NEWYORKSTATEURBANDEVELOPMENTCORPORATION

D/B/AEMPIRESTATEDEVELOPMENTCORPORATION
633 Third Avenue
New York NY 10017
October5,2010

Brootllrn Arena Infrastructure and TransportationImprovementFund' LLC

299 Brroadway,Suite 1220
New Yor\ NY 10007
Atteditrn. GeorgeOlsen

AYDC Regional DevelopmentCompany,LLC

c/o Forest City Ratner Conpanies,LLc
I Metotech Center
NewYork, NY 11201

Re: RecognitionAereement

I-adies and Gentlemen:

LLC ("Lgndgt")
Brooklyl Arena Infrastructure and TransportationIryrovement Fund;
advised the New York
and AYDC Regional Development Company, tLC ("Bor!gwer") have
Development Corporation ("ESDC")
State Urban Development Corporation Oiblu Empite State
(the 'I4ea-Agqement")
that (a) Lender and Borrower intend to execute a loan agreement
in the principal amount of up to Two Hurrdred Forty Nine
wkreby L.enderwill make a loan
Loan will be securedby a
Millfun ($249,000,000)Dollars to Bonower; (b) it is intendedthat the
in several DevelopmentLeases
seriesofmortgages encumberingthe Borrower's leaseholdestate
4' 2010' by
(as wch term is?e6ned in that certainDevelopmentAgreemtn! datedas of March
Agreement")); and (c)
and between ESDC an certain affrliates of Borrower (the "Developme*
must provide Lender with
in order to induce Lender to enter into the Loan Agreement,Elorrower
deliver a Recognition Agreement
an undertaking by ESDC to execute, acknowledge and
Agreement"). All
zubstdially in the form of Exhibit A attachedhereto (eactL a "RecoPpition
the meaningsgiven to
cap*ahzeAtermsused but oot otftir*ise defined in this letter shall have
suchterms in the DevelopmentAgreement
Agreement
ESDC confirms that in the event Borrower and Lender enter into the Loan
the Development Agreement,
and srbject to the satisfaction of all terms and conditions of
to (a) the creationand
appkable Interim Leaseand any other Project Documentationapplicable
will,. upon request by
seyenarrceof Development Leales, and (b) certified Mortgages, ESDC
of such Recognition
Bormwer and zubject to satisfactory completion of the rerraining terms
Agreerent, execute,acknowledgeand deliver a RecognitionAgreement.
alter any
Nothing in this letter shall, or shall be deemedto, modiff, amendor otherwise
any Development Leases'
term, condition or obligation set forth in the DevelopmentAgreement,
other Project Documentation. The terms of this letter are solely for
any Iuterim tear"s
";"*y have any rights with respectto, or
the benefit of Lender and Borrower, and no third party shall
and Lender'srights
the righ to rely upon, the terms of this letter. This letter and the Borrower
Brooklyn Arena Infrastrucfure and Transportation Improvement Fund, LLC
AYDC Regional Development Company, LLC
Page2

under this letter may not be assigned in whole or in part by either Borrower or Lender without
the prior written consent of ESDC, which consent shall be in ESDC's sole discretion. Any
assignment in violation of this letter shall be void ab initio.

This letter may be executed in any number of counterparls (rvhether facsimile. original,
portable document format or otherwise). each of rvhich when executed and delivered shall be
deemed to be an original. and such counterparts together shall constitute one and the same letter.
This letter shall be governed by. construed and enforced in accordancewith the lar,l'sof the State
ofNerv York, without reference to any conflicts of laws provisions thereof and u.'ithout the aid of
any rule, canon or custom requiring construction against the draftsman.

***

766509.04-New York Sewer 34 - MSW

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 Arenainfrastrlcture andTransportationImprovementl;und, LLC
Br:ookl1"n
AYDC RegionalDer,'elopment Company,l,LC
Page2

If you are in agreementlvith the foregoing,pieasecountersignthis leffer in the space

providedbelowandreturna fully executedcopvto our attcntion.

Very iruly yours,

NEW YOP*KS1IATEURBAN
DEVELOPMENT CORFORATIOND/BIA
EMPIRE STAT'E DEVELOPME}IT
CORPORATION

By:
Name:
Ti +I^.

,\CCHPTHD AND AGRESD

gNRY
THISS OF OCTOBER, 2O1O

BROOKLYN ARtli\iA
INFRASTRUCTURE AND
TRANSPORTATION IMPROVEMENT

N '&,'tvrZ8*1' CIaslrd}
l4t4{h{6 LL
AYDC RtrGiONAL DEVELOPMENT
COMPANY,LLC

Name: tna{
'1-:

Skadden,Arps, Slate,Meagher& Flom, LLP Fned,Frank,I{arris, Shriver& JasobsonLt,P

FourTimesSquare OneNew York Plaza
New York,1.{Y10036 NervYork, NY 10004
Atteniion: Neil L. Rock,Esq. Attention:StephenLefkowitz, Esq.

D'Agostino, Levine,Landesman& LedennanLL.P

345 Sev:enthAvenu.e,23d Floor
New Yorli, NY 10001
Attention: Michael J. Levine, Esq.

Yoik Server3,{ - MSW

766539.04-New
 EXHIBIT A

Form of RecognitionAgreement
 SASM&F COMMENTS 1O/O5I2O1O

RECOGNITIONAGREEMENT

AMONG

BROOKTYN ARENA INFRASTRUCTUREAND TRANSPORTATIONIMPROVEMENT

FIIND, LLC,
As Mortgagee

AND

AYDC REGIONAL DEVELOPMENT COMPANY, LLC,

As Developer

AND

NEW YORK STATE URBAN DEVELOPMENT CORPORATIOND/B/A EMPIRE STATE

DEVELOPMENT CORPORATION,
As ESDC

County: Kings
Section:
Block:
Lot:
Premises:

Dated:asof , 201-

Recordandreturnby mail to:

Skadden,Arps, Slate,Meagher& Flom LLP

Four TimesSquare
New York, New York 10036
Attention:Neil L. Rock,Esq.

York Sener3A - MSW

766510.06-New
 R]DCOGNITION AGREEMENT

THIS RECOGI\IITION AGREEMENT (this "Agreement"), datedthis - day

of _,201_, is madeby and amongBROOKLYN ARENA INFRASTRUCTURE AND
TRANSPORTATION IMPROVEMENT FUND, LLC, a New York limited liability company,
having an addressat299 Bmadway,Suite 1220,New York, New York 10007(in suchcapacity,
"Mortgagee"), AYI)C RBGIONAL DEVELOPMENT COMPANY, LLC, a Delaware
limited liability corryany, ha*'ing an addressat clo Forest City Ratner Companies,LLC, 1
MetroTech Center, Brootfirn, New York 11201 (togetherwith its successorsand permitted
assigns, "Developer")" d I\[EW YORK STATE URBAN DEVELOPMENT
CORPORATION DfBIA TWIPIRE STATE DEVELOPMENT CORPORATION, A
corporategovernmentalagencyof the Stateof New York constitutinga political subdivisionand
public benefit corporatbn, haoing an office at 633 Third Avenue,New York, New York 10017
(togetherwith its successors d assigns,"ESDC").

WI T NE S S E T H:

WIIEREA$ on July 18, 2006, ESDC adoptedthat certainGeneralProject Plan,

and on December8, 2{X}6,d July 23, 2009, ESDC adoptedthose certain Modified General
Project Plans(the 'l![GPP'] for the Atlantic Yards Land Use Improvementand Civic Project
(the "DevelopmentProie{t}, eachin accordancewith the New York StateUrban Development
CorporationAct;

WHEREAS, the DevelopmentProject comprisesthe constructionof a major

mixed--usedevelopmentinthe Atlantic Terminalareaof the Boroughof Brooklyn, City and State
ofNew York, including apofessional sportsvenue("Arena") to serveasthe homevenuefor the
National BasketballAssociationprofessionalbasketballteamcurrentlyknown as the New Jersey
Nets and as a venue for ofher entertainment,cultural, sporting and civic events,and other mixed
usebuildings(all zuchbuildingsother thanthe Arena,the "Project Buildings");

WIIEREAS th project site (the "Project Site") occupiesan approximately22-

acre areagenerally boundedby Flatbushand 4'n Avenues to the West, Vanderbilt Avenue to the
East,Atlantic Avenue to the Nortlr, and Dean and Pacific Streetsto the South and includesthe
approximately9-acre(including the land underthe 6s and CarltonAvenueBridges)below-grade
Long Island Rail Road \fmd€rbift StorageYard;

WIIEREAS, in order to effectuatethe intent of the MGPP, ESDC and Affrliates

of Developerhave enteredinto that certainDevelopmentAgteementdatedMarch 4, 2010 (the
"DevelopmentAgreement"), and that certainLand Acquisition FundingPropertyManagement
andRelocationAgreemeff datedasof September18, 2009 (the "LAFPMRA");

WHEREAS Mortgageeis the lawful .owner and holder of the Mortgage (as
hereinafterdefined);

WHERBAS, ESDC and Developerare partiesto the Agreementof Development

Leaset____J dated the date hereof (the "Lease") pursuantto which ESDC has demisedto

76651O-06-NewYork Sewer 3,{ - MSIII

Developer'that certain portion of the Project Site more particularly described on Exhibit A
attached hereto;

WHEREAS, pursuant to that certain lConsolidated and Modified] Leasehold

Mortgage, Security Agreement and Fixture Filing, dated as of the date hereof; between
Developer and Mortgagee (the "Mortgage"), which Mortgage has been (or simultaneously
herewittr, will be) recorded in the City Register, Mortgagee and Developer have encumbered (or
simuftaneously herewith, will encumber) Developer's leasehold estateunder the Lease in favor of
Mortgagee; and

WHEREAS, ESDC has agreed to recognize and grant certain rights to Mortgagee
with respect to the Lease and any New Lease, in each case, as more particularly described in this
Agreement.

