EXECUTFON \IERSION RECOGNITION AGREEMENT THIS RECOGNITION AGREEMENT (this "Agreement"), dated this _ day 2010, is made by and

among GRAMERCY WAREHOUSE FUI$XIING II LLC, a of _, Delaware limited liability oompffly, having an addressat 42A Lexington Avenue, Suite 1900, New York, New York I 0l 70" as agent for itself and its assignsand participants (in such capacity, togetherwith its successorsand assigns in such capacify, "Mortgagee'), AYDC INTERIM DEYELOPER, LLC, a Delaware limited liability company, having an addressffi. clo Forest City RatnerCompanies,LLC, 1 Metro'Tech Center, Brooklyn, New York 11201 (together with its successors and permitted assig$s, "Developer"), and NEW YORK STATE URBAI\ DEVELOPMENT CORPORATION DTBIA EMPIRE STATE I}EVELOPMENT CORPORATION, a corporate govemmental agency of the State of New Yoink constituting a political subdivision and prblic benefit corporation, having an offrce at 633 Third Avenue, New York,New York 10017 (together with its successors and assigns,"ESDC").

wIr NEg $ Er H:
WHEREAS' on.Iuly 18, 2006,ESDC adopted that certain General Pro-iectPlan, and on December8, 2005, and .Iuly 23,20A9, ESDC adopted those sertain Modified General ProjectPlans(the "MGPP") for the Atlantic Yards Land Use Improvement and Civic Project (the"DevelopmentProject"), eactrin accordancewith the New York State Urban Development Corporation Act; WHEREAS, the Development Project comprises the construstion of a major mixed*use development in the Attrantic Terminal area of the Borough of BrookliSrn,City and State ofNew York, including a professional sports venue ("Arena") to serveas the home venue for the NationalBasketballAssociation professional basketball team currently lcnown as the New Jersey Nets and as a venue for other entettainment, cultural, sporting and civic events, and other mixed usebuildings(all such buildings other than the Arena, the "Project Buitrdingsf'[ WHEREAS, the project site (the "Project Site") occupies an approximately ?'7acreareagenerallybounded by Ftratbush and 4n Avenues to the West, Vanderbi-It Avenue to the East,Atlantic Avenue to the North, and Dean and Pacific Streetsto the South and includes tlre approximately 9-acre (including the land under the 6thand Carlton Avenue Bridges) below-gr:r,Je LongIslandRail Road Vanderbilt StorageYard; WHEREAS, in order to effectuatethe intent of the MGPP, ESDC" Developer and Affiliates of Developer have entered into that certain Development ,A.greernent dated _, 2010 (the "I)evelopment Agreement"), and that certain Land Acquisition Fr,mding Property Management Relocation Agreement dated as of September18, 2009 (the "LAI'PMRA"); and WHEREAS, Mortgagee is the lawful owner and holder of the Original (as Mortgages hereinafter defrned); WIIEREAS, subject to and in accordancewith the terms and conditions of the IAFPMRA, ESDC has exercised its power of eminent domain to acquire, inter alia, the PhaseI (as Properties hereinafter defined) in order to implement the Development Project, and a portion

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of the PhaseI Properties are subject to the security interest granted in favor of'the Mortgagee pursuant the Original Mortgage; to WHEREAS, ESDC and DeveXoperare parties to the (i) Agreernent of Interim Lease (Arena Block, Non-Arena Parcel) dated the date hereof (the "Arena Block Interim Lease"); and (ii) Agreement of Interim Lease {Block 1129) dated the date hereof ("Block 1129 Interim Lease'l, and together with the Arena Block Interirn Lease,the "Interim Leases"); WHEREAS, pursuant to (a) a Mortgage Spreader Agreement and Financing dated as of the date hereo{ ail}ong Developer, certain Affiliates of Developer and Statement, Mortgagee(the "First Mortgage Spreadern') and (b) a Mortgage SpreaderAgreement, dated the date hereof, among Developer, certain Affitriates of Developer and Mortgagee (the "Second Mortgage Spreader" and together with the First Mortgage Spreader, the "Mortgage Spreaders"), which Mortgage Spreaders have been (or simultaneously herewith, will be) recordedin the Office of the City Register, Kings County (such Kings County Cffice of the City herewith, will) the Register, "City Register"), Mortgagee and Developer have (or simultaneoustry spread lien of the Original Mortgages to enaumber Developer's leasehold estatesunder the the InterimLeases; WHEREAS, pursuant to the Partial Release of Mortgaged Prernises, dated the date hereof, by Mortgagee (the "Mortgage Release"), which Mortgage Release has been (or simultaneouslyherewith, will be) recorded in the City Register, Mortgagee has released (or herewith, will release)the lien of the Original Mortgages on the fee interests of, simultaneously I the Phase Properties; and WHEREAS, pursuant to (a) the Third Amended and RestatedLeasehold and Fee Mortgage,Assignment of Leasesand Rents, Security Agreement and Financing Statement,dated as of the date hereof, among Developer, certai.n Afhliates of Developer and Mortgagee (the "First Mortgage") and (b) the Second Arne*ded and Restated Subordinate Leasehold and Fee Mortgage,Assignment of Leasesand Rerfs, Security Agreement and Financing Statement,dated as of the date hereof, among Developer" sertain Affiliates of Developer and Mortgagee (the "SecondMortgage" and together with the First lvfortgage,the "Mortgages")" which Mortgages have been (or simultaneously herewith, wiil be) recorded in the City Register, Mortgagee and Developerhave (or simultaneously herewidh,will) amendedand restatedthe Original Mortgages to encumber Developer's leasehold estates under the Interim Leases and certain fee simple of estates those certain Affiliates of Developer party to the Mortgages' WHEREAS, ESDC has agreedto recognize and grant certain rights to Mortgagee with respect to the Interim Leases and any New Leases, in each case, as Inore particularly in described this Agreement. NOW, THEREFORE, in co,nsiderationof the foregoing prernises, Ten Dollars ($10.00)paid in hand, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.the parties hereto, intending to be legally bound, hereby agree asfollows:

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ARTICLE I DEFT}$ITIONS ; CONSTRUCTION OF TERMS 1.I Definitions. Unless otherwiseindicatedin this Agreement, all capitalized terms used but not otherwi,sedefined in the body of this Agreement shall have the meaning given to such terms in Appendix "& attachedhereto and made apart hereof. Rules eif Construction. The following rules of construction shall be 1.2 applicable to this Agreer,nmf unless expressly provided otherwise or the eontext otherwise requires: (a) The terms "hereby", "hereof', "hereto", "herein", "hereundet" and any similar terms shall refilrto this Agreement, and "hereafler" shall mean after, and "heretofore" shall mean before, the date ofthis Agreement. (b) Words of the masculine, feminine or neuter gender shall mean and include the correlative words of the other gendersand words importing the singular number shall mean and include the plural number and vice versa. (c) The terms "include", "including" and similar terms shall be construedas if followed bylhe phrase "without being limited to". Whenever a parfy hereto "shall" perform (or causeto be performed) td) any obligations hereunder',zuch perfonnance shall, subject to Section 9.10 below, be at such party's sole cost and expe.*se" unless otherwise expressly provided in this Agreernent. (e) Except as otherwise exprsssly provided herein, any reference in this Agreement to any docurnent, instrument, certificate or agreementshall mean such document, instrument, certificate or agtreementas amended,restated, supplementedor otherwise modified from time to time in accordancewith the terms thereof. 1.3 Ca$ti.ons. The captions under the article and section numbers are for convenienceand referenqeonly and in no way define, limit or describethe scope or intent of this Agreementnor in any way affect the interpretation or meaning of this Agreernent. ARTICLE II REC,SGNITION OF MORTGAGEE: ESTOPPEL

Morteage Notices. Mortgagee has, on or prior to the date of this 2.1 Agreement, delivered to ESDC (a) the notice required to be given by Mortgagee pursuant to Section 29.1(a) of the Interirn Leases(the "RM Notice"), and (b) certified copies of the Original Mortgages and each amenihent thereto through the date of this Agreement (including the Mortgage Spreaders),in each case, as recorded (or to be recorded) with the City Register (collectively, the "Certified Mortgage"). Mortgageecovenantsand agreesto deliver to ESDC an updated RM Notice and Certified Mortgage each time the Certified Mortgage is, subjeqtto the requirements of the Interim Leases, if any, amended, restated, supplemented or otherwise

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modified from time to time. A true and complete (i) copy of the RM Notice is attached as as ExhrbilA, and (ii) descriptionof the Certified Mortgageis attached Exhibit E. Recognition. ESDC (a) hereby acknowledgesreceipt of the RM Notice 2.2 and Certified Mortgage, and (b) based on the information set forth in the RM Notice and the delivery of the Certified Mortgage, hereby confirms that the Certified Mortgage is a "Recogtized Mortgage" and that Mortgagee is a "Recognized Mortgagee" within the meaning of the hrterim Leases. Estoppel. Mortgagee does hereby certify to ESDC, with the knowledge 2.3 that suchcertificationwill be relied upon by ESDC, the following: (a) The Certified Mortgage is in fuIl force and effecf as of the date hereof. Except as attached as Exhibit B, the Certified Mortgage has not been amended, modified or otherwise supplemented. (b) The outstanding principal balance of the loan secured by the as of the datehereof,is $153,891,593.80. CertifiedMortgage, (c) The stated maturity date for the amounts secured by the Certified (after giving effect to all extension options in favor of Developer and its Affiliates Mortgage thereunder,if any) is February 11,2012. (d) To Mortgagee's knowledge, as of the date of tkris Agreement, no "Event of Default" (as defined in the Certifred Mortgage) has occurred and is continuing under the Certified Mortgage, and Mortgagee has no knowledge of any facts that with the giving of notice, the passage of time or both could constitute an Event of Default (as defined in the Certified Mortgage) under the Certified Mortgage. ARTICLE III EMINENT DOMAIN PROCEEDINGS Second Taking Properties - Upgraded Yard Condition. Anything in the 3.1 other Project Document to the contrary notwithstanding, Mortgagee and LAFPMRA or any Developer each acknowledge and agree that until (a) construction of the L,pgraded Yard commencesin accordancewith and subject to the terms of the Yard Relocation and Construction Agreement and (b) the conditions enumerated in Sections 3.1(b)(i) and 3,.i(bxii) of the Development Agreement have been satisfied, ESDC shall have no obligation to Mortgagee, any Person claiming by or through Mortgagee (including any SuccessorLeasehotrdOwner), or to Developer, any Affiliate of Developer or any Person claming by or through Developer or any AfFrliate of Developer to commenceany condemnationor other taking actions with respectto all or any portion of the SecondTaking Properties. 3.2 Second Taking Properties - Documentation Condition. Anlahing in the LAFPMRA or any other Project Document to the contrary notwithstanding, Mortgagee and Developer each acknowledge and agree that ESDC has agreed to commence the condemnation, eminent domain proceedings and taking actions with respect to, inter alia, the First Taking

