposit" or, collectively, the "Security Deposits") into a tenant security account (the "Tenant Security Account") within two (2) Business Days after receipt and comply, and (subject to Administrative Agent's compliance with Borrower's instructions given in accordance with this Agreement) cause the compliance with, all applicable Laws in connection with the acceptance, holding, use and releasing of the Security Deposits.

(2)Disbursements from Tenant Security Account. - Borrower may direct Administrative Agent to cause the bank at which the Tenant Security Account is maintained (the "Tenant Security Bank") to disburse funds from the Tenant Security Account in an amount equal to the applicable Security Deposit (or applicable portion thereof) and Administrative Agent shall comply with such direction if at the time thereof no Event of Default has occurred and is continuing provided the

proceeds are (i) applied in the ordinary course of business to sums due under the applicable Lease when the terms of such Lease or applicable Laws permit the application thereof or (ii) returned to the applicable tenant pursuant to Laws or the terms of the applicable Lease which require Borrower to return such Security Deposit (or portion thereof). After the occurrence and during the continuation of an Event of Default, Borrower shall have no right to direct Administrative Agent to withdraw any amounts from the Tenant Security Account or apply any Security Deposits, except as contemplated below. In the event an Event of Default has occurred and is continuing and Borrower is required pursuant to the terms of the applicable Lease or applicable Laws to return any Security Deposit (or portion thereof) to a tenant, Borrower shall deliver a notice to Administrative Agent certifying same and stating the reason therefor. Administrative Agent shall instruct the Tenant Security Bank to deliver the Security Deposit (or portion thereof) (1) to Borrower for delivery to the applicable tenant or (2) directly to the applicable tenant. The Tenant Security Bank shall be selected by Borrower and subject to Administrative Agent's approval, which approval shall not be unreasonably withheld, conditioned or delayed.

(3)Delivery of Lease Letter of Credit. - Borrower covenants and agrees to deliver to Administrative Agent upon Borrower's receipt (or receipt on its behalf) thereof each Lease Letter of Credit executed in connection with any Lease. All Lease Letters of Credit shall provide that any drawing thereunder shall be by presentation of a clean sight draft, without any representations or warranties of the beneficiary and be irrevocable, transferable and otherwise reasonably acceptable to Administrative Agent in form, content and as to issuer, subject to the terms and conditions of the applicable Lease.

(4)Draws Upon Lease Letters of Credit. - Borrower shall have the right to (i) make drawings under a Lease Letter of Credit at such time as no Event of Default has occurred and is continuing provided the proceeds are applied in the ordinary course of business to sums due under the applicable Lease when the terms of such Lease or applicable Laws permit the application thereof or (ii) return such Lease Letter of Credit to the applicable tenant pursuant to Laws or the terms of the applicable Lease which require Borrower to return such Lease Letter of Credit. After the occurrence and during the continuation of an Event of Default, Borrower shall have no right to make a drawing under, or return, a Lease Letter of Credit, except as contemplated below. In the event an Event of Default has occurred and is continuing and Borrower is required pursuant to the terms of the applicable Lease or applicable Laws to return any Lease Letter of Credit to the applicable tenant, Borrower shall deliver a notice to Administrative Agent certifying same and stating the reason therefor and, if Administrative Agent shall be holding such Lease Letter of Credit pursuant to this Section 6.28, Administrative Agent shall either deliver the Lease Letter of Credit to Borrower, or deliver the applicable Lease Letter of Credit directly to the applicable tenant.

(5)Expiring Lease Letters of Credit. - In the event that at any time any Lease Letter of Credit delivered to Administrative Agent by or on behalf of Borrower pursuant to this Section 6.28 by its terms (including pursuant to a notice given pursuant thereto) shall be due to expire within thirty (30) days, on or before the day which is thirty (30) days prior to such expiration, Borrower shall give notice thereof to Administrative Agent and Administrative Agent shall (or if Administrative Agent shall not receive such notice from Borrower, if Administrative Agent shall elect), to the extent permitted by the terms of the Lease Letter of Credit, the applicable Lease and applicable Laws, make a drawing on the Lease Letter of Credit in accordance with the applicable Lease and shall deposit such sums into the Tenant Security Account.

(6)Indemnity. - Borrower shall indemnify and hold Administrative Agent and Lenders harmless from and against all losses in connection with any claim by any tenant or any Person claiming by or through Borrower or any tenant in connection with any drawing by Administrative Agent on the Lease Letter of Credit or the application of any proceeds thereof or the transfer of the Lease Letter of Credit unless arising from the bad faith, fraud, gross negligence or willful misconduct of Administrative Agent or any Lender. This indemnity shall survive the payment and performance of the Total Loan.

Distributions.

Borrower shall not make any Distributions from any income produced by or otherwise generated in connection with the use and/or operation of the Premises other than as contemplated in the Lockbox Agreement, provided, however, that in no event shall Borrower make any Distributions during the existence of an Event of Default.

ARTICLE VII

ADMINISTRATIVE AGENT; RELATIONS AMONG LENDERS

Appointment, Powers and Immunities of Administrative Agent.

Each Lender hereby irrevocably appoints and authorizes Administrative Agent to act as its agent hereunder and under any other Loan Document with such powers as are delegated to Administrative Agent by the terms of this Agreement and any

other Loan Document, together with such other powers as are reasonably incidental thereto. Any and all actions relating to construction of the Improvements, including, without limitation, approval of changes to the Construction Cost Statement, Plans and Specifications, contracts and subcontracts and payment and performance bonds, shall be deemed to have been delegated to Administrative Agent exclusively and shall not require the approval of any Lender. Administrative Agent shall perform its obligations under this Agreement and the other Loan Documents in good faith according to the same standard of care as that customarily exercised by Administrative Agent in administering its own real estate loans. Administrative Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and any other Loan Document or required by Law, and shall not by reason of this Agreement be a fiduciary or trustee for any Lender except to the extent that Administrative Agent acts as an agent with respect to the receipt or payment of funds, nor shall Administrative Agent have any fiduciary duty to Borrower nor shall any Lender have any fiduciary duty to Borrower or any other Lender. No implied covenants, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist against Administrative Agent. Neither Administrative Agent nor any of its directors, officers, employees, agents, attorneys-in-fact or affiliates shall be responsible to Lenders for any recitals, statements, representations or warranties made by Borrower or any officer, partner or official of Borrower or any other Person contained in this Agreement or any other Loan Document, or in any certificate or other document or instrument referred to or provided for in, or received by any of them under, this Agreement or any other Loan Document, or for the value, legality, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or any other document or instrument referred to or provided for herein or therein, for the perfection or priority of any lien securing the obligations hereunder or thereunder or for any failure by Borrower or any Guarantor to perform any of its obligations hereunder or thereunder. Administrative Agent may employ agents and attorneys-in-fact and shall not be responsible, except as to money or securities received by it or its authorized agents, for the negligence or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. Neither Administrative Agent nor any of its directors, officers, employees, agents, attorneys-in-fact or affiliates shall be liable or responsible to Lenders for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith, except for its or their own gross negligence or willful misconduct.

Reliance by Administrative Agent.

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

Defaults.

Administrative Agent shall not be deemed to have knowledge of the occurrence of a Default or of an Event of Default unless Administrative Agent has actual knowledge thereof or has received notice from a Lender or Borrower specifying such Default or Event of Default and stating that such notice is a "Notice of Default". In the event that Administrative Agent has such actual knowledge or receives such a notice of the occurrence of a material Default or Event of Default, Administrative Agent shall give prompt notice thereof to Lenders. Administrative Agent shall promptly send to each Lender a copy of any notice of a Default or Event of Default that Administrative Agent sends to Borrower or Guarantor. Administrative Agent, following consultation with Lenders, shall (subject to Section 7.07) take such action with respect to such Default or Event of Default which is continuing, including with respect to the exercise of remedies or the realization on, or operation or disposition of, any or all of the Mortgaged Property or any other collateral for the Loan, as shall be directed by the Required Lenders; provided, however, that, unless and until Administrative Agent shall have received such directions, Administrative Agent may take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem to be in the best interest of Lenders. In no event shall Administrative Agent be required to take any such action which it determines would expose Administrative Agent to personal liability or would be contrary to the Loan Documents or to Law. Each of Lenders acknowledges and agrees that no individual Lender may separately enforce or exercise any of the provisions of any of the Loan Documents (including, without limitation, the Notes) other than through Administrative Agent.

Rights of Administrative Agent as Lender.

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

Sharing of Costs by Lenders; Indemnification of Administrative Agent.

Each Lender shall pay its ratable share, based on the respective outstanding principal balances under its Note and the other Notes, of any expenses incurred (and not paid or reimbursed by Borrower after demand for payment is made by Administrative Agent) by or on behalf of Lenders in connection with any Default or Event of Default, including, without limitation, costs of enforcement of the Loan Documents and any advances to pay taxes or insurance premiums, to complete the Improvements or otherwise to preserve the lien of the Mortgage or to preserve or protect the Mortgaged Property. In the event a Lender fails to pay its share of expenses as aforesaid, and all or a portion of such unpaid amount is paid by Administrative Agent and/or one or more of the other Lenders, then the defaulting Lender shall reimburse Administrative Agent and/or the other Lender(s) for the portion of such unpaid amount paid by it or them, as the case may be, together with interest thereon at the interest rate for Base Rate Loans from the date of payment by Administrative Agent and/or the other Lender(s). In addition, each Lender agrees to reimburse and indemnify Administrative Agent (to the extent it is not paid by or on behalf of Borrower, after demand for payment is made by Administrative Agent, under Section 8.19 or under the applicable provisions of any other Loan Document, but without limiting the obligation of Borrower under said Section 8.19 or such provisions), for such Lender's ratable share, based upon the respective outstanding principal balances under its Note and the other Notes, of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against Administrative Agent in any way relating to or arising out of this Agreement, any other Loan Document or any other documents contemplated by or referred to herein or the transactions contemplated hereby or thereby (including, without limitation, the costs and expenses which Borrower is obligated to pay under Section 8.19 or under the applicable provisions of any other Loan Document) or the enforcement of any of the terms hereof or thereof or of any such other documents or instruments; provided, however, that no Lender shall be liable for (i) any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the party to be indemnified or (ii) any loss of principal or interest with respect to Administrative Agent's Note or interest in the Loan.

Non-Reliance on Administrative Agent and Other Lenders.

Each Lender acknowledges that it has, independently and without reliance on Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own analysis of the collateral for the Loan and of the credit of Borrower and Guarantor, and its own decision to enter into this Agreement, and that it will, independently and without reliance upon Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or any other Loan Document. Administrative Agent shall not be required to keep itself informed as to the performance or observance by Borrower of this Agreement or any other Loan Document or any other document referred to or provided for herein or therein or to inspect the properties (including, without limitation, the Premises) or books of Borrower. Except for notices, reports and other documents and information expressly required to be furnished to Lenders by Administrative Agent hereunder, Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition or business of Borrower or Guarantor (or any affiliate of them) which may come into the possession of Administrative Agent or any of its affiliates.

Failure of Administrative Agent to Act.

Except for action expressly required of Administrative Agent hereunder, Administrative Agent shall in all cases be fully justified in failing or refusing to act hereunder unless it shall have received further assurances (which may include cash collateral) of the indemnification obligations of Lenders under Section 7.05 in respect of any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. If any indemnity furnished to Administrative Agent for any purpose shall, in the opinion of Administrative Agent, be insufficient or become impaired,

Administrative Agent may call for an additional indemnity and cease, or not commence, the action indemnified against until such additional indemnity is furnished.

Resignation or Removal of Administrative Agent.

Administrative Agent may resign on at least thirty (30) days' written notice to Lenders and Borrower or upon the occurrence of an Event of Default. Administrative Agent may be removed at any time with cause by the Required Lenders, provided that Borrower and the other Lenders shall be promptly notified thereof. Upon such resignation or removal of Administrative Agent, the Required Lenders shall have the right to appoint a successor Administrative Agent, which successor Administrative Agent shall (provided there exists no Event of Default) be subject to Borrower's approval, such approval not to be unreasonably withheld or delayed. If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within twenty (20) days after the resignation or the Required Lenders' removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of Lenders, appoint a successor Administrative Agent, which shall be one of Lenders, within ten (10) days, which successor Administrative Agent shall (provided there exists no Event of Default) be subject to Borrower's approval, such approval not to be unreasonably withheld or delayed (provided that such approval shall be deemed granted if such successor Administrative Agent shall be Norddeutsche Landesbank Girozentrale, New York Branch). The Required Lenders or the retiring Administrative Agent, as the case may be, shall upon the appointment of a successor Administrative Agent promptly so notify Borrower and the other Lenders. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent in accordance with the foregoing, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. After any retiring Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions of this Article VII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.

Amendments Concerning Agency Function.

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

Liability of Administrative Agent.

Administrative Agent (in its capacity as Administrative Agent and not as a Lender) shall not have any liabilities or responsibilities to Borrower on account of the failure of any Lender to perform its obligations hereunder or to any Lender on account of the failure of Borrower to perform its obligations hereunder or under any other Loan Document.

Transfer of Agency Function.

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

• Non-Receipt of Funds by Administrative Agent; Adjustments.

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

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

Withholding Taxes

Each Lender represents to each of Borrower and Administrative Agent that such Lender is entitled to receive any payments to be made to it hereunder without the withholding or backup withholding of any tax and will furnish to Borrower and Administrative Agent such forms, certifications, statements and other documents and any required renewals thereof as either of them may reasonably request from time to time to evidence such Lender's exemption from the withholding of any tax imposed by any jurisdiction or to enable Borrower and Administrative Agent to comply with any applicable Laws relating thereto. Without limiting the effect of the foregoing, such Lender will furnish to Borrower and Administrative Agent Form W-8ECI, Form W-8BEN or Form W-9 of the U.S. Internal Revenue Service, or such other forms, certifications, statements or documents and any required renewals thereof, duly executed and completed by such Lender, as evidence of such Lender's complete exemption from the withholding and backup withholding of United States tax with respect thereto. Neither Borrower nor Administrative Agent shall be obligated to make any payments hereunder to such Lender in respect of the Loan until such Lender shall have furnished to Borrower and Administrative Agent the requested form, certification, statement or document. Each Lender shall timely inform Administrative Agent and Borrower of any change to the information it previously provided on such certification, statement or document to the extent any such change affects such Lender's exemption from the withholding and backup withholding of any tax.

Sharing of Payments among Lenders.

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

Possession of Documents

Each Lender shall maintain possession of its own Note. Administrative Agent shall hold all other Loan Documents and related documents in its possession and maintain separate records and accounts with respect to the Loan, reflecting the interests of Lenders in the Loan, and shall permit Lenders and their representatives access at all reasonable times to inspect such Loan Documents, related documents, records and accounts.

Effect of a Lender's Failure to Make an Advance

In the event any Lender fails for any reason to fund the portion it is required to fund of any advance of Loan proceeds by 3:00 p.m. (New York time) on the second Business Day after the date established by Administrative Agent as the date such advance is to be made, such Lender shall be a "Delinquent Lender" for all purposes hereunder until and unless such delinquency is cured in accordance with the terms of and by the time permitted under Section 7.17, and the following provisions shall apply:

•    Administrative Agent shall notify (such notice being referred to as the "Delinquency Notice") each Lender and Borrower of any Lender's failure to fund. Each Non-Delinquent Lender shall have the right, but in no event or under any circumstance the obligation, to fund such Delinquent Lender's portion of such advance, provided that, within twenty (20) days of the date of the Delinquency Notice (the "Election Period"), such Non-Delinquent Lender or Lenders (each such Lender, an "Electing Lender") irrevocably commit(s) by notice in writing (an "Election Notice") to Administrative Agent, the other Lenders and Borrower to fund the Delinquent Lender's portion of the advance that is the subject of the delinquency and to assume the Delinquent Lender's obligations with respect to the advancing of the entire undisbursed portion of the Delinquent Lender's Individual Loan Commitment (such entire undisbursed portion of the Delinquent Lender's Individual Loan Commitment, including its portion of the advance that is the subject of the delinquency, the "Delinquency Amount"). It shall be a condition to a Lender's right to become an Electing Lender that it concurrently commits to assume the Delinquent Lender's obligations with respect to the unadvanced portion of the Other Loan. If Administrative Agent receives more than one Election Notice within the Election Period, then the Electing Lenders sending such notices shall be deemed to have committed to fund ratable shares of the Delinquency Amount based upon the amounts of their respective Individual Loan Commitments. If there are one or more Electing Lenders and the Delinquent Lender fails to cure during the Election Period as provided in Section 7.17, then upon the expiration of the Election Period, each Electing Lender's Individual Loan Commitment shall be automatically increased by the Delinquency Amount (if there is only one Electing Lender) or such Electing Lender's ratable share, determined as aforesaid, of the Delinquency Amount (if there are two or more Electing Lenders), and the Delinquent Lender's Individual Loan Commitment shall automatically be reduced by the Delinquency Amount. Administrative Agent shall thereupon notify Borrower and each Lender of (i) the adjusted amounts of the Individual Loan Commitments and (ii) if the advance that was the subject of the delinquency was not made pursuant to Section 7.12 or was refunded by Borrower pursuant to paragraph (e) of this Section, the rescheduled date of such advance (which shall be no sooner than three (3) Business Days after such notice). In the event Administrative Agent shall have funded, pursuant to Section 7.12, the entire advance that was the subject of the delinquency (including the Delinquent Lender's portion), and Borrower shall not have refunded such advance pursuant to paragraph (e) of this Section, the Electing Lender(s) shall remit to Administrative Agent (or if Borrower has refunded such advance pursuant to said paragraph (e), to Borrower) the Delinquent Lender's portion of the advance, or their ratable shares thereof, as the case may be, within three (3) Business Days of the notice provided for in the immediately preceding sentence, and Administrative Agent (or Borrower, as applicable) shall reimburse itself from such funds for making the Delinquent Lender's portion of the advance. Notwithstanding anything to the contrary contained herein, if Administrative Agent advances its own funds in respect of a Delinquent Lender's portion of an advance, Administrative Agent shall be entitled to the interest on the portion of the Principal Amount represented thereby, from the date Administrative Agent makes such advance until the date it is reimbursed therefor.

•    In connection with the adjustment of the amounts of the Individual Loan Commitments of the Delinquent Lender and Electing Lender(s) upon the expiration of the Election Period as aforesaid, Borrower covenants that it shall, promptly following the request of the Electing Lender(s), execute and deliver to each Electing Lender and the Delinquent Lender substitute notes substantially in the form of Exhibit E and stating: "This Note is a substitute note as contemplated by Section 7.16 of the Loan Agreement; it replaces and is in lieu of that certain note made by Maker dated [date of Note] to the order of [Lender] in the principal sum of [Lender's original Individual Loan Commitment]." Such substitute notes shall be in amounts equal to such Lenders' respective Individual Loan Commitments, as adjusted. All such substitute notes shall constitute "Notes" and the obligations evidenced by such substitute notes shall be secured by the Mortgage. In connection with Borrower's execution of substitute notes as aforesaid, Borrower shall deliver to Administrative Agent such evidence of the due authorization, execution and delivery of the substitute notes and any related documents as Administrative Agent may reasonably request. The execution and delivery of substitute notes as required above shall be a condition precedent to any further advances of Loan proceeds. Upon receipt of its substitute note, the Electing Lender and the Delinquent Lender will return to Borrower their notes that were replaced, provided that the delivery of a substitute note to the Delinquent Lender pursuant to this Section 7.16 shall operate to void and replace the note(s) previously held by the Delinquent Lender regardless of whether or not the Delinquent Lender returns the same as required hereby. Borrower, Administrative Agent and Lenders shall execute such modifications to the Loan Documents as shall, in the reasonable judgment of Administrative Agent, be necessary or desirable in connection with the adjustment of the amounts of Individual Loan Commitments in accordance with the foregoing provisions of this Section.

•    In the event that no Lender elects to commit to fund the Delinquency Amount within the Election Period as provided in paragraph (a) of this Section, Administrative Agent shall, upon the expiration of the Election Period, so notify Borrower and each Lender and the provisions of Section 2.09 shall apply.

•    Subject to a Delinquent Lender's right to cure as provided in Section 7.17, but notwithstanding anything else to the contrary contained in this Agreement, the Delinquent Lender's interest in, and any and all amounts due to a Delinquent Lender under, the Loan Documents (including, without limitation, all principal, interest, fees and expenses) shall be subordinate in lien priority and to the repayment of all amounts (including, without limitation, interest) then or thereafter due or to become due to the Non-Delinquent Lenders under the Loan Documents (including future advances), and the Delinquent Lender thereafter shall have no right to participate in any discussions among and/or decisions by Lenders hereunder and/or under the other Loan Documents. Further, subject to Section 7.17, any Delinquent Lender shall be bound by any amendment to, or waiver of, any provision of, or any action taken or omitted to be taken by Administrative Agent and/or the Non-Delinquent Lenders under, any Loan Document which is made subsequent to the Delinquent Lender's becoming a Delinquent Lender.

•    If, pursuant to the operation of Section 7.12, an advance of Loan proceeds is made without Administrative Agent's receipt of a Delinquent Lender's portion thereof and Borrower has not then complied with its obligations under Section 2.09, in addition to Borrower's obligations under Section 7.12, Borrower shall, upon demand of Administrative Agent, refund the entire such advance to Administrative Agent. Borrower's failure to do so within ten (10) days of such demand shall, notwithstanding anything to the contrary contained herein or in the Mortgage, constitute an Event of Default under the Mortgage. Upon its receipt of such funds from Borrower, Administrative Agent shall promptly remit to each Non-Delinquent Lender its appropriate share thereof.

Cure by Delinquent Lender.

A Delinquent Lender may cure a delinquency arising out of its failure to fund its required portion of any advance if, within the Election Period, it remits to Administrative Agent its required portion of such advance (together with interest thereon at the Default Rate from the date such advance was to have been made if such advance was made by Administrative Agent and not refunded by Borrower pursuant to either Section 7.12 or paragraph (e) of Section 7.16), in which event Administrative Agent shall so notify Borrower and the Non-Delinquent Lenders (i) of its receipt of such funds and (ii)(A) if the advance that was the subject of the delinquency shall not have been made (or shall have been refunded by Borrower pursuant to paragraph (e) of Section 7.16), of the rescheduled date of the advance (which shall be no sooner then three (3) Business Days after such notice) or (B) if Administrative Agent shall have funded the entire advance that was the subject of the delinquency (including the Delinquent Lender's portion) and Borrower shall not have refunded such advance pursuant to paragraph (e) of Section 7.16, of its intention to reimburse itself from funds received from the Delinquent Lender (which reimbursement is hereby authorized) for funding the Delinquent Lender's required portion of the advance. In the event any Delinquent Lender cures a delinquency prior to the expiration of the Election Period (or thereafter with the consent of all of the Non-Delinquent Lenders), such Delinquent Lender nonetheless shall be bound by any amendment to or waiver of any provision of, or any action taken or omitted to be taken by Administrative Agent and/or the Non-Delinquent Lenders under, any Loan Document which is made subsequent to that Lender's becoming a Delinquent Lender and prior to its curing the delinquency as provided in this Section, provided that such amendment or waiver of action was taken in accordance with the provisions of this Agreement. A Delinquent Lender shall have absolutely no right to cure any delinquency after the expiration of the Election Period unless all Non-Delinquent Lenders and Borrower, in their sole discretion, elect to permit such cure.

Delinquent Lender Not Excused.

Nothing contained in Sections 7.16 or 7.17 shall release or in any way limit a Delinquent Lender's obligations as a Lender hereunder and/or under any other of the Loan Documents. Further, a Delinquent Lender shall indemnify and hold harmless Administrative Agent, each of the Non-Delinquent Lenders and Borrower from any claim, loss, or costs incurred by Administrative Agent and/or the Non-Delinquent Lenders or Borrower as a result of a Delinquent Lender's failure to comply with the requirements of this Agreement, including, without limitation, any and all additional losses, damages, costs and expenses (including, without limitation, attorneys' fees) incurred by Administrative Agent and any Lender or Borrower as a result of and/or in connection with (i) a Non-Delinquent Lender's acting as an Electing Lender, (ii) any enforcement action brought by Administrative Agent against a Delinquent Lender, (iii) any action brought against Administrative Agent and/or Lenders and (iv) any action brought by Borrower against a Delinquent Lender. The indemnification provided above shall survive any termination of this Agreement.

Notices Regarding Delinquent Lender

Notices by Administrative Agent or Lenders pursuant to Sections 7.16 or 7.17 may be by telephone (to be promptly confirmed in writing).

Replacement Lender.

If any Lender becomes a Delinquent Lender and none of the other Lenders elects to be an Electing Lender pursuant to Section 7.16, Borrower shall have the right, provided there exists no Event of Default, to cause an Eligible Assignee or another financial institution reasonably acceptable to Administrative Agent to assume the Delinquent Lender's obligations with respect to the Delinquency Amount on the then-existing terms and conditions of the Loan Documents (such replacement institution, a "Replacement Lender"). It shall be a condition to such assumption that the Replacement Lender concurrently assumes the obligations of the Delinquent Lender with respect to the unfunded portion of the Other Loan. Such assumption shall be pursuant to an Assignment and Assumption Agreement or, if the Delinquent Lender fails or refuses to execute an Assignment and Assumption Agreement, a written instrument reasonably satisfactory to Administrative Agent. Upon such assumption and the payment by the Replacement Lender to Administrative Agent of a fee, for Administrative Agent's own account, in the amount of $3,500, the Replacement Lender shall become a "Lender" for all purposes hereunder, with an Individual Loan Commitment in an amount equal to the Delinquency Amount, and the Delinquent Lender's Individual Loan Commitment shall automatically be reduced by the Delinquency Amount. In connection with the foregoing, Borrower shall execute and deliver to the Replacement Lender and the Delinquent Lender replacement notes substantially in the form of Exhibit E and stating: "This Note is a replacement note as contemplated by Section 7.20 of the Loan Agreement; it replaces and is in lieu of that certain note made by Maker dated [date of Note] to the order of [Delinquent Lender] in the principal sum of [Delinquent Lender's original Individual Loan Commitment]." Such replacement notes shall be in amounts equal to, in the case of the Replacement Lender's note, the Delinquency Amount and, in the case of the Delinquent Lender's note, its Individual Loan Commitment, as reduced as aforesaid. Such replacement notes shall constitute "Notes" and the obligations evidenced thereby shall be secured by the Mortgage. In connection with Borrower's execution of replacement notes as aforesaid, Borrower shall deliver to Administrative Agent such evidence of the due authorization, execution and delivery of the replacement notes and any related documents as Administrative Agent may reasonably request. The Replacement Lender shall, prior to the first date on which interest or fees are payable hereunder for its account, deliver to Borrower and Administrative Agent certification as to exemption from deduction, backup withholding and withholding of any United States federal income taxes in accordance with Section 7.13 and otherwise (i.e., even if such Replacement Lender is a United States Person) furnish to Borrower and Administrative Agent such forms, certifications, statements and other documents as either of them may reasonably request from time to time to evidence that such Replacement Lender is entitled to receive any payments to be made to it hereunder without the withholding of any tax. The execution and delivery of replacement notes as required above shall be a condition precedent to any further advances of Loan proceeds. Upon receipt of its replacement note, the Delinquent Lender will return to Borrower its note(s) that was replaced, provided that the delivery of a replacement note to the Delinquent Lender pursuant to this Section 7.20 shall operate to void and replace the note(s) previously held by the Delinquent Lender regardless of whether or not the Delinquent Lender returns same as required hereby.

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

Lenders shall reasonably cooperate with Borrower's attempts to obtain a Replacement Lender, but they shall not be obligated to modify the Loan Documents in connection therewith, other than modifications pursuant to the immediately preceding paragraph. As part of the first advance of Loan proceeds following the admission of the Replacement Lender, the Replacement Lender shall advance to Borrower, subject to the satisfaction of all conditions of this Agreement, an amount equal to the Hard and Soft Costs paid by Borrower pursuant to clause (ii) of Section 2.09.

Borrower Matters.

Except as may be expressly set forth in this Article VII, nothing in this Article VII shall affect Borrower's or Guarantor's obligations hereunder or under the other Loan Documents.

Co-Arrangers.

Notwithstanding anything to the contrary contained herein, the Co-Arrangers named on the cover page of this Agreement shall not have any duties, responsibilities or liabilities under this Agreement in their capacities as the Co-Arrangers.

ARTICLE VIII

GENERAL CONDITIONS AND PROVISIONS

Loan Balancing.

Subject to Borrower's rights under Sections 2.06 and 2.07, if at any time Administrative Agent notifies Borrower that, in Administrative Agent's reasonable judgment, the undisbursed balance of the Loan is insufficient to pay the remaining Hard and Soft Costs, Borrower shall, at its option, either (i) within twenty (20) days of Administrative Agent's notification as aforesaid, deposit with Administrative Agent an amount equal to such deficiency, which Administrative Agent shall from time to time apply, or allow Borrower to apply, to such Hard and Soft Costs, (ii) pay for such Hard and Soft Costs, as incurred, in the amount of such deficiency so that the amount of the Loan which remains to be disbursed shall be sufficient to pay all remaining Hard and Soft Costs, and Borrower shall furnish Administrative Agent with such evidence thereof as Administrative Agent shall reasonably require or (iii) within twenty (20) days of Administrative Agent's notification as aforesaid, deliver to Administrative Agent an irrevocable unconditional letter of credit in the amount of such deficiency issued by a money center bank headquartered in the United States which has total assets of at least $100,000,000,000, whose commercial paper is rated at least "A-1/P-1" and whose long-term senior unsecured debt is rated at least "A-" and is otherwise reasonably acceptable to Administrative Agent (any such bank, an "Approved LC Bank"), which letter of credit shall name Administrative Agent as the beneficiary thereof, shall be available at sight, shall otherwise be in form and substance reasonably acceptable to Administrative Agent and can be presented for payment in the Borough of Manhattan, New York (the "Loan Balancing LC"), which Administrative Agent shall from time to time draw on and apply to such Hard and Soft Costs. Borrower hereby agrees that Administrative Agent shall have a lien on and security interest in, for the benefit of Lenders, any sums deposited pursuant to clause (i) above and that Borrower shall have no right to withdraw any such sums except for the payment of the aforesaid Hard and Soft Costs as approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed). Lenders shall have no obligation to make any further advances of proceeds of the Loan in respect of such Hard and Soft Cost budget lines which were deemed by Administrative Agent to be deficient until (a) the sums required to be deposited pursuant to clause (i) above have been exhausted, (b) Borrower has actually paid such Hard and Soft Costs pursuant to clause (ii) above or (c) the sums available to be drawn under any Loan Balancing LC have been exhausted, as the case may be, and, in any such case, the Loan is back "in balance". Any such sums not used as provided in said clause (i) shall be released to Borrower or any Loan Balancing LC shall be returned to Borrower when and to the extent that Administrative Agent reasonably determines that the total remaining Hard and Soft Costs of completion of the Improvements is less than or equal to the undisbursed balance of the Loan; provided, however, that should an Event of Default occur and be continuing, Administrative Agent shall, at the option of the Required Lenders, apply such amounts on deposit or available under the Loan Balancing LC either to the Hard and Soft Costs of completion of the Improvements or to the immediate reduction of outstanding principal and/or interest under the Notes.

Advance Not Waiver.

Any advance of Loan proceeds hereunder made prior to or without the fulfillment by Borrower of all of the conditions precedent thereto, whether or not known to Administrative Agent or Lenders, shall not constitute a waiver by Administrative Agent or Lenders of the requirement that all conditions, including the non-performed conditions, shall be required with respect to all future advances.

No Third-Party Beneficiaries.

This Agreement is solely for the benefit of Lenders, Administrative Agent and Borrower. All conditions of the obligations of Lenders to make advances hereunder are imposed solely and exclusively for the benefit of Lenders and may be freely waived or modified in whole or in part by Lenders at any time if in their sole discretion they deem it advisable to do so, and no Person other than Borrower (provided, however, that all conditions have been satisfied) shall have standing to require Lenders to make any Loan advances or to be a beneficiary of this Agreement or any advances to be made hereunder.

Authorization to Make Direct Advances

During the existence of any Event of Default, Borrower hereby irrevocably authorizes Lenders to advance any undisbursed Loan proceeds directly to the Construction Manager, Trade Contractors and other Persons to pay for completion of the Improvements to the extent such Persons are owed monies. All such direct advances to the extent such Persons are owed

monies shall satisfy pro tanto the obligations of Lenders to Borrower hereunder regardless of the disposition thereof by the Construction Manager, any Trade Contractors or other Person.

Authorization to Advance for Interest and Fees.

Borrower hereby requests that Lenders make an advance on each Interest Payment Date to pay interest on the Notes due at such time and to pay fees in accordance with the Loan Documents that are then due, and hereby irrevocably authorizes Lenders to disburse proceeds of the Loan to pay interest accrued on the Notes as it comes due, to pay fees in accordance with the Loan Documents as they become due, to pay expenses required to be paid by Borrower under the Loan Documents or to satisfy any of the conditions hereof, including, without limitation, the payment of the fees and expenses of Lenders' Counsel and the Construction Consultant.

• Letters of Credit.

•    Borrower, with the consent of the Required Lenders (such consent not to be unreasonably withheld, conditioned or delayed), may request, in lieu of advances of proceeds of the Loan, that Administrative Agent issue unconditional, irrevocable standby letters of credit (each, a "Letter of Credit") for the account of Borrower. Promptly upon Borrower's request for, and then upon issuance of, a Letter of Credit, Administrative Agent shall notify each Lender.

•    The amount of any Letter of Credit shall be limited to the amount of proceeds of the Loan available to be advanced hereunder, it being understood that the amount of each Letter of Credit issued and outstanding shall effect a reduction, by an equal amount, of proceeds available to Borrower under the Loan and shall be allocated by Administrative Agent to the Loan Budget Amount(s) it deems most appropriate in its reasonable discretion. Administrative Agent's issuance of each Letter of Credit shall be subject to Administrative Agent's determination that Borrower has satisfied all conditions precedent to its entitlement to an advance of Loan proceeds in accordance with the Loan Documents. Each Letter of Credit shall expire no later than one (1) month prior to the Maturity Date. Borrower may surrender or cause the surrender of any Letter of Credit, in which case the undrawn amount thereof shall be available as Loan proceeds.

•    In connection with, and as a further condition to the issuance of, each Letter of Credit, Borrower shall execute and deliver to Administrative Agent an application for the Letter of Credit on Administrative Agent's standard form therefor, together with such other documents, opinions and assurances as Administrative Agent shall reasonably require, and shall pay to Administrative Agent for the account of each Lender in accordance with its ratable share a letter of credit fee for each Letter of Credit equal to (i) 1.20% per annum times (ii) the daily maximum amount available to be drawn under such Letter of Credit. Such letter of credit fees shall be computed on a quarterly basis in arrears and shall be due and payable on the first Business Day after the end of each calendar quarter, commencing with the first such date to occur after the issuance of such Letter of Credit, on the expiration date of such Letter of Credit and thereafter on demand. Concurrent with the issuance of such Letter of Credit, Borrower shall pay directly to Administrative Agent for its own account a fronting fee with respect to the applicable Letter of Credit in an amount equal to its then customary fronting fee. In addition, Borrower shall pay directly to Administrative Agent for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of Administrative Agent relating to letters of credit as from time to time are in effect. Such customary fees and standard costs and charges shall be due and payable on demand and nonrefundable.

•    The parties hereto acknowledge and agree that, immediately upon notice from Administrative Agent of any drawing under a Letter of Credit, each Lender shall, notwithstanding the existence of a Default or Event of Default or the non-satisfaction of any conditions precedent to the making of an advance of the Loan, advance proceeds of the Loan, in an amount equal to its ratable share (based upon the undisbursed amounts of Lenders' respective Individual Loan Commitments) of such drawing, which advance shall be made to Administrative Agent to reimburse Administrative Agent, for its own account, for such drawing. Borrower hereby irrevocably authorizes Lenders to make such advances. Each Lender further acknowledges that its obligation to fund its share of drawings under Letters of Credit as aforesaid shall survive Lenders' termination of this Agreement or enforcement of remedies hereunder or under the other Loan Documents. In the event that any advance cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under any applicable bankruptcy or insolvency Law with respect to Borrower), then each Lender shall purchase (on or as of the date such advance would otherwise have been made) from Administrative Agent a participation interest in any unreimbursed drawing in an amount equal to its Pro Rata Share of such unreimbursed drawing.

•    Upon the occurrence and during the continuance of an Event of Default and at the written request of Administrative Agent, Borrower shall (i) deposit with Administrative Agent cash collateral in the amount of all the outstanding Letters of Credit, which cash collateral shall be held by Administrative Agent as security for Borrower's obligations in connection with the Letters of Credit and (ii) execute and deliver to Administrative Agent such documents as

Administrative Agent reasonably requests to confirm and perfect the assignment of such cash collateral to Administrative Agent.

Concerning Irrevocable Authorizations.

Any and all advances made at any time by Lenders pursuant to the irrevocable authorizations granted by Sections 8.04, 8.05 and 8.06 shall require no further direction, authorization or request for disbursement from Borrower and, except in the case of advances under Section 8.04, may be made whether or not there exists a Default or Event of Default. Any and all such disbursements shall be added to the outstanding principal balance evidenced by the Notes and shall be secured by the Mortgage. The aforesaid authorizations shall (i) not prevent Borrower from paying the contractors and other Persons, from paying the interest, or from satisfying the conditions and obligations referred to in said Sections, out of its own funds, (ii) in no event be construed so as to relieve Borrower or others from their obligations to pay such contractors or other Persons, to pay interest as and when due under the Notes, or to satisfy such conditions and obligations and (iii) except in the case of advances pursuant to Section 8.06, in no event obligate Lenders to disburse proceeds of the Loan for any such purposes.

• Intentionally Omitted.

• Intentionally Omitted.

• Intentionally Omitted.

Notices

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

Amendments and Waivers

No amendment or material waiver of any provision of this Agreement or any other Loan Document, nor consent to any material departure by Borrower or any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the party against whom such amendment, waiver or consent is sought to be enforced (it being understood, however, that the signatures of the Required Lenders and, solely for purposes of its acknowledgement thereof, Administrative Agent, shall be sufficient to bind Lenders to any such amendment, waiver or consent), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that the foregoing shall not limit or otherwise affect a provision hereof or any other Loan Document pursuant to which Administrative Agent is authorized to consent to or approve of any matter without the need for any Lender approval; provided further, that no amendment, waiver or consent shall, unless in writing and signed by all Lenders (subject, however, to the provisions of Section 7.16(d) and Section 7.20), do any of the following: (i) reduce the principal of, or interest on, the Notes or any fees due hereunder or any other amount due hereunder or under any other Loan Document; (ii) postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees due hereunder or under any other Loan Document; (iii) change the definition of Required Lenders; (iv) release any material portion of the Mortgaged Property or other collateral for the Loan other than in accordance with the Loan Documents; (v) amend this Section or any other provision requiring the consent of all Lenders; (vi) release, in whole or in part, any Guarantor other than in accordance with the Loan Documents; or (vii) increase the Loan Amount. Without limiting the foregoing, acceptance by Administrative Agent or Lenders of any sum required to be paid pursuant hereto or any other Loan Document, after its due date, or in an amount less than the sum then due, shall not constitute a waiver by Administrative Agent or Lenders of their right to require prompt payment when due of all other such sums or to declare a default or to exercise such other rights provided herein or in the other Loan Documents for such late or reduced payment.

All communications from Administrative Agent to Lenders requesting Lenders' determination, consent, approval or disapproval (i) shall be given in the form of a written notice to each Lender, (ii) shall be accompanied by or include a description or copy of the matter or thing as to which such determination, approval, consent or disapproval is requested and

(iii) shall include Administrative Agent's recommended course of action or determination in respect thereof. Each Lender shall reply promptly, but in any event within ten (10) Business Days (or five (5) Business Days with respect to any decision to accelerate or stop acceleration of the Loan) after receipt of the request therefor by Administrative Agent (the "Lender Reply Period"). Unless a Lender shall give written notice to Administrative Agent that it objects to the recommendation or determination of Administrative Agent (together with a written explanation of the reasons behind such objection) within the Lender Reply Period, such Lender shall be deemed to have approved or consented to such recommendation or determination.

Assignment; Participation.

Any Non-Delinquent Lender may at any time grant to one or more banks or other institutions not affiliated with Borrower or Guarantor (each a "Participant") participating interests in its Pro Rata Share of the Loan (the "Participations"). In the event of any such grant by a Lender of a Participation to a Participant, such Lender shall remain responsible for the performance of its obligations hereunder, and Borrower and Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations hereunder. Each Lender agrees for the benefit of Borrower that any agreement pursuant to which any Lender may grant a Participation shall provide that such Lender shall retain the sole right and responsibility to enforce the obligations of Borrower hereunder and under any other Loan Document, including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement or any other Loan Document; provided, however, that such participation agreement may provide that such Lender will not agree to any modification, amendment or waiver described in clauses (i) through (vii) of Section 8.12 without the consent of the Participant.

Upon request by Borrower, each Lender agrees to provide Borrower with notice of all Participations sold by such Lender, which shall acknowledge and represent compliance with the above terms of this Section 8.13. Subject to the provisions of Section 8.19, Borrower agrees to provide all assistance reasonably requested by a Lender to enable such Lender to sell Participations as aforesaid, or make assignments of its interest in the Loan as hereinafter provided in this Section.

A Lender may at any time assign to any financial institution not an Affiliate of Borrower or Guarantor with the consent of Administrative Agent and if to a financial institution which is not an Eligible Lender and provided there exists no Event of Default, with the consent of Borrower, which consents shall not be unreasonably withheld or delayed (such assignee, an "Assignee") all or a proportionate part of all of its rights and obligations under this Agreement and its Note, and such Assignee shall assume rights and obligations, pursuant to an Assignment and Assumption Agreement executed by such Assignee and the assigning Lender, provided no Assignee shall be an Affiliate of Borrower or Guarantor, provided, further, that, (i) concurrently with such assignment, the assigning Lender also assigns, and the Assignee assumes, a proportionate part of the assigning Lender's rights and obligations under the Other Loan and (ii) after giving effect to such assignment (and the related assignment with respect to the Other Loan), in each case, the Assignee's aggregate portion of the Loan and the Other Loan and, in the case of a partial assignment of a Lender's interest, the assigning Lender's aggregate portion of the Loan and the Other Loan will each be equal to or greater than $5,000,000. Upon (i) execution and delivery of such instrument, (ii) payment by such Assignee to the assigning Lender of an amount equal to the purchase price agreed between such Lender and such Assignee and (iii) payment by such Assignee to Administrative Agent of a fee, for Administrative Agent's own account, in the amount of $3,500, such Assignee shall be a party to this Agreement and shall have all the rights and obligations of a Lender as set forth in such Assignment and Assumption Agreement, and the assigning Lender shall be released from its obligations hereunder to a corresponding extent, and no further consent or action by any party shall be required. Upon the consummation of any assignment pursuant to this paragraph, substitute notes, in the form of Exhibit E, shall be issued to the assigning Lender (in the case of a partial assignment) and Assignee by Borrower, in exchange for the return of the assigning Lender's original Note. All such substitute notes shall constitute "Notes" and the obligations evidenced by such substitute notes shall constitute obligations secured by the Mortgage. In connection with Borrower's execution of substitute notes as aforesaid, Borrower shall deliver to Administrative Agent such evidence of the due authorization, execution and delivery of the substitute notes and any related documents as Administrative Agent may reasonably request. Assignee shall, prior to the first date on which interest or fees are payable hereunder for its account, deliver to Borrower and Administrative Agent certification as to exemption from deduction, backup withholding and withholding of any United States federal income taxes in accordance with Section 7.13 and otherwise furnish to Borrower and Administrative Agent such forms, certifications, statements and other documents as either of them may reasonably request from time to time to evidence that such Assignee is entitled to receive any payments to be made to it hereunder without the withholding of any tax or increased liability for any Additional Costs.

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

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

Borrower recognizes that in connection with a Lender's selling of Participations or making of assignments, any or all documentation, financial statements, appraisals and other data, or copies thereof, relevant to Borrower, Guarantor or the Loan may be exhibited to and retained by any such Participant or Assignee or prospective Participant or Assignee. A Lender's delivery of any financial statements and appraisals to any such Participant or Assignee or prospective Participant or Assignee shall be done on a confidential basis.

Setoff.

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

Successors and Assigns.

Except as herein provided, this Agreement shall be binding upon and inure to the benefit of Borrower, Administrative Agent and Lenders and their respective heirs, personal representatives, successors and assigns. Notwithstanding the foregoing, Borrower may not assign, transfer or set over to another, in whole or in part, all or any part of its benefits, rights, duties and obligations hereunder, including, but not limited to, performance of and compliance with conditions hereof and the right to receive the proceeds of current or future advances without the prior written consent of each Lender, which consent may be granted or denied in the sole and absolute discretion of each such Lender.

Severability.

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

Non-Waiver; Remedies Cumulative.

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

Certain Waivers.

Borrowerhereby irrevocably and unconditionally waives (i) promptness and diligence (except to the extent otherwise provided herein or in the other Loan Documents), (ii) notice of any actions taken by Administrative Agent or any Lender hereunder or under any other Loan Document or any other agreement or instrument relating hereto or thereto except to the extent otherwise provided herein or such other Loan Documents, (iii) except to the extent otherwise provided herein or in the other Loan Documents, all other notices, demands and protests, and all other formalities of every kind in connection with the enforcement of Borrower's obligations hereunder and under the other Loan Documents, the omission of or delay in which,

but for the provisions of this Section, might constitute grounds for relieving Borrower of any of its obligations hereunder or under the other Loan Documents, (iv) any requirement that Administrative Agent or any Lender protect, secure, perfect or insure any lien on any collateral for the Loan or exhaust any right or take any action against Borrower, Guarantor or any other Person or against any collateral for the Loan, (v) any right or claim of right to cause a marshalling of Borrower's assets and (vi) all rights of subrogation or contribution, whether arising by contract or operation of law or otherwise by reason of payment by Borrower pursuant hereto or to any other Loan Document. BORROWER, LENDERS AND ADMINISTRATIVE AGENT FURTHER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY OR ON BEHALF OF ADMINISTRATIVE AGENT OR LENDERS OR BORROWER WITH RESPECT TO THIS AGREEMENT, THE NOTES OR OTHERWISE IN RESPECT OF THE LOAN, ANY AND EVERY RIGHT TO A TRIAL BY JURY.

Expenses; Indemnification.

Borrower covenants and agrees to pay all (i) reasonable actual, out-of-pocket costs, expenses and charges (including, without limitation, all fees and charges of engineers, appraisers, the Construction Consultant and Lenders' Counsel) incurred by Administrative Agent or any Lender in connection with (x) the preparation for and consummation of the transactions contemplated hereby or for the performance hereof and of the other Loan Documents, and for any services which may be required in addition to those normally and reasonably contemplated hereby and (y) the enforcement hereof or of any or all of the other Loan Documents and (ii) the reasonable actual out-of-pocket costs and expenses incurred by PB Capital, NordLB and Administrative Agent in connection with the syndication of the Loan and the Other Loan; provided, however, that Borrower shall not be responsible for (1) the fees and expenses of legal counsel for Lenders other than Lenders' Counsel incurred in connection with said counsel's review of this Agreement, the other Loan Documents and the loan documents evidencing or securing the Other Loan (the "Other Loan Documents"), (2) costs, expenses and charges incurred by Administrative Agent in connection with the administration of the Loan (other than the administration fee required by Section 6.19 and the reasonable fees and expenses of Lenders' Counsel and the Construction Consultant) and (3) for an amount in excess of $50,000 for the syndication of the Loan and the Other Loan, including, without limitation, the fees and expenses of Lenders' Counsel in connection therewith. In connection with the foregoing and the below provisions of this Section 8.19 (and without limiting the express limitations with respect to Lenders' Counsel above with respect to syndication of the Loan and the Other Loan), Lenders agree, to the extent practicable, to appoint a single counsel and local counsel, selected by Administrative Agent, to act on behalf of all Lenders in connection with the enforcement of the Loan Documents and the Other Loan Documents. If Borrower fails to pay within ten (10) Business Days after demand (together with reasonably detailed supporting documentation) any costs, charges or expense required to be paid by it as aforesaid, and Administrative Agent or any Lender pays such costs, charges or expenses, Borrower shall reimburse Administrative Agent or such Lender, as appropriate, on demand for the amounts so paid, together with interest thereon at the Default Rate. Borrower further agrees to indemnify Administrative Agent and each Lender and their respective directors, officers, employees and agents from, and hold each of them harmless against, (x) any and all losses arising out of or by reason of any governmental investigation or litigation or other proceedings (including any threatened governmental investigation or litigation or other proceedings) relating to any actual or proposed use by Borrower of the proceeds of the Loan, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceedings and (y) any and all claims, actions, suits, proceedings, costs, expenses, losses, damages and liabilities of any kind, including in tort, penalties and interest, brought or asserted by a third party, arising out or by reason of any matter relating, directly or indirectly, to the ownership, condition, development, construction, sale, rental or financing of the Premises or Improvements or any part thereof (but excluding any such losses, liabilities, claims, damages or expenses incurred solely by reason of any default by Administrative Agent or any Lender hereunder or under any of the other Loan Documents or the gross negligence or willful misconduct of the party to be indemnified). In addition to the foregoing, Borrower shall pay any civil penalty or fine assessed by OFAC against, and all reasonable costs and expenses (including reasonable counsel fees and disbursements) incurred in connection with defense thereof by Administrative Agent or any Lender as a result of the funding of the Loan, the issuance of any Letters of Credit or the acceptance of payments or of collateral under the Loan Documents. The obligations of Borrower under this Section and under Sections 3.01, 3.03 and 6.07 shall survive the repayment of all amounts due under or in connection with any of the Loan Documents and the termination of the Individual Loan Commitments.

Counterparts.

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

Lenders' Right to Terminate

In the event the Initial Advance is not made within ninety (90) days of the date hereof, the Required Lenders shall have the absolute right, at their option, to terminate Lenders' obligations to Borrower under this Agreement and the loan commitment represented hereby. In the event of such termination, the Required Lenders shall direct Administrative Agent to send notice thereof to the other Lenders and Borrower.

Trust Fund.

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

Governing Law; Jurisdiction.

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

Integration.

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

Gross-Up for Taxes.

All payments made by Borrower under this Agreement and the Notes shall be made free and clear of, and without deduction or withholding for or on account of, any United States future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, hereafter imposed, levied, collected, withheld or assessed by any United States Governmental Authority, excluding income taxes, branch profits tax and franchise or other taxes (imposed in lieu of income taxes) imposed on a Lender as a result of a present or former connection between such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or its Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts payable to such Lender hereunder or under its Note, the amounts so payable to such Lender shall be increased to the extent necessary to yield to such Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable with respect to the Loan at the rates or in the amounts specified in this Agreement and its Note; provided, however, notwithstanding anything to the contrary contained in this Agreement, that Borrower shall not be required to increase any such amounts payable to such Lender if (A) such Lender fails to comply with the requirements of Section 7.13 or (B) to the extent any increase in such amounts required to be withheld is not a result of a change in Law or treaty. With respect to any Participant or Assignee under Section 8.13, "change in Law or treaty" shall be compared to the Law at the time such Participant or Assignee became a party to this Agreement, and not based on the Law as of the date hereof; provided further, solely for the avoidance of doubt, Borrower may avail itself of its rights to substitute a Lender pursuant to Section 3.05 to the extent of any tax gross-ups as described in this Section 8.25. Whenever any Non-Excluded Taxes are payable by Borrower (for which Borrower is obligated to pay additional amounts), as promptly as possible after payment thereof Borrower shall send to Administrative Agent for the account of such Lender a certified copy of an original official receipt received by Borrower showing payment thereof. If Borrower fails to pay any such Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit

to Administrative Agent the required receipts or other required documentary evidence, Borrower shall indemnify such Lender for any incremental taxes, interest or penalties that may become payable by such Lender as a result of any such failure. The agreements in this Section shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable hereunder.

Patriot Act Notice.

To help fight the funding of terrorism and money laundering activities, United States federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. For purposes of this section, "account" shall be understood to include account(s) opened in connection with the Loan, including, without limitation, the Building Loan Trust Account.

Limitation on Liability.

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

ARTICLE IX

PARTICULAR PROVISIONS

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

Subordination.

Provided there exists no Event of Default or monetary or bankruptcy-related Default, Administrative Agent shall, on Borrower's written request, subordinate the liens of the Mortgage and the Other Mortgage to the Declaration and shall execute the appropriate instruments (reasonably satisfactory to Administrative Agent in all respects) in recordable form to effect such subordination, upon the satisfaction of the following conditions:

(a)  Administrative Agent shall have received a copy of the Declaration and Tax Lot Drawings, which shall be in proper form for recording or filing, as necessary, in the Office of the City Register of the City of New York, together with (i) a copy of a "no-action letter" issued by the New York State Department of Law or (ii) an offering plan that has been accepted for filing by the New York Department of Law, as same may be amended from time to time;

(b)  the title policy or policies insuring the Mortgage and the Other Mortgage shall have been endorsed to (i) provide affirmative insurance to the effect that the Premises and Improvements and the improvements comprising the Residential Unit and the Retail Unit constitute a condominium validly created under the Condominium Act, (ii) amend the legal description of the Premises to accurately describe the Retail Unit and the Residential Unit and (iii) provide a standard condominium endorsement to such title policy or policies indicating that Administrative Agent still has a first priority lien which encumbers the Retail Unit and Residential Unit in form and substance reasonably satisfactory to Administrative Agent;

(c)  Borrower shall have caused to be duly executed and delivered to Lender (i) an Assignment of Developer's Rights in the form of Exhibit G, (ii) conditional resignations of the officers and members of the Board of Directors of the applicable condominium association appointed or elected by Borrower as owner of the Retail Unit in the form of Exhibits H-1 and H-2, respectively and (iii) an Agreement regarding Management Agreement in the form of Exhibit I;

(d)  Administrative Agent shall have received one or more opinions from Borrower's counsel to the effects that (i) the Condominium Documents satisfy all applicable requirements of Governmental Authorities and have been duly executed and, where necessary, duly recorded or filed pursuant to the Condominium Act, (ii) all requirements of any applicable Law relating to the formation of or conversion to, as the case may be, a Condominium have been duly satisfied and the Condominium has been duly created and no filing, registration or other compliance with any United States federal or state securities or other Law will be required in connection with the sale of Units, or if such filing is necessary, that the applicable Law governing the same has been fully complied

with and (iii) the documents referred to in paragraph (c) of this Section have each been duly authorized, executed and delivered by the respective parties thereto and are enforceable against said parties in accordance with their respective terms; and

(e)  the board of managers of the Condominium which shall be created by the Condominium Documents shall have furnished to Administrative Agent at no cost or expense to Administrative Agent, evidence of the property insurance required by the Mortgage naming Administrative Agent as Mortgagee, Borrower, the Residential Unit owner (and its mortgagee, if any) and said board of managers of the Condominium as loss payees.

Release of Residential Unit.

Provided there exists no Default or Event of Default, Administrative Agent shall release the Residential Unit from the liens of the Mortgage and the Other Mortgage upon the satisfaction of the following conditions: (a) Borrower shall have complied in all material respects with the provisions of Section 9.01, (b) Administrative Agent shall have received not less than fifteen (15) Business Days' prior written notice of the proposed release, (c) if in connection with such release, there is to be a sale or transfer of the Residential Unit such that Borrower shall no longer be the owner thereof, a notice (the "RU Transfer Notice") from Borrower to Administrative Agent as to whether such owner of the Residential Unit is an Affiliate of Borrower or is not an Affiliate of Borrower, (d) if the RU Transfer Notice indicates such owner will not be an Affiliate of Borrower, Home Depot, Century 21 and Kohl's shall each have (x) taken possession of its space under its respective lease, (y) begun paying rent under its respective lease and (z) be open for business to the public, (e) if the RU Transfer Notice indicates the owner will be an Affiliate of Borrower or if Borrower will continue as owner of the Residential Unit, an undertaking reasonably satisfactory in form and substance to Administrative Agent from such Affiliate or Borrower, as applicable, that the Residential Unit will not be transferred to a Person which is not an Affiliate of Borrower until such time as requirements of clauses (x), (y) and (z) of the immediately preceding clause (d) have been satisfied with respect to each of Home Depot, Century 21 and Kohl's; (f) liability and property insurance reasonably required by Administrative Agent shall be in place for the benefit of the Condominium, Borrower, Lenders and Administrative Agent in connection with the construction of the Residential Unit; (g) Administrative Agent shall have received evidence reasonably satisfactory to it that adequate safeguards and protections are in place for any tenants of the Retail Unit, their customers and the public, including, if necessary, appropriate covered walkways, that construction of the Residential Unit will not unreasonably interfere with the use and enjoyment of the Retail Unit during construction of the Residential Unit, that adequate pedestrian and vehicular ingress and egress exists for the use and operation of the Retail Unit and that adequate parking is available; (h) the Condominium, Borrower, Lenders and Administrative Agent shall each be indemnified by Guarantor against claims by any third Person for defects in construction or deviations from plans and specifications for the Residential Unit; and (i) to the extent not already contained in the Condominium Documents, reasonable and customary reciprocal easements are in place between the Residential Unit and the Retail Unit. From and after the date Administrative Agent releases the Residential Unit in accordance with the terms of this Agreement, the term "Premises" for purposes of this Agreement, shall be deemed to mean the premises then encumbered by the Mortgage, including the Retail Unit, in which the ownership thereof is retained by Borrower after the Declaration and Tax Lot Drawings are recorded in the Office of the City Register of the City of New York.

Special Purpose Entity.

Borrower represents that it is a Single-Purpose Entity, except that, prior to the date hereof Borrower has provided certain guaranties, indemnities and undertakings more particularly described in (a) the Amended and Restated Management and Development Agreement dated as of July 3, 2002 between Guarantor and Vornado Management Corp. and (b) the Reimbursement Agreement dated as of July 3, 2002 by and among Guarantor, 731 Commercial LLC, 731 Residential LLC and Vornado Realty L.P., and covenants and agrees that it shall maintain such status and shall not: (i) engage in any business other than that arising out of the ownership, operation and development of the Mortgaged Property; (ii) commingle its assets with the assets of any other person or entity; (iii) incur indebtedness other than as contemplated by this Agreement (including Permitted Debt); (iv) guarantee the obligations of any person or entity; or (v) except as contemplated by this Agreement, partition, or cause to be partitioned, the Mortgaged Property.

(a) Maturity Date Extension.Provided there exists no Event of Default, monetary Default or non-monetary material Default, Borrower shall have the option, once only, to extend the maturity date of the Loan and the Other Loan (collectively, the "Total Loan") for up to twelve (12) months so long as (i) the Improvements have been substantially completed as contemplated in Section 6.08, (ii) Administrative Agent shall have received a notice of the request for extension within thirty (30) to one hundred twenty (120) days prior to the scheduled Maturity Date, (iii) Administrative Agent shall have received on behalf of Lenders on or prior to the Maturity Date an extension fee in an amount equal to 0.10% (ten basis points) of the sum of the aggregate Principal Amount of the Total Loan and the aggregate unadvanced portion of the Total Loan (such sum, the "Total Commitment"), (iv) the ratio of the Total Commitment to the current market value of the Mortgaged Property remaining subject to the Mortgage as determined by an appraisal ordered and received by Administrative Agent in conjunction with the request for extension shall not exceed 70% (provided Borrower may unilaterally reduce the

Total Commitment to the extent then undrawn pursuant to documentation reasonably satisfactory in form and substance to Administrative Agent), (v) the Debt Service Coverage Ratio (which for purposes of this Section 9.04 shall be calculated based on the tenants in possession of their space under Leases approved or deemed approved in accordance with this Agreement and who are then actually paying rent (i.e., not in a free rent period) as of the Maturity Date to be extended and without regard to the length of the period for which any such tenant shall have been paying rent) for the four (4) Measurement Periods to follow shall not be less than 1.05 to 1.0, (vi) any interest rate hedging product then in effect pursuant to Section 6.23 has been extended for the extension term for the Total Commitment (as the same may be reduced as contemplated above and based on the then outstanding principal balance of the Loan and the Other Loan and the contemplated draw schedule then in effect with respect to the remaining unfunded Total Commitment (as the same may have been so reduced)), unless the LIBO Rate with an Interest Period of one (1) month has been less than 6.25% for the two (2) consecutive weeks prior to the maturity date to be extended, (vii) Borrower shall have delivered to Administrative Agent with the extension notice a certificate (which shall be deemed remade as of the maturity date to be extended), that the representations and warranties (other than those made as of a specific date) made to Administrative Agent and/or Lenders herein, in the other Loan Documents and in any other document, certificate or statement executed or delivered to Administrative Agent and/or Lenders in connection with the Loan or the Other Loan shall be true and correct on and as of the date of the maturity date with the same effect as if made on such date except for Certain Changes, (viii) Borrower executes and delivers an extension agreement with respect to the Notes and the Other Note and Guarantor reaffirms its obligations under the Guaranty pursuant to documentation reasonably satisfactory in form and substance to Administrative Agent, (ix) Administrative Agent shall have received evidence reasonably satisfactory to it that the financial covenants set forth in paragraph 12 of the Guaranty continue to be satisfied and (x) Borrower shall have paid all reasonable actual, out-of-pocket costs and expenses (including reasonable attorneys' fees and expenses) of Administrative Agent in connection with such extension. Any such notice of extension by Borrower may be withdrawn by Borrower in a notice to Administrative Agent on or prior to the maturity date, so long as, in connection with such withdrawal, the amounts owed pursuant to clause (x) above are paid within ten (10) days after Administrative Agent's demand therefor but in any event on or prior to the Maturity Date (provided Borrower receives at least one (1) Business Day's notice thereof). If Borrower is unable to extend due solely to the failure to meet the Debt Service Coverage Ratio test set forth in clause (v) above, Borrower may on or prior to the maturity date to be extended either (x) (subject to the prepayment provisions set forth in this Agreement) prepay the Total Loan by an amount such that upon recomputation of such Debt Service Coverage Ratio test the condition set forth in clause (v) above is then satisfied or (y) deposit cash collateral in an account under the sole dominion and control of Administrative Agent which is assigned, pledged and/or delivered to Administrative Agent pursuant to documentation in form and substance reasonably satisfactory to Administrative Agent in an amount (the "Reduction Amount") which if it were to be applied in prepayment of the Total Loan would result in the Debt Service Coverage Ratio test set forth in clause (v) above being satisfied or (z) deliver to Administrative Agent an irrevocable unconditional letter of credit issued by an Approved LC Bank in the Reduction Amount, which letter of credit shall name Administrative Agent as the beneficiary thereof, shall be available at sight and shall otherwise be in form and substance reasonably acceptable to Administrative Agent and can be presented for payment in the Borough of Manhattan, New York (any such letter of credit, the "Extension LC"). If an Event of Default shall occur and is continuing, Administrative Agent shall at the option of the Required Lenders, apply the amounts on deposit pursuant to clause (y) above or which are available under the Extension LC in reduction of the principal and/or interest under the Loan and the Other Loan as Administrative Agent shall elect.

(b) Completion Date Extension.Provided there exists no Event of Default, monetary Default or non-monetary material Default, Borrower shall have the option, once only, to extend the Completion Date for up to ninety (90) days so long as (i) Administrative Agent's has received a notice of the request for extension not later than ten (10) days prior to the scheduled Completion Date and (ii) Administrative Agent has received evidence reasonably satisfactory to it that no Lease then contains a completion or delivery date (the failure to meet would allow the tenant under such Lease to terminate such Lease) on or prior to the date to which the Completion Date is to be extended.

Severance.

Administrative Agent shall have the right to modify the Total Loan in order to create one or more notes of equal or varying priority and interest rates provided that (a) the total principal balance of the Total Loan as of the effective date of such modification equals the outstanding principal balance of the Total Loan immediately prior to such modification, (b) the weighted average stated interest rate of all such notes on the date created shall equal the stated interest rates that were applicable to the Total Loan immediately prior to the modification of Total Loan and (c) principal shall be paid in such a manner that one note is not paid down before or at a quicker rate than another such that the weighted average stated interest rate of all such notes increases due to the manner in which the notes are paid off relative to one another. Borrower, Administrative Agent and Lenders shall promptly execute an amendment to this Agreement, the Note, and the Loan Documents to evidence such modification and such document shall be reasonably satisfactory to Borrower. Borrower shall cooperate with all reasonable requests of Administrative Agent in order to establish the "component" notes and shall execute and deliver such documents as shall reasonably be required by Administrative Agent.

Bridge.