NOW, THEREFORE, in consideration of the foregoing premises, 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
as follows:

ARTICLE I

DEFINITIONS: CONSTRUCTION OF TERMS

1.1 Definitions. Unless otherwise indicated in this Agreement, all capitalized

terms used but not otherwise defined in the body of this Agreement shall have the meaning given
to such terms in Appendix A attachedhereto and made a part hereof

1.2 Rules of Construction. The following rules of construction shall be

applicable to this Agreement, unless expressly provided otherwise or the context otherwise
requires:

(u) The terms "hereby", "hereof', "hereto", "herein", t'hereundert' and

any similar terms shall refer to this Agreement, and "hereafter" shall mean after, and "heretofore"
shall mean before, the date of this Agreement.

(b) Words of the masculine,feminine or neuter gender shall mean and

include the correlative words of the other genders and 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

construed as if followed by the phrase "without being limited to".

(d) Whenever a party hereto "shall" perform (or causeto be performed)

any obligations hereunder, such performance shall, subject to Section 9.10 below, be at suctr
parfy's sole cost and expense,unless otherwise expressly provided in this Agreement.

(e) Except as otherwise expressly provided herein, any reference in

this Agreement to any document, instrument, certificate or agreementshall mean such document,

766510.0GNew York Seryer 3,A - MSW

instrument, certificate or agreement as amended, restated, supplemented or otherwise modified
from time to time in accordancewith the terms thereof.

i.3 Captions. The captions under the article and section numbers are for
convenience urrd ,"f.r"rrG only and in noway define, limit or describe the scope or intent of this
Agreement nor in any way affect the interpretation or meaning of this Agreement-

ARTICLE II

RECOGNITION OF MORTGAGEE: ESTOPPEL

2.I Mortgage Notices.

(a) Mortgagee has, on or prior to the date of this Agreement, delivered

to ESDC (i) the notice required to be given by Mortgagee pursuant to Section 28.2(a) of the
,'RM Notice"), and (ii) a certified copy of the Mortgage, as recorded (or to be
Lease (the
recorded) with the City Register (the "Certified Mortgage"). Mortgagee covenants and agrees
to deliver to ESDC an updated RM Notice and Certified Mortgage each time the Certified
Mortgage is, subject to the requirements of the Lease, if any, amended, restated, zupplemented or
otherwise modified from time to time. A true and complete copy of (x) the RM Notice is
attachedas $h[!lE,, and (y) the Certifred Mortgage is attached as Exhibit C-

(b) If (i) in connection with the Loan Agreement, Mortgagee and

Developer execute an additional subordinate or pari passu mortgage encumbering Developer's
Mortgaged Leasehold Estate in favor of Mortgagee and (ii) Mortgagee and Borrower comply in
all respects with and satisfy all requirements of the Lease and any other applicable Project
Document with respect to such additional subordinate or pari pasy mortgage, then such
additional subordinate or pari passu mortgage also shall be deemed a "Certified Mortgage" for
purposes of this Agreement, without the need for any further action by Mortgagee, ESDC or
b"r"lop"t. Thereafter, all references in this Agreement to a "Certified Mortgage" shall be
deemedto include such additional subordinate or pari passu Certlfre'dMortgage.

Z.Z Recognition. ESDC (a) hereby acknowledges receipt of the RM Notice

and Certified Mortgage, and (b) based on the information set forth in the RM Notice and delivery
of the Certified Mortgage, hereby confrms that, notwithstanding tlat Mortgagee is not a
"T,ending Institution" as such term is defined in the Lease, so long as Mortgagee strictly complies
with the terms. conditions and covenants set forth in this Agreement, (i) Mortgagee shall be
deemed to be a "Lending Institution" for purposes of the Lease; plovidgd, however, that
successors,assigns and participants of Mortgagee shall not have the benefit of the recognition
provided in this-Seqlig!22lbx! and shall be required to independently satisfu the definitional
iequirements set forth in the Lease, and (ii) the Certified Mortgage is a "Recognized Mortgage"
u"O liiq subject to the terms of Section 2.2(bXi), Mortgagee is a "Recognized Mortgagee" within
the meaning of the Lease.

2.3 Estoppel. Mortgagee does hereby certifii to ESDC, with the knowledge
that such certification will be relied upon by ESDC, the following:

7665 10.06-New York Sewer 3.A - MSW

 (a) The Certified Mortgage is in full force and effect as of the date
hereof.

(b) The rnaximum principal balance of the loan. secured by the

is
CertifiedMortgage I l.

(c) The stated maturify date for the loan secwed by the Certified
Mortgage (after giving effect to all extension options in favor of Developer and its Affiliates
thereunder, if any) is the fifth anniversary of the date of the final advance of loan funds, subject
to a forbearance period during which Mortgagee shall forbear from exercisitg all remedies
(whether at law, in equity, by contract or otherwise) for failure to repay the loan for a period of
two (2) years from such maturity date (the "Forebearance Period")'

(d) To Mortgagee's knowledge, as of the date of this Agreement, no

"Event of Default" (as defined in the Certified 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

3.1 Second Takine Propefiies - Upqraded Yard Condition. Anything in the

LAFPMRA or any other Project Document to the contrary notwithstanding, Mortgagee and
Developer each acknowledge and agree that until (a) construction of the Upgraded Yard
cofitmences in accordancewith and subject to the terms of the Yard Relocation and Construction
Agreement and (b) the conditions enumerated in Sections 3.1(bxt and 3.1(b)(ii) of the
Development Agreement have been satisfied, ESDC shall have no obligation to Mortgagee, any
Person claiming by or through Mortgagee (inctruding any Successor Leasehold Owner), or to
Developer, any Affiliate of Developer or any Person claming by or tlrough Developer or any
Affiliate of Developer to commence any condenrration or other taking actions with respect to all
or any portion of the Second Taking Properties.

3.2 Second Taking Properties - Documentation Condition. ESDC shall have

no obligation to Mortgagee, any Person claiming by or through Mortgagee (including any
SuccessorLeasehold Owner), or to Developer, any Affiliate of Developer or anyPerson claming
by or through Developer or any Affrliate of Developerto commence any condemnation, eminent
domain proceedings 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, easements,opinions of counsel, etc") deemed reasonably necessaryby ESDC for the
implementation, development or construction ofthe Development Project on all or any portion of
the Second Taking Properties or MTA Air Space Parcels is, in each case, fully executed and
effective or fully executed and in escrow subject only to release conditions that are reasonably
satisfactory to ESDC, and otherwise satisfy in ESDC's reasonable opinion the requirements of
the MGPP, MEC, the Development Agreement" all applicable Requirements, the DOB
Agreement and Design Guidelines, in each case,as modifred by this Agreement.

76651 0.06-New York Seruer 34 - MSW

 ARTICLE IV

THE LEASE: DEVELOPMENT AGREEMENT; UNDERTAKINGS

ESDC agrees that, notwithstanding the terms of the Lease and Development
Agreement, solely as between Mortgagee and any Successor Leasehold Owner on the one hand
and ESDC on the other hand, the following principles shall govern certain aspects of the
relationship of ESDC on the one hand and Mortgagee and any Successor Leasehold Owner on
the other hand with respect to the Lease or any New Leases; it being agreed that neither
Developer nor Developer's Affrliates nor any successor or assign of Developer (other than
Mortgagee or any Successor Leasehold Owner succeeding to tenant's rights under the Lease or
acquiring a New Lease, in each case by reason of a Foreclosure Event) shall have the benefit of
the principles articulated in this Article IV.

4.1 Term: Undertaking. Subject to the conditions set forth in this Article IV,
the Term of the Lease shall be extended, as ntressary, and on a cumulative basis, for such period
of time as shall be equal to the time necessary for Mortgagee, following the occurrence and
continuation of an Event of Default (as defined in the Certified Mortgage), to foreclose on the
Certified Mortgage (or otherwise acquire the leasehold estate under the Lease) and for a
Successor Leasehold Owner to make satisfactory arrangements with a Permitted Developer to
perform Developer's Obligations and exercise Developer's rights under the Lease or any New
Lease; provided that in each case Mortgagee is acting diligently, in good faith and in a
commercially reasonable manner to cause the satisfaction of such conditions. If upon the
expiration or termination of the Term (as stated in the Lease and without reference to this Section
4J) an action to foreclose on the Certffied Mortgage is pending, then during the extension of the
Term afforded by this Section 4.1 (A) Developer shall have no rights (but shall retain all of the
Developer's Obligations) under the Lease, and (B) until the occurrence of the Foreclosure Event,
Mortgagee shall have no rights or obligations under the Lease; plevrdgd, in all cases that the
extensions afforded by this Section 4.1 shall in no event extend the Term of the Lease, for a
period greater than ninety-nine (99) years following the Project Effective Date.