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notwithstanding the fact that the documentation with respect to the remainder of the Properties Project (including, documentationwith ttrreMTA, LIR& the Transit Authority, the Development City and NYCEDC) is not complete and mutually acceptabtre. As such, ESDC shall have no to obligation Mortgagee, any Person claiming by or through Mortgagee (includirlg any Successor Leasehold Owner), or to Developer, any Affiliate of Developer or any Person claming by or throughDeveloper or any Affiliate of Developer to commence any condernnation, eminent domainproceedings or other taking actions with respect to all or any portion of the Second Taking Properties until such time as all of the documentation (including leases, licenses, guaranties, opinions of counsel, etc.) deernedreasonably necessaryby ESDC for the easements, development or constructionof the Development Project on all o{ any portion of implementation, the SecondTaking Properties or MTA Air Space Parcels is, in each case, fuIly executed and effectiveor fully executed and in escrow subject only to release conditions that are reasonably to satisfactory ESDC, and otherwise satisff in ESDC's reasonable opinion the requirements of the MGPP, MEC, the Development Agreement, all applicable Requirernents, the DOB and Design Guidelines, in each case,as modified by this Agreemen't. Agreement ARTICLE IY INTERIM LEASESI DEVELOPMENT AGREEMENT ESDC agrees that, notwithstanding the terrns of the Interim Leases and Agreement, solely as between Mortgagee and any SuccessorLeasehold Owner on Development theonehand and ESDC on the other hand the following principles shall govercreertain aspectsof therelationshipof ESDC on the one hand and Mortgagee and any Stlccessorl-easehold Owner on the other hand with respect to the Interim Leases or any New Leases; it being agreed that neitherDeveloper nor Developer's Affiliates nor any successoror assign o'f Developer (other than Mortgagee or any Successor Leasehold Owner succeeding to tenanl's rights under an InterimLease or acquiring a New Lease, in each case by reason of a Foresl,osureEvent) shall have benefit of the principles articulated in this Article IV. the 4.1 Term: Undertaking.

(a) Subject to the conditions set forth in this Section 4.1(a), the Term and on a cumulative basis, as follows: Interim Lease shall be extended,as necessary, of each (i) for such period of time as shall be eqtnl to the time necessaryfor Mortgagee to, following the occurrence and continuation of an Event of Default (as defined in the Certified Mortgage), foreclose on the Certif,ied Mortgage (or otherwise acquire the leasehold estate under the Interim Leases) and. for a Successor Leasehold Owner to make satisfactory arrarlgements with a Permitted Developer to perform Developer's Obligations (as modified by Sections 4.4 and 5.2 below) and exercise Developer's rights under the Interim Leasesor any New Lease; prcvldgd that in each caseMortgagee is acting diligently, in good faith and in a commercially reasonable manner to causethe satisfactionof such conditions. If upon the expiration or termination of the Term (as stated in the Interim Leasesand without referenceto th,is Section 4.1) an action to foreclose on the Certified Mortgage is pending, then during the extension of the Term afforded by this Section a.l(a)(i) (A) Developer shall have no rights (but shall

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retain all of the Developer's Obligations) under the Interirn Leases, and (B) until the occurrenceof the ForeclosureEvent, Mortgagee shall have no rights or obligations under the Interim Leases; (ii) for such period of time as shall be equai to the period of time during which a Successor Leasehold Owner is prohibited from severing a Development Lease pursuant to 'A^rticle)O(X of the Interirn Leases (as modified by this Agreement) as a result of the failure to commence construction on the Arena in accordancewith the last sentenceof Section29.3(a) of the trnterintLeases; provided, in all casesthat the extensionsafforded by this Section 4.1(a) shall in no event extend ih" Tet- at any of the Interim Leases,for a period greaterthan ninety-nine (99) years following the Project Effective Date. (b) In the event that (i) Mortgagee foreeloses upon the certified Mortgage and (ii) construction of the Arena has not been commencedin aecordancewith the last sentence of Section 29.3(a) of the Interim Leases, then subject to co'r,npliance with all Requirements, ESDC and Mortgagee shall each work diligently and in goo'd f,aith to find an expeditious solution to allow the Developrnent Project to proceed in a rnanner that is rnindful of and consistent with Mortgagee's need to recoup its investment in those portio*rs of the Froject Site encumberedby the Certified Mortgage, as well as the development goals of ESDC and the City. Disbursement Procedures. The written consent of N4ortgagee shall be 4.2 required before ESDC and Developer agree to the disbursementof any funds by the Depositary other than in accordancewith the terrns and subject to the conditions set for:th in the Interim Leases. Landlord Bankruptcy Riehts. Prior to ESDC exercisinig&e right of first 4.3 refusal granted to it under Section 12.6(c) of the Interim Leases, ESDC shdl provide written nolice of such exercise to Mortgagee, and such exercise shaXlbe subiect to the rights of Mortgagee,if any, set forth in Article )O(D( of the Interim LeasesDefaults, which Excluded.Obligations. In addition to Tenant-Specifl:c 4.4 neither Mortgagee nor any SuccessorLeasehold Owner shall have any obligation to cure" neither Mortgagee nor any Successor Leasehold Owner shall have any obligation to perform or otherwise complete any of the following Developer Obligations under the Development Agreement (or to cure any default under any Interim Leaseby reasonof any of the following): (i) (ii) Development and construction of the Subway Entrance; Development and construction of the Cariton Avenue

Bridge;
(iii) Development and construction of the Additional Affordable

Housing Units;
(iv) Funding the Existing Parks Investment;

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(v) (vD (viil (viii) Units on Site 5: and

Development and construction of the Arena; Development and construction of the Platfbrrn; Development and construction of the Upgraded Yard; Development and construction of Affbrdable Housing

(ix) Any other work, activity or obligation under the Development Agreernent or any other Project Document that is not located on the portion of the Project Site included under the Interim Leasesor allocated to a different portion of the Project Site pursuant to Article YI hereof. 4.5 Arena Construction

