GRIFFIN LAND & NURSERIES INC (Form: 10-Q, Received: 04/08/2010 09:22:04)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

X	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED February 27, 2010

	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO _____

Commission File No. 1-12879

GRIFFIN LAND & NURSERIES, INC.

(Exact name of registrant as specified in its charter)

Delaware	06-0868496
(state or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

One Rockefeller Plaza, New York, New York	10020
(Address of principal executive offices)	(Zip Code)

Registrant’s Telephone Number including Area Code	(212) 218-7910

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer x

Non-accelerated filer ¨	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Number of shares of Common Stock outstanding at April 1, 2010: 5,102,436

Griffin Land & Nurseries, Inc.

PART I -		FINANCIAL INFORMATION

	ITEM 1	Financial Statements

		Consolidated Statements of Operations (unaudited)
		13 Weeks Ended February 27, 2010 and February 28, 2009	3

		Consolidated Balance Sheets (unaudited)
		February 27, 2010 and November 28, 2009	4

		Consolidated Statements of Changes in Stockholders’ Equity (unaudited)
		13 Weeks Ended February 27, 2010 and February 28, 2009	5

		Consolidated Statements of Cash Flows (unaudited)
		13 Weeks Ended February 27, 2010 and February 28, 2009	6

		Notes to Consolidated Financial Statements (unaudited)	7-21

	ITEM 2	Management’s Discussion and Analysis of
		Financial Condition and Results of Operations	22-28

	ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	28-29

	ITEM 4	Controls and Procedures	29

PART II -		OTHER INFORMATION

	ITEM 1	Not Applicable

	ITEM 1A	Risk Factors	30

	ITEMS 2-5	Not Applicable

	ITEM 6	Exhibits	30-32

		SIGNATURES	33

PART I	FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS

Griffin Land & Nurseries, Inc.

Consolidated Statements of Operations

(dollars in thousands, except per share data)

	For the 13 Weeks Ended,
	February 27, 2010			February 28, 2009
Landscape nursery net sales and other revenue	$	279		$	449
Rental revenue and property sales		4,527			4,184
Total revenue		4,806			4,633

Costs of landscape nursery sales and other revenue		319			419
Costs related to rental revenue and property sales		3,517			3,478
Total costs of goods sold and costs related to
rental revenue and property sales		3,836			3,897

Gross profit		970			736

Selling, general and administrative expenses		2,974			2,800
Operating loss		(2,004	)		(2,064	)
Interest expense		(1,041	)		(808	)
Investment income		104			47
Loss before income tax benefit		(2,941	)		(2,825	)
Income tax benefit		1,097			1,003
Net loss	$	(1,844	)	$	(1,822	)

Basic net loss per common share	$	(0.36	)	$	(0.36	)

Diluted net loss per common share	$	(0.36	)	$	(0.36	)

See Notes to Consolidated Financial Statements .

Griffin Land & Nurseries, Inc.

Consolidated Balance Sheets

(dollars in thousands, except per share data)

	February 27, 2010			November 28, 2009
ASSETS
Current Assets:
Cash and cash equivalents	$	6,415		$	9,149
Trading securities - short-term investments, net		-			454
Accounts receivable, less allowance of $179 and $187		1,208			2,681
Income taxes receivable		6,342			6,336
Inventories, net		20,991			19,573
Deferred income taxes		119			143
Other current assets		3,354			3,645
Total current assets		38,429			41,981
Real estate held for sale or lease, net		132,517			128,311
Available for sale securities - Investment in Centaur Media plc		3,940			4,615
Property and equipment, net		2,629			2,730
Deferred income taxes		135			-
Other assets		11,692			11,099
Total assets	$	189,342		$	188,736

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt	$	8,803		$	1,532
Accounts payable and accrued liabilities		4,119			3,667
Deferred revenue		1,008			1,249
Total current liabilities		13,930			6,448
Long-term debt		57,982			61,066
Deferred income taxes		-			1,050
Other noncurrent liabilities		4,994			5,426
Total liabilities		76,906			73,990

Commitments and contingencies (Note 11)

Stockholders' Equity:
Common stock, par value $0.01 per share, 10,000,000 shares
authorized, 5,489,402 and 5,479,402 shares issued,
respectively, and 5,102,436 and 5,092,436 shares outstanding, respectively		55			55
Additional paid-in capital		105,053			104,849
Retained earnings		19,988			22,342
Accumulated other comprehensive income, net of tax		766			926
Treasury stock, at cost, 386,966 shares		(13,426	)		(13,426	)
Total stockholders' equity		112,436			114,746
Total liabilities and stockholders' equity	$	189,342		$	188,736

See Notes to Consolidated Financial Statements .

Griffin Land & Nurseries, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

For the Thirteen Weeks Ended February 27, 2010 and February 28, 2009

(dollars in thousands)

	Shares of Common Stock Issued		Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total			Total Comprehensive Loss
Balance at November 29, 2008		5,455,382	$	55	$	103,997	$	29,888		$	646		$	(13,426	)	$	121,160

Exercise of stock options		8,047		-		107		-			-			-			107

Stock-based compensation
expense		-		-		88		-			-			-			88

Dividend declared, $0.10 per
share		-		-		-		(508	)		-			-			(508	)

Net loss		-		-		-		(1,822	)		-			-			(1,822	)	$	(1,822	)

Other comprehensive loss
from cash flow hedging
transaction, net of tax		-		-		-		-			(119	)		-			(119	)		(119	)

Other comprehensive loss
from Centaur Media plc,
net of tax		-		-		-		-			(1,248	)		-			(1,248	)		(1,248	)

Balance at February 28, 2009		5,463,429	$	55	$	104,192	$	27,558		$	(721	)	$	(13,426	)	$	117,658		$	(3,189	)



Balance at November 28, 2009		5,479,402	$	55	$	104,849	$	22,342		$	926		$	(13,426	)	$	114,746

Exercise of stock options		10,000		-		112		-			-			-			112

Stock-based compensation
expense		-		-		92		-			-			-			92

Dividend declared, $0.10 per
share		-		-		-		(510	)		-			-			(510	)

Net loss		-		-		-		(1,844	)		-			-			(1,844	)	$	(1,844	)

Other comprehensive gain
from cash flow hedging
transactions, net of tax		-		-		-		-			278			-			278			278

Other comprehensive loss
from Centaur Media plc,
net of tax		-		-		-		-			(438	)		-			(438	)		(438	)

Balance at February 27, 2010		5,489,402	$	55	$	105,053	$	19,988		$	766		$	(13,426	)	$	112,436		$	(2,004	)


See Notes to Consolidated Financial Statements.

Griffin Land & Nurseries, Inc.

Consolidated Statements of Cash Flows

(dollars in thousands)

	For the 13 Weeks Ended,
	February 27, 2010			February 28, 2009
Operating activities:
Net loss	$	(1,844	)	$	(1,822	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization		1,740			1,613
Deferred income taxes		(1,097	)		(1,003	)
Stock-based compensation expense		92			88
Amortization of debt issuance costs		69			25
Change in unrealized gains on trading securities		-			62
Changes in assets and liabilities:
Short-term investments		454			2,039
Accounts receivable		1,473			755
Inventories		(1,418	)		(3,593	)
Income tax receivable		(6	)		(2	)
Other current assets		291			658
Accounts payable and accrued liabilities		601			1,323
Deferred revenue		(338	)		(309	)
Other noncurrent assets and noncurrent liabilities, net		(557	)		(981	)
Net cash used in operating activities		(540	)		(1,147	)

Investing activities:
Building acquisition		(5,440	)		-
Additions to real estate held for sale or lease		(403	)		(1,998	)
Additions to property and equipment		(43	)		(8	)
Net cash used in investing activities		(5,886	)		(2,006	)

Financing activities:
Proceeds from debt		4,524			-
Dividends paid to stockholders		(509	)		(507	)
Payments of debt		(337	)		(315	)
Exercise of stock options		112			107
Debt issuance costs		(98	)		(469	)
Net cash provided by (used in) financing activities		3,692			(1,184	)
Net decrease in cash and cash equivalents		(2,734	)		(4,337	)
Cash and cash equivalents at beginning of period		9,149			4,773
Cash and cash equivalents at end of period	$	6,415		$	436

See Notes to Consolidated Financial Statements.

Griffin Land & Nurseries, Inc.

Notes to Consolidated Financial Statements

(dollars in thousands unless otherwise noted, except per share data)

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements of Griffin Land & Nurseries, Inc. (“Griffin”) include the accounts of Griffin’s real estate division (“Griffin Land”) and Griffin’s wholly-owned subsidiary in the landscape nursery business, Imperial Nurseries, Inc. (“Imperial”), and have been prepared in conformity with the standards of accounting measurement set forth by the Financial Accounting Standards Board (“FASB”) ASC 270, “ Interim Reporting.”

The accompanying financial statements have been prepared in accordance with the accounting policies stated in Griffin’s audited financial statements for the fiscal year ended November 28, 2009 included in Griffin’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission, and should be read in conjunction with the Notes to Consolidated Financial Statements appearing in that report. All adjustments, comprising only normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of results for the interim periods, have been reflected and all intercompany transactions have been eliminated. The consolidated balance sheet data as of November 28, 2009 was derived from Griffin’s audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. Griffin regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, stock-based compensation expense, deferred income tax asset valuations, valuation of derivative instruments and inventory reserves. Griffin bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by Griffin may differ materially and adversely from Griffin’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

In fiscal 2009, Griffin entered into two interest rate swap agreements to hedge interest rate exposures. Griffin does not use derivatives for speculative purposes. Griffin applied FASB ASC 815-10, “Derivatives and Hedging,” (“ASC 815-10”) as amended, which establishes accounting and reporting standards for derivative instruments and hedging activities. ASC 815-10 requires Griffin to recognize all derivatives as either assets or liabilities on its consolidated balance sheet and measure those instruments at fair value. The changes in the fair values of the interest rate swap agreements are assessed in accordance with ASC 815-10 and reflected in the carrying values of the interest rate swap agreements on Griffin’s consolidated balance sheet. The estimated fair values are based primarily on projected future swap rates.

Griffin applies cash flow hedge accounting to its interest rate swap agreements that are designated as hedges of the variability of future cash flows from floating rate liabilities based on the benchmark interest rates. The change in fair values of Griffin’s interest rate swap agreements are recorded as components of accumulated other comprehensive income in stockholders’ equity, to the extent they are

effective. Any ineffective portions of the change in fair value of these instruments would be recorded as interest expense.

The results of operations for the thirteen weeks ended February 27, 2010 (the “2010 first quarter”) are not necessarily indicative of the results to be expected for the full year. The thirteen weeks ended February 28, 2009 is referred to herein as the “2009 first quarter.”

Recent Accounting Pronouncements

In February 2010, the FASB issued Accounting Standards Update No. 2010-09, “Subsequent Events,” which amends the previous guidance on subsequent events and no longer requires Securities and Exchange Commission filers to disclose the date through which subsequent events have been evaluated. The subsequent event provisions were effective for Griffin in the 2010 first quarter. This guidance did not impact Griffin’s consolidated financial statements.

In the 2010 first quarter, Griffin adopted the new guidance in FASB ASC 805-10, “Business Combinations” (“ASC 805-10”) when it purchased an industrial building in Breinigsville, Pennsylvania. The new guidance on business combinations retains the underlying concepts of the previously issued standard in that the acquirer of a business is required to account for the business combination at fair value. As with previous guidance, the assets and liabilities of the acquisition are recorded at their fair values on the date of acquisition. Any excess of the fair value of consideration transferred over the estimated fair values of the net assets acquired is recorded as goodwill. Griffin did not record any goodwill related to this acquisition. The new guidance results in changes to the method of applying the acquisition method of accounting for business combinations in a number of significant aspects. Among other changes required under the new guidance, all acquisition costs are expensed as incurred. Prior to the new guidance, acquisition costs were capitalized. As required under ASC 805-10, Griffin’s acquisition costs related to this purchase have been expensed.

In January 2010, the FASB issued Accounting Standards Update No. 2010-06, “Fair Value Measurements and Disclosures,” which requires new disclosures and provides clarification of existing disclosures about fair value measurements. More specifically, this update will require: (a) an entity to disclose separately the amounts of significant transfers in and out of Levels 1 and 2 fair value measurements and to describe the reasons for the transfers; and (b) information about purchases, sales, issuances and settlements to be presented separately in the reconciliation for fair value measurements using significant unobservable inputs (Level 3 inputs). This guidance clarifies existing disclosure requirements for the level of disaggregation used for classes of assets and liabilities measured at fair value and requires disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements using Level 2 and Level 3 inputs. The update is effective for fiscal years beginning after December 15, 2009, except for the disclosure requirements related to the purchases, sales, issuances and settlements in the rollforward activity of Level 3 fair value measurements. Those disclosure requirements are effective for fiscal years beginning after December 31, 2010. Griffin’s does not believe the adoption of this guidance will have a material impact on its consolidated financial statements.

2. Industry Segment Information

Griffin defines its reportable segments by their products and services, which are comprised of the landscape nursery and real estate segments. Management operates and receives reporting based upon these segments. Griffin has no operations outside the United States. Griffin’s export sales and transactions between segments are not material.

	For the 13 Weeks Ended,
	February 27, 2010			February 28, 2009
Total net sales and other revenue:
Landscape nursery net sales and other revenue	$	279		$	449
Rental revenue and property sales		4,527			4,184
	$	4,806		$	4,633
Operating (loss) profit:
Landscape nursery	$	(783	)	$	(850	)
Real estate		(40	)		6
Industry segment totals		(823	)		(844	)
General corporate expense		(1,181	)		(1,220	)
Operating loss		(2,004	)		(2,064	)
Interest expense		(1,041	)		(808	)
Investment income		104			47
Loss before income tax benefit	$	(2,941	)	$	(2,825	)

Identifiable assets:	February 27, 2010		November 28, 2009
Landscape nursery	$	28,122	$	28,238
Real estate		143,869		139,681
Industry segment totals		171,991		167,919
General corporate		17,351		20,817
Total assets	$	189,342	$	188,736

The real estate segment had no revenue from property sales in either the 2010 first quarter or the 2009 first quarter. Included in other revenue of the landscape nursery segment in the 2010 first quarter is $122 of revenue from the rental of Imperial’s Florida farm. Imperial shut down its operations on its Florida farm in the 2009 third quarter. The landscape nursery segment had no rental revenue in the 2009 first quarter.

In fiscal 2008, Griffin adopted the provision of FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), which establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value, as follows:

Level 1 applies to assets or liabilities for which there are quoted market prices in active markets for identical assets or liabilities. Level 1 securities include Griffin’s short-term (trading account) investments and available-for-sale securities.