Administrative Agent and Lenders acknowledge receipt and approval of the current draft (version 6) of an Agreement, Deed of Cession, Grant of Easements and Amendment to 1987 Agreement among Guarantor, Borrower, Alexander's Rego Shopping Center, Inc. and The City of New York (the "Draft Mapping Agreement"). Borrower hereby covenants and agrees to promptly cause the Draft Mapping Agreement to be recorded after the date hereof with the Office of the City Register, Queens County, when the same has been duly authorized, executed and delivered. In connection therewith, the liens of the Mortgage and the Other Mortgage will need to be subordinated. Administrative Agent agrees to execute appropriate instruments (reasonably satisfactory to Administrative Agent in all respects) in recordable form to effect such subordination, upon satisfaction of the following conditions:

•    Administrative Agent shall have received a copy of the mapping agreement to be recorded with any material changes to the Draft Mapping Agreement to be subject to the approval of Administrative Agent, which approval shall not be unreasonably conditioned, withheld or delayed;

•    Borrower shall execute and deliver to Administrative Agent a mortgage spreader agreement for each of the mortgages comprising the Mortgage and the Other Mortgage pursuant to which the liens of each such mortgage are spread to encumber the easements, rights and benefits inuring to Borrower and the "Air Volume" (as defined in the Draft Mapping Agreement) in which the pedestrian and vehicular bridge is to be constructed, together with Section 255 Affidavits;

•    an endorsement to each of the title policies insuring the Mortgage and the Other Mortgage which shall insure the liens thereof as spread pursuant to the mortgage spreader agreements referred to above; and

•    an opinion of counsel with respect to Borrower's due authorization, execution and delivery of the mortgage spreader agreements referred to above, which shall be reasonably satisfactory in form and substance to Administrative Agent.

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

ALEXANDER’S OF REGO PARK II, INC. a Delaware corporation
By:	/s/ Alan J. Rice
	Alan J. Rice Secretary

Address for notices:

c/o Alexander’s, In
210 Route 4 East
Paramus, New Jersey 07652
Attention:  Chief Finacial Officerc

and to:

Vornado Realty Trust
888 Seventh Avenue
New York, New York 10019
Attention:  Executive Vice President – Capital Markets

with a copy to:

Vornado Realty Trust
888 Seventh Avenue
New York, New York 10019
Attention:  Corporation Counsel

and to:

Sullivan & Cromwell, LLP
125 Broad Street
New York, New York 10004
Attention:  Arthur S. Adler, Esq.

SIGNATURES

PB CAPITAL CORPORATION (as Lender and as Administrative Agent)
By:	/s/ Ann S. Wilhelm
	Ann S. Wilhelm Senior Director
By:	/s/ Daniel T. Cerulli
	Daniel T. Cerulli Senior Director
Address for notices and Applicable Lending Office:
PB Capital Corporation 230 Park Avenue New York, New York 10169 Attention:  Real Estate Finance

SIGNATURES

NORDDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH (as Lender)
By:	/s/ J. Malte Stoeckhert
	J. Malte Stoeckhert Senior Director and Manager
By:	/s/ Dirk Ziemer
	Dirk Ziemer Vice President
Address for notices and Applicable Lending Office:
Norddeutsche Landesbank Girozentrale, New York Branch 1114 Avenue of the Americas, 37th Floor New York, New York 10036 Attention:  Real Estate Finance / Lita Kot

SIGNATURES

WELLS FARGO BANK, NATIONAL ASSOCIATION (as Lender)
By:	/s/ Yorick Starr
	Yorick Starr Vice President
Address for notices and Applicable Lending Office:
Wells Fargo Bank, National Association 40 West 57th Street New York, New York 10019 Attention:  Yorick Starr

SIGNATURES

LANDESBANK BADEN-WURTTEMBERG, NEW YORK BRANCH (as Lender)
By:	/s/ Leonard J. Crann
	Leonard J. Crann Head of Real Estate Finance Department
By:	/s/ Robert Dowling
	Robert Dowling Vice President
Address for notices and Applicable Lending Office:
Landesbank Baden-Wurremberg, New York Branch 280 Park Avenue 31st Floor, West Building New York, New York 10017 Attention:  Mr. Leonard J. Crann

SIGNATURES

BANK OF IRELAND, CONNECTICUT BRANCH (as Lender)
By:	/s/ Conor Linehan
	Conor Linehan Director
By:	/s/ Declan Meagher
	Declan Meagher Managing Director
Address for notices and Applicable Lending Office:
Bank of Ireland, Connecticut Branch 300 First Stamford Place Stamford, Connecticut 06902 Attention:  Mr. Conor Linehan Mr. Declan Meagher

[Borrower]

STATE OF NEW YORK )

: ss.:

COUNTY OF NEW YORK )

On the 19^th day of December in the year 2007, before me, the undersigned, a notary public in and for said state, personally appeared Alan J. Rice, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

By:	/s/ Ilona Jacqueline Williams
	Ilona Jacqueline Williams Notary Public
	My Commission Expires:  July 3, 2010

[PB Capital]

STATE OF NEW YORK )

: ss.:

COUNTY OF NEW YORK )

On the 20^th day of December in the year 2007, before me, the undersigned, a notary public in and for said state, personally appeared Ann S. Wilhelm and Daniel T. Cerulli, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

By:	/s/ Elizabeth Cava
	Elizabeth Cava Notary Public, State of New York
	My Commission Expires:  February 28, 2011

[NordLB]

STATE OF NEW YORK )

: ss.:

COUNTY OF NEW YORK )

On the day of December in the year 2007, before me, the undersigned, a notary public in and for said state, personally appeared J. Malte Stoeckhert and Dirk Ziemer, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

By:	/s/ Elizabeth Cava
	Elizabeth Cava Notary Public, State of New York
	My Commission Expires:  February 28, 2011

[Wells Fargo]

STATE OF NEW YORK )

: ss.:

COUNTY OF NEW YORK )

On the 18^th day of December in the year 2007, before me, the undersigned, a notary public in and for said state, personally appeared Yorick Starr, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

By:	/s/ Kimberly Di Stefano
	Kimberly Di Stefano Notary Public, State of New York
	My Commission Expires:  December 4, 2010

[LBBW]

STATE OF NEW YORK )

: ss.:

COUNTY OF NEW YORK )

On the 18^th day of December in the year 2007, before me, the undersigned, a notary public in and for said state, personally appeared Leonard J. Crann and Robert Dowling, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

By:	/s/ Anna Berdan
	Anna Berdan Notary Public, State of New York
	My Commission Expires:  January 16, 2011

[Bank of Ireland]

STATE OF CONNECTICUT )

: ss.:

COUNTY OF FAIRFIELD )

On the 19^thday of December in the year 2007, before me, the undersigned, a notary public in and for said state, personally appeared Conor Linehan and Declan Meagher, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

By:	/s/ Susan Crawford
	Susan Crawford Notary Public, State of Connecticut
	My Commission Expires:

TABLE OF CONTENTS

Page

ARTICLE I PARTICULAR TERMS, DEFINITIONS AND RULES OF CONSTRUCTION 1

Section 1.01. Particular Terms 1

Section 1.02. Definitions 2

Section 1.03. Rules of Construction 23

ARTICLE II LOAN ADVANCES 23

Section 2.01. Advances Generally 23

Section 2.02. Certification and Verification of Costs 24

Section 2.03. Procedures for Advances 25

Section 2.04. Held-Back Amounts; Advances for Soft Costs After Completion 26

Section 2.05. Stored Materials 27

Section 2.06. Contingency Advances 29

Section 2.07. Reallocation of Amounts on Construction Cost Statement 29

Section 2.08. Certain Limitations on Advances 30

Section 2.09. Nature of Lenders' Obligations; Borrower's Rights and Obligations in Event a Lender Fails to Make an Advance30

Section 2.10. Notes 30

Section 2.11. Payments and Distributions; Certain Consequences of Delinquent Lender Status 31

Section 2.12. Interest 32

Section 2.13. Elections, Conversions and Continuations of Interest Rate 32

Section 2.14. Minimum Amounts and Maximum Number of Tranches 33

Section 2.15. Inapplicability of LIBOR Loans 34

Section 2.16. Late Payment Premium 34

Section 2.17. Voluntary Prepayments 34

Section 2.18. Acceleration of Advances 35

Section 2.19. LIBOR Margin Reduction 35

ARTICLE III YIELD MAINTENANCE ETC 35

Section 3.01. Additional Costs and Other Effects of Regulatory Changes; Taxes 35

Section 3.02. Limitations on Availability of LIBOR Loans 37

Section 3.03. Certain Compensation 37

Section 3.04. "Lender" to Include Participants 38

Section 3.05. Substitution of Lenders 38

ARTICLE IV CONDITIONS PRECEDENT 40

Section 4.01. Conditions Precedent to Initial Advance 40

Section 4.02. Conditions to Advances After the Initial Advance 48

Section 4.03. Conditions to Last Hard Costs Advance 50

ARTICLE V REPRESENTATIONS AND WARRANTIES 51

Section 5.01. Due Formation, Power and Authority 51

Section 5.02. Legally Enforceable Agreements 52

Section 5.03. Financial Statements 52

Section 5.04. Compliance With Laws; Payment of Taxes 52

Section 5.05. Litigation 52

Section 5.06. No Conflicts or Defaults 52

Section 5.07. Solvency 53

Section 5.08. Governmental Regulation 53

Section 5.09. Insurance 53

Section 5.10. ERISA 53

(i)

Page

Section 5.11. Other Documents 53

Section 5.12. No Default 53

Section 5.13. Accuracy of Information; Full Disclosure 54

Section 5.14. Separate Tax and Zoning Lot 54

Section 5.15. Requisition as Reaffirmation 54

Section 5.16. Plans and Specifications and Improvements 54

Section 5.17. Utility Services 54

Section 5.18. Creation of Liens 55

Section 5.19. Roads 55

Section 5.20. Construction Prior to Closing 55

Section 5.21. Lien Law Statement 55

Section 5.22. Anti-Money Laundering; OFAC; Patriot Act 55

ARTICLE VI COVENANTS OF BORROWER 56

Section 6.01. Compliance with Laws; Payment of Taxes 56

Section 6.02. Leases and Premises Documents 56

Section 6.03. Continuing Accuracy of Representations and Warranties 58

Section 6.04. Covenants, Restrictions and Easements 58

Section 6.05. Inspection and Cooperation 58

Section 6.06. Payment of Costs 58

Section 6.07. Brokers 59

Section 6.08. Construction of Improvements 59

Section 6.09. Project Sign 61

Section 6.10. Building Loan Trust Account 61

Section 6.11. Certain Materials to be Submitted 61

Section 6.12. Correction of Defects and Departures from Plans and Specifications 61

Section 6.13. Change Orders 61

Section 6.14. Regarding Construction Contracts 62

Section 6.15. Security of Site 62

Section 6.16. Intentionally Omitted 62

Section 6.17. Development, Management and Leasing of Premises 62

Section 6.18. Maintenance, Management, Service and Leasing Contracts 63

Section 6.19. Administration Fee 64

Section 6.20. Fees Required by Supplemental Fee Letter 64

Section 6.21. Reporting Requirements 64

Section 6.22. Condominium Covenants 66

Section 6.23. Hedging Product 67

Section 6.24. Lockbox 67

Section 6.25. Transfers 67

Section 6.26. Financial Covenants 67

Section 6.27. ICIP 68

Section 6.28. Security Deposits 68

Section 6.29. Distributions 70

ARTICLE VII ADMINISTRATIVE AGENT; RELATIONS AMONG LENDERS 70

Section 7.01. Appointment, Powers and Immunities of Administrative Agent 70

Section 7.02. Reliance by Administrative Agent 71

Section 7.03. Defaults 71

Section 7.04. Rights of Administrative Agent as Lender 72

Section 7.05. Sharing of Costs by Lenders; Indemnification of Administrative Agent 72

(ii)

Page

Section 7.06. Non-Reliance on Administrative Agent and Other Lenders 73

Section 7.07. Failure of Administrative Agent to Act 73

Section 7.08. Resignation or Removal of Administrative Agent 73

Section 7.09. Amendments Concerning Agency Function 74

Section 7.10. Liability of Administrative Agent 74

Section 7.11. Transfer of Agency Function 74

Section 7.12. Non-Receipt of Funds by Administrative Agent; Adjustments 74

Section 7.13. Withholding Taxes 75

Section 7.14. Sharing of Payments among Lenders 76

Section 7.15. Possession of Documents 76

Section 7.16. Effect of a Lender's Failure to Make an Advance 76

Section 7.17. Cure by Delinquent Lender 79

Section 7.18. Delinquent Lender Not Excused 79

Section 7.19. Notices Regarding Delinquent Lender 79

Section 7.20. Replacement Lender 80

Section 7.21. Borrower Matters 81

Section 7.22. Co-Arrangers 81

ARTICLE VIII GENERAL CONDITIONS AND PROVISIONS 81

Section 8.01. Loan Balancing 81

Section 8.02. Advance Not Waiver 82

Section 8.03. No Third-Party Beneficiaries 82

Section 8.04. Authorization to Make Direct Advances 82

Section 8.05. Authorization to Advance for Interest and Fees 82

Section 8.06. Letters of Credit 83

Section 8.07. Concerning Irrevocable Authorizations 84

Section 8.08. Intentionally Omitted 84

Section 8.09. Intentionally Omitted 85

Section 8.10. Intentionally Omitted 85

Section 8.11. Notices 85

Section 8.12. Amendments and Waivers 85

Section 8.13. Assignment; Participation 86

Section 8.14. Setoff 87

Section 8.15. Successors and Assigns 88

Section 8.16. Severability 88

Section 8.17. Non-Waiver; Remedies Cumulative 88

Section 8.18. Certain Waivers 88

Section 8.19. Expenses; Indemnification 89

Section 8.20. Counterparts 90

Section 8.21. Lenders' Right to Terminate 90

Section 8.22. Trust Fund 90

Section 8.23. Governing Law; Jurisdiction 90

Section 8.24. Integration 91

Section 8.25. Gross-Up for Taxes 91

Section 8.26. Patriot Act Notice 92

Section 8.27. Limitation on Liability 92

ARTICLE IX PARTICULAR PROVISIONS 92

Section 9.01. Subordination 92

Section 9.02. Release of Residential Unit 93

(iv)

Page

Section 9.03. Special Purpose Entity 94

Section 9.04. (a) Maturity Date Extension 94

(b) Completion Date Extension 94

Section 9.05. Severance 96

Section 9.06. Bridge 96

End of TOC - Do not delete this paragraph!

EXHIBITS

A Lien Law Statement

B Assignment and Assumption Agreement

C Lease Assignment Letter

D Pending Disbursements Clause

E Note

F Requisition Authorization Statement

G Assignment of Developer's Rights

H-1 Conditional Resignation of Officers

H-2 Conditional Resignation of Directors

I Agreement Regarding Management Agreement

(iv)

EX-10

Exhibit 10.2

PROJECT LOAN AGREEMENT

Dated as of December 21, 2007

among

ALEXANDER’S OF REGO PARK II, INC.,

as Borrower,

PB CAPITAL CORPORATION,

as Lender,

NORDDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH,

as Lender,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Lender,

LANDESBANK BADEN-WÜRTTEMBERG, NEW YORK BRANCH,

as Lender,

BANK OF IRELAND, CONNECTICUT BRANCH,

as Lender,

PB CAPITAL CORPORATION,

as Administrative Agent

and

PB CAPITAL CORPORATION

and

NORDDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH,

as Co-Arrangers

LOCATION OF PREMISES:

61-01 Junction Boulevard,

Queens, New York

NY 50214974v8

PROJECT LOAN AGREEMENT (this “Agreement”), dated as of December 21, 2007, among ALEXANDER’S OF REGO PARK II, INC., a Delaware corporation (“Borrower”), PB CAPITAL CORPORATION (in its individual capacity and not as Administrative Agent, “PB Capital”), NORDDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH (“NordLB”), WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), LANDESBANK BADEN-WÜRTTEMBERG, NEW YORK BRANCH (“LBBW”) and BANK OF IRELAND, CONNECTICUT BRANCH (“Bank of Ireland”; PB Capital, NordLB, Wells Fargo, LBBW, Bank of Ireland and such other lenders as may become Lenders pursuant to Section 3.05, 7.20 or 8.13 of the BLA (as defined below), as incorporated herein pursuant to paragraph 5 below, individually, a “Lender” and collectively, “Lenders”) and PB CAPITAL CORPORATION, as administrative agent for Lenders (together with its successors in such capacity, “Administrative Agent”)

Borrower desires that Lenders extend credit as provided herein, and Lenders are prepared to extend such credit on the terms and conditions hereinafter set forth. Accordingly, Borrower, Administrative Agent and Lenders agree as follows:

Loan.

On the basis of the representations, warranties and covenants made by Borrower herein and in the Mortgage (as defined below) and the BLA, and subject to Borrower’s satisfaction of the conditions herein set forth, each Lender agrees to advance its Pro Rata Share (as defined below) of, and Borrower agrees to accept, a loan (the “Loan”) in the amount of up to $98,215,000 (the “Loan Amount”). The Loan shall be evidenced by Borrower’s notes to Lenders in principal amounts equal to Lenders’ respective Individual Loan Commitments (as defined below) for the accounts of their respective “Applicable Lending Offices” (as such quoted term is defined in the BLA) and in an aggregate principal amount equal to the Loan Amount (said notes, as the same may be amended, modified, extended, severed, assigned, renewed and restated from time to time, including any substitute or replacement notes pursuant to Section 3.05, 7.16, 7.20 or 8.13 of the BLA, as incorporated herein pursuant to paragraph 5 hereof, each, a “Note” and collectively, the “Notes”). The Loan shall be secured by two mortgages, one designated as series I project loan mortgage, assignment of leases and rents and security agreement (the “Series I Mortgage”) in the principal amount of $65,715,000 from Borrower to Administrative Agent, for the benefit of Lenders, of Borrower’s interests in respect of the real property described in Schedule A to the Series I Mortgage (the “Premises”) and the second designated as series II project loan mortgage, assignment of leases and rents and security agreement (the “Series II Mortgage”; the Series I Mortgage and the Series II Mortgage, individually and collectively, the “Mortgage”) in the principal amount of $32,500,000 from Borrower to Administrative Agent, for the benefit of Lenders of Borrower’s interest in the Premises. Performance of Borrower’s obligations hereunder and under the Notes and Mortgage shall be guaranteed by an instrument (the “Guaranty”) executed by the person(s) or entities identified as “Guarantor” in the building loan agreement (the “BLA”) of even date herewith among Borrower, Lenders and Administrative Agent relative to the construction of the “Improvements” (as such quoted term is defined in the BLA) on the Premises. This Agreement, the Notes, the Mortgage, the Guaranty, the “Indemnity” and the “Requisition Authorization Statement” (as such quoted terms are defined in the BLA), Uniform Commercial Code financing statements in respect of the “Mortgaged Property” (as such quoted term is defined in the Mortgage) and any other collateral given as security for the Loan, and any other documents which evidence or secure the Loan are hereinafter referred to collectively as the “Loan Documents”.

NY 50214974v8

The Loan Amount shall be advanced as provided herein in respect of certain non-construction costs incurred by Borrower in connection with the Premises and the Improvements. Lenders shall fund each advance of the Loan ratably in accordance with the respective undisbursed amounts of their Individual Loan Commitments. For purposes of this Agreement, “Individual Loan Commitment” means, with respect to each Lender, the amount set forth in the table below opposite the name of such Lender (subject to adjustment in accordance with the provisions of Section 3.05, 7.16, 7.20 or 8.13 of the BLA, as incorporated herein pursuant to paragraph 5 hereof); and “Pro Rata Share” means, with respect to each Lender, the ratio of such Lender’s Individual Loan Commitment to the Loan Amount.

Lender	Individual Loan Commitment
PB Capital	$	23,852,214
NordLB	$	21,046,072
Wells Fargo	$	11,224,572
LBBW	$	28,061,428
Bank of Ireland	$	14,030,714

Advances.

Advances of Loan proceeds shall be made to Borrower in respect of the categories of costs and expenses (hereinafter “such Costs”) set forth on the budget annexed hereto as Exhibit A (the “Schedule of General Project Costs”) up to the “Loan Budget Amount” set forth on the Schedule of General Project Costs with respect to each such category. Advances shall be made monthly upon the satisfaction of the conditions set forth in paragraph 3 hereof and shall be in the amount of such Costs actually incurred by Borrower. Requests for an advance of Loan proceeds shall be in form and substance reasonably satisfactory to Administrative Agent and shall be accompanied by (i) such supporting documentation for such Costs as Administrative Agent may reasonably require, (ii) Borrower’s certificate to the effect that it has actually incurred such Costs in the amount of the requested advance, that such Costs have not been made the basis for any other request for an advance under this Agreement or under the BLA and (iii) a written notice of title continuation of or an endorsement to the title policy referred to in paragraph 3 below indicating that, since the date of the last preceding advance, there has been no change in the state of title or survey exception, in either case, not theretofore approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed), which endorsement shall have the effect of redating said policy to the date, and increasing the coverage thereof by the amount, of the advance then being made. Notwithstanding anything to the contrary contained in this Agreement, Lenders shall have no obligation to advance any portion of the Loan budget amount, if any, for (1) “Interest on Loan” if, when and to the extent that Administrative Agent, in its reasonable judgment, determines that the Improvements are generating, on a cash basis, positive cash flow in excess of Borrower’s other usual, reasonable and customary expenses regarding the Premises and/or Improvements, (2) any portion of the Loan Budget Amount, if any, for “Tenant Work” unless the lease to which such tenant work relates has been approved in accordance with the terms and conditions of the BLA or (3) any portion of the Loan Budget Amount, if any, for “Leasing Commissions” unless Administrative Agent has received and approved (such approval not to be unreasonably withheld, conditioned or delayed) (i) the brokerage or other leasing agreements with licensed leasing brokers (Administrative Agent acknowledges its receipt and approval of the Rego II Real Estate Retention Agreement dated as of December 20, 2007 as agreed and accepted by Vornado Realty L.P. and Borrower (the “Retention Agreement”)) and (ii) a copy, certified to be true, correct and complete by Borrower, of the executed lease pursuant to which the leasing commission is to be paid to such leasing

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NY 50214974v8

broker, which advance in respect of such lease shall not exceed the applicable amount set forth in such approved brokerage agreement (which, in the case of the Retention Agreement, shall be without regard to the deferral provisions of the Retention Agreement set forth in Section II.C.(b) of the Retention Agreement). In addition, the Loan Budget Amount for “Development Fee” in the amount of $17,586,681 shall be available to be paid to Vornado Realty L.P., with only $8,793,340.50 to be available hereunder, until the Improvements are completed in accordance with the BLA, in monthly installments equal to the product of (x) $8,793,340.50 times (y) the percentage of completion of construction of the Improvements as reasonably determined by the “Construction Consultant” (as such quoted term is defined in the BLA), with the balance of such amount available upon substantial completion of the Improvements in accordance with the provisions of Section 6.08 of the BLA. Lenders agree that, under the circumstances described in Section 4(j) of each of the “Assignment of Management Agreement” and the “Assignment of Leasing Agreement” (as such quoted terms are defined in the BLA), Lenders shall advance in respect of “Leasing Commissions” and/or “Development Fee” an amount equal to (calculated separately with respect to each such category) the excess of (x) the amount which Borrower would then be entitled to receive pursuant to the terms and provisions of this Agreement but had not requested over (y) the aggregate of the advances made in respect of the category in question.

All advances to Borrower are to be made at “Administrative Agent’s Office” (as such quoted term is defined in the BLA). Borrower shall submit requests for advances to Administrative Agent no later than 10:00 a.m. (New York time) on the date which is eight (8) “Business Days” (as such quoted term is defined in the BLA) prior to the date the advance is to be made. Administrative Agent, no later than three (3) Business Days prior to the date an advance is to be made, shall (i) notify each Lender either by telephone or by facsimile of the amount requested by Borrower, the amount approved by Administrative Agent, the portion of such advance to be funded by such Lender and the proposed date of such advance and (ii) send to each Lender by facsimile the summary pages of Borrower’s request for advance (without attachments). Not later than 10:00 a.m. (New York time) on the date of each advance, each Lender shall, through its Applicable Lending Office and subject to the conditions of this Agreement, make the amount to be advanced by it on such day available to Administrative Agent, at Administrative Agent’s Office and in immediately available funds. The amount so received by Administrative Agent shall by 3:00 p.m. (New York time) on the same Business Day, subject to the conditions of this Agreement, be made available to Borrower by Administrative Agent’s transferring said amount to an account designated by Borrower. Subsequent to the making of an advance, Administrative Agent shall deliver to a Lender, within eight (8) Business Days of such Lender’s request, such material relating to the request for such advance as such Lender may reasonably request. If Borrower withdraws any request for advance submitted as contemplated above, Borrower shall pay, in addition to any amounts set forth in Section 3.03 (as incorporated herein pursuant to paragraph 5 hereof), promptly following demand therefor, all reasonable costs and expenses incurred by Lenders and Administrative Agent in connection with reviewing such request for advance in contemplation of an advance.

Lenders and Administrative Agent have agreed to hold the Series II Mortgage and to not, at this time, record same subject to the terms and provisions hereof. Lenders shall not be obligated to make any advance which when aggregated with all Loan advances theretofore made would exceed the principal amount of the Series I Mortgage unless prior thereto the Series II Mortgage shall have been delivered to the Title Company for recording with the Office of City Register, Queens County and all mortgage recording taxes and fees for the Series II Mortgage shall have been duly paid by Borrower and the Title Company shall have issued for the benefit of Administrative Agent an endorsement to the Title Policy insuring the Series II Mortgage, which endorsement shall be reasonably satisfactory in form and substance to Administrative Agent. Administrative Agent agrees that it shall deliver the Series II Mortgage to the Title Company in order to secure an advance of Loan proceeds then being made. Borrower, Administrative Agent and Lenders agree that the Series I Mortgage and the Series II Mortgage will be recorded in the order that corresponds to the numerical designation of such Mortgages, which is to say that no advance will be made in respect of Series II Mortgage until the aggregate of the advances secured by the Series I Mortgage equals the principal amount thereof. Administrative Agent shall hold the Series II Mortgage and will record it as necessary as described above, provided, however, that Borrower agrees that Administrative Agent may at any time record the Series II Mortgage held by it and not then recorded, whether or not the Series II Mortgage is necessary to secure an advance of Loan proceeds then being made and without further

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consent or authorization of Borrower, provided, further, however, that Administrative Agent agrees that if Administrative Agent intends to record the Series II Mortgage pursuant to the provisions of the immediately preceding proviso, it shall give Borrower written notice of such intention at least ten (10) days prior to the recording of the Series II Mortgage during which ten (10) day period Borrower shall be entitled to reduce the unfunded portion of the Loan (pursuant to documentation reasonably satisfactory in form and substance to Administrative Agent) by an amount which Borrower and Administrative Agent agree will leave the Loan “in-balance” and in connection therewith (i) Borrower shall execute and/or deliver a replacement Series II Mortgage reflecting the reduced principal amount and otherwise in the same form as the Series II Mortgage delivered on the date hereof, (ii) the Title Company shall raise no additional exception to title as a result of the replacement of the Series II Mortgage delivered on the date hereof, (iii) Administrative Agent shall have received (1) an opinion of counsel to such effects as are reasonably required by Administrative Agent with respect to the replacement Series II Mortgage, (2) resolutions, consents or authorizations from Borrower with respect to such replacement, which shall be reasonably satisfactory in form and substance to Administrative Agent, (3) a reaffirmation and modification by Guarantor of its obligations under those of the Loan Documents to which it is a party, which shall be reasonably satisfactory in form and substance to Administrative Agent and (4) such additional documents or instruments as are reasonably requested by Administrative Agent in connection with such replacement and so long as, in the reasonable opinion of Administrative Agent, Lenders’ Counsel and the Title Insurer that the execution and delivery of such replacement Series II Mortgage will not be in contravention of the “Lien Law” (as such quoted term is defined in the BLA) and will not adversely affect or impair in any manner whatsoever the lien or the priority of the lien of the replacement Series II Mortgage, when recorded. In the absence of the satisfaction of the foregoing provisions of the last proviso of the immediately preceding sentence as and when required thereby, Administrative Agent shall be entitled to record the Series II Mortgage then in its possession. Borrower agrees to execute and deliver such documents, instruments and/or affidavits as are required by the Title Company, if any, in order to record the Series II Mortgage. Borrower hereby irrevocably directs and authorizes Administrative Agent, without further direction or authorization of Borrower, to make advances hereunder for payment of all mortgage recording taxes, recording fees, title insurance premiums and attorneys’ fees in connection with the foregoing.

Conditions Precedent.

Lenders’ obligations under this Agreement shall be conditioned upon, and no portion of the Loan shall be advanced until, the satisfaction of the following conditions:

(a)  There shall be no “Event of Default” (as such quoted term is defined in the BLA) or monetary or bankruptcy related “Default” (as such quoted term is defined in the BLA);

(b)  Administrative Agent shall have received: (i) executed counterparts of this Agreement and each of the other Loan Documents, (ii) for the account of Lenders, the commitment fee, if any, for the Loan which shall be retained by Lenders whether or not any advances are made hereunder, (iii) the policies of insurance required by the Mortgage, (iv) paid title insurance policies, in ALTA 2006 Loan Policy form (with New York endorsements), in the amount of each of the Series I Mortgage and the Series II Mortgage, insuring each such mortgage to be a valid lien on Borrower’s interest in the Premises free and clear of all defects and encumbrances not approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed), which shall contain no unacceptable survey exceptions, full coverage against mechanics’ and materialmen’s liens, such affirmative insurance and endorsements as Administrative Agent may reasonably require, an undertaking by the issuer thereof to provide the written notice of title continuation or endorsement referred to in paragraph 2(a) above and a pending disbursements clause in the form of Exhibit B, (v) an opinion of Borrower’s counsel to such effect as are reasonably required by Administrative Agent and (vi) resolutions, consents or authorizations in respect of the Loan, consistent with those required by paragraph (11) of Section 4.01(e) of the BLA for the loan contemplated thereby; and

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NY 50214974v8

(c)  Borrower shall have simultaneously made a requisition for an advance under the BLA and satisfied all conditions to the receipt of an advance thereunder.

Reallocation of Costs.

If there are savings in a particular Loan Budget Amount, and if such savings are substantiated by evidence reasonably satisfactory to Administrative Agent, Borrower shall have the right, upon prior approval of Administrative Agent, which approval shall not be unreasonably withheld, conditioned or delayed, to reallocate such savings to another Loan Budget Amount with respect to which additional costs have been or may be incurred; provided, however, that Borrower shall in no event or under any circumstances have the right to reallocate any portion of the Loan Budget Amount for “Interest on Loan” without in each instance obtaining the prior approval of Administrative Agent, which approval may be withheld in the sole and absolute discretion of Administrative Agent, or to cause a reallocation to occur that in the reasonable opinion of Administrative Agent, its counsel or the Title Insurer (as defined in the BLA) will be in contravention of the Lien Law (as defined in the BLA), or that in the reasonable opinion of Administrative Agent, its counsel or the Title Insurer will adversely affect or impair in any manner whatsoever the lien or the priority of the lien of the Mortgage.

Certain General Conditions and Representations.

The provisions of Sections 1.03, 2.09 and 2.11 through 2.17, inclusive, Article III, Sections 5.01 through 5.14, inclusive, Section 5.22, Sections 6.21 through 6.29, inclusive, Article VII, and Sections 8.02, 8.03, 8.04 through 8.19, inclusive, 8.21, 8.22, 8.24 and 8.25 through 8.27, inclusive, and Article IX of the BLA, and all the related definitions in the BLA (other than the definitions of those terms that are otherwise defined herein), are hereby incorporated herein by reference, as if fully and completely set forth herein, so that said provisions, as incorporated herein, shall refer to and apply in all respects to the Loan, the Loan Amount, each Lender’s Individual Loan Commitment and Pro Rata Share, the Mortgage, the Notes, this Agreement and the other Loan Documents; provided, however, that, as used in said provisions as incorporated herein, the term “Other Loan” shall refer to the loan made pursuant to the BLA, the term “Other Notes” shall refer to the notes evidencing such loan (it being intended that the provisions of the BLA pertaining to interest rate options shall permit Borrower to select, in a coordinated fashion, interest rates under the Notes and the Other Notes (as defined above)) and the term “Other Mortgage” shall refer to the mortgage(s) securing the notes evidencing such loan.

Counterparts.

This Agreement may be executed in any number of counterparts, and each such counterpart shall for all purposes be deemed to be an original, and all such counterparts together constitute but one and the same agreement.

Governing Law.

This Agreement and the rights and obligations of the parties hereunder shall in all respects be governed by, and construed and enforced in accordance with, the laws of the State of New York (without giving effect to New York’s principles of conflicts of law). Borrower, Lenders and Administrative Agent hereby irrevocably submit to the non-exclusive jurisdiction of any New York State or Federal United States federal court sitting in The City of New York (or any county in New York State where any portion of the Mortgaged Property is located) over any suit, action or proceeding arising out of or relating to this Agreement, and hereby agree and consent that, in addition to any methods of service of process provided for under applicable law, all service of process in any such suit, action or proceeding in any New York State or United States federal court sitting in The City of New York (or such other county in New York State) may be made by certified or registered mail, return receipt requested, directed to a party at the address indicated on the signature page hereof, and service so made shall be complete five (5) days after the same shall have been so mailed.

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Particular Provisions.

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

Loan Balancing.

If at any time Administrative Agent notifies Borrower that, in Administrative Agent’s reasonable judgment, the undisbursed balance of the Loan is insufficient to pay the remaining amount of such Costs, Borrower shall, at its option, either (i) within twenty (20) days of Administrative Agent’s notification as aforesaid, deposit with Administrative Agent an amount equal to such deficiency, which Administrative Agent shall from time to time apply, or allow Borrower to apply, to such Costs, (ii) pay for such Costs, as incurred, in the amount of such deficiency so that the amount of the Loan which remains to be disbursed shall be sufficient to pay all remaining such Costs, and Borrower shall furnish Administrative Agent with such evidence thereof as Administrative Agent shall reasonably require and (iii) within twenty (20) days of Administrative Agent’s notification as aforesaid, deliver to Administrative Agent an irrevocable unconditional letter of credit in the amount of such deficiency issued by an Approved LC Bank (as defined in the BLA), which letter of credit shall name Administrative Agent as the beneficiary thereof, shall be available at sight, shall otherwise be in form and substance reasonably acceptable to Administrative Agent and can be presented for payment in the Borough of Manhattan, New York (the “Project Loan Balancing LC”), which Administrative Agent shall from time to time draw on and apply to such Costs. Borrower hereby agrees that Administrative Agent shall have a lien on and security interest in, for the benefit of Lenders, any sums deposited pursuant to clause (i) above and that Borrower shall have no right to withdraw any such sums except for the payment of the aforesaid Costs as approved by Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed). Lenders shall have no obligation to make any further advances of proceeds of the Loan until (a) the sums required to be deposited pursuant to clause (i) above have been exhausted, (b) Borrower has actually paid such Costs pursuant to clause (ii) above or (c) the sums available to be drawn under any Project Loan Balancing LC have been exhausted, as the case may be, and, in any such case, the Loan is back “in balance”. Any such sums not used as provided in said clause (i) shall be released to Borrower or any Project Loan Balancing LC shall be returned to Borrower when and to the extent that Administrative Agent reasonably determines that the total remaining Costs to be incurred is less than or equal to the undisbursed balance of the Loan; provided, however, that should an Event of Default occur and be continuing at any time prior to such release or return, Administrative Agent shall, at the option of the Required Lenders, apply such amounts on deposit or available under the Project Loan Balancing LC either to such Costs or to the immediate reduction of outstanding principal and/or interest under the Notes.

Co-Arrangers.

Notwithstanding anything to the contrary, the Co-Arrangers named on the cover page of this Agreement shall not have any duties, responsibilities or liabilities under this Agreement in their capacities as the Co-Arrangers.

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IN WITNESS WHEREOF, Borrower, Lenders and Administrative Agent have caused this Agreement to be executed the day and year first above written.

ALEXANDER’S OF REGO PARK II, INC. a Delaware corporation
By:	/s/ Alan J. Rice
	Alan J. Rice Secretary

Address for notices:

c/o Alexander’s, In
210 Route 4 East
Paramus, New Jersey 07652
Attention:  Chief Finacial Officerc

and to:

Vornado Realty Trust
888 Seventh Avenue
New York, New York 10019
Attention:  Executive Vice President – Capital Markets

with a copy to:

Vornado Realty Trust
888 Seventh Avenue
New York, New York 10019
Attention:  Corporation Counsel

and to:

Sullivan & Cromwell, LLP
125 Broad Street
New York, New York 10004
Attention:  Arthur S. Adler, Esq.

SIGNATURES

PB CAPITAL CORPORATION (as Lender and as Administrative Agent)
By:	/s/ Ann S. Wilhelm
	Ann S. Wilhelm Senior Director
By:	/s/ Daniel T. Cerulli
	Daniel T. Cerulli Senior Director
Address for notices and Applicable Lending Office:
PB Capital Corporation 230 Park Avenue New York, New York 10169 Attention:  Real Estate Finance

SIGNATURES

NORDDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH (as Lender)
By:	/s/ J. Malte Stoeckhert
	J. Malte Stoeckhert Senior Director and Manager
By:	/s/ Dirk Ziemer
	Dirk Ziemer Vice President
Address for notices and Applicable Lending Office:
Norddeutsche Landesbank Girozentrale, New York Branch 1114 Avenue of the Americas, 37th Floor New York, New York 10036 Attention:  Real Estate Finance / Lita Kot

SIGNATURES

WELLS FARGO BANK, NATIONAL ASSOCIATION (as Lender)
By:	/s/ Yorick Starr
	Yorick Starr Vice President
Address for notices and Applicable Lending Office:
Wells Fargo Bank, National Association 40 West 57th Street New York, New York 10019 Attention:  Yorick Starr

SIGNATURES

LANDESBANK BADEN-WURTTEMBERG, NEW YORK BRANCH (as Lender)
By:	/s/ Leonard J. Crann
	Leonard J. Crann Head of Real Estate Finance Department
By:	/s/ Robert Dowling
	Robert Dowling Vice President
Address for notices and Applicable Lending Office:
Landesbank Baden-Wurremberg, New York Branch 280 Park Avenue 31st Floor, West Building New York, New York 10017 Attention:  Mr. Leonard J. Crann

NY 50214974v8

SIGNATURES

BANK OF IRELAND, CONNECTICUT BRANCH (as Lender)
By:	/s/ Conor Linehan
	Conor Linehan Director
By:	/s/ Declan Meagher
	Declan Meagher Managing Director
Address for notices and Applicable Lending Office:
Bank of Ireland, Connecticut Branch 300 First Stamford Place Stamford, Connecticut 06902 Attention:  Mr. Conor Linehan Mr. Declan Meagher

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NY 50214974v1

EXHIBIT A

Budget

Borrower:            Alexander’s of Rego Park II, Inc.
Premises:             61-01 Junction Boulevard, Borough of Queens, Queens, New York	Date:                   December 21, 2007

A	B	C		D
Item Nos.	Items of Cost	Total Costs (Estimates if no firm Contracts)		Loan Budget Amounts
1.	Land Cost	$	90,000,000		$	0
2.	Tenant Improvements		3,193,450			3,193,450
3.	Legal & Accounting		2,945,145			1,691,145
4.	Title Insurance		975,348			0
5.	Marketing		543,000			0
6.	Leasing Commissions		14,998,152			14,998,152
7.	Management Fee		260,000			260,000
8.	Development Fee		8,873,702			8,873,702
9.	Development Fee Holdback		8,873,702			8,873,702
10.	Mortgage Recording Tax		9,800,000			9,800,000
11.	Real Estate Taxes		1,768,000			1,100,000
12.	Hard Cost Contingency		11,295,148			11,295,148
13.	Soft Cost Contingency		2,857,224			2,857,224
14.	Miscellaneous		78,000			0
15.	Financing Costs		1,252,400			997,381
16.	Upfront Fee		1,750,000			1,052,367
17.	Loan Admin. Fee (PB) (paid monthly)		216,000			210,000
18.	IVI		93,600			93,600
19.	Capitalized Interest		32,919,129			32,919,129
Totals		$	192,692,000		$	98,215,000

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EXHIBIT B

Pending Disbursements Clause

Pending disbursement of the full proceeds of the loan secured by the insured mortgage or deed of trust described herein, this Policy insures only to the extent of the amount actually disbursed plus interest accrued thereon but increases up to the face amount of this Policy as disbursements are made in good faith and without knowledge of any defects in, or encumbrances prior to, the lien of the insured mortgage or deed of trust other than exceptions on Schedule B of this Policy not insured against hereunder.

Title shall be continued down to the date of each disbursement and the Company shall furnish to the Insured a continuation report which shall note (1) the new effective date and amount of this Policy, (2) all assessments, taxes, liens, encumbrances, leases, mortgages, easements and other items including survey variations, encroachments and setback violations then affecting the insured premises which have been filed of record or discovered by the Company since the original date of this Policy regardless of whether they affect the lien of the insured mortgage or deed of trust, (3) which of the aforesaid items have been filed or recorded since the date of the last preceding continuation report, and (4) which of said items are intended to be added as exceptions to the coverage of this Policy as to (a) all amounts secured by the insured mortgage or deed of trust and (b) only amounts secured by the insured mortgage or deed of trust advanced on or after the new effective date of this Policy.

In addition, each continuation search will notify the Insured of any liens which have been discharged by bonding, court deposit or any other means other than full payment.

In the event that the lien of the insured mortgage or deed of trust described herein is insured by more than one insurer, the Company agrees that it shall be bound by the continuation reports of a single company specified as “lead” insurer herein.

NY 50214974v8

EX-10

Exhibit 10.3

BLOCK: 2080

LOT: 101

ADDRESS: 61-01 Junction Boulevard, Queens, New York

COUNTY: Queens

Date:  December 21, 2007

SERIES I

BUILDING LOAN MORTGAGE, ASSIGNMENT OF LEASES

AND RENTS AND SECURITY AGREEMENT

(“this Mortgage”)

FROM

ALEXANDER’S OF REGO PARK II, INC.,

a corporation organized and existing under the laws of Delaware

(“Mortgagor”)

Address and Chief

Executive Office of Mortgagor: c/o Alexander’s, Inc.

210 Route 4 East

Paramus, New Jersey 07652

TO

PB CAPITAL CORPORATION

as administrative agent for Lenders (as hereinafter defined)

(together with its successors in such capacity, “Mortgagee”)

Address of Mortgagee: 230 Park Avenue

New York, New York 10169

Mortgage Amount: $249,285,000

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

Schiff Hardin LLP

900 Third Avenue, 23rd Floor

New York, New York 10022

Attention: Graham R. Hone, Esq.

NY 50214971v8

THE AMOUNT OF THIS MORTGAGE IS $249,285,000.

RECITAL

Mortgagor is the owner of the premises described in SCHEDULE A and proposes to erect substantial improvements thereon. In order to finance the construction thereof, Mortgagor has requested that Lenders provide a loan pursuant to the Loan Agreement identified below, of which up to the Mortgage Amount shall be secured by this Mortgage. Mortgagor has executed and delivered its notes, each dated the date hereof, obligating Mortgagor to pay, in the aggregate, the amount of the loan to be made pursuant to the Loan Agreement, or so much thereof as may be advanced from time to time in accordance with the terms of the Loan Agreement, a portion of which up to the Mortgage Amount is secured hereby. Said notes, as the same may hereafter be amended, modified, extended, severed, assigned, renewed, replaced or restated, and including any substitute or replacement notes executed pursuant to the Loan Agreement, are hereinafter referred to individually and collectively as the “Loan Note”. In addition, Mortgagor may after the date hereof enter into the Interest Rate Protection Agreement (as hereinafter defined) with Counterparty (as hereinafter defined), providing for one or more interest rate hedging transactions. The Loan Note and, if entered into, the Interest Rate Protection Agreement are hereinafter referred to individually and collectively as the “Note”. In the event the Interest Rate Protection Agreement is entered into and in order to avail itself of the benefits of this Mortgage, Counterparty shall be deemed to have appointed Mortgagee to act as its agent hereunder. Notwithstanding the language in the Granting Clause and Section 1.10 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 Lenders or 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.

CERTAIN DEFINITIONS AND RULES OF CONSTRUCTION

Mortgagor and Mortgagee agree that, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified.

“Additional Interest” means any and all sums that shall become due and payable by Mortgagor under the Interest Rate Protection Agreement.

“Business Day” has the meaning given to such term in the Loan Agreement.

“Chattels” means all fixtures, furnishings, fittings, appliances, apparatus, equipment, building materials and components, machinery, boilers, oil burners, power systems, heating, ventilating and air conditioning systems, elevators, and all other chattels and articles of personal property, of whatever kind or nature, and any additions thereto and any replacements, proceeds or products thereof (other than those owned by lessees or those claiming under or through lessees or leased by lessees from parties other than Mortgagor) now or at any time hereafter intended to be or actually affixed to, attached to, placed upon, or used in any way in connection with the complete and comfortable use, enjoyment, development, occupancy or operation of the Premises, and whether located on or off the Premises.

“Counterparty” means any Lender (but only a Lender) in its capacity as a party to any Interest Rate Protection Agreement, and its successors and assigns in such capacity.

“Declaration” has the meaning given to such term in the Loan Agreement.

“Default Rate” has the meaning given to such term in the Loan Agreement.

“Events of Default” means the events and circumstances described as such in Section 2.01.

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“Guarantor” means the party or parties, if any, identified as such in the Loan Agreement.

“Guaranty” has the meaning given to such term in the Loan Agreement.

“Hazardous Materials” means any pollutant, effluents, emissions, contaminants, toxic or hazardous wastes, materials or substances, as any of those terms are defined from time to time in or for the purposes of any relevant environmental law, rule, regulation, code, permit, order, notice, demand letter or other binding determination (hereinafter, “Environmental Laws”) including, without limitation, asbestos fibers and friable asbestos, polychlorinated biphenyls and any petroleum or hydrocarbon-based products or derivatives.

“Improvements” means all structures or buildings, and replacements thereof, to be erected or now or hereafter located upon the Premises, including all plant equipment, apparatus, machinery and fixtures of every kind and nature whatsoever forming part of said structures or buildings.

“Interest Rate Protection Agreement” means, collectively, the ISDA Master Agreement between Counterparty (that is a Lender) and Mortgagor with respect to interest rate hedging which may be hereafter entered into by and between Counterparty and Mortgagor, as any of the same may be amended, modified or supplemented from time to time, together with any and all “confirmations” under any thereof, provided, however, that the terms of each of the foregoing shall be subject to Mortgagee’s approval, not to be unreasonably withheld or delayed.

“Lenders” means, collectively, PB Capital, Norddeutsche Landesbank Girozentrale, New York Branch (“NordLB”), Wells Fargo Bank, National Association (“Wells Fargo”), Landesbank Baden-Württemberg, New York Branch (“LBBW”) and Bank of Ireland, Connecticut Branch (“Bank of Ireland”) and such other lending institutions who become “Lenders” pursuant to the Loan Agreement, together with their successors and permitted assigns in accordance with the terms of the Loan Agreement.

“Loan” means that portion of the loan in the Mortgage Amount made by Lenders to Mortgagor pursuant to the Loan Agreement and secured hereby.

“Loan Agreement” means that certain Building Loan Agreement, dated as of the date hereof, among Mortgagor, as Borrower, PB Capital, NordLB, Wells Fargo, LBBW and Bank of Ireland, as Lenders, and Mortgagee, as the same may hereafter be amended, modified or supplemented from time to time.

“Lockbox Agreement” has the meaning given to such term in the Loan Agreement.

“PB Capital” means PB Capital Corporation, in its individual capacity and not as Mortgagee.

“Permitted Exceptions” means any title exceptions or objections shown in the title policy insuring the lien hereof, including matters over which the Title Insurer (as defined in the Loan Agreement) has agreed to insure Mortgagee pursuant to endorsements to such title policy (which endorsements shall be in form and substance reasonably satisfactory to Mortgagee).

“Premises” means the premises described in SCHEDULE A including all of the easements, rights, privileges and appurtenances (including air or development rights) thereunto belonging or in anywise appertaining, and all of the estate, right, title, interest, claim or demand whatsoever of Mortgagor therein and in the streets and ways adjacent thereto, either in law or in equity, in possession or expectancy, now or hereafter acquired, and as used herein shall, unless the context otherwise requires, be deemed to include the Improvements.

“Premises Documents” means all reciprocal easement or operating agreements, declarations, development agreements, developer’s or utility agreements, and any similar such agreements or declarations now or hereafter affecting the Premises or any part thereof.

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“Required Lenders” has the meaning given to such term in the Loan Agreement.

All terms of this Mortgage which are not defined above shall have the meaning set forth elsewhere in this Mortgage.

Except as expressly indicated otherwise, when used in this Mortgage (i) “or” is not exclusive, (ii) “hereunder”, “herein”, “hereof” and the like refer to this Mortgage as a whole, (iii) “Article”, “Section” and “Schedule” refer to Articles, Sections and Schedules of this Mortgage, (iv) terms defined in the singular have a correlative meaning when used in the plural and vice versa, (v) a reference to a law or statute includes any amendment or modification to, or replacement of, such law or statute and (vi) a reference to an agreement, instrument or document means such agreement, instrument or document as the same may be amended, modified or supplemented from time to time in accordance with its terms. The cover page and all Schedules hereto are incorporated herein and made a part hereof. Any table of contents and the headings and captions herein are for convenience only and shall not affect the interpretation or construction hereof.

GRANTING CLAUSE

NOW, THEREFORE, Mortgagor, in consideration of the premises and in order to secure the payment of both the principal of, and the interest (including interest at the Default Rate and Additional Interest) and any other sums payable under, the Note, this Mortgage or the Loan Agreement and the performance and observance of all the provisions hereof and of the Note and the Loan Agreement, hereby gives, grants, bargains, sells, warrants, aliens, remises, releases, conveys, assigns, transfers, mortgages, hypothecates, deposits, pledges, sets over and confirms unto Mortgagee, all its estate, right, title and interest in, to and under any and all of the following described property (hereinafter, the “Mortgaged Property”) whether now owned or held or hereafter acquired:

(i) the Premises;

(ii) the Improvements;

(iii) the Chattels;

(iv) the Premises Documents;

(v)  all rents, royalties, issues, profits, revenue, income, recoveries, reimbursements and other benefits of the Mortgaged Property (hereinafter, the “Rents”) and all leases of the Mortgaged Property or portions thereof now or hereafter entered into and all right, title and interest of Mortgagor thereunder, including, without limitation, cash, letters of credit or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether such cash, letters of credit or securities are to be held until the expiration of the terms of such leases or applied to one or more of the installments of rent coming due immediately prior to the expiration of such terms, and including any guaranties of such leases and any lease cancellation, surrender or termination fees in respect thereof, all subject, however, to the provisions of Section 3.01;

(vi) all (a) development work product prepared in connection with the Premises, including, but not limited to, engineering, drainage, traffic, soil and other studies and tests; water, sewer, gas, electrical and telephone approvals, taps and connections; surveys, drawings, plans and specifications; and subdivision, zoning and platting materials; (b) building and other permits, rights, licenses and approvals relating to the Premises; (c) contracts and agreements (including, without limitation, contracts with architects and engineers, construction contracts and contracts for the maintenance, management or leasing of the Premises), contract rights, logos, trademarks, trade names, copyrights and other general intangibles used or useful in connection with the ownership, operation or occupancy of the Premises or any part thereof (excluding the name “Alexander’s” and any variants thereof); (d) financing commitments (debt or equity) issued to Mortgagor in respect

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of the Premises and all deposits and other amounts payable to Mortgagor thereunder; (e) contracts for the sale of all or any portion of the Premises, the Improvements or the Chattels, and all deposits and other amounts payable by the purchasers thereunder; (f) operating and other bank accounts, and monies therein, of Mortgagor relating to the Premises, including, without limitation, any accounts relating to real estate taxes or assessments; (g) interest rate protection agreements entered into by Mortgagor in respect of the Loan, whether pursuant to the Loan Agreement or otherwise, including, without limitation, the Interest Rate Protection Agreement; (h) commercial tort claims related to the Premises, the Improvements or the Chattels; (i) contracts for the purchase of inclusionary housing certificates and 421-a certificates; and (j) any inclusionary housing certificates and 421-a certificates, but in each case of the items set forth above in this paragraph (vi), to the extent assignable;

(vii)all rights of Mortgagor under promissory notes, letters of credit, electronic chattel paper, proceeds from accounts, payment intangibles, and general intangibles related to the Premises, as the terms “accounts”, “general intangibles”, and “payment intangibles” are defined in the applicable Uniform Commercial Code Article 9, as the same may be modified or amended from time to time;

(viii)           all other assets of Mortgagor related in any way to the Premises, subject to certain limitations that may be set forth herein; and

(ix) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims, including, without limitation, proceeds of insurance and condemnation awards, and all rights of Mortgagor to refunds of real estate taxes and assessments.

TO HAVE AND TO HOLD unto Mortgagee, its successors and assigns forever.

COVENANTS OF MORTGAGOR

Mortgagor covenants and agrees as follows:

Warranty of Title; Power and Authority.

Mortgagor warrants that it has a good and marketable title to an indefeasible fee estate in the Premises subject to no lien, charge or encumbrance except for Permitted Exceptions; that it owns the Chattels, all leases and the Rents in respect of the Mortgaged Property and all other personal property encumbered hereby free and clear of liens and claims; and that this Mortgage is and will remain a valid and enforceable lien on the Mortgaged Property subject only to the exceptions referred to above. Mortgagor has full power and lawful authority to mortgage the Mortgaged Property in the manner and form herein done or intended hereafter to be done. Mortgagor will preserve such title, and will forever warrant and defend the same to Mortgagee and will forever warrant and defend the validity and priority of the lien hereof against the claims of all persons and parties whomsoever.

Hazardous Materials.

Mortgagor represents and warrants that (i) except as disclosed in environmental reports provided to Mortgagee and to the best of Mortgagor’s knowledge, there has never been a release, deposit, disposal or leak of Hazardous Materials into or upon or under the Premises and the improvements thereon, including by means of burial, disposal, discharge, spillage, leakage, seepage, dumping and the like, that could reasonably be expected to result in liability under any Environmental Law or that has not been fully remediated in accordance with Environmental Law, (ii) neither it nor any portion of the Premises or improvements thereon is in violation of, or subject to any existing, pending or, to the best of Mortgagor’s knowledge, threatened investigation or proceeding by any governmental authorities under, any

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Environmental Law, (iii) there are no claims, litigation, administrative or other proceedings, whether actual or threatened, or judgments or orders, concerning Hazardous Materials relating in any way to the Premises or the improvements thereon and (iv) Mortgagor is not required by any Environmental Law to obtain any permits or licenses to construct or use any improvements, fixtures or equipment with respect to the Premises, or if any such permit or license is required such permit or license has been obtained or Mortgagor reasonably expects that such permit or license will be obtained in due course and will diligently pursue the obtaining thereof. Mortgagor will comply with all applicable Environmental Laws and will, at its sole cost and expense, promptly remove, or cause the removal of, any and all Hazardous Materials or the effects thereof at any time identified as being on, in, under or affecting the Premises which are in violation of any Environmental Law.

Flood Hazard Area.

Mortgagor represents that neither the Premises nor any part thereof is located in an area identified by the Secretary of the United States Department of Housing and Urban Development or by any applicable federal agency as having special flood hazards or, if it is, Mortgagor has obtained the insurance required by Section 1.09.

Further Assurances.

Mortgagor will, at its sole cost and expense, do, execute, acknowledge and deliver all and every such further acts, deeds, conveyances, mortgages, assignments, notices of assignment, transfers and assurances as Mortgagee shall from time to time reasonably require, for the better assuring, conveying, assigning, transferring and confirming unto Mortgagee the property and rights hereby conveyed or assigned or intended now or hereafter so to be, or which Mortgagor may be or may hereafter become bound to convey or assign to Mortgagee, or for carrying out the intention or facilitating the performance of the terms hereof, or for filing, registering or recording this Mortgage and, on demand, will execute and deliver, and hereby irrevocably authorizes Mortgagee to execute (including in Mortgagor’s name) and/or file, at any time and from time to time, one or more financing statements (including amendments), chattel mortgages or comparable security instruments, to evidence or perfect more effectively Mortgagee’s security interest in and the lien hereof upon the Chattels and other personal property encumbered hereby.

Information Reporting and Back-up Withholding.

Mortgagor will, at its sole cost and expense, do, execute, acknowledge and deliver all and every such acts, information reports, returns and withholding of monies as shall be necessary or appropriate to comply fully, or to cause full compliance, with all applicable information reporting and back-up withholding requirements of the Internal Revenue Code of 1986, as amended (including all regulations now or hereafter promulgated thereunder) in respect of the Premises and all transactions related to the Premises, and will at all times (i) at Mortgagee’s reasonable request, provide Mortgagee with reasonably satisfactory evidence of such compliance and (ii) notify Mortgagee of the information reported in connection with such compliance.

Filing and Recording of Documents.

Mortgagor forthwith upon the execution and delivery hereof, and thereafter from time to time, will cause this Mortgage, the Loan Agreement and any security instrument creating a lien or evidencing the lien hereof upon the Chattels and each instrument of further assurance to be filed, registered or recorded in such manner and in such places as may be required by any present or future law in order to publish notice of and fully to protect the lien hereof upon, and the interest of Mortgagee in, the Mortgaged Property.

Filing and Recording Fees and Other Charges.

Mortgagor will pay all filing, registration or recording fees, and all expenses incident to the execution and acknowledgment hereof, any mortgage supplemental hereto, any security instrument with respect to the Chattels, and any instrument of further assurance, and will pay all federal, state, county and municipal

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stamp taxes and other taxes (other than income, withholding, backup withholding, branch profits, franchise, similar taxes or taxes and fees in lieu of such taxes), duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of the Note, this Mortgage, any mortgage supplemental hereto, any security instrument with respect to the Chattels or any instrument of further assurance.

Payment and Performance of Loan Documents.

Mortgagor will punctually pay the principal and interest (including Additional Interest) and all other sums to become due in respect hereof and of the Note and the Loan Agreement at the time and place and in the manner specified therein, according to the true intent and meaning thereof, all in currency of the United States of America which at the time of such payment shall be legal tender for the payment of public and private debts. Mortgagor will duly and timely comply with and perform all of the terms, provisions, covenants and agreements contained in said documents and in all other documents or instruments executed or delivered by Mortgagor to Mortgagee or Lenders in connection with the Loan, and will permit no failures of performance thereunder.

Type of Entity; Maintenance of Existence; Compliance with Laws.

Mortgagor represents that its correct legal name, jurisdiction of formation/existence and chief executive office or, if applicable, sole place of business (or, if an individual, its principal residence) are as set forth on the cover page hereof. Mortgagor, if other than a natural person, further represents that it has delivered to Mortgagee a current, original certificate issued by the appropriate official of said jurisdiction evidencing such formation and existence, and agrees that it will, so long as it is owner of all or part of the Mortgaged Property, do all things necessary to preserve and keep in full force and effect its existence, franchises, rights and privileges as a business or stock corporation, partnership, limited liability company, trust or other entity under the laws of such jurisdiction. Mortgagor, if other than a natural person, will (a) not modify or amend such certificate or change its legal name or jurisdiction of formation/existence without Mortgagee’s prior consent, not to be unreasonably withheld, conditioned or delayed and (b) promptly notify Mortgagee of any change to the location of its chief executive office or, if applicable, sole place of business. Mortgagor, if an individual, will not change its legal name or principal residence without first giving Mortgagee at least thirty (30) days’ prior notice. Mortgagor will duly and timely comply with all laws, regulations, rules, statutes, orders and decrees of any governmental authority or court applicable to it or to the Mortgaged Property or any part thereof except where the failure to comply would not have a Material Adverse Effect (as defined in the Loan Agreement).

After-Acquired Property.

All right, title and interest of Mortgagor in and to all extensions, improvements, betterments, renewals, substitutes and replacements of, and all additions and appurtenances to, the Mortgaged Property, hereafter acquired by, or released to, Mortgagor or constructed, assembled or placed by Mortgagor on the Premises, and all conversions of the security constituted thereby, immediately upon such acquisition, release, construction, assembling, placement or conversion, as the case may be, and in each such case, without any further mortgage, conveyance, assignment or other act by Mortgagor, shall become subject to the lien hereof as fully and completely, and with the same effect, as though now owned by Mortgagor and specifically described in the Granting Clause hereof, but at any and all times Mortgagor will execute and deliver to Mortgagee any and all such further assurances, mortgages, conveyances or assignments thereof as Mortgagee may reasonably require for the purpose of expressly and specifically subjecting the same to the lien hereof.

Payment of Taxes and Other Charges.

Mortgagor, from time to time when the same shall become due and payable, will pay and discharge all taxes of every kind and nature (including real and personal property taxes and income, franchise, withholding, backup withholding, profits and gross receipts taxes), all general and special assessments, levies, permits, inspection and license fees, all water and sewer rents and charges, all charges for utilities, and all other charges (public or private) whether of a like or different nature, imposed upon or assessed

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against it or the Mortgaged Property or any part thereof or arising in respect of the occupancy, use or possession thereof. Mortgagor will, upon Mortgagee’s request, deliver to Mortgagee receipts evidencing (to Mortgagee’s reasonable satisfaction) the payment of all such taxes, assessments, levies, fees, rents and other charges imposed upon or assessed against it or the Mortgaged Property or any portion thereof.

Upon the occurrence and during the existence of an Event of Default, Mortgagee may, at its option, to be exercised by thirty (30) days’ notice to Mortgagor, require the deposit by Mortgagor, at the time of each payment of an installment of interest or principal under the Note (but no less often than monthly), of an additional amount sufficient to discharge the obligations under this clause (a) when they become due (other than with respect to income, withholding, backup withholding, profits and franchise taxes, similar taxes and taxes and fees in lieu of such taxes). The determination of the amount so payable and of the fractional part thereof to be deposited with Mortgagee, so that the aggregate of such deposits shall be sufficient for this purpose, shall be made by Mortgagee in its reasonable discretion. Such amounts shall be held by Mortgagee without interest and applied to the payment of the obligations in respect of which such amounts were deposited or, at Mortgagee’s option, to the payment of said obligations in such order or priority as Mortgagee shall determine, on or before the respective dates on which the same or any of them would become delinquent. If one (1) month prior to the due date of any of the aforementioned obligations the amounts then on deposit therefor shall be insufficient for the payment of such obligation in full, Mortgagor within ten (10) days after demand shall deposit the amount of the deficiency with Mortgagee. Nothing herein contained shall be deemed to affect any right or remedy of Mortgagee under any provisions hereof or of any statute or rule of law to pay any such amount and to add the amount so paid, together with interest at the Default Rate, to the indebtedness hereby secured.

Payment of Mechanics and Materialmen.

Mortgagor will pay, from time to time when the same shall become due, all lawful claims and demands of mechanics, materialmen, laborers, and others which, if unpaid, might result in, or permit the creation of, a lien on the Mortgaged Property or any part thereof, and in general will do or cause to be done everything necessary so that the lien hereof shall be fully preserved, at the cost of Mortgagor and without expense to Mortgagee. Without limiting the generality of the foregoing, Mortgagor will discharge, bond over, or have the Title Insurer insure over in a manner reasonably satisfactory to Mortgagee any mechanic’s lien within thirty (30) days of notice of the same (and in any event prior to the next advance to be made under the Loan Agreement) in case of the filing of any claims for lien or proceedings for the enforcement thereof.

Good Faith Contests.

Nothing in this Section 1.07 shall require the payment or discharge of any obligation imposed upon Mortgagor by this Section so long as Mortgagor shall in good faith and at its own expense contest the same or the validity thereof by appropriate legal proceedings which shall operate to prevent the collection thereof or other realization thereon and the sale or forfeiture of the Mortgaged Property or any part thereof to satisfy the same; provided, however, that (i) during such contest Mortgagor shall, at Mortgagee’s option, provide security reasonably satisfactory to Mortgagee, assuring the discharge of Mortgagor’s obligation hereunder and of any additional charge, penalty or expense arising from or incurred as a result of such contest, except that in the case of claims described in paragraph (b) of this Section 1.07, Mortgagor shall bond over, or have the Title Insurer insure over in a manner reasonably satisfactory to Mortgagee, any such claim prior to the next advance to be made under the Loan Agreement, and (ii) if at any time payment of any obligation imposed upon Mortgagor by clause (a) above shall become necessary to prevent the delivery of a tax deed or other instrument conveying the Mortgaged Property or any portion thereof because of non-payment, then Mortgagor shall pay the same in sufficient time to prevent the delivery of such tax deed or other instrument. In the case of claims described in paragraph (b) of this Section 1.07, if Mortgagor shall fail, within sixty (60) days after becoming aware of same, either (i) to discharge or (ii) to contest claims asserted and give security in the manner provided in this paragraph (c), or having commenced to contest the same, and having given such security, shall fail to prosecute such contest with diligence, or to maintain such security for its full amount, or upon adverse conclusion of any such contest, to cause any judgment or decree to be satisfied and lien to be released, then and in any such event, Mortgagee may, at its election (but shall not be required to), procure the release and discharge of any claim

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and any judgment or decree thereon and, further, may in its sole discretion effect any settlement or compromise of the same, and any amounts so expended by Mortgagee, including premiums paid or security furnished in connection with the issuance of any surety company bonds, shall constitute advances covered by Section 1.10. In settling, compromising or discharging any claims for lien, Mortgagee shall not be required to inquire into the validity or amount of any such claim. Notwithstanding the foregoing, Lenders shall have no obligation to make disbursements of Loan proceeds under the terms of the Loan Agreement at any time prior to such time as Mortgagor shall have discharged or contested any claims in accordance with this paragraph (c).