(a) If (l) a Successor Leasehold Owner succeeds to the leasehold (I) the Interirn Leases and any Development Leasesencurnberedby the Certified under interest Mortgage(collectively, the "Encumbered Leasehold Development Parcels") as a result of a Event or (II) a New Lease entered into with respectto such Encl.lmberedLeasehold Foreclosure DevelopmentParcels, and (2) at the time of such ForeclosureEvent or entry into a New Lease, constructionof the Arena has not coillmenced in accordancewith the last scntence of Section 29.3(a) the Interim Leases,then of (i) all SuccessorLeasehold Owners shall rernain subject to the provisions of said Section 29.3(a), and the Mortgagee Outside Compietion Date shall be extended until the earlier of: (A) the twelfth (12tn) anniversary of the date (I) ESDC waives in writing the conditions set forth in the last sentenceof Section 29.3(a) and Section 30.4(d) of the Interim Leases(and any equivalent provision of'any Development Leasesor New Leases) (together with any correspondingprovisions of; the Developrnent or Agreement,collectively, the "Arena Commencement Restrictionsnn) (II) construction of the Arena shaltrhave cofirmenced in accordance with the last sentence of Section 29.3(a) of the Interirn Leases;and (B) Project Effective Date; and LeaseholdOwners, acting together, in their (ii) All Successor sole discretion may, by wrifien notice (the "Option Trigger Noticeo*)given to ESDC, grant to ESDC the riglrt (but not the obligation) to terminate (the "Terrnination Option") LeaseholdOwners under all Interim Leases, all right, title and interest of all Successor Development Leases and New Leases upon payment of the Termination Price on or before the third (3'd) anniversary of the date on which the Option Trigger Notice is receivedby ESDC (the "Option Expiration Period"). If the Option Trigger Notice is given by all SuccessorLeasehold Owners, and ESDC does not exercise the Termination Option on or befbre the expiration of the Option Expiration Period, then subject to the date that is ninety-nine (99) years after the

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Seefian 4.5(b) below, the Arena CornmencementRestrictions shail no longer apply to '1129 (the "ll?g any EncrmrberedLeasehold Development Parcels located on Block Development Right"). No Option Trigger Notice shall be valid or otherwise effective unless and until ull Srr"""sror Leasehold Owners shall have joined in giving the Option Trigger Notice to ESDC. (b) Mortgagee aclenowledges,on behalf of itself ard all Successor LeaseholdOwnersothat'ESDC has agreed to grant the Il29 Development Right following the expiration of the Option Expiration Period, subject to the granting of the t X29 Development nignt being perrnineA by all applicable Requirements. If at any tine it is determined, or ESDC reasonably believes, that the- granting of the 1129 Development Right would violate any applicable Requirernents (i) the ll29 Development Right shall nct be granted to Morigagee or any SuccessorLeasehold Owner hereby and Mortgagee'sand each SuccessorLeasehold Owner-s rigtrt to develop improvements on all of the EncumberedLeasehold Development Parcelslocated on Block 1129 shall remain subject to the Arena CommencementRestrictions, {ii) neither ESDC Leasehold Owner as a result thereofl nor LDC shall have any liability to Mortgagee or Successor and (iii) at Mor,tgageeb or any SuccessorLeasehold Owner's reqrlest and expense, ESDC shall ,oop"r"t" with Mortgagee or such Successor Leasehold Owner to take all ac'tions reasonably to n.""rruryto obtain *"h upprovalsas shall be necessary grantthe 1129 DevelopmentRight Requirementsand the MGPP' consistentwittl the terms of this Agreement, all (c) meansthe lesserof (i) the outstanding indebtedness secured by the Certified Mortgage, including principal, capitalized interest and other sulns, as of the date of al'rd imrnediately prior to tt * Foreciosure Event, plus costs incurred by Mortgagee in connection with such Foreclosure Event (including, but not limited tc, reasonablelegal fees, appraisal fees, receivership fbes and real property transf'ertaxes); aud (ii) the fair market value of the leasehold interests under all Interirn Leases, Development Leases and New Leases taking into acccunt the developrnent rights, hurdens, cbligations and the restriqtions (othet than the Arena Cornrnen""*"rriRestrictions) associatedwith such leasetptrdinterests under the MGFP and the Project Documents and applicable to a Successcrlrasehold Owner thereunder, subject to this Agreement (the 'nFair Market Value'n), determined as set fonh on Appendix B Amendment of Project Documents. ESDC agreesthat it shall not arnend 4-6 project Documents without the prior written consent of Mortgagee' which or modify any of the consent shall not be unreasonablywithheld, delayed or conditioned; provided that the consent of Mortgagee to any amendment or modification of the Arena Development Lease shall not be required. Affordable Housing. SuccessorLeasehold Owners, as Tenants under the 4.7 applicable Development Leases, m€{, in connection with rhe construction of Project Site Affordable Housing Units, apply for financing then generally available to developers of For purposes of this section 4.5, the term "Ternnination Prieen'

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Affordable Housing Units; Uqyldgd that the lack of such financing shall not diminish any obligations of such Successor Leasehold Owners to provide Project Site Affordable Housing Units in accordancewith the requirementsof the Project Documents and this Agreement. ARTICLE V LIQUIDATED DAMAGES