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities in active markets; quoted prices for assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 2 liabilities include Griffin’s two interest rate swap derivatives (see Note 8). The fair values of Griffin’s interest rate swap derivative instruments are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Therefore, Griffin has categorized these derivative instruments as Level 2 within the fair value hierarchy.

On January 8, 2010, Griffin closed on the acquisition of an approximate 120,000 square foot industrial building located in Breinigsville, Pennsylvania (see Note 5). The acquisition was accounted for in accordance with ASC 805-10 whereby the assets acquired were recorded at their fair values. The fair value of the real estate assets acquired was based upon an independent appraisal, which included the utilization of publicly available data for similar properties. Therefore, Griffin has categorized the real estate assets acquired as Level 2 within the fair value hierarchy.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. As of February 27, 2010, Griffin’s consolidated balance sheet includes acquired intangible assets related to the building acquisition in Breinigsville, Pennsylvania. These assets are comprised of the value of the in-place lease and the associated tenant relationship. Griffin derived these values based on a discounted cash flow analysis using assumptions that included the rental rate of the in-place lease, the commission percentage expected to be paid on the lease up of vacant space and other data contained in the independent appraisal. Therefore, Griffin categorized the acquired intangible assets related to this transaction as Level 3 within the fair value hierarchy. As of November 28, 2009, Griffin’s financial statements did not include any Level 3 assets or liabilities.

The following are Griffin’s financial assets and liabilities carried at fair value and measured at fair value on a recurring basis:

	February 27, 2010

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)

Available-for-sale securities	$	3,940	$	-		$	-

Interest rate swaps	$	-	$	(319	)	$	-

	November 28, 2009

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)

Trading securities	$	454	$	-		$	-

Available-for-sale securities	$	4,615	$	-		$	-

Interest rate swaps	$	-	$	(770	)	$	-

The carrying and estimated fair values of Griffin’s financial instruments are as follows:

	February 27, 2010						November 28, 2009
	Carrying			Estimated			Carrying			Estimated
	Value			Fair Value			Value			Fair Value
Financial assets:
Cash and cash equivalents	$	6,415		$	6,415		$	9,149		$	9,149
Trading securities		-			-			454			454
Available-for-sale securities		3,940			3,940			4,615			4,615

Financial liabilities:
Revolving line of credit	$	2,500		$	2,500		$	2,500		$	2,500
Mortgage debt		64,205			64,655			60,002			59,508
Interest rate swaps		(319	)		(319	)		(770	)		(770	)

The fair values of the trading and available-for-sale securities are based on quoted market prices. The fair values of the revolving line of credit and mortgage debt are estimated based on current rates offered to Griffin for similar debt of the same remaining maturities, and additionally, Griffin considers its credit worthiness in determining the fair value of its debt. The fair value of the interest rate swaps (used for purposes other than trading) is the estimated amount Griffin would receive to terminate the swap agreements at the balance sheet date, taking into account current interest rates and the credit worthiness of the counterparty for assets and the credit worthiness of Griffin for liabilities.

At February 27, 2010 and November 28, 2009, the fair values of Griffin’s fixed rate mortgages were $44.2 million and $39.3 million, respectively. The fair values were based on the present values of future cash flows discounted at estimated borrowing rates for similar loans.

The fair values of Griffin’s nonfinancial assets related to the building acquisition in Breinigsville, Pennsylvania on January 8, 2010, the acquisition date, are listed below. There were no liabilities assumed in connection with this acquisition. These assets were initially recorded at fair value but will not be re-measured at fair value on a recurring basis.

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Real estate held for lease	$	-	$	5,381	$	-

Intangible assets	$	-	$	-	$	1,019

4. Inventories

Inventories consist of:

	February 27, 2010		November 28, 2009

Nursery stock	$	19,174	$	17,999
Materials and supplies		1,817		1,574
	$	20,991	$	19,573

As a result of the shutdown of Imperial’s Florida farm in fiscal 2009, all of Imperial’s inventory as of February 27, 2010 and November 28, 2009 is at Imperial’s Connecticut farm and field liner beds located nearby that farm.

5. Real Estate Assets

Building Acquisition

On January 8, 2010, Griffin Land closed on the purchase of an approximate 120,000 square foot industrial building in Breinigsville, Pennsylvania. The building was acquired from the bankruptcy estate of the previous owner of the building. Griffin Land paid $6.4 million in cash for the building, including approximately $1.0 million paid as a deposit in the 2009 fourth quarter. The building is located in a major industrial area of Pennsylvania’s Lehigh Valley and is currently under a full building lease to Olympus Corporation of the Americas (“Olympus”). Griffin Land incurred approximately $0.3 million of acquisition costs on the purchase of this building, which are included in selling, general and administrative expenses on Griffin’s consolidated statement of operations for the 2010 first quarter. Subsequent to the purchase of this building, Griffin Land completed a lease amendment with Olympus that extends the lease term through 2025. On January 29, 2010, Griffin closed on a $4.3 million nonrecourse mortgage on this building (see Note 8). This is Griffin Land’s first real estate purchase outside of the Hartford, Connecticut market, where Griffin Land’s core real estate holdings are located.

Based on an independent appraisal of the building acquired, Griffin determined that the fair value of the assets acquired was equal to the purchase price. Of the $6.4 million purchase price, approximately $5.4 million represented the fair value of the real estate held for lease and approximately $1.0 million represented the fair value of the acquired intangible assets, comprised of the value of the in-place lease at the time of purchase and a tenant relationship intangible asset. The intangible assets are included in other assets on Griffin’s consolidated balance sheet.

Real estate held for sale or lease consists of:

		February 27, 2010
	Estimated Useful Lives	Held for Sale		Held for Lease			Total
Land		$	1,634	$	8,880		$	10,514
Land improvements	10 to 30 years		691		13,302			13,993
Buildings and improvements	10 to 40 years		-		128,379			128,379
Tenant improvements	Shorter of useful life or terms of related lease		-		12,759			12,759
Development costs			6,714		4,530			11,244
			9,039		167,850			176,889
Accumulated depreciation			-		(44,372	)		(44,372	)
		$	9,039	$	123,478		$	132,517

		November 28, 2009
	Estimated Useful Lives	Held for Sale		Held for Lease			Total
Land		$	1,634	$	8,048		$	9,682
Land improvements	10 to 30 years		691		12,952			13,643
Buildings and improvements	10 to 40 years		-		124,603			124,603
Tenant improvements	Shorter of useful life or terms of related lease		-		12,538			12,538
Development costs			6,720		4,270			10,990
			9,045		162,411			171,456
Accumulated depreciation			-		(43,145	)		(43,145	)
		$	9,045	$	119,266		$	128,311

Included in real estate held for lease as of February 27, 2010 and November 28, 2009 was $2,706 and $2,786, respectively, reflecting the net book value of Imperial’s Florida farm that was shut down in fiscal 2009 and is being leased to another landscape nursery grower.

Total depreciation expense related to real estate held for sale or lease was $1,439 and $1,187 in the 2010 and 2009 first quarters, respectively. There was no capitalized interest in the 2010 first quarter and $20 of capitalized interest in the 2009 first quarter.

6. Investments

Short-Term Investments

In the 2010 first quarter, Griffin sold its remaining short-term investments. Griffin's short-term investments were comprised of debt securities and were accounted for as trading securities under FASB ASC 320-10, "Investments - Debt and Equity Securities" (“ASC 320-10”). Accordingly, the securities were recorded at their fair value based upon quoted market prices at the balance sheet date and net

realized and unrealized gains and losses on these investments are included in investment income in Griffin’s consolidated statements of operations. The composition of short-term investments at November 28, 2009 was as follows:

	Cost		Fair Value
U.S. Treasury securities	$	453	$	454

Investment income in the 2010 first quarter and 2009 first quarter consists of:

	For the 13 Weeks Ended,
	February 27, 2010		February 28, 2009

Interest and dividend income	$	104	$	23
Net realized gains on the sales of short-term investments		-		86
Changes in unrealized gains on short-term investments		-		(62	)
	$	104	$	47

Centaur Media plc

Griffin’s investment in the common stock of Centaur Media plc (“Centaur Media”) is accounted for as an available-for-sale security under ASC 320-10, whereby increases or decreases in the fair value of this investment, net of income taxes, along with the effect of changes in the foreign currency exchange rate, net of income taxes, are recorded as a component of other comprehensive income (see Note 9).

As of February 27, 2010, the cost, gross unrealized gain and fair value of Griffin’s investment in Centaur Media were $2,677, $1,263 and $3,940, respectively. As of November 28, 2009, the cost, gross unrealized gain and fair value of Griffin’s investment in Centaur Media were $2,677, $1,938 and $4,615, respectively.

7. Property and Equipment

Property and equipment consist of:

	Estimated Useful Lives	February 27, 2010			November 28, 2009
Land		$	437		$	437
Land improvements	10 to 20 years		1,561			1,561
Buildings and improvements	10 to 40 years		1,842			1,842
Machinery and equipment	3 to 20 years		11,867			11,824
			15,707			15,664
Accumulated depreciation			(13,078	)		(12,934	)
		$	2,629		$	2,730

Griffin did not incur any new capital lease obligations in either the 2010 first quarter or the 2009 first quarter.

8. Long-Term Debt

Long-term debt includes:

	February 27, 2010			November 28, 2009
Nonrecourse mortgages:
6.08%, due January 1, 2013	$	7,364		$	7,419
6.30%, due May 1, 2014		754			792
5.73%, due July 1, 2015		20,014			20,097
8.13%, due April 1, 2016		4,749			4,814
7.0%, due October 1, 2017		6,589			6,636
Variable rate mortgage, due February 1, 2019*		12,000			11,776
Variable rate mortgage, due July 1, 2019*		8,435			8,468
6.5%, due January 27, 2020		4,300			-
Total nonrecourse mortgages		64,205			60,002
Revolving line of credit		2,500			2,500
Capital leases		80			96
Total		66,785			62,598
Less: current portion		(8,803	)		(1,532	)
Total long-term debt	$	57,982		$	61,066


* Griffin entered into interest rate swap agreements effectively to fix the interest rates on
these loans (see below).

On January 29, 2010, Griffin closed on a $4.3 million nonrecourse mortgage with NewAlliance Bank. This mortgage is collateralized by the approximate 120,000 square foot industrial building in Breinigsville, Pennsylvania that was acquired earlier in the period. This mortgage has a ten-year term and a fixed interest rate of 6.5% with monthly principal and interest payments starting on March 1, 2010 based on a twenty-five year amortization schedule.

On February 6, 2009, Griffin closed on a $12 million construction to permanent mortgage loan with Berkshire Bank (the “Berkshire Bank Loan”), which provided a significant portion of the financing for construction in 2009 of an approximate 304,000 square foot warehouse facility in New England Tradeport (“Tradeport”), Griffin’s industrial park in Windsor and East Granby, Connecticut. Prior to the closing of the Berkshire Bank Loan, Griffin Land entered into a ten-year lease with The Tire Rack, Inc. (“Tire Rack”), a private company, to lease approximately 257,000 square feet of this facility. Under certain conditions, but no later than August 2014, the beginning of the sixth year of the lease, Tire Rack is required to lease the entire building. The lease contains provisions for a potential expansion that would increase the size of the building up to approximately 450,000 square feet.

Through January 31, 2010, the Berkshire Bank Loan functioned as a construction loan, with Griffin Land drawing funds as construction on the new warehouse progressed. The interest rate during that period was the greater of 2.75% above the thirty day LIBOR rate or 4%. Payments during that period were for interest only. On February 1, 2010, the Berkshire Bank Loan converted to a nine-year nonrecourse mortgage collateralized by the new warehouse facility, with monthly payments of principal and interest starting on March 1, 2010 based on a twenty-five year amortization schedule.

At the time Griffin closed the Berkshire Bank Loan, Griffin also entered into an interest rate swap agreement with the bank for a notional principal amount of $12 million at inception to fix the interest rate for the final nine years of the loan at 6.35%. Payments under the swap agreement commenced on the same date that payments under the nine-year nonrecourse mortgage commenced and will continue monthly until February 1, 2019, which is also the termination date of the Berkshire Bank Loan.

In the 2009 third quarter, Griffin entered into an interest rate swap agreement in connection with a nonrecourse mortgage on four industrial Tradeport buildings that Griffin also entered into at that time. Griffin accounts for both of its interest rate swap agreements as effective cash flow hedges (see Note 3). No ineffectiveness on the cash flow hedges was recognized as of February 27, 2010 and none is anticipated over the term of the agreements. Amounts in other comprehensive (loss) income will be reclassified into interest expense over the term of the swap agreements to achieve fixed rates on each mortgage. Neither of the interest rate swap agreements contains any credit risk related contingent features. For the 2010 first quarter, Griffin recognized a gain of $451 (included in other comprehensive loss), before taxes, on its interest rate swap agreements. As of February 27, 2010, $35 is expected to be reclassified over the next twelve months from other comprehensive income to interest expense. As of February 27, 2010, the liability for Griffin’s interest rate swap agreements was $319 and is included in other noncurrent liabilities on Griffin’s consolidated balance sheet.

On February 27, 2009, Griffin closed on a $10 million Revolving Line of Credit with Doral Bank (the “Credit Line”) that has a term of two years, but may be extended for an additional year by Griffin. The Credit Line is collateralized by several of Griffin Land’s buildings in Griffin Center and Griffin Center South. The interest rate on the Credit Line is the greater of the prime rate plus 1.5% or 6.88%. As of February 27, 2010, the prime rate was 3.25%. Griffin is using this facility for seasonal working capital needs, to supplement cash flow from operations and for general corporate purposes. As of February 27, 2010 and November 28, 2009, there was $2.5 million outstanding on the Credit Line.

As of February 27, 2010, the entire balance of Griffin’s 6.08% nonrecourse mortgage due January 1, 2013 ($7.4 million) is included in the current portion of long-term debt. Griffin has classified this mortgage as current because, for the twelve month period ending December 31, 2010, Griffin expects that the ratio of the net operating income, as defined in the mortgage agreement, of the buildings that collateralize the mortgage, to the debt service of the mortgage (the “debt service coverage covenant”) will be less than the 1.25 required under the mortgage. The debt service coverage covenant for the twelve months ended December 31, 2009 was waived by the bank as Griffin would not have been in compliance at that measurement date. Griffin currently expects to obtain a waiver from the bank for the debt service coverage covenant for the twelve months ending December 31, 2010, prior to that date, although there can be no such assurance that the bank will grant such a waiver.