Taxes on Mortgagee or Lenders.

Mortgagor will pay any taxes (except income, withholding, backup withholding, branch profits, franchise, similar taxes or taxes and fees in lieu of such taxes) imposed on Mortgagee or any Lender by reason of their interests in the Note or this Mortgage, but only to the extent provided for in the Loan Agreement.

Insurance.

Mortgagor will at all times (except as provided herein) provide, maintain and keep in force:

from the time that initial construction begins (soil removal for environmental remediation not to be considered beginning construction) on the new construction, builder’s risk insurance policies insuring the Premises, Improvements and Chattels for not less than 100% of the completed project insurable replacement cost value of the Improvements, which insurance shall be written on a “completed value” form (100% non-reporting) or its equivalent and shall include endorsements providing replacement cost coverage, agreed amount and/or coinsurance waiver, and granting permission to occupy. Such policies shall insure against loss or damage by fire and lightning; against loss or damage by other risks (including acts of terrorism) embraced by coverage of the type now known as “All Risk” or Special Peril property insurance, as is available in the insurance market place as of the closing date, endorsed to provide replacement cost coverage with agreed amount and/or co-insurance waiver, coverage for demolition and increased cost of construction due to the enforcement of laws regulating reconstruction following a loss in amounts not less than $3,000,000 per occurrence, and coverage for flood and earthquake in amounts not less than $5,000,000 per occurrence and in the annual aggregate for each peril; and against such other risks or hazards as Mortgagee from time to time may reasonably designate in an amount sufficient to prevent Mortgagee or Mortgagor from becoming a co-insurer under the terms of the applicable policies, but in any event in an amount not less than 100% of the then full replacement cost of the Improvements (exclusive of the cost of excavations, foundations and footings below the lowest basement floor) without deduction for physical depreciation. Such builder’s risk insurance shall also cover: (i) loss of materials, equipment, machinery, and supplies which become part of the completed project whether on-site, in transit, or stored off-site, or loss of any temporary structures, sidewalks, retaining walls, and underground property; and (ii) soft costs including coverage for 100% of the interest expense during the period of the construction and coverage for recurring expenses, including, but not limited to, plans, specifications, blueprints and models, real estate taxes, real estate commissions, advertising, architectural and engineering supervisory costs, legal and accounting costs, and delayed completion business income/rental interruption on an actual loss sustained basis. Mortgagor’s obligation to obtain terrorism coverage pursuant to the above and paragraph (ii), (iii) and (iv) below shall be qualified as follows: If the United States Government sponsored reinsurance backstop under the Terrorist Risk Insurance Act is no longer in effect, Mortgagor shall be required to provide terrorism insurance coverage with the respect to the Improvements in the minimum amount equal to the greater of (a) the full insurable replacement cost value of the Improvements and one (1) year lost rents value, or if such terrorism insurance coverage is not commercially available at Commercially Reasonable Terrorism Insurance Rates (as defined below), then in a minimum amount equal to the amount of terrorism insurance coverage which is commercially available at Commercially Reasonable Terrorism Insurance Rates. For purposes herein, “Commercially Reasonable Terrorism Insurance Rates” means, with respect to any amount of terrorism insurance coverage (inclusive of loss to property

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and lost rents), the rate which Administrative Agent determines to be reasonable; Mortgagor and Administrative Agent acknowledging and agreeing that (1) any annual premium with respect to terrorism insurance coverage which does not exceed one-half of one percent (0.5%) of the total insurable values with respect to loss of property and lost rents shall be deemed reasonable and (2) no inference shall be drawn that premiums in excess of the amount referred to in clause (1) above for terrorism insurance coverage are to be deemed unreasonable;

Property insurance covering any improvements on the Premises, including 100% of the insurable replacement cost value of all tenant improvements and betterments that any Lease (as defined in the Loan Agreement) or Premises Document requires Mortgagor to insure, against all risks of loss to the Improvements customarily covered by so-called “Cause of Loss – Special Form” policies as available in the insurance market as of the date of substantial completion of the Improvements (and against such additional risks of loss as may be customarily covered by such policies after such date). Each Cause of Loss – Special Form insurance policy shall cover: (i) 100% of the insurable replacement cost value of the Improvements; (ii) 100% of the insurable replacement cost value of all tenant improvements and betterments that any Lease or Premises Document requires Mortgagor to insure; (iii) loss of the undamaged portion of the Improvements and additional expense of demolition and increased cost of construction, including, without limitation, increased costs that arise from any changes in laws or other legal requirements with respect to such restoration, in an amount as is acceptable to Administrative Agent. Any Cause of Loss – Special Form insurance policy shall contain an agreed amount or a coinsurance waiver endorsement and a replacement cost value endorsement without reduction for depreciation. Cause of Loss - Special Form policies shall cover at least the following perils: building collapse, fire, flood, back-up of sewers and drains, water damage, tsunami, windstorm, earthquake, earth movement, landslide, mudslide, subsidence, acts of terrorism (certified and non-certified), impact of vehicles and aircraft, lightning, malicious mischief, and vandalism (earthquake, earth movement, landslide, mudslide, subsidence and flood may have a sub-limit of such amount as is acceptable to Administrative Agent). Such insurance policy shall name Mortgagor as the Insured and shall also name Administrative Agent as Mortgagee under a non-contributing New York standard mortgagee clause or equivalent endorsement satisfactory to Administrative Agent for real property and as Lender Loss Payee as respects business income/loss of rents (if any);

upon completion of construction of the Improvements, policies of insurance insuring the Premises for the same perils as outlined in (ii) above for business income and rents loss insurance in an amount equal to not less than one (1) year’s gross “rental value” of the Improvements. “Rental value” as used herein is defined as the sum of (A) the total anticipated gross rental income from tenant occupancy of such buildings as furnished and equipped, (B) the amount of all charges which are the legal obligation of tenants and which would otherwise be the obligation of Mortgagor and (C) the fair rental value of any portion of such buildings which is occupied by Mortgagor. This coverage shall also include an extended period of indemnity of not less than 365 days. Mortgagor hereby assigns the proceeds of such insurance to Mortgagee, to be applied by Mortgagee in payment of the interest and principal on the Note, insurance premiums, taxes, assessments and private impositions and any other operating expense of the Property or charge described in clause (B) above until such time as the Improvements shall have been restored and placed in full operation, at which time, provided Mortgagor is not then in default hereunder, the balance of such insurance proceeds, if any, held by Mortgagee shall be paid over to Mortgagor;

comprehensive boiler and machinery insurance providing coverage for all mechanical and electrical equipment in amounts not less than $20,000,000 per accident (during periods of construction, this coverage shall be provided once electrical equipment is energized);

if all or part of the Premises are located in an area identified by the Secretary of the United States Department of Housing and Urban Development or by any applicable federal agency as a flood hazard area, flood insurance in an amount at least equal to the maximum limit of coverage available under the National Flood Insurance Act of 1968. Regardless of the flood zone, the

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minimum amount of coverage required by this subsection for loss caused by floods shall not be less than $50,000,000or such other amount as is acceptable to Administrative Agent;

commercial general liability insurance on an “occurrence” basis against claims for “personal injury” liability, including, without limitation, bodily injury, death or property damage liability, products and completed operations liability with a limit of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate on a per location basis in the event of “personal injury” to any number of persons or of damage to property arising out of one “occurrence”. Such policies shall name Mortgagee as additional insured by an endorsement, and shall contain cross-liability and severability of interest clauses, all reasonably satisfactory to Mortgagee;

commercial automobile liability insurance covering all owned (if any) hired and non-owned automobiles in amounts not less than $1,000,000 per accident;

workers’ compensation and employers’ liability (and if required, disability) insurance covering the statutory requirements of the jurisdiction in which the Premises are located;

commercial umbrella liability insurance in excess of the liability insurance required in clauses (v), (vi) and (vii) above in amounts not less than $50,000,000 per occurrence and in the annual aggregate per location. During the period of vertical construction of the Improvements and at any time thereafter that substantial construction is underway, the amount of umbrella liability insurance shall be $75,000,000 except that if a controlled insurance program (CIP) permitted in paragraph (c) below is provided, the amount of liability required of Mortgagor under this paragraph (ix) shall be $19,000,000 when substantial construction is underway; and

such other insurance, and in such amounts, as may from time to time be reasonably required by Mortgagee against the same or other insurable hazards.

Mortgagor shall cause the following insurance to be maintained prior to the start of construction and during the construction of Improvements (or the restoration thereof following a loss):

by parties engaged in such construction:

(w)       commercial general liability insurance (including products and completed operations liability for a minimum of two (2) years following completion of construction) in amounts not less than $1,000,000 per occurrence and $2,000,000 aggregate per project;

(x)        commercial automobile liability insurance in amounts not less than $1,000,000 per accident;

(y)        workers’ compensation and employers’ liability insurance complying with the statutory requirements of the jurisdiction in which the Premises are located;

(z)        umbrella liability insurance in excess of the insurance required in clause (b)(i)(x) and (y) in amounts as follows:

(I)        for the construction manager/general contractor, limits of not less than $75,000,000 per occurrence and in the aggregate per project; if aggregate limits of umbrella liability insurance are shared, the amount of umbrella liability insurance for construction shall be increased to $80,000,000;

(II)       for other sub-trade contractors and their sub-subcontractors, amounts not less than good insurance practice would dictate based on the hazard/risk associated with their operations; and

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(III)      all sub-trade contractors and sub-subcontractors shall name Mortgagor and Mortgagee as additional insured and provide certificates of insurance and other evidence of coverage as may be required by Mortgagor or Mortgagee; and

Mortgagor shall cause all architects and engineers engaged in the design and construction of the project to provide professional errors and omissions liability insurance in amounts not less than $1,000,000 per claim and $2,000,000 in the aggregate except that the lead architect shall have $3,000,000 per claim and in the aggregate.

Liability insurance required of Mortgagor and general contractor/construction manager in Section 1.09(a)(ix) and (b)(i)(z)(I) above may be satisfied through a controlled insurance program (CIP) providing not less than $100,000,000 in liability limits for Mortgagor and contractors working at the construction site and shall include an extended reporting period for products/completed operations equal to the statutory period during which claims can be made following completion of the Improvements. The insurance coverage permitted by this paragraph shall include the liability insurance extensions required of the Mortgagorand contractors above.

All policies of insurance required under this Section 1.09 (i) shall be issued by companies having Best’s ratings of A:X or better as published in Best’s latest rating guide that are licensed in the jurisdiction in which the Premises are located (or where the failure to be so licensed does not affect the validity of the policy), (ii) except as provided for above, shall be subject to the approval of Mortgagee (such approval not to be unreasonably withheld, conditioned or delayed) as to amount, content, form and expiration date, (iii) except for the liability policies described in clauses (a)(vi) through (ix) above, shall contain a Non-Contributory Standard Mortgagee Clause and Lender’s Loss Payable Endorsement, or their equivalents, in favor of Mortgagee, and (iv) shall provide that the proceeds thereof shall be payable to Mortgagee. Mortgagee shall be furnished with the original or duplicate original of each policy required hereunder, which policies shall provide that they shall not lapse, nor be modified to reduce coverage or cancelled, without thirty (30) days’ written notice to Mortgagee, except for non-payment of premium in which case ten (10) days’ notice of cancellation is required. At least five (5) days prior to expiration of any policy required hereunder, Mortgagor shall furnish Mortgagee appropriate proof of issuance of a policy continuing in force the insurance covered by the policy so expiring. Mortgagor shall furnish to Mortgagee, promptly upon request, receipts or other satisfactory evidence of the payment of the premiums on such insurance policies. In the event that Mortgagor does not deposit with Mortgagee a new certificate or policy of insurance at least five (5) days prior to the expiration of any expiring policy and evidence of payment of premiums when due thereon, then Mortgagee may, but shall not be obligated to, procure such insurance and pay the premiums therefor, and Mortgagor agrees to repay to Mortgagee the premiums thereon promptly on demand, together with interest thereon at the Default Rate.

Mortgagor hereby assigns to Mortgagee all proceeds of any insurance required to be maintained by this Section 1.09 which Mortgagor may be entitled to receive for loss or damage to the Premises, Improvements or Chattels or for soft costs including interest expense. All such insurance proceeds shall be payable to Mortgagee, and Mortgagor hereby authorizes and directs any affected insurance company to make payment thereof directly to Mortgagee. Mortgagor shall give prompt notice to Mortgagee of any casualty, whether or not of a kind required to be insured against under the policies to be provided by Mortgagor hereunder, such notice to generally describe the nature and cause of such casualty and the extent of the damage or destruction. Mortgagor may settle, adjust or compromise any claims for loss, damage or destruction, regardless of whether or not there are insurance proceeds available or whether any such insurance proceeds are sufficient in amount to fully compensate for such loss or damage, subject to Mortgagee’s prior consent, which shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Mortgagee shall have the right to join Mortgagor in settling, adjusting or compromising any loss of $2,000,000 or more. Mortgagor hereby authorizes the application or release by Mortgagee of any insurance proceeds under any policy of insurance, subject to the other provisions hereof. The application or release by Mortgagee of any insurance proceeds shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.

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In the event of the foreclosure hereof or other transfer of the title to the Mortgaged Property in extinguishment, in whole or in part, of the indebtedness secured hereby, all right, title and interest of Mortgagor in and to any insurance policy, or premiums or payments in satisfaction of claims or any other rights thereunder then in force, shall pass to the purchaser or grantee notwithstanding the amount of any bid at such foreclosure sale. Nothing contained herein shall prevent the accrual of interest as provided in the Note on any portion of the principal balance due under the Note until such time as insurance proceeds are actually received and applied to reduce the principal balance outstanding.

Mortgagor shall not take out separate insurance concurrent in form or contributing in the event of loss with that required to be maintained under this Section 1.09 unless Mortgagee is included thereon as a named insured with loss payable to Mortgagee under standard mortgage endorsements of the character and to the extent above described. Mortgagor shall promptly notify Mortgagee whenever any such separate insurance is taken out and shall promptly deliver to Mortgagee the policy or policies of such insurance.

Prior to the subordination of this Mortgage to the Declaration pursuant to Section 9.01 of the Loan Agreement, any and all monies received as payment which Mortgagor may be entitled to receive for loss or damage to the Premises, Improvements or Chattels under any insurance maintained pursuant to this Section 1.09 (other than proceeds under the policies required by clause (a)(iii) above, which shall be paid over to Mortgagee and deposited in the Collection Account (as defined in the Lockbox Agreement)), less Mortgagee’s reasonable expenses for collecting and, if applicable, disbursing the insurance proceeds, or otherwise incurred in connection therewith shall be disbursed to Mortgagor for restoration in the same manner and subject to the same terms and conditions as advances of proceeds of the Loan under the Loan Agreement, provided that Mortgagee shall have reasonably determined that the restoration of the Improvements can be completed by the then Maturity Date of the Note at a cost which does not exceed the amount of available insurance proceeds or, in the event that such proceeds are reasonably determined by Mortgagee to be inadequate, Mortgagee shall have received either (x) a cash deposit from Mortgagor equal to the excess of said estimated cost of restoration over the amount of said available proceeds or (y) Guarantor’s agreement, so long as Guarantor is then in compliance with the financial covenants set forth in the Guaranty (whether or not then in effect), that it shall be unconditionally liable therefor, such agreement to be reasonably satisfactory in form and substance to Mortgagee and further that the Leases described in Section 4.01(e)(25) of the Loan Agreement shall remain in full force and effect during and after the completion of such restoration without abatement of rent beyond the time required for restoration. If the conditions for the advance of insurance proceeds for restoration set forth in the preceding sentence (the “Restoration Conditions”) are not satisfied within one hundred twenty (120) days of Mortgagee’s receipt thereof or if the actual restoration shall not have been commenced within such period, the Required Lenders shall have the option on not less than thirty (30) days’ notice to apply such insurance proceeds to the payment of the Note and to interest accrued and unpaid thereon in such order and proportions as the Required Lenders may elect, provided, however, that if prior to the expiration of such thirty (30) day period such restoration commences and the Restoration Conditions are satisfied, the insurance proceeds shall be available for restoration. After this Mortgage is so subordinated to the Declaration, if the Declaration requires that insurance proceeds be applied to restoration, the proceeds shall be so applied and if the terms and conditions set forth in the Declaration for the disbursement from time to time as restoration progresses of said proceeds are inconsistent with terms and conditions for advances of proceeds of the Loan, the terms and provisions of the Declaration shall control. Notwithstanding that the Declaration requires that the insurance proceeds be applied for restoration, the Restoration Conditions as between Mortgagor, Lenders and Mortgagee remain conditions to be satisfied by Mortgagor which if not satisfied shall be deemed to constitute an Event of Default and Mortgagee shall have the option of exercising any of the remedies set forth in Article II of this Mortgage. If the Declaration does not require that the insurance proceeds be applied to restoration, the proceeds shall be divided among all condominium unit owners in proportion to their respective percentage interest in the common elements and that portion of the proceeds due to Mortgagor shall be paid over to Mortgagee and the Required Lenders shall have the option at any time thereafter to apply same to the payment of the Note and interest accrued and unpaid thereon in such order and proportions as the Required Lenders may elect.

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Protective Advances by Mortgagee.

If Mortgagor shall fail to perform any of the covenants contained herein beyond the expiration of any applicable notice and grace periods, Mortgagee may, after ten (10) days’ notice to Mortgagor of Mortgagee’s intent to make such advance, except in an emergency in which event notice shall not be required, make advances to perform the same on its behalf and all sums so advanced shall be a lien upon the Mortgaged Property and shall be secured hereby. Mortgagor will repay on demand all sums so advanced on its behalf together with interest thereon at the Default Rate. The provisions of this Section shall not prevent any default in the observance of any covenant contained herein from constituting an Event of Default.

Visitation and Inspection.

Mortgagor will permit Mortgagee and any of Lenders, by their agents, representatives and attorneys, to visit and inspect all or any part of the Mortgaged Property on Business Days and at reasonable times and upon reasonable prior notice, subject to the rights of tenants and Mortgagor’s usual and customary safety requirements. Mortgagor will keep, and cause Guarantor to keep, adequate records and books of account in accordance with GAAP and, subject to applicable securities and other Laws relating to disclosure of material information, including Regulation FD, will permit, and cause Guarantor to permit, Mortgagee and any of Lenders, by their agents, accountants and attorneys, to examine its and Guarantor’s records and books of account and make copies thereof or extracts therefrom, and to discuss its or Guarantor’s affairs, finances and accounts with the officers or general partners, as the case may be, of Mortgagor or Guarantor, at such reasonable times as may be requested by Mortgagee or any of Lenders, as the case may be.

Estoppel Certificates.

Mortgagor, within five (5) business days of receipt of a written request, will furnish a statement, duly acknowledged, of the amount due whether for principal or interest on the Loan and whether to its knowledge any offsets, counterclaims or defenses exist against the indebtedness secured hereby, but no more than twice in any twelve (12) month period. Notwithstanding the foregoing, during the existence of any Event of Default, there shall be no limit on the number of any such requests by Mortgagee.

Maintenance of Premises and Improvements.

Mortgagor will not commit any waste on the Premises from and after completion of construction or make any change in the use of the Premises which will in any way increase any ordinary fire or other hazard arising out of construction or operation. Mortgagor will, at all times, maintain the Improvements and Chattels in good operating order and condition and will promptly make, from time to time, all repairs, renewals, replacements, additions and improvements in connection therewith which are needful or desirable to such end. The Improvements shall not be demolished or substantially altered, nor shall any Chattels be removed without Mortgagee’s prior consent except where appropriate replacements free of superior title, liens and claims are immediately made of value at least equal to the value of the removed Chattels or except where the same is obsolete or no longer necessary for the Property.

Condemnation.

Mortgagor, immediately upon obtaining knowledge of the institution or pending institution of any proceedings for the condemnation of the Premises or any portion thereof, will notify Mortgagee thereof. If the amount of the award or compensation is reasonably estimated to be in excess of $500,000, Mortgagee may participate in any such proceedings and may be represented therein by counsel of its selection. Mortgagor from time to time will deliver to Mortgagee all instruments requested by it to permit or facilitate such participation. In the event of such condemnation proceedings, the award or compensation payable is hereby assigned to and shall be paid to Mortgagee. Mortgagee shall be under no obligation to question the amount of any such award or compensation and may accept the same in the amount in which the same shall be paid. Prior to the subordination of this Mortgage to the Declaration pursuant to Section 9.01 of the Loan

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Agreement, the proceeds of any award or compensation so received shall be paid over to Mortgagee and deposited in the Collection Account, in any case under this Section, less Mortgagee’s reasonable expenses for collecting and, if applicable, disbursing the award, or otherwise incurred in connection therewith, and disbursed to Mortgagor from time to time for restoration of the Improvements in the same manner and subject to the same terms and conditions as advances of proceeds of the Loan under the Loan Agreement, provided that Mortgagee shall have reasonably determined that the restoration of the Improvements to an economically viable architectural whole can be completed by the then Maturity Date of the Note at a cost which does not exceed the amount of available condemnation award proceeds or, in the event that such proceeds are reasonably determined by Mortgagee to be inadequate, Mortgagee shall have received either (x) from Mortgagor a cash deposit equal to the excess of said estimated cost of restoration over the amount of said available proceeds or (y) Guarantor’s agreement, so long as Guarantor is then in compliance with the financial covenants set forth in the Guaranty (whether or not then in effect), that it shall be unconditionally liable therefor, such agreement to be reasonably satisfactory in form and substance to Mortgagee and further that the Leases described in Section 4.01(e)(25) of the Loan Agreement shall remain in full force and effect during and after the completion of such restoration without abatement of rent beyond the time required for restoration. If the conditions for the advance of condemnation award proceeds for restoration set forth in the preceding sentence (the “Condemnation Restoration Conditions”) are not satisfied within one hundred twenty (120) days of Mortgagee’s receipt thereof or if the actual restoration shall not have been commenced within such period, Required Lenders shall have the option on not less than thirty (30) days’ notice to apply such condemnation award proceeds to the payment of the Note and to interest accrued and unpaid thereon (at the rate of interest provided therein regardless of the rate of interest payable on the award by the condemning authority) in such order and proportions as the Required Lenders may elect, provided, however, that if prior to the expiration of such thirty (30) day period such restoration commences and the Condemnation Restoration Conditions are satisfied, the condemnation proceeds shall be available for restoration. After this Mortgage is so subordinated to the Declaration, if the Declaration requires that condemnation proceeds be applied to restoration, the proceeds shall be so applied and if the terms and conditions set forth in the Declaration for the disbursement from time to time as restoration progresses of said proceeds are inconsistent with terms and conditions for advances of proceeds of the Loan, the terms and provisions of the Declaration shall control. Notwithstanding that the Declaration requires that the condemnation proceeds be applied for restoration, the Condemnation Restoration Conditions as between Mortgagor, Lenders and Mortgagee remain conditions to be satisfied by Mortgagor which if not satisfied shall be deemed to constitute an Event of Default and Mortgagee shall have the option of exercising any of the remedies set forth in Article II of this Mortgage. If the Declaration does not require that the condemnation proceeds be applied to restoration, the proceeds shall be divided among all condominium unit owners in proportion to their respective percentage interest in the common elements and that portion of the proceeds due to Mortgagor shall be paid over to Mortgagee and the Required Lenders shall have the option at any time thereafter to apply same to the payment of the Note and interest accrued and unpaid thereon in such order and proportions as the Required Lenders may elect.

Leases.

Mortgagor will not (i) execute an assignment of the rents or any part thereof from the Premises without Mortgagee’s prior consent, (ii) enter into, or amend or modify, any lease, other than in accordance with the terms and conditions set forth in the Loan Agreement, (iii) except where the lessee is in material default thereunder, or where the tenant has the unilateral right to do so under its lease, terminate or consent to the cancellation or surrender of any lease of the Premises or of any part thereof, now existing or hereafter to be made, (iv) accept prepayments of any installments of rents to become due under such leases, except prepayments in the nature of security for the performance of the lessees thereunder or (v) modify, release or terminate any guaranties of any such lease, except in conjunction with an amendment of such lease entered into in accordance with the terms of the Loan Documents.

Mortgagor will not execute any lease of all or a substantial portion of the Premises except for actual occupancy by the lessee thereunder, and will at all times promptly and faithfully perform, or cause to be performed, in a commercially reasonable manner in all material respects all of the covenants, conditions and agreements contained in all leases of the Premises or portions thereof now or hereafter existing, on the part of the lessor thereunder to be kept and performed and will at all times, in a commercially reasonable

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manner, do all things necessary to compel performance by the lessee under each lease of all material obligations, covenants and agreements by such lessee to be performed thereunder. If any of such leases provide for the giving by the lessee of certificates with respect to the status of such leases, Mortgagor shall exercise its right to request such certificates within five (5) days of any demand therefor by Mortgagee, shall use commercially reasonable efforts to obtain same and shall deliver copies thereof to Mortgagee promptly upon receipt, provided the foregoing shall not be requested until the first anniversary hereof or, in the absence of an Event of Default, more frequently than once in any twelve (12) month period thereafter.

Each lease of the Premises, or of any part thereof, hereafter entered into shall provide that, in the event of the enforcement by Mortgagee of the remedies provided for hereby or by law, the lessee thereunder will, upon request of any person succeeding to the interest of Mortgagor as a result of such enforcement, automatically become the lessee of said successor in interest, without change in the terms or other provisions of such lease, provided, however, that said successor in interest shall not be bound by (i) any payment of rent or additional rent for more than one (1) month in advance, except prepayments in the nature of security for the performance by said lessee of its obligations under said lease or (ii) any amendment or modification of the lease made without the consent of Mortgagee or such successor in interest except to the extent the same are permitted under the Loan Agreement. Each lease shall also provide that, (x) the lease is subordinate to this Mortgage, subject to Mortgagee’s obligation to deliver non-disturbance agreements with respect to such lease set forth in the Loan Agreement, and (y) upon request by said successor in interest, such lessee shall execute and deliver an instrument or instruments confirming such attornment.

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.

All tenant security deposits (whether cash or a letter of credit) in respect of the Premises shall be held and applied as contemplated in the Loan Agreement.

Premises Documents.

Mortgagor shall (a) use all commercially reasonable efforts to do all things necessary to cause the due compliance and faithful performance in all material respects by the other parties to the Premises Documents of all obligations and agreements by such other parties to be complied with and performed thereunder, (b) not amend, modify or supplement the Premises Documents without Mortgagee’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed and (c) not terminate or consent to the termination of the Premises Documents.

Utilities.

Mortgagor will not, without the prior consent of Mortgagee, sell or contract to sell, or enter into an option to sell, or exchange, assign, convey, transfer possession of (including, without limitation, by lease) or otherwise dispose of all or any part of the utilities, utility commitments or other agreements or rights of any nature relating to the utilities, drainage ditches and/or treatment plants associated with the Mortgaged Property. Mortgagor further covenants and agrees that it will take any such action and execute, acknowledge, deliver and record and/or file any and all instruments as may be necessary, desirable or proper to keep any existing or future utility commitments covering the Mortgaged Property in a current and valid condition and to keep the existing utility capacity for the Mortgaged Property at or above the level required for the contemplated uses thereof. As used herein, the term “utilities” includes, without limitation, water, gas, electricity and storm and sanitary sewer.

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 costs of completing the “Improvements” as defined in the Loan Agreement (or, for the purpose of paying the “cost of improvement”, as such quoted

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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 and Lenders 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.

Interest Rate Protection.

Mortgagor agrees that upon request of Mortgagee it shall enter into an assignment of any interest rate protection agreements entered into by Mortgagor (if any), including, without limitation, the Interest Rate Protection Agreement, pursuant to which Mortgagor shall collaterally assign to Mortgagee all of its right, title and interest to receive any and all payments thereunder (and any related guarantee, if any) and shall deliver to Mortgagee an acknowledgment and agreement (either in such interest rate protection agreement or by separate instrument, in each case in form and substance reasonably satisfactory to Mortgagee) of the counterparty to such interest rate protection agreement acknowledging such assignment and agreeing to make any payments payable under or pursuant to such agreement directly to Mortgagee. If Mortgagee receives any payments under such agreement (other than a payment by reason of a Termination Event (as defined in such interest rate protection agreement) or any other payment during the existence of an Event of Default), Mortgagee shall hold and deposit the same in a cash collateral account as additional security for the Loan and the Other Loan and apply the same to interest payable on the next occurring payment date. If Mortgagee receives any payments under any such interest rate protection agreement during the existence of an Event of Default (including, without limitation, any payment by reason of a Termination Event), Mortgagee shall have the right to apply same to any portion of the sums secured hereby in any order it desires. If Mortgagee receives any payment by reason of a Termination Event under any such interest rate protection agreement, for so long as no Event of Default exists, such payment shall be held in a cash collateral account and shall be available in connection with the acquisition of a new interest rate protection agreement.

EVENTS OF DEFAULT AND REMEDIES

Events of Default and Certain Remedies.

If one or more of the following Events of Default shall happen, that is to say:

if (i) default shall be made in the payment of any principal under the Note when and as the same becomes due and payable, whether by maturity or by acceleration or otherwise, as herein or in the Note or Loan Agreement provided; or (ii) default shall be made in the payment of any interest under the Note or the Loan Agreement, the administrative fee payable to Mortgagee pursuant to Section 6.19 of the Loan Agreement and any fees payable to the Construction Consultant pursuant to the Loan Agreement, in any such case, when and as the same shall become due and payable, whether as part of any payment or prepayment or otherwise, in each case, as herein or in the Note or Loan Agreement provided, and such default shall have continued for a period of five (5) Business Days; or (iii) default shall be made in the payment of any other sums under the Note or the Loan Agreement, in any such case, when and as the same shall become due and payable, whether as part of any payment or prepayment or otherwise, in each case, as herein or in the Note or Loan Agreement provided, and such default shall have continued for a period of ten (10) days after notice to Mortgagor; or (iv) default shall be made in the payment of any tax or other charge required by Section 1.07 to be paid and said default shall have continued for a period of twenty (20) days after notice to Mortgagor; or

if default shall be made in the due observance or performance of any covenant, condition or agreement in the Note, the Loan Agreement, this Mortgage, any guaranty executed by Guarantor

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or in any other document executed or delivered to Mortgagee or Lenders in connection with the Loan (other than any such covenant, condition or agreement specifically provided for elsewhere in this Section 2.01), and such default shall have continued for a period of thirty (30) days after notice thereof shall have been given to Mortgagor by Mortgagee, or, in the case of such other documents, such shorter grace period, if any, as may be provided for therein; provided, however, that Mortgagor shall have such additional time in which to cure such default as is reasonably necessary if, by the reason of the nature thereof, such default cannot be cured by the payment of money and cannot by due diligence reasonably be wholly cured within said thirty (30) day or shorter period, as applicable, and Mortgagor has made diligent efforts to cure such default within the period aforesaid and thereafter prosecutes the curing of such default diligently and continuously to a cure within ninety (90) days thereafter, provided, further, that in no event shall such default result in an extension of the Completion Date or the Maturity Date (both as defined in the Loan Agreement); or

if any representation or warranty made by Mortgagor in Section 1.01 shall be incorrect, or if any other representation or warranty made to Mortgagee or Lenders in this Mortgage, the Loan Agreement, any guaranty executed by Guarantor, or in any other document, certificate or statement executed or delivered to Mortgagee or Lenders in connection with the Loan shall be incorrect in any material respect when made or remade; provided, however, that if any such representation or warranty is incorrect, Mortgagor shall promptly notify Mortgagee thereof and if such incorrect representation or warranty was made by the Person making same without knowledge to the contrary and is capable of being cured by such Person, such incorrect representation or warranty shall not be an Event of Default hereunder so long as Mortgagor (or such other Person) diligently proceeds to cure and cures such incorrect representation or warranty within thirty (30) days after notice from Mortgagee thereof such that the original representation or warranty made shall not then be incorrect in any material respect; provided, further, that if such incorrect representation or warranty is such that it cannot be cured by the payment of money, and if the cure thereof requires work to be performed, acts to be done or conditions to be removed which cannot, by their nature, with due diligence, be performed, done or removed, as the case may be, within such thirty (30) day period and Mortgagor (or such other Person) shall have commenced to cure such failure within such thirty (30) day period, such period shall be extended for so long as shall be required by Mortgagor (or such Person) to cure such incorrect representation or warranty, so long as during all such periods Mortgagor (or such other Person) diligently proceeds to effect such cure, provided, however, that in no event shall such thirty (30) day period be extended pursuant to the foregoing provisions for a period of in excess of one hundred twenty (120) days; or

if by order of a court of competent jurisdiction, a trustee, receiver or liquidator of the Mortgaged Property or any part thereof, or of Mortgagor shall be appointed and such order shall not be discharged or dismissed within ninety (90) days after such appointment; or

if Mortgagor shall file a petition in bankruptcy or for an arrangement or for reorganization pursuant to the Federal Bankruptcy Act or any similar federal or state law, or if, by decree of a court of competent jurisdiction, Mortgagor shall be adjudicated a bankrupt, or be declared insolvent, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or shall consent to the appointment of a receiver or receivers of all or any part of its property; or

if any of the creditors of Mortgagor shall file a petition in bankruptcy against Mortgagor or for reorganization of Mortgagor pursuant to the Federal Bankruptcy Act or any similar federal or state law, and if such petition shall not be discharged or dismissed within ninety (90) days after the date on which such petition was filed; or

if final judgment (i.e., beyond any right of appeal) for the payment of money in excess of $250,000 shall be rendered against Mortgagor and Mortgagor shall not discharge the same, cause it to be discharged or bond over it within ninety (90) days from the entry thereof, or shall not

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appeal therefrom or from the order, decree or process upon which or pursuant to which said judgment was granted, based or entered, and secure a stay of execution pending such appeal; or

if any of the events enumerated in clauses (d) through (f) of this Section 2.01 shall happen to Guarantor; or

if there shall occur a default which is not cured within the applicable grace period or cure period, if any, under any mortgage, deed of trust or other security instrument covering all or part of the Mortgaged Property regardless of whether any such mortgage, deed of trust or other security instrument is prior or subordinate hereto; it being further agreed by Mortgagor that an Event of Default hereunder shall constitute an Event of Default under any such mortgage, deed of trust or other security instrument held by Mortgagee; or

if there shall occur a default which is not cured within the applicable grace period or cure period, if any, under any of the Premises Documents; or if any of the Premises Documents is amended, modified, supplemented or terminated without Mortgagee’s prior consent (if required under the Loan Documents); or

if any transfer, sale, conveyance, other disposition, encumbrance or pledge occurs in violation of Section 6.25 of the Loan Agreement; or

if, except as contemplated or permitted by the Loan Agreement, Mortgagor shall encumber, or agree to encumber, in any manner, either voluntarily or involuntarily, by operation of law or otherwise, all or any portion of the Mortgaged Property, or any interest or rights therein (including air or development rights) without, in any such case, the prior written consent of the Required Lenders. As used in this clause, “encumber” shall include, without limitation, the placing or permitting the placing of any mortgage, deed of trust, assignment of rents or other security device (Any consent under this clause and the immediately preceding clause by Lender may be granted or denied in each such Lender’s sole and absolute discretion and, if consent should be given, any such transfer or encumbrance shall be subject hereto and to any other documents which evidence or secure the Loan, and, if a transfer, any such transferee shall assume all of Mortgagor’s obligations hereunder and thereunder and agree to be bound by all provisions and perform all obligations contained herein and therein; consent to one such transfer or encumbrance shall not be deemed to be a waiver of the right to require consent to future or successive transfers or encumbrances); or

if Mortgagor at any time shall fail to maintain the insurance required by Section 1.09; or

if Mortgagor fails to remain in compliance with the covenant set forth in Section 9.03(i) of the Loan Agreement; or

if Mortgagor breaches any of its covenants and agreements set forth in Section 1.14(a)(i); or

if there shall occur a default, including a default in the payment of Additional Interest, by Mortgagor under the Interest Rate Protection Agreement, if any, which is not cured within the applicable grace or cure period, if any, provided for therein; or

if Mortgagor fails to complete construction of the Improvements on or before the Completion Date; or

if, in the event the Mortgaged Property fails to receive the benefits of the Industrial and Commercial Incentive Program under New York State Real Property Tax Law, Article 4, Mortgagor fails to reduce the Total Commitment (as defined in the Loan Agreement) by the ICIP Reduction Amount (as defined in the Loan Agreement) in the manner and when required by Section 6.27 of the Loan Agreement;

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then and in every such case:

I.    Mortgagee, by notice to Mortgagor, may declare the entire principal of the Note then outstanding (if not then due and payable), and all accrued and unpaid interest (including Additional Interest) and other sums in respect thereof, to be due and payable immediately, and upon any such declaration the principal of the Note and said accrued and unpaid interest (including Additional Interest) and other sums shall become and be immediately due and payable, anything herein or in the Note or the Loan Agreement to the contrary notwithstanding.

II.   Mortgagee personally, or by its agents or attorneys, may enter into and upon all or any part of the Premises, and each and every part thereof, and is hereby given a right and license and appointed Mortgagor’s attorney-in-fact and exclusive agent to do so, and may exclude Mortgagor, its agents and servants wholly therefrom; and having and holding the same, may use, operate, manage and control the Premises and conduct the business thereof, either personally or by its superintendents, managers, agents, servants, attorneys or receivers; and upon every such entry, Mortgagee, at the expense of the Mortgaged Property, from time to time, either by purchase, repairs or construction, may maintain and restore the Mortgaged Property, whereof it shall become possessed as aforesaid, may complete the construction of the Improvements and in the course of such completion may make such changes in the contemplated Improvements as it may deem desirable and may insure the same; and likewise, from time to time, at the expense of the Mortgaged Property, Mortgagee may make all necessary or proper repairs, renewals and replacements and such useful alterations, additions, betterments and improvements thereto and thereon as to it may deem advisable; and in every such case Mortgagee shall have the right to manage and operate the Mortgaged Property and to carry on the business thereof and exercise all rights and powers of Mortgagor with respect thereto either in the name of Mortgagor or otherwise as it shall deem best; and Mortgagee shall be entitled to collect and receive the Rents and every part thereof, all of which shall for all purposes constitute property of Mortgagor; and in furtherance of such right Mortgagee may collect the rents payable under all leases of the Premises directly from the lessees thereunder upon notice to each such lessee that an Event of Default exists hereunder accompanied by a demand on such lessee for the payment to Mortgagee of all rents due and to become due under its lease, and Mortgagor FOR THE BENEFIT OF MORTGAGEE AND EACH SUCH LESSEE hereby covenants and agrees that the lessee shall be under no duty to question the accuracy of Mortgagee’s statement of default and shall unequivocally be authorized to pay said rents to Mortgagee without regard to the truth of Mortgagee’s statement of default and notwithstanding notices from Mortgagor disputing the existence of an Event of Default such that the payment of rent by the lessee to Mortgagee pursuant to such a demand shall constitute performance in full of the lessee’s obligation under the lease for the payment of rents by the lessee to Mortgagor; and after deducting the expenses of conducting the business thereof and of all maintenance, repairs, renewals, replacements, alterations, additions, betterments and improvements and amounts necessary to pay for taxes, assessments, insurance and prior or other proper charges upon the Mortgaged Property or any part thereof, as well as just and reasonable compensation for the services of Mortgagee and for all attorneys, counsel, agents, clerks, servants and other employees by it engaged and employed, Mortgagee shall apply the moneys arising as aforesaid, first, to the payment of the principal of the Note and the interest thereon, when and as the same shall become payable and in such order and proportions as Mortgagee shall elect and second, to the payment of any other sums required to be paid by Mortgagor hereunder or under the Loan Agreement.

III. Mortgagee, with or without entry, personally or by its agents or attorneys, insofar as applicable, 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

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forth in Section 3.06), and all estate, right, title and interest, claim and demand therein, and right of redemption 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.

Other Matters Concerning Sales.

Mortgagee may adjourn from time to time any sale by it to be made hereunder or by virtue hereof by announcement at the time and place appointed for such sale or for such adjourned sale or sales; and, except as otherwise provided by any applicable provision of law, Mortgagee, without further notice or publication, may make such sale at the time and place to which the same shall be so adjourned.

Upon the completion of any sale or sales made by Mortgagee under or by virtue of this Article II, Mortgagee, or an officer of any court empowered to do so, shall execute and deliver to the accepted purchaser or purchasers a good and sufficient instrument or instruments conveying, assigning and transferring all estate, right, title and interest in and to the property and rights sold. Mortgagee is hereby appointed the true and lawful attorney irrevocable of Mortgagor, in its name and stead, to make all necessary conveyances, assignments, transfers and deliveries of the Mortgaged Property and rights so sold and for that purpose Mortgagee may execute all necessary instruments of conveyance, assignment and transfer, and may substitute one or more persons with like power, Mortgagor hereby ratifying and confirming all that its said attorney or such substitute or substitutes shall lawfully do by virtue hereof. Nevertheless, Mortgagor, if requested by Mortgagee, shall ratify and confirm any such sale or sales by executing and delivering to Mortgagee or to such purchaser or purchasers all such instruments as may be advisable, in the judgment of Mortgagee, for the purpose, and as may be designated in such request. Any such sale or sales made under or by virtue of this Article II, whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, shall operate to divest all the estate, right, title, interest, claim and demand whatsoever, whether at law or in equity, of Mortgagor in and to the properties and rights so sold, and shall be a perpetual bar both at law and in equity against Mortgagor and against any and all persons claiming or who may claim the same, or any part thereof from, through or under Mortgagor.

In the event of any sale or sales made under or by virtue of this Article II (whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale), the entire principal of, and interest and other sums on, the Note, if not previously due and payable, and all other sums required to be paid by Mortgagor pursuant hereto or to the Loan Agreement, immediately thereupon shall, anything in any of said documents to the contrary notwithstanding, become due and payable.

The purchase money, proceeds or avails of any sale or sales made under or by virtue of this Article II, together with any other sums which then may be held by Mortgagee hereunder, whether under the provisions of this Article II or otherwise, shall be applied as follows:

First: To the payment of the costs and expenses of such sale, including reasonable compensation to Mortgagee’s agents and counsel, and of any judicial proceedings wherein the same may be made, and of all liabilities, advances and reasonable expenses made or incurred by Mortgagee or Lenders hereunder, and also including reasonable attorneys’ fees, expenses and costs of investigation, all as actually incurred and including, without limitation, reasonable attorneys’ fees, costs and expenses of investigation incurred in appellate proceedings or in any action or

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participation in, or in connection with, any case or proceeding under any applicable bankruptcy or insolvency law, together with interest at the Default Rate on all advances made by Mortgagee or Lenders, and of all taxes, assessments or other charges, except any taxes, assessments or other charges subject to which the Mortgaged Property shall have been sold.

Second: To the payment of the whole amount then due, owing or unpaid upon the Note for principal and interest, with interest on the unpaid principal at the Default Rate from and after the happening of any Event of Default, in such order and amounts as Mortgagee may elect.

Third: To the payment of any other sums required to be paid by Mortgagor pursuant to any provision hereof or of the Note or the Loan Agreement, including all expenses, liabilities and advances made or incurred by Mortgagee hereunder or in connection with the enforcement hereof, together with interest at the Default Rate on all such advances.

Fourth: To the payment of the surplus, if any, to whomsoever may be lawfully entitled to receive the same.

Upon any sale or sales made under or by virtue of this Article II, whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, Mortgagee may bid for and acquire the Mortgaged Property or any part thereof and in lieu of paying cash therefor may make settlement for the purchase price by crediting upon the indebtedness secured hereby the net sales price after deducting therefrom the expenses of the sale and the costs of the action and any other sums which Mortgagee is authorized to deduct hereunder.

Payment of Amounts Due.

In case an Event of Default shall have happened and be continuing, then, upon demand of Mortgagee, Mortgagor will pay to Mortgagee the whole amount which then shall have become due and payable on the Note, for principal or interest (including Additional Interest) or both, as the case may be, and after the happening of said Event of Default will also pay to Mortgagee interest at the Default Rate on the then unpaid principal of the Note, and the sums required to be paid by Mortgagor pursuant to any provision hereof or of the Loan Agreement, and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to Mortgagee’s agents and counsel and any reasonable expenses incurred by Mortgagee hereunder. In the event Mortgagor shall fail forthwith to pay all such amounts upon such demand, Mortgagee shall be entitled and empowered to institute such action or proceedings at law or in equity as may be advised by its counsel for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against Mortgagor and collect, out of the property of Mortgagor wherever situated, as well as out of the Mortgaged Property, in any manner provided by law, moneys adjudged or decreed to be payable.

Mortgagee shall be entitled to recover judgment as aforesaid either before, after or during the pendency of any proceedings for the enforcement of the provisions hereof; and the right of Mortgagee to recover such judgment shall not be affected by any entry or sale hereunder, or by the exercise of any other right, power or remedy for the enforcement of the provisions hereof, or the foreclosure of the lien hereof; and in the event of a sale of the Mortgaged Property, and of the application of the proceeds of sale, as herein provided, to the payment of the debt hereby secured, Mortgagee shall be entitled to enforce payment of, and to receive all amounts then remaining due and unpaid upon, the Note, and to enforce payment of all other charges, payments and costs due hereunder or under the Loan Agreement or otherwise in respect of the Loan, and shall be entitled to recover judgment for any portion of the debt remaining unpaid, with interest at the Default Rate. In case of proceedings against Mortgagor in insolvency or bankruptcy or any proceedings for its reorganization or involving the liquidation of its assets, then Mortgagee shall be entitled to prove the whole amount of principal, interest and other sums due upon the Note to the full amount thereof, and all other payments, charges and costs due hereunder or under the Loan Agreement or otherwise in respect of the Loan, without deducting therefrom any proceeds obtained from the sale of the whole or any part of the Mortgaged Property, provided, however, that in no case shall Mortgagee receive a greater

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amount than such principal and interest and such other payments, charges and costs from the aggregate amount of the proceeds of the sale of the Mortgaged Property and the distribution from the estate of Mortgagor.

No recovery of any judgment by Mortgagee and no levy of an execution under any judgment upon the Mortgaged Property or upon any other property of Mortgagor shall affect in any manner or to any extent, the lien hereof upon the Mortgaged Property or any part thereof, or any liens, rights, powers or remedies of Mortgagee hereunder, but such liens, rights, powers and remedies of Mortgagee shall continue unimpaired as before.

Any moneys thus collected by Mortgagee under this Section 2.03 shall be applied by Mortgagee in accordance with the provisions of clause (d) of Section 2.02.

Actions; Receivers.

After the happening of any Event of Default and during its continuance, immediately upon the commencement of any action, suit or other legal proceedings by Mortgagee to obtain judgment for the principal of, or interest on, the Note and other sums required to be paid by Mortgagor pursuant to any provision hereof or of the Loan Agreement, or of any other nature in aid of the enforcement of the Note or hereof or of the Loan Agreement, Mortgagor will (a) waive the issuance and service of process and enter its voluntary appearance in such action, suit or proceeding and (b) if required by Mortgagee, consent to the appointment of a receiver or receivers of all or part of the Mortgaged Property and of any or all of the Rents in respect thereof. After the happening of any Event of Default and during its continuance, upon the commencement of any proceedings to foreclose this Mortgage or to enforce the specific performance hereof or in aid thereof or upon the commencement of any other judicial proceeding to enforce any right of Mortgagee, Mortgagee shall be entitled, as a matter of right, if it shall so elect, without the giving of notice to any other party and without regard to the adequacy or inadequacy of any security for the indebtedness secured hereby, forthwith either before or after declaring the unpaid principal of the Note to be due and payable, to the appointment of such a receiver or receivers.

Mortgagee’s Right to Possession.

Notwithstanding the appointment of any receiver, liquidator or trustee of Mortgagor, or of any of its property, or of the Mortgaged Property or any part thereof, Mortgagee shall be entitled to retain possession and control of all property now or hereafter held hereunder.

Remedies Cumulative.

No remedy herein conferred upon or reserved to Mortgagee is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity or by statute. No delay or omission of Mortgagee to exercise any right or power accruing upon any Event of Default shall impair any such right or power, or shall be construed to be a waiver of any such Event of Default or any acquiescence therein; and every power and remedy given hereby to Mortgagee may be exercised from time to time as often as may be deemed expedient by Mortgagee. Nothing herein or in the Note or the Loan Agreement shall affect the obligation of Mortgagor to pay the principal of, and interest and other sums on, the Note and the Loan Agreement in the manner and at the time and place therein respectively expressed.

Moratorium Laws; Right of Redemption.

Mortgagor will not at any time insist upon, or plead, or in any manner whatever claim or take any benefit or advantage of any stay or extension or moratorium law, any exemption from execution or sale of the Mortgaged Property or any part thereof, wherever enacted, now or at any time hereafter in force, which may affect the covenants and terms of performance hereof, nor claim, take or insist upon any benefit or advantage of any law now or hereafter in force providing for the valuation or appraisal of the Mortgaged

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Property, or any part thereof, prior to any sale or sales thereof which may be made pursuant to any provision herein, or pursuant to the decree, judgment or order of any court of competent jurisdiction; nor, after any such sale or sales, claim or exercise any right under any statute heretofore or hereafter enacted to redeem the property so sold or any part thereof and Mortgagor hereby expressly waives all benefit or advantage of any such law or laws, and covenants not to hinder, delay or impede the execution of any power herein granted or delegated to Mortgagee, but to suffer and permit the execution of every power as though no such law or laws had been made or enacted. Mortgagor, for itself and all who may claim under it, waives, to the extent that it lawfully may, all right to have the Mortgaged Property marshaled upon any foreclosure hereof.

Mortgagor’s Use and Occupancy after Default.

During the continuance of any Event of Default and pending the exercise by Mortgagee of its right to exclude Mortgagor from all or any part of the Premises, Mortgagor agrees to pay the fair and reasonable rental value for the use and occupancy of any portion of the Premises which are in its or any of its affiliates’ actual possession for such period and, upon default of any such payment, will vacate and surrender such possession of the Premises to Mortgagee or to a receiver, if any, and in default thereof may be evicted by any summary action or proceeding for the recovery of possession of premises for non-payment of rent, however designated.

Mortgagee’s Rights Concerning Application of Amounts Collected.

Notwithstanding anything to the contrary contained herein, upon the occurrence and during the continuance of an Event of Default, Mortgagee may apply, to the extent permitted by law, any amount collected hereunder to principal, interest (including Additional Interest) or any other sum due under the Note or the Loan Agreement or otherwise in respect of the Loan in such order and amounts, and to such obligations, as Mortgagee shall elect in its sole and absolute discretion.

MISCELLANEOUS

Assignment of Rents.

This Mortgage constitutes a present, absolute, unconditional and irrevocable assignment of all of the Rents now or hereafter accruing, and Mortgagor, without limiting the generality of the Granting Clause hereof, specifically hereby presently, absolutely, unconditionally and irrevocably assigns, transfers and sets over all of the Rents now or hereafter accruing to Mortgagee. The aforesaid assignment shall be effective immediately upon the execution hereof and is not conditioned upon the occurrence of any Event of Default or any other contingency or event, provided, however, that Mortgagee hereby grants to Mortgagor the right and license to collect and receive the Rents as they become due, and not in advance, so long as no Event of Default exists hereunder. Immediately upon the occurrence of any such Event of Default, the foregoing right and license shall be automatically terminated and of no further force or effect and, if any such Event of Default is cured, as evidenced by a certificate from Mortgagee to such effect, such right and license shall be automatically reinstated. Nothing contained in this Section or elsewhere herein shall be construed to make Mortgagee a mortgagee in possession unless and until Mortgagee actually takes possession of the Mortgaged Property, nor to obligate Mortgagee to take any action or incur any expense or discharge any duty or liability under or in respect of any leases or other agreements relating to the Mortgaged Property or any part thereof.

Security Agreement.

This Mortgage constitutes a security agreement under the applicable Uniform Commercial Code with respect to the Chattels and such other of the Mortgaged Property which is personal property. Mortgagor agrees that it will not terminate or amend any financing statements filed in connection with the Loan

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without Mortgagee’s prior consent. In addition to the rights and remedies granted to Mortgagee by other applicable law or hereby, Mortgagee shall have all of the rights and remedies with respect to the Chattels and such other personal property as are granted to a secured party under the applicable Uniform Commercial Code. Upon Mortgagee’s request, Mortgagor shall promptly and at its expense assemble the Chattels and such other personal property and make the same available to Mortgagee at a convenient place acceptable to Mortgagee. Mortgagor shall pay to Mortgagee on demand, with interest at the Default Rate, any and all expenses, including reasonable attorneys’ fees, incurred by Mortgagee in protecting its interest in the Chattels and such other personal property and in enforcing its rights with respect thereto. Any notice of sale, disposition or other intended action by Mortgagee with respect to the Chattels and such other personal property sent to Mortgagor in accordance with the provisions hereof at least five (5) days prior to such action shall constitute reasonable notice to Mortgagor. The proceeds of any such sale or disposition, or any part thereof, may be applied by Mortgagee to the payment of the indebtedness secured hereby in such order and proportions as Mortgagee in its discretion shall deem appropriate.

Application of Certain Payments.

In the event that all or any part of the Mortgaged Property is encumbered by one or more mortgages held by Mortgagee, Mortgagor hereby irrevocably authorizes and directs Mortgagee to apply any payment received by Mortgagee in respect of any note secured hereby or by any other such mortgage to the payment of such of said notes as Mortgagee shall elect in its sole and absolute discretion, and Mortgagee shall have the right to apply any such payment in reduction of principal and/or interest and in such order and amounts as Mortgagee shall elect in its sole and absolute discretion without regard to the priority of the mortgage securing the note so repaid or to contrary directions from Mortgagor or any other party.

Severability.

In the event any one or more of the provisions contained herein or in the Note or the Loan Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, but this Mortgage shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein or therein, provided, however, that if such provision held to be invalid, illegal or unenforceable relates to the payment of any sum under the Note or any other material monetary sum, then Mortgagee may, at the option of the Required Lenders, declare the indebtedness of such specific sums only to be immediately due and payable.

Modifications and Waivers.

No provision hereof may be changed, waived, discharged or terminated orally or by any other means except as provided in Section 8.12 of the Loan Agreement. Any agreement hereafter made by Mortgagor and Mortgagee relating hereto shall be superior to the rights of the holder of any intervening or subordinate lien or encumbrance.

Notices, Etc.

All notices, demands, consents, approvals and statements required or permitted hereunder shall be in writing and shall be deemed to have been sufficiently given or served for all purposes when presented personally, three (3) days after mailing by registered or certified mail, postage prepaid, or one (1) day after delivery to a nationally recognized overnight courier service (provided such courier service is instructed to deliver the next Business Day) providing evidence of the date of delivery, if to Mortgagor at (a) its address stated above and (b) Vornado Realty Trust, 888 Seventh Avenue, New York, New York 10019, Attention: Executive Vice President - Capital Markets; if to Mortgagee to the attention of its Real Estate Finance office at its address stated above, or at such other address of which a party shall have notified the party giving such notice in accordance with the provisions of this Section.

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Successors and Assigns.

All of the grants, covenants, terms, provisions and conditions herein shall run with the land and shall apply to, bind and inure to the benefit of, the respective successors and assigns of Mortgagor and Mortgagee.

Limitation on Interest.

Regardless of any provision contained herein or in any of the other Loan documents, the total liability for payments in the nature of interest shall not exceed the applicable limits now or hereafter imposed by any applicable state or federal interest rate laws to which Mortgagee and/or Lenders may be subject. If any payments in the nature of interest, fees and other charges made hereunder or under the Note or other Loan documents are held to be in excess of the applicable limits imposed by any such applicable state or federal interest rate laws, it is agreed that any such amount held to be in excess shall be considered payment of principal under the Note and the indebtedness evidenced thereby shall be reduced by such amount in the inverse order of maturity so that the total liability for payments in the nature of interest, fees and other charges shall not exceed the applicable limits imposed by any such applicable state or federal interest rate laws in compliance with the desires of Mortgagor, Mortgagee and Lenders.

Counterparts.

This Mortgage may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same mortgage.

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.

Lenders’ Sale of Interests in Loan.

Mortgagor recognizes that any Lender may sell and transfer interests in the Loan to one or more participants or assignees and that all documentation, financial statements, appraisals and other data, or copies thereof, relevant to Mortgagor, any Guarantor or the Loan, may be exhibited to and retained by any such participant or assignee or prospective participant or assignee, subject to the confidentiality provision under which the foregoing are delivered to such Person pursuant to the Loan Agreement.

No Merger of Interests.

Unless expressly provided otherwise, in the event that ownership hereof and title to the fee and/or leasehold estates in the Premises encumbered hereby shall become vested in the same person or entity, this Mortgage shall not merge in said title but shall continue to be and remain a valid and subsisting lien on said estates in the Premises for the amount secured hereby.

CERTAIN WAIVERS.

MORTGAGOR AND, BY ITS ACCEPTANCE HEREOF, MORTGAGEE FOR ITSELF AND ON BEHALF OF LENDERS HEREBY EXPRESSLY AND UNCONDITIONALLY WAIVE, IN CONNECTION WITH ANY FORECLOSURE OR SIMILAR ACTION OR PROCEDURE BROUGHT BY MORTGAGEE OR LENDERS HEREUNDER, ANY AND EVERY RIGHT IT MAY HAVE TO A TRIAL BY JURY.

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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 or Lenders, as applicable, shall (i) execute and 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 for recording, (ii) in the case of an assignment of this Mortgage, deliver the Notes, together with an allonge to the assignee in question and (iii) execute and deliver such other instruments of assignment, termination or release (as applicable), including appropriate UCC-3 termination statements, as Mortgagor may reasonably request, to evidence such satisfaction, release or assignment, as applicable. As a condition to any such satisfaction or assignment, Mortgagor covenants and agrees to pay Mortgagee’s reasonable fees and expenses (including reasonable attorneys’ fees and expenses) in connection therewith. Upon any such satisfaction or assignment, Mortgagee and Lenders shall, automatically and without the need for any 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 and Lenders 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.

Other Liens; Subrogation.

In the event any or all of the proceeds of the indebtedness secured hereby have been used to extinguish, extend or renew any indebtedness heretofore existing against the Mortgaged Property or to satisfy any indebtedness or obligation secured by a lien or encumbrance of any kind, such proceeds have been advanced by Lenders and/or Mortgagee at Mortgagor’s request, and, to the extent of such funds so used, the indebtedness hereby secured shall be subrogated to all of the rights, claims, liens, titles and interest heretofore existing against the Mortgaged Property to secure the indebtedness or obligation so extinguished, paid, extended or renewed, and the former rights, claims, liens, title and interests, if any, shall not be waived but rather shall be continued in full force and effect and in favor of Lenders and/or Mortgagee, as the case may be, and shall not be merged with the lien and security for the repayment of the indebtedness hereby secured.

Intentionally Omitted.

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 units, 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.

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IN WITNESS WHEREOF, this Mortgage has been duly executed and delivered by Mortgagor.

ALEXANDER’S OF REGO PARK II, INC. a Delaware corporation
By:	/s/ Alan J. Rice
	Alan J. Rice Secretary

STATE OF NEW YORK )

: ss.:

COUNTY OF NEW YORK )

On the 19^th day of December in the year 2007, before me, the undersigned, a notary public in and for said state, personally appeared Alan J. Rice, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

By:	/s/ Ilona Jacqueline Williams
	Ilona Jacqueline Williams Notary Public
	My Commission Expires:  July 3, 2010

SCHEDULE A

PARCEL I- Block 2080 Lot 101

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

BEGINNING at the corner formed by the intersection of the southerly side of Horace Harding Expressway, formerly Horace Harding Boulevard and Nassau Boulevard, 260 feet wide, and the easterly side of Junction Boulevard, 80 feet wide, as said Horace Harding Expressway and Junction Boulevard are now laid out on the Final Topographical Map of the City of New York;

RUNNING THENCE easterly along the southerly side of Horace Harding Expressway, 456.35 feet to the westerly side of 97th Street, 60 feet wide, as shown on the Final Topographical Map of the City of New York, prior to the adoption of the Alteration Map No.3530 on December 20, 1951;

THENCE southerly along the said westerly side of 97th Street, 630 feet to the northerly side of 62nd Drive, 80 feet wide, as shown on the Final Topographical Map of the City of New York, prior to the adoption of the Alteration Map No.4822 on March 2, 1987 on Cal. No. 1;

THENCE westerly along the said northerly side of 62nd Drive, 456.35 feet to the easterly side of Junction Boulevard;

THENCE northerly along the easterly of Junction Boulevard, 630 feet to the point or place of BEGINNING.

EXCEPTING THEREFROM those portions of Horse Brook Creek as it winded and turned through the above described premises which are 10 feet wide and which lie between the westerly line of 97th Street as it was laid out 60 feet wide on the Final Map of the City of New York for the Borough of Queens prior to the adoption of the Alteration Map No.3530 on December 20, 1951 and the westerly line of 97th Street as it is laid out 70 feet wide on the present Final Map of the City of New York for the Borough of Queens.

PARCEL II

BEGINNING at a point on the northerly side of 62nd Drive, 80 feet wide, distant 80 feet westerly, as measured along the the northerly side of 62nd Drive, from the corner formed by the intersection of the westerly side of 97th Street, 70 feet wide, and said northerly side of 62nd Drive, between a lower limiting horizontal plane at elevation 35.70 feet and an upper limiting horizontal plane at elevation 80.2 feet;

RUNNING THENCE from this point of beginning, southerly along a line forming an interior angle of 90 degrees with the northerly side of 62nd Drive, 80 feet to the southerly side of 62nd Drive;

THENCE westerly along the southerly side of 62nd Drive along a line forming an interior angle of 90 degrees with the last mentioned course, 30 feet;

THENCE northerly along a line forming an interior angle of 90 degrees with the last mentioned course, 80 feet to the northerly side of 62nd Drive;

THENCE easterly along the northerly side of 62nd Drive along a line forming an interior angle of 90 degrees with the last mentioned course, 30 feet to the point or place of BEGINNING.

ELEVATIONS refer to the datum in use by the Queens Topographical Bureau which is 2.725 feet above mean sea level at Sandy Hook, New Jersey as established by the U.S. Coast and Geodetic Survey.

NY 50214971v8

TABLE OF CONTENTS

Page

ARTICLE I COVENANTS OF MORTGAGOR 5

Section 1.01. (a) Warranty of Title; Power and Authority 5

(b) Hazardous Materials 6

(c) Flood Hazard Area 6

Section 1.02. (a) Further Assurances 6

(b) Information Reporting and Back-up Withholding 7

Section 1.03. (a) Filing and Recording of Documents 7

(b) Filing and Recording Fees and Other Charges 7

Section 1.04. Payment and Performance of Loan Documents 7

Section 1.05. Type of Entity; Maintenance of Existence; Compliance with Laws                                                                                                                                                7

Section 1.06. After-Acquired Property 8

Section 1.07. (a) Payment of Taxes and Other Charges 8

(b) Payment of Mechanics and Materialmen 9

(c) Good Faith Contests 9

Section 1.08. Taxes on Mortgagee or Lenders 10

Section 1.09. Insurance 10

Section 1.10. Protective Advances by Mortgagee 17

Section 1.11. (a) Visitation and Inspection 17

(b) Estoppel Certificates 17

Section 1.12. Maintenance of Premises and Improvements 17

Section 1.13. Condemnation 18

Section 1.14. Leases 19

Section 1.15. Premises Documents 20

Section 1.16. Utilities 20

Section 1.17. Trust Fund; Lien Laws 21

Section 1.18. Interest Rate Protection 21

ARTICLE II EVENTS OF DEFAULT AND REMEDIES 21

Section 2.01. Events of Default and Certain Remedies 21

Section 2.02. Other Matters Concerning Sales 27

Section 2.03. Payment of Amounts Due 28

Section 2.04. Actions; Receivers 29

Section 2.05. Mortgagee’s Right to Possession 30

Section 2.06. Remedies Cumulative 30

Section 2.07. Moratorium Laws; Right of Redemption 30

Section 2.08. Mortgagor’s Use and Occupancy after Default 30

Section 2.09. Mortgagee’s Rights Concerning Application of Amounts Collected 31

ARTICLE III MISCELLANEOUS 31

Section 3.01. Assignment of Rents 31

Section 3.02. Security Agreement 31

Section 3.03. Application of Certain Payments 32

Section 3.04. Severability 32

Section 3.05. Modifications and Waivers 32

Section 3.06. Notices, Etc 32

Section 3.07. Successors and Assigns 33

Section 3.08. Limitation on Interest 33

Section 3.09. Counterparts 33

Section 3.10. Substitute Mortgages 33

Section 3.11. Lenders’ Sale of Interests in Loan 33

Section 3.12. No Merger of Interests 33

Section 3.13. CERTAIN WAIVERS 34

(i)

Page

Section 3.14. Satisfaction or Assignment of Mortgage 34

Section 3.15. Other Liens; Subrogation 34

Section 3.16. Intentionally Omitted 34

Section 3.17. New York Provisions 34

(ii)

EX-10

Exhibit 10.4

BLOCK: 2080

LOT: 101

ADDRESS: 61-01 Junction Boulevard, Queens, New York

COUNTY: Queens

Date:  December 21, 2007

SERIES II

BUILDING LOAN MORTGAGE, ASSIGNMENT OF LEASES

AND RENTS AND SECURITY AGREEMENT

(“this Mortgage”)

FROM

ALEXANDER’S OF REGO PARK II, INC.,

a corporation organized and existing under the laws of Delaware

(“Mortgagor”)

Address and Chief

Executive Office of Mortgagor: c/o Alexander’s, Inc.