4.2 Disbursement Procedures. The written consent of Mortgagee shall be

required before ESDC and Developer agree to the disbursement of any funds by the Depositary
other than in accordancewith the terms and subject to the conditions set forth in the Lease.

. 4.3 Landlord Bankruptcy Rights. ?rior to ESDC exercising the right of first
refusal granted to it under Section 11.6(c) of the Lease, ESDC shall provide written notice of
such exercise to Mortgagee, and such exercise shall be subject to the rights of Mortgagee, if any,
set forth in Article XXVil of the Lease.

4.4 Excluded Oblieations. In addition to Tenant-Specific Defaults, which

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 the Lease by reason of any of the following):

(a) Development and construction of the Subway Entrance;

766510.06-NewYork Sewer 3,A - MSW

 o) Development and construction of the Carlton Avenue Bridge;

(c) Development and construction of the Additional Affordable

Housing Units;

(d) Funding the Existing Parks Investment;

(e) Development and construction of the Arena;

(0 Development and construction of the Platform;

(e) Development and construction of the Upgraded Yard;

(h) Development and construction of Aftordable Housing units on

Site 5; and

(r) Any other work, activity or obligation under the Development

on the Mortgaged Leasehold
Agreement or anY other project Document that is not (i) located
Work attached as Exhibit E
Estate and (ii) set forth in itre description of the Development
attached to the Lease.

Affordable Housing. SuccessorLeaseholdowners may, in connection

4.5
with the of P-lect Site Aflordable Housing Units, apply for financing then
"o*t*"tioni developlrs of Affordable Housing units; provided that the lack of such
;;;ll, owners to nlofde
"""ir"ur"
financing shall not diminish any obligations of such SuccessorLeasehold
project Site Aftordable Housing Units in accordancewith the requirementsof any Project
Documentandthis Agreement.

4.6
amend or modify the
consentof Mortgag"" *t utt t" t"quired before ESDC and Developer
to the Lease-
descriptionof the Gvebpment Work as set forth in Exhibit E attached

4.7 Retentionof Advisory Professionals'

(a) Upon the occurrenceof any event specifiedin the definition of

promptly give written
specially serviced roan 1a "section a.7@) Event"), Mortgageeshall
detail such Section
notice thereof to ESDC (which written ,roii"" shall specifi in reasonable
;'S""tion 4.7(a) Notice", and the date of the Sectiona'7@) Notice' the
;.r@);;""0 1tf,"
,,section a.7@) Notice Date"). In the event Mortgageeshall fail to give the section a'7@)
prior written notice to
Notice to ESDC,then ESDC shall havethe right upon 10 BusinessDays
to record,without the
Mortgagee,to terminatethis Agreement(andiottowing suchtermination,
instrument with the City Register
need for any further action by Developeror Mortgages,an
notice (the "Section
evidencingsuchtermination);provided,that if Mortgageedeliverswritten
4.7(a) Cure Notic""; to eso-*itnin the foregoing 10-BusinessDay period (time being of the
had the appropriate
essence)disclosingttre informationthat would hurr. b".tt providedto ESDC
shall no longer have the right
Section4.7(a)Notice beendeliveredby Mortgagee,then (i) ESDC
aJ@) CureNotice,
to terminatethis Agreementwith respectto the iiems disclosedin the Section
in such Section4'7(a)
and (ii) the Sectiona.7@)Notice Date with respectto the items disclosed

766510.06-New York Sewer 3,4 - MSW

Cure Notice shall be demed, for all purposes, to be the date that the event or events discnosed in
the Section a.7@) Cure Notice occurred (or if such date is not readily determinable, on tlrc date
determined by ESDC acting in its reasonable discretion).

(b) Within 90 days of the Section a.7@) Notice Date, Mortgagee shnXl,
at its sole cost and expense, retain one or more of the restructuring advisory orga*izatfons
identffied on Exhibit D attached hereto, an affrliate thereof or such other restructuring advisoqy
organization or organizations as shall be acceptable to ESDC in its reasonable discretion (the
"Advimry Professionals")- The Advisory Professionals shall be retained by Mortgagee to assist
Mortgagee with resolving the Section a.7@) Event. Mortgagee shall cooperate in all reaeorable
respects with the Advisory Professionals in resolving the Section a-7@) Event. If reqtrested hy
ESDC, Mortgagee shall keep ESDC reasonably apprised of the status of discussions anrc!astions
taken by Mortgagee (and recommended by the Advisory Professbrnls) with respect to resoh$ion
ofthe Section a.7@) Everrt.

4.8 Sale of Certified Mortgaee: PurchaserOption.

(a) In the event Mortgagee is, for any reason or no reason, umble or
unwilling to resolve the Section a.7@) Event on or before the second anniversary of the $ectbn
a.7@) Notice Date (such second anniversary, the "Section 4.8(a) I)ate"), then commeneing on
the SecJion a.8(a) Date Mortgagee shall market for sale Mortgagee's entire right, title and intsrest
in the indebtedness secured by the Certified Mortgage (the "Section 4.8(a) SaIe") for sale to a
third party that is not an Affiliate of Mortgagee, which independetrly satisfies the definitbn of
"Lending Institution" set forth in the Lease and otherwise satisfres all other requirementsn if any,
set forth in the Lease or any other applicable Project Document. Mortgagee shall, at its sole cost
and erpense, retain a third party marketing frrm of national standing with experience in large
loan sales to sophisticated buyers and sellers (such as Eastdil Secure{ LLC) (the "tr oan Emker")
to assist Mortgagee in effectuating the Section 4.8(a) Sale. Subject to the terms of this S@tbn
4.8(d. the terms and conditions (including representations, warranties and indernnities" if anlr)
for the Section a.8(a) Sale shall be established by Mortgagee (after consultation with tlle Loan
Broker) in its reasonable discretion. If requested in writing" Mortgagee shall keep ESDC
reasonably apprised of the Section 4.8(a) Sale process (and shall rntiff ESDC in writing upon
the consummation ofthe Section 4.8(a) Sale).

(b) Commencing on the Section a.S(a) Date and subject to the terrm of
Section 4.8(d) below, until the earlier of (i) Mortgagee's consumrnation of the Section 4.8(a) SaIe,
(ii) the resolution (whether by settlement or otherwise) of all Section a.7@) Events then
continuing (as evidenced by a written certification delivered by an officer of Mortgagee and
Devebper having direct knowledge of the underlying facts) or (iii) the consummation of a sale
pursuant to the Section 4.8(b) Option, ESDC or its designee (lrereinafter the "Section 4.8
Purchaser") shall have the right at any time to purchase (the "Section 4.8{b) Option")
Mortgagee's entire right, title and interest in the indebtedness secured by the Certified Mortgage
for an amount equal to the then current Fair Market Value of the Mortgaged Leasehold Estate.
The Section 4.8(b) Option shall be exercisable by written notice delivered by a Section 4.8
Purshaser to Mortgagee (which notice may be revoked at any time prior to the consumrnatiCIn of
the conveyance of . such indebtedness by written notice to fofortgagee). Closing of' the
conveyance under the Section 4.8(b) Option shall occur within 90 days of the date written rctice

766510-O6-New Yort Ssver3A - MSW

of exercise is delivered to Mortgagee; provided that if Fair Market Value of the Mortgaged
LeasehoH Estate has not been established by zuch 90th day, the closing shaltr occur within 30
days foXbwing the establishment of the Fair Market Value of the Mortgaged Leasehold Estate-
If the Soction 4.8(b) Option is exercised in aceordance with this Section 4.8{b). then Mortgagee
shall convey Mortgagee's entire righ! title and interest in the indebtedress secured by the
Certiftd Mortgagee to the Sectitm 4-8 Purchaser on such terms ad corditions (inchrding
re"presedations, warranties and indenmities) as are then prevailing in tle New York City mroket
for lage loan sales between sophisticated buyers and sellers. Failure of Mortgagee to
consurnmate the conveyance of Mortgagee's entire interest in the idebtedrress secured by the
Certified Mortgage in accordance with this Section 4.8O). which is due solely to the acts or
oulissinns of Mortgagee, shall allow ESDC to, at its election, terminate this egroement follawing
written notice to Mortgagee (and following such terminatio4 to record, without th need for any
furt}m action by Developer or Mortgagee, an instrument with the Cfu Regis!tr evidencing such
ternrinatim).