9. Stockholders’ Equity

Earnings Per Share

Basic and diluted per share results were based on the following:

	For the 13 Weeks Ended,
	February 27, 2010			February 28, 2009

Net loss as reported for computation
of basic and diluted per share results	$	(1,844	)	$	(1,822	)

Weighted average shares outstanding for
computation of basic and diluted
per share results (a)		5,098,000			5,073,000

(a)

Incremental shares from the assumed exercise of Griffin stock options are not included in periods where the inclusion of such shares would be anti-dilutive. The incremental shares from the assumed exercise of stock options in the 2010 first quarter and 2009 first quarter would have been 20,000 and 39,000, respectively.

Griffin Stock Option Plan

In fiscal 2009, the Board of Directors adopted the Griffin Land & Nurseries, Inc. 2009 Stock Option Plan (the “2009 Stock Option Plan”), which replaced the Griffin Land & Nurseries, Inc. 1997 Stock Option Plan (the “1997 Stock Option Plan”). The 2009 Stock Option Plan was approved by Griffin’s stockholders at Griffin’s 2009 Annual Meeting of Stockholders held on May 12, 2009. The Compensation Committee of Griffin’s Board of Directors administers the 2009 Stock Option Plan. The 2009 Stock Option Plan makes available options to purchase 386,926 shares of Griffin common stock, which includes 161,926 options to purchase the 161,926 shares that were available for issuance under the 1997 Stock Option Plan at the time it was replaced. Options granted under the 2009 Stock Option Plan may be either incentive stock options or non-qualified stock options issued at fair market value on the date approved by Griffin’s Board of Directors. Vesting of all of Griffin's previously issued stock options is solely based upon service requirements and does not contain market or performance conditions.

Stock options issued will expire ten years from the grant date. In accordance with the 2009 Stock Option Plan, stock options issued to non-employee directors upon their initial election to the board of directors are fully exercisable immediately upon the date of the option grant. Stock options issued to non-employee directors upon their reelection to the board of directors vest on the second anniversary from the date of grant. Stock options issued to employees vest in equal installments on the third, fourth and fifth anniversaries from the date of grant. None of the stock options outstanding at February 27, 2010 may be exercised as stock appreciation rights.

There were no stock options granted during the 2010 first quarter. There were 61,749 options granted during the 2009 first quarter under the 1997 Stock Option Plan. The fair values of the stock options granted during the 2009 first quarter were $14.88 for 22,500 options, $14.40 for 22,500 options, $10.54 for 15,000 options and $15.53 for 1,749 options. The fair values of all options granted were estimated as of each grant date using the Black-Scholes option-pricing model. Assumptions used in determining the fair value of the stock options granted in the 2009 first quarter were as follows:

		Expected volatility	37.7% to 42.5%
		Risk free interest rate	1.6% to 2.0%
		Expected option term	5 to 8.5 years
		Annual dividend yield	$0.40

Activity under the Griffin Stock Option Plan is summarized as follows:

	For the 13 Weeks Ended,
	February 27, 2010					February 28, 2009
Vested Options	Number of Shares			Weighted Avg. Exercise Price		Number of Shares			Weighted Avg. Exercise Price
Outstanding at beginning of period		71,133		$	17.61		89,368		$	15.56
Exercised		(10,000	)	$	11.22		(8,047	)	$	13.25
Granted and vested		-			-		1,749		$	34.30
Outstanding at end of period		61,133		$	18.65		83,070		$	16.17

Range of Exercise Prices for Vested Options		Outstanding at February 27, 2010		Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life (in years)		Total Intrinsic Value		Total Grant Date Fair Value
$	11.00-$14.00		28,544	$	12.47		1.3	$	464	$	135
$	15.00-$18.00		15,322	$	16.80		1.6		183		98
$	24.00-$35.00		17,267	$	30.52		6.2		22		275
			61,133	$	18.65		2.7	$	669	$	508

	For the 13 Weeks Ended,
	February 27, 2010				February 28, 2009
Nonvested Options	Number of Shares		Weighted Avg. Exercise Price		Number of Shares		Weighted Avg. Exercise Price
Nonvested at beginning of period		101,377	$	32.84		40,684	$	33.66
Granted		-		-		60,000	$	33.07
Nonvested at end of period		101,377	$	32.84		100,684	$	33.31

Range of Exercise Prices for Nonvested Options		Outstanding at February 27, 2010		Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life (in years)		Total Intrinsic Value		Total Grant Date Fair Value
$	28.00-$31.00		12,849	$	29.12		8.3	$	5	$	180
$	33.00-$35.00		88,528	$	33.38		8.6		-		1,240
			101,377	$	32.84		8.5	$	5	$	1,420

		Number of option holders at February 27, 2010	21

Compensation expense for stock options recognized in the 2010 first quarter and the 2009 first quarter was $92 and $88, respectively, with related tax benefits of $23 and $26, respectively. As of February 27, 2010, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows:

		Balance of Fiscal 2010	$ 257
		Fiscal 2011	$ 263
		Fiscal 2012	$ 141
		Fiscal 2013	$ 56
		Fiscal 2014	$ 7

Accumulated Other Comprehensive Income

Changes in accumulated other comprehensive income in the 2010 first quarter and 2009 first quarter consist of the following:

	For the 13 Weeks Ended,
	February 27, 2010			February 28, 2009

Balance at beginning of period	$	926		$	646
Increase (decrease) in value of cash flow hedge, net of taxes of $173
and ($64), respectively		278			(119	)
Decrease in fair value of Centaur Media, net of taxes of ($122)
and ($633), respectively		(226	)		(1,176	)
Decrease in fair value of Centaur Media, due to exchange loss,
net of taxes of ($115) and ($39), respectively		(212	)		(72	)
Balance at end of period	$	766		$	(721	)


Accumulated other comprehensive income is comprised of the following:

	February 27, 2010			November 28, 2009
Unrealized gain on investment in Centaur Media plc	$	843		$	1,281
Actuarial gain on postretirement benefit plan		131			131
Unrealized loss on cash flow hedges		(208	)		(486	)
	$	766		$	926

Cash Dividend

In the 2010 first quarter, Griffin declared a cash dividend of $0.10 per common share for holders of record as of the close of business on February 22, 2010, payable on March 4, 2010. In the 2009 first quarter, Griffin declared a cash dividend of $0.10 per common share.

10. Supplemental Financial Statement Information

Supplemental Cash Flow Information

The decreases of $675 and $1,920, respectively, in the 2010 first quarter and 2009 first quarter in Griffin’s Investment in Centaur Media reflect the mark to market adjustment of this investment and did not affect Griffin’s cash.

Included in accounts payable and accrued liabilities at February 27, 2010 and November 28, 2009 were $365 and $515, respectively, for additions to real estate held for sale or lease. Accounts payable and accrued liabilities related to additions to real estate held for sale or lease decreased by $150 in the 2010 first quarter and increased by $900 in the 2009 first quarter.

As of February 27, 2010, included in Griffin’s accrued liabilities is a dividend payable of $510 reflecting a dividend on Griffin’s common stock declared prior to the end of the 2010 first quarter that was paid subsequent to the end of Griffin’s 2010 first quarter. As of November 28, 2009, Griffin’s accrued liabilities included $509 for a dividend on Griffin’s common stock that was declared prior to the end of fiscal 2009 and paid in the 2010 first quarter.

Interest payments, net of capitalized interest, were $912 and $809 in the 2010 first quarter and 2009 first quarter, respectively.

Income Taxes

Griffin’s effective income tax rate was 37.3% in the 2010 first quarter as compared to 35.5% in the 2009 first quarter. The effective tax rate used in the 2010 first quarter is based on management’s projections for the balance of the year. To the extent that actual results differ from current projections, the effective income tax rate may change.

An increase to deferred tax assets of $237 in the 2010 first quarter relates to the mark to market adjustment on Griffin’s investment in Centaur Media. A decrease to deferred tax assets of $173 in the 2010 first quarter relates to the fair value adjustment of Griffin’s cash flow hedges. A decrease to deferred tax liabilities of $736 in the 2009 first quarter relates to the mark to market adjustment on Griffin’s investment in Centaur Media and to the fair value adjustment of a cash flow hedge that was entered into in the 2009 first quarter. These increases and decreases to deferred income taxes are included as charges and credits, respectively, in Griffin’s other comprehensive loss for the 2010 and 2009 first quarters.

As of February 27, 2010, Griffin’s consolidated balance sheet includes a net current deferred tax asset of $119 and a net noncurrent deferred tax asset of $135. Although Griffin has incurred pretax losses for the fiscal years ended November 29, 2008 and November 28, 2009 and has also incurred a pretax loss in the 2010 first quarter, management has concluded that a valuation allowance against those net deferred tax assets is not required.

Postretirement Benefits

Griffin maintains a postretirement benefits program that provides principally health and life insurance benefits to certain of its retirees. The liability for postretirement benefits is included in other noncurrent liabilities on Griffin’s consolidated balance sheets. Griffin’s postretirement benefits program is unfunded, with benefits to be paid from Griffin's general assets. Griffin’s contributions to its postretirement benefits program were $1 each in the 2010 and 2009 first quarters with an expected contribution of $8 for the fiscal 2010 full year. The components of Griffin's postretirement benefits expense are immaterial for all periods presented.

11. Commitments and Contingencies

As of February 27, 2010, Griffin had committed purchase obligations of $0.8 million, principally for the purchase of plants and raw materials by Imperial and for master planning of Griffin Land’s industrial properties.

Griffin is involved, as a defendant, in various litigation matters arising in the ordinary course of business. In the opinion of management, based on the advice of counsel, the ultimate liability, if any, with respect to these matters are not expected to be material, individually or in the aggregate, to Griffin’s consolidated financial position, results of operations or cash flows.

12. Subsequent Event

On March 17, 2010, Griffin Land closed on the purchase of approximately 51 acres of undeveloped land in Lower Nazareth, Pennsylvania. The undeveloped land was acquired from the bankruptcy estate of the sole owner of the property. The purchase price was $1.8 million plus acquisition expenses, including approximately $0.3 million paid as a deposit in the 2009 fourth quarter. The undeveloped land is located in a major industrial area of Pennsylvania’s Lehigh Valley and has approvals for the development of two industrial buildings totaling approximately 530,000 square feet.

In accordance with FASB ASC 855 “Subsequent Events”, Griffin has evaluated any events or transactions occurring after February 27, 2010, the balance sheet date, and noted that there have been no such events or transactions which would require recognition or disclosure in the consolidated financial statements as of and for the quarter ended February 27, 2010, other than the disclosures herein.

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
	CONDITION AND RESULTS OF OPERATIONS

Overview

The consolidated financial statements of Griffin include the accounts of Griffin’s subsidiary in the landscape nursery business, Imperial Nurseries, Inc. (“Imperial”), and Griffin’s Connecticut and Massachusetts based real estate business (“Griffin Land”).

The significant accounting policies and methods used in the preparation of Griffin’s consolidated financial statements included in Item 1 are consistent with those used in the preparation of Griffin’s audited financial statements for the fiscal year ended November 28, 2009 included in Griffin’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission.

Summary

Griffin incurred a net loss of $1.8 million in both the thirteen weeks ended February 27, 2010 (the “2010 first quarter”) and the thirteen weeks ended February 28, 2009 (the “2009 first quarter”). Although Griffin’s net loss was essentially unchanged in the 2010 first quarter as compared to the 2009 first quarter, Griffin incurred a slightly lower operating loss in the 2010 first quarter and had a slightly higher tax benefit in the 2010 first quarter, substantially offset by higher interest expense in the 2010 first quarter as compared to the 2009 first quarter. The change in Griffin’s operating loss principally reflects a slightly lower operating loss at Imperial. Imperial historically incurs an operating loss in the first quarter due to the highly seasonal nature of its landscape nursery business. The slightly higher income tax benefit principally reflects the effect of changes in state income taxes. The higher interest expense reflects the higher level of debt in the 2010 first quarter as compared to the 2009 first quarter. Griffin Land’s operating results were essentially break-even in both the 2010 and 2009 first quarters as increased profit from leasing activities in the 2010 first quarter versus the 2009 first quarter was substantially offset by acquisition expenses incurred during the 2010 first quarter on the building purchase completed during the period. Griffin’s general corporate expense was essentially unchanged in the 2010 first quarter as compared to the 2009 first quarter.

Results of Operations

Thirteen Weeks Ended February 27, 2010 Compared to the Thirteen Weeks Ended February 28, 2009

Griffin’s consolidated total revenue increased to $4.8 million in the 2010 first quarter from $4.6 million in the 2009 first quarter. The net increase reflects a $0.3 million increase in revenue at Griffin Land partially offset by slightly lower net sales and other revenue at Imperial.

A summary of the square footage of Griffin Land’s real estate portfolio is as follows:

	Total Square Footage	Square Footage Leased	Percentage Leased

As of February 27, 2010	2,540,000	2,029,000	80%
As of November 28, 2009	2,420,000	1,893,000	78%
As of February 28, 2009	2,116,000	1,684,000	80%

Griffin Land’s total square footage and square footage leased at the end of the 2010 first quarter was higher than the comparative amounts at year end 2009 due principally to the purchase of a 120,000 square foot fully leased industrial building located in Breinigsville, Pennsylvania in the 2010 first quarter. The increase in total square footage and square footage leased at the end of the 2010 first quarter as compared to the end of the 2009 first quarter principally reflects the construction, during fiscal 2009, of a 304,000 square foot building in New England Tradeport (“Tradeport”), Griffin Land’s industrial park in Windsor and East Granby, Connecticut, of which 257,000 is currently leased, and the fully leased 120,000 square foot industrial building acquired during the 2010 first quarter.

The increase in Griffin Land’s total revenue in the 2010 first quarter as compared to the 2009 first quarter principally reflects: (a) approximately $0.5 million of revenue from the new 304,000 square foot building in Tradeport that was completed and placed in service in the 2009 third quarter and from the 120,000 square foot industrial building acquired during the 2010 first quarter; (b) approximately $0.2 million from leasing previously vacant space subsequent to the end of the 2009 first quarter; partially offset by (c) an approximately $0.3 million reduction in rental revenue as a result of leases that expired subsequent to the 2009 first quarter and were not renewed. Market activity for industrial and office space was soft throughout fiscal 2009 and, for industrial space, remained weak through the 2010 first quarter. There was a slight increase in market activity for office space in early 2010. In the 2010 first quarter, Griffin Land entered into a new lease for approximately 19,000 square feet of previously vacant office space, and subsequent to the end of the 2010 first quarter Griffin Land completed a lease for 21,000 square feet of previously vacant office space.