ESDC agrees that notwithstanding the terms of the Interim Leases and DevelopmentAgreement, solely as between Mor[gagee and any SuccessorI-easehold Owner an the one hand and ESDC on the other hand the fotrtowing principles shall govenl the relationship, from and after Mortgagee's commencement of'foreclosure proceedings wittr respect to the Certifred Mortgage, of Mortgagee and any SuccessorLeasehold Owner on the one hand and ESDC on the other hand with respectto the liquidated damagesdescribed in Seetion 5.3 below in lieu of the liquidated damagesthat are payable to ESDC pursuant to the terrns of the Interim Leasesand Development Agreement; it being agreed that neither Developer nor Developer's any Successor Affiliates nor any successor or assign of Developer (other than Mortgagee o.'f, EvenQ LeaseholdOwner succeedingto Mortgagee'srights, in each case following a Fo,reclosure principles articulated in this Article v. shallhave the benefit of the Payment Timeline Reset. As described, avrd subject to the terrns, 5.1 conditions and qualifications set forth, in Section a.l(a) above, the Ternn of,eaoh Interirn Lease or,any New Lease shall be extended, as necessary,and on a curnulative basis, so as to allow sufficient time ficllowing the occuffence and continuation of an Event of Default (as defined in the Certified Mortgage) for Mortgagee to foreclose on the Certified Mortgage (or otherwise acquire tenant's interest under the Interim Lease pursuant to a Forectrosure Event) and for a SuccessorLeasehold Owner to make satisfactory arrangementswith a Pernrit$ed Devetroperto perfiorm Developer's Obligations (as modified ,by Sections 4.4 and 5.2 be'iow) and exercise Developer'srights (including, but not limited to, the right to create Developr,nentLeases)under the Interim Leasesor any New Lease; provided that in each case Mortgagee is acting diligently, in good faith and in a commercially reasonable rnanner to cause the occurrence of such conditions. Commencing on the date (the "Reset Date") Mortgagee or a SuccessorLeasehold Owner acquires Developer's interest as tenant under the lnterim Leases CIrany New Lease and rnakessatisfactory arrangementswith a Permitted Developer, and, to the extent required by the Interim Leases or any New Leases, ESDC approves such Permitted Develope4 the Successor LeaseholdOvmer shall have twelve (12) years (as the samemay be extended pursuant tc Section 4.f(a) or 4.5(a) hereof, the "Mortgagee Outside Completion Date") in which to create Development Leases and to construct or cause the construction and Substantial Completio'n of the Phase I Improvements (as modified by Sectian 4.4 above and Section 5.2 below) in accordancewith and subject to the terms of the Development Agreement and other applicable Project Documents, and the term of the Interim Leasesor any New Lease shall, as necessary,be extendedto the Mortgagee Outside Completion Date. Each of Mortgagee, Perrnitted Developer by LeaseholdOwner, as applicable,shall, if requested ESDC, executeand deliver and Successor a letter confirming the ResetDate.

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5.2

PhaseI ImProvements-

(a) If and to the extent Site 5 is subject to an agreement of lease (whether interim, development or otherwise) or is otherwise included in an Interirn Lease betweenESDC and Developer (or an Affitiate of Developer) that is, in each case, encurnberedby a RecognizedMortgage for the benefit of,Mortgagee or its AfFrliate, then fror,n and after the date of such lease, a Suicessor Leasehold Owner shall, following a Foreclosure Event but subject to Section 5.2(dxi) hereof, be required to colrstruct (or to cause a Fermitted Developer or SuccessorLeasehold Ovrner to construct) and cause the Substantial Completiem (as de ined in the Arena Block Interim Lease) of, as part of the Fhase I Improvements (as modified by Section 4.4 above), Project Buildings having a minirnurn of One Million Five Hwdred Thousand (1,500,000) gross square feet (exclusive of the squarefootage of the Arena) or* the Arena Block and Site 5 (the "1.5M GSF Requirement")(b) If and to the extent Site 5 is not subject to an agleement of lease (whether interim, deveiopment or otherwise) between ESDC and Developer (or an Affiliate of ieveloper) or is not otherwise included in an Interim Leasethat is, in each case' encurnberedby a RecognizedMortgage for the benefit of Mortgagee or its Affiliate, then a SuccessorLeasehold Owner shall, following a ForeclosrueEvent but subject to Section s.z(dxii) hereof, he required a Permitted Developer or SuccessorLeasehold Owner to constrtrct) and to construct (or to "urri" causethe SubstantialCompletion (as defined in the Arena Block Interim Lease) of, as part of the PhaseI Improvements (as modified by Seetion 4.4 above), Project Btlildings l,raving e nninimum gross square feet (excLwsiveof the square of One Million Three Hundred Thousand (tr,3CI0,000) (the "1"3M GSF Requirement"). footage of the Arena) on the Arena Block (c) In determining the gross square footage constr,u,etedfor Xlurposes of Sections 5.2(a) and (b) hereof, ESDC strrallinclude the gross square footage of al} Project Buildings constructedin accordancewith the requirements of the Developr"nelrtAgreement and applicable Project Lease on the Arena Block and, if applicable, Site 5, whether constrwcted by Developer, an Affiliate of Deveioper, fufortgagee"a successorPermitted Developer, a Successor Leasehold Owner or any permitted assign of Developer, Mortgagee or a Sucsesssr tr easehold Owner. (d) If a Developrnent Lease(s) has or have been severed pursuant to Article XXX of the Arena Block Interim Lease and such severed lease or leases is eir are no longer subject to a Recognized Mortgage in favor of Mortgagee, then {he 1-5R4 GSF shall be reducedas follows: and the 1.3M GSF Requirernent Requirement (i) as applicable, (A) the 1.5M GSF Requirernent shall be reducedby the gross squarefcotage of eaehProject Building SubstantiatrlyCornpleted (as defined in the applicable Developlrrent Lease) on the Arena Block and on Site 5, and (B) the I .3M GSF Requirement shall be reduced by the gross squarefootage of each Project Building Substantially Completed (as defined in the applicable Development Lease) on the Arena Block; (ii) the l"5M GSF Requireme.ntshall be frullher reduced by a percentage,(A) the numerator of which shall be the lesser of the (I) tlrc maxirnum gross