(c) For purposes of this Agreement, "Fair Market Value of &e

I\,Iortgaged Leasehold Estate" shall be deternnined in the following nrarmer: simultaneously
with tb delivery of notice exercising the Sectbn 4-8O) Option, tlre Section 4-8 Purchaser shall
submit fio Mortgagee its determination of ttrre Fair Mmket Value of tlp lMortgaged feasehoH
Estate rmd the basis for such determination- h{odgagee shall have 20 days in which to accE}t or
dispute srch determination of the Fair Market Value of the Mortgaged l-easehH Estate" exd if
not disprted in writing within such period, zuch Fair Market Value of tb Mortgaged tearebld
Estate shall be deemed accepted by Mortgagee. If Mortgagee disputes th Sectbn 4"8
Purchser's determination of Fair Market Value of the Mortgaged I"easebond Estate, then
simukeneously with delivery Mortgage's written notice of disagreennen! Ivlortgagee shall infurm
the Section 4.8 Purchaser of Mortgagee's determinatbn of t}re Feir Ma*€t Vafue of, tbe
Mortgagod Leasehold Estate and the basis for zuch determination. Tlrumfter" IUortgagee and
the Swtirrn 4.8 Purchaser shall meet to attenrpt to agree on ttre Fair hdarket Vafue of'rk
Mortgaged Leasehold Estdte, and it within 20 days after such meeting" the said two parties,shall
be umble to agree upon the valuatiorq then tlrey shall jointly select an rygrraisa who shaltrbe a
conryetent and impartial appraiser satisfying the requirements set forth in this Section 4.&{c}.
Witlin aperiod of 30 days after the apipoinmentn such appraiser shall choose eitlpr Mortgagee's
or the Section 4.8 Purchaser's deterrrination of,' the Fair Market. Vahre of' the Mortgaged
LeasehoH Estate, such choice being final and decisive. In the event Mortgagee and the Section
4.8 Purchaser are unable to agree upon the appointment ofthe appraiser wittrin frve days after tlle
expiration of the foregoing 20-day period, either Mortgagee or the Section 4.8 Purchaser shatrl
have the right to apply to the Suprerne Court of Kings County for the appointment of, an
apprafu,ersatisfying the requirements set forth in this Section 4.8(c). and the other shall not raise
any question as to the court's full power and jurisdiction to entertain the application and make the
aprpointnrent. Any appraiser selected or aprpointed pursrant to this Section 4-8(c) shall be a
menob€r of the American Institute of,Real Estate Appraisers (or a successor organization), shall
be a real estate appraiser, and, to the extent such expertise is available" shall be experienced in
the appraisal of comparable cbmmercial real estate, but in any event shaltr have been doing
business as a real estate appraiser-in New York City for a period of at least ten (X0) years before
the dde of such appointment. AII appraisers chosen or appointed pursuant to ttris Section 4.E(c)
shall be sworn fairly and impartially to perform their duties as zuch aprpraiser. Each of
Mortgagee and the Section 4.8 Purchaser shall equally share the fees and e4penses of the

7665l$-O6-lilew York Sewer 3A - MSW

appraiser, if appointed. In determiniog th" Fair Market Value oftb Mortgaged teasehold Estate,
such determination shall include appropriate and reasonable adjusrrnents for all hrrdens, costs
and expenses borne by the tenant under the Lease, the current tenmfs proposed use of the
Mortgaged Leasehold Estate, and the antfoipated cost of fuarrcing the denelopment of the
Mortgaged kasehold Estate in accordarrce with the rquirements of the Itrse and othr
applicable Project Documents.

(d) The terms of Section 4.8(a) notcrithanding, the Saction 4-8(b)

Option shall not be exercisable by a Secticn 4-8 Purchasm fiom and pfter the date Mortgagee
notifies ESDC in writing of the of any foreebsure proceeding wirh respect to the
Certified Mortgage commenced in accordance with Sectbn 13 of tk New York State Real
Property Actions Proceedings Law (or any successor statu,te thereto); provided tbt Mortgagee,
at all times, uses good faith and diligent efforts in pur*ring snch foreclosme proceeding to
conclusion- Mortgagee shall (i) noti$ ESDC in writing when any zuch forecbsure proceeding
has been commenced with respect to tre Certified Mortgagq, md (O ifrequested by ESDC" shall
keep ESDC reasonably apprised (inctuding, in writing) as to fu stdus of,, and devebpments in,
any such foreclozure proceeding. In th event ESDC deterrnines that Mortgagee has not usd (or
is not using) good ftith and diligerf efforts in pwsuing such forrclosrre proceding ESDC shall
give Mortgagee written notice of surchdetermination, which written notice shall specify the basis
for such determination. In the event th basis for ESDCs &termination are mt rectifred to
ESDC's reasonable satisfaction \i.ithin 30 days following the date of the qnitten notice to
Moitgagee, then thereafter the Section a-8(a) Option stmll be exercisabtre btrr a Section 4-8
Purchaser.

ARTICLE V

TIJOI}II}ATED DAMAGEST

ESDC agrees that notqrithstanding the ternx of the I-ease and Development
Agreement, solely as between Mortgagee ard any Successor leasehold Owns on tbe one hand
and ESDC on the other hand the following principles shaltr govern the relatbnship, from and
after Mortgagee's commencement of foreclosure proceedings with respect to th Certified
Mortgage, of Mortgagee and any Su:cessor lcasehold Owner on the one hand ard ESDC on the
other hand with respect to the liquidated darnages described in Section 5.3 bebrv in lieu of the
liquidated damages that are payable to ESDC pursuant tCI the terms of tb Lease and
Development Agreement; it being agreed that neither Devekrper nor Developefs
"Affliates nor
any successor or assign of Developer (other than Mortguge" ro any Successor l-easehold Owner
succeeding to Mortgagee's rights, in each case following a Foreclosure Event) shall have the
benefit of the principles articulated in this Article V.

5.I Par,rment Timeline Reset. As descriH" ad subject to the t€,Tms,

conditions and qualifications set fortlr, in Section 4.1 above; the Term of each tr ease or any New
Lease shall be extended, as necessary, and on a cumulative hsis, so as to alXow sufficient time
following the occurrence and continuation of an Event of, Defrult (as defined in the Certified

' This Article is applicableonly to DeveloprnentLeaseson Arena Block {i-e." B-1, B-l2,V3 and B4)-

10
7665 lO,OGNew York Smrcr 3,A - MSW
Mortgage) for Mortgagee to foreclose on the Certified Mortgage (or otherxrise acquire tenant's
interest under the Lease pursuarfi to a Foreclosure Event) and for a Sucesmr l"casehold Owner
to make satisfactory arrangements with a Permitted Developer to perbrnn Developer's
Obligations and exercise Developer's rights rmder the Icase or zrnyNew Leam; provided that in
each case Mortgagee is acting diligently, in good faith and in a commerciatry reamnable marmer
to cause the occurrence of such conditiore- Commencing on tlre date {4 hilortgagee or a
Successor L.easehold Owner acquires Devebper''s interest as tenant tmder the Leam or anyNew
Lease and makes satisfrctory arrangements with a Permitted Developer" and, (4 to the extent
required by tle Lease or any New I.easeq ESDC approves such Permitted Developer (the "Reset
Date"), the Successor Leasehotd Ovrrrr shall have twelve (12) pars (as the same may be
extended pursuant to Section 4-1 hereof, tbe "Mortgagee Outside Compledion Date") in which
to construct or cause the constirrction and Substantbl Corpletion (as such term fu defrred in the
Lease) of the Development \I{ork in accordrue with and subject to fu t€rms of the
Development Agreement and other applicable Project Documentg and th term of,the Lease or
any New Lease shall, as necessary, be extended to the Mortgagee Outside Coryletion Date.
Each of Mortgagee, Permitted Developer and Successor I-easehcld Owner, as rylkable, shall, if
requested by ESDC, execute and deliver a lef,ter confirming the Reset Date-

5.2 Phase I Iqnovernent*

(a) If and to the extent Site 5 is subject to m agrcsmnt of lease

(whether interim, developmeat or otherwise) or is otherwise included in a Floject [.ease between
ESDC and Developer (or an Afiliate of Developer) that is, in each caseu emrmbered by a
Recognized Mortgage for the benefit of Mortgagee or its Affiliate" then the Iiquidated rlamages
under Section 5.3 shall be due if (f Substmial C-oryletion (as zuch term is &fimsd in the Lease)
of the Development Work is mt achieved in accordance with ad subjd frr th tenns of the
Development Agreement, any otber applicable Project Document ad ths PrCIjM Leases, and (ii)
as part of the Phase I hprovements, Suhtantial Coryletion (as zuch terrn is defined in the
Development of Pmject Buititings having a minimum of Orp MiruicmFive Hundred
Thousand (1,500,000) gross square feet {exclusive of the square footage of the Arena} on the
Arena Block and Site 5 (the "I.sM GSF Xlequirement") is not achieved in accordance with the
terms of any applicable Project Document.

O) If and to tlrc extent Site 5 is not subject to an agrwrent of lease

(whether interirq development or otherwise) between ESDC and Developer (or an Affiliate of
Developer) or is not otherwise irrcluded in a Project Lease between ESDC anrl Developer (or an
Affrliate of Developer) that is, in each case, encumbered by a Recognired. trMortgage for the
benefit of Mortgagee or its Affiliate, then the liquidated damages under Sectiqn 5-3 shall be due
if Substantial Completion (as such term is defined in the I-ease) of the Devebpment Work is not
achieved in accordance with and zubject to tlre terms of the Development Agreffint, any other
applicable Project Document and the Project leases" and (ii) as part of the Phaffi I lqrrovements,
Substantial Corrpletion (as such term is defined in the Development Ageennent) of Project
Buildings having a minimum of^One Million Tkee Hundred Thousand (1"30fi,ffi0 gross square
feet (exclusive of the square footage of, tlre Arena) on the Arena Block (the "1-3M GSF
Requirement") is not achieved in accordarrce with the terms of any applicabtre Project Document.