Griffin Land had no property sales revenue in either the 2010 or the 2009 first quarters. Property sales occur periodically and changes in revenue from year to year from those transactions may not be indicative of any trends in the real estate business.

Net sales and other revenue at Imperial were lower in the 2010 first quarter as compared to the 2009 first quarter. Included in Imperial’s 2010 first quarter net sales and other revenue is $0.1 million of rental revenue with respect to Imperial’s Florida farm. Imperial shut down its Florida farm operations in the 2009 third quarter and is leasing that facility to another grower of landscape nursery products. Imperial’s landscape nursery business is highly seasonal, with sales peaking in the spring. First quarter sales at Imperial are not significant because sales in the winter months that comprise the first quarter

(December through February) have accounted for less than 3% of Imperial’s full year net sales in each of the past three years.

Griffin incurred a consolidated operating loss, including general corporate expense, of $2.0 million in the 2010 first quarter, as compared to a consolidated operating loss, including general corporate expense, of $2.1 million incurred in the 2009 first quarter. Griffin Land’s operating results were essentially break-even in both the 2010 and 2009 first quarters, whereas Imperial’s operating loss in the 2010 first quarter was slightly lower than its 2009 first quarter operating loss. Griffin’s general corporate expense was essentially unchanged in the 2010 first quarter as compared to the 2009 first quarter.

Operating results at Griffin Land in the 2010 and 2009 first quarters were as follows:

	2010			2009
	First Qtr.			First Qtr.
	(amounts in thousands)
Rental revenue	$	4,527		$	4,184
Costs related to rental revenue excluding
depreciation and amortization expense (a)		(1,995	)		(2,117	)
Profit from leasing activities before general and
administrative expenses and before depreciation
and amortization expense (a)		2,532			2,067
Revenue from property sales		-			-
Costs related to property sales		-			-
Gain from property sales		-			-
Profit from leasing activities and gain from property sales
before general and administrative expenses and before
depreciation and amortization expense (a)		2,532			2,067
General and administrative expenses excluding depreciation
and amortization expense and excluding acquisition expenses (a)		(743	)		(692	)
Acquisition expenses		(301	)		-
Total general and administrative expenses excluding depreciation
and amortization expense (a)		(1,044	)		(692	)
Profit before depreciation and amortization expense (a)		1,488			1,375
Depreciation and amortization expense related to costs of
rental revenue		(1,522	)		(1,361	)
Depreciation and amortization expense - other		(6	)		(8	)
Operating (loss) profit	$	(40	)	$	6

(a)

The costs related to rental revenue excluding depreciation and amortization expense, profit from leasing activities before general and administrative expenses and before depreciation and amortization expense, general and administrative expenses excluding depreciation and amortization expense and excluding acquisition expenses, general and administrative expenses excluding depreciation and amortization expense and profit before depreciation and amortization expense are disclosures not in conformity with accounting principles generally accepted in the United State of America. They are presented because Griffin believes they are useful financial indicators for measuring the results in its real estate business segment. However, they should not be considered as an

alternative to operating profit as a measure of operating results in accordance with accounting principles generally accepted in the United States of America. The aggregate of: (i) costs related to rental revenue excluding depreciation and amortization expense; (ii) costs related to property sales; and (iii) depreciation and amortization expense related to costs of rental revenue, equals the costs related to rental revenue and property sales as reported on Griffin’s consolidated statement of operations.

Profit from leasing activities before general and administrative expenses and before depreciation and amortization expense increased by approximately $0.5 million in the 2010 first quarter as compared to the 2009 first quarter, principally reflecting the increase in rental revenue and lower costs related to rental revenue excluding depreciation and amortization expense. Costs related to rental revenue excluding depreciation and amortization expense were lower in the 2010 first quarter as compared to the 2009 first quarter due principally to lower snow removal and lower utility expenses in the 2010 first quarter, which more than offset the building operating expenses in the 2010 first quarter of the new Tradeport building that came on line in the 2009 third quarter.

Griffin Land’s general and administrative expenses increased by approximately $0.3 million in the 2010 first quarter as compared to the 2009 first quarter due principally to $0.3 million of acquisition costs incurred for the purchase of the 120,000 square foot industrial building in Pennsylvania that closed during the 2010 first quarter. Depreciation and amortization expense at Griffin Land increased from $1.4 million in the 2009 first quarter to $1.5 million in the 2010 first quarter due principally to approximately $0.2 million for the Tradeport industrial building completed and placed in service in the 2009 third quarter partially offset by lower depreciation and amortization expenses on tenant improvements related to leases that expired subsequent to the 2009 first quarter and were not renewed.

Imperial’s operating results in the 2010 and 2009 first quarters were as follows:

	2010			2009
	First Qtr.			First Qtr.
	(amounts in thousands)
Net sales and other revenue	$	279		$	449
Cost of goods sold		319			419
Gross (loss) profit		(40	)		30
Selling, general and administrative expenses		(743	)		(880	)
Operating loss	$	(783	)	$	(850	)

Due to the seasonality of the landscape nursery business, Imperial historically incurs a first quarter operating loss. As previously noted, Imperial’s first quarter net sales are not significant to its total net sales for the year. Selling, general and administrative expenses were lower in the 2010 first quarter as compared to the 2009 first quarter due principally to lower payroll expenses as a result of the shutdown of the Florida farm that was completed in the 2009 third quarter.

Imperial’s fiscal 2010 operating results are expected to be negatively impacted by the weak economy and poor housing market. Selling prices in fiscal 2009 were lower than the previous year, and Imperial does not expect any pricing improvements in fiscal 2010. Weak sales over the past two years has resulted in an oversupply of product available for sale by growers of landscape nursery product, which is expected to prohibit any improvement in pricing in the current year.

Griffin’s consolidated interest expense increased to $1.0 million in the 2010 first quarter as compared to $0.8 million in the 2009 first quarter, principally reflecting the higher debt level during the 2010 first quarter as compared to the 2009 first quarter. Griffin’s average outstanding debt was $64.6 million in the 2010 first quarter as compared to $48.4 million in the 2009 first quarter. The increased debt principally reflects borrowings under the $12 million nonrecourse mortgage that financed a significant portion of the 304,000 square foot Tradeport warehouse built in fiscal 2009 and a $4.3 million mortgage taken out on the industrial building in Pennsylvania that was acquired in the 2010 first quarter.

Griffin’s investment income increased in the 2010 first quarter as compared to the 2009 first quarter. The increase reflects a dividend from Centaur Media received in the 2010 first quarter (there was no dividend income in the 2009 first quarter) partially offset by lower investment income on Griffin’s short-term investments. The decrease in investment income from Griffin’s short-term investments in the 2010 first quarter principally reflects Griffin having an average balance of short-term investments of $0.4 million in the 2010 first quarter as compared to an average of $8.1 million of short-term investments in the 2009 first quarter. The reduction in short-term investments principally reflects the liquidation of those investments and use of the proceeds over the last nine months of fiscal 2009 and the 2010 first quarter to invest in additions to Griffin Land’s real estate assets and supplement cash generated from Griffin’s operations.

Griffin’s effective income tax rate was 37.3 % in the 2010 first quarter as compared to 35.5 % in the 2009 first quarter. The higher effective tax rate in the 2010 first quarter is attributed to the effect of changes in state taxes. The effective tax rate used in the 2010 first quarter is based on management’s projections of operating results for the full year. To the extent that actual results differ from current projections, the effective income tax rate may change.

Off Balance Sheet Arrangements

Griffin does not have any material off balance sheet arrangements.

Liquidity and Capital Resources

Net cash used in operating activities was $0.5 million in the 2010 first quarter as compared to $1.1 million in the 2009 first quarter. Net cash used in operating activities in the 2010 first quarter includes $0.5 million of cash generated from the liquidation of short-term investments as compared to $2.0 million of cash generated from a reduction of Griffin’s short-term investments in the 2009 first quarter. Excluding the reductions of short-term investments in each period, Griffin had net cash used in operating activities of $1.0 million in the 2010 first quarter as compared to $3.2 million in the 2009 first quarter. The lower usage of cash in the 2010 first quarter as compared to the 2009 first quarter principally reflects a smaller increase in inventory and a greater reduction in accounts receivable at Imperial in the 2010 first quarter as compared to the 2009 first quarter. The increase in inventory during the 2009 first quarter includes inventory at Imperial’s Florida farm, which Imperial closed during the 2009 third quarter.

In the 2010 first quarter, Griffin had net cash of $5.9 million used in investing activities as compared to net cash of $2.0 million used in investing activities in the 2009 first quarter. The net cash used in investing activities in the 2010 first quarter principally reflects the $5.4 million paid for the acquisition of the fully leased 120,000 square foot industrial building in Breinigsville, Pennsylvania. The total purchase price of the building was $6.4 million, with $1.0 million paid in the 2009 fourth quarter. Additions to real estate held for sale or lease were $0.4 million during the 2010 first quarter and additions to property and equipment were less than $0.1 million during the 2010 first quarter.

Net cash provided by financing activities was $3.7 million in the 2010 first quarter as compared to net cash of $1.2 million used in financing activities in the 2009 first quarter. The net cash provided by

financing activities in the 2010 first quarter includes $4.5 million of proceeds from new borrowings, comprised of $4.3 million from a new nonrecourse mortgage with NewAlliance Bank on the 120,000 square foot industrial building acquired in Pennsylvania and $0.2 million from the final borrowings under the construction to permanent mortgage loan with Berkshire Bank. The new mortgage with NewAlliance Bank has a fixed interest rate of 6.5% and a ten-year term with payments based on a twenty-five year amortization schedule. In addition, Griffin received $0.1 million of cash from the exercise of stock options. The proceeds from debt and cash received from the exercise of stock options were partially offset by a $0.5 million dividend payment on Griffin’s common stock, $0.3 million for payments of principal on Griffin Land’s nonrecourse mortgages and $0.1 million of debt issuance costs.

On March 17, 2010, Griffin Land completed the purchase of approximately 51 acres of undeveloped land in Lower Nazareth, Pennsylvania. The land was purchased for approximately $1.8 million, before acquisition expenses, and is located in a major industrial area in the Lehigh Valley. The land acquired has approvals for the development of two industrial buildings totaling approximately 530,000 square feet. This transaction, along with the purchase of the 120,000 square foot industrial building in nearby Breinigsville, Pennsylvania are Griffin’s first real estate acquisitions outside of the Hartford, Connecticut market, where Griffin Land’s core real estate holdings are located.

In the near-term, Griffin plans to continue to invest in its real estate business, including expenditures to build out interiors of its buildings as leases are completed, infrastructure improvements required for future development of its real estate holdings and the potential acquisition of properties outside of the Hartford, Connecticut market. Griffin does not expect to commence any speculative construction projects for its Connecticut real estate portfolio until a substantial portion of Griffin Land’s currently vacant space is leased.

Griffin’s payments (including principal and interest) under contractual obligations as of February 27, 2010 are as follows:

	Total		Due Within One Year		Due From 1-3 Years		Due From 3-5 Years		Due in More Than 5 Years
	(in millions)
Mortgages	$	90.1	$	5.7	$	18.0	$	9.9	$	56.5
Revolving Line of Credit		2.5		-		2.5		-		-
Capital Lease Obligations		0.1		0.1		-		-		-
Operating Lease Obligations		0.8		0.2		0.5		0.1		-
Purchase Obligations (1)		0.8		0.8		-		-		-
Other (2)		2.3		-		-		-		2.3
	$	96.6	$	6.8	$	21.0	$	10.0	$	58.8

(1)

Includes obligations for the purchase of plants and raw materials by Imperial and for master planning of Griffin Land’s industrial properties.

(2)

Includes Griffin’s deferred compensation plan and other postretirement benefit liabilities.

As of February 27, 2010, Griffin had cash and cash equivalents of approximately $6.4 million and Griffin also expects to receive an income tax refund of approximately $6.3 million in the second half of fiscal 2010. Management believes that its cash and cash equivalents, expected income tax refund and borrowing capacity under its $10 million credit line are sufficient to meet Griffin’s seasonal working capital requirements, the continued investment in Griffin’s real estate assets and the payment of quarterly dividends on its common stock. Griffin may also continue to seek other nonrecourse mortgage placements on its properties. Griffin Land’s real estate portfolio currently includes seven buildings aggregating approximately 750,000 square feet that are not mortgaged. Griffin also expects to continue to seek to purchase either or both land and buildings in markets outside of the Hartford, Connecticut area. Real estate acquisitions may or may not occur based on many factors, including real estate pricing.

Forward-Looking Information

The above information in Management’s Discussion and Analysis of Financial Condition and Results of Operations includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Although Griffin believes that its plans, intentions and expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such plans, intentions or expectations will be achieved, particularly with respect to leasing of currently vacant space, construction of additional facilities in the real estate business, the ability to obtain additional mortgage financing, development of the 51 acre land parcel recently acquired, the expected income tax refund and Griffin’s anticipated future liquidity. The projected information disclosed herein is based on assumptions and estimates that, while considered reasonable by Griffin as of the date hereof, are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, many of which are beyond the control of Griffin.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of changes in value of a financial instrument, derivative or non-derivative, caused by fluctuations in interest rates, foreign exchange rates and equity prices. Changes in these factors could cause fluctuations in earnings and cash flows.

For fixed rate mortgage debt, changes in interest rates generally affect the fair market value of the debt instrument, but not earnings or cash flows. Griffin does not have an obligation to prepay any fixed rate debt prior to maturity, and therefore, interest rate risk and changes in the fair market value of fixed rate debt should not have a significant impact on earnings or cash flows until such debt is refinanced, if necessary. Griffin’s mortgage interest rates are described in Note 8 to the unaudited consolidated financial statements included in Item 1.

For variable rate debt, changes in interest rates generally do not impact the fair market value of the debt instrument, but do affect future earnings and cash flows. As of February 27, 2010, Griffin had $22.9 million of variable rate debt outstanding, including $20.4 million for which Griffin had entered into interest rate swap agreements which effectively fixes the interest rate on that debt. Because the remaining variable rate debt includes a provision establishing a minimum interest rate, a 1% increase in the benchmark interest rate on which the variable rate debt is based upon would not have increased Griffin’s interest expense.

Griffin is exposed to market risks from fluctuations in interest rates and the effects of those

fluctuations on the market values of Griffin’s cash equivalents. These investments generally consist of money market securities that are not significantly exposed to interest rate risk.