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squarefootage perrnitted by the applicable severedDeveloprnent Lease{s) (which has not yet been accagnted for in Section 5.2(dxi) above as a Substantially CornptretedPraject -Building) and (II) the maximum gross square footage that may be constsucted on such severed-parcel(s)(which has not yet been accounted for in Section 5"2{dxi} above as a Substantially Completed Froject Building) pursuant to Exhibit C of the MG?P and (B) the denorninator of which shall be the sum of (I) the numerator, (Ii) the rnaxirnwn gtoss square footage that may be constructed on the remaining prernises dernised under ttre Arena Block Interim Lease per the MGPP and (III) the maximum gross square footage that may be cans'tructedon Site 5 per the MGPP; or (iii) the 1.3M GSF Requirement shall be furtlrcr reduced by a percentage, {A) the numerator of which shall be the lesser of the {I} the neaximun gross rq,rut" footage permitted by the applicable severed Development Lease(s) {which has not y.t b"*tt accognted for in Section 5.2(dxi) above as a Substantially Cornpleted Project building) and (II) the rnaximum gross square footage that may be conskusted on such severedparcel{s} (which has not yet been accounted for in Section 5.2(dxi) above as a Substantially ConnpletedProject Building) pursuant to Exhibit C of the MGPP and [B) the denominator of which shall be the sum of (I) the numerator, and (I$ the maxirnurn gross square foctage that may be constructed on the remaining prernises demised under the Arena Block Interirn Lease' An example of this Section 5.2{d) is set forth on 1!ppg1!!4C attachedhereto. 53 Liquidated Damases.

ln the event Mortgagee, a Permitted DeveXstrer or Snrecessor {a} Leasehold Owner fails to construct and Substantially Complete the Phase I nwrprovements(as modified by Sections 4.4 and 5.2 above) in accordancewith and subject to the terrns of the Development Agreement and other applicable Project Documents on or priex the Mortgagee Outside Cornpleiion Date, then the following amounts shall (without affecting the obligations of b'e Developer *d itr Affrliates under the Interim Leasesand Developrnent ,Agrercment) payable by the person suceeedingto Developer's interest in the Interim Leases (wt*e{her such Ferson is Mortgagee, its Perrnitted Developer or any SuccessorLeasehold Owner) to ESDC: as liquidated da*ager for such failure notwithstanding any contrary requirements set fbrth in the Interirn Agreement: Leasesor Devetropment

(il
Outside Cornpletion Date.

$7,500,000 will be due and payable on tii.e Mortgagee

(ii) Until the Phase I Improvements (as rnodified by Sections 4.4 and.5.2 above) have been constructed and Substantially Completed in accordance with and subject to the terms of the Development Agreennent and other applicableFroject Documents,an additional $7,500,000will be due and payable on each oi ttr" first (lit) through fourth (+ft) anniversariesof the Mortgagee OLltside Completion of Date (for an aggregate five (5) paymentstotaling $37,500,000)'

11
York Server3A - MSW' 719327.08-New

AF{D ANY OF ITSELF MOR.TGAGEE (ON BEHALF PERSON CLAIMING BY OR TT,{ROUGII MORTGAGEE {INCLUDING ANiY FT]TURE AGREES PERMITTED DEVELOPER AND SUCCESSOR LEASE}XOLD OWNER} THAT (I) THE AMOUNT OF ACTUAL DAMAGES TO BE STISTAINEII tsY ESDC IN (AS MOIIIFIED BY SECTIOI'{S 4.4 THE EYENT THE PHASE r MPROVEMENTS AI\D 5.2 ABOVA) HAVE NOT BEEN SUBSTANTIALLY COMPLETED ON OR PRIOR TO THE MORTGAGEE OUTSII}E COMPLETION }ATE WCIULD BE MATERIAL, REAX}ILY AIYD NOT CALCULATION OF PRECISE BUT INCAPABLE FORTI{ IN SECTION 5.3(a}" ARE ASCERTAINABLE, (II) THE AFdOUNTS SET REASONABLE IN PROPORTION TO THE PROBABLE DAMAGES LII(BLY TO tsE SUSTAINED By ESDC, 0II) MORTGAGEE HAS HA.D THE, ADYICE CIF COT.TTNSEL FOR THE OF ITS OWN SELECTION WIIO REVIEWED TI.IE PROVISION 5.3(A} IN SET FORTH IN T}TIS SECTICN PAYMENT OF THE AMOUI{TS CONNECTION WITH THE EXECUTION AND DELXVERY OF' THIS ITGREEIWENT' AT ARFTS L.ENGTH, (ID THE TERMS OF THIS AGREEMENT WERE NEGOfiATED AND (\r) THE AMOUNTS SET FORTH IN THIS SECTION s.3{n} ARE NOT A PENA.LTY Os[ PUNITTVE INTENDED TO, AND DO Ir{OT, CONSTITUTE DAMAGES FOR AFIY PURPOSES" Upon ESDC's receipt of each of the }iquidated damages payments O) required to be.made by Mortgagee pursuant to Section 53{a} }*ereof, the Terre of' the [nterim Leasesshail be extended for a period of one (1) year ending on the next anniverwy of the thencurrentMortgagee Outside Completion Date. (c) All arnotints payableto ESDC purmrantto this Secfion 5.3 shall be payable in United Sates currency, ilr a single lump sum, by' wire transfer cf irnroediately availablefunds to the account designatedat suchtime by ESDC. (d) In the event the amounts set forth in Seetion 5.3{a} above are not cor'wtitute a paid to ESDC when the same shall be due and payable, then sueh fuilure strhatrl monetary Event of Default under each of the lnterirn Lease and under the DeveloXrment Agreement,and as a consequencethereof the landlord under each of the Interim Leases, and gSOC under the Development Agreenaent, shall have atrl of the ri$ts and relrrcdi:es granted to eachof them as a result of an monetary Event of Default, including, without lirnitation, th,eright to terminatethe applicable agreement. No Offsets or Credits. The amounts payable pursuarrt to Section 5.3 5.4 aboveare separate,distinct and stand apart from any amotrnts tl*at rnay be due and payable to ESDC by Develcper or any Affiliate of Developer under any other Plo;ect Doslr-raent or otherwise, whether for the failtne to satisff the same or any difftrent criteria or requirernents- As such,Mortgagee and Developer each acknowledge and aglee that notwithstanding any provision of the Interim Leases or other Project Documents that may limit or otherwise restriot ESDC's right to recover twice for the same event or circumstances, neither Mortgagee (including its PermittedDeveloper and SuccessorLeasehold Owner) nor Developer (including any Affiliate of Developeror any Person claiming by or through Developer or zrnyAffiliate of Developer) shall be entitled to any credit or offset for amounts paid by the other party against the ar,nour$spayable