210 Route 4 East

Paramus, New Jersey 07652

TO

PB CAPITAL CORPORATION

as administrative agent for Lenders (as hereinafter defined)

(together with its successors in such capacity, “Mortgagee”)

Address of Mortgagee: 230 Park Avenue

New York, New York 10169

Mortgage Amount: $2,500,000

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

Schiff Hardin LLP

900 Third Avenue, 23rd Floor

New York, New York 10022

Attention: Graham R. Hone, Esq.

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THE AMOUNT OF THIS MORTGAGE IS $2,500,000.

RECITAL

Mortgagor is the owner of the premises described in SCHEDULE A and proposes to erect substantial improvements thereon. In order to finance the construction thereof, Mortgagor has requested that Lenders provide a loan pursuant to the Loan Agreement identified below, of which up to the Mortgage Amount shall be secured by this Mortgage. Mortgagor has executed and delivered its notes, each dated the date hereof, obligating Mortgagor to pay, in the aggregate, the amount of the loan to be made pursuant to the Loan Agreement, or so much thereof as may be advanced from time to time in accordance with the terms of the Loan Agreement, a portion of which up to the Mortgage Amount is secured hereby. Said notes, as the same may hereafter be amended, modified, extended, severed, assigned, renewed, replaced or restated, and including any substitute or replacement notes executed pursuant to the Loan Agreement, are hereinafter referred to individually and collectively as the “Loan Note”. In addition, Mortgagor may after the date hereof enter into the Interest Rate Protection Agreement (as hereinafter defined) with Counterparty (as hereinafter defined), providing for one or more interest rate hedging transactions. The Loan Note and, if entered into, the Interest Rate Protection Agreement are hereinafter referred to individually and collectively as the “Note”. In the event the Interest Rate Protection Agreement is entered into and in order to avail itself of the benefits of this Mortgage, Counterparty shall be deemed to have appointed Mortgagee to act as its agent hereunder. Notwithstanding the language in the Granting Clause and Section 1.10 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 Lenders or 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.

CERTAIN DEFINITIONS AND RULES OF CONSTRUCTION

Mortgagor and Mortgagee agree that, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified.

“Additional Interest” means any and all sums that shall become due and payable by Mortgagor under the Interest Rate Protection Agreement.

“Business Day” has the meaning given to such term in the Loan Agreement.

“Chattels” means all fixtures, furnishings, fittings, appliances, apparatus, equipment, building materials and components, machinery, boilers, oil burners, power systems, heating, ventilating and air conditioning systems, elevators, and all other chattels and articles of personal property, of whatever kind or nature, and any additions thereto and any replacements, proceeds or products thereof (other than those owned by lessees or those claiming under or through lessees or leased by lessees from parties other than Mortgagor) now or at any time hereafter intended to be or actually affixed to, attached to, placed upon, or used in any way in connection with the complete and comfortable use, enjoyment, development, occupancy or operation of the Premises, and whether located on or off the Premises.

“Counterparty” means any Lender (but only a Lender) in its capacity as a party to any Interest Rate Protection Agreement, and its successors and assigns in such capacity.

“Declaration” has the meaning given to such term in the Loan Agreement.

“Default Rate” has the meaning given to such term in the Loan Agreement.

“Events of Default” means the events and circumstances described as such in Section 2.01.

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“Guarantor” means the party or parties, if any, identified as such in the Loan Agreement.

“Guaranty” has the meaning given to such term in the Loan Agreement.

“Hazardous Materials” means any pollutant, effluents, emissions, contaminants, toxic or hazardous wastes, materials or substances, as any of those terms are defined from time to time in or for the purposes of any relevant environmental law, rule, regulation, code, permit, order, notice, demand letter or other binding determination (hereinafter, “Environmental Laws”) including, without limitation, asbestos fibers and friable asbestos, polychlorinated biphenyls and any petroleum or hydrocarbon-based products or derivatives.

“Improvements” means all structures or buildings, and replacements thereof, to be erected or now or hereafter located upon the Premises, including all plant equipment, apparatus, machinery and fixtures of every kind and nature whatsoever forming part of said structures or buildings.

“Interest Rate Protection Agreement” means, collectively, the ISDA Master Agreement between Counterparty (that is a Lender) and Mortgagor with respect to interest rate hedging which may be hereafter entered into by and between Counterparty and Mortgagor, as any of the same may be amended, modified or supplemented from time to time, together with any and all “confirmations” under any thereof, provided, however, that the terms of each of the foregoing shall be subject to Mortgagee’s approval, not to be unreasonably withheld or delayed.

“Lenders” means, collectively, PB Capital, Norddeutsche Landesbank Girozentrale, New York Branch (“NordLB”), Wells Fargo Bank, National Association (“Wells Fargo”), Landesbank Baden-Württemberg, New York Branch (“LBBW”) and Bank of Ireland, Connecticut Branch (“Bank of Ireland”) and such other lending institutions who become “Lenders” pursuant to the Loan Agreement, together with their successors and permitted assigns in accordance with the terms of the Loan Agreement.

“Loan” means that portion of the loan in the Mortgage Amount made by Lenders to Mortgagor pursuant to the Loan Agreement and secured hereby.

“Loan Agreement” means that certain Building Loan Agreement, dated as of the date hereof, among Mortgagor, as Borrower, PB Capital, NordLB, Wells Fargo, LBBW and Bank of Ireland, as Lenders, and Mortgagee, as the same may hereafter be amended, modified or supplemented from time to time.

“Lockbox Agreement” has the meaning given to such term in the Loan Agreement.

“PB Capital” means PB Capital Corporation, in its individual capacity and not as Mortgagee.

“Permitted Exceptions” means any title exceptions or objections shown in the title policy insuring the lien hereof, including matters over which the Title Insurer (as defined in the Loan Agreement) has agreed to insure Mortgagee pursuant to endorsements to such title policy (which endorsements shall be in form and substance reasonably satisfactory to Mortgagee).

“Premises” means the premises described in SCHEDULE A including all of the easements, rights, privileges and appurtenances (including air or development rights) thereunto belonging or in anywise appertaining, and all of the estate, right, title, interest, claim or demand whatsoever of Mortgagor therein and in the streets and ways adjacent thereto, either in law or in equity, in possession or expectancy, now or hereafter acquired, and as used herein shall, unless the context otherwise requires, be deemed to include the Improvements.

“Premises Documents” means all reciprocal easement or operating agreements, declarations, development agreements, developer’s or utility agreements, and any similar such agreements or declarations now or hereafter affecting the Premises or any part thereof.

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“Required Lenders” has the meaning given to such term in the Loan Agreement.

All terms of this Mortgage which are not defined above shall have the meaning set forth elsewhere in this Mortgage.

Except as expressly indicated otherwise, when used in this Mortgage (i) “or” is not exclusive, (ii) “hereunder”, “herein”, “hereof” and the like refer to this Mortgage as a whole, (iii) “Article”, “Section” and “Schedule” refer to Articles, Sections and Schedules of this Mortgage, (iv) terms defined in the singular have a correlative meaning when used in the plural and vice versa, (v) a reference to a law or statute includes any amendment or modification to, or replacement of, such law or statute and (vi) a reference to an agreement, instrument or document means such agreement, instrument or document as the same may be amended, modified or supplemented from time to time in accordance with its terms. The cover page and all Schedules hereto are incorporated herein and made a part hereof. Any table of contents and the headings and captions herein are for convenience only and shall not affect the interpretation or construction hereof.

GRANTING CLAUSE

NOW, THEREFORE, Mortgagor, in consideration of the premises and in order to secure the payment of both the principal of, and the interest (including interest at the Default Rate and Additional Interest) and any other sums payable under, the Note, this Mortgage or the Loan Agreement and the performance and observance of all the provisions hereof and of the Note and the Loan Agreement, hereby gives, grants, bargains, sells, warrants, aliens, remises, releases, conveys, assigns, transfers, mortgages, hypothecates, deposits, pledges, sets over and confirms unto Mortgagee, all its estate, right, title and interest in, to and under any and all of the following described property (hereinafter, the “Mortgaged Property”) whether now owned or held or hereafter acquired:

(i) the Premises;

(ii) the Improvements;

(iii) the Chattels;

(iv) the Premises Documents;

(v)  all rents, royalties, issues, profits, revenue, income, recoveries, reimbursements and other benefits of the Mortgaged Property (hereinafter, the “Rents”) and all leases of the Mortgaged Property or portions thereof now or hereafter entered into and all right, title and interest of Mortgagor thereunder, including, without limitation, cash, letters of credit or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether such cash, letters of credit or securities are to be held until the expiration of the terms of such leases or applied to one or more of the installments of rent coming due immediately prior to the expiration of such terms, and including any guaranties of such leases and any lease cancellation, surrender or termination fees in respect thereof, all subject, however, to the provisions of Section 3.01;

(vi) all (a) development work product prepared in connection with the Premises, including, but not limited to, engineering, drainage, traffic, soil and other studies and tests; water, sewer, gas, electrical and telephone approvals, taps and connections; surveys, drawings, plans and specifications; and subdivision, zoning and platting materials; (b) building and other permits, rights, licenses and approvals relating to the Premises; (c) contracts and agreements (including, without limitation, contracts with architects and engineers, construction contracts and contracts for the maintenance, management or leasing of the Premises), contract rights, logos, trademarks, trade names, copyrights and other general intangibles used or useful in connection with the ownership, operation or occupancy of the Premises or any part thereof (excluding the name “Alexander’s” and any variants thereof); (d) financing commitments (debt or equity) issued to Mortgagor in respect

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of the Premises and all deposits and other amounts payable to Mortgagor thereunder; (e) contracts for the sale of all or any portion of the Premises, the Improvements or the Chattels, and all deposits and other amounts payable by the purchasers thereunder; (f) operating and other bank accounts, and monies therein, of Mortgagor relating to the Premises, including, without limitation, any accounts relating to real estate taxes or assessments; (g) interest rate protection agreements entered into by Mortgagor in respect of the Loan, whether pursuant to the Loan Agreement or otherwise, including, without limitation, the Interest Rate Protection Agreement; (h) commercial tort claims related to the Premises, the Improvements or the Chattels; (i) contracts for the purchase of inclusionary housing certificates and 421-a certificates; and (j) any inclusionary housing certificates and 421-a certificates, but in each case of the items set forth above in this paragraph (vi), to the extent assignable;

(vii)all rights of Mortgagor under promissory notes, letters of credit, electronic chattel paper, proceeds from accounts, payment intangibles, and general intangibles related to the Premises, as the terms “accounts”, “general intangibles”, and “payment intangibles” are defined in the applicable Uniform Commercial Code Article 9, as the same may be modified or amended from time to time;

(viii)           all other assets of Mortgagor related in any way to the Premises, subject to certain limitations that may be set forth herein; and

(ix) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims, including, without limitation, proceeds of insurance and condemnation awards, and all rights of Mortgagor to refunds of real estate taxes and assessments.

TO HAVE AND TO HOLD unto Mortgagee, its successors and assigns forever.

COVENANTS OF MORTGAGOR

Mortgagor covenants and agrees as follows:

Warranty of Title; Power and Authority.

Mortgagor warrants that it has a good and marketable title to an indefeasible fee estate in the Premises subject to no lien, charge or encumbrance except for Permitted Exceptions; that it owns the Chattels, all leases and the Rents in respect of the Mortgaged Property and all other personal property encumbered hereby free and clear of liens and claims; and that this Mortgage is and will remain a valid and enforceable lien on the Mortgaged Property subject only to the exceptions referred to above. Mortgagor has full power and lawful authority to mortgage the Mortgaged Property in the manner and form herein done or intended hereafter to be done. Mortgagor will preserve such title, and will forever warrant and defend the same to Mortgagee and will forever warrant and defend the validity and priority of the lien hereof against the claims of all persons and parties whomsoever.

Hazardous Materials.

Mortgagor represents and warrants that (i) except as disclosed in environmental reports provided to Mortgagee and to the best of Mortgagor’s knowledge, there has never been a release, deposit, disposal or leak of Hazardous Materials into or upon or under the Premises and the improvements thereon, including by means of burial, disposal, discharge, spillage, leakage, seepage, dumping and the like, that could reasonably be expected to result in liability under any Environmental Law or that has not been fully remediated in accordance with Environmental Law, (ii) neither it nor any portion of the Premises or improvements thereon is in violation of, or subject to any existing, pending or, to the best of Mortgagor’s knowledge, threatened investigation or proceeding by any governmental authorities under, any

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Environmental Law, (iii) there are no claims, litigation, administrative or other proceedings, whether actual or threatened, or judgments or orders, concerning Hazardous Materials relating in any way to the Premises or the improvements thereon and (iv) Mortgagor is not required by any Environmental Law to obtain any permits or licenses to construct or use any improvements, fixtures or equipment with respect to the Premises, or if any such permit or license is required such permit or license has been obtained or Mortgagor reasonably expects that such permit or license will be obtained in due course and will diligently pursue the obtaining thereof. Mortgagor will comply with all applicable Environmental Laws and will, at its sole cost and expense, promptly remove, or cause the removal of, any and all Hazardous Materials or the effects thereof at any time identified as being on, in, under or affecting the Premises which are in violation of any Environmental Law.

Flood Hazard Area.

Mortgagor represents that neither the Premises nor any part thereof is located in an area identified by the Secretary of the United States Department of Housing and Urban Development or by any applicable federal agency as having special flood hazards or, if it is, Mortgagor has obtained the insurance required by Section 1.09.

Further Assurances.

Mortgagor will, at its sole cost and expense, do, execute, acknowledge and deliver all and every such further acts, deeds, conveyances, mortgages, assignments, notices of assignment, transfers and assurances as Mortgagee shall from time to time reasonably require, for the better assuring, conveying, assigning, transferring and confirming unto Mortgagee the property and rights hereby conveyed or assigned or intended now or hereafter so to be, or which Mortgagor may be or may hereafter become bound to convey or assign to Mortgagee, or for carrying out the intention or facilitating the performance of the terms hereof, or for filing, registering or recording this Mortgage and, on demand, will execute and deliver, and hereby irrevocably authorizes Mortgagee to execute (including in Mortgagor’s name) and/or file, at any time and from time to time, one or more financing statements (including amendments), chattel mortgages or comparable security instruments, to evidence or perfect more effectively Mortgagee’s security interest in and the lien hereof upon the Chattels and other personal property encumbered hereby.

Information Reporting and Back-up Withholding.

Mortgagor will, at its sole cost and expense, do, execute, acknowledge and deliver all and every such acts, information reports, returns and withholding of monies as shall be necessary or appropriate to comply fully, or to cause full compliance, with all applicable information reporting and back-up withholding requirements of the Internal Revenue Code of 1986, as amended (including all regulations now or hereafter promulgated thereunder) in respect of the Premises and all transactions related to the Premises, and will at all times (i) at Mortgagee’s reasonable request, provide Mortgagee with reasonably satisfactory evidence of such compliance and (ii) notify Mortgagee of the information reported in connection with such compliance.

Filing and Recording of Documents.

Mortgagor forthwith upon the execution and delivery hereof, and thereafter from time to time, will cause this Mortgage, the Loan Agreement and any security instrument creating a lien or evidencing the lien hereof upon the Chattels and each instrument of further assurance to be filed, registered or recorded in such manner and in such places as may be required by any present or future law in order to publish notice of and fully to protect the lien hereof upon, and the interest of Mortgagee in, the Mortgaged Property.

Filing and Recording Fees and Other Charges.

Mortgagor will pay all filing, registration or recording fees, and all expenses incident to the execution and acknowledgment hereof, any mortgage supplemental hereto, any security instrument with respect to the Chattels, and any instrument of further assurance, and will pay all federal, state, county and municipal

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stamp taxes and other taxes (other than income, withholding, backup withholding, branch profits, franchise, similar taxes or taxes and fees in lieu of such taxes), duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of the Note, this Mortgage, any mortgage supplemental hereto, any security instrument with respect to the Chattels or any instrument of further assurance.

Payment and Performance of Loan Documents.

Mortgagor will punctually pay the principal and interest (including Additional Interest) and all other sums to become due in respect hereof and of the Note and the Loan Agreement at the time and place and in the manner specified therein, according to the true intent and meaning thereof, all in currency of the United States of America which at the time of such payment shall be legal tender for the payment of public and private debts. Mortgagor will duly and timely comply with and perform all of the terms, provisions, covenants and agreements contained in said documents and in all other documents or instruments executed or delivered by Mortgagor to Mortgagee or Lenders in connection with the Loan, and will permit no failures of performance thereunder.

Type of Entity; Maintenance of Existence; Compliance with Laws.

Mortgagor represents that its correct legal name, jurisdiction of formation/existence and chief executive office or, if applicable, sole place of business (or, if an individual, its principal residence) are as set forth on the cover page hereof. Mortgagor, if other than a natural person, further represents that it has delivered to Mortgagee a current, original certificate issued by the appropriate official of said jurisdiction evidencing such formation and existence, and agrees that it will, so long as it is owner of all or part of the Mortgaged Property, do all things necessary to preserve and keep in full force and effect its existence, franchises, rights and privileges as a business or stock corporation, partnership, limited liability company, trust or other entity under the laws of such jurisdiction. Mortgagor, if other than a natural person, will (a) not modify or amend such certificate or change its legal name or jurisdiction of formation/existence without Mortgagee’s prior consent, not to be unreasonably withheld, conditioned or delayed and (b) promptly notify Mortgagee of any change to the location of its chief executive office or, if applicable, sole place of business. Mortgagor, if an individual, will not change its legal name or principal residence without first giving Mortgagee at least thirty (30) days’ prior notice. Mortgagor will duly and timely comply with all laws, regulations, rules, statutes, orders and decrees of any governmental authority or court applicable to it or to the Mortgaged Property or any part thereof except where the failure to comply would not have a Material Adverse Effect (as defined in the Loan Agreement).

After-Acquired Property.

All right, title and interest of Mortgagor in and to all extensions, improvements, betterments, renewals, substitutes and replacements of, and all additions and appurtenances to, the Mortgaged Property, hereafter acquired by, or released to, Mortgagor or constructed, assembled or placed by Mortgagor on the Premises, and all conversions of the security constituted thereby, immediately upon such acquisition, release, construction, assembling, placement or conversion, as the case may be, and in each such case, without any further mortgage, conveyance, assignment or other act by Mortgagor, shall become subject to the lien hereof as fully and completely, and with the same effect, as though now owned by Mortgagor and specifically described in the Granting Clause hereof, but at any and all times Mortgagor will execute and deliver to Mortgagee any and all such further assurances, mortgages, conveyances or assignments thereof as Mortgagee may reasonably require for the purpose of expressly and specifically subjecting the same to the lien hereof.

Payment of Taxes and Other Charges.

Mortgagor, from time to time when the same shall become due and payable, will pay and discharge all taxes of every kind and nature (including real and personal property taxes and income, franchise, withholding, backup withholding, profits and gross receipts taxes), all general and special assessments, levies, permits, inspection and license fees, all water and sewer rents and charges, all charges for utilities, and all other charges (public or private) whether of a like or different nature, imposed upon or assessed

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against it or the Mortgaged Property or any part thereof or arising in respect of the occupancy, use or possession thereof. Mortgagor will, upon Mortgagee’s request, deliver to Mortgagee receipts evidencing (to Mortgagee’s reasonable satisfaction) the payment of all such taxes, assessments, levies, fees, rents and other charges imposed upon or assessed against it or the Mortgaged Property or any portion thereof.

Upon the occurrence and during the existence of an Event of Default, Mortgagee may, at its option, to be exercised by thirty (30) days’ notice to Mortgagor, require the deposit by Mortgagor, at the time of each payment of an installment of interest or principal under the Note (but no less often than monthly), of an additional amount sufficient to discharge the obligations under this clause (a) when they become due (other than with respect to income, withholding, backup withholding, profits and franchise taxes, similar taxes and taxes and fees in lieu of such taxes). The determination of the amount so payable and of the fractional part thereof to be deposited with Mortgagee, so that the aggregate of such deposits shall be sufficient for this purpose, shall be made by Mortgagee in its reasonable discretion. Such amounts shall be held by Mortgagee without interest and applied to the payment of the obligations in respect of which such amounts were deposited or, at Mortgagee’s option, to the payment of said obligations in such order or priority as Mortgagee shall determine, on or before the respective dates on which the same or any of them would become delinquent. If one (1) month prior to the due date of any of the aforementioned obligations the amounts then on deposit therefor shall be insufficient for the payment of such obligation in full, Mortgagor within ten (10) days after demand shall deposit the amount of the deficiency with Mortgagee. Nothing herein contained shall be deemed to affect any right or remedy of Mortgagee under any provisions hereof or of any statute or rule of law to pay any such amount and to add the amount so paid, together with interest at the Default Rate, to the indebtedness hereby secured.

Payment of Mechanics and Materialmen.

Mortgagor will pay, from time to time when the same shall become due, all lawful claims and demands of mechanics, materialmen, laborers, and others which, if unpaid, might result in, or permit the creation of, a lien on the Mortgaged Property or any part thereof, and in general will do or cause to be done everything necessary so that the lien hereof shall be fully preserved, at the cost of Mortgagor and without expense to Mortgagee. Without limiting the generality of the foregoing, Mortgagor will discharge, bond over, or have the Title Insurer insure over in a manner reasonably satisfactory to Mortgagee any mechanic’s lien within thirty (30) days of notice of the same (and in any event prior to the next advance to be made under the Loan Agreement) in case of the filing of any claims for lien or proceedings for the enforcement thereof.

Good Faith Contests.

Nothing in this Section 1.07 shall require the payment or discharge of any obligation imposed upon Mortgagor by this Section so long as Mortgagor shall in good faith and at its own expense contest the same or the validity thereof by appropriate legal proceedings which shall operate to prevent the collection thereof or other realization thereon and the sale or forfeiture of the Mortgaged Property or any part thereof to satisfy the same; provided, however, that (i) during such contest Mortgagor shall, at Mortgagee’s option, provide security reasonably satisfactory to Mortgagee, assuring the discharge of Mortgagor’s obligation hereunder and of any additional charge, penalty or expense arising from or incurred as a result of such contest, except that in the case of claims described in paragraph (b) of this Section 1.07, Mortgagor shall bond over, or have the Title Insurer insure over in a manner reasonably satisfactory to Mortgagee, any such claim prior to the next advance to be made under the Loan Agreement, and (ii) if at any time payment of any obligation imposed upon Mortgagor by clause (a) above shall become necessary to prevent the delivery of a tax deed or other instrument conveying the Mortgaged Property or any portion thereof because of non-payment, then Mortgagor shall pay the same in sufficient time to prevent the delivery of such tax deed or other instrument. In the case of claims described in paragraph (b) of this Section 1.07, if Mortgagor shall fail, within sixty (60) days after becoming aware of same, either (i) to discharge or (ii) to contest claims asserted and give security in the manner provided in this paragraph (c), or having commenced to contest the same, and having given such security, shall fail to prosecute such contest with diligence, or to maintain such security for its full amount, or upon adverse conclusion of any such contest, to cause any judgment or decree to be satisfied and lien to be released, then and in any such event, Mortgagee may, at its election (but shall not be required to), procure the release and discharge of any claim

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and any judgment or decree thereon and, further, may in its sole discretion effect any settlement or compromise of the same, and any amounts so expended by Mortgagee, including premiums paid or security furnished in connection with the issuance of any surety company bonds, shall constitute advances covered by Section 1.10. In settling, compromising or discharging any claims for lien, Mortgagee shall not be required to inquire into the validity or amount of any such claim. Notwithstanding the foregoing, Lenders shall have no obligation to make disbursements of Loan proceeds under the terms of the Loan Agreement at any time prior to such time as Mortgagor shall have discharged or contested any claims in accordance with this paragraph (c).

Taxes on Mortgagee or Lenders.

Mortgagor will pay any taxes (except income, withholding, backup withholding, branch profits, franchise, similar taxes or taxes and fees in lieu of such taxes) imposed on Mortgagee or any Lender by reason of their interests in the Note or this Mortgage, but only to the extent provided for in the Loan Agreement.

Insurance.

Mortgagor will at all times (except as provided herein) provide, maintain and keep in force:

from the time that initial construction begins (soil removal for environmental remediation not to be considered beginning construction) on the new construction, builder’s risk insurance policies insuring the Premises, Improvements and Chattels for not less than 100% of the completed project insurable replacement cost value of the Improvements, which insurance shall be written on a “completed value” form (100% non-reporting) or its equivalent and shall include endorsements providing replacement cost coverage, agreed amount and/or coinsurance waiver, and granting permission to occupy. Such policies shall insure against loss or damage by fire and lightning; against loss or damage by other risks (including acts of terrorism) embraced by coverage of the type now known as “All Risk” or Special Peril property insurance, as is available in the insurance market place as of the closing date, endorsed to provide replacement cost coverage with agreed amount and/or co-insurance waiver, coverage for demolition and increased cost of construction due to the enforcement of laws regulating reconstruction following a loss in amounts not less than $3,000,000 per occurrence, and coverage for flood and earthquake in amounts not less than $5,000,000 per occurrence and in the annual aggregate for each peril; and against such other risks or hazards as Mortgagee from time to time may reasonably designate in an amount sufficient to prevent Mortgagee or Mortgagor from becoming a co-insurer under the terms of the applicable policies, but in any event in an amount not less than 100% of the then full replacement cost of the Improvements (exclusive of the cost of excavations, foundations and footings below the lowest basement floor) without deduction for physical depreciation. Such builder’s risk insurance shall also cover: (i) loss of materials, equipment, machinery, and supplies which become part of the completed project whether on-site, in transit, or stored off-site, or loss of any temporary structures, sidewalks, retaining walls, and underground property; and (ii) soft costs including coverage for 100% of the interest expense during the period of the construction and coverage for recurring expenses, including, but not limited to, plans, specifications, blueprints and models, real estate taxes, real estate commissions, advertising, architectural and engineering supervisory costs, legal and accounting costs, and delayed completion business income/rental interruption on an actual loss sustained basis. Mortgagor’s obligation to obtain terrorism coverage pursuant to the above and paragraph (ii), (iii) and (iv) below shall be qualified as follows: If the United States Government sponsored reinsurance backstop under the Terrorist Risk Insurance Act is no longer in effect, Mortgagor shall be required to provide terrorism insurance coverage with the respect to the Improvements in the minimum amount equal to the greater of (a) the full insurable replacement cost value of the Improvements and one (1) year lost rents value, or if such terrorism insurance coverage is not commercially available at Commercially Reasonable Terrorism Insurance Rates (as defined below), then in a minimum amount equal to the amount of terrorism insurance coverage which is commercially available at Commercially Reasonable Terrorism Insurance Rates. For purposes herein, “Commercially Reasonable Terrorism Insurance Rates” means, with respect to any amount of terrorism insurance coverage (inclusive of loss to

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property and lost rents), the rate which Administrative Agent determines to be reasonable; Mortgagor and Administrative Agent acknowledging and agreeing that (1) any annual premium with respect to terrorism insurance coverage which does not exceed one-half of one percent (0.5%) of the total insurable values with respect to loss of property and lost rents shall be deemed reasonable and (2) no inference shall be drawn that premiums in excess of the amount referred to in clause (1) above for terrorism insurance coverage are to be deemed unreasonable;

Property insurance covering any improvements on the Premises, including 100% of the insurable replacement cost value of all tenant improvements and betterments that any Lease (as defined in the Loan Agreement) or Premises Document requires Mortgagor to insure, against all risks of loss to the Improvements customarily covered by so-called “Cause of Loss – Special Form” policies as available in the insurance market as of the date of substantial completion of the Improvements (and against such additional risks of loss as may be customarily covered by such policies after such date). Each Cause of Loss – Special Form insurance policy shall cover: (i) 100% of the insurable replacement cost value of the Improvements; (ii) 100% of the insurable replacement cost value of all tenant improvements and betterments that any Lease or Premises Document requires Mortgagor to insure; (iii) loss of the undamaged portion of the Improvements and additional expense of demolition and increased cost of construction, including, without limitation, increased costs that arise from any changes in laws or other legal requirements with respect to such restoration, in an amount as is acceptable to Administrative Agent. Any Cause of Loss – Special Form insurance policy shall contain an agreed amount or a coinsurance waiver endorsement and a replacement cost value endorsement without reduction for depreciation. Cause of Loss - Special Form policies shall cover at least the following perils: building collapse, fire, flood, back-up of sewers and drains, water damage, tsunami, windstorm, earthquake, earth movement, landslide, mudslide, subsidence, acts of terrorism (certified and non-certified), impact of vehicles and aircraft, lightning, malicious mischief, and vandalism (earthquake, earth movement, landslide, mudslide, subsidence and flood may have a sub-limit of such amount as is acceptable to Administrative Agent). Such insurance policy shall name Mortgagor as the Insured and shall also name Administrative Agent as Mortgagee under a non-contributing New York standard mortgagee clause or equivalent endorsement satisfactory to Administrative Agent for real property and as Lender Loss Payee as respects business income/loss of rents (if any);

upon completion of construction of the Improvements, policies of insurance insuring the Premises for the same perils as outlined in (ii) above for business income and rents loss insurance in an amount equal to not less than one (1) year’s gross “rental value” of the Improvements. “Rental value” as used herein is defined as the sum of (A) the total anticipated gross rental income from tenant occupancy of such buildings as furnished and equipped, (B) the amount of all charges which are the legal obligation of tenants and which would otherwise be the obligation of Mortgagor and (C) the fair rental value of any portion of such buildings which is occupied by Mortgagor. This coverage shall also include an extended period of indemnity of not less than 365 days. Mortgagor hereby assigns the proceeds of such insurance to Mortgagee, to be applied by Mortgagee in payment of the interest and principal on the Note, insurance premiums, taxes, assessments and private impositions and any other operating expense of the Property or charge described in clause (B) above until such time as the Improvements shall have been restored and placed in full operation, at which time, provided Mortgagor is not then in default hereunder, the balance of such insurance proceeds, if any, held by Mortgagee shall be paid over to Mortgagor;

comprehensive boiler and machinery insurance providing coverage for all mechanical and electrical equipment in amounts not less than $20,000,000 per accident (during periods of construction, this coverage shall be provided once electrical equipment is energized);

if all or part of the Premises are located in an area identified by the Secretary of the United States Department of Housing and Urban Development or by any applicable federal agency as a flood hazard area, flood insurance in an amount at least equal to the maximum limit of coverage available under the National Flood Insurance Act of 1968. Regardless of the flood zone, the

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minimum amount of coverage required by this subsection for loss caused by floods shall not be less than $50,000,000or such other amount as is acceptable to Administrative Agent;

commercial general liability insurance on an “occurrence” basis against claims for “personal injury” liability, including, without limitation, bodily injury, death or property damage liability, products and completed operations liability with a limit of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate on a per location basis in the event of “personal injury” to any number of persons or of damage to property arising out of one “occurrence”. Such policies shall name Mortgagee as additional insured by an endorsement, and shall contain cross-liability and severability of interest clauses, all reasonably satisfactory to Mortgagee;

commercial automobile liability insurance covering all owned (if any) hired and non-owned automobiles in amounts not less than $1,000,000 per accident;

workers’ compensation and employers’ liability (and if required, disability) insurance covering the statutory requirements of the jurisdiction in which the Premises are located;

commercial umbrella liability insurance in excess of the liability insurance required in clauses (v), (vi) and (vii) above in amounts not less than $50,000,000 per occurrence and in the annual aggregate per location. During the period of vertical construction of the Improvements and at any time thereafter that substantial construction is underway, the amount of umbrella liability insurance shall be $75,000,000 except that if a controlled insurance program (CIP) permitted in paragraph (c) below is provided, the amount of liability required of Mortgagor under this paragraph (ix) shall be $19,000,000 when substantial construction is underway; and

such other insurance, and in such amounts, as may from time to time be reasonably required by Mortgagee against the same or other insurable hazards.

Mortgagor shall cause the following insurance to be maintained prior to the start of construction and during the construction of Improvements (or the restoration thereof following a loss):

by parties engaged in such construction:

(w)       commercial general liability insurance (including products and completed operations liability for a minimum of two (2) years following completion of construction) in amounts not less than $1,000,000 per occurrence and $2,000,000 aggregate per project;

(x)        commercial automobile liability insurance in amounts not less than $1,000,000 per accident;

(y)        workers’ compensation and employers’ liability insurance complying with the statutory requirements of the jurisdiction in which the Premises are located;

(z)        umbrella liability insurance in excess of the insurance required in clause (b)(i)(x) and (y) in amounts as follows:

(I)        for the construction manager/general contractor, limits of not less than $75,000,000 per occurrence and in the aggregate per project; if aggregate limits of umbrella liability insurance are shared, the amount of umbrella liability insurance for construction shall be increased to $80,000,000;

(II)       for other sub-trade contractors and their sub-subcontractors, amounts not less than good insurance practice would dictate based on the hazard/risk associated with their operations; and

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(III)      all sub-trade contractors and sub-subcontractors shall name Mortgagor and Mortgagee as additional insured and provide certificates of insurance and other evidence of coverage as may be required by Mortgagor or Mortgagee; and

Mortgagor shall cause all architects and engineers engaged in the design and construction of the project to provide professional errors and omissions liability insurance in amounts not less than $1,000,000 per claim and $2,000,000 in the aggregate except that the lead architect shall have $3,000,000 per claim and in the aggregate.

Liability insurance required of Mortgagor and general contractor/construction manager in Section 1.09(a)(ix) and (b)(i)(z)(I) above may be satisfied through a controlled insurance program (CIP) providing not less than $100,000,000 in liability limits for Mortgagor and contractors working at the construction site and shall include an extended reporting period for products/completed operations equal to the statutory period during which claims can be made following completion of the Improvements. The insurance coverage permitted by this paragraph shall include the liability insurance extensions required of the Mortgagorand contractors above.

All policies of insurance required under this Section 1.09 (i) shall be issued by companies having Best’s ratings of A:X or better as published in Best’s latest rating guide that are licensed in the jurisdiction in which the Premises are located (or where the failure to be so licensed does not affect the validity of the policy), (ii) except as provided for above, shall be subject to the approval of Mortgagee (such approval not to be unreasonably withheld, conditioned or delayed) as to amount, content, form and expiration date, (iii) except for the liability policies described in clauses (a)(vi) through (ix) above, shall contain a Non-Contributory Standard Mortgagee Clause and Lender’s Loss Payable Endorsement, or their equivalents, in favor of Mortgagee, and (iv) shall provide that the proceeds thereof shall be payable to Mortgagee. Mortgagee shall be furnished with the original or duplicate original of each policy required hereunder, which policies shall provide that they shall not lapse, nor be modified to reduce coverage or cancelled, without thirty (30) days’ written notice to Mortgagee, except for non-payment of premium in which case ten (10) days’ notice of cancellation is required. At least five (5) days prior to expiration of any policy required hereunder, Mortgagor shall furnish Mortgagee appropriate proof of issuance of a policy continuing in force the insurance covered by the policy so expiring. Mortgagor shall furnish to Mortgagee, promptly upon request, receipts or other satisfactory evidence of the payment of the premiums on such insurance policies. In the event that Mortgagor does not deposit with Mortgagee a new certificate or policy of insurance at least five (5) days prior to the expiration of any expiring policy and evidence of payment of premiums when due thereon, then Mortgagee may, but shall not be obligated to, procure such insurance and pay the premiums therefor, and Mortgagor agrees to repay to Mortgagee the premiums thereon promptly on demand, together with interest thereon at the Default Rate.

Mortgagor hereby assigns to Mortgagee all proceeds of any insurance required to be maintained by this Section 1.09 which Mortgagor may be entitled to receive for loss or damage to the Premises, Improvements or Chattels or for soft costs including interest expense. All such insurance proceeds shall be payable to Mortgagee, and Mortgagor hereby authorizes and directs any affected insurance company to make payment thereof directly to Mortgagee. Mortgagor shall give prompt notice to Mortgagee of any casualty, whether or not of a kind required to be insured against under the policies to be provided by Mortgagor hereunder, such notice to generally describe the nature and cause of such casualty and the extent of the damage or destruction. Mortgagor may settle, adjust or compromise any claims for loss, damage or destruction, regardless of whether or not there are insurance proceeds available or whether any such insurance proceeds are sufficient in amount to fully compensate for such loss or damage, subject to Mortgagee’s prior consent, which shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Mortgagee shall have the right to join Mortgagor in settling, adjusting or compromising any loss of $2,000,000 or more. Mortgagor hereby authorizes the application or release by Mortgagee of any insurance proceeds under any policy of insurance, subject to the other provisions hereof. The application or release by Mortgagee of any insurance proceeds shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.

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In the event of the foreclosure hereof or other transfer of the title to the Mortgaged Property in extinguishment, in whole or in part, of the indebtedness secured hereby, all right, title and interest of Mortgagor in and to any insurance policy, or premiums or payments in satisfaction of claims or any other rights thereunder then in force, shall pass to the purchaser or grantee notwithstanding the amount of any bid at such foreclosure sale. Nothing contained herein shall prevent the accrual of interest as provided in the Note on any portion of the principal balance due under the Note until such time as insurance proceeds are actually received and applied to reduce the principal balance outstanding.

Mortgagor shall not take out separate insurance concurrent in form or contributing in the event of loss with that required to be maintained under this Section 1.09 unless Mortgagee is included thereon as a named insured with loss payable to Mortgagee under standard mortgage endorsements of the character and to the extent above described. Mortgagor shall promptly notify Mortgagee whenever any such separate insurance is taken out and shall promptly deliver to Mortgagee the policy or policies of such insurance.

Prior to the subordination of this Mortgage to the Declaration pursuant to Section 9.01 of the Loan Agreement, any and all monies received as payment which Mortgagor may be entitled to receive for loss or damage to the Premises, Improvements or Chattels under any insurance maintained pursuant to this Section 1.09 (other than proceeds under the policies required by clause (a)(iii) above, which shall be paid over to Mortgagee and deposited in the Collection Account (as defined in the Lockbox Agreement)), less Mortgagee’s reasonable expenses for collecting and, if applicable, disbursing the insurance proceeds, or otherwise incurred in connection therewith shall be disbursed to Mortgagor for restoration in the same manner and subject to the same terms and conditions as advances of proceeds of the Loan under the Loan Agreement, provided that Mortgagee shall have reasonably determined that the restoration of the Improvements can be completed by the then Maturity Date of the Note at a cost which does not exceed the amount of available insurance proceeds or, in the event that such proceeds are reasonably determined by Mortgagee to be inadequate, Mortgagee shall have received either (x) a cash deposit from Mortgagor equal to the excess of said estimated cost of restoration over the amount of said available proceeds or (y) Guarantor’s agreement, so long as Guarantor is then in compliance with the financial covenants set forth in the Guaranty (whether or not then in effect), that it shall be unconditionally liable therefor, such agreement to be reasonably satisfactory in form and substance to Mortgagee and further that the Leases described in Section 4.01(e)(25) of the Loan Agreement shall remain in full force and effect during and after the completion of such restoration without abatement of rent beyond the time required for restoration. If the conditions for the advance of insurance proceeds for restoration set forth in the preceding sentence (the “Restoration Conditions”) are not satisfied within one hundred twenty (120) days of Mortgagee’s receipt thereof or if the actual restoration shall not have been commenced within such period, the Required Lenders shall have the option on not less than thirty (30) days’ notice to apply such insurance proceeds to the payment of the Note and to interest accrued and unpaid thereon in such order and proportions as the Required Lenders may elect, provided, however, that if prior to the expiration of such thirty (30) day period such restoration commences and the Restoration Conditions are satisfied, the insurance proceeds shall be available for restoration. After this Mortgage is so subordinated to the Declaration, if the Declaration requires that insurance proceeds be applied to restoration, the proceeds shall be so applied and if the terms and conditions set forth in the Declaration for the disbursement from time to time as restoration progresses of said proceeds are inconsistent with terms and conditions for advances of proceeds of the Loan, the terms and provisions of the Declaration shall control. Notwithstanding that the Declaration requires that the insurance proceeds be applied for restoration, the Restoration Conditions as between Mortgagor, Lenders and Mortgagee remain conditions to be satisfied by Mortgagor which if not satisfied shall be deemed to constitute an Event of Default and Mortgagee shall have the option of exercising any of the remedies set forth in Article II of this Mortgage. If the Declaration does not require that the insurance proceeds be applied to restoration, the proceeds shall be divided among all condominium unit owners in proportion to their respective percentage interest in the common elements and that portion of the proceeds due to Mortgagor shall be paid over to Mortgagee and the Required Lenders shall have the option at any time thereafter to apply same to the payment of the Note and interest accrued and unpaid thereon in such order and proportions as the Required Lenders may elect.

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Protective Advances by Mortgagee.

If Mortgagor shall fail to perform any of the covenants contained herein beyond the expiration of any applicable notice and grace periods, Mortgagee may, after ten (10) days’ notice to Mortgagor of Mortgagee’s intent to make such advance, except in an emergency in which event notice shall not be required, make advances to perform the same on its behalf and all sums so advanced shall be a lien upon the Mortgaged Property and shall be secured hereby. Mortgagor will repay on demand all sums so advanced on its behalf together with interest thereon at the Default Rate. The provisions of this Section shall not prevent any default in the observance of any covenant contained herein from constituting an Event of Default.

Visitation and Inspection.

Mortgagor will permit Mortgagee and any of Lenders, by their agents, representatives and attorneys, to visit and inspect all or any part of the Mortgaged Property on Business Days and at reasonable times and upon reasonable prior notice, subject to the rights of tenants and Mortgagor’s usual and customary safety requirements. Mortgagor will keep, and cause Guarantor to keep, adequate records and books of account in accordance with GAAP and, subject to applicable securities and other Laws relating to disclosure of material information, including Regulation FD, will permit, and cause Guarantor to permit, Mortgagee and any of Lenders, by their agents, accountants and attorneys, to examine its and Guarantor’s records and books of account and make copies thereof or extracts therefrom, and to discuss its or Guarantor’s affairs, finances and accounts with the officers or general partners, as the case may be, of Mortgagor or Guarantor, at such reasonable times as may be requested by Mortgagee or any of Lenders, as the case may be.

Estoppel Certificates.

Mortgagor, within five (5) business days of receipt of a written request, will furnish a statement, duly acknowledged, of the amount due whether for principal or interest on the Loan and whether to its knowledge any offsets, counterclaims or defenses exist against the indebtedness secured hereby, but no more than twice in any twelve (12) month period. Notwithstanding the foregoing, during the existence of any Event of Default, there shall be no limit on the number of any such requests by Mortgagee.

Maintenance of Premises and Improvements.

Mortgagor will not commit any waste on the Premises from and after completion of construction or make any change in the use of the Premises which will in any way increase any ordinary fire or other hazard arising out of construction or operation. Mortgagor will, at all times, maintain the Improvements and Chattels in good operating order and condition and will promptly make, from time to time, all repairs, renewals, replacements, additions and improvements in connection therewith which are needful or desirable to such end. The Improvements shall not be demolished or substantially altered, nor shall any Chattels be removed without Mortgagee’s prior consent except where appropriate replacements free of superior title, liens and claims are immediately made of value at least equal to the value of the removed Chattels or except where the same is obsolete or no longer necessary for the Property.

Condemnation.

Mortgagor, immediately upon obtaining knowledge of the institution or pending institution of any proceedings for the condemnation of the Premises or any portion thereof, will notify Mortgagee thereof. If the amount of the award or compensation is reasonably estimated to be in excess of $500,000, Mortgagee may participate in any such proceedings and may be represented therein by counsel of its selection. Mortgagor from time to time will deliver to Mortgagee all instruments requested by it to permit or facilitate such participation. In the event of such condemnation proceedings, the award or compensation payable is hereby assigned to and shall be paid to Mortgagee. Mortgagee shall be under no obligation to question the amount of any such award or compensation and may accept the same in the amount in which the same shall be paid. Prior to the subordination of this Mortgage to the Declaration pursuant to Section 9.01 of the Loan

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Agreement, the proceeds of any award or compensation so received shall be paid over to Mortgagee and deposited in the Collection Account, in any case under this Section, less Mortgagee’s reasonable expenses for collecting and, if applicable, disbursing the award, or otherwise incurred in connection therewith, and disbursed to Mortgagor from time to time for restoration of the Improvements in the same manner and subject to the same terms and conditions as advances of proceeds of the Loan under the Loan Agreement, provided that Mortgagee shall have reasonably determined that the restoration of the Improvements to an economically viable architectural whole can be completed by the then Maturity Date of the Note at a cost which does not exceed the amount of available condemnation award proceeds or, in the event that such proceeds are reasonably determined by Mortgagee to be inadequate, Mortgagee shall have received either (x) from Mortgagor a cash deposit equal to the excess of said estimated cost of restoration over the amount of said available proceeds or (y) Guarantor’s agreement, so long as Guarantor is then in compliance with the financial covenants set forth in the Guaranty (whether or not then in effect), that it shall be unconditionally liable therefor, such agreement to be reasonably satisfactory in form and substance to Mortgagee and further that the Leases described in Section 4.01(e)(25) of the Loan Agreement shall remain in full force and effect during and after the completion of such restoration without abatement of rent beyond the time required for restoration. If the conditions for the advance of condemnation award proceeds for restoration set forth in the preceding sentence (the “Condemnation Restoration Conditions”) are not satisfied within one hundred twenty (120) days of Mortgagee’s receipt thereof or if the actual restoration shall not have been commenced within such period, Required Lenders shall have the option on not less than thirty (30) days’ notice to apply such condemnation award proceeds to the payment of the Note and to interest accrued and unpaid thereon (at the rate of interest provided therein regardless of the rate of interest payable on the award by the condemning authority) in such order and proportions as the Required Lenders may elect, provided, however, that if prior to the expiration of such thirty (30) day period such restoration commences and the Condemnation Restoration Conditions are satisfied, the condemnation proceeds shall be available for restoration. After this Mortgage is so subordinated to the Declaration, if the Declaration requires that condemnation proceeds be applied to restoration, the proceeds shall be so applied and if the terms and conditions set forth in the Declaration for the disbursement from time to time as restoration progresses of said proceeds are inconsistent with terms and conditions for advances of proceeds of the Loan, the terms and provisions of the Declaration shall control. Notwithstanding that the Declaration requires that the condemnation proceeds be applied for restoration, the Condemnation Restoration Conditions as between Mortgagor, Lenders and Mortgagee remain conditions to be satisfied by Mortgagor which if not satisfied shall be deemed to constitute an Event of Default and Mortgagee shall have the option of exercising any of the remedies set forth in Article II of this Mortgage. If the Declaration does not require that the condemnation proceeds be applied to restoration, the proceeds shall be divided among all condominium unit owners in proportion to their respective percentage interest in the common elements and that portion of the proceeds due to Mortgagor shall be paid over to Mortgagee and the Required Lenders shall have the option at any time thereafter to apply same to the payment of the Note and interest accrued and unpaid thereon in such order and proportions as the Required Lenders may elect.

Leases.

Mortgagor will not (i) execute an assignment of the rents or any part thereof from the Premises without Mortgagee’s prior consent, (ii) enter into, or amend or modify, any lease, other than in accordance with the terms and conditions set forth in the Loan Agreement, (iii) except where the lessee is in material default thereunder, or where the tenant has the unilateral right to do so under its lease, terminate or consent to the cancellation or surrender of any lease of the Premises or of any part thereof, now existing or hereafter to be made, (iv) accept prepayments of any installments of rents to become due under such leases, except prepayments in the nature of security for the performance of the lessees thereunder or (v) modify, release or terminate any guaranties of any such lease, except in conjunction with an amendment of such lease entered into in accordance with the terms of the Loan Documents.

Mortgagor will not execute any lease of all or a substantial portion of the Premises except for actual occupancy by the lessee thereunder, and will at all times promptly and faithfully perform, or cause to be performed, in a commercially reasonable manner in all material respects all of the covenants, conditions and agreements contained in all leases of the Premises or portions thereof now or hereafter existing, on the part of the lessor thereunder to be kept and performed and will at all times, in a commercially reasonable

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manner, do all things necessary to compel performance by the lessee under each lease of all material obligations, covenants and agreements by such lessee to be performed thereunder. If any of such leases provide for the giving by the lessee of certificates with respect to the status of such leases, Mortgagor shall exercise its right to request such certificates within five (5) days of any demand therefor by Mortgagee, shall use commercially reasonable efforts to obtain same and shall deliver copies thereof to Mortgagee promptly upon receipt, provided the foregoing shall not be requested until the first anniversary hereof or, in the absence of an Event of Default, more frequently than once in any twelve (12) month period thereafter.

Each lease of the Premises, or of any part thereof, hereafter entered into shall provide that, in the event of the enforcement by Mortgagee of the remedies provided for hereby or by law, the lessee thereunder will, upon request of any person succeeding to the interest of Mortgagor as a result of such enforcement, automatically become the lessee of said successor in interest, without change in the terms or other provisions of such lease, provided, however, that said successor in interest shall not be bound by (i) any payment of rent or additional rent for more than one (1) month in advance, except prepayments in the nature of security for the performance by said lessee of its obligations under said lease or (ii) any amendment or modification of the lease made without the consent of Mortgagee or such successor in interest except to the extent the same are permitted under the Loan Agreement. Each lease shall also provide that, (x) the lease is subordinate to this Mortgage, subject to Mortgagee’s obligation to deliver non-disturbance agreements with respect to such lease set forth in the Loan Agreement, and (y) upon request by said successor in interest, such lessee shall execute and deliver an instrument or instruments confirming such attornment.

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.

All tenant security deposits (whether cash or a letter of credit) in respect of the Premises shall be held and applied as contemplated in the Loan Agreement.

Premises Documents.

Mortgagor shall (a) use all commercially reasonable efforts to do all things necessary to cause the due compliance and faithful performance in all material respects by the other parties to the Premises Documents of all obligations and agreements by such other parties to be complied with and performed thereunder, (b) not amend, modify or supplement the Premises Documents without Mortgagee’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed and (c) not terminate or consent to the termination of the Premises Documents.

Utilities.

Mortgagor will not, without the prior consent of Mortgagee, sell or contract to sell, or enter into an option to sell, or exchange, assign, convey, transfer possession of (including, without limitation, by lease) or otherwise dispose of all or any part of the utilities, utility commitments or other agreements or rights of any nature relating to the utilities, drainage ditches and/or treatment plants associated with the Mortgaged Property. Mortgagor further covenants and agrees that it will take any such action and execute, acknowledge, deliver and record and/or file any and all instruments as may be necessary, desirable or proper to keep any existing or future utility commitments covering the Mortgaged Property in a current and valid condition and to keep the existing utility capacity for the Mortgaged Property at or above the level required for the contemplated uses thereof. As used herein, the term “utilities” includes, without limitation, water, gas, electricity and storm and sanitary sewer.

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 costs of completing the “Improvements” as defined in the Loan Agreement (or, for the purpose of paying the “cost of improvement”, as such quoted

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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 and Lenders 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.

Interest Rate Protection.

Mortgagor agrees that upon request of Mortgagee it shall enter into an assignment of any interest rate protection agreements entered into by Mortgagor (if any), including, without limitation, the Interest Rate Protection Agreement, pursuant to which Mortgagor shall collaterally assign to Mortgagee all of its right, title and interest to receive any and all payments thereunder (and any related guarantee, if any) and shall deliver to Mortgagee an acknowledgment and agreement (either in such interest rate protection agreement or by separate instrument, in each case in form and substance reasonably satisfactory to Mortgagee) of the counterparty to such interest rate protection agreement acknowledging such assignment and agreeing to make any payments payable under or pursuant to such agreement directly to Mortgagee. If Mortgagee receives any payments under such agreement (other than a payment by reason of a Termination Event (as defined in such interest rate protection agreement) or any other payment during the existence of an Event of Default), Mortgagee shall hold and deposit the same in a cash collateral account as additional security for the Loan and the Other Loan and apply the same to interest payable on the next occurring payment date. If Mortgagee receives any payments under any such interest rate protection agreement during the existence of an Event of Default (including, without limitation, any payment by reason of a Termination Event), Mortgagee shall have the right to apply same to any portion of the sums secured hereby in any order it desires. If Mortgagee receives any payment by reason of a Termination Event under any such interest rate protection agreement, for so long as no Event of Default exists, such payment shall be held in a cash collateral account and shall be available in connection with the acquisition of a new interest rate protection agreement.

EVENTS OF DEFAULT AND REMEDIES

Events of Default and Certain Remedies.

If one or more of the following Events of Default shall happen, that is to say:

if (i) default shall be made in the payment of any principal under the Note when and as the same becomes due and payable, whether by maturity or by acceleration or otherwise, as herein or in the Note or Loan Agreement provided; or (ii) default shall be made in the payment of any interest under the Note or the Loan Agreement, the administrative fee payable to Mortgagee pursuant to Section 6.19 of the Loan Agreement and any fees payable to the Construction Consultant pursuant to the Loan Agreement, in any such case, when and as the same shall become due and payable, whether as part of any payment or prepayment or otherwise, in each case, as herein or in the Note or Loan Agreement provided, and such default shall have continued for a period of five (5) Business Days; or (iii) default shall be made in the payment of any other sums under the Note or the Loan Agreement, in any such case, when and as the same shall become due and payable, whether as part of any payment or prepayment or otherwise, in each case, as herein or in the Note or Loan Agreement provided, and such default shall have continued for a period of ten (10) days after notice to Mortgagor; or (iv) default shall be made in the payment of any tax or other charge required by Section 1.07 to be paid and said default shall have continued for a period of twenty (20) days after notice to Mortgagor; or

if default shall be made in the due observance or performance of any covenant, condition or agreement in the Note, the Loan Agreement, this Mortgage, any guaranty executed by Guarantor or in any other document executed or delivered to Mortgagee or Lenders in connection with the Loan (other than any such covenant, condition or agreement specifically provided for elsewhere in

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this Section 2.01), and such default shall have continued for a period of thirty (30) days after notice thereof shall have been given to Mortgagor by Mortgagee, or, in the case of such other documents, such shorter grace period, if any, as may be provided for therein; provided, however, that Mortgagor shall have such additional time in which to cure such default as is reasonably necessary if, by the reason of the nature thereof, such default cannot be cured by the payment of money and cannot by due diligence reasonably be wholly cured within said thirty (30) day or shorter period, as applicable, and Mortgagor has made diligent efforts to cure such default within the period aforesaid and thereafter prosecutes the curing of such default diligently and continuously to a cure within ninety (90) days thereafter, provided, further, that in no event shall such default result in an extension of the Completion Date or the Maturity Date (both as defined in the Loan Agreement); or

if any representation or warranty made by Mortgagor in Section 1.01 shall be incorrect, or if any other representation or warranty made to Mortgagee or Lenders in this Mortgage, the Loan Agreement, any guaranty executed by Guarantor, or in any other document, certificate or statement executed or delivered to Mortgagee or Lenders in connection with the Loan shall be incorrect in any material respect when made or remade; provided, however, that if any such representation or warranty is incorrect, Mortgagor shall promptly notify Mortgagee thereof and if such incorrect representation or warranty was made by the Person making same without knowledge to the contrary and is capable of being cured by such Person, such incorrect representation or warranty shall not be an Event of Default hereunder so long as Mortgagor (or such other Person) diligently proceeds to cure and cures such incorrect representation or warranty within thirty (30) days after notice from Mortgagee thereof such that the original representation or warranty made shall not then be incorrect in any material respect; provided, further, that if such incorrect representation or warranty is such that it cannot be cured by the payment of money, and if the cure thereof requires work to be performed, acts to be done or conditions to be removed which cannot, by their nature, with due diligence, be performed, done or removed, as the case may be, within such thirty (30) day period and Mortgagor (or such other Person) shall have commenced to cure such failure within such thirty (30) day period, such period shall be extended for so long as shall be required by Mortgagor (or such Person) to cure such incorrect representation or warranty, so long as during all such periods Mortgagor (or such other Person) diligently proceeds to effect such cure, provided, however, that in no event shall such thirty (30) day period be extended pursuant to the foregoing provisions for a period of in excess of one hundred twenty (120) days; or

if by order of a court of competent jurisdiction, a trustee, receiver or liquidator of the Mortgaged Property or any part thereof, or of Mortgagor shall be appointed and such order shall not be discharged or dismissed within ninety (90) days after such appointment; or

if Mortgagor shall file a petition in bankruptcy or for an arrangement or for reorganization pursuant to the Federal Bankruptcy Act or any similar federal or state law, or if, by decree of a court of competent jurisdiction, Mortgagor shall be adjudicated a bankrupt, or be declared insolvent, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or shall consent to the appointment of a receiver or receivers of all or any part of its property; or

if any of the creditors of Mortgagor shall file a petition in bankruptcy against Mortgagor or for reorganization of Mortgagor pursuant to the Federal Bankruptcy Act or any similar federal or state law, and if such petition shall not be discharged or dismissed within ninety (90) days after the date on which such petition was filed; or

if final judgment (i.e., beyond any right of appeal) for the payment of money in excess of $250,000 shall be rendered against Mortgagor and Mortgagor shall not discharge the same, cause it to be discharged or bond over it within ninety (90) days from the entry thereof, or shall not appeal therefrom or from the order, decree or process upon which or pursuant to which said judgment was granted, based or entered, and secure a stay of execution pending such appeal; or

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if any of the events enumerated in clauses (d) through (f) of this Section 2.01 shall happen to Guarantor; or

if there shall occur a default which is not cured within the applicable grace period or cure period, if any, under any mortgage, deed of trust or other security instrument covering all or part of the Mortgaged Property regardless of whether any such mortgage, deed of trust or other security instrument is prior or subordinate hereto; it being further agreed by Mortgagor that an Event of Default hereunder shall constitute an Event of Default under any such mortgage, deed of trust or other security instrument held by Mortgagee; or

if there shall occur a default which is not cured within the applicable grace period or cure period, if any, under any of the Premises Documents; or if any of the Premises Documents is amended, modified, supplemented or terminated without Mortgagee’s prior consent (if required under the Loan Documents); or

if any transfer, sale, conveyance, other disposition, encumbrance or pledge occurs in violation of Section 6.25 of the Loan Agreement; or

if, except as contemplated or permitted by the Loan Agreement, Mortgagor shall encumber, or agree to encumber, in any manner, either voluntarily or involuntarily, by operation of law or otherwise, all or any portion of the Mortgaged Property, or any interest or rights therein (including air or development rights) without, in any such case, the prior written consent of the Required Lenders. As used in this clause, “encumber” shall include, without limitation, the placing or permitting the placing of any mortgage, deed of trust, assignment of rents or other security device (Any consent under this clause and the immediately preceding clause by Lender may be granted or denied in each such Lender’s sole and absolute discretion and, if consent should be given, any such transfer or encumbrance shall be subject hereto and to any other documents which evidence or secure the Loan, and, if a transfer, any such transferee shall assume all of Mortgagor’s obligations hereunder and thereunder and agree to be bound by all provisions and perform all obligations contained herein and therein; consent to one such transfer or encumbrance shall not be deemed to be a waiver of the right to require consent to future or successive transfers or encumbrances); or

if Mortgagor at any time shall fail to maintain the insurance required by Section 1.09; or

if Mortgagor fails to remain in compliance with the covenant set forth in Section 9.03(i) of the Loan Agreement; or

if Mortgagor breaches any of its covenants and agreements set forth in Section 1.14(a)(i); or

if there shall occur a default, including a default in the payment of Additional Interest, by Mortgagor under the Interest Rate Protection Agreement, if any, which is not cured within the applicable grace or cure period, if any, provided for therein; or

if Mortgagor fails to complete construction of the Improvements on or before the Completion Date; or

if, in the event the Mortgaged Property fails to receive the benefits of the Industrial and Commercial Incentive Program under New York State Real Property Tax Law, Article 4, Mortgagor fails to reduce the Total Commitment (as defined in the Loan Agreement) by the ICIP Reduction Amount (as defined in the Loan Agreement) in the manner and when required by Section 6.27 of the Loan Agreement;

then and in every such case:

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I.    Mortgagee, by notice to Mortgagor, may declare the entire principal of the Note then outstanding (if not then due and payable), and all accrued and unpaid interest (including Additional Interest) and other sums in respect thereof, to be due and payable immediately, and upon any such declaration the principal of the Note and said accrued and unpaid interest (including Additional Interest) and other sums shall become and be immediately due and payable, anything herein or in the Note or the Loan Agreement to the contrary notwithstanding.

II.   Mortgagee personally, or by its agents or attorneys, may enter into and upon all or any part of the Premises, and each and every part thereof, and is hereby given a right and license and appointed Mortgagor’s attorney-in-fact and exclusive agent to do so, and may exclude Mortgagor, its agents and servants wholly therefrom; and having and holding the same, may use, operate, manage and control the Premises and conduct the business thereof, either personally or by its superintendents, managers, agents, servants, attorneys or receivers; and upon every such entry, Mortgagee, at the expense of the Mortgaged Property, from time to time, either by purchase, repairs or construction, may maintain and restore the Mortgaged Property, whereof it shall become possessed as aforesaid, may complete the construction of the Improvements and in the course of such completion may make such changes in the contemplated Improvements as it may deem desirable and may insure the same; and likewise, from time to time, at the expense of the Mortgaged Property, Mortgagee may make all necessary or proper repairs, renewals and replacements and such useful alterations, additions, betterments and improvements thereto and thereon as to it may deem advisable; and in every such case Mortgagee shall have the right to manage and operate the Mortgaged Property and to carry on the business thereof and exercise all rights and powers of Mortgagor with respect thereto either in the name of Mortgagor or otherwise as it shall deem best; and Mortgagee shall be entitled to collect and receive the Rents and every part thereof, all of which shall for all purposes constitute property of Mortgagor; and in furtherance of such right Mortgagee may collect the rents payable under all leases of the Premises directly from the lessees thereunder upon notice to each such lessee that an Event of Default exists hereunder accompanied by a demand on such lessee for the payment to Mortgagee of all rents due and to become due under its lease, and Mortgagor FOR THE BENEFIT OF MORTGAGEE AND EACH SUCH LESSEE hereby covenants and agrees that the lessee shall be under no duty to question the accuracy of Mortgagee’s statement of default and shall unequivocally be authorized to pay said rents to Mortgagee without regard to the truth of Mortgagee’s statement of default and notwithstanding notices from Mortgagor disputing the existence of an Event of Default such that the payment of rent by the lessee to Mortgagee pursuant to such a demand shall constitute performance in full of the lessee’s obligation under the lease for the payment of rents by the lessee to Mortgagor; and after deducting the expenses of conducting the business thereof and of all maintenance, repairs, renewals, replacements, alterations, additions, betterments and improvements and amounts necessary to pay for taxes, assessments, insurance and prior or other proper charges upon the Mortgaged Property or any part thereof, as well as just and reasonable compensation for the services of Mortgagee and for all attorneys, counsel, agents, clerks, servants and other employees by it engaged and employed, Mortgagee shall apply the moneys arising as aforesaid, first, to the payment of the principal of the Note and the interest thereon, when and as the same shall become payable and in such order and proportions as Mortgagee shall elect and second, to the payment of any other sums required to be paid by Mortgagor hereunder or under the Loan Agreement.

III. Mortgagee, with or without entry, personally or by its agents or attorneys, insofar as applicable, 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

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forth in Section 3.06), and all estate, right, title and interest, claim and demand therein, and right of redemption 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.

Other Matters Concerning Sales.

Mortgagee may adjourn from time to time any sale by it to be made hereunder or by virtue hereof by announcement at the time and place appointed for such sale or for such adjourned sale or sales; and, except as otherwise provided by any applicable provision of law, Mortgagee, without further notice or publication, may make such sale at the time and place to which the same shall be so adjourned.