Griffin does not have foreign currency exposure related to its operations. Griffin does have an investment in a public company, Centaur Media plc, based in the United Kingdom. The amount to be realized from the ultimate liquidation of that investment and conversion of proceeds into United States currency is subject to future foreign currency exchange rates.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Griffin maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to Griffin’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), Griffin carried out an evaluation, under the supervision and with the participation of Griffin’s management, including Griffin’s Chief Executive Officer and Griffin’s Chief Financial Officer, of the effectiveness of the design and operation of Griffin’s disclosure controls and procedures as of the end of the fiscal period covered by this report. Based on the foregoing, Griffin’s Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There has been no change in Griffin’s internal control over financial reporting during Griffin’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Griffin’s internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1A.

RISK FACTORS

There have been no material changes from risk factors as previously disclosed in Item 1A of the Company’s Annual Report on Form 10-K for the year ended November 28, 2009.

ITEM 6.	EXHIBITS

	Exhibit No.	Description

	3.1	Form of Amended and Restated Certificate of Incorporation of Griffin Land & Nurseries, Inc. (incorporated by reference to the Form 10 of Griffin Land & Nurseries, Inc., filed April 8, 1997, as amended)

	3.2	Form of Bylaws of Griffin Land & Nurseries, Inc. (incorporated by reference to the Form 10 of Griffin Land & Nurseries, Inc., filed April 8, 1997, as amended)

	10.4	Form of Agricultural Lease between Griffin Land & Nurseries, Inc. and General Cigar Holdings, Inc. (incorporated by reference to the Registration Statement on Form S-1 of General Cigar Holdings, Inc., filed December 24, 1996, as amended)

	10.6	Form of 1997 Stock Option Plan of Griffin Land & Nurseries, Inc. (incorporated by reference to the Form 10 of Griffin Land & Nurseries, Inc., filed April 8, 1997, as amended)

	10.7	Form of 401(k) Plan of Griffin Land & Nurseries, Inc. (incorporated by reference to the Form 10 of Griffin Land & Nurseries, Inc., filed April 8, 1997, as amended)

	10.17	Loan Agreement dated June 24, 1999 (incorporated by reference to Form 10-Q dated August 28, 1999, filed October 8, 1999)

	10.21	Mortgage Deed, Security Agreement, Financing Statement and Fixture Filing with Absolute Assignment of Rents and Leases dated September 17, 2002 between Tradeport Development I, LLC and Farm Bureau Life Insurance Company (incorporated by reference to Form 10-Q dated August 31, 2002, filed October 11, 2002)

	10.22	Letter of Agreement between Griffin Land & Nurseries, Inc. and USAA Real Estate Company (incorporated by reference to Form 10-Q dated August 31, 2002, filed October 11, 2002)

	10.23	Agreement of Purchase and Sale of Partnership Interest between Griffin Land & Nurseries, Inc. and USAA Real Estate Company dated December 3, 2002 (incorporated by reference to Form 10-K dated November 30, 2002, filed February 28, 2003)


	10.24	Mortgage Deed and Security Agreement dated December 17, 2002 between Griffin Center Development IV, LLC and Webster Bank (incorporated by reference to Form 10-K dated November 30, 2002, filed February 28, 2003)

	10.28	Secured Installment Note and First Amendment of Mortgage and Loan Documents dated April 16, 2004 among Tradeport Development I, LLC, and Griffin Land & Nurseries, Inc. and Farm Bureau Life Insurance Company (incorporated by reference to Form 10-Q dated May 29, 2004, filed July 13, 2004)

	10.29	Mortgage Deed Security Agreement, Fixture Filing, Financing Statement and Assignment of Leases and Rents dated July 6, 2005 by Tradeport Development II, LLC in favor of First Sunamerica Life Insurance Company (incorporated by reference to Form 10-Q dated May 28, 2005, filed on November 2, 2005)

	10.30	Promissory Note dated July 6, 2005 (incorporated by reference to Form 10-Q dated May 28, 2005, filed on November 2, 2005)

	10.31	Guaranty Agreement as of July 6, 2005 by Griffin Land & Nurseries, Inc. in favor of Sunamerica Life Insurance Company (incorporated by reference to Form 10-Q dated May 28, 2005, filed on November 2, 2005)

	10.32	Amended and Restated Mortgage Deed Security Agreement, Fixture Filing, Financing Statement and Assignment of Leases and Rents dated November 16, 2006 by Tradeport Development II, LLC in favor of First Sunamerica Life Insurance Company (incorporated by reference to Form 10-K dated December 2, 2006, filed February 15, 2007)

	10.33	Amended and Restated Promissory Note dated November 16, 2006 (incorporated by reference to Form 10-K dated December 2, 2006, filed February 15, 2007)

	10.34	Guaranty Agreement as of November 16, 2006 by Griffin Land & Nurseries, Inc. in favor of Sunamerica Life Insurance Company (incorporated by reference to Form 10-K dated December 2, 2006, filed February 15, 2007)

	10.35	Employment Agreement by and between Imperial Nurseries, Inc. and Gregory Schaan dated January 1, 2001, as amended April 9, 2008 (incorporated by reference to Form 10-Q dated March 1, 2008, filed April 10, 2008)

	10.36	Construction Loan and Security Agreement dated February 6, 2009 by and between Tradeport Development III, LLC, Griffin Land & Nurseries, Inc., and Berkshire Bank (incorporated by reference to Form 10-Q dated February 28, 2009, filed April 9, 2009)

	10.37	$12,000,000 Construction Note dated February 6, 2009 (incorporated by reference to Form 10-Q dated February 28, 2009, filed April 9, 2009)

	10.38	Revolving Line of Credit Loan Agreement dated February 27, 2009 between Griffin Land & Nurseries, Inc. and Doral Bank, FSB (incorporated by reference to Form 10-Q dated February 28, 2009, filed April 9, 2009)

	10.39	$10,000,000 Promissory Note (Revolving Line of Credit) dated February 27, 2009 (incorporated by reference to Form 10-Q dated February 28, 2009, filed April 9, 2009)

	10.40	Loan and Security Agreement dated July 9, 2009 between Griffin Land & Nurseries, Inc. and People’s United Bank (incorporated by reference to Form 10-Q dated August 29, 2009, filed October 8, 2009)

	10.41	$10,500,000 Promissory Note dated July 9, 2009 (incorporated by reference to Form 10-Q dated August 29, 2009, filed October 8, 2009)

	10.42 *	Mortgage and Security Agreement dated January 27, 2010 between Riverbend Crossings III Holdings, LLC and NewAlliance Bank

	10.43 *	$4,300,000 Promissory Note dated January 27, 2010

	31.1 *	Certifications of Chief Executive Officer Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	31.2 *	Certifications of Chief Financial Officer Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes Oxley Act of 2002

	32.1 *	Certifications of Chief Executive Officer Pursuant to 18 U.S.C
		Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	32.2 *	Certifications of Chief Financial Officer Pursuant to 18 U.S.C
		Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed herewith.

SIGNATURES

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

		GRIFFIN LAND & NURSERIES, INC.

		BY: /s/ FREDERICK M. DANZIGER
Date : April 8, 2010		Frederick M. Danziger
		President and Chief Executive Officer


		BY: /s/ ANTHONY J. GALICI
Date : April 8, 2010		Anthony J. Galici
		Vice President, Chief Financial Officer and Secretary,
		Chief Accounting Officer

I hereby certify that the address of the

Mortgagee stated below is correct.

James R. Lagasse, Vice President of

MORTGAGE AND SECURITY AGREEMENT

TO ALL PEOPLE TO WHOM THESE PRESENTS SHALL COME, GREETINGS:

KNOW YE, THAT RIVERBEND CROSSINGS III HOLDINGS LLC , a Pennsylvania limited liability company, having a principal office and mailing address at c/o Griffin Land & Nurseries, Inc., 204 West Newberry Road, Bloomfield, Connecticut 06002 (hereinafter called the " Grantor "), for the consideration of Ten ($10.00) dollars and other good and valuable consideration received to the full satisfaction of NEWALLIANCE BANK , a Connecticut banking corporation having an office at 195 Church Street, New Haven, Connecticut 06510 (hereinafter called the " Grantee "), DOES HEREBY GRANT, CONVEY, TRANSFER AND ASSIGN TO Grantee, its successors and assigns, forever the following property, interests and rights (collectively, the " Mortgaged Property "):

That certain piece or parcel of land, with any buildings and improvements now or hereafter placed thereon, known as 871 Nestle Way and being in the Town of Breinigsville, County of Lehigh, and Commonwealth of Pennsylvania, and more particularly bounded and described in Schedule A annexed hereto and made a part hereof (collectively, the " Premises ").

All the right, title and interest of the Grantor, now or hereafter acquired, in or to the land lying in the bed of any street, road or avenue, opened or proposed, and any and all sidewalks, plazas, alleys, strips and gores, in front of, adjoining or adjacent to said Premises; and any and all privileges, tenements, hereditaments, licenses, easements, rights, royalties, mineral, oil and gas rights, rents, issues and profits, water, water rights, and appurtenances, reversions and remainders belonging or in any way appertaining to the Premises.

All right, title and interest of the Grantor in or to any and all buildings, improvements, structures, equipment, machinery, apparatus, appliances, fittings, fixtures, chattels, building materials, supplies, and other property stored at or delivered to the Premises, and articles of personal property of every kind and nature whatsoever, now or hereafter located in, upon or about the Premises, or any part thereof, and used or usable in connection with any present or future occupancy or operation of the Premises„ and all renewals and replacements thereof and additions and accessions thereto, whether or not the same are or shall be attached to the Premises in any manner (hereinafter collectively called the " Service Equipment "). Service Equipment shall be deemed to include, without limitation, all heating, lighting, laundry, incinerating and power equipment, engines, pipes, pumps, tanks, motors, dynamos, boilers, fuel, conduits, switchboards, plumbing, lifting, cleaning, refrigerating, ventilating, and communications apparatus, sprinkler systems and other fire prevention and fire extinguishing apparatus, air cooling and air conditioning apparatus, elevators, escalators, shades, blinds, awnings, screens, storm doors, and windows, refrigerators, refrigerating plants, wall cabinets, attached cabinets, partitions, ducts and compressors, pumps, filters, hoses, gas and electric equipment and fixtures, ranges, stoves, disposals, washing machines, dryers, furniture, furnishings, tables, chairs, carpets and rugs, and all right, title and interest of the Grantor in and to any Service Equipment which may be subject to any security agreement, conditional bill of sale, or chattel mortgage superior to the rights of the Grantee under this Mortgage and Security Agreement (the " Mortgage "), and the Grantor agrees to execute and deliver, from time to time, such further documents and instruments as may be requested by the Grantee to confirm, preserve, and enforce the lien of this Mortgage as to the Service Equipment; and all the proceeds and products of any

and all Service Equipment, including, but not limited to, any deposits or payments now or hereafter made thereon.

Any and all unearned premiums, accrued, accruing or to accrue under any insurance policy or policies now or hereafter obtained by Grantor and all proceeds payable by reason of the conversion, voluntary or involuntary, of the Mortgaged Property, the improvements and/or any other property or rights encumbered or conveyed hereby, or any part thereof, into cash or liquidated claims.

Any and all awards or payments, including interest thereon, and the right to receive the same, which may be made with respect to the Mortgaged Property as a result of the exercise of the right of eminent domain, the alteration of the grade of any street, or any other injury to or decrease in the value of the Mortgaged Property, to the extent of all amounts which may be secured by this Mortgage at the date of receipt of any such award or payment by the Grantee, and of the reasonable attorneys' fees, costs and disbursements incurred by the Grantee in connection with the collection of such award or payment, and the Grantor agrees to execute and deliver, from time to time, such further instruments as may be requested by the Grantee to confirm such assignment to the Grantor of any such award or payment.

Any and all further estate, right, title, interest, property, claim and demand whatsoever, either in law or in equity, of the Grantor, in or to any of the above.

TO HAVE AND TO HOLD the above granted and bargained Mortgaged Property, with the privileges and appurtenances thereof, unto the said Grantee, its successors and assigns, forever, to its and their own proper use and behoof. And also, the said Grantor does for Grantor and for Grantor's heirs, executors, administrators, successors and assigns covenant with the said Grantee, its successors and assigns, that at and until the ensealing of these presents Grantor is well seized of the Mortgaged Property as a good indefeasible estate in FEE SIMPLE; and has good right to bargain and sell the same in manner and form as above written; and that the same is free from all encumbrances whatsoever, except encumbrances set forth on Schedule B, Part I of the mortgagee title insurance policy delivered to and pre-approved by Grantee (the " Policy ").

AND FURTHERMORE, the said Grantor does by these presents bind Grantor and Grantor's heirs, executors, administrators, successors and assigns, forever, to warrant and defend the above granted and bargained Mortgaged Property to the said Grantee, its successors and assigns, against all claims and demand whatsoever, except as set forth on Schedule B, Part I of the Policy.

THE CONDITION OF THIS DEED IS SUCH THAT:

WHEREAS, Grantee this date has made to Grantor a commercial mortgage loan in the principal amount of FOUR MILLION THREE HUNDRED THOUSAND AND 00/100 DOLLARS ($4,300,000.00) (the " Loan ") having a maturity date of not later than January 28, 2020 as evidenced by a Promissory Note of even date in such amount payable to Grantee or order (the " Note "); and

WHEREAS, in consideration thereof, and in order more fully to protect the security of this Mortgage, Grantor represents, warrants, covenants, and agrees as follows:

1. Authority, to Execute Loan Documents . The Grantor has full power and authority to execute and deliver the Note, this Mortgage, all other mortgage instruments, security agreements, and all other agreements and documents required of it (collectively, the " Loan Documents "), to the Grantee, and the execution and delivery of the same is not in violation of and will not result in default of any agreements or understanding the Grantor may have with any person or persons. The Grantor's execution and delivery of the same has been duly authorized by all requisite company actions.

2. Legal Tender, Joint and Several Liability . The Grantor shall pay all the indebtedness evidenced by the Note, including, but not limited to, all outstanding principal and the interest owed under

the Note in lawful money of the United States at the times and in the manner set forth in the Note (collectively, the " Mortgage Debt "). If the Grantor consists of more than one person or entity, such Grantors shall be jointly and severally liable for the performance of all covenants and agreements herein contained:

3. Taxes Assessments, Other Charges and Future Laws . The Grantor shall pay promptly, before the same shall become delinquent, all real estate taxes, other taxes, assessments, sewer rents, water rates and other charges of any kind now or hereafter levied or assessed upon the Mortgaged Property or any part thereof, or upon the Note, or upon the interest of the Grantee in the Mortgaged Property, and any governmental or municipal charges and impositions for which lien rights exist. The Grantor shall exhibit to the Grantee receipts for the payment of real estate taxes immediately following payment thereof, and receipts for the payment of all other items specified in this Section prior to the date when the same shall become delinquent, upon request of the Grantee.