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York Server34 - MSW 719327.08-New

any of the Interim Leases or by such party under this Agreement, the Developrnent .A"greement, anyother Project Docurnent. AII.TICLE VI ALLOCATXON OF DEVELOPMENT PROJECT OBLIGATXQNS

Attached as Exhlhit__.le is a schedule, initialed by an Allocation. 6.1 authorizedrepresentativeof each of Developer and Mortgagee, allocating afflorlg the Project Site includedin the Interim Leases(the "Mortgaged Leasehsld Estate") and the remaining balance of the Project Site (the "Remainder Projeet Site") the developrnent and constrLlction obligations with respect to the Development Project set forth in the Developrnent Agreement and other ProjectDocuments, including the development and construction requirernents,setforth in Section 2.3 of the Development Agreement (collectively, the "Fx'oject Requirementsn'). ESDC agrees that it shall not permit Developer, any Affiliate of Developer or arl). successor or assign of Developer or any Affiliate of Developer to reallocate the Project Requirer:nents among the MortgagedLeasehold Estate and the Remainder Project Site without the prior written consent of Mortgagee; provided that any reallocation of Project Requirements to or aruong the parcels includedin the Mortgaged Leasehold Estateshall require Mortgagee Consent, and reallocation of ProjectRequirementsailocated to the Remainder Project Site solely among the parcels included in the Remainder Project Site shall not require ESDC to provide notise to or obtain the.approval of Mortgagee. Development Lease Allocation- Developer agreesthat in connection with 6.2 to anyrequest to ESDC for a Development Lease pursnrant Article Xlil( of the Interim Leases, Developer shall deliver to Mortgagee and ESDC a sahedule (the "Ilwelopment Schedule") detailing the Project Requirementsto be constructedas part of the proposed Development Lease. To the extent Developer elects to reallocate the Project Reqrirements as a res,ult of the Project Requirements allocated to the proposed Development. I-ease as set f,orth on the Developrnent then such reallocation shall require the approval of Mcrtgagee if and to the extent set Schedule" Developer shall in forth in Section 6.1 above. Prior to the creation of amyDevelopment X-ease, reflecting the Project any event deliver to ESDC and Mortgagee a revised Exhibit C Requilements set forth on the Development Schedule that have been allocated to the proposed Development Lease and setting forth the Froject Requirernents that remain allocated to the Mortgagee remainder of the Mortgaged Leasehold Estate and Remainder Project Site. {-trnless within thirty (30) days of receipt by shall detiver a written objection to such replacementExhibit Mortgagee and ESDC, then such replacernent Exhibit shall be conclusive and binding upon Mortgageeand Developer. rely, without any Reliance. ESDC shall be entittred to conctrr.asively 6.3 investigation, upon the trast Exhibit C delivered to ESDC in requirement of inquiry or with and subiect to the terms and conditions of this Article YI. accordance

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York Server3,4 - MSW 719327.08-New

ARTICLE REPRESE}{TATISNS 7.1 that: date hereof

VII

AND WARRANTIES

Developer ReFtesentations. Developer representsand warrants as of the

(a) Org*ntza$ion- Developer is a limited liability cornpany, and has duly organized and is validly existing and in good standing pursuantto the trawsof the State been of Delawarewith requisite power ard authority to own properties and transact the businessesin which it is now engaged. Developer is duly qualified to do businessand is in good standing in the Stateof New York. (b) Proeeedfircgs. Developer has the fulI limited liability company powerto and has taken all necessaryaegionto authorize the execution, delivery and performance -of *tir Agreement. This Agreement Ims been duly executed and delivered by, or on behalf of, and constitutesa legal, valid and binding obligation of Developer, enforceable against Developer in Developer accordancewith its terrsrsDeveloper has been asked to pay, and (c) Psryents. No triitegwl neitherhas offered to pay or paid arayillegal consideration, whether monetary or otherwise, in with the execution and delivery by ESDC of this Agreement. connection (d) Person Neither Developer nor any of its Principals No Pro*hibited is a Prohibited Personor Federal Pruhibited Ferson. 7.2 hereofthat: date Mortgaeee ReFr,ffientations. Mortgagee representsand warrants as of the

()rgcniza{ion Mortgagee is a lirnited liability eompany, and has (a) duly organized and is validly exiis*icg and in good standing pwsuant to the laws of the State been of Delawarewith requisite power M au&:ority to own properties and transact the businessesin which it is now engaged. To tlle extent the conduct of Mortgagee's busir,rcssso requires, and is in good standing in the State of'New York. is Mortgagee duly qualified to do busir,rcss (b) Praceedings. Mortgagee has the full limited triability company powerto and has taken all necessaryastion to authorize the execution, delivery and performance of ttris Agreement. This Agreement has been duly executed and delivered by, or on behalf of, Mortgagei and constitutes a legal, valid and binding obligation of Mortgagee, enforceable againitMortgagee in accordancewith its terrns subject to bankruptcy and equitable principles o1' general application. (c) Authority. Mortgagee, in its capacity as agent for itself and its and assigns participants, (i) is the legal owner and holder of all interest in the Certified Mortgage, analil; has full power, right and authority to enter into this Agreement on behalf of all itself and its assigns and participants, (iii) bV virtue of Mortgagee's execution and delivery of this Agreement,Mortgagee and its assigns and participants are bound by the terms hereof, and (iv) below on behalf of Mortgagee has the right, power and thit the Person whose signature appeuus

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York Server3A - MSW 719327.08-New