11
76651 O.OGNew Yort Server 3A - MSW
 (c) In determinfug the gross quare footage constructed for purposes
of Sections 52{a) and ft} hereot, ESDC sball include tk gross square footage of atl Project
Buildings constuuctedin accordancewith the requirements of the DeveloprnentAgreement and
the applicable Ploject Leaseson the Arena Block and, if 4plicable, Site 5, whetk onstructed
by Developer, an Affiliate of Developer, Mortgagee, a suocessor Permitted Developer, a
SuccessorLeasehold Owner or any permitted assign of Developer, Mortgagee or a-Successor
LeaseholdOwrer-

5-3 Liquidated Damages-

(a) In the event (f Substmtial C-oryletion (as such term is defined in

the Lease)ofthe Development"Work is mt achievedin accordancewith and zubjoct to the terms
of the Developnrnt Agreemen! other applicable Prcject Doqrent and Lease ild (il the 1.5M
GSF Requiremeutor l.3M GSF Require,ment(as ryplicable) has not beensatisfied on orprior to
the MortgageeOutside Corryletion Date, tbe,nthe folbwing amounts shall (withom affecting the
obligationsofDeveloper and its Affiliates uderthe Projsct f.easesand Devebpnent AgreemenQ
be payableby tbe Personsucceedingto Develope,fsinterest in the Lease(whetk srch Personis
Mortgagee,its Permitted Developer or any SuccessorLeasehold Owner) to ESDC as liquidated
damagesfur such failure noturithstanding my contrar5rrequirements set forth in tk Lease or
DevelopmentAgreement:
t will
(} $t I be due *nd payable on tbe Mortgagee
OutsideCorpletion Date-

(4 Uabll the Suhantial Coryletion (as suchterm is defiaed in

the Development Agreement) ofth l-5M GSF Requirement or 1.3M G$F Rquirement
(as applicable),an.additional$t l'will be due ard payableon eachof,^thefirst (l')
ttrougfo fturth (4m) arniversaries of the Mortg4gee Outside CompletfumDate (for an
aggregateof five (5) paym.entstotaling $f 11-

MORTGAGEE (ON BEHAIT OF TTSELF AND AF{y PERSON

CLAIMING BY OR THROUGH Ib{ORTGAGEN flNCLT]DING A]ISY FUTURE
PERMITTET) DBVELOPER Al[D S[]CCESSOR LEASEHOLD OWIYERD AGREES
TIIAT CI THE AMOT]NT OF ACTUAL DAMAGES TO BE SUSTAINET} BY ESDC IN
THE E\ZENT TIIE WORI( DESCRIBED IN TIIIS SECTION 5 HAS I{OT BEEN
SUBSTAIYTIAIIY COMPLETED OI\T OR PRIOR TO THE MORTGAGEE OUTSIDE
COMPLETION I}ATE WOULD BE MATERIAL BUT INCAPABLE OS."PRECISE

The annuaXarnent of liquidated darnages*ratl be calculated by muhiplying $7,500,000by a pu'curtage, tre

num€f,atorofuihich is the maximunr amount of grcs squae fodage developableon the DevetroprnentPucel
pursuantto ihe l-ease as set fgth qr Exhibit E attadred tberco, and the denominator of whidr w46y,957
-
The annua!arnountofliquidated darnages*rall be calculatedbymultiplying $7,500,000byapercertagg the
numeratm ofsftich is the maxirnr.rmarnq-rntof gross squarefodage developableon the Derdoplnent Pucel
pursuantto *re Lease as set forttr qr Exhibit E attaclredthereto, and ihe denominator of which tsL654.957
-
5x the amormt set out in Footnote lt{o. 2 above

t2
766510.06-New YGt SES3A - MSW
CALCULATION AniD NOT READILY ASCERTAINABLE, (ft) THE AMOIINTS SET
FORTH IN SECTION 5J(a) ARE REASOIYABLE IN PROPORTION TO Tm
PROBABLE IIAMAGBS LTKELY TO BE SUSTAThTEDBY ESDC, OrD MORTGAGEE
IIAS HAD THE AI}VICT OF COTJNSEL OF ITS OWN SELECTION WHO RE\rIEWED
THE PROYISION F1ORTHE PAYMENT OF THE AMOUNTS SET FORTH IN TMS
SECTION 5.3(a) IN CONNECIION WTIE THE EXECUTION AND DELIYERY OF
TIIIS AGREEMEIYT, (Iv) THE TER}VIS OF THIS AGREEMEhIT WERE
NEGOTIATEI) AT ARMS LENGTH, AIYD (v) THE AMOI'NTS SET FORTH IN TmS
SECTION 5.3{a} ARE NOT INTENDED TO, AND DO NOT, CONSTffUTE A
PENALTY OR PT}I\ITITI/E DAMAGES FOR A TY PT]RPOSES.

(b) Upon ESDC's receipt of each of the liquidated datn*gespayrnents

required to h madeby Mortgagee prrsuant to Sectbn 5-3(a) hereof, the Term ofthe kase shall
be extended for a FiDd of one (1) year ending on the next anniversary of,'the then-current
MortgageeOutsideCoryletion Date.

(c) All amountspayable to ESDC pursuantto this Sectbn 5-3 shall be

payable in United Sates curency, in a single lrrp sum, by wire transfer of immediately
availablefunds to tbe account designatedat suchtire by ESDC.
' (d) In the event the amoutrs set forth in Section 5-3{a) above me not
paid to ESDC when th same shall be due and palable, then zuch fuilure shall constitute a
monetary Event ofDefruft rmder tlre Lease,and as a ermsequsncethereof the ladlord under the
Lease,shall have atr ofthe rights and re.rnediesgrild to it as a resuft of an rrnretary Event of
Defrirh, including" witbout limitation, the right to tarminate the Lease.

5,4 No Offiets or Credfu- Tk amomts payablepursuantto Secti<ur5-3 above

are sqrarate,distirct d stand apart from any aumudsthat may be due and payable to ESDC by
Developer or any Affiliate of Developer under any other Project Docunrerfr or otherwise,
whether for th frihne to satisff the same or anlr different criteria or requirements- As such,
Mortgageeand Developer each acknowledgeand agrw that notwithstandingany provision of the
Interim Leasesor other Project Documentsthat rray limit or otherwiserestrist ESDC's right to
recover twice for the same event or circumstarrcegneither Mortgagee (including its Permitted
Developer and SuecessorLeaseholdOwner) nor Developer (including any Affiliate of Developer
or:rny Personclaiming by or ttnough Developer or:!ny Affiliate of Developer) shall he entitled
to any credit or offset for amountspaid by the otlrcnparty against the amountspayable by such
party under this Agreement, the Development any of the Interim Leasesor any other
Project Document.J

ARTICLE VI

ALIT)CATION OF DEVELOPMHYT PRO.'ECT OBLIGATIONS

6"1 Allocation- Attached as Exhibit E is a schedule, initialed by an

authorizedrepresentativeof each of Developer and Mortgagee, allocating among &e Project Site
included in the Lease {the "Mortgaged Leasehold Estate") and the remaining balance of the
Project Site (the "Remainder Project Site") the devebpment and construction obligations with

13
7665lO,OGNew York Sws3A -IrlSW
respect to the Development Proftct set forth in the Development Agreement and other Project
Documents, including the development and construction requirements set forth in Section 2.3 of
the Development Agreement (collctively, the "Project Requirements"). ESDC agrees that it
shall not permit Developer, any Afrliate of Developer or any successor or assign of Developer
or any Affiliate of Developer tri reallocate the Project Requirements among the Mortgaged
Leasehold Estate and the Re.rnainrler Prroject Site without ttre prior written consent of Mortgagee;
provided that any reallocation of Prortct Requirements to or:rmong the parcels included in the
Mo{gaged Leasehold Estate s}rall lsquirs Mortgagee's consent, and reallocation of Project
Requirements allocated to tk Rerrninder Project Site solely among the parcels included in the
Remainder Project Site SaIl not require ESDC to provrtle mtice to or obtain the approval of
Mortgagee. Unless Mortgagee sball deliver a written objection to the reallocation of the Project
Requirements among tbe Mortgaged l-easehold Estate ard th Remainder Project Site within
thirty (30) days of receipt by Mortgagee and ESDC, then such replacement Exhibit shall be
conclusive and binding upon Mortgagee and Developer.

6-2 Reliance- ESDC shall be entitled to conclusively rely, without any

requirenent of inquiry or inrrcstigation, upon the last Exhibit E delivered to ESDC in
accordance with and zubject to tk ttrms and conditions ofthis Article VI.

ARTICLE \III

REPRES$ilATTONS Arlp \YARRANTTES

7-l Develop€r R€,pr€sentations. Developer represents and warrants as of the

date hereofthat:

(a) Qrganization. Developer is a limited liability company, and has

beea duly organized and is validly existing and in good sading pursuant to the laws of the State
of Deliaware with requisite ponner and authority to own properties and transact the businesses in
which it is now engaged. Devebper is duly qualified to do business and is in good standing in
the State ofNew York

(b) Proceedings. Developer has the full limited liability company

pow€r to and has taken all necessary'action to authorize tk oxecution, delivery and performance
of this Agreement. This Agreement has been duly executed and delivered by, or on behalf of,
Developer and constitutes a legal, valid and binding obligation of Developer, enforceable against
Developer in accordance with its terms-

(c) Na lllegal Payments. Devetroper has not been asked to pay, and
neither has offered to pay or paid any illegal consideratior4 whether monetary or otherwise, in
cormection with the executbn and delivery by ESDC of this Agreement.