In the event of the passage, after the date of this Mortgage, of any law or in the event of the rendition of a decision of any court of competent jurisdiction imposing upon the Grantee the taxes, charges or assessments previously paid by the Grantor, or changing in any way the laws for the taxation of mortgages or indebtedness secured by mortgages, or imposing a tax, directly or indirectly, on this Mortgage or the Note, or changing the manner of the collection of any such taxes, charges or assessments, so as to affect this Mortgage or lessen the net income to Grantee on the Mortgage Debt Grantor shall pay any such tax, charge or assessment to or for the Grantee.

4. Hazard Insurance . The Grantor shall keep the Mortgaged Property and any and all alterations, rebuilding, replacements and additions thereto, insured for the benefit of the Grantee pursuant to policies which shall provide coverage of not less than coverage encompassed by Builder’s Risk (during any period of construction of the improvements), Fire, Extended Coverage and Vandalism and Malicious Mischief perils broadened to so-called "Direct or All Risk of Physical Loss" (hereinafter collectively called the " Hazards and Risks "), all in forms approved by the Grantee and in an amount equivalent to the greater of the Loan or one hundred (100%) percent of the full insurable value thereof, with such insurance to provide for the full replacement cost, excluding the footings and foundations below the lower basement floor undersurface, or if there is no basement, that surface which is below ground level, without deduction for depreciation. Such insurance shall not contain any clause which would result in the insured thereunder being required to carry insurance with respect to the property covered thereby in an amount equal to the minimum specific percentage of the full replacement cost of such property in order to prevent the insured therein named from becoming a co-insurer of any loss under such policy. If deemed reasonably necessary by the Grantee, the Grantor shall also maintain in full force and effect with respect to the Mortgaged Property, Boiler and Machinery insurance, in forms and amounts satisfactory to the Grantee. The Grantor shall also maintain rent insurance against loss of rentals arising out of damage or destruction from the said Hazards and Risks and vandalism and malicious mischief, in an amount sufficient to avoid any coinsurance penalty, but in any event for not less than one (1) year's gross rental income of the Premises, or for such other amount as the Grantee may require. Grantor may provide coverage required by this Section 4 through a blanket policy.

All insurance herein provided for shall cite the Grantee as a first mortgagee therein and shall be obtained by the Grantor and issued by companies satisfactory to the Grantee. All policies, including additional and renewal policies, shall contain an agreement by the insurer that it will endeavor to provide at least fifteen (15) days prior written notice to the Grantee of any cancellation of the policy, provided that failure to do so shall impose no obligation or liability on the insurer. All renewal binders shall be delivered to the Grantee before the expiration of the then current policy, with renewal policies to follow within fifteen (15) days after receipt thereof by the Grantor. All policies, including additional and renewal policies, shall be payable, in case of loss or damage, to the Grantee as the first mortgagee and shall contain the standard Mortgage Endorsement and non-contributing mortgagee clause as well as the standard waiver of subrogation endorsement, and waiver of other endorsements, as the Grantee may require from time to time, all to be in form acceptable to the Grantee. In the event of any loss, the Grantor will give immediate notice thereof to the Grantee. The Grantor hereby appoints the Grantee its attorney-in-fact, coupled with

an interest, and authorizes, and so long as an Event of Default has occurred and has not been cured, directs and empowers such attorney, at the Grantee's option, on behalf of the Grantor, to adjust, compromise and settle any losses under any of the insurance policies, to collect and receive payments of insurance, to endorse the Grantor's name on all documents, checks and drafts in payment of any insured loss. If no Event of Default has occurred and is continuing and the cost to repair the damage to the Mortgaged Premises does not exceed $500,000.00, then the insurance proceeds shall be paid to Grantor and used for the restoration of the Mortgaged Premises. If the cost to repair the damage exceeds $500,000.00, provided no Event of Default has occurred and is continuing and further provided that Grantor demonstrates to the full satisfaction of Grantee in Grantee's reasonable discretion that: (i) the subject insurance proceeds are sufficient to restore the damage to the Mortgaged Property, (ii) the restoration of damage caused by such casualty can be completed within two hundred forty (240) days following such casualty; and (iii) the restoration of damage is permitted under applicable state and local regulations, then Grantee will permit the use of such insurance proceeds received by Grantee and Grantor to be used for the restoration of the Mortgaged Property subject to the following additional conditions. The foregoing shall apply only to such insurance proceeds as may be needed to defray the cost of restoration and any excess over the actual cost of restoration shall be paid over to Grantor. Any insurance proceeds made available shall be held by Grantee until Grantor furnishes complete plans and specifications for the restoration of the Mortgaged Property, reasonably satisfactory to Grantee and accompanied by all required governmental approvals and permits and shall be disbursed to the Grantor solely for the purpose of restoring the Mortgaged Property to its former condition as the work progresses, the time and amount of each disbursement to be at the sole discretion and upon the estimate of Grantee. The foregoing shall not apply to any casualty which occurs during the last one hundred eighty (180) days prior to the maturity date of the loan secured hereby.

If, at any time during the term of this Mortgage, including any extension thereof, the area in which the Premises, or any part thereof, is located is designated as a "flood prone" area pursuant to the Flood Disaster Protection Act of 1973, or any amendment or supplements thereto, or if such area is identified on official flood maps published by the Department of Housing and Urban Development as a "flood" area/zone, then, in such event, Grantor shall promptly obtain flood insurance in an amount equal to that coverage available pursuant to regulations adopted from time to time by the National Flood Insurance Program or the amount of indebtedness hereby secured, whichever is less, and shall otherwise comply with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973. Grantor further covenants and agrees to fully comply with the requirements of any law, order, rule, ordinance or regulation concerning flood insurance, to the extent that the same apply to the Premises, or any part thereof.

5. Liability Insurance . The Grantor shall obtain, carry and maintain liability insurance with minimum limits of $2,000,000.00 per occurrence and $3,000,000.00 in the aggregate with companies satisfactory to the Grantee, and copies of such insurance policies, including renewals thereof, shall be deposited with the Grantee and shall contain a provision designating the Grantee as an additional insured party and providing for not less than fifteen (15) days written notice to the Grantee prior to any cancellation, non-renewal or material change thereof. Grantor may provide coverage required by this Section 5 through a blanket policy. The Grantee may, based on customary and reasonable market requirements applicable to properties of this type and usage, re-evaluate the foregoing coverage amounts and require that they be reasonably increased from time to time.

6. Other Insurance . The Grantee may, at its option, reasonably require the Grantor to obtain additional insurance in forms, amounts, substance and with companies, institutions or persons reasonably satisfactory to the Grantee. If at any time, the Mortgaged Property shall be deemed or discovered subsequent to the date hereof to be "nonconforming," Grantor shall, upon request by the Grantee, immediately insure the Mortgaged Property against: (a) contingent liability from the operation of any such building laws; (b) demolition insurance; and (c) increased cost of construction insurance, all in such formats and amounts as shall be satisfactory to Grantee.

7. Tax Escrow . The Grantor agrees to pay to Grantee on a monthly basis together with payments due under the Note, amounts estimated by the Grantee to be sufficient to enable the Grantee

to pay, as they become due, all taxes and assessments and charges as set forth in this Mortgage. Any deficiencies because of the insufficiency of such additional payments shall be forthwith deposited by the Grantor with the Grantee upon demand by the Grantee. No trust relationship shall exist between the Grantor and Grantee as to said funds so deposited, and said funds may be commingled with the Grantee's other funds, and no interest shall be paid by the Grantee to the Grantor for any funds so deposited. The Grantee, at its option at any time after such Event of Default, may apply the balance remaining of said funds so deposited, as a credit against the Mortgage Debt.

8. Maintenance and Repair . The Grantor shall maintain the Mortgaged Property in good condition and repair, and shall not commit or suffer any waste thereon. Provided insurance or condemnation proceeds are made available to the Grantor, the Grantor shall promptly repair, restore, replace or rebuild any part of the Mortgaged Property which may be damaged or destroyed by any casualty whatsoever or which may be affected by any proceeding of the character referred to in Section 11 hereof.

9. Alteration or Demolition . The Grantor agrees that no building or other property now or hereafter covered by the lien of this Mortgage shall be removed, demolished, or structurally altered without the prior written consent of the Grantee, except that the Grantor may remove or dispose of, free from the lien of this Mortgage, any Service Equipment as from time to time may become worn out or obsolete, provided that prior to such removal, any such Service Equipment shall be replaced with other equipment of value and utility at least equal to that of the replaced Service Equipment and free from any title retention or security agreement or other encumbrance. By such removal and replacement, the Grantor shall be deemed to have automatically subjected such other equipment to the lien of this Mortgage and Section 24 hereof. The Grantor shall immediately notify the Grantee of any such replacement and shall further execute such mortgage, security agreement, or other documents as the Grantee may require with respect thereto.

10. Restrictions on Sale and Use of Property, Etc. The Grantor shall at all times own the Mortgaged Property and will not sell, lease, encumber, grant a security interest in, suffer change in title or ownership of, or otherwise transfer, or vest title in anyone other than the Grantor, to all or any part of the Mortgaged Property while any part of the Mortgage Debt remains unpaid, except with the Grantee's prior written consent. Further, unless required by applicable law or unless the Grantee has otherwise agreed in writing, the Grantor shall not allow changes in the nature of the occupancy for which the Mortgaged Property were intended on the date of this Mortgage, including, but not limited to, any change in any private restrictive covenant or private restrictions, if any, limiting or defining the uses which may be made of any part of the Premises; nor shall the Grantor initiate a change in the zoning classification of the Premises, without the prior written consent of the Grantee.

11. Eminent Domain . In the event that the whole or any substantial part of the Mortgaged Property shall be taken by eminent domain, or in the event of any alteration of the grade of any street or highway, or if any other injury to or decrease in value of the Mortgaged Property, or the reacquisition of the whole or any part of the Mortgaged Property pursuant to the terms of any redevelopment plan or agreement affecting the Mortgaged Property or if any agreement shall be made between the Grantor and any entity vested with the power of eminent domain, any and all awards and payments on account thereof shall be deposited with the Grantee (such awards and/or payment hereinafter referred to as the " Award " or " Payment "). The Grantor shall give the Grantee immediate notice of the actual or threatened commencement of any of the foregoing proceedings, and shall deliver to the Grantee copies of all papers served in connection with any such proceedings. The Grantee shall have the right to intervene and participate in any proceedings in connection with any such taking and any costs and expenses incurred by the Grantee in connection therewith shall be payable by the Grantor on demand, unless such intervention shall be prohibited by the court having jurisdiction over such taking, in which event the Grantor shall consult with the Grantee in connection with such proceedings; and the Grantor shall not enter into any agreement with regard to the Mortgaged Property or any Award or Payment on account thereof unless the Grantee shall have consented thereto in writing. The Grantor hereby appoints the Grantee its attorney-in-fact; coupled with an interest, and authorizes, directs and empowers such

attorney, at the Grantee's option, on behalf of the Grantor, to adjust, compromise and settle the claim for any such Award or Payment, to collect, receive and retain the proceeds thereof, to endorse the Grantor's name on all documents and instruments in connection therewith, and to give proper receipts therefor. The Grantor further agrees, on request, to make, execute, and deliver to the Grantee any and all assignments and other instruments, as the Grantee may require, to confirm or assign all such Award or Payment to the Grantee free and clear of any and all encumbrances of any nature whatsoever.

Notwithstanding any such taking, alteration of grade, other injury to or decrease in value of the Mortgaged Property, or reacquisition of title, or agreement, the Grantor shall continue to pay the Mortgage Debt. Any reduction in the Mortgage Debt resulting from the application by the Grantee of such award or payment as hereinafter set forth shall be deemed to take effect only on the date of such application. The proceeds of any award or payment, after deducting the expenses of collection, including, but not limited to, attorneys' and other professional fees and other costs and disbursements incurred by the Grantee, may be applied by the Grantee, at its option, toward payment of the Mortgage Debt, whether or not same shall be then due or payable, or be paid over wholly or in part to the Grantor for the purposes of altering or restoring any part of the Mortgaged Property which may have been damaged as a result of any such taking, alteration of grade, or other injury to the Mortgaged Property, or for any other purpose or object satisfactory to the Grantee, but the Grantee shall not be obligated to see to the proper application of any amount paid over to the Grantor, nor shall the amount so paid over to the Grantor be deemed a payment on the Mortgage Debt. The Grantee agrees that so long as it is reasonably practical to do so, it will pay over such proceeds to the Grantor for restoration of the Mortgaged Property upon the same terms and conditions as apply to the use of insurance proceeds under Paragraph 4 above.

If prior to the receipt by the Grantee of such award or payment, the Mortgaged Property shall have been sold on foreclosure of this Mortgage, the Grantee shall have the right to receive said award or payment to the extent of the Mortgage Debt remaining unsatisfied after such sale of the Mortgaged Property, with interest thereon at the highest rate set forth in the Note, whether or not a deficiency judgment on this Mortgage shall have been sought or recovered or denied, and to the extent of the attorneys' and other professional fees, costs and disbursements incurred by the Grantee in connection with the collection of such award or payment.

12. Protection of Lien; Costs and Indemnification . The Grantor shall pay all reasonable costs, expenses and disbursements incurred in connection with the Loan, including, but not limited to, reasonable attorneys' and other professional fees, recording fees, survey costs, title search fees, abstract fees, title insurance premiums, brokerage fees, and appraisal fees. The Grantor shall indemnify and hold the Grantee harmless from all costs, expenses and disbursements arising from the claims of any person or incurred by reason of any action, suit, proceeding, hearing, motion or application before any court or administrative body in which the Grantee may be a party by reason hereof, including, but not limited to, condemnation, bankruptcy and administrative proceedings, as well as any other proceedings wherein proof of claim is required to be filed, or incurred or expended for any reason in the defense, enforcement, protection or sustaining of the terms, lien or priority of this Mortgage, to the extent not caused by Grantee's gross negligence or willful misconduct. At its option, but without any liability for failure to do so, the Grantee may pay any reasonable costs, expenses or disbursements required to be, but not paid by Grantor under this Mortgage, and may perform any acts required under this Mortgage to be performed by the Grantor and incur the expense thereof, and the Grantor shall repay all such costs, expenses and disbursements to the Grantee on demand, together with interest thereon at the highest rate set forth in the Note, from the date on which such payment is made by the Grantee, and the same shall be included in the Mortgage Debt and be secured by this Mortgage.