Upon the completion of any sale or sales made by Mortgagee under or by virtue of this Article II, Mortgagee, or an officer of any court empowered to do so, shall execute and deliver to the accepted purchaser or purchasers a good and sufficient instrument or instruments conveying, assigning and transferring all estate, right, title and interest in and to the property and rights sold. Mortgagee is hereby appointed the true and lawful attorney irrevocable of Mortgagor, in its name and stead, to make all necessary conveyances, assignments, transfers and deliveries of the Mortgaged Property and rights so sold and for that purpose Mortgagee may execute all necessary instruments of conveyance, assignment and transfer, and may substitute one or more persons with like power, Mortgagor hereby ratifying and confirming all that its said attorney or such substitute or substitutes shall lawfully do by virtue hereof. Nevertheless, Mortgagor, if requested by Mortgagee, shall ratify and confirm any such sale or sales by executing and delivering to Mortgagee or to such purchaser or purchasers all such instruments as may be advisable, in the judgment of Mortgagee, for the purpose, and as may be designated in such request. Any such sale or sales made under or by virtue of this Article II, whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, shall operate to divest all the estate, right, title, interest, claim and demand whatsoever, whether at law or in equity, of Mortgagor in and to the properties and rights so sold, and shall be a perpetual bar both at law and in equity against Mortgagor and against any and all persons claiming or who may claim the same, or any part thereof from, through or under Mortgagor.

In the event of any sale or sales made under or by virtue of this Article II (whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale), the entire principal of, and interest and other sums on, the Note, if not previously due and payable, and all other sums required to be paid by Mortgagor pursuant hereto or to the Loan Agreement, immediately thereupon shall, anything in any of said documents to the contrary notwithstanding, become due and payable.

The purchase money, proceeds or avails of any sale or sales made under or by virtue of this Article II, together with any other sums which then may be held by Mortgagee hereunder, whether under the provisions of this Article II or otherwise, shall be applied as follows:

First: To the payment of the costs and expenses of such sale, including reasonable compensation to Mortgagee’s agents and counsel, and of any judicial proceedings wherein the same may be made, and of all liabilities, advances and reasonable expenses made or incurred by Mortgagee or Lenders hereunder, and also including reasonable attorneys’ fees, expenses and costs of investigation, all as actually incurred and including, without limitation, reasonable attorneys’ fees, costs and expenses of investigation incurred in appellate proceedings or in any

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action or participation in, or in connection with, any case or proceeding under any applicable bankruptcy or insolvency law, together with interest at the Default Rate on all advances made by Mortgagee or Lenders, and of all taxes, assessments or other charges, except any taxes, assessments or other charges subject to which the Mortgaged Property shall have been sold.

Second: To the payment of the whole amount then due, owing or unpaid upon the Note for principal and interest, with interest on the unpaid principal at the Default Rate from and after the happening of any Event of Default, in such order and amounts as Mortgagee may elect.

Third: To the payment of any other sums required to be paid by Mortgagor pursuant to any provision hereof or of the Note or the Loan Agreement, including all expenses, liabilities and advances made or incurred by Mortgagee hereunder or in connection with the enforcement hereof, together with interest at the Default Rate on all such advances.

Fourth: To the payment of the surplus, if any, to whomsoever may be lawfully entitled to receive the same.

Upon any sale or sales made under or by virtue of this Article II, whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, Mortgagee may bid for and acquire the Mortgaged Property or any part thereof and in lieu of paying cash therefor may make settlement for the purchase price by crediting upon the indebtedness secured hereby the net sales price after deducting therefrom the expenses of the sale and the costs of the action and any other sums which Mortgagee is authorized to deduct hereunder.

Payment of Amounts Due.

In case an Event of Default shall have happened and be continuing, then, upon demand of Mortgagee, Mortgagor will pay to Mortgagee the whole amount which then shall have become due and payable on the Note, for principal or interest (including Additional Interest) or both, as the case may be, and after the happening of said Event of Default will also pay to Mortgagee interest at the Default Rate on the then unpaid principal of the Note, and the sums required to be paid by Mortgagor pursuant to any provision hereof or of the Loan Agreement, and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to Mortgagee’s agents and counsel and any reasonable expenses incurred by Mortgagee hereunder. In the event Mortgagor shall fail forthwith to pay all such amounts upon such demand, Mortgagee shall be entitled and empowered to institute such action or proceedings at law or in equity as may be advised by its counsel for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against Mortgagor and collect, out of the property of Mortgagor wherever situated, as well as out of the Mortgaged Property, in any manner provided by law, moneys adjudged or decreed to be payable.

Mortgagee shall be entitled to recover judgment as aforesaid either before, after or during the pendency of any proceedings for the enforcement of the provisions hereof; and the right of Mortgagee to recover such judgment shall not be affected by any entry or sale hereunder, or by the exercise of any other right, power or remedy for the enforcement of the provisions hereof, or the foreclosure of the lien hereof; and in the event of a sale of the Mortgaged Property, and of the application of the proceeds of sale, as herein provided, to the payment of the debt hereby secured, Mortgagee shall be entitled to enforce payment of, and to receive all amounts then remaining due and unpaid upon, the Note, and to enforce payment of all other charges, payments and costs due hereunder or under the Loan Agreement or otherwise in respect of the Loan, and shall be entitled to recover judgment for any portion of the debt remaining unpaid, with interest at the Default Rate. In case of proceedings against Mortgagor in insolvency or bankruptcy or any proceedings for its reorganization or involving the liquidation of its assets, then Mortgagee shall be entitled to prove the whole amount of principal, interest and other sums due upon the Note to the full amount thereof, and all other payments, charges and costs due hereunder or under the Loan Agreement or otherwise in respect of the Loan, without deducting therefrom any proceeds obtained from the sale of the whole or any part of the Mortgaged Property, provided, however, that in no case shall Mortgagee receive a greater

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amount than such principal and interest and such other payments, charges and costs from the aggregate amount of the proceeds of the sale of the Mortgaged Property and the distribution from the estate of Mortgagor.

No recovery of any judgment by Mortgagee and no levy of an execution under any judgment upon the Mortgaged Property or upon any other property of Mortgagor shall affect in any manner or to any extent, the lien hereof upon the Mortgaged Property or any part thereof, or any liens, rights, powers or remedies of Mortgagee hereunder, but such liens, rights, powers and remedies of Mortgagee shall continue unimpaired as before.

Any moneys thus collected by Mortgagee under this Section 2.03 shall be applied by Mortgagee in accordance with the provisions of clause (d) of Section 2.02.

Actions; Receivers.

After the happening of any Event of Default and during its continuance, immediately upon the commencement of any action, suit or other legal proceedings by Mortgagee to obtain judgment for the principal of, or interest on, the Note and other sums required to be paid by Mortgagor pursuant to any provision hereof or of the Loan Agreement, or of any other nature in aid of the enforcement of the Note or hereof or of the Loan Agreement, Mortgagor will (a) waive the issuance and service of process and enter its voluntary appearance in such action, suit or proceeding and (b) if required by Mortgagee, consent to the appointment of a receiver or receivers of all or part of the Mortgaged Property and of any or all of the Rents in respect thereof. After the happening of any Event of Default and during its continuance, upon the commencement of any proceedings to foreclose this Mortgage or to enforce the specific performance hereof or in aid thereof or upon the commencement of any other judicial proceeding to enforce any right of Mortgagee, Mortgagee shall be entitled, as a matter of right, if it shall so elect, without the giving of notice to any other party and without regard to the adequacy or inadequacy of any security for the indebtedness secured hereby, forthwith either before or after declaring the unpaid principal of the Note to be due and payable, to the appointment of such a receiver or receivers.

Mortgagee’s Right to Possession.

Notwithstanding the appointment of any receiver, liquidator or trustee of Mortgagor, or of any of its property, or of the Mortgaged Property or any part thereof, Mortgagee shall be entitled to retain possession and control of all property now or hereafter held hereunder.

Remedies Cumulative.

No remedy herein conferred upon or reserved to Mortgagee is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity or by statute. No delay or omission of Mortgagee to exercise any right or power accruing upon any Event of Default shall impair any such right or power, or shall be construed to be a waiver of any such Event of Default or any acquiescence therein; and every power and remedy given hereby to Mortgagee may be exercised from time to time as often as may be deemed expedient by Mortgagee. Nothing herein or in the Note or the Loan Agreement shall affect the obligation of Mortgagor to pay the principal of, and interest and other sums on, the Note and the Loan Agreement in the manner and at the time and place therein respectively expressed.

Moratorium Laws; Right of Redemption.

Mortgagor will not at any time insist upon, or plead, or in any manner whatever claim or take any benefit or advantage of any stay or extension or moratorium law, any exemption from execution or sale of the Mortgaged Property or any part thereof, wherever enacted, now or at any time hereafter in force, which may affect the covenants and terms of performance hereof, nor claim, take or insist upon any benefit or advantage of any law now or hereafter in force providing for the valuation or appraisal of the Mortgaged

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Property, or any part thereof, prior to any sale or sales thereof which may be made pursuant to any provision herein, or pursuant to the decree, judgment or order of any court of competent jurisdiction; nor, after any such sale or sales, claim or exercise any right under any statute heretofore or hereafter enacted to redeem the property so sold or any part thereof and Mortgagor hereby expressly waives all benefit or advantage of any such law or laws, and covenants not to hinder, delay or impede the execution of any power herein granted or delegated to Mortgagee, but to suffer and permit the execution of every power as though no such law or laws had been made or enacted. Mortgagor, for itself and all who may claim under it, waives, to the extent that it lawfully may, all right to have the Mortgaged Property marshaled upon any foreclosure hereof.

Mortgagor’s Use and Occupancy after Default.

During the continuance of any Event of Default and pending the exercise by Mortgagee of its right to exclude Mortgagor from all or any part of the Premises, Mortgagor agrees to pay the fair and reasonable rental value for the use and occupancy of any portion of the Premises which are in its or any of its affiliates’ actual possession for such period and, upon default of any such payment, will vacate and surrender such possession of the Premises to Mortgagee or to a receiver, if any, and in default thereof may be evicted by any summary action or proceeding for the recovery of possession of premises for non-payment of rent, however designated.

Mortgagee’s Rights Concerning Application of Amounts Collected.

Notwithstanding anything to the contrary contained herein, upon the occurrence and during the continuance of an Event of Default, Mortgagee may apply, to the extent permitted by law, any amount collected hereunder to principal, interest (including Additional Interest) or any other sum due under the Note or the Loan Agreement or otherwise in respect of the Loan in such order and amounts, and to such obligations, as Mortgagee shall elect in its sole and absolute discretion.

MISCELLANEOUS

Assignment of Rents.

This Mortgage constitutes a present, absolute, unconditional and irrevocable assignment of all of the Rents now or hereafter accruing, and Mortgagor, without limiting the generality of the Granting Clause hereof, specifically hereby presently, absolutely, unconditionally and irrevocably assigns, transfers and sets over all of the Rents now or hereafter accruing to Mortgagee. The aforesaid assignment shall be effective immediately upon the execution hereof and is not conditioned upon the occurrence of any Event of Default or any other contingency or event, provided, however, that Mortgagee hereby grants to Mortgagor the right and license to collect and receive the Rents as they become due, and not in advance, so long as no Event of Default exists hereunder. Immediately upon the occurrence of any such Event of Default, the foregoing right and license shall be automatically terminated and of no further force or effect and, if any such Event of Default is cured, as evidenced by a certificate from Mortgagee to such effect, such right and license shall be automatically reinstated. Nothing contained in this Section or elsewhere herein shall be construed to make Mortgagee a mortgagee in possession unless and until Mortgagee actually takes possession of the Mortgaged Property, nor to obligate Mortgagee to take any action or incur any expense or discharge any duty or liability under or in respect of any leases or other agreements relating to the Mortgaged Property or any part thereof.

Security Agreement.

This Mortgage constitutes a security agreement under the applicable Uniform Commercial Code with respect to the Chattels and such other of the Mortgaged Property which is personal property. Mortgagor agrees that it will not terminate or amend any financing statements filed in connection with the Loan without Mortgagee’s prior consent. In addition to the rights and remedies granted to Mortgagee by other applicable law or hereby, Mortgagee shall have all of the rights and remedies with respect to the Chattels

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and such other personal property as are granted to a secured party under the applicable Uniform Commercial Code. Upon Mortgagee’s request, Mortgagor shall promptly and at its expense assemble the Chattels and such other personal property and make the same available to Mortgagee at a convenient place acceptable to Mortgagee. Mortgagor shall pay to Mortgagee on demand, with interest at the Default Rate, any and all expenses, including reasonable attorneys’ fees, incurred by Mortgagee in protecting its interest in the Chattels and such other personal property and in enforcing its rights with respect thereto. Any notice of sale, disposition or other intended action by Mortgagee with respect to the Chattels and such other personal property sent to Mortgagor in accordance with the provisions hereof at least five (5) days prior to such action shall constitute reasonable notice to Mortgagor. The proceeds of any such sale or disposition, or any part thereof, may be applied by Mortgagee to the payment of the indebtedness secured hereby in such order and proportions as Mortgagee in its discretion shall deem appropriate.

Application of Certain Payments.

In the event that all or any part of the Mortgaged Property is encumbered by one or more mortgages held by Mortgagee, Mortgagor hereby irrevocably authorizes and directs Mortgagee to apply any payment received by Mortgagee in respect of any note secured hereby or by any other such mortgage to the payment of such of said notes as Mortgagee shall elect in its sole and absolute discretion, and Mortgagee shall have the right to apply any such payment in reduction of principal and/or interest and in such order and amounts as Mortgagee shall elect in its sole and absolute discretion without regard to the priority of the mortgage securing the note so repaid or to contrary directions from Mortgagor or any other party.

Severability.

In the event any one or more of the provisions contained herein or in the Note or the Loan Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, but this Mortgage shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein or therein, provided, however, that if such provision held to be invalid, illegal or unenforceable relates to the payment of any sum under the Note or any other material monetary sum, then Mortgagee may, at the option of the Required Lenders, declare the indebtedness of such specific sums only to be immediately due and payable.

Modifications and Waivers.

No provision hereof may be changed, waived, discharged or terminated orally or by any other means except as provided in Section 8.12 of the Loan Agreement. Any agreement hereafter made by Mortgagor and Mortgagee relating hereto shall be superior to the rights of the holder of any intervening or subordinate lien or encumbrance.

Notices, Etc.

All notices, demands, consents, approvals and statements required or permitted hereunder shall be in writing and shall be deemed to have been sufficiently given or served for all purposes when presented personally, three (3) days after mailing by registered or certified mail, postage prepaid, or one (1) day after delivery to a nationally recognized overnight courier service (provided such courier service is instructed to deliver the next Business Day) providing evidence of the date of delivery, if to Mortgagor at (a) its address stated above and (b) Vornado Realty Trust, 888 Seventh Avenue, New York, New York 10019, Attention: Executive Vice President - Capital Markets; if to Mortgagee to the attention of its Real Estate Finance office at its address stated above, or at such other address of which a party shall have notified the party giving such notice in accordance with the provisions of this Section.

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Successors and Assigns.

All of the grants, covenants, terms, provisions and conditions herein shall run with the land and shall apply to, bind and inure to the benefit of, the respective successors and assigns of Mortgagor and Mortgagee.

Limitation on Interest.

Regardless of any provision contained herein or in any of the other Loan documents, the total liability for payments in the nature of interest shall not exceed the applicable limits now or hereafter imposed by any applicable state or federal interest rate laws to which Mortgagee and/or Lenders may be subject. If any payments in the nature of interest, fees and other charges made hereunder or under the Note or other Loan documents are held to be in excess of the applicable limits imposed by any such applicable state or federal interest rate laws, it is agreed that any such amount held to be in excess shall be considered payment of principal under the Note and the indebtedness evidenced thereby shall be reduced by such amount in the inverse order of maturity so that the total liability for payments in the nature of interest, fees and other charges shall not exceed the applicable limits imposed by any such applicable state or federal interest rate laws in compliance with the desires of Mortgagor, Mortgagee and Lenders.

Counterparts.

This Mortgage may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same mortgage.

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.

Lenders’ Sale of Interests in Loan.

Mortgagor recognizes that any Lender may sell and transfer interests in the Loan to one or more participants or assignees and that all documentation, financial statements, appraisals and other data, or copies thereof, relevant to Mortgagor, any Guarantor or the Loan, may be exhibited to and retained by any such participant or assignee or prospective participant or assignee, subject to the confidentiality provision under which the foregoing are delivered to such Person pursuant to the Loan Agreement.

No Merger of Interests.

Unless expressly provided otherwise, in the event that ownership hereof and title to the fee and/or leasehold estates in the Premises encumbered hereby shall become vested in the same person or entity, this Mortgage shall not merge in said title but shall continue to be and remain a valid and subsisting lien on said estates in the Premises for the amount secured hereby.

CERTAIN WAIVERS.

MORTGAGOR AND, BY ITS ACCEPTANCE HEREOF, MORTGAGEE FOR ITSELF AND ON BEHALF OF LENDERS HEREBY EXPRESSLY AND UNCONDITIONALLY WAIVE, IN CONNECTION WITH ANY FORECLOSURE OR SIMILAR ACTION OR PROCEDURE BROUGHT BY MORTGAGEE OR LENDERS HEREUNDER, ANY AND EVERY RIGHT IT MAY HAVE TO A TRIAL BY JURY.

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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 or Lenders, as applicable, shall (i) execute and 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 for recording, (ii) in the case of an assignment of this Mortgage, deliver the Notes, together with an allonge to the assignee in question and (iii) execute and deliver such other instruments of assignment, termination or release (as applicable), including appropriate UCC-3 termination statements, as Mortgagor may reasonably request, to evidence such satisfaction, release or assignment, as applicable. As a condition to any such satisfaction or assignment, Mortgagor covenants and agrees to pay Mortgagee’s reasonable fees and expenses (including reasonable attorneys’ fees and expenses) in connection therewith. Upon any such satisfaction or assignment, Mortgagee and Lenders shall, automatically and without the need for any 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 and Lenders 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.

Other Liens; Subrogation.

In the event any or all of the proceeds of the indebtedness secured hereby have been used to extinguish, extend or renew any indebtedness heretofore existing against the Mortgaged Property or to satisfy any indebtedness or obligation secured by a lien or encumbrance of any kind, such proceeds have been advanced by Lenders and/or Mortgagee at Mortgagor’s request, and, to the extent of such funds so used, the indebtedness hereby secured shall be subrogated to all of the rights, claims, liens, titles and interest heretofore existing against the Mortgaged Property to secure the indebtedness or obligation so extinguished, paid, extended or renewed, and the former rights, claims, liens, title and interests, if any, shall not be waived but rather shall be continued in full force and effect and in favor of Lenders and/or Mortgagee, as the case may be, and shall not be merged with the lien and security for the repayment of the indebtedness hereby secured.

Subordination.

The lien of this Mortgage is hereby made subject and subordinate to the lien of the Series I Building Loan Mortgage, Assignment of Leases and Rents and Security Agreement dated as of the date hereof from Mortgagor to Mortgagee in the amount of $249,285,000 which is intended to be recorded with the Office of the City Register, Queens County and to all amendments, extensions, modifications, renewals and consolidations thereof hereafter entered into.

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 units, 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.

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IN WITNESS WHEREOF, this Mortgage has been duly executed and delivered by Mortgagor.

ALEXANDER’S OF REGO PARK II, INC. a Delaware corporation
By:	/s/ Alan J. Rice
	Alan J. Rice Secretary

STATE OF NEW YORK )

: ss.:

COUNTY OF NEW YORK )

On the 19^th day of December in the year 2007, before me, the undersigned, a notary public in and for said state, personally appeared Alan J. Rice, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

By:	/s/ Ilona Jacqueline Williams
	Ilona Jacqueline Williams Notary Public
	My Commission Expires:  July 3, 2010

SCHEDULE A

PARCEL I- Block 2080 Lot 101

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

BEGINNING at the corner formed by the intersection of the southerly side of Horace Harding Expressway, formerly Horace Harding Boulevard and Nassau Boulevard, 260 feet wide, and the easterly side of Junction Boulevard, 80 feet wide, as said Horace Harding Expressway and Junction Boulevard are now laid out on the Final Topographical Map of the City of New York;

RUNNING THENCE easterly along the southerly side of Horace Harding Expressway, 456.35 feet to the westerly side of 97th Street, 60 feet wide, as shown on the Final Topographical Map of the City of New York, prior to the adoption of the Alteration Map No.3530 on December 20, 1951;

THENCE southerly along the said westerly side of 97th Street, 630 feet to the northerly side of 62nd Drive, 80 feet wide, as shown on the Final Topographical Map of the City of New York, prior to the adoption of the Alteration Map No.4822 on March 2, 1987 on Cal. No. 1;

THENCE westerly along the said northerly side of 62nd Drive, 456.35 feet to the easterly side of Junction Boulevard;

THENCE northerly along the easterly of Junction Boulevard, 630 feet to the point or place of BEGINNING.

EXCEPTING THEREFROM those portions of Horse Brook Creek as it winded and turned through the above described premises which are 10 feet wide and which lie between the westerly line of 97th Street as it was laid out 60 feet wide on the Final Map of the City of New York for the Borough of Queens prior to the adoption of the Alteration Map No.3530 on December 20, 1951 and the westerly line of 97th Street as it is laid out 70 feet wide on the present Final Map of the City of New York for the Borough of Queens.

PARCEL II

BEGINNING at a point on the northerly side of 62nd Drive, 80 feet wide, distant 80 feet westerly, as measured along the the northerly side of 62nd Drive, from the corner formed by the intersection of the westerly side of 97th Street, 70 feet wide, and said northerly side of 62nd Drive, between a lower limiting horizontal plane at elevation 35.70 feet and an upper limiting horizontal plane at elevation 80.2 feet;

RUNNING THENCE from this point of beginning, southerly along a line forming an interior angle of 90 degrees with the northerly side of 62nd Drive, 80 feet to the southerly side of 62nd Drive;

THENCE westerly along the southerly side of 62nd Drive along a line forming an interior angle of 90 degrees with the last mentioned course, 30 feet;

THENCE northerly along a line forming an interior angle of 90 degrees with the last mentioned course, 80 feet to the northerly side of 62nd Drive;

THENCE easterly along the northerly side of 62nd Drive along a line forming an interior angle of 90 degrees with the last mentioned course, 30 feet to the point or place of BEGINNING.

ELEVATIONS refer to the datum in use by the Queens Topographical Bureau which is 2.725 feet above mean sea level at Sandy Hook, New Jersey as established by the U.S. Coast and Geodetic Survey.

NY 50234854v1

TABLE OF CONTENTS

Page

ARTICLE I COVENANTS OF MORTGAGOR 5

Section 1.01. (a) Warranty of Title; Power and Authority 5

(b) Hazardous Materials 6

(c) Flood Hazard Area 6

Section 1.02. (a) Further Assurances 6

(b) Information Reporting and Back-up Withholding 7

Section 1.03. (a) Filing and Recording of Documents 7

(b) Filing and Recording Fees and Other Charges 7

Section 1.04. Payment and Performance of Loan Documents 7

Section 1.05. Type of Entity; Maintenance of Existence; Compliance with Laws                                                                                                                                                7

Section 1.06. After-Acquired Property 8

Section 1.07. (a) Payment of Taxes and Other Charges 8

(b) Payment of Mechanics and Materialmen 9

(c) Good Faith Contests 9

Section 1.08. Taxes on Mortgagee or Lenders 10

Section 1.09. Insurance 10

Section 1.10. Protective Advances by Mortgagee 17

Section 1.11. (a) Visitation and Inspection 17

(b) Estoppel Certificates 17

Section 1.12. Maintenance of Premises and Improvements 17

Section 1.13. Condemnation 18

Section 1.14. Leases 19

Section 1.15. Premises Documents 20

Section 1.16. Utilities 20

Section 1.17. Trust Fund; Lien Laws 21

Section 1.18. Interest Rate Protection 21

ARTICLE II EVENTS OF DEFAULT AND REMEDIES 21

Section 2.01. Events of Default and Certain Remedies 21

Section 2.02. Other Matters Concerning Sales 27

Section 2.03. Payment of Amounts Due 28

Section 2.04. Actions; Receivers 29

Section 2.05. Mortgagee’s Right to Possession 30

Section 2.06. Remedies Cumulative 30

Section 2.07. Moratorium Laws; Right of Redemption 30

Section 2.08. Mortgagor’s Use and Occupancy after Default 30

Section 2.09. Mortgagee’s Rights Concerning Application of Amounts Collected 31

ARTICLE III MISCELLANEOUS 31

Section 3.01. Assignment of Rents 31

Section 3.02. Security Agreement 31

Section 3.03. Application of Certain Payments 32

Section 3.04. Severability 32

Section 3.05. Modifications and Waivers 32

Section 3.06. Notices, Etc 32

Section 3.07. Successors and Assigns 33

Section 3.08. Limitation on Interest 33

Section 3.09. Counterparts 33

Section 3.10. Substitute Mortgages 33

Section 3.11. Lenders’ Sale of Interests in Loan 33

Section 3.12. No Merger of Interests 33

Section 3.13. CERTAIN WAIVERS 34

(i)

Page

Section 3.14. Satisfaction or Assignment of Mortgage 34

Section 3.15. Other Liens; Subrogation 34

Section 3.16. Subordination 34

Section 3.17. New York Provisions 35

(ii)

EX-10

Exhibit 10.5

BLOCK: 2080

LOT: 101

ADDRESS: 61-01 Junction Boulevard, Queens, New York

COUNTY: Queens

Date:  December 21, 2007

SERIES I

PROJECT LOAN MORTGAGE, ASSIGNMENT OF LEASES

AND RENTS AND SECURITY AGREEMENT

(“this Mortgage”)

FROM

ALEXANDER’S OF REGO PARK II, INC.,

a corporation organized and existing under the laws of Delaware

(“Mortgagor”)

Address and Chief

Executive Office of Mortgagor: c/o Alexander’s, Inc.

210 Route 4 East

Paramus, New Jersey 07652

TO

PB CAPITAL CORPORATION

as administrative agent for Lenders (as hereinafter defined)

(together with its successors in such capacity, “Mortgagee”)

Address of Mortgagee: 230 Park Avenue

New York, New York 10169

Mortgage Amount: $65,715,000

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

Schiff Hardin LLP

900 Third Avenue, 23rd Floor

New York, New York 10022

Attention: Graham R. Hone, Esq.

NY 50233957v2

THE AMOUNT OF THIS MORTGAGE IS $65,715,000.

RECITAL

Mortgagor is the owner of the premises described in SCHEDULE A and proposes to erect substantial improvements thereon. In order to finance certain non-”cost-of-improvement” items in connection with the construction thereof, Mortgagor has requested that Lenders provide a loan pursuant to the Loan Agreement identified below, of which up to the Mortgage Amount shall be secured by this Mortgage. Mortgagor has executed and delivered its notes, each dated the date hereof, obligating Mortgagor to pay, in the aggregate, the amount of the loan to be made pursuant to the Loan Agreement, or so much thereof as may be advanced from time to time in accordance with the terms of the Loan Agreement, a portion of which up to the Mortgage Amount is secured hereby. Said notes, as the same may hereafter be amended, modified, extended, severed, assigned, renewed, replaced or restated, and including any substitute or replacement notes executed pursuant to the Loan Agreement, are hereinafter referred to individually and collectively as the “Loan Note”. In addition, Mortgagor may after the date hereof enter into the Interest Rate Protection Agreement (as hereinafter defined) with Counterparty (as hereinafter defined), providing for one or more interest rate hedging transactions. The Loan Note and, if entered into, the Interest Rate Protection Agreement are hereinafter referred to individually and collectively as the “Note”. In the event the Interest Rate Protection Agreement is entered into and in order to avail itself of the benefits of this Mortgage, Counterparty shall be deemed to have appointed Mortgagee to act as its agent hereunder. Notwithstanding the language in the Granting Clause and Section 1.10 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 Lenders or 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.

CERTAIN DEFINITIONS AND RULES OF CONSTRUCTION

Mortgagor and Mortgagee agree that, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified.

“Additional Interest” means any and all sums that shall become due and payable by Mortgagor under the Interest Rate Protection Agreement.

“Building Loan Agreement” means that certain Building Loan Agreement, dated as of the date hereof, among Mortgagor, as Borrower, PB Capital, NordLB, Wells Fargo, LBBW and Bank of Ireland, as Lenders, and Mortgagee, as the same may hereafter be amended, modified or supplemented from time to time.

“Business Day” has the meaning given to such term in the Building Loan Agreement.

“Chattels” means all fixtures, furnishings, fittings, appliances, apparatus, equipment, building materials and components, machinery, boilers, oil burners, power systems, heating, ventilating and air conditioning systems, elevators, and all other chattels and articles of personal property, of whatever kind or nature, and any additions thereto and any replacements, proceeds or products thereof (other than those owned by lessees or those claiming under or through lessees or leased by lessees from parties other than Mortgagor) now or at any time hereafter intended to be or actually affixed to, attached to, placed upon, or used in any way in connection with the complete and comfortable use, enjoyment, development, occupancy or operation of the Premises, and whether located on or off the Premises.

“Counterparty” means any Lender (but only a Lender) in its capacity as a party to any Interest Rate Protection Agreement, and its successors and assigns in such capacity.

NY 50233957v2

“Declaration” has the meaning given to such term in the Building Loan Agreement.

“Default Rate” has the meaning given to such term in the Building Loan Agreement.

“Events of Default” means the events and circumstances described as such in Section 2.01.

“Guarantor” means the party or parties, if any, identified as such in the Loan Agreement.

“Guaranty” has the meaning given to such term in the Loan Agreement.

“Hazardous Materials” means any pollutant, effluents, emissions, contaminants, toxic or hazardous wastes, materials or substances, as any of those terms are defined from time to time in or for the purposes of any relevant environmental law, rule, regulation, code, permit, order, notice, demand letter or other binding determination (hereinafter, “Environmental Laws”) including, without limitation, asbestos fibers and friable asbestos, polychlorinated biphenyls and any petroleum or hydrocarbon-based products or derivatives.

“Improvements” means all structures or buildings, and replacements thereof, to be erected or now or hereafter located upon the Premises, including all plant equipment, apparatus, machinery and fixtures of every kind and nature whatsoever forming part of said structures or buildings.

“Interest Rate Protection Agreement” means, collectively, the ISDA Master Agreement between Counterparty (that is a Lender) and Mortgagor with respect to interest rate hedging which may be hereafter entered into by and between Counterparty and Mortgagor, as any of the same may be amended, modified or supplemented from time to time, together with any and all “confirmations” under any thereof, provided, however, that the terms of each of the foregoing shall be subject to Mortgagee’s approval, not to be unreasonably withheld or delayed.

“Lenders” means, collectively, PB Capital, Norddeutsche Landesbank Girozentrale, New York Branch (“NordLB”), Wells Fargo Bank, National Association (“Wells Fargo”), Landesbank Baden-Württemberg, New York Branch (“LBBW”) and Bank of Ireland, Connecticut Branch (“Bank of Ireland”) and such other lending institutions who become “Lenders” pursuant to the Loan Agreement, together with their successors and permitted assigns in accordance with the terms of the Loan Agreement.

“Loan” means that portion of the loan in the Mortgage Amount made by Lenders to Mortgagor pursuant to the Loan Agreement and secured hereby.

“Loan Agreement” means that certain Project Loan Agreement, dated as of the date hereof, among Mortgagor, as Borrower, PB Capital, NordLB, Wells Fargo, LBBW and Bank of Ireland, as Lenders, and Mortgagee, as the same may hereafter be amended, modified or supplemented from time to time.

“Lockbox Agreement” has the meaning given to such term in the Building Loan Agreement.

“PB Capital” means PB Capital Corporation, in its individual capacity and not as Mortgagee.

“Permitted Exceptions” means any title exceptions or objections shown in the title policy insuring the lien hereof, including matters over which the Title Insurer (as defined in the Building Loan Agreement) has agreed to insure Mortgagee pursuant to endorsements to such title policy (which endorsements shall be in form and substance reasonably satisfactory to Mortgagee).

“Premises” means the premises described in SCHEDULE A including all of the easements, rights, privileges and appurtenances (including air or development rights) thereunto belonging or in anywise appertaining, and all of the estate, right, title, interest, claim or demand whatsoever of Mortgagor therein and in the streets and ways adjacent thereto, either in law or in equity, in possession or expectancy, now or

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NY 50233957v2

hereafter acquired, and as used herein shall, unless the context otherwise requires, be deemed to include the Improvements.

“Premises Documents” means all reciprocal easement or operating agreements, declarations, development agreements, developer’s or utility agreements, and any similar such agreements or declarations now or hereafter affecting the Premises or any part thereof.

“Required Lenders” has the meaning given to such term in the Building Loan Agreement.

All terms of this Mortgage which are not defined above shall have the meaning set forth elsewhere in this Mortgage.

Except as expressly indicated otherwise, when used in this Mortgage (i) “or” is not exclusive, (ii) “hereunder”, “herein”, “hereof” and the like refer to this Mortgage as a whole, (iii) “Article”, “Section” and “Schedule” refer to Articles, Sections and Schedules of this Mortgage, (iv) terms defined in the singular have a correlative meaning when used in the plural and vice versa, (v) a reference to a law or statute includes any amendment or modification to, or replacement of, such law or statute and (vi) a reference to an agreement, instrument or document means such agreement, instrument or document as the same may be amended, modified or supplemented from time to time in accordance with its terms. The cover page and all Schedules hereto are incorporated herein and made a part hereof. Any table of contents and the headings and captions herein are for convenience only and shall not affect the interpretation or construction hereof.

GRANTING CLAUSE

NOW, THEREFORE, Mortgagor, in consideration of the premises and in order to secure the payment of both the principal of, and the interest (including interest at the Default Rate and Additional Interest) and any other sums payable under, the Note, this Mortgage or the Loan Agreement and the performance and observance of all the provisions hereof and of the Note and the Loan Agreement, hereby gives, grants, bargains, sells, warrants, aliens, remises, releases, conveys, assigns, transfers, mortgages, hypothecates, deposits, pledges, sets over and confirms unto Mortgagee, all its estate, right, title and interest in, to and under any and all of the following described property (hereinafter, the “Mortgaged Property”) whether now owned or held or hereafter acquired:

(i) the Premises;

(ii) the Improvements;

(iii) the Chattels;

(iv) the Premises Documents;

(v)  all rents, royalties, issues, profits, revenue, income, recoveries, reimbursements and other benefits of the Mortgaged Property (hereinafter, the “Rents”) and all leases of the Mortgaged Property or portions thereof now or hereafter entered into and all right, title and interest of Mortgagor thereunder, including, without limitation, cash, letters of credit or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether such cash, letters of credit or securities are to be held until the expiration of the terms of such leases or applied to one or more of the installments of rent coming due immediately prior to the expiration of such terms, and including any guaranties of such leases and any lease cancellation, surrender or termination fees in respect thereof, all subject, however, to the provisions of Section 3.01;

(vi) all (a) development work product prepared in connection with the Premises, including, but not limited to, engineering, drainage, traffic, soil and other studies and tests; water, sewer, gas, electrical and telephone approvals, taps and connections; surveys, drawings, plans and

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NY 50233957v2

specifications; and subdivision, zoning and platting materials; (b) building and other permits, rights, licenses and approvals relating to the Premises; (c) contracts and agreements (including, without limitation, contracts with architects and engineers, construction contracts and contracts for the maintenance, management or leasing of the Premises), contract rights, logos, trademarks, trade names, copyrights and other general intangibles used or useful in connection with the ownership, operation or occupancy of the Premises or any part thereof (excluding the name “Alexander’s” and any variants thereof); (d) financing commitments (debt or equity) issued to Mortgagor in respect of the Premises and all deposits and other amounts payable to Mortgagor thereunder; (e) contracts for the sale of all or any portion of the Premises, the Improvements or the Chattels, and all deposits and other amounts payable by the purchasers thereunder; (f) operating and other bank accounts, and monies therein, of Mortgagor relating to the Premises, including, without limitation, any accounts relating to real estate taxes or assessments; (g) interest rate protection agreements entered into by Mortgagor in respect of the Loan, whether pursuant to the Loan Agreement or otherwise, including, without limitation, the Interest Rate Protection Agreement; (h) commercial tort claims related to the Premises, the Improvements or the Chattels; (i) contracts for the purchase of inclusionary housing certificates and 421-a certificates; and (j) any inclusionary housing certificates and 421-a certificates, but in each case of the items set forth above in this paragraph (vi), to the extent assignable;

(vii)all rights of Mortgagor under promissory notes, letters of credit, electronic chattel paper, proceeds from accounts, payment intangibles, and general intangibles related to the Premises, as the terms “accounts”, “general intangibles”, and “payment intangibles” are defined in the applicable Uniform Commercial Code Article 9, as the same may be modified or amended from time to time;

(viii)           all other assets of Mortgagor related in any way to the Premises, subject to certain limitations that may be set forth herein; and

(ix) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims, including, without limitation, proceeds of insurance and condemnation awards, and all rights of Mortgagor to refunds of real estate taxes and assessments.

TO HAVE AND TO HOLD unto Mortgagee, its successors and assigns forever.

COVENANTS OF MORTGAGOR

Mortgagor covenants and agrees as follows:

Warranty of Title; Power and Authority.

Mortgagor warrants that it has a good and marketable title to an indefeasible fee estate in the Premises subject to no lien, charge or encumbrance except for Permitted Exceptions; that it owns the Chattels, all leases and the Rents in respect of the Mortgaged Property and all other personal property encumbered hereby free and clear of liens and claims; and that this Mortgage is and will remain a valid and enforceable lien on the Mortgaged Property subject only to the exceptions referred to above. Mortgagor has full power and lawful authority to mortgage the Mortgaged Property in the manner and form herein done or intended hereafter to be done. Mortgagor will preserve such title, and will forever warrant and defend the same to Mortgagee and will forever warrant and defend the validity and priority of the lien hereof against the claims of all persons and parties whomsoever.

Hazardous Materials.

Mortgagor represents and warrants that (i) except as disclosed in environmental reports provided to Mortgagee and to the best of Mortgagor’s knowledge, there has never been a release, deposit, disposal or

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NY 50233957v2

leak of Hazardous Materials into or upon or under the Premises and the improvements thereon, including by means of burial, disposal, discharge, spillage, leakage, seepage, dumping and the like, that could reasonably be expected to result in liability under any Environmental Law or that has not been fully remediated in accordance with Environmental Law, (ii) neither it nor any portion of the Premises or improvements thereon is in violation of, or subject to any existing, pending or, to the best of Mortgagor’s knowledge, threatened investigation or proceeding by any governmental authorities under, any Environmental Law, (iii) there are no claims, litigation, administrative or other proceedings, whether actual or threatened, or judgments or orders, concerning Hazardous Materials relating in any way to the Premises or the improvements thereon and (iv) Mortgagor is not required by any Environmental Law to obtain any permits or licenses to construct or use any improvements, fixtures or equipment with respect to the Premises, or if any such permit or license is required such permit or license has been obtained or Mortgagor reasonably expects that such permit or license will be obtained in due course and will diligently pursue the obtaining thereof. Mortgagor will comply with all applicable Environmental Laws and will, at its sole cost and expense, promptly remove, or cause the removal of, any and all Hazardous Materials or the effects thereof at any time identified as being on, in, under or affecting the Premises which are in violation of any Environmental Law.

Flood Hazard Area.

Mortgagor represents that neither the Premises nor any part thereof is located in an area identified by the Secretary of the United States Department of Housing and Urban Development or by any applicable federal agency as having special flood hazards or, if it is, Mortgagor has obtained the insurance required by Section 1.09.

Further Assurances.

Mortgagor will, at its sole cost and expense, do, execute, acknowledge and deliver all and every such further acts, deeds, conveyances, mortgages, assignments, notices of assignment, transfers and assurances as Mortgagee shall from time to time reasonably require, for the better assuring, conveying, assigning, transferring and confirming unto Mortgagee the property and rights hereby conveyed or assigned or intended now or hereafter so to be, or which Mortgagor may be or may hereafter become bound to convey or assign to Mortgagee, or for carrying out the intention or facilitating the performance of the terms hereof, or for filing, registering or recording this Mortgage and, on demand, will execute and deliver, and hereby irrevocably authorizes Mortgagee to execute (including in Mortgagor’s name) and/or file, at any time and from time to time, one or more financing statements (including amendments), chattel mortgages or comparable security instruments, to evidence or perfect more effectively Mortgagee’s security interest in and the lien hereof upon the Chattels and other personal property encumbered hereby.

Information Reporting and Back-up Withholding.

Mortgagor will, at its sole cost and expense, do, execute, acknowledge and deliver all and every such acts, information reports, returns and withholding of monies as shall be necessary or appropriate to comply fully, or to cause full compliance, with all applicable information reporting and back-up withholding requirements of the Internal Revenue Code of 1986, as amended (including all regulations now or hereafter promulgated thereunder) in respect of the Premises and all transactions related to the Premises, and will at all times (i) at Mortgagee’s reasonable request, provide Mortgagee with reasonably satisfactory evidence of such compliance and (ii) notify Mortgagee of the information reported in connection with such compliance.

Filing and Recording of Documents.

Mortgagor forthwith upon the execution and delivery hereof, and thereafter from time to time, will cause this Mortgage, the Loan Agreement and any security instrument creating a lien or evidencing the lien hereof upon the Chattels and each instrument of further assurance to be filed, registered or recorded in such manner and in such places as may be required by any present or future law in order to publish notice of and fully to protect the lien hereof upon, and the interest of Mortgagee in, the Mortgaged Property.

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NY 50233957v2

Filing and Recording Fees and Other Charges.

Mortgagor will pay all filing, registration or recording fees, and all expenses incident to the execution and acknowledgment hereof, any mortgage supplemental hereto, any security instrument with respect to the Chattels, and any instrument of further assurance, and will pay all federal, state, county and municipal stamp taxes and other taxes (other than income, withholding, backup withholding, branch profits, franchise, similar taxes or taxes and fees in lieu of such taxes), duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of the Note, this Mortgage, any mortgage supplemental hereto, any security instrument with respect to the Chattels or any instrument of further assurance.

Payment and Performance of Loan Documents.

Mortgagor will punctually pay the principal and interest (including Additional Interest) and all other sums to become due in respect hereof and of the Note and the Loan Agreement at the time and place and in the manner specified therein, according to the true intent and meaning thereof, all in currency of the United States of America which at the time of such payment shall be legal tender for the payment of public and private debts. Mortgagor will duly and timely comply with and perform all of the terms, provisions, covenants and agreements contained in said documents and in all other documents or instruments executed or delivered by Mortgagor to Mortgagee or Lenders in connection with the Loan, and will permit no failures of performance thereunder.

Type of Entity; Maintenance of Existence; Compliance with Laws.

Mortgagor represents that its correct legal name, jurisdiction of formation/existence and chief executive office or, if applicable, sole place of business (or, if an individual, its principal residence) are as set forth on the cover page hereof. Mortgagor, if other than a natural person, further represents that it has delivered to Mortgagee a current, original certificate issued by the appropriate official of said jurisdiction evidencing such formation and existence, and agrees that it will, so long as it is owner of all or part of the Mortgaged Property, do all things necessary to preserve and keep in full force and effect its existence, franchises, rights and privileges as a business or stock corporation, partnership, limited liability company, trust or other entity under the laws of such jurisdiction. Mortgagor, if other than a natural person, will (a) not modify or amend such certificate or change its legal name or jurisdiction of formation/existence without Mortgagee’s prior consent, not to be unreasonably withheld, conditioned or delayed and (b) promptly notify Mortgagee of any change to the location of its chief executive office or, if applicable, sole place of business. Mortgagor, if an individual, will not change its legal name or principal residence without first giving Mortgagee at least thirty (30) days’ prior notice. Mortgagor will duly and timely comply with all laws, regulations, rules, statutes, orders and decrees of any governmental authority or court applicable to it or to the Mortgaged Property or any part thereof except where the failure to comply would not have a Material Adverse Effect (as defined in the Building Loan Agreement).

After-Acquired Property.

All right, title and interest of Mortgagor in and to all extensions, improvements, betterments, renewals, substitutes and replacements of, and all additions and appurtenances to, the Mortgaged Property, hereafter acquired by, or released to, Mortgagor or constructed, assembled or placed by Mortgagor on the Premises, and all conversions of the security constituted thereby, immediately upon such acquisition, release, construction, assembling, placement or conversion, as the case may be, and in each such case, without any further mortgage, conveyance, assignment or other act by Mortgagor, shall become subject to the lien hereof as fully and completely, and with the same effect, as though now owned by Mortgagor and specifically described in the Granting Clause hereof, but at any and all times Mortgagor will execute and deliver to Mortgagee any and all such further assurances, mortgages, conveyances or assignments thereof as Mortgagee may reasonably require for the purpose of expressly and specifically subjecting the same to the lien hereof.

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Payment of Taxes and Other Charges.

Mortgagor, from time to time when the same shall become due and payable, will pay and discharge all taxes of every kind and nature (including real and personal property taxes and income, franchise, withholding, backup withholding, profits and gross receipts taxes), all general and special assessments, levies, permits, inspection and license fees, all water and sewer rents and charges, all charges for utilities, and all other charges (public or private) whether of a like or different nature, imposed upon or assessed against it or the Mortgaged Property or any part thereof or arising in respect of the occupancy, use or possession thereof. Mortgagor will, upon Mortgagee’s request, deliver to Mortgagee receipts evidencing (to Mortgagee’s reasonable satisfaction) the payment of all such taxes, assessments, levies, fees, rents and other charges imposed upon or assessed against it or the Mortgaged Property or any portion thereof.

Upon the occurrence and during the existence of an Event of Default, Mortgagee may, at its option, to be exercised by thirty (30) days’ notice to Mortgagor, require the deposit by Mortgagor, at the time of each payment of an installment of interest or principal under the Note (but no less often than monthly), of an additional amount sufficient to discharge the obligations under this clause (a) when they become due (other than with respect to income, withholding, backup withholding, profits and franchise taxes, similar taxes and taxes and fees in lieu of such taxes). The determination of the amount so payable and of the fractional part thereof to be deposited with Mortgagee, so that the aggregate of such deposits shall be sufficient for this purpose, shall be made by Mortgagee in its reasonable discretion. Such amounts shall be held by Mortgagee without interest and applied to the payment of the obligations in respect of which such amounts were deposited or, at Mortgagee’s option, to the payment of said obligations in such order or priority as Mortgagee shall determine, on or before the respective dates on which the same or any of them would become delinquent. If one (1) month prior to the due date of any of the aforementioned obligations the amounts then on deposit therefor shall be insufficient for the payment of such obligation in full, Mortgagor within ten (10) days after demand shall deposit the amount of the deficiency with Mortgagee. Nothing herein contained shall be deemed to affect any right or remedy of Mortgagee under any provisions hereof or of any statute or rule of law to pay any such amount and to add the amount so paid, together with interest at the Default Rate, to the indebtedness hereby secured.

Payment of Mechanics and Materialmen.

Mortgagor will pay, from time to time when the same shall become due, all lawful claims and demands of mechanics, materialmen, laborers, and others which, if unpaid, might result in, or permit the creation of, a lien on the Mortgaged Property or any part thereof, and in general will do or cause to be done everything necessary so that the lien hereof shall be fully preserved, at the cost of Mortgagor and without expense to Mortgagee. Without limiting the generality of the foregoing, Mortgagor will discharge, bond over, or have the Title Insurer insure over in a manner reasonably satisfactory to Mortgagee any mechanic’s lien within thirty (30) days of notice of the same (and in any event prior to the next advance to be made under the Loan Agreement) in case of the filing of any claims for lien or proceedings for the enforcement thereof.

Good Faith Contests.

Nothing in this Section 1.07 shall require the payment or discharge of any obligation imposed upon Mortgagor by this Section so long as Mortgagor shall in good faith and at its own expense contest the same or the validity thereof by appropriate legal proceedings which shall operate to prevent the collection thereof or other realization thereon and the sale or forfeiture of the Mortgaged Property or any part thereof to satisfy the same; provided, however, that (i) during such contest Mortgagor shall, at Mortgagee’s option, provide security reasonably satisfactory to Mortgagee, assuring the discharge of Mortgagor’s obligation hereunder and of any additional charge, penalty or expense arising from or incurred as a result of such contest, except that in the case of claims described in paragraph (b) of this Section 1.07, Mortgagor shall bond over, or have the Title Insurer insure over in a manner reasonably satisfactory to Mortgagee, any such claim prior to the next advance to be made under the Loan Agreement, and (ii) if at any time payment of any obligation imposed upon Mortgagor by clause (a) above shall become necessary to prevent the delivery of a tax deed or other instrument conveying the Mortgaged Property or any portion thereof because of non-payment, then Mortgagor shall pay the same in sufficient time to prevent the delivery of

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such tax deed or other instrument. In the case of claims described in paragraph (b) of this Section 1.07, if Mortgagor shall fail, within sixty (60) days after becoming aware of same, either (i) to discharge or (ii) to contest claims asserted and give security in the manner provided in this paragraph (c), or having commenced to contest the same, and having given such security, shall fail to prosecute such contest with diligence, or to maintain such security for its full amount, or upon adverse conclusion of any such contest, to cause any judgment or decree to be satisfied and lien to be released, then and in any such event, Mortgagee may, at its election (but shall not be required to), procure the release and discharge of any claim and any judgment or decree thereon and, further, may in its sole discretion effect any settlement or compromise of the same, and any amounts so expended by Mortgagee, including premiums paid or security furnished in connection with the issuance of any surety company bonds, shall constitute advances covered by Section 1.10. In settling, compromising or discharging any claims for lien, Mortgagee shall not be required to inquire into the validity or amount of any such claim. Notwithstanding the foregoing, Lenders shall have no obligation to make disbursements of Loan proceeds under the terms of the Loan Agreement at any time prior to such time as Mortgagor shall have discharged or contested any claims in accordance with this paragraph (c).

Taxes on Mortgagee or Lenders.

Mortgagor will pay any taxes (except income, withholding, backup withholding, branch profits, franchise, similar taxes or taxes and fees in lieu of such taxes) imposed on Mortgagee or any Lender by reason of their interests in the Note or this Mortgage, but only to the extent provided for in the Building Loan Agreement.

Insurance.

Mortgagor will at all times (except as provided herein) provide, maintain and keep in force:

from the time that initial construction begins (soil removal for environmental remediation not to be considered beginning construction) on the new construction, builder’s risk insurance policies insuring the Premises, Improvements and Chattels for not less than 100% of the completed project insurable replacement cost value of the Improvements, which insurance shall be written on a “completed value” form (100% non-reporting) or its equivalent and shall include endorsements providing replacement cost coverage, agreed amount and/or coinsurance waiver, and granting permission to occupy. Such policies shall insure against loss or damage by fire and lightning; against loss or damage by other risks (including acts of terrorism) embraced by coverage of the type now known as “All Risk” or Special Peril property insurance, as is available in the insurance market place as of the closing date, endorsed to provide replacement cost coverage with agreed amount and/or co-insurance waiver, coverage for demolition and increased cost of construction due to the enforcement of laws regulating reconstruction following a loss in amounts not less than $3,000,000 per occurrence, and coverage for flood and earthquake in amounts not less than $5,000,000 per occurrence and in the annual aggregate for each peril; and against such other risks or hazards as Mortgagee from time to time may reasonably designate in an amount sufficient to prevent Mortgagee or Mortgagor from becoming a co-insurer under the terms of the applicable policies, but in any event in an amount not less than 100% of the then full replacement cost of the Improvements (exclusive of the cost of excavations, foundations and footings below the lowest basement floor) without deduction for physical depreciation. Such builder’s risk insurance shall also cover: (i) loss of materials, equipment, machinery, and supplies which become part of the completed project whether on-site, in transit, or stored off-site, or loss of any temporary structures, sidewalks, retaining walls, and underground property; and (ii) soft costs including coverage for 100% of the interest expense during the period of the construction and coverage for recurring expenses, including, but not limited to, plans, specifications, blueprints and models, real estate taxes, real estate commissions, advertising, architectural and engineering supervisory costs, legal and accounting costs, and delayed completion business income/rental interruption on an actual loss sustained basis. Mortgagor’s obligation to obtain terrorism coverage pursuant to the above and paragraph (ii), (iii) and (iv) below shall be qualified as follows: If the United States Government sponsored reinsurance backstop under the Terrorist Risk Insurance Act

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is no longer in effect, Mortgagor shall be required to provide terrorism insurance coverage with the respect to the Improvements in the minimum amount equal to the greater of (a) the full insurable replacement cost value of the Improvements and one (1) year lost rents value, or if such terrorism insurance coverage is not commercially available at Commercially Reasonable Terrorism Insurance Rates (as defined below), then in a minimum amount equal to the amount of terrorism insurance coverage which is commercially available at Commercially Reasonable Terrorism Insurance Rates. For purposes herein, “Commercially Reasonable Terrorism Insurance Rates” means, with respect to any amount of terrorism insurance coverage (inclusive of loss to property and lost rents), the rate which Administrative Agent determines to be reasonable; Mortgagor and Administrative Agent acknowledging and agreeing that (1) any annual premium with respect to terrorism insurance coverage which does not exceed one-half of one percent (0.5%) of the total insurable values with respect to loss of property and lost rents shall be deemed reasonable and (2) no inference shall be drawn that premiums in excess of the amount referred to in clause (1) above for terrorism insurance coverage are to be deemed unreasonable;

Property insurance covering any improvements on the Premises, including 100% of the insurable replacement cost value of all tenant improvements and betterments that any Lease (as defined in the Building Loan Agreement) or Premises Document requires Mortgagor to insure, against all risks of loss to the Improvements customarily covered by so-called “Cause of Loss – Special Form” policies as available in the insurance market as of the date of substantial completion of the Improvements (and against such additional risks of loss as may be customarily covered by such policies after such date). Each Cause of Loss – Special Form insurance policy shall cover: (i) 100% of the insurable replacement cost value of the Improvements; (ii) 100% of the insurable replacement cost value of all tenant improvements and betterments that any Lease or Premises Document requires Mortgagor to insure; (iii) loss of the undamaged portion of the Improvements and additional expense of demolition and increased cost of construction, including, without limitation, increased costs that arise from any changes in laws or other legal requirements with respect to such restoration, in an amount as is acceptable to Administrative Agent. Any Cause of Loss – Special Form insurance policy shall contain an agreed amount or a coinsurance waiver endorsement and a replacement cost value endorsement without reduction for depreciation. Cause of Loss - Special Form policies shall cover at least the following perils: building collapse, fire, flood, back-up of sewers and drains, water damage, tsunami, windstorm, earthquake, earth movement, landslide, mudslide, subsidence, acts of terrorism (certified and non-certified), impact of vehicles and aircraft, lightning, malicious mischief, and vandalism (earthquake, earth movement, landslide, mudslide, subsidence and flood may have a sub-limit of such amount as is acceptable to Administrative Agent). Such insurance policy shall name Mortgagor as the Insured and shall also name Administrative Agent as Mortgagee under a non-contributing New York standard mortgagee clause or equivalent endorsement satisfactory to Administrative Agent for real property and as Lender Loss Payee as respects business income/loss of rents (if any);

upon completion of construction of the Improvements, policies of insurance insuring the Premises for the same perils as outlined in (ii) above for business income and rents loss insurance in an amount equal to not less than one (1) year’s gross “rental value” of the Improvements. “Rental value” as used herein is defined as the sum of (A) the total anticipated gross rental income from tenant occupancy of such buildings as furnished and equipped, (B) the amount of all charges which are the legal obligation of tenants and which would otherwise be the obligation of Mortgagor and (C) the fair rental value of any portion of such buildings which is occupied by Mortgagor. This coverage shall also include an extended period of indemnity of not less than 365 days. Mortgagor hereby assigns the proceeds of such insurance to Mortgagee, to be applied by Mortgagee in payment of the interest and principal on the Note, insurance premiums, taxes, assessments and private impositions and any other operating expense of the Property or charge described in clause (B) above until such time as the Improvements shall have been restored and placed in full operation, at which time, provided Mortgagor is not then in default hereunder, the balance of such insurance proceeds, if any, held by Mortgagee shall be paid over to Mortgagor;

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comprehensive boiler and machinery insurance providing coverage for all mechanical and electrical equipment in amounts not less than $20,000,000 per accident (during periods of construction, this coverage shall be provided once electrical equipment is energized);

if all or part of the Premises are located in an area identified by the Secretary of the United States Department of Housing and Urban Development or by any applicable federal agency as a flood hazard area, flood insurance in an amount at least equal to the maximum limit of coverage available under the National Flood Insurance Act of 1968. Regardless of the flood zone, the minimum amount of coverage required by this subsection for loss caused by floods shall not be less than $50,000,000or such other amount as is acceptable to Administrative Agent;

commercial general liability insurance on an “occurrence” basis against claims for “personal injury” liability, including, without limitation, bodily injury, death or property damage liability, products and completed operations liability with a limit of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate on a per location basis in the event of “personal injury” to any number of persons or of damage to property arising out of one “occurrence”. Such policies shall name Mortgagee as additional insured by an endorsement, and shall contain cross-liability and severability of interest clauses, all reasonably satisfactory to Mortgagee;

commercial automobile liability insurance covering all owned (if any) hired and non-owned automobiles in amounts not less than $1,000,000 per accident;

workers’ compensation and employers’ liability (and if required, disability) insurance covering the statutory requirements of the jurisdiction in which the Premises are located;

commercial umbrella liability insurance in excess of the liability insurance required in clauses (v), (vi) and (vii) above in amounts not less than $50,000,000 per occurrence and in the annual aggregate per location. During the period of vertical construction of the Improvements and at any time thereafter that substantial construction is underway, the amount of umbrella liability insurance shall be $75,000,000 except that if a controlled insurance program (CIP) permitted in paragraph (c) below is provided, the amount of liability required of Mortgagor under this paragraph (ix) shall be $19,000,000 when substantial construction is underway; and

such other insurance, and in such amounts, as may from time to time be reasonably required by Mortgagee against the same or other insurable hazards.

Mortgagor shall cause the following insurance to be maintained prior to the start of construction and during the construction of Improvements (or the restoration thereof following a loss):

by parties engaged in such construction:

(w)       commercial general liability insurance (including products and completed operations liability for a minimum of two (2) years following completion of construction) in amounts not less than $1,000,000 per occurrence and $2,000,000 aggregate per project;

(x)        commercial automobile liability insurance in amounts not less than $1,000,000 per accident;

(y)        workers’ compensation and employers’ liability insurance complying with the statutory requirements of the jurisdiction in which the Premises are located;

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(z)        umbrella liability insurance in excess of the insurance required in clause (b)(i)(x) and (y) in amounts as follows:

(I)        for the construction manager/general contractor, limits of not less than $75,000,000 per occurrence and in the aggregate per project; if aggregate limits of umbrella liability insurance are shared, the amount of umbrella liability insurance for construction shall be increased to $80,000,000;

(II)       for other sub-trade contractors and their sub-subcontractors, amounts not less than good insurance practice would dictate based on the hazard/risk associated with their operations; and

(III)      all sub-trade contractors and sub-subcontractors shall name Mortgagor and Mortgagee as additional insured and provide certificates of insurance and other evidence of coverage as may be required by Mortgagor or Mortgagee; and

Mortgagor shall cause all architects and engineers engaged in the design and construction of the project to provide professional errors and omissions liability insurance in amounts not less than $1,000,000 per claim and $2,000,000 in the aggregate except that the lead architect shall have $3,000,000 per claim and in the aggregate.

Liability insurance required of Mortgagor and general contractor/construction manager in Section 1.09(a)(ix) and (b)(i)(z)(I) above may be satisfied through a controlled insurance program (CIP) providing not less than $100,000,000 in liability limits for Mortgagor and contractors working at the construction site and shall include an extended reporting period for products/completed operations equal to the statutory period during which claims can be made following completion of the Improvements. The insurance coverage permitted by this paragraph shall include the liability insurance extensions required of the Mortgagorand contractors above.

All policies of insurance required under this Section 1.09 (i) shall be issued by companies having Best’s ratings of A:X or better as published in Best’s latest rating guide that are licensed in the jurisdiction in which the Premises are located (or where the failure to be so licensed does not affect the validity of the policy), (ii) except as provided for above, shall be subject to the approval of Mortgagee (such approval not to be unreasonably withheld, conditioned or delayed) as to amount, content, form and expiration date, (iii) except for the liability policies described in clauses (a)(vi) through (ix) above, shall contain a Non-Contributory Standard Mortgagee Clause and Lender’s Loss Payable Endorsement, or their equivalents, in favor of Mortgagee, and (iv) shall provide that the proceeds thereof shall be payable to Mortgagee. Mortgagee shall be furnished with the original or duplicate original of each policy required hereunder, which policies shall provide that they shall not lapse, nor be modified to reduce coverage or cancelled, without thirty (30) days’ written notice to Mortgagee, except for non-payment of premium in which case ten (10) days’ notice of cancellation is required. At least five (5) days prior to expiration of any policy required hereunder, Mortgagor shall furnish Mortgagee appropriate proof of issuance of a policy continuing in force the insurance covered by the policy so expiring. Mortgagor shall furnish to Mortgagee, promptly upon request, receipts or other satisfactory evidence of the payment of the premiums on such insurance policies. In the event that Mortgagor does not deposit with Mortgagee a new certificate or policy of insurance at least five (5) days prior to the expiration of any expiring policy and evidence of payment of premiums when due thereon, then Mortgagee may, but shall not be obligated to, procure such insurance and pay the premiums therefor, and Mortgagor agrees to repay to Mortgagee the premiums thereon promptly on demand, together with interest thereon at the Default Rate.

Mortgagor hereby assigns to Mortgagee all proceeds of any insurance required to be maintained by this Section 1.09 which Mortgagor may be entitled to receive for loss or damage to the Premises, Improvements or Chattels or for soft costs including interest expense. All such insurance proceeds shall be payable to Mortgagee, and Mortgagor hereby authorizes and directs any affected insurance company to make payment thereof directly to Mortgagee. Mortgagor shall give prompt notice to Mortgagee of any casualty, whether or

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not of a kind required to be insured against under the policies to be provided by Mortgagor hereunder, such notice to generally describe the nature and cause of such casualty and the extent of the damage or destruction. Mortgagor may settle, adjust or compromise any claims for loss, damage or destruction, regardless of whether or not there are insurance proceeds available or whether any such insurance proceeds are sufficient in amount to fully compensate for such loss or damage, subject to Mortgagee’s prior consent, which shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Mortgagee shall have the right to join Mortgagor in settling, adjusting or compromising any loss of $2,000,000 or more. Mortgagor hereby authorizes the application or release by Mortgagee of any insurance proceeds under any policy of insurance, subject to the other provisions hereof. The application or release by Mortgagee of any insurance proceeds shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.

In the event of the foreclosure hereof or other transfer of the title to the Mortgaged Property in extinguishment, in whole or in part, of the indebtedness secured hereby, all right, title and interest of Mortgagor in and to any insurance policy, or premiums or payments in satisfaction of claims or any other rights thereunder then in force, shall pass to the purchaser or grantee notwithstanding the amount of any bid at such foreclosure sale. Nothing contained herein shall prevent the accrual of interest as provided in the Note on any portion of the principal balance due under the Note until such time as insurance proceeds are actually received and applied to reduce the principal balance outstanding.

Mortgagor shall not take out separate insurance concurrent in form or contributing in the event of loss with that required to be maintained under this Section 1.09 unless Mortgagee is included thereon as a named insured with loss payable to Mortgagee under standard mortgage endorsements of the character and to the extent above described. Mortgagor shall promptly notify Mortgagee whenever any such separate insurance is taken out and shall promptly deliver to Mortgagee the policy or policies of such insurance.

Prior to the subordination of this Mortgage to the Declaration pursuant to Section 9.01 of the Building Loan Agreement, any and all monies received as payment which Mortgagor may be entitled to receive for loss or damage to the Premises, Improvements or Chattels under any insurance maintained pursuant to this Section 1.09 (other than proceeds under the policies required by clause (a)(iii) above, which shall be paid over to Mortgagee and deposited in the Collection Account (as defined in the Lockbox Agreement)), less Mortgagee’s reasonable expenses for collecting and, if applicable, disbursing the insurance proceeds, or otherwise incurred in connection therewith shall be disbursed to Mortgagor for restoration in the same manner and subject to the same terms and conditions as advances of proceeds of the Loan under the Loan Agreement, provided that Mortgagee shall have reasonably determined that the restoration of the Improvements can be completed by the then Maturity Date of the Note at a cost which does not exceed the amount of available insurance proceeds or, in the event that such proceeds are reasonably determined by Mortgagee to be inadequate, Mortgagee shall have received either (x) a cash deposit from Mortgagor equal to the excess of said estimated cost of restoration over the amount of said available proceeds or (y) Guarantor’s agreement, so long as Guarantor is then in compliance with the financial covenants set forth in the Guaranty (whether or not then in effect), that it shall be unconditionally liable therefor, such agreement to be reasonably satisfactory in form and substance to Mortgagee and further that the Leases described in Section 4.01(e)(25) of the Building Loan Agreement shall remain in full force and effect during and after the completion of such restoration without abatement of rent beyond the time required for restoration. If the conditions for the advance of insurance proceeds for restoration set forth in the preceding sentence (the “Restoration Conditions”) are not satisfied within one hundred twenty (120) days of Mortgagee’s receipt thereof or if the actual restoration shall not have been commenced within such period, the Required Lenders shall have the option on not less than thirty (30) days’ notice to apply such insurance proceeds to the payment of the Note and to interest accrued and unpaid thereon in such order and proportions as the Required Lenders may elect, provided, however, that if prior to the expiration of such thirty (30) day period such restoration commences and the Restoration Conditions are satisfied, the insurance proceeds shall be available for restoration. After this Mortgage is so subordinated to the Declaration, if the Declaration requires that insurance proceeds be applied to restoration, the proceeds shall be so applied and if the terms and conditions set forth in the Declaration for the disbursement from time to time as restoration progresses of said proceeds are inconsistent with terms and conditions for advances of proceeds of the Loan, the terms and provisions of the Declaration shall control. Notwithstanding that the Declaration requires that the

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insurance proceeds be applied for restoration, the Restoration Conditions as between Mortgagor, Lenders and Mortgagee remain conditions to be satisfied by Mortgagor which if not satisfied shall be deemed to constitute an Event of Default and Mortgagee shall have the option of exercising any of the remedies set forth in Article II of this Mortgage. If the Declaration does not require that the insurance proceeds be applied to restoration, the proceeds shall be divided among all condominium unit owners in proportion to their respective percentage interest in the common elements and that portion of the proceeds due to Mortgagor shall be paid over to Mortgagee and the Required Lenders shall have the option at any time thereafter to apply same to the payment of the Note and interest accrued and unpaid thereon in such order and proportions as the Required Lenders may elect.