(d) No Prohibited Person. Neitber Developer nor any of its Principals

is a Prohibited Person or Federat Prohftited Person.

7 .2 Mortgagee Re,presentations. Mortgagee represents and warrants as of the

date hereofthat:

t4
76651O-06-New Yor* Sswr 3lt - MSIV
 (a) Organization. Mortgagee is a limited liability cdilnrymqn rrul has
been duly organized and is validly existing and in good standing pursuant to tlrs bws oftk State
of New York with requisite pos'er and authority to own properties and transaet &sksinasses in
which it is now engaged.

(b) Proceedings. Mortgagee has the full limited liafurTity @iln1rany

power to and has taken all necessary action to authorize the execution, deliveryr *nd perbmame
of this Agreement. This Agreement has been duly executed and delivered by" w m behlf of,,
Mortgagee and constitutes a legal, valid and binding obligation of Mortgagm, enforceable
against Mortgagee in accordance {.ith its terms subject to bankruptcy and equimtilepninciples of
general application.

(c) A*hority. Mortgagee (i) is the legal owne,r nrpfl &obHcr of all
interest in the Certified Mortgage, and (ii) has full power, right and authorig 1mffif€r into rhis
Agreement, (iii) to its knowledge, possesses all requisite licenses, permits, armdmfiborizations
necessary or otherwise required to originate, administer and service the loam to Denetroper
conte, l,ated by the Loan Agreement and secured by the Certified Mortgagen {r"} try virtue of
Mortgagee's execution and delivery of this Agreement, Mortgagee is bound by tfre terses heot,
and (v) that the Person whse signature appears below on behalf of Mortgagee ftss fu righ,
power ad authority to execute and delivery this Agreement on behalf of Mortgagoe"

(d) No lllegal Paynents. Mortgagee has not 6sen n*ed tu pa5 and
neithgr has offered to pay or paid any illegal consideration, whether monetar5r or ofiberwi*, in
connectionwith the and delivery by ESDC of this Agreement.

(e) No Prohibited Person- Neither Mortgagee nor affi3rsfifs Prircipals

nor, to Mortgagee's knowledge, any Person that has a direct interest in the CeEeiffi Rtortgage is
a Prohrlbited Person or Federal Prohibited Person.

7-3 ESDC Representations. ESDC represents and warraulis as of fu date

hereof that (a) ESDC has full fnwer to and has taken all necessary action to awfhorize tbe
executicrn, delivery and performance of this Agreement; and (b) this Agreemcxs has heen duty
executed and delivered by, or on behalf of ESDC and, assuming the favorabte' ceffiMi*n of all
litigation the Development Project to which ESDC is a parfy, constitutes @gI, valid
and binding obligations of ESDC, enforceable against ESDC, in accordance wi&h its reryective
terrns-

ARTICLE VIII

NOTICES

8.1 Notices- All notices and communications required, pernr,frfierlmotkrwise

given to any of the parties to this Agreement will be delivered by hand or sen{ &ryregi$tered or
certified mail, return receipt requested, or by Federal Express or other overnight rnail serv$cethat
provides a receipt to the sender. Receipt of a notice by the party to whosr, the notice is
transmitted will be deemed to have occurred upon receipt, if hand delivered; five {5} daXrsfrom
the date of mailing, if mailed; or the next Business Day after transmittal by Fefual Express or

15
7665IO-05-New Yo* Swer 3,4 - MSW
 be effective
provides a receipt to lhe sender' Notices shall
other overnight delivery service that accept receipt
,"tt"rr"";, notwithstanding the refusal to
upon receipt (as set arrt i" the preceding to which no notice was
a change of addresswith respect
or the inability to delirrer on account of
given
will be delivered to the
(a) All notices and correspondenceto ESDC
addressee(s)
to such other or additional address(es)or
forlowing address(es)and addressee(s)or
Mortgagee from time to time:
of which ESDC may notify Developer or

Address: New York State Urban Development Corporation

633 Thfud Avenue
New Yorlq New York 10017
' Attention: General Counsel

with copiesto:

Address: SkadderuArps, Slate,Meagher& Flom LLP

Four Times Square
New Yorh New York 10036
Attention: Neil L' Roclq Esq'

and:

Address: New York City Economic DevelopmentCorporatton

110William Street
New York, NY 10038
Attn: President

and:

Address: New York City EconomicDevelopmentCorporation

William Street
New York, NY i0038
Attn: GeneralCounsel

and:

Address: New York City Law Department

100 ChurchStreet
New York, NY 10007
Attn: Chiei EconomicDevelopmentDivision

(b)A llnotices a n d c o rre s p o n d e n c e lo De v e lo p e rwillb e d e liv e r e d t o

th e followingaddress(es)anda d a r" s , " " 1 , ; o r' t o s u c h o rafromtime
d d it io n atolatime:
d d re s s (e s ) o r
of *i,irifj"*fp"' may notiff iSoC or Mortgagee
addressee(s)
A ddress:AY DCRe g io n a lDe v e lo p me n t Co mp a n y , L L c
c/o ForestCity Ruttt"t Companies'LLC

16
766510-06-New York Seryer 3A - MSW
 I MetroTachCenter
Brook\ro, tr{emYork 11201
Attention: GemeralCounsel .

with copiesto:

Address: ForestCftyEmerprises,Inc.
50 Public Sqllue, Suite 1360,Terminal Tower
Cleveland,Ohio44113
Attention: GemeralCounsel

and

Address: Fried, Frmlq Harris, Shriver & JacobsonIIF

OneNew yoltplaza
New York,l.Iew York 10004
Attention: StephenLefl<owitz, Esq.

(c) All notices ad cerreqrondenceto Mortgagee will he delivered to

the following address(es)and addresse{s} or to zuch other or additior,nl address(es)or
addressee(s)of which Mortgageemay notify ESDC or Developerfrom time totirme:

Address: BrooklynArffiInfraskuctureandTranrynrtation
IrrproveredFun4 LLC
c/o New Ycr* City Regional Center,IIC
299 Breadmray"Suite 1220
NewYodc}$mrYork 10007

with copiesto:

Address: DAgostim, Levine, Landesman& Lederman, LLP

345 Seveufhllvenue,23rd Floor
New York" !$emrYork 10001
Attention: RdfohaelJ- Levine, Esq.

ARTICI-E D(

MISCELLANEOUS

9.1 Entire Agreement. This Agreernent and the Lease coffiain all of the
promises,agreements,conditions,inducementsmril trnderstandingsbetween{he parties hereto
concerningthe matterscontemplatedby this Agse€ronent, and there are no pro,rnises"agreements,
conditions,understandings,inducements, warrar,rffusor re.presentations,
oral onvnrrtten,expressed
or implied, betweenthem concerningthe mattemcontemplatedby this Agreemetr other than as
expressly set forth herein or as may be exprmsly contained in any enfurceable written
agreementsor instrumentsexecutedsimultaneouslyherewith or hereafterby the parties to this
Agreement. Notwithstandingthe foregoing,nothimgcontainedin this Sectiong-l is intendedto
terminate,modify or otherwiselimit the applicab,ilitycfthe MGPP to the DevelopmentProject.

\!
7665I 0.06-NewYork Server34 - MSW
 9.2 Governing Laws: Forum: Wavier of }rrJr Trial. This Agreernetr shall be
governed by, interpreted under, construed in accordance vrifb and enforced underthe traws of the
State of New York. The parties intend and agree that the FrCIper forum for tle litigation of any
and all disputes or conhoversies aising out of or related €o his Agreement is any comt of the
State of New York, Kings County- Each of the parties agrees that it will not courmence any
action or proceeding arising out of or relating to this Agreement ir *y court ctkr than as
specified in the preceding sentence and that it shall not chllenge on gpcunds af farum non
conveniens or any other similar grouds any action or procding so commemed, d hereby
stipulates and irrevocably agrees that said courts have in prsonam jurisdiction o.rr€reach ofthem
for such litigation of any dispute or contrioversy arising orfr of or in any way related to this
AgTeement. EACH PARTY E)(PRESSLY AND U}}CONDITIONALLY wATvES, IN
CONNECRON WITII ANY SUIT, ACTION OR PROCEEDING RELATIFSG TO THIS
AGREEMENT, ANY AND EVERY RIGHT IT MAY HA\TE TO A TRIAL BY JURY.

g-3
Intemretation- Any urcertainty or mbigurty regarding the provisions of
this Agreement shall not be interpr€fed against any party as the draftsman of the document, but
shall be resolved by application of all orkr principles of law regarding interpretatiorn of contracts.