The Grantee, in making any payment herein authorized in the place and stead of the Grantor which relates to: (i) taxes, assessments, water rates, sewer use and rentals and other governmental or municipal charges, fines, impositions or liens asserted against the Mortgaged Property, may do so according to any bill, statement or estimate procured from the appropriate public office without inquiry into the accuracy thereof or into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof, or (ii) insurance premiums, may do so according to any notice, bill, statement or estimate

procured from the appropriate insurer without inquiry into the accuracy or validity thereof, or (iii) any apparent or threatened adverse title, lien, statement of lien, encumbrance, claim or charge, shall be the sole judge of the legality or validity of same, or (iv) the expense of repairs or replacement of any buildings, improvements, Service Equipment or any other Mortgaged Property, shall be the sole judge of the necessity for, and extent of, any such repairs or replacement, or (v) any other purpose not specifically enumerated in this Section, may do so whenever, in its reasonable judgment and discretion, such payment shall seem necessary. or desirable to defend or protect the lien of this Mortgage, and provided further that in connection therewith, the Grantee, at its option, may, and is hereby authorized, to obtain a continuation report of title prepared by a title insurance company, the costs of which shall be repayable by the Grantor on demand, together with interest thereon at the highest rate set forth in the Note, from the date on which such payment is made by the Grantee, and the same shall be included in the Mortgage Debt and be secured by this Mortgage.

13. Rental and Security . The Grantor shall not collect rent more than thirty (30) days in advance of its due date under any lease for any part of the Mortgaged Property without the prior written consent of the Grantee; and in the event such approval is given, the Grantor agrees to deposit said rents with the Grantee upon request. The Grantor shall not assign the whole or any part of said rents, or income or profits arising from the Mortgaged Property, without the prior written consent of the Grantee.

14. Waiver of Liens . The Grantor shall furnish to the Grantee all such waivers and releases of liens or claims upon the Mortgaged Property as the Grantee may require, and shall keep and maintain the Mortgaged Property free from the claim of all persons supplying labor or materials in connection with the construction or repair of any building on the Premises, notwithstanding by whom such labor or materials may have been contracted. In the event that any mechanics lien is filed against the Mortgaged Property, the Grantor shall cause the same to be canceled and discharged of record within sixty (60) days after the date of filing thereof.

15. Estoppel Certificate . The Grantor shall certify by a writing, duly acknowledged, to the Grantee, or to any proposed assignee of this Mortgage, upon request, the amount of principal and interest then owing on this Mortgage and whether any offsets or defenses exist against the Mortgage Debt, within ten (10) business days of such request.

16. Statement on Encumbrances . Upon request by the Grantee, the Grantor shall obtain from all persons hereafter having or acquiring any interest in, or encumbrance on, the Mortgaged Property or any part thereof, a writing, duly acknowledged, stating the nature and extent of such interest or encumbrance, and that the same is subordinate to this Mortgage and that no offset or defenses exist in favor thereof against this Mortgage or the Note, and deliver such writing to the Grantee.

17. Receiver . The Grantee, in any action to foreclose this Mortgage, or upon the actual or threatened waste to any part of the Mortgaged Property, or upon the occurrence of an Event of Default beyond any applicable notice and cure periods, shall be at liberty to apply for the appointment of a receiver of the rents, issues, profits and security deposits of the Mortgaged Property without notice, and shall, to the extent permitted by law, be entitled to the appointment of such receiver as a matter of right, without consideration of the value of the Mortgaged Property as security for the Mortgage Debt, or the solvency of any person or corporation liable for the payment of such rental amounts.

18. Books, Records and Accounts . The Grantor will keep and maintain or will cause to be kept and maintained proper and accurate books, records and accounts reflecting all items of income and expense in connection with the operation of the Mortgaged Property or any part thereof, including, but not limited to, any services, equipment or furnishings provided in connection therewith, whether such income or expenses be realized by the Grantor or by any other person or entity whatsoever. The Grantee or its designee shall have the right from time to time, at all times during normal business hours and upon reasonable prior notice, to examine such books, records and accounts at the office of the Grantor or other

person or entity maintaining such books, records, and accounts and to make copies or extracts thereof as the Grantee shall desire.

19. Rental and Income Statements . In accordance with and as otherwise requested in Section 34(c) below, the Grantor shall furnish to the Grantee upon request, statements prepared in a manner satisfactory to the Grantee and in such detail as the Grantee may reasonably require, showing the annual rent roll, other income, and the detailed operating expenses of the Mortgaged Property.

20. Right to Enter Premises . The Grantee and any persons authorized by the Grantee shall have the right to enter and inspect the Mortgaged Property at all reasonable times and upon reasonable prior notice, subject to the rights of tenant(s). Any professional fees and expenses that may be incurred by Grantee in connection with any reports prepared by or on behalf of Grantee shall be paid by Grantor within thirty (30) days of billing; provided that, such reports are required by a regulatory agency or body or Grantor has committed an Event of Default. Any third party professionals engaged to prepare any reports must be approved by Grantee.

21. No Waiver, Etc. Any failure by the Grantee to insist upon the strict performance by the Grantor of any of the terms and provisions hereof shall not be deemed to be a waiver of any of the terms and provisions hereof, and the Grantee, notwithstanding any such failure, shall have the right thereafter to insist upon the strict performance by the Grantor, of any and all of the terms and provisions of this Mortgage. Neither the Grantor nor any other person now or hereafter obligated for the payment of the Mortgage Debt, in whole or in part, shall be relieved of such obligation by reason of: (a) the failure of the Grantee to comply with any request of the Grantor or of any other person so obligated to take action to foreclose this Mortgage or otherwise enforce any of the provisions of this Mortgage or any obligation secured by this Mortgage, (b) the release, regardless of consideration, of the whole or any part of the Mortgaged Property or of any obligor for the Mortgage Debt, and (c) any agreement or stipulation between any subsequent owner or owners of the Mortgaged Property and the Grantee extending the time of payment or modifying the terms of the Note or this Mortgage without first having obtained the consent of the Grantor or such other person, and in the latter event, the Grantor and all such other persons shall continue to be liable to make such payments according to the terms of any such agreement of extension or modification, unless expressly released and discharged in writing by the Grantee.

Regardless of consideration, and without the necessity for any notice to or consent by the holder of any subordinate lien on the Premises, the Grantee may release the obligation of anyone at any time liable for the Mortgage Debt or any part of the Mortgaged Property and may extend the time of payment or otherwise modify the terms of the Note and/or this Mortgage without, as to the Mortgaged Property or the remainder thereof, in any way impairing or affecting the lien of this Mortgage, or the priority of such lien, as security for the payment of the Mortgaged Debt as it may be so extended or modified, over any subordinate lien.

22. Partial Foreclosure . The Grantee may, at its option and to the extent permitted by law, foreclose this Mortgage for any portion of the Mortgage Debt or any other sums secured hereby which are then due and payable, subject to the continuing lien of this Mortgage for the balance not then due, but nothing contained in this Section shall impair or affect any right or remedy which the Grantee might now or hereafter have, were it not for this Section, and the right given by this Section shall be in addition to any others which the Grantee may have hereunder.

23. Marshaling . The Grantee shall not be compelled to release, or be prevented from foreclosing or enforcing this Mortgage upon all or any part of the Mortgaged Property, unless the entire Mortgage Debt hereby secured shall be paid in lawful money as aforesaid; and the Grantee shall not be required to accept any part or parts of the Mortgaged Property, as distinguished from the entire whole thereof, as payment of or upon said Mortgage Debt to the extent of the value of such part or parts; and the Grantee shall not be compelled to accept or allow any apportionment of said Mortgage Debt to or among any separate parts of the Mortgaged Property. In case of a foreclosure sale, the Mortgaged

Property may be sold in one parcel and as an entirety or in such parcels, manner or order as the Grantee in its sole discretion may elect.

24. Security Agreement and Financing Statement . This Mortgage shall constitute a Security Agreement within the meaning of the Uniform Commercial Code as enacted and adopted in the Commonwealth of Pennsylvania, as amended from time to time (the " Code ") with respect to any interests or property included in the definition herein of the words "Mortgaged Property", which interests or property may not be deemed to form a part of the real estate described in Schedule A or may not constitute a "fixture" (within the meaning of the Code). Accordingly, in addition to any other rights and remedies availed to the Grantee hereunder, the Grantee shall have all the rights of a "secured party" under the Code, as amended from time to time. Furthermore, to the extent as may be required by law, the Grantor hereby authorizes the Grantee to sign and file financing or continuation statements at any time with respect to any of the Mortgaged Property, without such financing statements being executed by, or on behalf of the Grantor. Notwithstanding the foregoing, the Grantor shall execute or cause to be executed such financing or continuation statements as required by applicable law the Grantee and shall reimburse the Grantee on demand for all costs and expenses of any kind incurred in connection therewith, including, without limitation, the Grantee's attorneys' fees. THIS MORTGAGE IS EFFECTIVE AND SHALL BE EFFECTIVE AS A FINANCING STATEMENT FILED AS A FIXTURE FILING WITH RESPECT TO ALL GOODS WHICH ARE OR ARE TO BECOME FIXTURES INCLUDED WITHIN THE MORTGAGED PROPERTY AND IS TO BE FILED FOR RECORD IN THE REAL ESTATE RECORDS OF THE OFFICE OF THE TOWN WHERE THE MORTGAGED PROPERTY IS SITUATED. THE MAILING ADDRESS OF GRANTOR AND THE ADDRESS OF GRANTEE FROM WHICH INFORMATION CONCERNING THE SECURITY INTEREST MAY BE OBTAINED ARE SET FORTH ON PAGE ONE HEREOF. PHOTOGRAPHIC OR OTHER REPRODUCTION OF THIS MORTGAGE OR ANY FINANCING STATEMENT RELATING TO THIS MORTGAGE SHALL BE SUFFICIENT AS A FINANCING STATEMENT.

25. Interest After Judgment . Should the Grantee herein obtain a judgment against Grantor, interest shall accrue on said judgment at the interest rate set forth in the Note as applicable to interest payable before or after judgment, or as provided by statute, whichever interest rate shall be greater at that time.

26. Rights and Remedies Cumulative . To the extent permitted by law, the rights and remedies provided for in this Mortgage, or which the Grantee may have otherwise, at law or in equity (including, but not limited to, the right to damages by reason of the failure of the Grantor to keep, observe and perform any of the covenants and agreements contained in this Mortgage), shall be distinct, separate and cumulative, and shall not be deemed to be inconsistent with each other, and none of them, whether or not exercised by the Grantee, shall be deemed to be in exclusion of any other, and any two or more of all such rights and remedies may be exercised at the same time. Further, the Grantee may resort for the payment of the Mortgage Debt to any other security therefor held by the Grantee, in such order or manner as the Grantee may elect. If the Grantor has given the Grantee one or more mortgages other than this Mortgage with respect to the Mortgaged Property or any portion thereof, then all such mortgages, and all rights and remedies provided for in all such mortgages shall remain distinct and separate, and none of them shall merge or be merged with this Mortgage or any other mortgages.

27. WAIVER OF HOMESTEAD . FURTHER, THE GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL VALUATION, APPRAISEMENT, HOMESTEAD, EXEMPTION, STAY, REDEMPTION AND MORATORIUM LAWS, NOW IN FORCE OR WHICH MAY HEREAFTER BECOME LAW.

28. WAIVER OF JURY TRIAL . THE GRANTOR HEREBY WAIVES TRIAL BY JURY IN ANY COURT AND IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS MORTGAGE IS A PART AND/OR THE ENFORCEMENT OF ANY OF THE GRANTEE'S RIGHTS

AND REMEDIES. THE GRANTOR ACKNOWLEDGES THAT GRANTOR MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH GRANTOR'S ATTORNEY. NO PARTY TO THIS MORTGAGE HAS AGREED WITH OR REPRESENTED TO ANY OTHER PARTY HERETO THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

29. Compliance with Local, State and Federal Regulation .

(a) Grantor has, to the extent appropriate and obtainable, procured any and all necessary certificates, licenses, authorizations, registrations, permits, environmental and zoning resolutions and/or approvals necessary for the operation of all improvements and businesses at the Mortgaged Property, or any part thereof, or the commencement or continuance of construction thereof, as the case may be.

(b) Respecting the Mortgaged Property and the use and operation thereof, the Grantor shall at all times remain in compliance with all federal, state and local laws and ordinances, and the Grantor is not, to the best of its knowledge, and shall not be at any time, in violation of any restrictive covenant or zoning, land use, environmental protection (including, without limitation, air pollution, water pollution, and inland wetland proscriptions), health, occupation, safety or other law, regulation or order.

(c) Without limiting in any way the generality of the foregoing respecting the Mortgaged Property and the use and operation thereof, the Grantor is, to the best of its knowledge, and shall at all times remain in compliance with any statutes, regulations, orders or compliance schedules relating to all orders of the federal Occupational Safety and Health Act (" OSHA ") and the Pennsylvania Occupational Safety and Health Act, and the Grantor has made arrangements so that it will be, within time limits set by OSHA, in full compliance with any orders or compliance schedules issued in connection therewith relating to the future operations of the Grantor.

30. Environmental Matters . Grantor and Grantee have entered into that certain Environmental Compliance and Indemnity Agreement of even date herewith, the terms and conditions of which are incorporated herein by this reference and made a part hereof as if fully set forth herein.