Protective Advances by Mortgagee.

If Mortgagor shall fail to perform any of the covenants contained herein beyond the expiration of any applicable notice and grace periods, Mortgagee may, after ten (10) days’ notice to Mortgagor of Mortgagee’s intent to make such advance, except in an emergency in which event notice shall not be required, make advances to perform the same on its behalf and all sums so advanced shall be a lien upon the Mortgaged Property and shall be secured hereby. Mortgagor will repay on demand all sums so advanced on its behalf together with interest thereon at the Default Rate. The provisions of this Section shall not prevent any default in the observance of any covenant contained herein from constituting an Event of Default.

Visitation and Inspection.

Mortgagor will permit Mortgagee and any of Lenders, by their agents, representatives and attorneys, to visit and inspect all or any part of the Mortgaged Property on Business Days and at reasonable times and upon reasonable prior notice, subject to the rights of tenants and Mortgagor’s usual and customary safety requirements. Mortgagor will keep, and cause Guarantor to keep, adequate records and books of account in accordance with GAAP and, subject to applicable securities and other Laws relating to disclosure of material information, including Regulation FD, will permit, and cause Guarantor to permit, Mortgagee and any of Lenders, by their agents, accountants and attorneys, to examine its and Guarantor’s records and books of account and make copies thereof or extracts therefrom, and to discuss its or Guarantor’s affairs, finances and accounts with the officers or general partners, as the case may be, of Mortgagor or Guarantor, at such reasonable times as may be requested by Mortgagee or any of Lenders, as the case may be.

Estoppel Certificates.

Mortgagor, within five (5) business days of receipt of a written request, will furnish a statement, duly acknowledged, of the amount due whether for principal or interest on the Loan and whether to its knowledge any offsets, counterclaims or defenses exist against the indebtedness secured hereby, but no more than twice in any twelve (12) month period. Notwithstanding the foregoing, during the existence of any Event of Default, there shall be no limit on the number of any such requests by Mortgagee.

Maintenance of Premises and Improvements.

Mortgagor will not commit any waste on the Premises from and after completion of construction or make any change in the use of the Premises which will in any way increase any ordinary fire or other hazard arising out of construction or operation. Mortgagor will, at all times, maintain the Improvements and Chattels in good operating order and condition and will promptly make, from time to time, all repairs, renewals, replacements, additions and improvements in connection therewith which are needful or desirable to such end. The Improvements shall not be demolished or substantially altered, nor shall any Chattels be removed without Mortgagee’s prior consent except where appropriate replacements free of superior title, liens and claims are immediately made of value at least equal to the value of the removed Chattels or except where the same is obsolete or no longer necessary for the Property.

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Condemnation.

Mortgagor, immediately upon obtaining knowledge of the institution or pending institution of any proceedings for the condemnation of the Premises or any portion thereof, will notify Mortgagee thereof. If the amount of the award or compensation is reasonably estimated to be in excess of $500,000, Mortgagee may participate in any such proceedings and may be represented therein by counsel of its selection. Mortgagor from time to time will deliver to Mortgagee all instruments requested by it to permit or facilitate such participation. In the event of such condemnation proceedings, the award or compensation payable is hereby assigned to and shall be paid to Mortgagee. Mortgagee shall be under no obligation to question the amount of any such award or compensation and may accept the same in the amount in which the same shall be paid. Prior to the subordination of this Mortgage to the Declaration pursuant to Section 9.01 of the Building Loan Agreement, the proceeds of any award or compensation so received shall be paid over to Mortgagee and deposited in the Collection Account, in any case under this Section, less Mortgagee’s reasonable expenses for collecting and, if applicable, disbursing the award, or otherwise incurred in connection therewith, and disbursed to Mortgagor from time to time for restoration of the Improvements in the same manner and subject to the same terms and conditions as advances of proceeds of the Loan under the Loan Agreement, provided that Mortgagee shall have reasonably determined that the restoration of the Improvements to an economically viable architectural whole can be completed by the then Maturity Date of the Note at a cost which does not exceed the amount of available condemnation award proceeds or, in the event that such proceeds are reasonably determined by Mortgagee to be inadequate, Mortgagee shall have received either (x) from Mortgagor a cash deposit equal to the excess of said estimated cost of restoration over the amount of said available proceeds or (y) Guarantor’s agreement, so long as Guarantor is then in compliance with the financial covenants set forth in the Guaranty (whether or not then in effect), that it shall be unconditionally liable therefor, such agreement to be reasonably satisfactory in form and substance to Mortgagee and further that the Leases described in Section 4.01(e)(25) of the Building Loan Agreement shall remain in full force and effect during and after the completion of such restoration without abatement of rent beyond the time required for restoration. If the conditions for the advance of condemnation award proceeds for restoration set forth in the preceding sentence (the “Condemnation Restoration Conditions”) are not satisfied within one hundred twenty (120) days of Mortgagee’s receipt thereof or if the actual restoration shall not have been commenced within such period, Required Lenders shall have the option on not less than thirty (30) days’ notice to apply such condemnation award proceeds to the payment of the Note and to interest accrued and unpaid thereon (at the rate of interest provided therein regardless of the rate of interest payable on the award by the condemning authority) in such order and proportions as the Required Lenders may elect, provided, however, that if prior to the expiration of such thirty (30) day period such restoration commences and the Condemnation Restoration Conditions are satisfied, the condemnation proceeds shall be available for restoration. After this Mortgage is so subordinated to the Declaration, if the Declaration requires that condemnation proceeds be applied to restoration, the proceeds shall be so applied and if the terms and conditions set forth in the Declaration for the disbursement from time to time as restoration progresses of said proceeds are inconsistent with terms and conditions for advances of proceeds of the Loan, the terms and provisions of the Declaration shall control. Notwithstanding that the Declaration requires that the condemnation proceeds be applied for restoration, the Condemnation Restoration Conditions as between Mortgagor, Lenders and Mortgagee remain conditions to be satisfied by Mortgagor which if not satisfied shall be deemed to constitute an Event of Default and Mortgagee shall have the option of exercising any of the remedies set forth in Article II of this Mortgage. If the Declaration does not require that the condemnation proceeds be applied to restoration, the proceeds shall be divided among all condominium unit owners in proportion to their respective percentage interest in the common elements and that portion of the proceeds due to Mortgagor shall be paid over to Mortgagee and the Required Lenders shall have the option at any time thereafter to apply same to the payment of the Note and interest accrued and unpaid thereon in such order and proportions as the Required Lenders may elect.

Leases.

Mortgagor will not (i) execute an assignment of the rents or any part thereof from the Premises without Mortgagee’s prior consent, (ii) enter into, or amend or modify, any lease, other than in accordance with the terms and conditions set forth in the Building Loan Agreement, (iii) except where the lessee is in material default thereunder, or where the tenant has the unilateral right to do so under its lease, terminate or consent

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to the cancellation or surrender of any lease of the Premises or of any part thereof, now existing or hereafter to be made, (iv) accept prepayments of any installments of rents to become due under such leases, except prepayments in the nature of security for the performance of the lessees thereunder or (v) modify, release or terminate any guaranties of any such lease, except in conjunction with an amendment of such lease entered into in accordance with the terms of the Loan Documents.

Mortgagor will not execute any lease of all or a substantial portion of the Premises except for actual occupancy by the lessee thereunder, and will at all times promptly and faithfully perform, or cause to be performed, in a commercially reasonable manner in all material respects all of the covenants, conditions and agreements contained in all leases of the Premises or portions thereof now or hereafter existing, on the part of the lessor thereunder to be kept and performed and will at all times, in a commercially reasonable manner, do all things necessary to compel performance by the lessee under each lease of all material obligations, covenants and agreements by such lessee to be performed thereunder. If any of such leases provide for the giving by the lessee of certificates with respect to the status of such leases, Mortgagor shall exercise its right to request such certificates within five (5) days of any demand therefor by Mortgagee, shall use commercially reasonable efforts to obtain same and shall deliver copies thereof to Mortgagee promptly upon receipt, provided the foregoing shall not be requested until the first anniversary hereof or, in the absence of an Event of Default, more frequently than once in any twelve (12) month period thereafter.

Each lease of the Premises, or of any part thereof, hereafter entered into shall provide that, in the event of the enforcement by Mortgagee of the remedies provided for hereby or by law, the lessee thereunder will, upon request of any person succeeding to the interest of Mortgagor as a result of such enforcement, automatically become the lessee of said successor in interest, without change in the terms or other provisions of such lease, provided, however, that said successor in interest shall not be bound by (i) any payment of rent or additional rent for more than one (1) month in advance, except prepayments in the nature of security for the performance by said lessee of its obligations under said lease or (ii) any amendment or modification of the lease made without the consent of Mortgagee or such successor in interest except to the extent the same are permitted under the Building Loan Agreement. Each lease shall also provide that, (x) the lease is subordinate to this Mortgage, subject to Mortgagee’s obligation to deliver non-disturbance agreements with respect to such lease set forth in the Building Loan Agreement, and (y) upon request by said successor in interest, such lessee shall execute and deliver an instrument or instruments confirming such attornment.

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.

All tenant security deposits (whether cash or a letter of credit) in respect of the Premises shall be held and applied as contemplated in the Building Loan Agreement.

Premises Documents.

Mortgagor shall (a) use all commercially reasonable efforts to do all things necessary to cause the due compliance and faithful performance in all material respects by the other parties to the Premises Documents of all obligations and agreements by such other parties to be complied with and performed thereunder, (b) not amend, modify or supplement the Premises Documents without Mortgagee’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed and (c) not terminate or consent to the termination of the Premises Documents.

Utilities.

Mortgagor will not, without the prior consent of Mortgagee, sell or contract to sell, or enter into an option to sell, or exchange, assign, convey, transfer possession of (including, without limitation, by lease) or otherwise dispose of all or any part of the utilities, utility commitments or other agreements or rights of any nature relating to the utilities, drainage ditches and/or treatment plants associated with the Mortgaged Property. Mortgagor further covenants and agrees that it will take any such action and execute, acknowledge, deliver and record and/or file any and all instruments as may be necessary, desirable or

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proper to keep any existing or future utility commitments covering the Mortgaged Property in a current and valid condition and to keep the existing utility capacity for the Mortgaged Property at or above the level required for the contemplated uses thereof. As used herein, the term “utilities” includes, without limitation, water, gas, electricity and storm and sanitary sewer.

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 costs of completing the “Improvements” as defined in the Building Loan Agreement (or, 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 and Lenders 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.

Interest Rate Protection.

Mortgagor agrees that upon request of Mortgagee it shall enter into an assignment of any interest rate protection agreements entered into by Mortgagor (if any), including, without limitation, the Interest Rate Protection Agreement, pursuant to which Mortgagor shall collaterally assign to Mortgagee all of its right, title and interest to receive any and all payments thereunder (and any related guarantee, if any) and shall deliver to Mortgagee an acknowledgment and agreement (either in such interest rate protection agreement or by separate instrument, in each case in form and substance reasonably satisfactory to Mortgagee) of the counterparty to such interest rate protection agreement acknowledging such assignment and agreeing to make any payments payable under or pursuant to such agreement directly to Mortgagee. If Mortgagee receives any payments under such agreement (other than a payment by reason of a Termination Event (as defined in such interest rate protection agreement) or any other payment during the existence of an Event of Default), Mortgagee shall hold and deposit the same in a cash collateral account as additional security for the Loan and the Other Loan and apply the same to interest payable on the next occurring payment date. If Mortgagee receives any payments under any such interest rate protection agreement during the existence of an Event of Default (including, without limitation, any payment by reason of a Termination Event), Mortgagee shall have the right to apply same to any portion of the sums secured hereby in any order it desires. If Mortgagee receives any payment by reason of a Termination Event under any such interest rate protection agreement, for so long as no Event of Default exists, such payment shall be held in a cash collateral account and shall be available in connection with the acquisition of a new interest rate protection agreement.

EVENTS OF DEFAULT AND REMEDIES

Events of Default and Certain Remedies.

If one or more of the following Events of Default shall happen, that is to say:

if (i) default shall be made in the payment of any principal under the Note when and as the same becomes due and payable, whether by maturity or by acceleration or otherwise, as herein or in the Note or Loan Agreement provided; or (ii) default shall be made in the payment of any interest under the Note or the Loan Agreement, the administrative fee payable to Mortgagee pursuant to Section 6.19 of the Building Loan Agreement and any fees payable to the Construction Consultant pursuant to the Building Loan Agreement, in any such case, when and as the same shall become due and payable, whether as part of any payment or prepayment or otherwise, in each case, as herein or in the Note or Loan Agreement provided, and such default shall have continued for a period of five (5) Business Days; or (iii) default shall be made in the payment of any other sums under the Note or the Loan Agreement, in any such case, when and as the same

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shall become due and payable, whether as part of any payment or prepayment or otherwise, in each case, as herein or in the Note or Loan Agreement provided, and such default shall have continued for a period of ten (10) days after notice to Mortgagor; or (iv) default shall be made in the payment of any tax or other charge required by Section 1.07 to be paid and said default shall have continued for a period of twenty (20) days after notice to Mortgagor; or

if default shall be made in the due observance or performance of any covenant, condition or agreement in the Note, the Loan Agreement, this Mortgage, any guaranty executed by Guarantor or in any other document executed or delivered to Mortgagee or Lenders in connection with the Loan (other than any such covenant, condition or agreement specifically provided for elsewhere in this Section 2.01), and such default shall have continued for a period of thirty (30) days after notice thereof shall have been given to Mortgagor by Mortgagee, or, in the case of such other documents, such shorter grace period, if any, as may be provided for therein; provided, however, that Mortgagor shall have such additional time in which to cure such default as is reasonably necessary if, by the reason of the nature thereof, such default cannot be cured by the payment of money and cannot by due diligence reasonably be wholly cured within said thirty (30) day or shorter period, as applicable, and Mortgagor has made diligent efforts to cure such default within the period aforesaid and thereafter prosecutes the curing of such default diligently and continuously to a cure within ninety (90) days thereafter, provided, further, that in no event shall such default result in an extension of the Completion Date or the Maturity Date (both as defined in the Building Loan Agreement); or

if any representation or warranty made by Mortgagor in Section 1.01 shall be incorrect, or if any other representation or warranty made to Mortgagee or Lenders in this Mortgage, the Loan Agreement, any guaranty executed by Guarantor, or in any other document, certificate or statement executed or delivered to Mortgagee or Lenders in connection with the Loan shall be incorrect in any material respect when made or remade; provided, however, that if any such representation or warranty is incorrect, Mortgagor shall promptly notify Mortgagee thereof and if such incorrect representation or warranty was made by the Person making same without knowledge to the contrary and is capable of being cured by such Person, such incorrect representation or warranty shall not be an Event of Default hereunder so long as Mortgagor (or such other Person) diligently proceeds to cure and cures such incorrect representation or warranty within thirty (30) days after notice from Mortgagee thereof such that the original representation or warranty made shall not then be incorrect in any material respect; provided, further, that if such incorrect representation or warranty is such that it cannot be cured by the payment of money, and if the cure thereof requires work to be performed, acts to be done or conditions to be removed which cannot, by their nature, with due diligence, be performed, done or removed, as the case may be, within such thirty (30) day period and Mortgagor (or such other Person) shall have commenced to cure such failure within such thirty (30) day period, such period shall be extended for so long as shall be required by Mortgagor (or such Person) to cure such incorrect representation or warranty, so long as during all such periods Mortgagor (or such other Person) diligently proceeds to effect such cure, provided, however, that in no event shall such thirty (30) day period be extended pursuant to the foregoing provisions for a period of in excess of one hundred twenty (120) days; or

if by order of a court of competent jurisdiction, a trustee, receiver or liquidator of the Mortgaged Property or any part thereof, or of Mortgagor shall be appointed and such order shall not be discharged or dismissed within ninety (90) days after such appointment; or

if Mortgagor shall file a petition in bankruptcy or for an arrangement or for reorganization pursuant to the Federal Bankruptcy Act or any similar federal or state law, or if, by decree of a court of competent jurisdiction, Mortgagor shall be adjudicated a bankrupt, or be declared insolvent, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or shall consent to the appointment of a receiver or receivers of all or any part of its property; or

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if any of the creditors of Mortgagor shall file a petition in bankruptcy against Mortgagor or for reorganization of Mortgagor pursuant to the Federal Bankruptcy Act or any similar federal or state law, and if such petition shall not be discharged or dismissed within ninety (90) days after the date on which such petition was filed; or

if final judgment (i.e., beyond any right of appeal) for the payment of money in excess of $250,000 shall be rendered against Mortgagor and Mortgagor shall not discharge the same, cause it to be discharged or bond over it within ninety (90) days from the entry thereof, or shall not appeal therefrom or from the order, decree or process upon which or pursuant to which said judgment was granted, based or entered, and secure a stay of execution pending such appeal; or

if any of the events enumerated in clauses (d) through (f) of this Section 2.01 shall happen to Guarantor; or

if there shall occur a default which is not cured within the applicable grace period or cure period, if any, under any mortgage, deed of trust or other security instrument covering all or part of the Mortgaged Property regardless of whether any such mortgage, deed of trust or other security instrument is prior or subordinate hereto; it being further agreed by Mortgagor that an Event of Default hereunder shall constitute an Event of Default under any such mortgage, deed of trust or other security instrument held by Mortgagee; or

if there shall occur a default which is not cured within the applicable grace period or cure period, if any, under any of the Premises Documents; or if any of the Premises Documents is amended, modified, supplemented or terminated without Mortgagee’s prior consent (if required under the Loan Documents); or

if any transfer, sale, conveyance, other disposition, encumbrance or pledge occurs in violation of Section 6.25 of the Building Loan Agreement; or

if, except as contemplated or permitted by the Building Loan Agreement, Mortgagor shall encumber, or agree to encumber, in any manner, either voluntarily or involuntarily, by operation of law or otherwise, all or any portion of the Mortgaged Property, or any interest or rights therein (including air or development rights) without, in any such case, the prior written consent of the Required Lenders. As used in this clause, “encumber” shall include, without limitation, the placing or permitting the placing of any mortgage, deed of trust, assignment of rents or other security device (Any consent under this clause and the immediately preceding clause by Lender may be granted or denied in each such Lender’s sole and absolute discretion and, if consent should be given, any such transfer or encumbrance shall be subject hereto and to any other documents which evidence or secure the Loan, and, if a transfer, any such transferee shall assume all of Mortgagor’s obligations hereunder and thereunder and agree to be bound by all provisions and perform all obligations contained herein and therein; consent to one such transfer or encumbrance shall not be deemed to be a waiver of the right to require consent to future or successive transfers or encumbrances); or

if Mortgagor at any time shall fail to maintain the insurance required by Section 1.09; or

if Mortgagor fails to remain in compliance with the covenant set forth in Section 9.03(i) of the Building Loan Agreement; or

if Mortgagor breaches any of its covenants and agreements set forth in Section 1.14(a)(i); or

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if there shall occur a default, including a default in the payment of Additional Interest, by Mortgagor under the Interest Rate Protection Agreement, if any, which is not cured within the applicable grace or cure period, if any, provided for therein; or

if Mortgagor fails to complete construction of the Improvements on or before the Completion Date; or

if, in the event the Mortgaged Property fails to receive the benefits of the Industrial and Commercial Incentive Program under New York State Real Property Tax Law, Article 4, Mortgagor fails to reduce the Total Commitment (as defined in the Building Loan Agreement) by the ICIP Reduction Amount (as defined in the Building Loan Agreement) in the manner and when required by Section 6.27 of the Building Loan Agreement;

then and in every such case:

I.    Mortgagee, by notice to Mortgagor, may declare the entire principal of the Note then outstanding (if not then due and payable), and all accrued and unpaid interest (including Additional Interest) and other sums in respect thereof, to be due and payable immediately, and upon any such declaration the principal of the Note and said accrued and unpaid interest (including Additional Interest) and other sums shall become and be immediately due and payable, anything herein or in the Note or the Loan Agreement to the contrary notwithstanding.

II.   Mortgagee personally, or by its agents or attorneys, may enter into and upon all or any part of the Premises, and each and every part thereof, and is hereby given a right and license and appointed Mortgagor’s attorney-in-fact and exclusive agent to do so, and may exclude Mortgagor, its agents and servants wholly therefrom; and having and holding the same, may use, operate, manage and control the Premises and conduct the business thereof, either personally or by its superintendents, managers, agents, servants, attorneys or receivers; and upon every such entry, Mortgagee, at the expense of the Mortgaged Property, from time to time, either by purchase, repairs or construction, may maintain and restore the Mortgaged Property, whereof it shall become possessed as aforesaid, may complete the construction of the Improvements and in the course of such completion may make such changes in the contemplated Improvements as it may deem desirable and may insure the same; and likewise, from time to time, at the expense of the Mortgaged Property, Mortgagee may make all necessary or proper repairs, renewals and replacements and such useful alterations, additions, betterments and improvements thereto and thereon as to it may deem advisable; and in every such case Mortgagee shall have the right to manage and operate the Mortgaged Property and to carry on the business thereof and exercise all rights and powers of Mortgagor with respect thereto either in the name of Mortgagor or otherwise as it shall deem best; and Mortgagee shall be entitled to collect and receive the Rents and every part thereof, all of which shall for all purposes constitute property of Mortgagor; and in furtherance of such right Mortgagee may collect the rents payable under all leases of the Premises directly from the lessees thereunder upon notice to each such lessee that an Event of Default exists hereunder accompanied by a demand on such lessee for the payment to Mortgagee of all rents due and to become due under its lease, and Mortgagor FOR THE BENEFIT OF MORTGAGEE AND EACH SUCH LESSEE hereby covenants and agrees that the lessee shall be under no duty to question the accuracy of Mortgagee’s statement of default and shall unequivocally be authorized to pay said rents to Mortgagee without regard to the truth of Mortgagee’s statement of default and notwithstanding notices from Mortgagor disputing the existence of an Event of Default such that the payment of rent by the lessee to Mortgagee pursuant to such a demand shall constitute performance in full of the lessee’s obligation under the lease for the payment of rents by the lessee to Mortgagor; and after deducting the expenses of conducting the business thereof and of all maintenance, repairs, renewals, replacements, alterations, additions, betterments and improvements and amounts necessary to pay for taxes, assessments, insurance and prior or other proper charges upon the Mortgaged Property or any part thereof, as well as just and reasonable compensation for the services of Mortgagee and for all attorneys, counsel, agents, clerks, servants and other employees by it engaged and employed, Mortgagee shall apply the moneys arising as

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aforesaid, first, to the payment of the principal of the Note and the interest thereon, when and as the same shall become payable and in such order and proportions as Mortgagee shall elect and second, to the payment of any other sums required to be paid by Mortgagor hereunder or under the Loan Agreement.

III. Mortgagee, with or without entry, personally or by its agents or attorneys, insofar as applicable, 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 3.06), and all estate, right, title and interest, claim and demand therein, and right of redemption 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.

Other Matters Concerning Sales.

Mortgagee may adjourn from time to time any sale by it to be made hereunder or by virtue hereof by announcement at the time and place appointed for such sale or for such adjourned sale or sales; and, except as otherwise provided by any applicable provision of law, Mortgagee, without further notice or publication, may make such sale at the time and place to which the same shall be so adjourned.

Upon the completion of any sale or sales made by Mortgagee under or by virtue of this Article II, Mortgagee, or an officer of any court empowered to do so, shall execute and deliver to the accepted purchaser or purchasers a good and sufficient instrument or instruments conveying, assigning and transferring all estate, right, title and interest in and to the property and rights sold. Mortgagee is hereby appointed the true and lawful attorney irrevocable of Mortgagor, in its name and stead, to make all necessary conveyances, assignments, transfers and deliveries of the Mortgaged Property and rights so sold and for that purpose Mortgagee may execute all necessary instruments of conveyance, assignment and transfer, and may substitute one or more persons with like power, Mortgagor hereby ratifying and confirming all that its said attorney or such substitute or substitutes shall lawfully do by virtue hereof. Nevertheless, Mortgagor, if requested by Mortgagee, shall ratify and confirm any such sale or sales by executing and delivering to Mortgagee or to such purchaser or purchasers all such instruments as may be advisable, in the judgment of Mortgagee, for the purpose, and as may be designated in such request. Any such sale or sales made under or by virtue of this Article II, whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, shall operate to divest all the estate, right, title, interest, claim and demand whatsoever, whether at law or in equity, of Mortgagor in and to the properties and rights so sold, and shall be a perpetual bar both at law and in equity against Mortgagor and against any and all persons claiming or who may claim the same, or any part thereof from, through or under Mortgagor.

In the event of any sale or sales made under or by virtue of this Article II (whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale), the entire principal of, and interest and other sums on, the Note, if not previously due and payable, and all other sums required to be paid by Mortgagor pursuant hereto or to the Loan

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Agreement, immediately thereupon shall, anything in any of said documents to the contrary notwithstanding, become due and payable.

The purchase money, proceeds or avails of any sale or sales made under or by virtue of this Article II, together with any other sums which then may be held by Mortgagee hereunder, whether under the provisions of this Article II or otherwise, shall be applied as follows:

First: To the payment of the costs and expenses of such sale, including reasonable compensation to Mortgagee’s agents and counsel, and of any judicial proceedings wherein the same may be made, and of all liabilities, advances and reasonable expenses made or incurred by Mortgagee or Lenders hereunder, and also including reasonable attorneys’ fees, expenses and costs of investigation, all as actually incurred and including, without limitation, reasonable attorneys’ fees, costs and expenses of investigation incurred in appellate proceedings or in any action or participation in, or in connection with, any case or proceeding under any applicable bankruptcy or insolvency law, together with interest at the Default Rate on all advances made by Mortgagee or Lenders, and of all taxes, assessments or other charges, except any taxes, assessments or other charges subject to which the Mortgaged Property shall have been sold.

Second: To the payment of the whole amount then due, owing or unpaid upon the Note for principal and interest, with interest on the unpaid principal at the Default Rate from and after the happening of any Event of Default, in such order and amounts as Mortgagee may elect.

Third: To the payment of any other sums required to be paid by Mortgagor pursuant to any provision hereof or of the Note or the Loan Agreement, including all expenses, liabilities and advances made or incurred by Mortgagee hereunder or in connection with the enforcement hereof, together with interest at the Default Rate on all such advances.

Fourth: To the payment of the surplus, if any, to whomsoever may be lawfully entitled to receive the same.

Upon any sale or sales made under or by virtue of this Article II, whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, Mortgagee may bid for and acquire the Mortgaged Property or any part thereof and in lieu of paying cash therefor may make settlement for the purchase price by crediting upon the indebtedness secured hereby the net sales price after deducting therefrom the expenses of the sale and the costs of the action and any other sums which Mortgagee is authorized to deduct hereunder.

Payment of Amounts Due.

In case an Event of Default shall have happened and be continuing, then, upon demand of Mortgagee, Mortgagor will pay to Mortgagee the whole amount which then shall have become due and payable on the Note, for principal or interest (including Additional Interest) or both, as the case may be, and after the happening of said Event of Default will also pay to Mortgagee interest at the Default Rate on the then unpaid principal of the Note, and the sums required to be paid by Mortgagor pursuant to any provision hereof or of the Loan Agreement, and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to Mortgagee’s agents and counsel and any reasonable expenses incurred by Mortgagee hereunder. In the event Mortgagor shall fail forthwith to pay all such amounts upon such demand, Mortgagee shall be entitled and empowered to institute such action or proceedings at law or in equity as may be advised by its counsel for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against Mortgagor and collect, out of the property of Mortgagor wherever situated, as well as out of the Mortgaged Property, in any manner provided by law, moneys adjudged or decreed to be payable.

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Mortgagee shall be entitled to recover judgment as aforesaid either before, after or during the pendency of any proceedings for the enforcement of the provisions hereof; and the right of Mortgagee to recover such judgment shall not be affected by any entry or sale hereunder, or by the exercise of any other right, power or remedy for the enforcement of the provisions hereof, or the foreclosure of the lien hereof; and in the event of a sale of the Mortgaged Property, and of the application of the proceeds of sale, as herein provided, to the payment of the debt hereby secured, Mortgagee shall be entitled to enforce payment of, and to receive all amounts then remaining due and unpaid upon, the Note, and to enforce payment of all other charges, payments and costs due hereunder or under the Loan Agreement or otherwise in respect of the Loan, and shall be entitled to recover judgment for any portion of the debt remaining unpaid, with interest at the Default Rate. In case of proceedings against Mortgagor in insolvency or bankruptcy or any proceedings for its reorganization or involving the liquidation of its assets, then Mortgagee shall be entitled to prove the whole amount of principal, interest and other sums due upon the Note to the full amount thereof, and all other payments, charges and costs due hereunder or under the Loan Agreement or otherwise in respect of the Loan, without deducting therefrom any proceeds obtained from the sale of the whole or any part of the Mortgaged Property, provided, however, that in no case shall Mortgagee receive a greater amount than such principal and interest and such other payments, charges and costs from the aggregate amount of the proceeds of the sale of the Mortgaged Property and the distribution from the estate of Mortgagor.

No recovery of any judgment by Mortgagee and no levy of an execution under any judgment upon the Mortgaged Property or upon any other property of Mortgagor shall affect in any manner or to any extent, the lien hereof upon the Mortgaged Property or any part thereof, or any liens, rights, powers or remedies of Mortgagee hereunder, but such liens, rights, powers and remedies of Mortgagee shall continue unimpaired as before.

Any moneys thus collected by Mortgagee under this Section 2.03 shall be applied by Mortgagee in accordance with the provisions of clause (d) of Section 2.02.

Actions; Receivers.

After the happening of any Event of Default and during its continuance, immediately upon the commencement of any action, suit or other legal proceedings by Mortgagee to obtain judgment for the principal of, or interest on, the Note and other sums required to be paid by Mortgagor pursuant to any provision hereof or of the Loan Agreement, or of any other nature in aid of the enforcement of the Note or hereof or of the Loan Agreement, Mortgagor will (a) waive the issuance and service of process and enter its voluntary appearance in such action, suit or proceeding and (b) if required by Mortgagee, consent to the appointment of a receiver or receivers of all or part of the Mortgaged Property and of any or all of the Rents in respect thereof. After the happening of any Event of Default and during its continuance, upon the commencement of any proceedings to foreclose this Mortgage or to enforce the specific performance hereof or in aid thereof or upon the commencement of any other judicial proceeding to enforce any right of Mortgagee, Mortgagee shall be entitled, as a matter of right, if it shall so elect, without the giving of notice to any other party and without regard to the adequacy or inadequacy of any security for the indebtedness secured hereby, forthwith either before or after declaring the unpaid principal of the Note to be due and payable, to the appointment of such a receiver or receivers.

Mortgagee’s Right to Possession.

Notwithstanding the appointment of any receiver, liquidator or trustee of Mortgagor, or of any of its property, or of the Mortgaged Property or any part thereof, Mortgagee shall be entitled to retain possession and control of all property now or hereafter held hereunder.

Remedies Cumulative.

No remedy herein conferred upon or reserved to Mortgagee is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity or by statute. No delay or omission of

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Mortgagee to exercise any right or power accruing upon any Event of Default shall impair any such right or power, or shall be construed to be a waiver of any such Event of Default or any acquiescence therein; and every power and remedy given hereby to Mortgagee may be exercised from time to time as often as may be deemed expedient by Mortgagee. Nothing herein or in the Note or the Loan Agreement shall affect the obligation of Mortgagor to pay the principal of, and interest and other sums on, the Note and the Loan Agreement in the manner and at the time and place therein respectively expressed.

Moratorium Laws; Right of Redemption.

Mortgagor will not at any time insist upon, or plead, or in any manner whatever claim or take any benefit or advantage of any stay or extension or moratorium law, any exemption from execution or sale of the Mortgaged Property or any part thereof, wherever enacted, now or at any time hereafter in force, which may affect the covenants and terms of performance hereof, nor claim, take or insist upon any benefit or advantage of any law now or hereafter in force providing for the valuation or appraisal of the Mortgaged Property, or any part thereof, prior to any sale or sales thereof which may be made pursuant to any provision herein, or pursuant to the decree, judgment or order of any court of competent jurisdiction; nor, after any such sale or sales, claim or exercise any right under any statute heretofore or hereafter enacted to redeem the property so sold or any part thereof and Mortgagor hereby expressly waives all benefit or advantage of any such law or laws, and covenants not to hinder, delay or impede the execution of any power herein granted or delegated to Mortgagee, but to suffer and permit the execution of every power as though no such law or laws had been made or enacted. Mortgagor, for itself and all who may claim under it, waives, to the extent that it lawfully may, all right to have the Mortgaged Property marshaled upon any foreclosure hereof.

Mortgagor’s Use and Occupancy after Default.

During the continuance of any Event of Default and pending the exercise by Mortgagee of its right to exclude Mortgagor from all or any part of the Premises, Mortgagor agrees to pay the fair and reasonable rental value for the use and occupancy of any portion of the Premises which are in its or any of its affiliates’ actual possession for such period and, upon default of any such payment, will vacate and surrender such possession of the Premises to Mortgagee or to a receiver, if any, and in default thereof may be evicted by any summary action or proceeding for the recovery of possession of premises for non-payment of rent, however designated.

Mortgagee’s Rights Concerning Application of Amounts Collected.

Notwithstanding anything to the contrary contained herein, upon the occurrence and during the continuance of an Event of Default, Mortgagee may apply, to the extent permitted by law, any amount collected hereunder to principal, interest (including Additional Interest) or any other sum due under the Note or the Loan Agreement or otherwise in respect of the Loan in such order and amounts, and to such obligations, as Mortgagee shall elect in its sole and absolute discretion.

MISCELLANEOUS

Assignment of Rents.

This Mortgage constitutes a present, absolute, unconditional and irrevocable assignment of all of the Rents now or hereafter accruing, and Mortgagor, without limiting the generality of the Granting Clause hereof, specifically hereby presently, absolutely, unconditionally and irrevocably assigns, transfers and sets over all of the Rents now or hereafter accruing to Mortgagee. The aforesaid assignment shall be effective immediately upon the execution hereof and is not conditioned upon the occurrence of any Event of Default or any other contingency or event, provided, however, that Mortgagee hereby grants to Mortgagor the right and license to collect and receive the Rents as they become due, and not in advance, so long as no Event of Default exists hereunder. Immediately upon the occurrence of any such Event of Default, the foregoing right and license shall be automatically terminated and of no further force or effect and, if any such Event

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of Default is cured, as evidenced by a certificate from Mortgagee to such effect, such right and license shall be automatically reinstated. Nothing contained in this Section or elsewhere herein shall be construed to make Mortgagee a mortgagee in possession unless and until Mortgagee actually takes possession of the Mortgaged Property, nor to obligate Mortgagee to take any action or incur any expense or discharge any duty or liability under or in respect of any leases or other agreements relating to the Mortgaged Property or any part thereof.

Security Agreement.

This Mortgage constitutes a security agreement under the applicable Uniform Commercial Code with respect to the Chattels and such other of the Mortgaged Property which is personal property. Mortgagor agrees that it will not terminate or amend any financing statements filed in connection with the Loan without Mortgagee’s prior consent. In addition to the rights and remedies granted to Mortgagee by other applicable law or hereby, Mortgagee shall have all of the rights and remedies with respect to the Chattels and such other personal property as are granted to a secured party under the applicable Uniform Commercial Code. Upon Mortgagee’s request, Mortgagor shall promptly and at its expense assemble the Chattels and such other personal property and make the same available to Mortgagee at a convenient place acceptable to Mortgagee. Mortgagor shall pay to Mortgagee on demand, with interest at the Default Rate, any and all expenses, including reasonable attorneys’ fees, incurred by Mortgagee in protecting its interest in the Chattels and such other personal property and in enforcing its rights with respect thereto. Any notice of sale, disposition or other intended action by Mortgagee with respect to the Chattels and such other personal property sent to Mortgagor in accordance with the provisions hereof at least five (5) days prior to such action shall constitute reasonable notice to Mortgagor. The proceeds of any such sale or disposition, or any part thereof, may be applied by Mortgagee to the payment of the indebtedness secured hereby in such order and proportions as Mortgagee in its discretion shall deem appropriate.

Application of Certain Payments.

In the event that all or any part of the Mortgaged Property is encumbered by one or more mortgages held by Mortgagee, Mortgagor hereby irrevocably authorizes and directs Mortgagee to apply any payment received by Mortgagee in respect of any note secured hereby or by any other such mortgage to the payment of such of said notes as Mortgagee shall elect in its sole and absolute discretion, and Mortgagee shall have the right to apply any such payment in reduction of principal and/or interest and in such order and amounts as Mortgagee shall elect in its sole and absolute discretion without regard to the priority of the mortgage securing the note so repaid or to contrary directions from Mortgagor or any other party.

Severability.

In the event any one or more of the provisions contained herein or in the Note or the Loan Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, but this Mortgage shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein or therein, provided, however, that if such provision held to be invalid, illegal or unenforceable relates to the payment of any sum under the Note or any other material monetary sum, then Mortgagee may, at the option of the Required Lenders, declare the indebtedness of such specific sums only to be immediately due and payable.

Modifications and Waivers.

No provision hereof may be changed, waived, discharged or terminated orally or by any other means except as provided in Section 8.12 of the Building Loan Agreement. Any agreement hereafter made by Mortgagor and Mortgagee relating hereto shall be superior to the rights of the holder of any intervening or subordinate lien or encumbrance.

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Notices, Etc.

All notices, demands, consents, approvals and statements required or permitted hereunder shall be in writing and shall be deemed to have been sufficiently given or served for all purposes when presented personally, three (3) days after mailing by registered or certified mail, postage prepaid, or one (1) day after delivery to a nationally recognized overnight courier service (provided such courier service is instructed to deliver the next Business Day) providing evidence of the date of delivery, if to Mortgagor at (a) its address stated above and (b) Vornado Realty Trust, 888 Seventh Avenue, New York, New York 10019, Attention: Executive Vice President - Capital Markets; if to Mortgagee to the attention of its Real Estate Finance office at its address stated above, or at such other address of which a party shall have notified the party giving such notice in accordance with the provisions of this Section.

Successors and Assigns.

All of the grants, covenants, terms, provisions and conditions herein shall run with the land and shall apply to, bind and inure to the benefit of, the respective successors and assigns of Mortgagor and Mortgagee.

Limitation on Interest.

Regardless of any provision contained herein or in any of the other Loan documents, the total liability for payments in the nature of interest shall not exceed the applicable limits now or hereafter imposed by any applicable state or federal interest rate laws to which Mortgagee and/or Lenders may be subject. If any payments in the nature of interest, fees and other charges made hereunder or under the Note or other Loan documents are held to be in excess of the applicable limits imposed by any such applicable state or federal interest rate laws, it is agreed that any such amount held to be in excess shall be considered payment of principal under the Note and the indebtedness evidenced thereby shall be reduced by such amount in the inverse order of maturity so that the total liability for payments in the nature of interest, fees and other charges shall not exceed the applicable limits imposed by any such applicable state or federal interest rate laws in compliance with the desires of Mortgagor, Mortgagee and Lenders.

Counterparts.

This Mortgage may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same mortgage.

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.

Lenders’ Sale of Interests in Loan.

Mortgagor recognizes that any Lender may sell and transfer interests in the Loan to one or more participants or assignees and that all documentation, financial statements, appraisals and other data, or copies thereof, relevant to Mortgagor, any Guarantor or the Loan, may be exhibited to and retained by any such participant or assignee or prospective participant or assignee, subject to the confidentiality provision under which the foregoing are delivered to such Person pursuant to the Loan Agreement.

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No Merger of Interests.

Unless expressly provided otherwise, in the event that ownership hereof and title to the fee and/or leasehold estates in the Premises encumbered hereby shall become vested in the same person or entity, this Mortgage shall not merge in said title but shall continue to be and remain a valid and subsisting lien on said estates in the Premises for the amount secured hereby.

CERTAIN WAIVERS.

MORTGAGOR AND, BY ITS ACCEPTANCE HEREOF, MORTGAGEE FOR ITSELF AND ON BEHALF OF LENDERS HEREBY EXPRESSLY AND UNCONDITIONALLY WAIVE, IN CONNECTION WITH ANY FORECLOSURE OR SIMILAR ACTION OR PROCEDURE BROUGHT BY MORTGAGEE OR LENDERS HEREUNDER, ANY AND EVERY RIGHT IT MAY HAVE TO A TRIAL BY JURY.

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 or Lenders, as applicable, shall (i) execute and 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 for recording, (ii) in the case of an assignment of this Mortgage, deliver the Notes, together with an allonge to the assignee in question and (iii) execute and deliver such other instruments of assignment, termination or release (as applicable), including appropriate UCC-3 termination statements, as Mortgagor may reasonably request, to evidence such satisfaction, release or assignment, as applicable. As a condition to any such satisfaction or assignment, Mortgagor covenants and agrees to pay Mortgagee’s reasonable fees and expenses (including reasonable attorneys’ fees and expenses) in connection therewith. Upon any such satisfaction or assignment, Mortgagee and Lenders shall, automatically and without the need for any 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 and Lenders 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.

Other Liens; Subrogation.

In the event any or all of the proceeds of the indebtedness secured hereby have been used to extinguish, extend or renew any indebtedness heretofore existing against the Mortgaged Property or to satisfy any indebtedness or obligation secured by a lien or encumbrance of any kind, such proceeds have been advanced by Lenders and/or Mortgagee at Mortgagor’s request, and, to the extent of such funds so used, the indebtedness hereby secured shall be subrogated to all of the rights, claims, liens, titles and interest heretofore existing against the Mortgaged Property to secure the indebtedness or obligation so extinguished, paid, extended or renewed, and the former rights, claims, liens, title and interests, if any, shall not be waived but rather shall be continued in full force and effect and in favor of Lenders and/or Mortgagee, as the case may be, and shall not be merged with the lien and security for the repayment of the indebtedness hereby secured.

Subordination.

The lien of this Mortgage is hereby made subject and subordinate to the lien of any building loan mortgage from Mortgagor to Mortgagee now or hereafter entered into which encumbers the Premises, including, without limitation, the Series I Building Loan Mortgage, Assignment of Leases and Rents and Security Agreement dated as of the date hereof from Mortgagor to Mortgagee in the amount of $249,285,000 which is intended to be recorded with the Office of the City Register, Queens County (the “Office”) and that certain Series II Building Loan Mortgage, Assignment of Leases and Rents and Security Agreement dated as of the date hereof from Mortgagor to Mortgagee in the amount of up to $2,500,000 which is intended to

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be recorded with the Office and to all amendments, extensions, modifications, renewals and consolidations thereof hereafter entered into.

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 units, 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.

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IN WITNESS WHEREOF, this Mortgage has been duly executed and delivered by Mortgagor.

ALEXANDER’S OF REGO PARK II, INC. a Delaware corporation
By:	/s/ Alan J. Rice
	Alan J. Rice Secretary

STATE OF NEW YORK )

: ss.:

COUNTY OF NEW YORK )

On the 19^th day of December in the year 2007, before me, the undersigned, a notary public in and for said state, personally appeared Alan J. Rice, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

By:	/s/ Ilona Jacqueline Williams
	Ilona Jacqueline Williams Notary Public
	My Commission Expires:  July 3, 2010

SCHEDULE A

PARCEL I- Block 2080 Lot 101

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

BEGINNING at the corner formed by the intersection of the southerly side of Horace Harding Expressway, formerly Horace Harding Boulevard and Nassau Boulevard, 260 feet wide, and the easterly side of Junction Boulevard, 80 feet wide, as said Horace Harding Expressway and Junction Boulevard are now laid out on the Final Topographical Map of the City of New York;

RUNNING THENCE easterly along the southerly side of Horace Harding Expressway, 456.35 feet to the westerly side of 97th Street, 60 feet wide, as shown on the Final Topographical Map of the City of New York, prior to the adoption of the Alteration Map No.3530 on December 20, 1951;

THENCE southerly along the said westerly side of 97th Street, 630 feet to the northerly side of 62nd Drive, 80 feet wide, as shown on the Final Topographical Map of the City of New York, prior to the adoption of the Alteration Map No.4822 on March 2, 1987 on Cal. No. 1;

THENCE westerly along the said northerly side of 62nd Drive, 456.35 feet to the easterly side of Junction Boulevard;

THENCE northerly along the easterly of Junction Boulevard, 630 feet to the point or place of BEGINNING.

EXCEPTING THEREFROM those portions of Horse Brook Creek as it winded and turned through the above described premises which are 10 feet wide and which lie between the westerly line of 97th Street as it was laid out 60 feet wide on the Final Map of the City of New York for the Borough of Queens prior to the adoption of the Alteration Map No.3530 on December 20, 1951 and the westerly line of 97th Street as it is laid out 70 feet wide on the present Final Map of the City of New York for the Borough of Queens.

PARCEL II

BEGINNING at a point on the northerly side of 62nd Drive, 80 feet wide, distant 80 feet westerly, as measured along the the northerly side of 62nd Drive, from the corner formed by the intersection of the westerly side of 97th Street, 70 feet wide, and said northerly side of 62nd Drive, between a lower limiting horizontal plane at elevation 35.70 feet and an upper limiting horizontal plane at elevation 80.2 feet;

RUNNING THENCE from this point of beginning, southerly along a line forming an interior angle of 90 degrees with the northerly side of 62nd Drive, 80 feet to the southerly side of 62nd Drive;

THENCE westerly along the southerly side of 62nd Drive along a line forming an interior angle of 90 degrees with the last mentioned course, 30 feet;

THENCE northerly along a line forming an interior angle of 90 degrees with the last mentioned course, 80 feet to the northerly side of 62nd Drive;

THENCE easterly along the northerly side of 62nd Drive along a line forming an interior angle of 90 degrees with the last mentioned course, 30 feet to the point or place of BEGINNING.

ELEVATIONS refer to the datum in use by the Queens Topographical Bureau which is 2.725 feet above mean sea level at Sandy Hook, New Jersey as established by the U.S. Coast and Geodetic Survey.

NY 50233957v2

TABLE OF CONTENTS

Page

ARTICLE I COVENANTS OF MORTGAGOR 5

Section 1.01. (a) Warranty of Title; Power and Authority 5

(b) Hazardous Materials 6

(c) Flood Hazard Area 6

Section 1.02. (a) Further Assurances 6

(b) Information Reporting and Back-up Withholding 7

Section 1.03. (a) Filing and Recording of Documents 7

(b) Filing and Recording Fees and Other Charges 7

Section 1.04. Payment and Performance of Loan Documents 7

Section 1.05. Type of Entity; Maintenance of Existence; Compliance with Laws                                                                                                                                                8

Section 1.06. After-Acquired Property 8

Section 1.07. (a) Payment of Taxes and Other Charges 8

(b) Payment of Mechanics and Materialmen 9

(c) Good Faith Contests 9

Section 1.08. Taxes on Mortgagee or Lenders 10

Section 1.09. Insurance 10

Section 1.10. Protective Advances by Mortgagee 17

Section 1.11. (a) Visitation and Inspection 17

(b) Estoppel Certificates 17

Section 1.12. Maintenance of Premises and Improvements 18

Section 1.13. Condemnation 18

Section 1.14. Leases 19

Section 1.15. Premises Documents 20

Section 1.16. Utilities 20

Section 1.17. Trust Fund; Lien Laws 21

Section 1.18. Interest Rate Protection 21

ARTICLE II EVENTS OF DEFAULT AND REMEDIES 22

Section 2.01. Events of Default and Certain Remedies 22

Section 2.02. Other Matters Concerning Sales 27

Section 2.03. Payment of Amounts Due 28

Section 2.04. Actions; Receivers 29

Section 2.05. Mortgagee’s Right to Possession 30

Section 2.06. Remedies Cumulative 30

Section 2.07. Moratorium Laws; Right of Redemption 30

Section 2.08. Mortgagor’s Use and Occupancy after Default 31

Section 2.09. Mortgagee’s Rights Concerning Application of Amounts Collected 31

ARTICLE III MISCELLANEOUS 31

Section 3.01. Assignment of Rents 31

Section 3.02. Security Agreement 32

Section 3.03. Application of Certain Payments 32

Section 3.04. Severability 32

Section 3.05. Modifications and Waivers 32

Section 3.06. Notices, Etc 33

Section 3.07. Successors and Assigns 33

Section 3.08. Limitation on Interest 33

Section 3.09. Counterparts 33

Section 3.10. Substitute Mortgages 33

Section 3.11. Lenders’ Sale of Interests in Loan 33

Section 3.12. No Merger of Interests 34

Section 3.13. CERTAIN WAIVERS 34

(i)

Page

Section 3.14. Satisfaction or Assignment of Mortgage 34

Section 3.15. Other Liens; Subrogation 34

Section 3.16. Subordination 35

Section 3.17. New York Provisions 35

(ii)

EX-10

Exhibit 10.6

BLOCK: 2080

LOT: 101

ADDRESS: 61-01 Junction Boulevard, Queens, New York

COUNTY: Queens

Date:  December 21, 2007

SERIES II

PROJECT LOAN MORTGAGE, ASSIGNMENT OF LEASES

AND RENTS AND SECURITY AGREEMENT

(“this Mortgage”)

FROM

ALEXANDER’S OF REGO PARK II, INC.,

a corporation organized and existing under the laws of Delaware

(“Mortgagor”)

Address and Chief

Executive Office of Mortgagor: c/o Alexander’s, Inc.

210 Route 4 East

Paramus, New Jersey 07652

TO

PB CAPITAL CORPORATION

as administrative agent for Lenders (as hereinafter defined)

(together with its successors in such capacity, “Mortgagee”)

Address of Mortgagee: 230 Park Avenue

New York, New York 10169

Mortgage Amount: $32,500,000

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

Schiff Hardin LLP

900 Third Avenue, 23rd Floor

New York, New York 10022

Attention: Graham R. Hone, Esq.

NY 50234853v1

THE AMOUNT OF THIS MORTGAGE IS $32,500,000.

RECITAL

Mortgagor is the owner of the premises described in SCHEDULE A and proposes to erect substantial improvements thereon. In order to finance certain non-”cost-of-improvement” items in connection with the construction thereof, Mortgagor has requested that Lenders provide a loan pursuant to the Loan Agreement identified below, of which up to the Mortgage Amount shall be secured by this Mortgage. Mortgagor has executed and delivered its notes, each dated the date hereof, obligating Mortgagor to pay, in the aggregate, the amount of the loan to be made pursuant to the Loan Agreement, or so much thereof as may be advanced from time to time in accordance with the terms of the Loan Agreement, a portion of which up to the Mortgage Amount is secured hereby. Said notes, as the same may hereafter be amended, modified, extended, severed, assigned, renewed, replaced or restated, and including any substitute or replacement notes executed pursuant to the Loan Agreement, are hereinafter referred to individually and collectively as the “Loan Note”. In addition, Mortgagor may after the date hereof enter into the Interest Rate Protection Agreement (as hereinafter defined) with Counterparty (as hereinafter defined), providing for one or more interest rate hedging transactions. The Loan Note and, if entered into, the Interest Rate Protection Agreement are hereinafter referred to individually and collectively as the “Note”. In the event the Interest Rate Protection Agreement is entered into and in order to avail itself of the benefits of this Mortgage, Counterparty shall be deemed to have appointed Mortgagee to act as its agent hereunder. Notwithstanding the language in the Granting Clause and Section 1.10 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 Lenders or 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.

CERTAIN DEFINITIONS AND RULES OF CONSTRUCTION

Mortgagor and Mortgagee agree that, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified.

“Additional Interest” means any and all sums that shall become due and payable by Mortgagor under the Interest Rate Protection Agreement.

“Building Loan Agreement” means that certain Building Loan Agreement, dated as of the date hereof, among Mortgagor, as Borrower, PB Capital, NordLB, Wells Fargo, LBBW and Bank of Ireland, as Lenders, and Mortgagee, as the same may hereafter be amended, modified or supplemented from time to time.

“Business Day” has the meaning given to such term in the Building Loan Agreement.

“Chattels” means all fixtures, furnishings, fittings, appliances, apparatus, equipment, building materials and components, machinery, boilers, oil burners, power systems, heating, ventilating and air conditioning systems, elevators, and all other chattels and articles of personal property, of whatever kind or nature, and any additions thereto and any replacements, proceeds or products thereof (other than those owned by lessees or those claiming under or through lessees or leased by lessees from parties other than Mortgagor) now or at any time hereafter intended to be or actually affixed to, attached to, placed upon, or used in any way in connection with the complete and comfortable use, enjoyment, development, occupancy or operation of the Premises, and whether located on or off the Premises.

“Counterparty” means any Lender (but only a Lender) in its capacity as a party to any Interest Rate Protection Agreement, and its successors and assigns in such capacity.

NY 50234853v1

“Declaration” has the meaning given to such term in the Building Loan Agreement.

“Default Rate” has the meaning given to such term in the Building Loan Agreement.

“Events of Default” means the events and circumstances described as such in Section 2.01.

“Guarantor” means the party or parties, if any, identified as such in the Loan Agreement.

“Guaranty” has the meaning given to such term in the Loan Agreement.

“Hazardous Materials” means any pollutant, effluents, emissions, contaminants, toxic or hazardous wastes, materials or substances, as any of those terms are defined from time to time in or for the purposes of any relevant environmental law, rule, regulation, code, permit, order, notice, demand letter or other binding determination (hereinafter, “Environmental Laws”) including, without limitation, asbestos fibers and friable asbestos, polychlorinated biphenyls and any petroleum or hydrocarbon-based products or derivatives.

“Improvements” means all structures or buildings, and replacements thereof, to be erected or now or hereafter located upon the Premises, including all plant equipment, apparatus, machinery and fixtures of every kind and nature whatsoever forming part of said structures or buildings.

“Interest Rate Protection Agreement” means, collectively, the ISDA Master Agreement between Counterparty (that is a Lender) and Mortgagor with respect to interest rate hedging which may be hereafter entered into by and between Counterparty and Mortgagor, as any of the same may be amended, modified or supplemented from time to time, together with any and all “confirmations” under any thereof, provided, however, that the terms of each of the foregoing shall be subject to Mortgagee’s approval, not to be unreasonably withheld or delayed.

“Lenders” means, collectively, PB Capital, Norddeutsche Landesbank Girozentrale, New York Branch (“NordLB”), Wells Fargo Bank, National Association (“Wells Fargo”), Landesbank Baden-Württemberg, New York Branch (“LBBW”) and Bank of Ireland, Connecticut Branch (“Bank of Ireland”) and such other lending institutions who become “Lenders” pursuant to the Loan Agreement, together with their successors and permitted assigns in accordance with the terms of the Loan Agreement.

“Loan” means that portion of the loan in the Mortgage Amount made by Lenders to Mortgagor pursuant to the Loan Agreement and secured hereby.

“Loan Agreement” means that certain Project Loan Agreement, dated as of the date hereof, among Mortgagor, as Borrower, PB Capital, NordLB, Wells Fargo, LBBW and Bank of Ireland, as Lenders, and Mortgagee, as the same may hereafter be amended, modified or supplemented from time to time.

“Lockbox Agreement” has the meaning given to such term in the Building Loan Agreement.

“PB Capital” means PB Capital Corporation, in its individual capacity and not as Mortgagee.

“Permitted Exceptions” means any title exceptions or objections shown in the title policy insuring the lien hereof, including matters over which the Title Insurer (as defined in the Building Loan Agreement) has agreed to insure Mortgagee pursuant to endorsements to such title policy (which endorsements shall be in form and substance reasonably satisfactory to Mortgagee).

“Premises” means the premises described in SCHEDULE A including all of the easements, rights, privileges and appurtenances (including air or development rights) thereunto belonging or in anywise appertaining, and all of the estate, right, title, interest, claim or demand whatsoever of Mortgagor therein and in the streets and ways adjacent thereto, either in law or in equity, in possession or expectancy, now or

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hereafter acquired, and as used herein shall, unless the context otherwise requires, be deemed to include the Improvements.

“Premises Documents” means all reciprocal easement or operating agreements, declarations, development agreements, developer’s or utility agreements, and any similar such agreements or declarations now or hereafter affecting the Premises or any part thereof.

“Required Lenders” has the meaning given to such term in the Building Loan Agreement.

All terms of this Mortgage which are not defined above shall have the meaning set forth elsewhere in this Mortgage.

Except as expressly indicated otherwise, when used in this Mortgage (i) “or” is not exclusive, (ii) “hereunder”, “herein”, “hereof” and the like refer to this Mortgage as a whole, (iii) “Article”, “Section” and “Schedule” refer to Articles, Sections and Schedules of this Mortgage, (iv) terms defined in the singular have a correlative meaning when used in the plural and vice versa, (v) a reference to a law or statute includes any amendment or modification to, or replacement of, such law or statute and (vi) a reference to an agreement, instrument or document means such agreement, instrument or document as the same may be amended, modified or supplemented from time to time in accordance with its terms. The cover page and all Schedules hereto are incorporated herein and made a part hereof. Any table of contents and the headings and captions herein are for convenience only and shall not affect the interpretation or construction hereof.

GRANTING CLAUSE

NOW, THEREFORE, Mortgagor, in consideration of the premises and in order to secure the payment of both the principal of, and the interest (including interest at the Default Rate and Additional Interest) and any other sums payable under, the Note, this Mortgage or the Loan Agreement and the performance and observance of all the provisions hereof and of the Note and the Loan Agreement, hereby gives, grants, bargains, sells, warrants, aliens, remises, releases, conveys, assigns, transfers, mortgages, hypothecates, deposits, pledges, sets over and confirms unto Mortgagee, all its estate, right, title and interest in, to and under any and all of the following described property (hereinafter, the “Mortgaged Property”) whether now owned or held or hereafter acquired:

(i) the Premises;

(ii) the Improvements;

(iii) the Chattels;

(iv) the Premises Documents;

(v)  all rents, royalties, issues, profits, revenue, income, recoveries, reimbursements and other benefits of the Mortgaged Property (hereinafter, the “Rents”) and all leases of the Mortgaged Property or portions thereof now or hereafter entered into and all right, title and interest of Mortgagor thereunder, including, without limitation, cash, letters of credit or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether such cash, letters of credit or securities are to be held until the expiration of the terms of such leases or applied to one or more of the installments of rent coming due immediately prior to the expiration of such terms, and including any guaranties of such leases and any lease cancellation, surrender or termination fees in respect thereof, all subject, however, to the provisions of Section 3.01;

(vi) all (a) development work product prepared in connection with the Premises, including, but not limited to, engineering, drainage, traffic, soil and other studies and tests; water, sewer, gas, electrical and telephone approvals, taps and connections; surveys, drawings, plans and

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specifications; and subdivision, zoning and platting materials; (b) building and other permits, rights, licenses and approvals relating to the Premises; (c) contracts and agreements (including, without limitation, contracts with architects and engineers, construction contracts and contracts for the maintenance, management or leasing of the Premises), contract rights, logos, trademarks, trade names, copyrights and other general intangibles used or useful in connection with the ownership, operation or occupancy of the Premises or any part thereof (excluding the name “Alexander’s” and any variants thereof); (d) financing commitments (debt or equity) issued to Mortgagor in respect of the Premises and all deposits and other amounts payable to Mortgagor thereunder; (e) contracts for the sale of all or any portion of the Premises, the Improvements or the Chattels, and all deposits and other amounts payable by the purchasers thereunder; (f) operating and other bank accounts, and monies therein, of Mortgagor relating to the Premises, including, without limitation, any accounts relating to real estate taxes or assessments; (g) interest rate protection agreements entered into by Mortgagor in respect of the Loan, whether pursuant to the Loan Agreement or otherwise, including, without limitation, the Interest Rate Protection Agreement; (h) commercial tort claims related to the Premises, the Improvements or the Chattels; (i) contracts for the purchase of inclusionary housing certificates and 421-a certificates; and (j) any inclusionary housing certificates and 421-a certificates, but in each case of the items set forth above in this paragraph (vi), to the extent assignable;

(vii)all rights of Mortgagor under promissory notes, letters of credit, electronic chattel paper, proceeds from accounts, payment intangibles, and general intangibles related to the Premises, as the terms “accounts”, “general intangibles”, and “payment intangibles” are defined in the applicable Uniform Commercial Code Article 9, as the same may be modified or amended from time to time;

(viii)           all other assets of Mortgagor related in any way to the Premises, subject to certain limitations that may be set forth herein; and

(ix) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims, including, without limitation, proceeds of insurance and condemnation awards, and all rights of Mortgagor to refunds of real estate taxes and assessments.

TO HAVE AND TO HOLD unto Mortgagee, its successors and assigns forever.

COVENANTS OF MORTGAGOR

Mortgagor covenants and agrees as follows:

Warranty of Title; Power and Authority.

Mortgagor warrants that it has a good and marketable title to an indefeasible fee estate in the Premises subject to no lien, charge or encumbrance except for Permitted Exceptions; that it owns the Chattels, all leases and the Rents in respect of the Mortgaged Property and all other personal property encumbered hereby free and clear of liens and claims; and that this Mortgage is and will remain a valid and enforceable lien on the Mortgaged Property subject only to the exceptions referred to above. Mortgagor has full power and lawful authority to mortgage the Mortgaged Property in the manner and form herein done or intended hereafter to be done. Mortgagor will preserve such title, and will forever warrant and defend the same to Mortgagee and will forever warrant and defend the validity and priority of the lien hereof against the claims of all persons and parties whomsoever.

Hazardous Materials.

Mortgagor represents and warrants that (i) except as disclosed in environmental reports provided to Mortgagee and to the best of Mortgagor’s knowledge, there has never been a release, deposit, disposal or leak of Hazardous Materials into or upon or under the Premises and the improvements thereon, including

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by means of burial, disposal, discharge, spillage, leakage, seepage, dumping and the like, that could reasonably be expected to result in liability under any Environmental Law or that has not been fully remediated in accordance with Environmental Law, (ii) neither it nor any portion of the Premises or improvements thereon is in violation of, or subject to any existing, pending or, to the best of Mortgagor’s knowledge, threatened investigation or proceeding by any governmental authorities under, any Environmental Law, (iii) there are no claims, litigation, administrative or other proceedings, whether actual or threatened, or judgments or orders, concerning Hazardous Materials relating in any way to the Premises or the improvements thereon and (iv) Mortgagor is not required by any Environmental Law to obtain any permits or licenses to construct or use any improvements, fixtures or equipment with respect to the Premises, or if any such permit or license is required such permit or license has been obtained or Mortgagor reasonably expects that such permit or license will be obtained in due course and will diligently pursue the obtaining thereof. Mortgagor will comply with all applicable Environmental Laws and will, at its sole cost and expense, promptly remove, or cause the removal of, any and all Hazardous Materials or the effects thereof at any time identified as being on, in, under or affecting the Premises which are in violation of any Environmental Law.

Flood Hazard Area.

Mortgagor represents that neither the Premises nor any part thereof is located in an area identified by the Secretary of the United States Department of Housing and Urban Development or by any applicable federal agency as having special flood hazards or, if it is, Mortgagor has obtained the insurance required by Section 1.09.

Further Assurances.

Mortgagor will, at its sole cost and expense, do, execute, acknowledge and deliver all and every such further acts, deeds, conveyances, mortgages, assignments, notices of assignment, transfers and assurances as Mortgagee shall from time to time reasonably require, for the better assuring, conveying, assigning, transferring and confirming unto Mortgagee the property and rights hereby conveyed or assigned or intended now or hereafter so to be, or which Mortgagor may be or may hereafter become bound to convey or assign to Mortgagee, or for carrying out the intention or facilitating the performance of the terms hereof, or for filing, registering or recording this Mortgage and, on demand, will execute and deliver, and hereby irrevocably authorizes Mortgagee to execute (including in Mortgagor’s name) and/or file, at any time and from time to time, one or more financing statements (including amendments), chattel mortgages or comparable security instruments, to evidence or perfect more effectively Mortgagee’s security interest in and the lien hereof upon the Chattels and other personal property encumbered hereby.