9-4 Consents. All consents and approv'atrs that may b" gr* under this
Agreement shall, as a condition of their effectiveness, be in writing- The granting of,an5r consent
or approval by a party to perforrn any act requiring consed or approval under tb tsms of this
Agreement, or the failure on the part of,a party to obrtct to any such action takm without the
required consent or approval, shall not, except where expressty stated otler,wim, be deemed a
waiver by the party whose consent was required of its right fo require such conmt or approval
for any further similar act. The forcgoing shall not limit tre effect of any provisbn of this
Agreement by which consent is deemed granted, if objwtirn is not rnade qrifhfu a specified
period. Unless otherwise providecli in this Agreemen! in gralrting any consent or taking any
action under this Agreement, Mortgagee, Developer atd ESDC shall in atrl cases act in a
commercially reasonable manner-

9.5 Severability- If any te,rrrg covenant" reshiction or condition qontained in

this Agreement shall, to any extent" b invalid or unenforeable, the remainder of'this llgreement
(or the application of such terrn, covernntn restriction or condition to Persons or circumstances
other than those with respect to whiich it is invalid or unen&,rceable) shall not be affected thereby
and each terrn, covenant, restriction and condition of this Agreement sha l be valid and
enforceable to the fullest extent perrnitted by law.

9.6 Amendments. The parties agree that the provisions of, this Agreement
may be modified or amended, in wlple or in part, only by an instrument in writing, executed by
the parties hereto.

g-7
Successors and Assigns, The provirsions of this Agreemed shall, except
as otherwise provided herein, run to the ben€fit of and be binding upon the partbs hereto and
their respective successors and assigrrs- Mortgagee shatrl give ESDC written notice of any
assignment by Mortgagee of any of its rights or obligations under this Agreement. Developer
shall not assign, in whole or in part, any of its rights or obligations under this Agreernent without
the prior written consent of ESDC and Mortgagee.

l8
766510.06-New York Server 3,{ - MSW
 9.8 Couderparts. This Agreement may be executed in multiple counterparts
(whether by facsimile, portabb document format, original or otherwise), each of which shall be
deemed an original, and all srch counterparts taken together shall constitute one amd the same
instrument.

9.9 Limitation of Liabilitv. In no event shall ESDC have any liability

whatsoever under this Agreement; provided, however, that this Section 9.9 shall mt operate to
relieve ESDC, or any successorthereof, of any of its obligations hereunder.

9.10 ESDC Fees and Costs. Developer acknowledges and agrees, for itself, its
AfFrliates and each of their p€rmitted successorsand assigns that all costs and e4p€,ns€sincurred
by ESDC under this Agreement shall be for the account o{, and shall be payable rryon demand,
by Developer.

9.I 1 Devebper's Consent. Developer has joined this Agreernmt to evidence its
consent to all of the agreemeds ofESDC and Mortgagee set forth in this Agreerr:nffi- Nothing in
this Agreement shall, or shall be deemed to, modi&, amend or otherwise after any term,
condition or obligation set forth in any agreement between Mortgagee and Devetroper-

g.12
Recordation. The parties hereby agree that this Agreement or a
memorandum thereof shall be recorded in the City Register.

9.I3 Froprbtary Capacity Only. Nothing in this Agreenrent is intended to

burden or restrict the ex€rcise by any Governmental Authority of its "police powe,r" or impose
any liability upon any Gonernmental Authority for (or entitle Mortgagee to anlr defense, claim or
counterclaim on account of) the exercise of such "police power". In keeping therewith,
Mortgagee's relations with all Governmental Authorities, when acting in their capacity as
Governmental Authoritbs, shall be governed by otherwise applicable Legal Requireurents.

l9
7665 10.06-New York Server 3,4 - MSW
 IN WITNESS WHEREOF, this Agreement has been executed by the parties as
of the day and year first written above.

MORTGAGEE:

BROOKLYN ARENA
INFRASTRUCTUREAND
TRANSPORTATiONIMPROVEMENT
FLTND,LLC, aNew York limited liability
company

By:
Name:
Title:

STATEOFNEWYORK )
) SS.

coUNTYoFNEWYORK )

On the day of the year 2010 beforeme, the undersigned,a notary

-in
pu b licin andforsaidstate,person a lly a p p e a re d , p e rs o n a lly
known to me or proved to me on the basisof satisfactoryevidenceto be the individual whose
nameis subscribedto the within instrumentand acknowledgedto me that he/she/theyexecuted
the samein his/her/their capacity as of Brooklyn Arena Infrastructure
and Transportation Improvement Fund, LLC, and that by his/her/their signature on the
instrument, the individual executedthe instrument.

NotaryPublic

[NotarySeal] My commissionexpires:

20
766510.06-NewYork Server3,{: MSW
 DEVELOPER:

AYDC REGIONAL DEVELOPMENT

COMPANY, LLC, a Delawarelimited
liability company

By:
Name:
Title:

STATE OFNEWYORK )
) ss.
COUNTYOFNEWYORK )

On the - day of _in the year 2010 beforeme, the undersigned,a notary
public in and for said state,personallyappeared , personally
known to me or proved to me on the basisof satisfactoryevidenceto be the individual whose
name is subscribedto the within instrument and acknowledsedto me that he/she/thevexecuted
the samein his/trer/theircapacityas of AYDC Regional Development
Company,LLC, and that by his/her/their signatureon the instrument,the individual executedthe
instrument.

Notary Public

[Notary Seal] My commissionexpires:

21
7665l0.0GNew York Seruer 34 - MSW
 ESDC:

NEW YORK STATE URBAN

DEVELOPMENT CORPORATION(dlbta
EmpireStateDevelopmentCorporation)

By:
Name:
Title:

STATEOFNEWYORK )
) ss.
COTINTY OF NEW YORK )

On the dav of in the year 2010 before me, the undersigned, a notary
publicinandforsaidstate,personallyappeared,personally
known to me or proved to me on the basis of satisfactory evidence to be thi individual whose
name is subscribed to the within instrument and acknowledged to me that he/she/they executed
the same in his/her/their capacity as of the New york state urban
Development Corporation (dlbla -Empire State Development Corporation), and that by
hiVher/their signature on the instrument, the individual executed the instrument.

Notary Public

[Notary Seal] My commissionexpires:

22
766510.06-NewYork Sener 3,A- MSW
 APPENDD( A

Unless otherwise defined in the Agreement to which this AbpendtrA is attached,

capitalized terms used in the Agreement and the Schedules and the Exhihits #ached to the
Agreement, shall have the meanings set forth in this Anpendix A.

"1.3M GSF Requirement" has the meaning set forth Sectioa 5-2(a) kreof.

"1.5MGSF Requirement" has the meaning set forth Sectbn 54blhereof.

"Additional Affordable Housing Units" has the meaning ascrihd to such term
in the Development Agreement.

"Advisory Professionals" has the meaning set forth section 4.7(b,) hereof

"Affifiate' means, with respect to any Persorq any otber Person tbat, directly or
indirectly, Controlq is Controlled by or is under conrmon ownership or C-ontrolwifh such Person
or is a director, officer, general partner, member or marvrger of such Personor, wfrhrespect to an
individual, has a relationship with such individual by blood, adoptbn or rn*rriage not more
remote than first cousin-

"Affordable Housing Units" has the meaning ascriH to wih term in the
Development Agreeme,nt

"Agreement" has the meaning set forth in the introductory pagrryh beneto-

"Arena' has the meamng set forth in the recitals hereto-

"Arena Block" means the assemblage on the western portion of the Project Site
by joining Blocks I I 18, I I I 9, and ll27 and closing portions of Pacific Stred *nd 5ft Avenue,
including the traffic island at Pacific Street and 5e Avenue.

"Block 1128" means Block 1128 on the tax map of the Bomugfu of Brooklyn,
Kings County, Cityand State ofNew York.

"Business Day" means any day other than a Saturday or Smday or any other day
on which commercial banks in New York, New York are authorized orrequiredbV law to close.

"Carlton Avenue Bridge" has the meaning ascribed to mcfr t€rm in the
Development Agree,ment

"Cerfffied Mortgage" has the meaning set forth Section 2-1 IET€o,f

'City' means The City of New York, a municipal corporati*n" together with its
successorsand assigns-

"City Register" the office of the City Register, Kings Count;r, State ofNew York,
together with its successorsand assigns.

AppendixA-l
7665l0.OGNew York Swer 3A - MSW
 "Control" and "Controlled* moans any one or more of the economic, equitable
or beneficial ownership of 50% or more ofaPerson or the pov/er, exercisable jointly or severally,
to manage and direct a Person through ffis dfurct, indirect, or beneficial ownership of partnership
interests, membership interests, stock, {ruS powers, or other besreficial interests and/or
marngement or voting rights.

"Depositary" hasthe lr€s$img ascribedto zuchterrn oftk Lease.

"Design Guidelines" has &B meaning ascribedto s.rchterm'in the Development

Agreement

"tr)eveloper" hasthe memfu sot forth in the paragraphhereto.

"Developer's Obligatioxs' has the meaning ascribed to the term "Tenant's

Obligations' in the Leas€.

"Development Agreemenf Ims the meaning set forih in fhe recitals hereto.

"Development Project" hs fu meaning set forth in th recitals hereto.

"Development Work" has &s meaning ascribed to snch term in the Lease.

"DOB Agreement" has {fis: nneaning ascribed to srrch t€rm in the Lease.
nl'|'Sfxnr bas the meaning set furth in the introductorypamgraph hereto.