APPENDD( C Example.qf calculation of the 1,.3MGSF Calculatio.n the Thefollowingchart provides relevantinformation regardingthe parcel sizes from the MGpp:

gros-s..squaire,'foq!"ag.eF'gf-thSliindividudt:buildi'riqs arb. iTie.aggfegqte maxi'rnqm'g.qiiarb:foiara'S+:thet.wonJd,b:b rjeieitope.d.jh l(ji'p'aidi:1h:aii.the

F:-..-..--

_.=J...-....'__.*..-__-._._-.r___

gqg!piesgJg-s[eg&l:hdrvr-Q-u-e!-ssnere&eles-e-sbgqses. --

Scenarios: AIl ScenariosAssume that Site 5 is not part of the Collateral and the 1.3M GSF Requirementapplies 1. If no Developrnent Parcelshave been severedfrom the Interim Lease then the Successor LeaseholdOqrnerwill be requiredto build 1,300,000GSF. If a Developnment Leaseon Building 2 has been severedand substantial completion of a property with 380,687GSF has been achievedthen the 1.3M GSF Requirement applicable to a SuccessorLeasehold Owner shall be reducedto: 919,313 SF G Calculation: 1,300,000 GSF- 380,687 GSF(Substantially Completed):919,313 GSF 3, if a DeveloprnentLeaseon Building 2 hasbeenseveredand substantialcompletionof a property \nrith380,687GSF hasbeenachievedand then a DevelopmentLeaseon Building 3 with 343,632GSF hasbeen sev€,red transferred a Developer and to unaffiliated with Mortgageeor Successor LeaseholdOwner and not completedthen the 1.3M GSF Requirementapplicableto a Successor Leasehold Owner shall be reducedto; 780,313 GSF Calcalation: a) 1,300,000 GSF - 380,687GSF (Substantially Completed):919,313 GSF less

2.

AppendixC-l
71932?.08-New Scrver3A - MSW Yo*

b) 343,632GSF (numerator) (343,632 / GSF+ i,106,009GSF+ 824,629GSF) (denominator) : 15.1 @ercentage) lYo multiplied by 919,313 GSF : 138,904 GSFreduction Reduced Requirement: 1,300,000 GSFless380,687 GSFless 138,904 GSF: 780.409GSF

AppendixC-2
719327.08-New York Scrver3A - MSW

Exhibit B Certified Morteaee
"Certified Mortgage" shall mean,collectively, the following: l. The Original Mortgage; 2. \\at certainMortgage Spreader Agreementamorg Ay 35-37 Sixth, LLC, a New york limited iiabilitv company ("35'37 Sixth"), AY 487 Dean,LLC, aNew York limited liability company ("487 Dean"), A* 489 Dean, LLC, a New York limited liability company("489 Dean") and (iv) AyDi Interim Deveioper, LLC, a Delaware limited liability company (,,InteU!0_Dgl'elSEI" and togetier with 3S-37 Sixth, +gZ Dean and 489 Dean, collectively, the 'Msrtgap$") und Mortgagee, dated as of the date hereof, aad relating to a loan in the original principal amountof $152,821,234. 3, That certainPartial Releaseof MortgagedPremisesamoogMortgagorsand Mortgagee,datedasof the datehereof,and relating to a loan in the original principal amountof $152,821,234. 4. That certain Third Amended and RestatedLeaseholdand Fee Mortgage, Assignment of Leasesand Rents, Security Agreementand Financing Staternent among Mortgagors and Mortgagee, datedas of the datehereof. 5' That certai:rMortgage SpreaderAgreementamong Mortgagors and Mortgagee, dated as of the date hereof, and relating to a loan in the original principal ?mountof $37,362,050. 3, That certaiaPartial Releaseof MortgagedPrernises amongMortgagorsand Mortgagee,datedasof the datehereof,and relating to a loan in the original principal amountof $37,362,050. 4. That certain SecondAmended aad RestatedSubordinate Leaseholdand Fee Mortgage, Assignmentof Leasesand Rents, Security Agreement and Financing Statementamong Mortgagors and Mortgagee,dated as ofthe datehereof.

uS\DANIENOV525135.1

E)(HIBIT C ProjeetRequirements AllocationSchedule
ProjectRequirement
No lessthan 1,500,000 of gsf Improvementsoo the PhaseI Property (excludine the Arena) Maximum gsf of Improvements on Proiect Siie (excludine the Arena) No less thaa2,25AProject Site Affordable Housing Units Mortgaged LeaseholdEstate Remainder Project Site

No lessthan 1,300,000 (lessany No lessthan 200,000gsf (lessaay gsf amouutsover 200,000sf constnrcted amountsover 1,300,000 gsf on Site 5) constuoted on tle Arena Block)

Maximum 3,406,342 gsf
No lessthan 945 Project Site A-ffordable Housing Units (includes minimum of 300 units oa tle Arena Block aud 30% ofthe residential units ou the Arena Block)

Maximum gsf 3,718,658
1,305Project Site Affordable Housing Units lessany ProjectSite Affordablo Housing Units constructed the Mortgaged on LeaseholdEstate. Arena

Arena
Open Space

Obligationsfor eachDevelopment Parcelshall be pursuantto the Design Guidelines Urban Room (aspart of Building B1)

Obligationsfor eachDevelopment Parcel shallbe pwsuant to tie Design Guidelines

UrbanRoom UperadedYard Platform SubwavEntrance CarltonAveaue Bridse

Uperaded Yard Platform Subway Entrance Carlton AvenueBridee

( Arena Parking l, I 00 non-exclusive ArenaParklngr spaces)
School Intergenerational Community Center Health Care Clinic School lntergenerational Community Ceuter Health Care Clinic

Acknowledged:

Mortgagee

Developer

'

to Subject (a) thetermsof the Are.na ParkingEasement, (b) thatneitherMortgagee any Successor and nor Leasehold Owner shallhaveanyobligationto fund the costof creating operating temporary and the ArenaParking,

719327.08-New York Ssver 3A,- MSW

Exhibit C-1

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