Information Reporting and Back-up Withholding.

Mortgagor will, at its sole cost and expense, do, execute, acknowledge and deliver all and every such acts, information reports, returns and withholding of monies as shall be necessary or appropriate to comply fully, or to cause full compliance, with all applicable information reporting and back-up withholding requirements of the Internal Revenue Code of 1986, as amended (including all regulations now or hereafter promulgated thereunder) in respect of the Premises and all transactions related to the Premises, and will at all times (i) at Mortgagee’s reasonable request, provide Mortgagee with reasonably satisfactory evidence of such compliance and (ii) notify Mortgagee of the information reported in connection with such compliance.

Filing and Recording of Documents.

Mortgagor forthwith upon the execution and delivery hereof, and thereafter from time to time, will cause this Mortgage, the Loan Agreement and any security instrument creating a lien or evidencing the lien hereof upon the Chattels and each instrument of further assurance to be filed, registered or recorded in such manner and in such places as may be required by any present or future law in order to publish notice of and fully to protect the lien hereof upon, and the interest of Mortgagee in, the Mortgaged Property.

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Filing and Recording Fees and Other Charges.

Mortgagor will pay all filing, registration or recording fees, and all expenses incident to the execution and acknowledgment hereof, any mortgage supplemental hereto, any security instrument with respect to the Chattels, and any instrument of further assurance, and will pay all federal, state, county and municipal stamp taxes and other taxes (other than income, withholding, backup withholding, branch profits, franchise, similar taxes or taxes and fees in lieu of such taxes), duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of the Note, this Mortgage, any mortgage supplemental hereto, any security instrument with respect to the Chattels or any instrument of further assurance.

Payment and Performance of Loan Documents.

Mortgagor will punctually pay the principal and interest (including Additional Interest) and all other sums to become due in respect hereof and of the Note and the Loan Agreement at the time and place and in the manner specified therein, according to the true intent and meaning thereof, all in currency of the United States of America which at the time of such payment shall be legal tender for the payment of public and private debts. Mortgagor will duly and timely comply with and perform all of the terms, provisions, covenants and agreements contained in said documents and in all other documents or instruments executed or delivered by Mortgagor to Mortgagee or Lenders in connection with the Loan, and will permit no failures of performance thereunder.

Type of Entity; Maintenance of Existence; Compliance with Laws.

Mortgagor represents that its correct legal name, jurisdiction of formation/existence and chief executive office or, if applicable, sole place of business (or, if an individual, its principal residence) are as set forth on the cover page hereof. Mortgagor, if other than a natural person, further represents that it has delivered to Mortgagee a current, original certificate issued by the appropriate official of said jurisdiction evidencing such formation and existence, and agrees that it will, so long as it is owner of all or part of the Mortgaged Property, do all things necessary to preserve and keep in full force and effect its existence, franchises, rights and privileges as a business or stock corporation, partnership, limited liability company, trust or other entity under the laws of such jurisdiction. Mortgagor, if other than a natural person, will (a) not modify or amend such certificate or change its legal name or jurisdiction of formation/existence without Mortgagee’s prior consent, not to be unreasonably withheld, conditioned or delayed and (b) promptly notify Mortgagee of any change to the location of its chief executive office or, if applicable, sole place of business. Mortgagor, if an individual, will not change its legal name or principal residence without first giving Mortgagee at least thirty (30) days’ prior notice. Mortgagor will duly and timely comply with all laws, regulations, rules, statutes, orders and decrees of any governmental authority or court applicable to it or to the Mortgaged Property or any part thereof except where the failure to comply would not have a Material Adverse Effect (as defined in the Building Loan Agreement).

After-Acquired Property.

All right, title and interest of Mortgagor in and to all extensions, improvements, betterments, renewals, substitutes and replacements of, and all additions and appurtenances to, the Mortgaged Property, hereafter acquired by, or released to, Mortgagor or constructed, assembled or placed by Mortgagor on the Premises, and all conversions of the security constituted thereby, immediately upon such acquisition, release, construction, assembling, placement or conversion, as the case may be, and in each such case, without any further mortgage, conveyance, assignment or other act by Mortgagor, shall become subject to the lien hereof as fully and completely, and with the same effect, as though now owned by Mortgagor and specifically described in the Granting Clause hereof, but at any and all times Mortgagor will execute and deliver to Mortgagee any and all such further assurances, mortgages, conveyances or assignments thereof as Mortgagee may reasonably require for the purpose of expressly and specifically subjecting the same to the lien hereof.

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Payment of Taxes and Other Charges.

Mortgagor, from time to time when the same shall become due and payable, will pay and discharge all taxes of every kind and nature (including real and personal property taxes and income, franchise, withholding, backup withholding, profits and gross receipts taxes), all general and special assessments, levies, permits, inspection and license fees, all water and sewer rents and charges, all charges for utilities, and all other charges (public or private) whether of a like or different nature, imposed upon or assessed against it or the Mortgaged Property or any part thereof or arising in respect of the occupancy, use or possession thereof. Mortgagor will, upon Mortgagee’s request, deliver to Mortgagee receipts evidencing (to Mortgagee’s reasonable satisfaction) the payment of all such taxes, assessments, levies, fees, rents and other charges imposed upon or assessed against it or the Mortgaged Property or any portion thereof.

Upon the occurrence and during the existence of an Event of Default, Mortgagee may, at its option, to be exercised by thirty (30) days’ notice to Mortgagor, require the deposit by Mortgagor, at the time of each payment of an installment of interest or principal under the Note (but no less often than monthly), of an additional amount sufficient to discharge the obligations under this clause (a) when they become due (other than with respect to income, withholding, backup withholding, profits and franchise taxes, similar taxes and taxes and fees in lieu of such taxes). The determination of the amount so payable and of the fractional part thereof to be deposited with Mortgagee, so that the aggregate of such deposits shall be sufficient for this purpose, shall be made by Mortgagee in its reasonable discretion. Such amounts shall be held by Mortgagee without interest and applied to the payment of the obligations in respect of which such amounts were deposited or, at Mortgagee’s option, to the payment of said obligations in such order or priority as Mortgagee shall determine, on or before the respective dates on which the same or any of them would become delinquent. If one (1) month prior to the due date of any of the aforementioned obligations the amounts then on deposit therefor shall be insufficient for the payment of such obligation in full, Mortgagor within ten (10) days after demand shall deposit the amount of the deficiency with Mortgagee. Nothing herein contained shall be deemed to affect any right or remedy of Mortgagee under any provisions hereof or of any statute or rule of law to pay any such amount and to add the amount so paid, together with interest at the Default Rate, to the indebtedness hereby secured.

Payment of Mechanics and Materialmen.

Mortgagor will pay, from time to time when the same shall become due, all lawful claims and demands of mechanics, materialmen, laborers, and others which, if unpaid, might result in, or permit the creation of, a lien on the Mortgaged Property or any part thereof, and in general will do or cause to be done everything necessary so that the lien hereof shall be fully preserved, at the cost of Mortgagor and without expense to Mortgagee. Without limiting the generality of the foregoing, Mortgagor will discharge, bond over, or have the Title Insurer insure over in a manner reasonably satisfactory to Mortgagee any mechanic’s lien within thirty (30) days of notice of the same (and in any event prior to the next advance to be made under the Loan Agreement) in case of the filing of any claims for lien or proceedings for the enforcement thereof.

Good Faith Contests.

Nothing in this Section 1.07 shall require the payment or discharge of any obligation imposed upon Mortgagor by this Section so long as Mortgagor shall in good faith and at its own expense contest the same or the validity thereof by appropriate legal proceedings which shall operate to prevent the collection thereof or other realization thereon and the sale or forfeiture of the Mortgaged Property or any part thereof to satisfy the same; provided, however, that (i) during such contest Mortgagor shall, at Mortgagee’s option, provide security reasonably satisfactory to Mortgagee, assuring the discharge of Mortgagor’s obligation hereunder and of any additional charge, penalty or expense arising from or incurred as a result of such contest, except that in the case of claims described in paragraph (b) of this Section 1.07, Mortgagor shall bond over, or have the Title Insurer insure over in a manner reasonably satisfactory to Mortgagee, any such claim prior to the next advance to be made under the Loan Agreement, and (ii) if at any time payment of any obligation imposed upon Mortgagor by clause (a) above shall become necessary to prevent the delivery of a tax deed or other instrument conveying the Mortgaged Property or any portion thereof because of non-payment, then Mortgagor shall pay the same in sufficient time to prevent the delivery of

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such tax deed or other instrument. In the case of claims described in paragraph (b) of this Section 1.07, if Mortgagor shall fail, within sixty (60) days after becoming aware of same, either (i) to discharge or (ii) to contest claims asserted and give security in the manner provided in this paragraph (c), or having commenced to contest the same, and having given such security, shall fail to prosecute such contest with diligence, or to maintain such security for its full amount, or upon adverse conclusion of any such contest, to cause any judgment or decree to be satisfied and lien to be released, then and in any such event, Mortgagee may, at its election (but shall not be required to), procure the release and discharge of any claim and any judgment or decree thereon and, further, may in its sole discretion effect any settlement or compromise of the same, and any amounts so expended by Mortgagee, including premiums paid or security furnished in connection with the issuance of any surety company bonds, shall constitute advances covered by Section 1.10. In settling, compromising or discharging any claims for lien, Mortgagee shall not be required to inquire into the validity or amount of any such claim. Notwithstanding the foregoing, Lenders shall have no obligation to make disbursements of Loan proceeds under the terms of the Loan Agreement at any time prior to such time as Mortgagor shall have discharged or contested any claims in accordance with this paragraph (c).

Taxes on Mortgagee or Lenders.

Mortgagor will pay any taxes (except income, withholding, backup withholding, branch profits, franchise, similar taxes or taxes and fees in lieu of such taxes) imposed on Mortgagee or any Lender by reason of their interests in the Note or this Mortgage, but only to the extent provided for in the Building Loan Agreement.

Insurance.

Mortgagor will at all times (except as provided herein) provide, maintain and keep in force:

from the time that initial construction begins (soil removal for environmental remediation not to be considered beginning construction) on the new construction, builder’s risk insurance policies insuring the Premises, Improvements and Chattels for not less than 100% of the completed project insurable replacement cost value of the Improvements, which insurance shall be written on a “completed value” form (100% non-reporting) or its equivalent and shall include endorsements providing replacement cost coverage, agreed amount and/or coinsurance waiver, and granting permission to occupy. Such policies shall insure against loss or damage by fire and lightning; against loss or damage by other risks (including acts of terrorism) embraced by coverage of the type now known as “All Risk” or Special Peril property insurance, as is available in the insurance market place as of the closing date, endorsed to provide replacement cost coverage with agreed amount and/or co-insurance waiver, coverage for demolition and increased cost of construction due to the enforcement of laws regulating reconstruction following a loss in amounts not less than $3,000,000 per occurrence, and coverage for flood and earthquake in amounts not less than $5,000,000 per occurrence and in the annual aggregate for each peril; and against such other risks or hazards as Mortgagee from time to time may reasonably designate in an amount sufficient to prevent Mortgagee or Mortgagor from becoming a co-insurer under the terms of the applicable policies, but in any event in an amount not less than 100% of the then full replacement cost of the Improvements (exclusive of the cost of excavations, foundations and footings below the lowest basement floor) without deduction for physical depreciation. Such builder’s risk insurance shall also cover: (i) loss of materials, equipment, machinery, and supplies which become part of the completed project whether on-site, in transit, or stored off-site, or loss of any temporary structures, sidewalks, retaining walls, and underground property; and (ii) soft costs including coverage for 100% of the interest expense during the period of the construction and coverage for recurring expenses, including, but not limited to, plans, specifications, blueprints and models, real estate taxes, real estate commissions, advertising, architectural and engineering supervisory costs, legal and accounting costs, and delayed completion business income/rental interruption on an actual loss sustained basis. Mortgagor’s obligation to obtain terrorism coverage pursuant to the above and paragraph (ii), (iii) and (iv) below shall be qualified as follows: If the United States Government sponsored reinsurance backstop under the Terrorist Risk Insurance Act

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is no longer in effect, Mortgagor shall be required to provide terrorism insurance coverage with the respect to the Improvements in the minimum amount equal to the greater of (a) the full insurable replacement cost value of the Improvements and one (1) year lost rents value, or if such terrorism insurance coverage is not commercially available at Commercially Reasonable Terrorism Insurance Rates (as defined below), then in a minimum amount equal to the amount of terrorism insurance coverage which is commercially available at Commercially Reasonable Terrorism Insurance Rates. For purposes herein, “Commercially Reasonable Terrorism Insurance Rates” means, with respect to any amount of terrorism insurance coverage (inclusive of loss to property and lost rents), the rate which Administrative Agent determines to be reasonable; Mortgagor and Administrative Agent acknowledging and agreeing that (1) any annual premium with respect to terrorism insurance coverage which does not exceed one-half of one percent (0.5%) of the total insurable values with respect to loss of property and lost rents shall be deemed reasonable and (2) no inference shall be drawn that premiums in excess of the amount referred to in clause (1) above for terrorism insurance coverage are to be deemed unreasonable;

Property insurance covering any improvements on the Premises, including 100% of the insurable replacement cost value of all tenant improvements and betterments that any Lease (as defined in the Building Loan Agreement) or Premises Document requires Mortgagor to insure, against all risks of loss to the Improvements customarily covered by so-called “Cause of Loss – Special Form” policies as available in the insurance market as of the date of substantial completion of the Improvements (and against such additional risks of loss as may be customarily covered by such policies after such date). Each Cause of Loss – Special Form insurance policy shall cover: (i) 100% of the insurable replacement cost value of the Improvements; (ii) 100% of the insurable replacement cost value of all tenant improvements and betterments that any Lease or Premises Document requires Mortgagor to insure; (iii) loss of the undamaged portion of the Improvements and additional expense of demolition and increased cost of construction, including, without limitation, increased costs that arise from any changes in laws or other legal requirements with respect to such restoration, in an amount as is acceptable to Administrative Agent. Any Cause of Loss – Special Form insurance policy shall contain an agreed amount or a coinsurance waiver endorsement and a replacement cost value endorsement without reduction for depreciation. Cause of Loss - Special Form policies shall cover at least the following perils: building collapse, fire, flood, back-up of sewers and drains, water damage, tsunami, windstorm, earthquake, earth movement, landslide, mudslide, subsidence, acts of terrorism (certified and non-certified), impact of vehicles and aircraft, lightning, malicious mischief, and vandalism (earthquake, earth movement, landslide, mudslide, subsidence and flood may have a sub-limit of such amount as is acceptable to Administrative Agent). Such insurance policy shall name Mortgagor as the Insured and shall also name Administrative Agent as Mortgagee under a non-contributing New York standard mortgagee clause or equivalent endorsement satisfactory to Administrative Agent for real property and as Lender Loss Payee as respects business income/loss of rents (if any);

upon completion of construction of the Improvements, policies of insurance insuring the Premises for the same perils as outlined in (ii) above for business income and rents loss insurance in an amount equal to not less than one (1) year’s gross “rental value” of the Improvements. “Rental value” as used herein is defined as the sum of (A) the total anticipated gross rental income from tenant occupancy of such buildings as furnished and equipped, (B) the amount of all charges which are the legal obligation of tenants and which would otherwise be the obligation of Mortgagor and (C) the fair rental value of any portion of such buildings which is occupied by Mortgagor. This coverage shall also include an extended period of indemnity of not less than 365 days. Mortgagor hereby assigns the proceeds of such insurance to Mortgagee, to be applied by Mortgagee in payment of the interest and principal on the Note, insurance premiums, taxes, assessments and private impositions and any other operating expense of the Property or charge described in clause (B) above until such time as the Improvements shall have been restored and placed in full operation, at which time, provided Mortgagor is not then in default hereunder, the balance of such insurance proceeds, if any, held by Mortgagee shall be paid over to Mortgagor;

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comprehensive boiler and machinery insurance providing coverage for all mechanical and electrical equipment in amounts not less than $20,000,000 per accident (during periods of construction, this coverage shall be provided once electrical equipment is energized);

if all or part of the Premises are located in an area identified by the Secretary of the United States Department of Housing and Urban Development or by any applicable federal agency as a flood hazard area, flood insurance in an amount at least equal to the maximum limit of coverage available under the National Flood Insurance Act of 1968. Regardless of the flood zone, the minimum amount of coverage required by this subsection for loss caused by floods shall not be less than $50,000,000or such other amount as is acceptable to Administrative Agent;

commercial general liability insurance on an “occurrence” basis against claims for “personal injury” liability, including, without limitation, bodily injury, death or property damage liability, products and completed operations liability with a limit of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate on a per location basis in the event of “personal injury” to any number of persons or of damage to property arising out of one “occurrence”. Such policies shall name Mortgagee as additional insured by an endorsement, and shall contain cross-liability and severability of interest clauses, all reasonably satisfactory to Mortgagee;

commercial automobile liability insurance covering all owned (if any) hired and non-owned automobiles in amounts not less than $1,000,000 per accident;

workers’ compensation and employers’ liability (and if required, disability) insurance covering the statutory requirements of the jurisdiction in which the Premises are located;

commercial umbrella liability insurance in excess of the liability insurance required in clauses (v), (vi) and (vii) above in amounts not less than $50,000,000 per occurrence and in the annual aggregate per location. During the period of vertical construction of the Improvements and at any time thereafter that substantial construction is underway, the amount of umbrella liability insurance shall be $75,000,000 except that if a controlled insurance program (CIP) permitted in paragraph (c) below is provided, the amount of liability required of Mortgagor under this paragraph (ix) shall be $19,000,000 when substantial construction is underway; and

such other insurance, and in such amounts, as may from time to time be reasonably required by Mortgagee against the same or other insurable hazards.

Mortgagor shall cause the following insurance to be maintained prior to the start of construction and during the construction of Improvements (or the restoration thereof following a loss):

by parties engaged in such construction:

(w)       commercial general liability insurance (including products and completed operations liability for a minimum of two (2) years following completion of construction) in amounts not less than $1,000,000 per occurrence and $2,000,000 aggregate per project;

(x)        commercial automobile liability insurance in amounts not less than $1,000,000 per accident;

(y)        workers’ compensation and employers’ liability insurance complying with the statutory requirements of the jurisdiction in which the Premises are located;

(z)        umbrella liability insurance in excess of the insurance required in clause (b)(i)(x) and (y) in amounts as follows:

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(I)        for the construction manager/general contractor, limits of not less than $75,000,000 per occurrence and in the aggregate per project; if aggregate limits of umbrella liability insurance are shared, the amount of umbrella liability insurance for construction shall be increased to $80,000,000;

(II)       for other sub-trade contractors and their sub-subcontractors, amounts not less than good insurance practice would dictate based on the hazard/risk associated with their operations; and

(III)      all sub-trade contractors and sub-subcontractors shall name Mortgagor and Mortgagee as additional insured and provide certificates of insurance and other evidence of coverage as may be required by Mortgagor or Mortgagee; and

Mortgagor shall cause all architects and engineers engaged in the design and construction of the project to provide professional errors and omissions liability insurance in amounts not less than $1,000,000 per claim and $2,000,000 in the aggregate except that the lead architect shall have $3,000,000 per claim and in the aggregate.

Liability insurance required of Mortgagor and general contractor/construction manager in Section 1.09(a)(ix) and (b)(i)(z)(I) above may be satisfied through a controlled insurance program (CIP) providing not less than $100,000,000 in liability limits for Mortgagor and contractors working at the construction site and shall include an extended reporting period for products/completed operations equal to the statutory period during which claims can be made following completion of the Improvements. The insurance coverage permitted by this paragraph shall include the liability insurance extensions required of the Mortgagorand contractors above.

All policies of insurance required under this Section 1.09 (i) shall be issued by companies having Best’s ratings of A:X or better as published in Best’s latest rating guide that are licensed in the jurisdiction in which the Premises are located (or where the failure to be so licensed does not affect the validity of the policy), (ii) except as provided for above, shall be subject to the approval of Mortgagee (such approval not to be unreasonably withheld, conditioned or delayed) as to amount, content, form and expiration date, (iii) except for the liability policies described in clauses (a)(vi) through (ix) above, shall contain a Non-Contributory Standard Mortgagee Clause and Lender’s Loss Payable Endorsement, or their equivalents, in favor of Mortgagee, and (iv) shall provide that the proceeds thereof shall be payable to Mortgagee. Mortgagee shall be furnished with the original or duplicate original of each policy required hereunder, which policies shall provide that they shall not lapse, nor be modified to reduce coverage or cancelled, without thirty (30) days’ written notice to Mortgagee, except for non-payment of premium in which case ten (10) days’ notice of cancellation is required. At least five (5) days prior to expiration of any policy required hereunder, Mortgagor shall furnish Mortgagee appropriate proof of issuance of a policy continuing in force the insurance covered by the policy so expiring. Mortgagor shall furnish to Mortgagee, promptly upon request, receipts or other satisfactory evidence of the payment of the premiums on such insurance policies. In the event that Mortgagor does not deposit with Mortgagee a new certificate or policy of insurance at least five (5) days prior to the expiration of any expiring policy and evidence of payment of premiums when due thereon, then Mortgagee may, but shall not be obligated to, procure such insurance and pay the premiums therefor, and Mortgagor agrees to repay to Mortgagee the premiums thereon promptly on demand, together with interest thereon at the Default Rate.

Mortgagor hereby assigns to Mortgagee all proceeds of any insurance required to be maintained by this Section 1.09 which Mortgagor may be entitled to receive for loss or damage to the Premises, Improvements or Chattels or for soft costs including interest expense. All such insurance proceeds shall be payable to Mortgagee, and Mortgagor hereby authorizes and directs any affected insurance company to make payment thereof directly to Mortgagee. Mortgagor shall give prompt notice to Mortgagee of any casualty, whether or not of a kind required to be insured against under the policies to be

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provided by Mortgagor hereunder, such notice to generally describe the nature and cause of such casualty and the extent of the damage or destruction. Mortgagor may settle, adjust or compromise any claims for loss, damage or destruction, regardless of whether or not there are insurance proceeds available or whether any such insurance proceeds are sufficient in amount to fully compensate for such loss or damage, subject to Mortgagee’s prior consent, which shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Mortgagee shall have the right to join Mortgagor in settling, adjusting or compromising any loss of $2,000,000 or more. Mortgagor hereby authorizes the application or release by Mortgagee of any insurance proceeds under any policy of insurance, subject to the other provisions hereof. The application or release by Mortgagee of any insurance proceeds shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.

In the event of the foreclosure hereof or other transfer of the title to the Mortgaged Property in extinguishment, in whole or in part, of the indebtedness secured hereby, all right, title and interest of Mortgagor in and to any insurance policy, or premiums or payments in satisfaction of claims or any other rights thereunder then in force, shall pass to the purchaser or grantee notwithstanding the amount of any bid at such foreclosure sale. Nothing contained herein shall prevent the accrual of interest as provided in the Note on any portion of the principal balance due under the Note until such time as insurance proceeds are actually received and applied to reduce the principal balance outstanding.

Mortgagor shall not take out separate insurance concurrent in form or contributing in the event of loss with that required to be maintained under this Section 1.09 unless Mortgagee is included thereon as a named insured with loss payable to Mortgagee under standard mortgage endorsements of the character and to the extent above described. Mortgagor shall promptly notify Mortgagee whenever any such separate insurance is taken out and shall promptly deliver to Mortgagee the policy or policies of such insurance.

Prior to the subordination of this Mortgage to the Declaration pursuant to Section 9.01 of the Building Loan Agreement, any and all monies received as payment which Mortgagor may be entitled to receive for loss or damage to the Premises, Improvements or Chattels under any insurance maintained pursuant to this Section 1.09 (other than proceeds under the policies required by clause (a)(iii) above, which shall be paid over to Mortgagee and deposited in the Collection Account (as defined in the Lockbox Agreement)), less Mortgagee’s reasonable expenses for collecting and, if applicable, disbursing the insurance proceeds, or otherwise incurred in connection therewith shall be disbursed to Mortgagor for restoration in the same manner and subject to the same terms and conditions as advances of proceeds of the Loan under the Loan Agreement, provided that Mortgagee shall have reasonably determined that the restoration of the Improvements can be completed by the then Maturity Date of the Note at a cost which does not exceed the amount of available insurance proceeds or, in the event that such proceeds are reasonably determined by Mortgagee to be inadequate, Mortgagee shall have received either (x) a cash deposit from Mortgagor equal to the excess of said estimated cost of restoration over the amount of said available proceeds or (y) Guarantor’s agreement, so long as Guarantor is then in compliance with the financial covenants set forth in the Guaranty (whether or not then in effect), that it shall be unconditionally liable therefor, such agreement to be reasonably satisfactory in form and substance to Mortgagee and further that the Leases described in Section 4.01(e)(25) of the Building Loan Agreement shall remain in full force and effect during and after the completion of such restoration without abatement of rent beyond the time required for restoration. If the conditions for the advance of insurance proceeds for restoration set forth in the preceding sentence (the “Restoration Conditions”) are not satisfied within one hundred twenty (120) days of Mortgagee’s receipt thereof or if the actual restoration shall not have been commenced within such period, the Required Lenders shall have the option on not less than thirty (30) days’ notice to apply such insurance proceeds to the payment of the Note and to interest accrued and unpaid thereon in such order and proportions as the Required Lenders may elect, provided, however, that if prior to the expiration of such thirty (30) day period such restoration commences and the Restoration Conditions are satisfied, the insurance proceeds shall be available for restoration. After this Mortgage is so subordinated to the Declaration, if the Declaration requires that insurance proceeds be applied to restoration, the proceeds shall be so applied and if the terms and conditions set forth in the Declaration for the disbursement from time to time as restoration progresses of said proceeds are inconsistent with terms and conditions for advances of proceeds of the Loan, the terms and provisions of the Declaration shall control. Notwithstanding that the

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Declaration requires that the insurance proceeds be applied for restoration, the Restoration Conditions as between Mortgagor, Lenders and Mortgagee remain conditions to be satisfied by Mortgagor which if not satisfied shall be deemed to constitute an Event of Default and Mortgagee shall have the option of exercising any of the remedies set forth in Article II of this Mortgage. If the Declaration does not require that the insurance proceeds be applied to restoration, the proceeds shall be divided among all condominium unit owners in proportion to their respective percentage interest in the common elements and that portion of the proceeds due to Mortgagor shall be paid over to Mortgagee and the Required Lenders shall have the option at any time thereafter to apply same to the payment of the Note and interest accrued and unpaid thereon in such order and proportions as the Required Lenders may elect.

Protective Advances by Mortgagee.

If Mortgagor shall fail to perform any of the covenants contained herein beyond the expiration of any applicable notice and grace periods, Mortgagee may, after ten (10) days’ notice to Mortgagor of Mortgagee’s intent to make such advance, except in an emergency in which event notice shall not be required, make advances to perform the same on its behalf and all sums so advanced shall be a lien upon the Mortgaged Property and shall be secured hereby. Mortgagor will repay on demand all sums so advanced on its behalf together with interest thereon at the Default Rate. The provisions of this Section shall not prevent any default in the observance of any covenant contained herein from constituting an Event of Default.

Visitation and Inspection.

Mortgagor will permit Mortgagee and any of Lenders, by their agents, representatives and attorneys, to visit and inspect all or any part of the Mortgaged Property on Business Days and at reasonable times and upon reasonable prior notice, subject to the rights of tenants and Mortgagor’s usual and customary safety requirements. Mortgagor will keep, and cause Guarantor to keep, adequate records and books of account in accordance with GAAP and, subject to applicable securities and other Laws relating to disclosure of material information, including Regulation FD, will permit, and cause Guarantor to permit, Mortgagee and any of Lenders, by their agents, accountants and attorneys, to examine its and Guarantor’s records and books of account and make copies thereof or extracts therefrom, and to discuss its or Guarantor’s affairs, finances and accounts with the officers or general partners, as the case may be, of Mortgagor or Guarantor, at such reasonable times as may be requested by Mortgagee or any of Lenders, as the case may be.

Estoppel Certificates.

Mortgagor, within five (5) business days of receipt of a written request, will furnish a statement, duly acknowledged, of the amount due whether for principal or interest on the Loan and whether to its knowledge any offsets, counterclaims or defenses exist against the indebtedness secured hereby, but no more than twice in any twelve (12) month period. Notwithstanding the foregoing, during the existence of any Event of Default, there shall be no limit on the number of any such requests by Mortgagee.

Maintenance of Premises and Improvements.

Mortgagor will not commit any waste on the Premises from and after completion of construction or make any change in the use of the Premises which will in any way increase any ordinary fire or other hazard arising out of construction or operation. Mortgagor will, at all times, maintain the Improvements and Chattels in good operating order and condition and will promptly make, from time to time, all repairs, renewals, replacements, additions and improvements in connection therewith which are needful or desirable to such end. The Improvements shall not be demolished or substantially altered, nor shall any Chattels be removed without Mortgagee’s prior consent except where appropriate replacements free of superior title, liens and claims are immediately made of value at least equal to the value of the removed Chattels or except where the same is obsolete or no longer necessary for the Property.

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Condemnation.

Mortgagor, immediately upon obtaining knowledge of the institution or pending institution of any proceedings for the condemnation of the Premises or any portion thereof, will notify Mortgagee thereof. If the amount of the award or compensation is reasonably estimated to be in excess of $500,000, Mortgagee may participate in any such proceedings and may be represented therein by counsel of its selection. Mortgagor from time to time will deliver to Mortgagee all instruments requested by it to permit or facilitate such participation. In the event of such condemnation proceedings, the award or compensation payable is hereby assigned to and shall be paid to Mortgagee. Mortgagee shall be under no obligation to question the amount of any such award or compensation and may accept the same in the amount in which the same shall be paid. Prior to the subordination of this Mortgage to the Declaration pursuant to Section 9.01 of the Building Loan Agreement, the proceeds of any award or compensation so received shall be paid over to Mortgagee and deposited in the Collection Account, in any case under this Section, less Mortgagee’s reasonable expenses for collecting and, if applicable, disbursing the award, or otherwise incurred in connection therewith, and disbursed to Mortgagor from time to time for restoration of the Improvements in the same manner and subject to the same terms and conditions as advances of proceeds of the Loan under the Loan Agreement, provided that Mortgagee shall have reasonably determined that the restoration of the Improvements to an economically viable architectural whole can be completed by the then Maturity Date of the Note at a cost which does not exceed the amount of available condemnation award proceeds or, in the event that such proceeds are reasonably determined by Mortgagee to be inadequate, Mortgagee shall have received either (x) from Mortgagor a cash deposit equal to the excess of said estimated cost of restoration over the amount of said available proceeds or (y) Guarantor’s agreement, so long as Guarantor is then in compliance with the financial covenants set forth in the Guaranty (whether or not then in effect), that it shall be unconditionally liable therefor, such agreement to be reasonably satisfactory in form and substance to Mortgagee and further that the Leases described in Section 4.01(e)(25) of the Building Loan Agreement shall remain in full force and effect during and after the completion of such restoration without abatement of rent beyond the time required for restoration. If the conditions for the advance of condemnation award proceeds for restoration set forth in the preceding sentence (the “Condemnation Restoration Conditions”) are not satisfied within one hundred twenty (120) days of Mortgagee’s receipt thereof or if the actual restoration shall not have been commenced within such period, Required Lenders shall have the option on not less than thirty (30) days’ notice to apply such condemnation award proceeds to the payment of the Note and to interest accrued and unpaid thereon (at the rate of interest provided therein regardless of the rate of interest payable on the award by the condemning authority) in such order and proportions as the Required Lenders may elect, provided, however, that if prior to the expiration of such thirty (30) day period such restoration commences and the Condemnation Restoration Conditions are satisfied, the condemnation proceeds shall be available for restoration. After this Mortgage is so subordinated to the Declaration, if the Declaration requires that condemnation proceeds be applied to restoration, the proceeds shall be so applied and if the terms and conditions set forth in the Declaration for the disbursement from time to time as restoration progresses of said proceeds are inconsistent with terms and conditions for advances of proceeds of the Loan, the terms and provisions of the Declaration shall control. Notwithstanding that the Declaration requires that the condemnation proceeds be applied for restoration, the Condemnation Restoration Conditions as between Mortgagor, Lenders and Mortgagee remain conditions to be satisfied by Mortgagor which if not satisfied shall be deemed to constitute an Event of Default and Mortgagee shall have the option of exercising any of the remedies set forth in Article II of this Mortgage. If the Declaration does not require that the condemnation proceeds be applied to restoration, the proceeds shall be divided among all condominium unit owners in proportion to their respective percentage interest in the common elements and that portion of the proceeds due to Mortgagor shall be paid over to Mortgagee and the Required Lenders shall have the option at any time thereafter to apply same to the payment of the Note and interest accrued and unpaid thereon in such order and proportions as the Required Lenders may elect.

Leases.

Mortgagor will not (i) execute an assignment of the rents or any part thereof from the Premises without Mortgagee’s prior consent, (ii) enter into, or amend or modify, any lease, other than in accordance with the terms and conditions set forth in the Building Loan Agreement, (iii) except where the lessee is in material default thereunder, or where the tenant has the unilateral right to do so under its lease,

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terminate or consent to the cancellation or surrender of any lease of the Premises or of any part thereof, now existing or hereafter to be made, (iv) accept prepayments of any installments of rents to become due under such leases, except prepayments in the nature of security for the performance of the lessees thereunder or (v) modify, release or terminate any guaranties of any such lease, except in conjunction with an amendment of such lease entered into in accordance with the terms of the Loan Documents.

Mortgagor will not execute any lease of all or a substantial portion of the Premises except for actual occupancy by the lessee thereunder, and will at all times promptly and faithfully perform, or cause to be performed, in a commercially reasonable manner in all material respects all of the covenants, conditions and agreements contained in all leases of the Premises or portions thereof now or hereafter existing, on the part of the lessor thereunder to be kept and performed and will at all times, in a commercially reasonable manner, do all things necessary to compel performance by the lessee under each lease of all material obligations, covenants and agreements by such lessee to be performed thereunder. If any of such leases provide for the giving by the lessee of certificates with respect to the status of such leases, Mortgagor shall exercise its right to request such certificates within five (5) days of any demand therefor by Mortgagee, shall use commercially reasonable efforts to obtain same and shall deliver copies thereof to Mortgagee promptly upon receipt, provided the foregoing shall not be requested until the first anniversary hereof or, in the absence of an Event of Default, more frequently than once in any twelve (12) month period thereafter.

Each lease of the Premises, or of any part thereof, hereafter entered into shall provide that, in the event of the enforcement by Mortgagee of the remedies provided for hereby or by law, the lessee thereunder will, upon request of any person succeeding to the interest of Mortgagor as a result of such enforcement, automatically become the lessee of said successor in interest, without change in the terms or other provisions of such lease, provided, however, that said successor in interest shall not be bound by (i) any payment of rent or additional rent for more than one (1) month in advance, except prepayments in the nature of security for the performance by said lessee of its obligations under said lease or (ii) any amendment or modification of the lease made without the consent of Mortgagee or such successor in interest except to the extent the same are permitted under the Building Loan Agreement. Each lease shall also provide that, (x) the lease is subordinate to this Mortgage, subject to Mortgagee’s obligation to deliver non-disturbance agreements with respect to such lease set forth in the Building Loan Agreement, and (y) upon request by said successor in interest, such lessee shall execute and deliver an instrument or instruments confirming such attornment.

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.

All tenant security deposits (whether cash or a letter of credit) in respect of the Premises shall be held and applied as contemplated in the Building Loan Agreement.

Premises Documents.

Mortgagor shall (a) use all commercially reasonable efforts to do all things necessary to cause the due compliance and faithful performance in all material respects by the other parties to the Premises Documents of all obligations and agreements by such other parties to be complied with and performed thereunder, (b) not amend, modify or supplement the Premises Documents without Mortgagee’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed and (c) not terminate or consent to the termination of the Premises Documents.

Utilities.

Mortgagor will not, without the prior consent of Mortgagee, sell or contract to sell, or enter into an option to sell, or exchange, assign, convey, transfer possession of (including, without limitation, by lease) or otherwise dispose of all or any part of the utilities, utility commitments or other agreements or rights of any nature relating to the utilities, drainage ditches and/or treatment plants associated with the Mortgaged Property. Mortgagor further covenants and agrees that it will take any such action and execute, acknowledge, deliver and record and/or file any and all instruments as may be necessary, desirable or

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proper to keep any existing or future utility commitments covering the Mortgaged Property in a current and valid condition and to keep the existing utility capacity for the Mortgaged Property at or above the level required for the contemplated uses thereof. As used herein, the term “utilities” includes, without limitation, water, gas, electricity and storm and sanitary sewer.

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 costs of completing the “Improvements” as defined in the Building Loan Agreement (or, 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 and Lenders 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.

Interest Rate Protection.

Mortgagor agrees that upon request of Mortgagee it shall enter into an assignment of any interest rate protection agreements entered into by Mortgagor (if any), including, without limitation, the Interest Rate Protection Agreement, pursuant to which Mortgagor shall collaterally assign to Mortgagee all of its right, title and interest to receive any and all payments thereunder (and any related guarantee, if any) and shall deliver to Mortgagee an acknowledgment and agreement (either in such interest rate protection agreement or by separate instrument, in each case in form and substance reasonably satisfactory to Mortgagee) of the counterparty to such interest rate protection agreement acknowledging such assignment and agreeing to make any payments payable under or pursuant to such agreement directly to Mortgagee. If Mortgagee receives any payments under such agreement (other than a payment by reason of a Termination Event (as defined in such interest rate protection agreement) or any other payment during the existence of an Event of Default), Mortgagee shall hold and deposit the same in a cash collateral account as additional security for the Loan and the Other Loan and apply the same to interest payable on the next occurring payment date. If Mortgagee receives any payments under any such interest rate protection agreement during the existence of an Event of Default (including, without limitation, any payment by reason of a Termination Event), Mortgagee shall have the right to apply same to any portion of the sums secured hereby in any order it desires. If Mortgagee receives any payment by reason of a Termination Event under any such interest rate protection agreement, for so long as no Event of Default exists, such payment shall be held in a cash collateral account and shall be available in connection with the acquisition of a new interest rate protection agreement.

EVENTS OF DEFAULT AND REMEDIES

Events of Default and Certain Remedies.

If one or more of the following Events of Default shall happen, that is to say:

if (i) default shall be made in the payment of any principal under the Note when and as the same becomes due and payable, whether by maturity or by acceleration or otherwise, as herein or in the Note or Loan Agreement provided; or (ii) default shall be made in the payment of any interest under the Note or the Loan Agreement, the administrative fee payable to Mortgagee pursuant to Section 6.19 of the Building Loan Agreement and any fees payable to the Construction Consultant pursuant to the Building Loan Agreement, in any such case, when and as the same shall become due and payable, whether as part of any payment or prepayment or otherwise, in each case, as herein or in the Note or Loan Agreement provided, and such default shall have continued for a period of five (5) Business Days; or (iii) default shall be made in the payment of any other sums under the Note or the Loan Agreement, in any such case, when and as the same

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shall become due and payable, whether as part of any payment or prepayment or otherwise, in each case, as herein or in the Note or Loan Agreement provided, and such default shall have continued for a period of ten (10) days after notice to Mortgagor; or (iv) default shall be made in the payment of any tax or other charge required by Section 1.07 to be paid and said default shall have continued for a period of twenty (20) days after notice to Mortgagor; or

if default shall be made in the due observance or performance of any covenant, condition or agreement in the Note, the Loan Agreement, this Mortgage, any guaranty executed by Guarantor or in any other document executed or delivered to Mortgagee or Lenders in connection with the Loan (other than any such covenant, condition or agreement specifically provided for elsewhere in this Section 2.01), and such default shall have continued for a period of thirty (30) days after notice thereof shall have been given to Mortgagor by Mortgagee, or, in the case of such other documents, such shorter grace period, if any, as may be provided for therein; provided, however, that Mortgagor shall have such additional time in which to cure such default as is reasonably necessary if, by the reason of the nature thereof, such default cannot be cured by the payment of money and cannot by due diligence reasonably be wholly cured within said thirty (30) day or shorter period, as applicable, and Mortgagor has made diligent efforts to cure such default within the period aforesaid and thereafter prosecutes the curing of such default diligently and continuously to a cure within ninety (90) days thereafter, provided, further, that in no event shall such default result in an extension of the Completion Date or the Maturity Date (both as defined in the Building Loan Agreement); or

if any representation or warranty made by Mortgagor in Section 1.01 shall be incorrect, or if any other representation or warranty made to Mortgagee or Lenders in this Mortgage, the Loan Agreement, any guaranty executed by Guarantor, or in any other document, certificate or statement executed or delivered to Mortgagee or Lenders in connection with the Loan shall be incorrect in any material respect when made or remade; provided, however, that if any such representation or warranty is incorrect, Mortgagor shall promptly notify Mortgagee thereof and if such incorrect representation or warranty was made by the Person making same without knowledge to the contrary and is capable of being cured by such Person, such incorrect representation or warranty shall not be an Event of Default hereunder so long as Mortgagor (or such other Person) diligently proceeds to cure and cures such incorrect representation or warranty within thirty (30) days after notice from Mortgagee thereof such that the original representation or warranty made shall not then be incorrect in any material respect; provided, further, that if such incorrect representation or warranty is such that it cannot be cured by the payment of money, and if the cure thereof requires work to be performed, acts to be done or conditions to be removed which cannot, by their nature, with due diligence, be performed, done or removed, as the case may be, within such thirty (30) day period and Mortgagor (or such other Person) shall have commenced to cure such failure within such thirty (30) day period, such period shall be extended for so long as shall be required by Mortgagor (or such Person) to cure such incorrect representation or warranty, so long as during all such periods Mortgagor (or such other Person) diligently proceeds to effect such cure, provided, however, that in no event shall such thirty (30) day period be extended pursuant to the foregoing provisions for a period of in excess of one hundred twenty (120) days; or

if by order of a court of competent jurisdiction, a trustee, receiver or liquidator of the Mortgaged Property or any part thereof, or of Mortgagor shall be appointed and such order shall not be discharged or dismissed within ninety (90) days after such appointment; or

if Mortgagor shall file a petition in bankruptcy or for an arrangement or for reorganization pursuant to the Federal Bankruptcy Act or any similar federal or state law, or if, by decree of a court of competent jurisdiction, Mortgagor shall be adjudicated a bankrupt, or be declared insolvent, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or shall consent to the appointment of a receiver or receivers of all or any part of its property; or

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if any of the creditors of Mortgagor shall file a petition in bankruptcy against Mortgagor or for reorganization of Mortgagor pursuant to the Federal Bankruptcy Act or any similar federal or state law, and if such petition shall not be discharged or dismissed within ninety (90) days after the date on which such petition was filed; or

if final judgment (i.e., beyond any right of appeal) for the payment of money in excess of $250,000 shall be rendered against Mortgagor and Mortgagor shall not discharge the same, cause it to be discharged or bond over it within ninety (90) days from the entry thereof, or shall not appeal therefrom or from the order, decree or process upon which or pursuant to which said judgment was granted, based or entered, and secure a stay of execution pending such appeal; or

if any of the events enumerated in clauses (d) through (f) of this Section 2.01 shall happen to Guarantor; or

if there shall occur a default which is not cured within the applicable grace period or cure period, if any, under any mortgage, deed of trust or other security instrument covering all or part of the Mortgaged Property regardless of whether any such mortgage, deed of trust or other security instrument is prior or subordinate hereto; it being further agreed by Mortgagor that an Event of Default hereunder shall constitute an Event of Default under any such mortgage, deed of trust or other security instrument held by Mortgagee; or

if there shall occur a default which is not cured within the applicable grace period or cure period, if any, under any of the Premises Documents; or if any of the Premises Documents is amended, modified, supplemented or terminated without Mortgagee’s prior consent (if required under the Loan Documents); or

if any transfer, sale, conveyance, other disposition, encumbrance or pledge occurs in violation of Section 6.25 of the Building Loan Agreement; or

if, except as contemplated or permitted by the Building Loan Agreement, Mortgagor shall encumber, or agree to encumber, in any manner, either voluntarily or involuntarily, by operation of law or otherwise, all or any portion of the Mortgaged Property, or any interest or rights therein (including air or development rights) without, in any such case, the prior written consent of the Required Lenders. As used in this clause, “encumber” shall include, without limitation, the placing or permitting the placing of any mortgage, deed of trust, assignment of rents or other security device (Any consent under this clause and the immediately preceding clause by Lender may be granted or denied in each such Lender’s sole and absolute discretion and, if consent should be given, any such transfer or encumbrance shall be subject hereto and to any other documents which evidence or secure the Loan, and, if a transfer, any such transferee shall assume all of Mortgagor’s obligations hereunder and thereunder and agree to be bound by all provisions and perform all obligations contained herein and therein; consent to one such transfer or encumbrance shall not be deemed to be a waiver of the right to require consent to future or successive transfers or encumbrances); or

if Mortgagor at any time shall fail to maintain the insurance required by Section 1.09; or

if Mortgagor fails to remain in compliance with the covenant set forth in Section 9.03(i) of the Building Loan Agreement; or

if Mortgagor breaches any of its covenants and agreements set forth in Section 1.14(a)(i); or

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if there shall occur a default, including a default in the payment of Additional Interest, by Mortgagor under the Interest Rate Protection Agreement, if any, which is not cured within the applicable grace or cure period, if any, provided for therein; or

if Mortgagor fails to complete construction of the Improvements on or before the Completion Date; or

if, in the event the Mortgaged Property fails to receive the benefits of the Industrial and Commercial Incentive Program under New York State Real Property Tax Law, Article 4, Mortgagor fails to reduce the Total Commitment (as defined in the Building Loan Agreement) by the ICIP Reduction Amount (as defined in the Building Loan Agreement) in the manner and when required by Section 6.27 of the Building Loan Agreement;

then and in every such case:

I.    Mortgagee, by notice to Mortgagor, may declare the entire principal of the Note then outstanding (if not then due and payable), and all accrued and unpaid interest (including Additional Interest) and other sums in respect thereof, to be due and payable immediately, and upon any such declaration the principal of the Note and said accrued and unpaid interest (including Additional Interest) and other sums shall become and be immediately due and payable, anything herein or in the Note or the Loan Agreement to the contrary notwithstanding.

II.   Mortgagee personally, or by its agents or attorneys, may enter into and upon all or any part of the Premises, and each and every part thereof, and is hereby given a right and license and appointed Mortgagor’s attorney-in-fact and exclusive agent to do so, and may exclude Mortgagor, its agents and servants wholly therefrom; and having and holding the same, may use, operate, manage and control the Premises and conduct the business thereof, either personally or by its superintendents, managers, agents, servants, attorneys or receivers; and upon every such entry, Mortgagee, at the expense of the Mortgaged Property, from time to time, either by purchase, repairs or construction, may maintain and restore the Mortgaged Property, whereof it shall become possessed as aforesaid, may complete the construction of the Improvements and in the course of such completion may make such changes in the contemplated Improvements as it may deem desirable and may insure the same; and likewise, from time to time, at the expense of the Mortgaged Property, Mortgagee may make all necessary or proper repairs, renewals and replacements and such useful alterations, additions, betterments and improvements thereto and thereon as to it may deem advisable; and in every such case Mortgagee shall have the right to manage and operate the Mortgaged Property and to carry on the business thereof and exercise all rights and powers of Mortgagor with respect thereto either in the name of Mortgagor or otherwise as it shall deem best; and Mortgagee shall be entitled to collect and receive the Rents and every part thereof, all of which shall for all purposes constitute property of Mortgagor; and in furtherance of such right Mortgagee may collect the rents payable under all leases of the Premises directly from the lessees thereunder upon notice to each such lessee that an Event of Default exists hereunder accompanied by a demand on such lessee for the payment to Mortgagee of all rents due and to become due under its lease, and Mortgagor FOR THE BENEFIT OF MORTGAGEE AND EACH SUCH LESSEE hereby covenants and agrees that the lessee shall be under no duty to question the accuracy of Mortgagee’s statement of default and shall unequivocally be authorized to pay said rents to Mortgagee without regard to the truth of Mortgagee’s statement of default and notwithstanding notices from Mortgagor disputing the existence of an Event of Default such that the payment of rent by the lessee to Mortgagee pursuant to such a demand shall constitute performance in full of the lessee’s obligation under the lease for the payment of rents by the lessee to Mortgagor; and after deducting the expenses of conducting the business thereof and of all maintenance, repairs, renewals, replacements, alterations, additions, betterments and improvements and amounts necessary to pay for taxes, assessments, insurance and prior or other proper charges upon the Mortgaged Property or any part thereof, as well as just and reasonable compensation for the services of Mortgagee and for all attorneys, counsel, agents, clerks, servants and other employees by it engaged and employed, Mortgagee shall apply the moneys arising as

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aforesaid, first, to the payment of the principal of the Note and the interest thereon, when and as the same shall become payable and in such order and proportions as Mortgagee shall elect and second, to the payment of any other sums required to be paid by Mortgagor hereunder or under the Loan Agreement.

III. Mortgagee, with or without entry, personally or by its agents or attorneys, insofar as applicable, 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 3.06), and all estate, right, title and interest, claim and demand therein, and right of redemption 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.

Other Matters Concerning Sales.

Mortgagee may adjourn from time to time any sale by it to be made hereunder or by virtue hereof by announcement at the time and place appointed for such sale or for such adjourned sale or sales; and, except as otherwise provided by any applicable provision of law, Mortgagee, without further notice or publication, may make such sale at the time and place to which the same shall be so adjourned.

Upon the completion of any sale or sales made by Mortgagee under or by virtue of this Article II, Mortgagee, or an officer of any court empowered to do so, shall execute and deliver to the accepted purchaser or purchasers a good and sufficient instrument or instruments conveying, assigning and transferring all estate, right, title and interest in and to the property and rights sold. Mortgagee is hereby appointed the true and lawful attorney irrevocable of Mortgagor, in its name and stead, to make all necessary conveyances, assignments, transfers and deliveries of the Mortgaged Property and rights so sold and for that purpose Mortgagee may execute all necessary instruments of conveyance, assignment and transfer, and may substitute one or more persons with like power, Mortgagor hereby ratifying and confirming all that its said attorney or such substitute or substitutes shall lawfully do by virtue hereof. Nevertheless, Mortgagor, if requested by Mortgagee, shall ratify and confirm any such sale or sales by executing and delivering to Mortgagee or to such purchaser or purchasers all such instruments as may be advisable, in the judgment of Mortgagee, for the purpose, and as may be designated in such request. Any such sale or sales made under or by virtue of this Article II, whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, shall operate to divest all the estate, right, title, interest, claim and demand whatsoever, whether at law or in equity, of Mortgagor in and to the properties and rights so sold, and shall be a perpetual bar both at law and in equity against Mortgagor and against any and all persons claiming or who may claim the same, or any part thereof from, through or under Mortgagor.

In the event of any sale or sales made under or by virtue of this Article II (whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale), the entire principal of, and interest and other sums on, the Note, if not previously due and payable, and all other sums required to be paid by Mortgagor pursuant hereto or to the

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Loan Agreement, immediately thereupon shall, anything in any of said documents to the contrary notwithstanding, become due and payable.

The purchase money, proceeds or avails of any sale or sales made under or by virtue of this Article II, together with any other sums which then may be held by Mortgagee hereunder, whether under the provisions of this Article II or otherwise, shall be applied as follows:

First: To the payment of the costs and expenses of such sale, including reasonable compensation to Mortgagee’s agents and counsel, and of any judicial proceedings wherein the same may be made, and of all liabilities, advances and reasonable expenses made or incurred by Mortgagee or Lenders hereunder, and also including reasonable attorneys’ fees, expenses and costs of investigation, all as actually incurred and including, without limitation, reasonable attorneys’ fees, costs and expenses of investigation incurred in appellate proceedings or in any action or participation in, or in connection with, any case or proceeding under any applicable bankruptcy or insolvency law, together with interest at the Default Rate on all advances made by Mortgagee or Lenders, and of all taxes, assessments or other charges, except any taxes, assessments or other charges subject to which the Mortgaged Property shall have been sold.

Second: To the payment of the whole amount then due, owing or unpaid upon the Note for principal and interest, with interest on the unpaid principal at the Default Rate from and after the happening of any Event of Default, in such order and amounts as Mortgagee may elect.

Third: To the payment of any other sums required to be paid by Mortgagor pursuant to any provision hereof or of the Note or the Loan Agreement, including all expenses, liabilities and advances made or incurred by Mortgagee hereunder or in connection with the enforcement hereof, together with interest at the Default Rate on all such advances.

Fourth: To the payment of the surplus, if any, to whomsoever may be lawfully entitled to receive the same.

Upon any sale or sales made under or by virtue of this Article II, whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, Mortgagee may bid for and acquire the Mortgaged Property or any part thereof and in lieu of paying cash therefor may make settlement for the purchase price by crediting upon the indebtedness secured hereby the net sales price after deducting therefrom the expenses of the sale and the costs of the action and any other sums which Mortgagee is authorized to deduct hereunder.

Payment of Amounts Due.

In case an Event of Default shall have happened and be continuing, then, upon demand of Mortgagee, Mortgagor will pay to Mortgagee the whole amount which then shall have become due and payable on the Note, for principal or interest (including Additional Interest) or both, as the case may be, and after the happening of said Event of Default will also pay to Mortgagee interest at the Default Rate on the then unpaid principal of the Note, and the sums required to be paid by Mortgagor pursuant to any provision hereof or of the Loan Agreement, and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to Mortgagee’s agents and counsel and any reasonable expenses incurred by Mortgagee hereunder. In the event Mortgagor shall fail forthwith to pay all such amounts upon such demand, Mortgagee shall be entitled and empowered to institute such action or proceedings at law or in equity as may be advised by its counsel for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against Mortgagor and collect, out of the property of Mortgagor wherever situated, as well as out of the Mortgaged Property, in any manner provided by law, moneys adjudged or decreed to be payable.

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Mortgagee shall be entitled to recover judgment as aforesaid either before, after or during the pendency of any proceedings for the enforcement of the provisions hereof; and the right of Mortgagee to recover such judgment shall not be affected by any entry or sale hereunder, or by the exercise of any other right, power or remedy for the enforcement of the provisions hereof, or the foreclosure of the lien hereof; and in the event of a sale of the Mortgaged Property, and of the application of the proceeds of sale, as herein provided, to the payment of the debt hereby secured, Mortgagee shall be entitled to enforce payment of, and to receive all amounts then remaining due and unpaid upon, the Note, and to enforce payment of all other charges, payments and costs due hereunder or under the Loan Agreement or otherwise in respect of the Loan, and shall be entitled to recover judgment for any portion of the debt remaining unpaid, with interest at the Default Rate. In case of proceedings against Mortgagor in insolvency or bankruptcy or any proceedings for its reorganization or involving the liquidation of its assets, then Mortgagee shall be entitled to prove the whole amount of principal, interest and other sums due upon the Note to the full amount thereof, and all other payments, charges and costs due hereunder or under the Loan Agreement or otherwise in respect of the Loan, without deducting therefrom any proceeds obtained from the sale of the whole or any part of the Mortgaged Property, provided, however, that in no case shall Mortgagee receive a greater amount than such principal and interest and such other payments, charges and costs from the aggregate amount of the proceeds of the sale of the Mortgaged Property and the distribution from the estate of Mortgagor.

No recovery of any judgment by Mortgagee and no levy of an execution under any judgment upon the Mortgaged Property or upon any other property of Mortgagor shall affect in any manner or to any extent, the lien hereof upon the Mortgaged Property or any part thereof, or any liens, rights, powers or remedies of Mortgagee hereunder, but such liens, rights, powers and remedies of Mortgagee shall continue unimpaired as before.

Any moneys thus collected by Mortgagee under this Section 2.03 shall be applied by Mortgagee in accordance with the provisions of clause (d) of Section 2.02.

Actions; Receivers.

After the happening of any Event of Default and during its continuance, immediately upon the commencement of any action, suit or other legal proceedings by Mortgagee to obtain judgment for the principal of, or interest on, the Note and other sums required to be paid by Mortgagor pursuant to any provision hereof or of the Loan Agreement, or of any other nature in aid of the enforcement of the Note or hereof or of the Loan Agreement, Mortgagor will (a) waive the issuance and service of process and enter its voluntary appearance in such action, suit or proceeding and (b) if required by Mortgagee, consent to the appointment of a receiver or receivers of all or part of the Mortgaged Property and of any or all of the Rents in respect thereof. After the happening of any Event of Default and during its continuance, upon the commencement of any proceedings to foreclose this Mortgage or to enforce the specific performance hereof or in aid thereof or upon the commencement of any other judicial proceeding to enforce any right of Mortgagee, Mortgagee shall be entitled, as a matter of right, if it shall so elect, without the giving of notice to any other party and without regard to the adequacy or inadequacy of any security for the indebtedness secured hereby, forthwith either before or after declaring the unpaid principal of the Note to be due and payable, to the appointment of such a receiver or receivers.

Mortgagee’s Right to Possession.

Notwithstanding the appointment of any receiver, liquidator or trustee of Mortgagor, or of any of its property, or of the Mortgaged Property or any part thereof, Mortgagee shall be entitled to retain possession and control of all property now or hereafter held hereunder.

Remedies Cumulative.

No remedy herein conferred upon or reserved to Mortgagee is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity or by statute. No delay or omission of

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Mortgagee to exercise any right or power accruing upon any Event of Default shall impair any such right or power, or shall be construed to be a waiver of any such Event of Default or any acquiescence therein; and every power and remedy given hereby to Mortgagee may be exercised from time to time as often as may be deemed expedient by Mortgagee. Nothing herein or in the Note or the Loan Agreement shall affect the obligation of Mortgagor to pay the principal of, and interest and other sums on, the Note and the Loan Agreement in the manner and at the time and place therein respectively expressed.

Moratorium Laws; Right of Redemption.

Mortgagor will not at any time insist upon, or plead, or in any manner whatever claim or take any benefit or advantage of any stay or extension or moratorium law, any exemption from execution or sale of the Mortgaged Property or any part thereof, wherever enacted, now or at any time hereafter in force, which may affect the covenants and terms of performance hereof, nor claim, take or insist upon any benefit or advantage of any law now or hereafter in force providing for the valuation or appraisal of the Mortgaged Property, or any part thereof, prior to any sale or sales thereof which may be made pursuant to any provision herein, or pursuant to the decree, judgment or order of any court of competent jurisdiction; nor, after any such sale or sales, claim or exercise any right under any statute heretofore or hereafter enacted to redeem the property so sold or any part thereof and Mortgagor hereby expressly waives all benefit or advantage of any such law or laws, and covenants not to hinder, delay or impede the execution of any power herein granted or delegated to Mortgagee, but to suffer and permit the execution of every power as though no such law or laws had been made or enacted. Mortgagor, for itself and all who may claim under it, waives, to the extent that it lawfully may, all right to have the Mortgaged Property marshaled upon any foreclosure hereof.

Mortgagor’s Use and Occupancy after Default.

During the continuance of any Event of Default and pending the exercise by Mortgagee of its right to exclude Mortgagor from all or any part of the Premises, Mortgagor agrees to pay the fair and reasonable rental value for the use and occupancy of any portion of the Premises which are in its or any of its affiliates’ actual possession for such period and, upon default of any such payment, will vacate and surrender such possession of the Premises to Mortgagee or to a receiver, if any, and in default thereof may be evicted by any summary action or proceeding for the recovery of possession of premises for non-payment of rent, however designated.

Mortgagee’s Rights Concerning Application of Amounts Collected.

Notwithstanding anything to the contrary contained herein, upon the occurrence and during the continuance of an Event of Default, Mortgagee may apply, to the extent permitted by law, any amount collected hereunder to principal, interest (including Additional Interest) or any other sum due under the Note or the Loan Agreement or otherwise in respect of the Loan in such order and amounts, and to such obligations, as Mortgagee shall elect in its sole and absolute discretion.

MISCELLANEOUS

Assignment of Rents.

This Mortgage constitutes a present, absolute, unconditional and irrevocable assignment of all of the Rents now or hereafter accruing, and Mortgagor, without limiting the generality of the Granting Clause hereof, specifically hereby presently, absolutely, unconditionally and irrevocably assigns, transfers and sets over all of the Rents now or hereafter accruing to Mortgagee. The aforesaid assignment shall be effective immediately upon the execution hereof and is not conditioned upon the occurrence of any Event of Default or any other contingency or event, provided, however, that Mortgagee hereby grants to Mortgagor the right and license to collect and receive the Rents as they become due, and not in advance, so long as no Event of Default exists hereunder. Immediately upon the occurrence of any such Event of Default, the foregoing right and license shall be automatically terminated and of no further force or effect and, if any such Event

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of Default is cured, as evidenced by a certificate from Mortgagee to such effect, such right and license shall be automatically reinstated. Nothing contained in this Section or elsewhere herein shall be construed to make Mortgagee a mortgagee in possession unless and until Mortgagee actually takes possession of the Mortgaged Property, nor to obligate Mortgagee to take any action or incur any expense or discharge any duty or liability under or in respect of any leases or other agreements relating to the Mortgaged Property or any part thereof.

Security Agreement.

This Mortgage constitutes a security agreement under the applicable Uniform Commercial Code with respect to the Chattels and such other of the Mortgaged Property which is personal property. Mortgagor agrees that it will not terminate or amend any financing statements filed in connection with the Loan without Mortgagee’s prior consent. In addition to the rights and remedies granted to Mortgagee by other applicable law or hereby, Mortgagee shall have all of the rights and remedies with respect to the Chattels and such other personal property as are granted to a secured party under the applicable Uniform Commercial Code. Upon Mortgagee’s request, Mortgagor shall promptly and at its expense assemble the Chattels and such other personal property and make the same available to Mortgagee at a convenient place acceptable to Mortgagee. Mortgagor shall pay to Mortgagee on demand, with interest at the Default Rate, any and all expenses, including reasonable attorneys’ fees, incurred by Mortgagee in protecting its interest in the Chattels and such other personal property and in enforcing its rights with respect thereto. Any notice of sale, disposition or other intended action by Mortgagee with respect to the Chattels and such other personal property sent to Mortgagor in accordance with the provisions hereof at least five (5) days prior to such action shall constitute reasonable notice to Mortgagor. The proceeds of any such sale or disposition, or any part thereof, may be applied by Mortgagee to the payment of the indebtedness secured hereby in such order and proportions as Mortgagee in its discretion shall deem appropriate.

Application of Certain Payments.

In the event that all or any part of the Mortgaged Property is encumbered by one or more mortgages held by Mortgagee, Mortgagor hereby irrevocably authorizes and directs Mortgagee to apply any payment received by Mortgagee in respect of any note secured hereby or by any other such mortgage to the payment of such of said notes as Mortgagee shall elect in its sole and absolute discretion, and Mortgagee shall have the right to apply any such payment in reduction of principal and/or interest and in such order and amounts as Mortgagee shall elect in its sole and absolute discretion without regard to the priority of the mortgage securing the note so repaid or to contrary directions from Mortgagor or any other party.

Severability.

In the event any one or more of the provisions contained herein or in the Note or the Loan Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, but this Mortgage shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein or therein, provided, however, that if such provision held to be invalid, illegal or unenforceable relates to the payment of any sum under the Note or any other material monetary sum, then Mortgagee may, at the option of the Required Lenders, declare the indebtedness of such specific sums only to be immediately due and payable.

Modifications and Waivers.

No provision hereof may be changed, waived, discharged or terminated orally or by any other means except as provided in Section 8.12 of the Building Loan Agreement. Any agreement hereafter made by Mortgagor and Mortgagee relating hereto shall be superior to the rights of the holder of any intervening or subordinate lien or encumbrance.

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Notices, Etc.

All notices, demands, consents, approvals and statements required or permitted hereunder shall be in writing and shall be deemed to have been sufficiently given or served for all purposes when presented personally, three (3) days after mailing by registered or certified mail, postage prepaid, or one (1) day after delivery to a nationally recognized overnight courier service (provided such courier service is instructed to deliver the next Business Day) providing evidence of the date of delivery, if to Mortgagor at (a) its address stated above and (b) Vornado Realty Trust, 888 Seventh Avenue, New York, New York 10019, Attention: Executive Vice President - Capital Markets; if to Mortgagee to the attention of its Real Estate Finance office at its address stated above, or at such other address of which a party shall have notified the party giving such notice in accordance with the provisions of this Section.

Successors and Assigns.

All of the grants, covenants, terms, provisions and conditions herein shall run with the land and shall apply to, bind and inure to the benefit of, the respective successors and assigns of Mortgagor and Mortgagee.

Limitation on Interest.

Regardless of any provision contained herein or in any of the other Loan documents, the total liability for payments in the nature of interest shall not exceed the applicable limits now or hereafter imposed by any applicable state or federal interest rate laws to which Mortgagee and/or Lenders may be subject. If any payments in the nature of interest, fees and other charges made hereunder or under the Note or other Loan documents are held to be in excess of the applicable limits imposed by any such applicable state or federal interest rate laws, it is agreed that any such amount held to be in excess shall be considered payment of principal under the Note and the indebtedness evidenced thereby shall be reduced by such amount in the inverse order of maturity so that the total liability for payments in the nature of interest, fees and other charges shall not exceed the applicable limits imposed by any such applicable state or federal interest rate laws in compliance with the desires of Mortgagor, Mortgagee and Lenders.