"Existing Parks Investurerf has the meaning ascribed to such term in the
Development Agrement

"Fair Market Value of tke hrflortgaged Leasehold Estate" has the meaning set
forth Section 4.8(c'l hereof

"Federal Prohibited Persw'has the meaning ascribed to such term in the Lease.

"FirS Taking Properties* means the real property and improvement thereon
comprised of Blocks 1118, 1119, I 127, 1A29, Lots 42 arfi 47 an Bbck 1121, and Lot 35 on
Block 1i20, Fifth Avenue between Atkmtic and Flatbush Avenues, Pacific Street between
Flatbush and Sixth Avenues, the traffrc isled at Fifth Avenue and Pacifrc Street, and Pacific
Street between Carlton and Vanderbih Avermes, each in the Borouglr of Brooklyn, (rngs County,
State ofNew Yorlc

"Forbeariance Period" has &e meaning set forth in Sectbn 2.3(c) hereof

"Foreclosure Event" has th meaning ascribed to such term in the Lease.

"Governmental AuthorifirF nneans the United States of America, the State of

New York, the City and any ageney, department" corporation, commission, board, bureau,
instrumentality or polittical subdivision of any of the foregorng (with the exception of ESDC' to
the extent ESDC is acting in its capacity us a party to this Agreement or another agreement

A*ryendix A-2
7665I 0.06-NewYork Server3d - MSW
related to the Development Project), now existing or hereafter created, having or exercising
jurisdiction over the Project Site or any portion of any of the foregoing.

"Interim Lease" has the meaning ascribed to such term in the Development
Agreement.

"LAFPMRA" has the meaning set forth in the recitals hereto'

"LIRR" has the meaning ascribed to such term in the Development Agreement'

',Loan Agreement" means that certain loan agteementdated I l, between

Mortgagee and Developer pursuant to which Mortgagee has made a loan to Developer in an
amount not to exceed $24i,000,000, and which loan is secured by (or will be secured by)
Developer'sinterest in the Lease as well as multiple other Development Leases.

"Loan Broker" hasthe meaning set forth Section4.8(d hereof'

;'MEc', has the meaningascribedto such term in the Development Agreement.

"MGPP" has the meaning set forth in the recitals hereto.

"Mortgage" has the meaning set forth in the recitals hereto'

"Mortgaged Leasehold Estate" has the meaning set forth Section 6.1 hereof.

"Mortgagee" has the meaning set forth in the introductory paragraph hereto.

"Mortgagee Outside Completion Date" has the meaning set forth Section 5.1
hereof.

"MTA" has the meaning ascribed to such term in the Development Agreement.

"MTA Air Space Parcels" has the meaning ascribed to such term in the
Development Agreement.

."New Lease" has the meaningascribedto suchterm in the Lease.

"NYCBDC" means the New York City Economic Development Corporation, a

local development corporation formed pursuant to Section I4lI of the Not-for-Profit
CorporationLaw of the Stateof New York, and its successorsand assigns.

"Option Trigger Date" has the meaningset forth Section4.8(b) hereof.

"Permitted Developer" has the meaningascribedto suchterm in the Lease.

"person" means an individual, fiduciary, partnership, limited liability company,

fum, association,or corporation, or any other form of businessor Governmental Authority.

AppendixA-3
766510.06-NewYork Seruer3A - MSW
 "Phase I Improvements" has the meaning ascribed to such term in the
Development Agreement.

"Platform" has the meaning ascribed to such term in the Development Agreement.

"Principals" has the meaning ascribedto suchterm in the Lease.

"Prohibited Person" has the meaningascribedto such term in the Lease.

"Pr.oject Buildings" has the meaningset forth in the recitalshereto.

"Project Document" means this Agreement, the Development Agreement, the

LAFPMRA, the Project Leases, the State Funding Agreement (as defined in the Development
Agreement), and the City Funding Agreement (as defined in the Development Agreement).

"Project Bffective Date" has the meaning ascribed to such term in the
Development Agreement.

"Project Lease" has the meaning ascribed to such term in the Development
Agreement; provided that for purposes of this Agreement, "Project Lease" shall not include the
Arena Development Lease (as defined in the Development Agreement).

"Project Requirements" has the meaningset forth Sectipn 6.1 hereof.

"Project Site" has the meaning set forth in the recitals hereto.

"Recognized Mortgage" has the meaning ascribed to such term in the Lease.

"Remainder Project Site" has the meaningset forth Section 6.1 hereof

"Reset Date" has the meaning set forth Section5.1 hereof

"RM Notice" has the meaning set forth Section2.1 hereof.

"Requiremelts" meansall applicablepresentand future, foreseenand unforeseen,

laws, rules, orders, ordinances,regulations,statutes,requirements,permits,consents,certificates,
approvals, codes and executive orders of any Governmental Authority now existing or hereafter
created, and of any and all of their departments and bureaus, including, without limitation, the
Green Buildings Standards(New York City Charter Section 224.1 and Title 43, Chapter l0 of
the Rules of the City of New York) (to the extent applicable), all Environmental Laws (as
defined in the Development Agreement) affecting the Project Site and, in each case, without
regard to the nature or cost of the work required to be done, extraordinary, as well as ordinary,
and without regard to any exemption by reason of ESDC's interest in the Project Site other than
the Overridden Provisions (as defined in the Development Agreement), of all Governmental
Authorities now existing or hereaftercreated.

"Second Taking Properties" means the real property and improvement thereon
comprisedof Block 927 - Lots 1 and 16 (including the "air rights" for such lots), Block 1i20 -

AppendixA-4
766510.06-New York Server3A' - MSW
Lots 19 and 28" end Block ll28 - Lots 1, 2, 4, 85 and 89, in each case, in the Borough of
Brooklyrl Kings Couffi5r, State ofNew York.

"Secdom a-7@'l Event" has the meaning set forth Section 4.7(a) hereof.

"Sdon a-7@) Cure Notice" has the meaning set forth Section 4.7(a) hereof.

"Setfion 4-7(a) Notice" has the meaning set forth Section 4.7(a) hereof-

'Section a.7@) Notice Date" has the meaning set forth Section 4.7(d hereof.

"Sdon 4-8 Purchaser" has the meaning set forth Section 4.8(b) hereof.

'*Secdon a.8(a) Date" has the meaning set forth Section 4.8(a) hereof.

'nSecffona-8(a) Sale" has the meaning set forth Section 4.8(a) hereof.

"Sec$on4.8(b) Option" has the meaning set forth Section 4.8(b) hereof.
-
"Site 5'means Block 927,Lots I and 16 on the tax map of the Borough of
Brookl1m, Kings Courty, City and State ofNew York

"Spedall5r Serviced Loan" means (a) the failure of Developer to satisfy any
monetary obligatbn -rder the Loan Agreement or the Certified Mortgage, or (b) the occurrence
and continuation of a non-monetary Event of Default (as such term is defined in the Loan
Agreement or Certiffi Mortgage); provided that the occurrence of the Forebearance Period shall
not itself be deemed-totrigger the occurrence of a "Specially Serviced Loan".

"subway Entrance" has the meaning ascribed to such term in the Development
Agreement.

"Successor Leasehold Owner" means any Person succeeding to Developer's

leasehold estate in tre Lease following a Foreclosure Event and their respective successor and
assigns; provided that in each case such Person is not a Prohibited Person, Developer, Forest
City Enterprises, krc or an Affiliate of Developer or Forest City Enterprises, Inc., or a Person in
which Developm or Forest City Enterprises, Inc or an Affiliate of Developer or Forest City
Enterprises, Inc- bas my direct or indirect ownership, economic or other interest (other than by
reason of ownership of less than one percent of publicly traded securities).

"Tenant-Specific Defaults" has the meaning ascribed to such term in the Lease.

'nTerm'has the meanins ascribed to such term in the Lease.

'Tlpgraded Yard" has the meaning ascribed to such term in the Development
Agreement.

'oYard Relocation and Construction Agreement" has the meaning ascribed to

such term in the Devetropment Agreement.

AppendixA-5
7665 10.06-New York Swn3A - MSW
 EXHIBIT A

LEGAL DESCRIPTION

ExhibitA-1
766510.06-NewYork Sener 3.A- MSW
 EXHIBIT B

RM NOTICE

[seeattached]

ExhibitB-1
766510-06-NewYork Sewer 3A - MSW
 EXIIIBIT C

CERTIFIED MORTGAGE

fseeattached]

ExhibitC-l
766510.06-NewYork Sewer 3A' - MSW
 E)MIBITI)

ADVISORY PROTESSIONALS

Alvarez & Marsal

AlixPartners
Blackhifl Partners
BlackstoneGloup
CapstoneAdvisory Group
Dutr& Phefos
FTI C.omrhing
GlassRatnerAdvisory & Capital Group
' Greenhill & Co.
Houlihan Lokey Howard & Zukin
Jefferies& Co-
l-azmd
Miller Buckfire & Co.
Moellis & Coryany
NachmanHalsBrrownstein
Navi gant Cryital Advisors
PennHudsonFinancial Group
Rothschild
SSGCapitalAdvisors

ExlubitD-l
766510.06-NewYork Sewer 34 - MSW