Counterparts.

This Mortgage may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same mortgage.

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.

Lenders’ Sale of Interests in Loan.

Mortgagor recognizes that any Lender may sell and transfer interests in the Loan to one or more participants or assignees and that all documentation, financial statements, appraisals and other data, or copies thereof, relevant to Mortgagor, any Guarantor or the Loan, may be exhibited to and retained by any such participant or assignee or prospective participant or assignee, subject to the confidentiality provision under which the foregoing are delivered to such Person pursuant to the Loan Agreement.

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No Merger of Interests.

Unless expressly provided otherwise, in the event that ownership hereof and title to the fee and/or leasehold estates in the Premises encumbered hereby shall become vested in the same person or entity, this Mortgage shall not merge in said title but shall continue to be and remain a valid and subsisting lien on said estates in the Premises for the amount secured hereby.

CERTAIN WAIVERS.

MORTGAGOR AND, BY ITS ACCEPTANCE HEREOF, MORTGAGEE FOR ITSELF AND ON BEHALF OF LENDERS HEREBY EXPRESSLY AND UNCONDITIONALLY WAIVE, IN CONNECTION WITH ANY FORECLOSURE OR SIMILAR ACTION OR PROCEDURE BROUGHT BY MORTGAGEE OR LENDERS HEREUNDER, ANY AND EVERY RIGHT IT MAY HAVE TO A TRIAL BY JURY.

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 or Lenders, as applicable, shall (i) execute and 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 for recording, (ii) in the case of an assignment of this Mortgage, deliver the Notes, together with an allonge to the assignee in question and (iii) execute and deliver such other instruments of assignment, termination or release (as applicable), including appropriate UCC-3 termination statements, as Mortgagor may reasonably request, to evidence such satisfaction, release or assignment, as applicable. As a condition to any such satisfaction or assignment, Mortgagor covenants and agrees to pay Mortgagee’s reasonable fees and expenses (including reasonable attorneys’ fees and expenses) in connection therewith. Upon any such satisfaction or assignment, Mortgagee and Lenders shall, automatically and without the need for any 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 and Lenders 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.

Other Liens; Subrogation.

In the event any or all of the proceeds of the indebtedness secured hereby have been used to extinguish, extend or renew any indebtedness heretofore existing against the Mortgaged Property or to satisfy any indebtedness or obligation secured by a lien or encumbrance of any kind, such proceeds have been advanced by Lenders and/or Mortgagee at Mortgagor’s request, and, to the extent of such funds so used, the indebtedness hereby secured shall be subrogated to all of the rights, claims, liens, titles and interest heretofore existing against the Mortgaged Property to secure the indebtedness or obligation so extinguished, paid, extended or renewed, and the former rights, claims, liens, title and interests, if any, shall not be waived but rather shall be continued in full force and effect and in favor of Lenders and/or Mortgagee, as the case may be, and shall not be merged with the lien and security for the repayment of the indebtedness hereby secured.

Subordination.

The lien of this Mortgage is (a) hereby made subject and subordinate to the lien of any building loan mortgage from Mortgagor to Mortgagee now or hereafter entered into which encumbers the Premises, including, without limitation, the Series I Building Loan Mortgage, Assignment of Leases and Rents and Security Agreement dated as of the date hereof from Mortgagor to Mortgagee in the amount of $249,285,000 which is intended to be recorded with the Office of the City Register, Queens County (the “Office”) and that certain Series II Building Loan Mortgage, Assignment of Leases and Rents and Security Agreement dated as of the date hereof from Mortgagor to Mortgagee in the amount of up to $2,500,000

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which is intended to be recorded with the Office and (b) hereby made subject and subordinate to the lien of that certain Series I Project Loan Mortgage, Assignment of Leases and Rents and Security Agreement dated as of the date hereof from Mortgagor to Mortgagee in the amount of $65,715,000 which is intended to be recorded with the Office and to all amendments, extensions, modifications, renewals and consolidations thereof hereafter entered into.

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 units, 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.

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IN WITNESS WHEREOF, this Mortgage has been duly executed and delivered by Mortgagor.

ALEXANDER’S OF REGO PARK II, INC. a Delaware corporation
By:	/s/ Alan J. Rice
	Alan J. Rice Secretary

STATE OF NEW YORK )

: ss.:

COUNTY OF NEW YORK )

On the 19^th day of December in the year 2007, before me, the undersigned, a notary public in and for said state, personally appeared Alan J. Rice, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

By:	/s/ Ilona Jacqueline Williams
	Ilona Jacqueline Williams Notary Public
	My Commission Expires:  July 3, 2010

SCHEDULE A

PARCEL I- Block 2080 Lot 101

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

BEGINNING at the corner formed by the intersection of the southerly side of Horace Harding Expressway, formerly Horace Harding Boulevard and Nassau Boulevard, 260 feet wide, and the easterly side of Junction Boulevard, 80 feet wide, as said Horace Harding Expressway and Junction Boulevard are now laid out on the Final Topographical Map of the City of New York;

RUNNING THENCE easterly along the southerly side of Horace Harding Expressway, 456.35 feet to the westerly side of 97th Street, 60 feet wide, as shown on the Final Topographical Map of the City of New York, prior to the adoption of the Alteration Map No.3530 on December 20, 1951;

THENCE southerly along the said westerly side of 97th Street, 630 feet to the northerly side of 62nd Drive, 80 feet wide, as shown on the Final Topographical Map of the City of New York, prior to the adoption of the Alteration Map No.4822 on March 2, 1987 on Cal. No. 1;

THENCE westerly along the said northerly side of 62nd Drive, 456.35 feet to the easterly side of Junction Boulevard;

THENCE northerly along the easterly of Junction Boulevard, 630 feet to the point or place of BEGINNING.

EXCEPTING THEREFROM those portions of Horse Brook Creek as it winded and turned through the above described premises which are 10 feet wide and which lie between the westerly line of 97th Street as it was laid out 60 feet wide on the Final Map of the City of New York for the Borough of Queens prior to the adoption of the Alteration Map No.3530 on December 20, 1951 and the westerly line of 97th Street as it is laid out 70 feet wide on the present Final Map of the City of New York for the Borough of Queens.

PARCEL II

BEGINNING at a point on the northerly side of 62nd Drive, 80 feet wide, distant 80 feet westerly, as measured along the the northerly side of 62nd Drive, from the corner formed by the intersection of the westerly side of 97th Street, 70 feet wide, and said northerly side of 62nd Drive, between a lower limiting horizontal plane at elevation 35.70 feet and an upper limiting horizontal plane at elevation 80.2 feet;

RUNNING THENCE from this point of beginning, southerly along a line forming an interior angle of 90 degrees with the northerly side of 62nd Drive, 80 feet to the southerly side of 62nd Drive;

THENCE westerly along the southerly side of 62nd Drive along a line forming an interior angle of 90 degrees with the last mentioned course, 30 feet;

THENCE northerly along a line forming an interior angle of 90 degrees with the last mentioned course, 80 feet to the northerly side of 62nd Drive;

THENCE easterly along the northerly side of 62nd Drive along a line forming an interior angle of 90 degrees with the last mentioned course, 30 feet to the point or place of BEGINNING.

ELEVATIONS refer to the datum in use by the Queens Topographical Bureau which is 2.725 feet above mean sea level at Sandy Hook, New Jersey as established by the U.S. Coast and Geodetic Survey.

NY 50234853v1

TABLE OF CONTENTS

Page

ARTICLE I COVENANTS OF MORTGAGOR 5

Section 1.01. (a) Warranty of Title; Power and Authority 5

(b) Hazardous Materials 6

(c) Flood Hazard Area 6

Section 1.02. (a) Further Assurances 6

(b) Information Reporting and Back-up Withholding 7

Section 1.03. (a) Filing and Recording of Documents 7

(b) Filing and Recording Fees and Other Charges 7

Section 1.04. Payment and Performance of Loan Documents 7

Section 1.05. Type of Entity; Maintenance of Existence; Compliance with Laws                                                                                                                                                8

Section 1.06. After-Acquired Property 8

Section 1.07. (a) Payment of Taxes and Other Charges 8

(b) Payment of Mechanics and Materialmen 9

(c) Good Faith Contests 9

Section 1.08. Taxes on Mortgagee or Lenders 10

Section 1.09. Insurance 10

Section 1.10. Protective Advances by Mortgagee 17

Section 1.11. (a) Visitation and Inspection 17

(b) Estoppel Certificates 17

Section 1.12. Maintenance of Premises and Improvements 18

Section 1.13. Condemnation 18

Section 1.14. Leases 19

Section 1.15. Premises Documents 20

Section 1.16. Utilities 20

Section 1.17. Trust Fund; Lien Laws 21

Section 1.18. Interest Rate Protection 21

ARTICLE II EVENTS OF DEFAULT AND REMEDIES 22

Section 2.01. Events of Default and Certain Remedies 22

Section 2.02. Other Matters Concerning Sales 27

Section 2.03. Payment of Amounts Due 28

Section 2.04. Actions; Receivers 29

Section 2.05. Mortgagee’s Right to Possession 30

Section 2.06. Remedies Cumulative 30

Section 2.07. Moratorium Laws; Right of Redemption 30

Section 2.08. Mortgagor’s Use and Occupancy after Default 31

Section 2.09. Mortgagee’s Rights Concerning Application of Amounts Collected 31

ARTICLE III MISCELLANEOUS 31

Section 3.01. Assignment of Rents 31

Section 3.02. Security Agreement 32

Section 3.03. Application of Certain Payments 32

Section 3.04. Severability 32

Section 3.05. Modifications and Waivers 32

Section 3.06. Notices, Etc 33

Section 3.07. Successors and Assigns 33

Section 3.08. Limitation on Interest 33

Section 3.09. Counterparts 33

Section 3.10. Substitute Mortgages 33

Section 3.11. Lenders’ Sale of Interests in Loan 33

Section 3.12. No Merger of Interests 34

Section 3.13. CERTAIN WAIVERS 34

(i)

Page

Section 3.14. Satisfaction or Assignment of Mortgage 34

Section 3.15. Other Liens; Subrogation 34

Section 3.16. Subordination 35

Section 3.17. New York Provisions 35

(ii)

EX-10

Exhibit 10.7

COMPLETION COSTS GUARANTY

As of December 21, 2007

PB Capital Corporation, as administrative

agent for itself and the other "Lenders"

(as such quoted term is defined in

the Agreement, as hereinafter defined)

230 Park Avenue

New York, New York 10169

Attention: Real Estate Finance

Re: Loans aggregating $350,000,000 (collectively, the "Loan") to Alexander's of Rego Park II, Inc. ("Borrower")

Gentlemen:

To induce Lenders to consummate the captioned transaction and to lend to Borrower in accordance with (i) a Building Loan Agreement (the "BLA") and a Project Loan Agreement (the "Project Loan Agreement"; the Project Loan Agreement and the BLA, collectively, the "Agreement"), each dated the date hereof among Borrower, Lenders and you as Administrative Agent (in such capacity, "Administrative Agent"), (ii) a Note or Notes made by Borrower in the aggregate principal amount of $350,000,000 (as the same may be amended, modified, extended, severed, assigned, renewed or restated from time to time, including any substitute or replacement notes executed pursuant to the Agreement, collectively, the "Note") and (iii) one or more mortgage(s) dated the date hereof from Borrower to Administrative Agent (as amended from time to time, collectively, the "Mortgage" and the term "Mortgage" shall be deemed to include any other agreement or instrument given to Administrative Agent or Lenders as security for the Loan and the term "Collateral" shall mean the property covered by the Mortgage and any other collateral now or hereafter given as security for the Loan), the undersigned (hereinafter, "Guarantor") does hereby represent, warrant and covenant to Lenders and Administrative Agent as follows (capitalized terms used herein without definition shall have the respective meanings ascribed thereto in the Agreement):

Obligations Guaranteed.

•Subject to paragraph 13 hereof, if for any reason whatsoever, Borrower fails to prosecute with diligence and continuity or fails or neglects to complete the construction and completion of the Improvements, as contemplated by and described in the Agreement, free and clear of liens and paid for in full, such that the same constitutes an Event of Default (such failure, the "Completion Event of Default"), Guarantor absolutely, irrevocably and unconditionally guarantees to Administrative Agent and Lenders, either:

(x)        completion of the Improvements in accordance with the terms and provisions of the Agreement and in such event Guarantor shall have the right, subject to the terms and conditions of the Agreement, to draw and use any undisbursed Loan funds to complete the Improvements (which funds shall be disbursed and used only in accordance with the Loan Agreement, except that the existence of the Completion Event of Default shall not prevent or

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preclude the advance of Loan funds) so long as: (A) Guarantor is diligently pursuing completion of construction of the Improvements as provided above; (B) neither Borrower nor any Guarantor is

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or becomes a debtor in any state or federal bankruptcy or insolvency proceeding; (C) such disbursements of Loan proceeds to Guarantor shall be secured by the Mortgage with the same priority as all previous advances to Borrower; (D) no transfer, sale, conveyance, mortgage, hypothecation, pledge, assignment or other disposition in violation of the Loan Documents has occurred; (E) there is no continuing Event of Default under the Loan Documents, other than (i) the Completion Event of Default or (ii) any Event of Default not related to clauses (B) or (D) above and which cannot be cured by the payment of money which either (x) Guarantor is proceeding diligently and continuously to cure or (y) is not reasonably susceptible of being cured by Guarantor; and (F) no additional Event of Default shall have occurred and be continuing (other than an Event of Default (but not including Events of Default related to clauses (B) or (D) above or which can be cured by the payment of money) which either (x) Guarantor is proceeding diligently and continuously to cure or (y) is not reasonably susceptible of being cured by Guarantor) following the date demand has been made for Guarantor's performance under this clause 1(x) of this Guaranty; or

(y)        the payment by Guarantor of an amount (the "Completion Costs Amount") equal to the excess, if any, of: (i) all of the "Hard Costs" and "Soft Costs" under the BLA and "Costs" under the Project Loan Agreement (collectively, "Construction Costs") which are estimated to be incurred in connection with the lien free completion of the Improvements as required of Borrower by the Agreement, including, without limitation, interest on the outstanding principal balance of the Loan and on the amount which would otherwise be required to be disbursed under the Loan in order to achieve completion as decribed herein, in each case, through the projected date of completion as herein determined (but not, in either case, including interest at the Default Rate), administrative agent fees, the Construction Consultant's fees, real estate taxes and assessments, other Soft Costs and Costs through the estimated date of such completion and those Construction Costs occasioned by, or arising as a result of, any default under any documents evidencing, securing or relating to the Loan (irrespective of the amounts set forth in the Construction Cost Statement or the Schedule of General Project Costs (collectively, the "Schedules") and irrespective of the absence of any amount in the Schedules for a particular item of Construction Costs), but specifically excluding any increase to such Construction Costs arising solely due to any delay caused by the arbitration procedure described below (including, but not limited to, interest accruing during such period), all of which amounts described in this clause (y)(i) shall be determined as hereinafter contemplated; over (ii) the sum of the undisbursed portion of the Loan, each such amount to be determined as of the date of the acceleration of the indebtedness evidenced by the Note following an Event of Default under the Mortgage. In addition, for purposes of this Guaranty, Construction Costs shall be deemed to also include (a) unless the Plans or Borrower's standard work letter provide for a standard of completion (in which event, such standard of completion will be utilized) those Construction Costs which are required to be incurred in order to complete the Improvements to a standard equal to industry practice, as determined in accordance with the procedure provided below in Section 1(c), for improvements comparable to the Improvements and (b) Borrower's responsibility under any leases, subleases or letters of intent in connection with the Premises executed by Borrower, with respect to occupancy of all or any portion of the Improvements.

•(i)         The election to proceed under the provisions of clause 1(x) above or under the provisions of clause 1(y) above shall be at the sole and exclusive option of the Required Lenders and shall be made by the Required Lenders at any time after the occurrence of the Completion Event of Default or within sixty (60) days of Guarantor's notice to Administrative Agent, delivered at any time following the Completion Event of Default, requesting that Lenders make an election to proceed under clause 1(x) above or clause 1(y) above. Administrative Agent shall notify Guarantor of the Required Lenders' election to proceed under clause 1(x) above or clause 1(y) above which election, once made, shall be irrevocable and exclusive, provided, however, that if the Required Lenders have elected to proceed under clause 1(x) above and at any time thereafter Guarantor fails or refuses to perform in accordance with said clause 1(x) above or, if any of the conditions set forth in clause 1(x) above is not thereafter satisfied,

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the Required Lenders may then elect to proceed under clause 1(y) above. Notwithstanding anything in the foregoing to the contrary, if at the time of the election to be made by the Required Lenders an event or

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circumstance exists which would preclude any one or more of the conditions set forth in said clause 1(x) above from being satisfied, the Required Lenders, unless the unsatisfied condition(s) in question is waived by the Required Lenders in connection with any election to proceed under clause 1(x) above, shall elect to proceed under clause 1(y) above.

(ii)        Each of the two alternative remedies set forth in this paragraph 1 shall be equally available to Administrative Agent and Lenders and the choice by the Required Lenders of one alternative over another shall not be subject to question or challenge by Guarantor or any other person, nor shall any such choice be asserted as a defense, setoff or failure to mitigate damages in any action, proceeding or counter-action by Administrative Agent to recover damages or seeking any other remedy under this Guaranty. The parties have agreed to the alternative remedies specified herein in part because they recognize that the choice of remedies in the event of a default hereunder will necessarily be and should properly be a matter of business judgment, which the passage of time and events may or may not prove to have been the best choice to maximize recovery by Lenders at the lowest cost to Borrower and/or Guarantor. It is the intention of the parties that such choice by the Required Lenders be given conclusive effect, regardless of subsequent developments or the apparent correctness or incorrectness of such choice.

•If the Required Lenders elect to proceed under the provisions of clause 1(y) above, Administrative Agent shall provide Guarantor with written notice of such election (the "Clause 1(y) Notice"), which shall include the amount of the undisbursed portion of the Loan (the "Undisbursed Amount") then secured by a mortgage which is recorded against the Premises. Guarantor agrees that if Administrative Agent delivers the Clause 1(y) Notice, its liability under this Guaranty shall be determined as contemplated in clause 1(y) above and herein (whether or not Administrative Agent or Lenders complete or intend to complete the Improvements). Within twenty (20) days of the Clause 1(y) Notice, (x) Guarantor shall provide Administrative Agent with written notice (the "Guarantor's Estimate Notice") of Guarantor's estimate of the Construction Costs (the "Guarantor's Construction Costs Amount") and shall include a line-item by line-item allocation of amounts, a projected progress schedule to achieve completion (which shall be used as the basis for calculating, among other things, the interest component of Guarantor's Construction Costs Amount), a description of the building standard necessary to meet industry practice (if required as contemplated above) and otherwise shall be reasonably detailed and (y) Administrative Agent shall provide to Guarantor with written notice (the "Lenders' Estimate Notice") of the estimate of the Construction Costs (the "Lender's Construction Costs Amount") and shall include a line-item by line-item allocation of amounts, a projected progress schedule to achieve completion (which shall be used as the basis for calculating, among other things, the interest component of Lenders' Construction Costs Amount), a description of the building standard necessary to meet industry practice (if required as contemplated above) and otherwise shall be reasonably detailed. If Guarantor or Administrative Agent fails to deliver the Guarantor's Estimate Notice or the Lenders' Estimate Notice, respectively, within the time period required above, and has itself delivered to the other the Guarantor's Estimate Notice or the Lenders' Estimate Notice, as applicable, the party which has delivered its Notice (the "Tendering Party") shall notify the other (the "Non-Tendering Party") in writing (the "Failure Notice") of the failure to deliver the Guarantor's Estimate Notice or the Lenders' Estimate Notice, as applicable. The Non-Tendering Party shall have ten (10) days after the Failure Notice to either provide its initial Guarantor's Estimate Notice or Lenders' Estimate Notice, as applicable. If the Non-Tendering Party fails to deliver the Guarantor's Estimate Notice or the Lenders' Estimate Notice, as applicable, on or before the expiration of such ten (10) day period, the Tendering Party shall deliver a second notice (the "Second Failure Notice") to the Non-Tendering Party that the Non-Tendering Party has failed to deliver the Guarantor's Estimate Notice or the Lenders' Estimate Notice, as applicable, that the Non-Tendering Party has ten (10) additional days to deliver same and further stating that "THE FAILURE TO PROVIDE THE [GUARANTOR'S ESTIMATE NOTICE/LENDERS' ESTIMATE NOTICE (TO BE SELECTED AS APPROPRIATE)] ON OR BEFORE ____________, 20___ WILL RESULT IN THE [GUARANTOR'S ESTIMATE NOTICE/LENDERS' ESTIMATE NOTICE (TO BE THE ONE NOT SELECTED ABOVE)] CONTROLLING AND DETERMINING THE LIABILITY OF GUARANTOR" and shall set forth the Completion Costs Amount, which shall be the excess of (x) the Guarantor's Construction Costs Amount (if Guarantor is the Tendering Party) or the Lenders' Construction Costs Amount (if Administrative Agent is the Tendering Party) over (y) the Undisbursed Amount. If the Non-Tendering Party fails to deliver the Guarantor's Estimate Notice or the

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Lenders' Estimate Notice, as applicable, on or before the tenth day after the Second Failure Notice (which shall be the date specified in the Second Failure Notice), Guarantor shall pay to Administrative Agent within twenty (20) days of the date of the Second Failure Notice the Completion Costs Amount set forth in the Second Failure Notice. If Guarantor has delivered the Guarantor's Estimate Notice and Administrative Agent has delivered the Lenders' Estimate Notice, within twenty (20) days of the earliest to be delivered of the Guarantor's Estimate Notice and the Lenders' Estimate Notice, Guarantor and Administrative Agent shall meet to discuss the Completion Costs Amount, the Guarantor's Construction Cost Amount and the Lenders' Construction Costs Amount and if within twenty (20) days of such first meeting Administrative Agent and Guarantor agree on the Construction Costs, Administrative Agent and Guarantor shall memorialize such agreement in writing (the "Negotiated Agreement"), which shall include the Completion Costs Amount, and within ten (10) days of the Negotiated Agreement, Guarantor shall pay to Administrative Agent the Completion Costs Amount memorialized in the Negotiated Agreement. If within twenty (20) days after such first meeting Administrative Agent and Guarantor have not entered into the Negotiated Agreement, within five (5) Business Days after the expiration of such twenty (20) day period, Administrative Agent and Guarantor shall jointly appoint a third expert meeting the requirements hereinafter set forth. In the event Administrative Agent and Guarantor are unable to agree upon the appointment of a third expert within the time period described above, then either party may apply to the American Arbitration Association (or its successors) to make the appointment of a third expert meeting the requirements hereinafter set forth. For purposes of this Guaranty "Independent Expert" shall mean the third expert jointly appointed by Administrative Agent and Guarantor or the third expert appointed by the American Arbitration Association (or its successors). Within the twenty (20) day period after the appointment of such Independent Expert meeting the requirements hereinafter set forth, the Independent Expert shall hold a meeting or series of meetings with each of Administrative Agent and Guarantor in attendance at which each such party shall be permitted to present evidence with respect to, and its calculations of, the Construction Costs according to rules and procedures established by the Independent Expert and which rules and procedures shall be designed to meet the time deadlines described herein. Within thirty (30) days of the appointment of such Independent Expert, the Independent Expert shall deliver to Administrative Agent and Guarantor at their respective addresses set forth below by prepaid postage sent registered or certified mail, return receipt requested (the "Expert Notice") its determination of the Construction Costs (the "Independent Construction Costs Amount"). The Independent Construction Costs Amount so selected by the Independent Expert shall be binding on Guarantor on the one hand and Administrative Agent and Lenders on the other hand and Guarantor shall pay to Administrative Agent the Completion Costs Amount (which shall be the excess of the Independent Construction Costs Amount over the Undisbursed Amount) within ten (10) days of the Expert Notice. Any Independent Expert shall have at least ten (10) years' experience in construction related matters, shall be impartial, shall not be engaged in any litigation against Guarantor, Administrative Agent or any Lender and shall not otherwise be aware of any conflict of interest between such expert and Guarantor, Administrative Agent or any Lender and whose appointment shall be specifically conditioned on the Independent Construction Costs Amount (as herein defined) being an amount which shall not be less than Guarantor's Construction Costs Amount and not greater than Lenders' Construction Costs Amount. Such Independent Expert shall be sworn to fairly and impartially perform its duties as such expert. The fees and expenses of the Independent Expert shall be shared equally by Guarantor on the one hand, Administrative Agent and Lenders on the other. Each party shall be responsible for the fees and expenses of its own experts, attorneys and other representatives. In rendering its decision, the Independent Expert shall have no power to modify or reform any of the provisions of this Guaranty or the other Loan Documents. To the extent the Completion Costs Amount is not paid when due in accordance with the foregoing provisions, the Completion Costs Amount shall thereafter bear interest at the Default Rate until paid in full.

Each of Guarantor, on the one hand, and Administrative Agent and Lenders, on the other hand, agree that any estimate by it of Construction Costs shall be made in good faith.

•If the Required Lenders elect to proceed under the provisions of clause 1(x) above, this Guaranty is a continuing guaranty and shall remain in full force and effect until the Improvements are substantially completed as required by Section 6.08 of the BLA and any time period within which mechanics or other parties (collectively, "Mechanics") are entitled to file liens against the

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Mortgaged Property for construction or related work claims shall have expired. Administrative Agent agrees that upon Administrative Agent's receipt of evidence reasonably satisfactory to Administrative Agent of such substantial completion of the Improvements, and, provided, that no undischarged liens which have not been bonded over shall have been filed against the Mortgaged Property by Mechanics, Administrative Agent shall deliver a written confirmation that this Guaranty is limited only to a guaranty against the filing of subsequent liens against the Mortgaged Property by Mechanics. Thereafter, this Guaranty shall continue as a guaranty against claims and liens by Mechanics until the earlier to occur of (i) the date Mechanics are no longer legally entitled to file any such claims or liens against the Mortgaged Property and (ii) if there is a payment or performance bond for a general contractor, the date of delivery of a completed AIA Form G707 (Consent of Surety to Final Payment), whereupon Administrative Agent shall deliver to Guarantor Administrative Agent's final written confirmation of termination of this Guaranty in full, except to the extent of any undischarged Mechanics' liens have been filed against the Mortgaged Property.

•Guarantor acknowledges and agrees that this Guaranty is a continuing guaranty subject to and in accordance with the terms hereof and that the agreements, guaranties and waivers made by Guarantor herein, and Guarantor's obligations hereunder, are and shall at all times continue to be primary, absolute, irrevocable and unconditional.

Liability Unimpaired.

Guarantor's liability hereunder shall in no way be limited or impaired by, and Guarantor hereby consents to and agrees to be bound by any of the following made prior to the completion of the foreclosure of the Mortgage or delivery to Administrative Agent or its designee of a deed in lieu thereof: any amendment or modification of the provisions of any of the Loan Documents or any other instrument made to or with Administrative Agent or Lenders by Borrower or any change in the Plans and Specifications, the Loan Budget Amounts, the General Contract, the construction schedule, any Trade Contracts or any other construction documents made by Borrower. In addition, Guarantor's liability hereunder shall in no way be limited or impaired by (i) any extensions of time for performance required by any of said documents, (ii) any sale, assignment or foreclosure of the Note or Mortgage or any sale or transfer of all or part of the Collateral, (iii) any exculpatory provision in any of said instruments limiting Lenders' or Administrative Agent's recourse to all or any part of the Collateral, or limiting Lenders' or Administrative Agent's rights to a deficiency judgment against Borrower, (iv) the release of Borrower or any other Person from performance or observance of any of the agreements, covenants, terms or conditions contained in any of said instruments by operation of law or otherwise, (v) the release or substitution in whole or in part of all or any portion of the Collateral, (vi) the failure to record the Mortgage or file any UCC financing statements (or the improper recording or filing of any thereof) or to otherwise perfect, protect, secure or insure any security interest or lien given as security for the Loan, (vii) the accuracy or inaccuracy of any of the representations and warranties made by or on behalf of Borrower under the Agreement or in any Requisition or request for advance thereunder, (viii) the invalidity, irregularity or unenforceability as against Borrower or Guarantor, in whole or in part, of this Guaranty, any of the other Loan Documents or any other instrument or agreement executed or delivered to Administrative Agent or Lenders in connection with the Loan, or (ix) any other action or circumstance whatsoever which constitutes, or might be construed to constitute, a legal or equitable discharge or defense of Borrower for its obligations under any of the Loan Documents or of Guarantor under this Guaranty, other than payment or performance; and, in any such case, whether with or without notice to Guarantor and with or without consideration.

Preservation of Loan Documents.

Guarantor will cause Borrower to maintain and preserve the enforceability of the Loan Documents as the same may be modified and will not permit Borrower to take or to fail to take actions of any kind, the taking of which or the failure to take which might be the basis for a claim that Guarantor has a defense to its obligations hereunder, other than performance of such obligations in accordance with the terms of the instruments imposing the same.

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Indemnification; Payments; Certain Waivers.

Guarantor (i) waives any right or claim of right to cause a marshalling of Borrower's or any other Person's assets or to cause Administrative Agent or Lenders to proceed against all or any part of the Collateral or against any of the security for the Loan or for the obligations guaranteed hereby before proceeding against Guarantor or to proceed against Guarantor, if more than one, in any particular order, (ii) agrees that any payments required to be made by Guarantor hereunder shall become due on demand in accordance with the terms hereof immediately upon the happening of any Event of Default under the Loan Documents and (iii) expressly postpones and subordinates, for so long as the Loan remains unpaid, all rights, remedies and defenses now or hereafter accorded by applicable Law to guarantors. Without limiting the generality of the foregoing, Guarantor hereby postpones and subordinates, for so long as the Loan remains unpaid, all rights (x) of subrogation, (y) to participate in any claim or remedy Lenders or Administrative Agent may now or hereafter have against Borrower or in all or any portion of the Collateral and (z) to contribution, indemnification, set-off, exoneration or reimbursement, whether from Borrower, Guarantor, or any other Person now or hereafter primarily or secondarily liable for any of Borrower's obligations to Lenders, and whether arising by contract or operation of law or otherwise by reason of Guarantor's execution, delivery or performance of this Guaranty.

Reinstatement.

This Guaranty shall continue to be effective, or be reinstated automatically, as the case may be, if at any time payment, in whole or in part, of any of the obligations guaranteed hereby is rescinded or otherwise must be restored or returned by Administrative Agent or Lenders (whether as a preference, fraudulent conveyance or otherwise) upon or in connection with the insolvency, bankruptcy, dissolution, liquidation or reorganization of Borrower, Guarantor or any other Person, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, Borrower, Guarantor or any other Person or for a substantial part of Borrower's, Guarantor's or any of such other Person's property, as the case may be, or otherwise, all as though such payment had not been made. Guarantor further agrees that in the event any such payment is rescinded or must be restored or returned, all costs and expenses (including, without limitation, legal fees and expenses) incurred by or on behalf of Lenders in defending or enforcing such continuance or reinstatement, as the case may be, shall constitute costs of enforcement, the payment of which is guaranteed by Guarantor pursuant to paragraph 1 above.

Formation and Existence; Power and Authority.

Guarantor is a corporation, is duly organized, validly existing and in good standing under the laws of the state of its formation and has full power and authority to execute, deliver and perform this Guaranty and any Loan Document to which it is a party. Without limiting the following provisions of this paragraph 6, Guarantor will preserve and maintain such legal existence and good standing. Guarantor may not assign its rights nor delegate its obligations under this Guaranty, in whole or in part, without prior written consent of all Lenders, which consent may be granted or denied in the sole and absolute discretion of each Lender, and any purported assignment or delegation absent such consent is void, provided, however, that, if Guarantor sells, assigns, transfers or otherwise disposes of all or substantially all of its assets and business to another Person, so long as (i) such Person then complies with the Net Worth and Cash and Cash Equivalents (as such terms are hereinafter defined) covenants set forth in paragraph 10(c) of this Guaranty, (ii) a certification from the chief financial officer of such Person to the same effect as is described in paragraph 10(d) hereof, together with supporting financial data and information in respect thereof, is provided to Administrative Agent, (iii) such Person assumes Guarantor's obligations under this Guaranty either by documentation reasonably satisfactory in form and substance to Administrative Agent or by operation of law or otherwise, evidenced to Administrative Agent's reasonable satisfaction, (iv) Administrative Agent receives and approves (such approval not to be unreasonably withheld, conditioned or delayed) such additional supporting documents as are reasonably requested by Administrative Agent in connection with such assignment or delegation, such as, without limitation, certified copies of the organizational documents of such Person and an opinion of counsel of such Person which shall be to substantially the same effects as was delivered to Administrative Agent on the date hereof with respect to Guarantor and (v) a certificate of

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such Person containing the representations and warranties set forth in paragraphs 6-9, inclusive, of this Guaranty, no consent by any Lender shall be required.

Litigation; Compliance with Judgments.

There are no actions, suits or proceedings pending or, to Guarantor's knowledge, threatened against or affecting Guarantor, at law or in equity, before or by any court, arbitrator or Governmental Authorities except actions, suits or proceedings which are, or are likely in Guarantor's reasonable judgment to be, fully covered by insurance (except for any applicable deductible) or would, if adversely determined, not be likely to have a Material Adverse Effect. Guarantor is not in material default with respect to any order, writ, injunction, decree or demand of any court, arbitrator or Governmental Authorities which is likely to have a Material Adverse Effect.

No Conflicts.

The consummation of the transactions contemplated hereby and the performance of this Guaranty and the other Loan Documents to which Guarantor is a party have not resulted and will not result in any breach of, or constitute a default under, any mortgage, deed of trust, lease, bank loan or credit agreement, corporate charter, by-laws, partnership agreement or other instrument to which Guarantor is a party or by which Guarantor or its property is bound or affected, where such breach or default individually or collectively would have a Material Adverse Effect.

Compliance with Laws.

Guarantor is in compliance with, and the transactions contemplated by this Guaranty and the other Loan Documents do not and will not violate any provision of, or require any filing, registration, consent or approval (other than consents or approvals which have been previously obtained or filings or registrations which will be made in the ordinary course) under, any Law presently in effect having applicability to Guarantor, except where the failure to comply or any such violation would not have, taken singly or collectively, a Material Adverse Effect. Guarantor will comply promptly with all Laws now or hereafter in effect having applicability to it, the failure to comply with which would have a material adverse effect on Guarantor's ability to perform its obligations under this Guaranty.

Financial Statements; Financial Covenants.

•The most recent financial statements heretofore delivered by Guarantor to Administrative Agent are true, correct and complete in all material respects, have been prepared in accordance with GAAP and fairly present Guarantor's financial condition as of the respective dates thereof; no material adverse change has occurred in the financial condition reflected therein since the respective date thereof.

•Guarantor shall furnish to Administrative Agent the financial statements and certifications of Guarantor required by the Agreement as and when required thereby.

•Guarantor shall, at all times, collectively, maintain an aggregate Net Worth (as defined below) located in the United States of not less than $250,000,000.00. "Net Worth" shall be established by capitalizing the trailing twelve (12) months of net operating income (as determined in accordance with GAAP, but excluding Guarantor's general and administrative expenses) for each real property owned or leased by Guarantor using a 6% capitalization rate less any outstanding debt secured by the fee or leasehold interest in connection with each such property and corporate debt of Guarantor (but excluding any stock appreciation rights). In addition, Guarantor shall, at all times, collectively, maintain Cash and Cash Equivalents (as defined below) located in the United States aggregating not less than $50,000,000.00. "Cash and Cash Equivalents" shall mean, as of the date of determination, (i) lawful currency of the United States of America, (ii) direct obligations of the United States of America or any agency or instrumentality thereof or obligations backed by the full faith and credit of the United States of

• America maturing in twelve (12) months or less from the date of measurement, (iii) commercial paper maturing in one hundred eighty (180) days or less rated not lower than A-1 by Standard & Poor's, or P-1 by Moody's Investors Service, Inc. on the date of measurement and (iv) demand deposits, time deposits or certificates of deposit maturing within one (1) year in commercial banks whose obligations are rated not lower than A-1 by Moody's Investors Service, Inc., or not lower than A+ or the equivalent by Standard & Poor's on the date of measurement.

•Guarantor shall provide Administrative Agent within forty-five (45) days after the end of each fiscal quarter with a certification from the chief financial officer of Guarantor that such Person has reviewed the terms of this Guaranty and of the financial condition of Guarantor and that based thereon Guarantor was in compliance with the financial covenants set forth in clause (c) above of this paragraph 10 as of the end of the fiscal quarter in question and setting forth in reasonable detail computations evidencing compliance with said financial covenants, together with supporting financial data and information in respect thereof.

Non-Waiver; Remedies Cumulative.

No failure or delay on Administrative Agent's or Lenders' part in exercising any right, power or privilege under this Guaranty, any of the other Loan Documents or any other document made to or with Lenders or Administrative Agent in connection with the Loan shall operate as a waiver of any such privilege, power or right or shall be deemed to constitute Lenders' or Administrative Agent's acquiescence in any default by Borrower, Guarantor or any other obligor under any of said documents. A waiver by Lenders or Administrative Agent of any right or remedy under this Guaranty, any of the other Loan Documents or any other document made to or with Lenders or Administrative Agent in connection with the Loan on any one occasion shall not be construed as a bar to any right or remedy which Lenders or Administrative Agent otherwise would have on any future occasion. The rights and remedies provided in said documents are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by Law.

Liability Unaffected by Release.

Any Guarantor, or any other party liable upon or in respect of any obligation hereby guaranteed, may be released without affecting the liability of any Guarantor not so released.

Not a Principal Payment Guaranty.

In no event shall this Guaranty be deemed to constitute a guaranty of the payment of the principal evidenced by the Note and secured by the Mortgage.

Transfers of Interests in Loan.

Guarantor recognizes that, subject to the provisions of Section 8.13 of the BLA, any Lender may sell and transfer interests in the Loan to one or more Participants and/or Assignees and that all documentation, financial statements, appraisals and other data, or copies thereof, relevant to Borrower, any Guarantor or the Loan, may be exhibited to and retained by any such Participant or Assignee or prospective participant or assignee. Each Lender agrees, by its acceptance hereof, that such Lender's delivery of any financial statements and appraisals to any such Participant or Assignee or prospective participant or assignee shall be done on a confidential basis and if such prospective participant or assignee does not become a Participant or an Assignee, then the Lender in question shall request that all documentation delivered to said prospective participant or assignee pursuant to the preceding sentence shall be returned to such Lender and kept confidential in accordance with the terms and conditions of the Loan Documents applicable to Participants and Assignees, as if such prospective participant or assignee had been a "Participant" or "Assignee", respectively, as defined in the Loan Documents.

Separate Indemnity/Other Guaranty.

Guarantor acknowledges and agrees that Lenders' and Administrative Agent's rights (and Guarantor's obligations) under this Guaranty shall be in addition to all of Lenders' and Administrative Agent's rights (and all of Guarantor's obligations) under any other guaranty or any indemnity agreement now or hereafter executed and delivered to Lenders and/or Administrative Agent by Borrower and/or Guarantor in connection with the Loan, and payments by Guarantor under this Guaranty shall not reduce any of Guarantor's obligations and liabilities under any such other guaranty or indemnity agreement (except to the extent any such payment by Guarantor under this Guaranty is in respect of the same obligation or liability covered under any such other guaranty or indemnity agreement).

ADDITIONAL WAIVERS IN THE EVENT OF ENFORCEMENT.

GUARANTOR, AND BY THEIR ACCEPTANCE HEREOF, ADMINISTRATIVE AGENT AND EACH LENDER HEREBY EXPRESSLY AND UNCONDITIONALLY WAIVE, IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY OR IN CONNECTION WITH THIS GUARANTY, ANY AND EVERY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY.

Governing Law; Submission to Jurisdiction.

This Guaranty and the rights and obligations of Lenders and Guarantor hereunder shall in all respects be governed by, and construed and enforced in accordance with, the laws of the State of New York (without giving effect to New York's principles of conflicts of law). Guarantor, and by their acceptance hereof, Administrative Agent and each Lender hereby irrevocably submits to the non-exclusive jurisdiction of any New York State or Federal court sitting in The City of New York over any suit, action or proceeding arising out of or relating to this Guaranty, and Guarantor hereby agrees and consents that, in addition to any methods of service of process provided for under applicable law, all service of process in any such suit, action or proceeding in any New York State or Federal court sitting in The City of New York may be made by certified or registered mail, return receipt requested, directed to Guarantor at the address, and if more than one Guarantor, at their respective addresses, indicated below, and service so made shall be complete five (5) days after the same shall have been so mailed.

Severability.

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

Entire Agreement; Amendments.

This Guaranty contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior oral or written agreements or statements relating to such subject matter, and none of the terms and provisions hereof may be waived, amended or terminated except by a written instrument signed by the party against whom enforcement of the waiver, amendment or termination is sought.

Successors and Assigns.

This Guaranty shall be binding upon and shall inure to the benefit of Lenders, Administrative Agent and Guarantor and their respective heirs, personal representatives, and permitted successors and assigns. This Guaranty may be assigned by any or all of Lenders in connection with an assignment of all or any part of the Loan made in accordance with the Loan Documents with respect to all or any portion of the obligations

guaranteed hereby, and when so assigned Guarantor shall be liable under this Guaranty to the assignee(s) of the portion(s) of the obligations guaranteed hereby so assigned without in any manner affecting the liability of Guarantor hereunder to the assigning Lender(s) with respect to any portion of the obligations guaranteed hereby retained by the assigning Lender(s), or to any other Lender.

Paragraph Headings.

Any paragraph headings and captions in this Guaranty are for convenience only and shall not affect the interpretation or construction hereof.

Notices.

All notices hereunder shall be in writing and shall be deemed to have been sufficiently given or served for all purposes when sent as provided in the BLA, if to Guarantor at the addresses stated on the signature page hereof and if to Administrative Agent at its address stated above or at such other address of which a party shall have notified the party giving such notice in writing in accordance with the foregoing requirements.

Counterparts.

This Guaranty may be executed in one or more counterparts, each of which shall be deemed an original. Said counterparts shall constitute but one and the same instrument.

Very truly yours,

ALEXANDER’S, INC.
By:	/s/ Alan J. Rice
	Alan J. Rice Secretary

Address of Guarantor:

c/o Alexander’s, In
210 Route 4 East
Paramus, New Jersey 07652
Attention:  Chief Finacial Officerc

Vornado Realty Trust
888 Seventh Avenue
New York, New York 10019
Attention:  Executive Vice President – Capital Markets

With a copy to:

Vornado Realty Trust
888 Seventh Avenue
New York, New York 10019
Attention:  Corporation Counsel

This is to certify that this Guaranty was executed in my presence on the date hereof by the parties whose signatures appear above in the capacities indicated.

By:	/s/ Ilona Jacqueline Williams
	Ilona Jacqueline Williams Notary Public
	My Commission Expires:  July 3, 2010

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EX-10

Exhibit 10.8

GUARANTY OF PAYMENT - MORTGAGE LOAN

As of December 21, 2007

PB Capital Corporation, as administrative

agent for itself and the other “Lenders”

(as such quoted term is defined in

the Agreement, as hereinafter defined)

230 Park Avenue

New York, New York 10169

Attention: Real Estate Finance

Re: Loans aggregating $350,000,000 (collectively, the “Loan”) to Alexander’s of Rego Park II, Inc. (“Borrower”)

Gentlemen:

To induce Lenders to consummate the captioned transaction and to lend to Borrower in accordance with (i) a Building Loan Agreement (the “BLA”) and a Project Loan Agreement (the “Project Loan Agreement”; the Project Loan Agreement and the BLA, collectively, the “Agreement”), each dated the date hereof among Borrower, Lenders and you as Administrative Agent (in such capacity, “Administrative Agent”), (ii) a Note or Notes made by Borrower in the aggregate principal amount of $350,000,000 (as the same may be amended, modified, extended, severed, assigned, renewed or restated from time to time, including any substitute or replacement notes executed pursuant to the Agreement, collectively, the “Note”) and (iii) one or more mortgage(s) dated the date hereof from Borrower to Administrative Agent (as amended from time to time, collectively, the “Mortgage” and the term “Mortgage” shall be deemed to include any other agreement or instrument given to Administrative Agent or Lenders as security for the Loan and the term “Collateral” shall mean the property covered by the Mortgage and any other collateral now or hereafter given as security for the Loan), the undersigned (hereinafter, “Guarantor”) does hereby represent, warrant and covenant to Lenders and Administrative Agent as follows (Capitalized terms used herein without definition shall have the respective meanings ascribed thereto in the Agreement):

Obligations Guaranteed.

Guarantor guarantees the prompt payment when due, whether at maturity or by acceleration or otherwise, of (i) any loss, cost, damage or expense paid or incurred by or on behalf of any Lender and/or Administrative Agent by reason of (1) intentional misconduct or fraudulent acts or omissions by Borrower or Guarantor (collectively, the “Borrower Parties”), (2) intentional and material misrepresentations in any of the Loan Documents by any of the Borrower Parties, (3) intentional physical waste of any portion of the Mortgaged Property by any of the Borrower Parties, (4) misapplication or misappropriation by any of the Borrower Parties of any insurance proceeds, condemnation awards or tenant security deposits, or of any rental or other income which was required by the Mortgage or other Loan Documents to be paid or applied in a specified manner, arising, in any such case, with respect to the Mortgaged Property, (5) any distributions from Borrower to Borrower Parties made during the continuance of an Event of Default, any monetary Default or, after notice from Administrative Agent of such default, any material non-monetary Default, (6) any voluntary or collusive involuntary direct or indirect transfer of the Mortgaged Property or any interest in Borrower in contravention of the Loan Documents, (7) the voluntary or collusive involuntary incurrence of any secured or unsecured indebtedness in contravention of the Loan Documents, (8) any voluntary or collusive involuntary filing of any bankruptcy, insolvency or similar proceeding by or

NY 50215432v6

against Borrower or Guarantor, and/or (9) the voluntary creation of any pledge, lien or other encumbrance on the Mortgaged Property in contravention of the Loan Documents, (ii) all payments due from Borrower

under or in respect of any swaps or other interest rate protection or hedging product arrangements obtained in respect of the Loan, including, without limitation, amounts paid by Administrative Agent or Lenders to purchase interest rate protection or hedging products if Borrower fails to do so as and when required to do so under the terms of the BLA, (iii) all amounts owed pursuant to Section 3.03 of the BLA, (iv) to the extent Borrower fails or refuses to reduce the Total Commitment by the ICIP Reduction Amount pursuant to Section 6.27 of the BLA, an amount equal to the ICIP Reduction Amount and (v) all reasonable out-of-pocket, third party legal and other costs or expenses paid or incurred by or on behalf of Lenders and/or Administrative Agent in the enforcement of this Guaranty against Guarantor. Notwithstanding anything in this Guaranty to the contrary, Guarantor shall become liable for all of Borrower’s payment obligations under the Note, Mortgage and Agreement (whether evidenced any such document or a judgment obtained in respect of any such document), including, without limitation, the entire principal balance of the Loan and interest thereon to the extent provided for in said documents (including default interest to the extent provided for therein whether arising prior to or after maturity or acceleration of the Loan), upon the occurrence of any of the events specified in clauses (6)-(9), inclusive, above, provided, however, that in the case of clauses (7) and (9), only if the event in question is in respect of borrowed money. Guarantor acknowledges and agrees that this Guaranty is a continuing guaranty and that the agreements, guaranties and waivers made by Guarantor herein, and Guarantor’s obligations hereunder, are and shall at all times continue to be primary, absolute and unconditional.

Liability Unimpaired.

Guarantor’s liability hereunder shall in no way be limited or impaired by, and Guarantor hereby consents to and agrees to be bound by, any amendment or modification of the provisions of any of the Loan Documents or any other instrument made to or with Administrative Agent or Lenders by Borrower. In addition, Guarantor’s liability hereunder shall in no way be limited or impaired by (i) any extensions of time for performance required by any of said documents, (ii) any sale, assignment or foreclosure of the Note or Mortgage or any sale or transfer of all or any part of the Collateral, (iii) any exculpatory provision in any of said instruments limiting Lenders’ or Administrative Agent’s recourse to all or any portion of the Collateral, or limiting Lenders’ or Administrative Agent’s rights to a deficiency judgment against Borrower, (iv) the release of Borrower or any other Person from performance or observance of any of the agreements, covenants, terms or conditions contained in any of said instruments by operation of law or otherwise, (v) the release or substitution in whole or in part of all or any portion of the Collateral, (vi) the failure to record the Mortgage or file any UCC financing statements (or the improper recording or filing of any thereof) or to otherwise perfect, protect, secure or insure any security interest or lien given as security for the Loan, (vii) the invalidity, irregularity or unenforceability as against Borrower or Guarantor, in whole or in part, of any of the Loan Documents, this Guaranty or any other instrument or agreement executed or delivered to Administrative Agent or Lenders in connection with the Loan or (viii) any other action or circumstance whatsoever which constitutes, or might be construed to constitute, a legal or equitable discharge or defense of Borrower for its obligations under any of the Loan Documents or of Guarantor under this Guaranty; and, in any such case, whether with or without notice to Guarantor and with or without consideration.

Preservation of Loan Documents.

Guarantor will cause Borrower to maintain and preserve the enforceability of the Loan Documents as the same may be modified and will not permit Borrower to take or to fail to take actions of any kind, the taking of which or the failure to take which might be the basis for a claim that Guarantor has a defense to its obligations hereunder, other than performance of such obligations in accordance with the terms of the instruments imposing the same.

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Indemnification; Payments; Certain Waivers.

Guarantor (i) waives any right or claim of right to cause a marshalling of Borrower’s or any other Person’s assets or to cause Administrative Agent or Lenders to proceed against all or any portion of the Collateral or against any of the security for the Loan or for the obligations guaranteed hereby before proceeding against Guarantor or to proceed against Guarantor, if more than one, in any particular order, (ii) agrees that any

payments required to be made by Guarantor hereunder shall become due on demand pursuant to a notice from Administrative Agent to Guarantor given in accordance with paragraph 22 hereof and without presentment to Borrower, demand for payment or protest, or notice of non-payment or protest and (iii) expressly postpones and subordinates, for so long as the Loan remains unpaid, all rights, remedies and defenses now or hereafter accorded by applicable Law to guarantors. Without limiting the generality of the foregoing, Guarantor hereby postpones and subordinates, for so long as the Loan remains unpaid, all rights (x) of subrogation, (y) to participate in any claim or remedy Lenders or Administrative Agent may now or hereafter have against Borrower or in all or any portion of the Collateral and (z) to contribution, indemnification, set-off, exoneration or reimbursement, whether from Borrower, Guarantor, or any other Person now or hereafter primarily or secondarily liable for any of Borrower’s obligations to Lenders, and whether arising by contract or operation of law or otherwise by reason of Guarantor’s execution, delivery or performance of this Guaranty.

Reinstatement.

This Guaranty shall continue to be effective, or be reinstated automatically, as the case may be, if at any time payment, in whole or in part, of any of the obligations guaranteed hereby is rescinded or otherwise must be restored or returned by Administrative Agent or Lenders (whether as a preference, fraudulent conveyance or otherwise) upon or in connection with the insolvency, bankruptcy, dissolution, liquidation or reorganization of Borrower, Guarantor or any other Person, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, Borrower, Guarantor or any other Person or for a substantial part of Borrower’s, Guarantor’s or any of such other Person’s property, as the case may be, or otherwise, all as though such payment had not been made. Guarantor further agrees that in the event any such payment is rescinded or must be restored or returned, all costs and expenses (including, without limitation, legal fees and expenses) incurred by or on behalf of Lenders in defending or enforcing such continuance or reinstatement, as the case may be, shall constitute costs of enforcement, the payment of which is guaranteed by Guarantor pursuant to paragraph 2 above.

Formation and Existence; Power and Authority.

Guarantor is a corporation, is duly organized, validly existing and in good standing under the laws of the state of its formation and has full power and authority to execute, deliver and perform this Guaranty and any Loan Document to which it is a party. Without limiting the following provisions of this paragraph 6, Guarantor will preserve and maintain such legal existence and good standing. Guarantor may not assign its rights nor delegate its obligations under this Guaranty, in whole or in part, without prior written consent of all Lenders, which consent may be granted or denied in the sole and absolute discretion of each Lender, and any purported assignment or delegation absent such consent is void, provided, however, that, if Guarantor sells, assigns, transfers or otherwise disposes of all or substantially all of its assets and business to another Person, so long as (i) such Person then complies with the Net Worth and Cash and Cash Equivalents (as such terms are hereinafter defined) covenants set forth in paragraph 10(c) of this Guaranty, (ii) a certification from the chief financial officer of such Person to the same effect as is described in paragraph 10(d) hereof, together with supporting financial data and information in respect thereof, is provided to Administrative Agent, (iii) such Person assumes Guarantor’s obligations under this Guaranty either by documentation reasonably satisfactory in form and substance to Administrative Agent or by operation of law or otherwise, evidenced to Administrative Agent’s reasonable satisfaction, (iv) Administrative Agent receives and approves (such approval not to be unreasonably withheld, conditioned or delayed) such additional supporting documents as are reasonably requested by Administrative Agent in connection with such assignment or delegation, such as, without limitation, certified copies of the organizational documents of such Person and an opinion of counsel of such Person which shall be to substantially the same effects as

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NY 50215432v6

was delivered to Administrative Agent on the date hereof with respect to Guarantor and (v) a certificate of such Person containing the representations and warranties set forth in paragraphs 6-9, inclusive, of this Guaranty, no consent by any Lender shall be required.

Litigation; Compliance with Judgments.

There are no actions, suits or proceedings pending or, to Guarantor’s knowledge, threatened against or affecting Guarantor, at law, in equity or before or by any court, arbitrator or Governmental Authorities except actions, suits or proceedings which are, or are likely in Guarantor’s reasonable judgment to be, fully covered by insurance (except for any applicable deductible) or would, if adversely determined, not be likely to have a Material Adverse Effect. Guarantor is not in material default with respect to any order, writ, injunction, decree or demand of any court or Governmental Authorities which is likely to have a Material Adverse Effect.

No Conflicts.

The consummation of the transactions contemplated hereby and the performance of this Guaranty and the other Loan Documents to which Guarantor is a party have not resulted and will not result in any breach of, or constitute a default under, any mortgage, deed of trust, lease, bank loan or credit agreement, corporate charter, bylaws, partnership agreement or other instrument to which Guarantor is a party or by which Guarantor is bound or affected where such breach or default individually or collectively would have a Material Adverse Effect.

Compliance with Laws.

Guarantor is in compliance with, and the transactions contemplated by the Loan Documents and this Guaranty do not and will not violate, any provision of, or require any filing, registration, consent or approval (other than consents or approvals which have been previously obtained or filings or registrations which will be made in the ordinary course) under, any federal, state or local law, rule, regulation, ordinance, order, writ, judgment, injunction, decree, determination or award (hereinafter, “Laws”) presently in effect having applicability to Guarantor, except where the failure to comply or any such violation would not have, taken singly or collectively, a Material Adverse Effect. Guarantor will comply promptly with all Laws now or hereafter in effect having applicability to it, the failure to comply with which would have a Material Adverse Effect.

Financial Statements; Financial Covenants.

(a)  The most recent financial statements heretofore delivered by Guarantor to Administrative Agent are true, correct and complete in all material respects, have been prepared in accordance with GAAP and fairly present Guarantor’s financial condition as of the respective dates thereof; no material adverse change has occurred in the financial condition reflected therein since the respective dates thereof.

(b)  Guarantor shall furnish to Administrative Agent the financial statements and certifications of Guarantor required by the Agreement as and when required thereby.

(c)  Guarantor shall, at all times, collectively, maintain an aggregate Net Worth (as defined below) located in the United States of not less than $250,000,000.00. “Net Worth” shall be established by capitalizing the trailing twelve (12) months of net operating income (as determined in accordance with GAAP, but excluding Guarantor’s general and administrative expenses) for each real property owned or leased by Guarantor using a 6% capitalization rate less any outstanding debt secured by the fee or leasehold interest in connection with each such property and corporate debt of Guarantor (but excluding any stock appreciation rights). In addition, Guarantor shall, at all times, collectively, maintain Cash and Cash Equivalents (as defined below) located in the United States aggregating not less than $50,000,000.00. “Cash and Cash

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NY 50215432v6

Equivalents” shall mean, as of the date of determination, (i) lawful currency of the United States of America, (ii) direct obligations of the United States of America or any agency or instrumentality thereof or obligations backed by the full faith and credit of the United States of America maturing in twelve (12) months or less from the date of determination, (iii) commercial

paper maturing in one hundred eighty (180) days or less rated not lower than A-1 by Standard & Poor’s, or P-1 by Moody’s Investors Service, Inc. on the date of determination and (iv) demand deposits, time deposits or certificates of deposit maturing within one (1) year in commercial banks whose obligations are rated not lower than A-1 by Moody’s Investors Service, Inc., or not lower than A+ or the equivalent by Standard & Poor’s on the date of determination.

(d)  Guarantor shall provide Administrative Agent within forty-five (45) Business Days after the end of each fiscal quarter with a certification from the chief financial officer of Guarantor that such Person has reviewed the terms of this Guaranty and of the financial condition of Guarantor and that based thereon Guarantor was in compliance with the financial covenants set forth in clause (c) of this paragraph 10 as of the end of the fiscal quarter in question and setting forth in reasonable detail computations evidencing compliance with said financial covenants, together with supporting financial data and information in respect thereof.

Non-Waiver; Remedies Cumulative.

No failure or delay on Lenders’ or Administrative Agent’s part in exercising any right, power or privilege under any of the Loan Documents, this Guaranty or any other document made to or with Lenders or Administrative Agent in connection with the Loan shall operate as a waiver of any such privilege, power or right or shall be deemed to constitute Administrative Agent’s or Lenders’ acquiescence in any default by Borrower or Guarantor under any of said documents. A waiver by Lenders or Administrative Agent of any right or remedy under any of the Loan Documents, this Guaranty or any other document made to or with Lenders or Administrative Agent in connection with the Loan on any one occasion shall not be construed as a bar to any right or remedy which Lenders or Administrative Agent otherwise would have on any future occasion. The rights and remedies provided in said documents are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by Law.

Liability Unaffected by Release.

Any Guarantor, or any other party liable upon or in respect of any obligation hereby guaranteed, may be released without affecting the liability of any Guarantor not so released.

Transfers of Interests in Loan.

Guarantor recognizes that, subject to the provisions of Section 8.13 of the BLA, any Lender may sell and transfer interests in the Loan to one or more Participants and/or Assignees and that all documentation, financial statements, appraisals and other data, or copies thereof, relevant to Borrower, any Guarantor or the Loan, may be exhibited to and retained by any such Participant or Assignee or prospective participant or assignee. Each Lender agrees, by its acceptance hereof, that a Lender’s delivery of any financial statements and appraisals to any such Participants or Assignee or prospective participant or assignee shall be done on a confidential basis and if such prospective participant or assignee does not become a Participant or Assignee, then all documentation delivered to such prospective participant or assignee pursuant to the preceding sentence shall be returned to Lender or Administrative Agent and kept confidential in accordance with the terms and conditions of the Loan Documents applicable to Participants and Assignees, as if such prospective participant or assignee had been a “Participant” or “Assignee”, respectively, as defined in the Loan Documents.

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NY 50215432v6

Separate Indemnity/Other Guaranty.

Guarantor acknowledges and agrees that Lenders’ and Administrative Agent’s rights (and Guarantor’s obligations) under this Guaranty shall be in addition to all of Lenders’ and Administrative Agent’s rights (and all of Guarantor’s obligations) under any other guaranty or any indemnity agreement now or hereafter executed and delivered to Lenders and/or Administrative Agent by Borrower and/or Guarantor in connection with the Loan, and payments by Guarantor under this Guaranty shall not reduce any of Guarantor’s obligations and liabilities under any such other guaranty or indemnity agreement (except to the

extent any such payment by Guarantor under this Guaranty is in respect of the same obligation or liability covered under any such other guaranty or indemnity agreement).

ADDITIONAL WAIVERS IN THE EVENT OF ENFORCEMENT.

GUARANTOR, AND BY THEIR ACCEPTANCE HEREOF, ADMINISTRATIVE AGENT AND EACH LENDER HEREBY EXPRESSLY AND UNCONDITIONALLY WAIVE, IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY OR IN CONNECTION WITH THIS GUARANTY, ANY AND EVERY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY.

Governing Law; Submission to Jurisdiction.

This Guaranty and the rights and obligations of Lenders and Guarantor hereunder shall in all respects be governed by, and construed and enforced in accordance with, the Laws of the State of New York (without giving effect to New York’s principles of conflicts of law). Guarantor, and by their acceptance hereof, Administrative Agent and each Lender hereby irrevocably submits to the non-exclusive jurisdiction of any New York State or Federal court sitting in The City of New York over any suit, action or proceeding arising out of or relating to this Guaranty, and Guarantor hereby agrees and consents that, in addition to any methods of service of process provided for under applicable Law, all service of process in any such suit, action or proceeding in any New York State or Federal court sitting in The City of New York may be made at the address, and if more than one Guarantor, at their respective addresses, indicated below.

Severability.

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

Setoff.

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

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NY 50215432v6

Entire Agreement; Amendments.

This Guaranty contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior oral or written agreements or statements relating to such subject matter, and none of the terms and provisions hereof may be waived, amended or terminated except in accordance with the provisions of the BLA.

Successors and Assigns.

This Guaranty shall be binding upon and shall inure to the benefit of Lenders and Administrative Agent and Guarantor and their respective heirs, personal representatives and permitted successors and assigns. This Guaranty may be assigned by any or all of Lenders in connection with an assignment of all or any part of the Loan made in accordance with the Loan Documents with respect to all or any portion of the obligations guaranteed hereby, and when so assigned Guarantor shall be liable under this Guaranty to the assignee(s) of the portion(s) of the obligations guaranteed hereby so assigned without in any manner affecting the liability of Guarantor hereunder to the assigning Lender(s) with respect to any portion of the obligations guaranteed hereby retained by the assigning Lender(s), or to any other Lender.

Paragraph Headings.

Any paragraph headings and captions in this Guaranty are for convenience only and shall not affect the interpretation or construction hereof.

Notices.

All notices hereunder shall be in writing and shall be deemed to have been sufficiently given or served for all purposes when sent as provided in the BLA, if to Guarantor at the addresses stated on the signature page hereof and if to Administrative Agent at its address stated above or at such other address of which a party shall have notified the party giving such notice in writing in accordance with the foregoing requirements.

Termination.

Subject to paragraph 5, this Guaranty shall automatically terminate and Guarantor shall be released from all obligations and liabilities hereunder upon the date on which the Loan and all amounts due under the Loan Documents have been paid in full and the remaining commitments for any unadvanced portion of the Total Loan shall have been terminated.

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NY 50215432v6

Counterparts.

This Guaranty may be executed in one or more counterparts, each of which shall be deemed an original. Said counterparts shall constitute but one and the same instrument.

Very truly yours,

ALEXANDER’S, INC.
By:	/s/ Alan J. Rice
	Alan J. Rice Secretary

Address of Guarantor:

c/o Alexander’s, In
210 Route 4 East
Paramus, New Jersey 07652
Attention:  Chief Finacial Officerc

Vornado Realty Trust
888 Seventh Avenue
New York, New York 10019
Attention:  Executive Vice President – Capital Markets

With a copy to:

Vornado Realty Trust
888 Seventh Avenue
New York, New York 10019
Attention:  Corporation Counsel

This is to certify that this Guaranty was executed in my presence on the date hereof by the parties whose signatures appear above in the capacities indicated.

By:	/s/ Ilona Jacqueline Williams
	Ilona Jacqueline Williams Notary Public
	My Commission Expires:  July 3, 2010

EX-99.1

Exhibit 99.1

CONTACT: JOSEPH MACNOW

(201) 587-8541

210 Route 4 East

Paramus, NJ 07652

FOR IMMEDIATE RELEASE – DECEMBER 21, 2007

Alexander’s Closes $350 Million Construction Financing

for its Rego Park Shopping Center

PARAMUS, NEW JERSEY...ALEXANDER’S, INC. (New York Stock Exchange: ALX) announced today that it has closed a construction loan providing up to $350 million to finance its Rego Park project, a development consisting of a 600,000 square foot shopping center on four levels and a parking deck containing approximately 1,400 spaces. The loan has an interest rate of LIBOR plus 1.20% and a term of three years with a one-year extension option. The shopping center will be anchored by a 134,000 square foot Century 21 department store, a 138,000 square foot Home Depot and a 132,000 square foot Kohl’s.

Alexander’s, Inc. is a real estate investment trust, which has seven properties in the greater New York City metropolitan area.

Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks associated with the timing of and costs associated with property improvements, financing commitments and general competitive factors.

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