31. Event of Default . Upon the occurrence of an Event of Default hereunder, the Mortgage Debt shall become due and payable forthwith at the option of the Grantee. Each of the following events shall be deemed to be an " Event of Default " hereunder: (i) the failure of the Grantor to pay when due any and all indebtedness owed to the Grantee, including, without limitation, any principal and/or interest or any amount owed under this Mortgage when due and payable as provided herein; or (ii) failure to promptly (within the time period set forth or, if no period is specifically set forth, then within thirty (30) days after written notice from the Grantee) observe, perform or comply with any obligation, condition or covenant to be observed, performed or complied with by the Grantor of the Mortgage Debt, under this Mortgage, the Note or any other agreements and documents executed and/or delivered in connection with the Loan; or (iii) failure of the Grantor to pay when due any other indebtedness or liabilities owed to the Grantee or, as to any obligation in excess of $50,000.00, singularly or in the aggregate, owed to any other person or entity, or failure to promptly observe, perform or comply with any other covenants or obligations owed to the Grantee, or the occurrence of a default under any documents or agreements evidencing, securing or relating in any way to any indebtedness, liabilities or obligations of every kind, nature and description of the Grantor owing to the Grantee, other than the Mortgage Debt (collectively, the " Financing Agreements "); or (iv) the Grantor shall cease to legally exist or be dissolved, or the Grantor shall be deprived of title, possession or control of the Mortgaged Property by process or operation of law or order of any court, or if any foreclosure proceeding shall be instituted on any lien or mortgage of any kind affecting the Mortgaged Property; or (v) the filing by or against the Grantor of any petition, arrangement, reorganization, or the like under any insolvency or bankruptcy law, or the adjudication of them or any of them as a bankrupt, or the making of an assignment for the benefit of creditors, or the appointment of a receiver for any part of any of their respective properties (with respect

to an involuntary petition or filing, Grantor shall have up to sixty (60) days to cause the dismissal of same); or (vi) insolvency (as such term is deemed in the Federal Bankruptcy Code, U.C.C. Section 101(32)) of the Grantor, or any of Grantor's members, officers, or managers; or (vii) any material representation, warranty, or disclosure, or any statements, certificate or other data made by or furnished by the Grantor in this Mortgage, the Note and any other agreements and documents executed and/or delivered in connection with the Loan, or any material representation, warranty, or disclosure made by the Grantor is determined by the Grantee to have been false or misleading on the date when made; or (viii) any amendment or modification of any provision of the articles of organization of Grantor or of its operating agreement changing the nature of Grantor's business, the powers of the manager, the voting rights of its members or the management of the Project or Grantor without Grantee's prior written consent; or (ix) any change, withdrawal, removal, addition or substitution of any member of Grantor holding more than 10% of the interest or Grantor without the Grantee's prior written consent or any other change in the control or management of Grantor or any hypothecation, alienation, transfer, pledging, securitization, assignment, collateralization, granting, or mortgaging of any such interest of Grantor; or (x) any merger or consolidation of the Grantor with or into another person, unless the resulting entity has a net asset value equal to or greater than the Grantor.

FOR THE PURPOSE OF OBTAINING POSSESSION OF THE PROPERTY FOLLOWING ANY DEFAULT HEREUNDER, THE BORROWER IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD IN THE COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE, AS ATTORNEY FOR THE BORROWER, AS WELL AS FOR THE PERSONS CLAIMING UNDER, BY, OR THROUGH THE BORROWER, TO APPEAR FOR AND CONFESS JUDGMENT IN EJECTMENT AGAINST THE BORROWER AND ALL PERSONS CLAIMING UNDER, BY, OR THROUGH THE BORROWER, IN FAVOR OF THE LENDER FOR THE RECOVERY BY THE LENDER OF POSSESSION OF THE PROPERTY, FOR WHICH THIS MORTGAGE (OR A COPY THEREOF VERIFIED BY AFFIDAVIT) SHALL BE SUFFICIENT WARRANT; WHEREUPON A WRIT OF POSSESSION OF THE PROPERTY MAY BE ISSUED FORTHWITH, WITHOUT ANY PRIOR WRIT OR PROCEEDING WHATSOEVER AND WITHOUT STAY OF EXECUTION, THE BORROWER HEREBY RELEASING AND AGREEING TO RELEASE THE LENDER AND ANY SUCH ATTORNEY FROM ALL PROCEDURAL ERRORS AND DEFECTS WHATSOEVER IN ENTERING SUCH ACTION OR JUDGMENT OR IN CAUSING SUCH WRIT OR PROCESS TO BE ISSUED OR IN ANY PROCEEDING THEREON OR CONCERNING THE SAME, PROVIDED THAT THE LENDER SHALL HAVE FILED IN SUCH ACTION AN AFFIDAVIT MADE ON THE LENDER'S BEHALF SETTING FORTH THE FACTS NECESSARY TO AUTHORIZE THE ENTRY OF SUCH JUDGMENT ACCORDING TO THE TERMS OF THIS MORTGAGE, OF WHICH FACTS SUCH AFFIDAVIT SHALL BE PRIMA FACIE EVIDENCE. IT IS HEREBY EXPRESSLY AGREED THAT IF FOR ANY REASON AFTER ANY SUCH ACTION HAS BEEN COMMENCED, THE SAME SHALL BE DISCONTINUED, MARKED SATISFIED OF RECORD, OR TERMINATED, OR POSSESSION OF THE PROPERTY SHALL REMAIN IN OR BE RESTORED TO THE BORROWER OR ANYONE CLAIMING UNDER, BY, OR THROUGH THE BORROWER, THE LENDER MAY, WHEREVER AND AS OFTEN AS THE LENDER SHALL HAVE THE RIGHT TO TAKE POSSESSION AGAIN OF THE PROPERTY, BRING ONE OR MORE FURTHER ACTIONS IN THE MANNER HEREINBEFORE SET FORTH TO RECOVER POSSESSION OF THE PROPERTY AND TO CONFESS JUDGMENT THEREIN AS HEREINABOVE PROVIDED, AND THE AUTHORITY AND POWER ABOVE GIVEN TO ANY SUCH ATTORNEY SHALL EXTEND TO ALL SUCH FURTHER ACTIONS IN EJECTMENT AND CONFESSION OF JUDGMENT THEREIN AS HEREINABOVE PROVIDED, WHETHER BEFORE OR AFTER AN ACTION OF MORTGAGE FORECLOSURE IS BROUGHT OR OTHER PROCEEDINGS IN EXECUTION ARE INSTITUTED UPON THIS MORTGAGE OR ANY INSTRUMENT THEN EVIDENCING ANY OF THE LIABILITIES, AND AFTER JUDGMENT THEREON OR THEREIN AND AFTER A JUDICIAL SALE OF THE PROPERTY.

32. Miscellaneous Provisions .

(a) In the event of a foreclosure of this Mortgage, the purchaser of the Mortgaged Property, if the Grantee so consents, shall succeed to all the rights of the Grantor to the Mortgaged

Property, including, without limitation, any right to unearned premiums, in and to all policies of insurance assigned and delivered to the Grantee pursuant to the provisions hereof.

(b) Any demand by the Grantee upon the Grantor hereunder, or any notice required to be given hereunder shall be deemed sufficient and commercially reasonable notice and shall be effective when delivered to an overnight mail or messenger service or deposited in the mails, first class, postage prepaid, registered or certified mail, return receipt requested, to Grantor or Grantee, as the case may be, at its address set forth above. Either of the parties hereto may notify the other that any such notice shall be given to such other address as such party may so instruct by written notice similarly given.

(c) Any and all provisions of the Financing Agreements are hereby made a part hereof to the same extent as if fully set forth herein.

(d) The Grantor shall immediately give notice to the Grantee of any Event of Default by the Grantor of the Mortgage Debt under this Mortgage and shall notify the Grantee promptly of the occurrence of any of the following:

(i) a fire or other casualty causing material damage to the Mortgaged Property;

(ii) receipt of notice of eminent domain proceedings or condemnation of the Mortgaged Properly;

(iii) receipt of notice from any governmental authority relating to the structure, use or occupancy of the Mortgaged Property, or any real property adjacent to the Mortgaged Property;

(iv) receipt of any notice from any tenant of all or any portion of the Mortgaged Property asserting that the Grantor is in breach of a material obligation to such tenant;

(v) substantial change in the use of the Mortgaged Properly;

(vi) receipt of any notice from the holder of any lien or security interest in the Mortgaged Property asserting that the Grantor is in breach of an obligation to such holder;

(vii) commencement of any litigation affecting the Mortgaged Property that is not covered by insurance;

(viii) any contract or agreement with respect to any sale or other transfer of any part of the Mortgaged Property.

(e) Wherever used in this Mortgage, unless the context clearly indicates a contrary intent, or unless otherwise specifically provided herein, the word "Grantee" shall include "any subsequent holder or holders of this Mortgage" the word "person" shall include "an individual, corporation, partnership, unincorporated association, or other entity". Unless otherwise provided herein, plural or singular shall include each other, and pronouns in any gender shall be construed as masculine, feminine or neuter as the context requires.

(f) If any term or provision of this Mortgage or the application thereof to any person or circumstance, shall to any extent be invalid or unenforceable, the remainder of this Mortgage, or the application of such term or provision to persons or circumstances other than those as to which it is invalid

or unenforceable, shall not be affected thereby, and each term and provision of this Mortgage shall be valid and enforceable to the fullest extent permitted by law.

(g) The captions or section headings used in this Mortgage are for convenience only and of no substance or significance, and shall not be used to interpret, modify or affect in any way the covenants and agreements herein contained.

(h) This Mortgage shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, and shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns.

33. Special Provisions . The Grantor further agrees and covenants as follows:

(a) Not later than one hundred twenty (120) days after the end of each fiscal year, financial information of Grantor including, without limitation, an annual rent roll, an operating statement, a cash flow statement and a balance sheet and any other information reasonably requested by the Grantee, prepared by Grantor's chief financial officer, or if Grantor has no such officer, the chief financial officer of Grantor's manager.

(b) The Grantor shall also furnish to the Grantee such other financial information as the Grantee reasonably requires.

(c) No subsequent encumbrances, liens, or interests of any kind shall be permitted (voluntary of involuntary) on or in the Mortgaged Property.

(d) The Grantor will fund an 18-month debt service interest reserve account (the " Interest Reserve ") during the last four (4) years of the existing term of the lease between the Grantor and Olympus Corporation of the Americas dated December 16, 2008 (the " Olympus Lease "), to be held by and pledged to the Bank pursuant to a pledge and security agreement reasonably acceptable to the Grantee. Upon extension of the existing term of the Olympus Lease, or execution of a new lease on terms reasonably acceptable to the Grantee, this provision shall be of no further force and effect and, if it has been funded, the Interest Reserve will be released to the Grantor.

(e) The Grantor will fund a $100,000 tenant improvement/Leasing commission reserve account (the " TI/LC Reserve ") during the last four (4) years of the existing term of the Olympus Lease, to be held by and pledged to the Bank pursuant to a pledge and security agreement reasonably acceptable to the Grantee. Upon extension of the existing term of the Olympus Lease, or execution of a new lease on terms reasonably acceptable to the Grantee, this provision shall be of no further force and effect and, if it has been funded, the TI/LC Reserve will be released to the Grantor.

34. Appraisals . The Grantor will reimburse the Grantee for the reasonable costs of obtaining or updating appraisals of the Mortgaged Property in accordance with the Grantee's regulatory requirements, unless an Event of Default has occurred, in which case, the Grantee reserves the right to obtain an updated appraisal of the Mortgaged Property at any time and from time to time, the cost of which updated appraisal or appraisals shall be exclusively borne by the Grantor.

35. Nonrecourse . Notwithstanding any other provision of this Mortgage or other Loan Documents to the contrary, the execution of this Mortgage shall impose no personal liability on the Grantor or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent or affiliate of the Grantor or any person owning, directly or indirectly, any legal or beneficial interest in the Grantor, or any successors or assigns of any of the foregoing (the " Exculpated Parties ") for payment of the indebtedness evidenced hereby. The Grantee shall look only to the Mortgaged Property and to the rents, issues and profits thereof, and other collateral identified herein and in the other Loan

Documents, and upon an Event of a Default will not seek any deficiency or personal judgment against the Grantor or any of the Exculpated Parties, except such judgment or decree as may be necessary to foreclose and bar the Grantor's interests in the Mortgaged Property. Notwithstanding the foregoing, the Grantor shall remain personally liable for all expenses, damages, losses and costs (including, without limitation, reasonable attorney’s fees) incurred by the Grantee in connection with:

(i)	fraud or gross negligence on behalf of or by the Grantor in connection with the Grantor’s application for or obtaining the Loan or in the performance of the Grantor’s obligations thereunder;

(ii)	obtaining and using insurance loss or condemnation proceeds other than as provided for in this Mortgage;

(iii)

misappropriation of rents or security deposits from the Mortgaged Property while an Event of Default is continuing;

(iv)	intentional physical waste of the Mortgaged Property on behalf of or by the Grantor;

(v)	The Grantor’s breach of the warranties, covenants and representations made under the Environmental Compliance And Indemnity Agreement between the Grantor and the Grantee of even date herewith; and

(vi)	failure to pay any taxes, assessments or other charges with respect to the Mortgaged Property.

NOW, THEREFORE, if the Note and any additional notes which in accordance with the provisions hereof shall be secured hereby, and any extensions or renewals thereof shall be well and truly paid according to their tenor, and if all agreements and provisions contained in all such notes and herein are fully kept and performed, then this deed shall become null and void; otherwise to remain in full force and effect.

[The Remainder of this Page Intentionally Left Blank]

IN WITNESS WHEREOF, the Grantor has hereunto caused this instrument to be executed as of the 28th day of January, 2010.

Signed, Sealed, and Delivered
in the presence of:	RIVERBEND CROSSINGS III HOLDINGS LLC


	By:	Riverbend Lehigh Valley Holdings I LLC
		Its Sole Member

		By:	Griffin Land & Nurseries, Inc.
			Its Sole Member

/s/Lucille Valentine	/s/Michael Gamzon
Print Name: Lucille Valentine	Name:	Michael Gamzon
	Title:	Vice President

/s/Anna Giliberti
Print Name: Anna Giliberti

STATE OF	New York	)
		)	ss. __________________
COUNTY OF	New York	)

On this 27th day of January, 2010, before me a Notary Public in and for the State of New York, the undersigned officer, personally appeared Michael Gamzon , who acknowledged him/herself to be the Vice President of Griffin Land & Nurseries, Inc., the sole member of Riverbend Lehigh Valley Holdings I LLC, which is the sole member of RIVERBEND CROSSINGS III HOLDINGS LLC, a Pennsylvania limited liability company, and that he as such officer of Griffin Land & Nurseries, Inc., being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of Riverbend Crossings III Holdings LLC by him/herself as such officer of the sole member of the sole member of said limited liability company.

	/s/Theresa Gordon
	Name: Theresa Gordon
	Notary Public
	My Commission Expires: August 23, 2013

Signature Page to Mortgage and Security Agreement

Exhibit 10.43

PROMISSORY NOTE

$4,300,000.00

January 27, 2010

New York , New York

FOR VALUE RECEIVED , RIVERBEND CROSSINGS III HOLDINGS LLC , a Pennsylvania limited liability company having its principal office and mailing address at c/o Griffin Land & Nurseries, Inc., 204 West Newberry Road, Bloomfield, Connecticut 06002 (the "Borrower" ), hereby promises to pay to the order of NEWALLIANCE BANK , a Connecticut banking corporation (the "Bank" ), at its offices at 195 Church Street, New Haven, Connecticut 06510, or such other place as Bank shall designate in writing from time to time, the principal sum of Four Million Three Hundred Thousand and 00/100 ($4,300,000.00) (the "Loan" ) in United States Dollars, together with interest thereon at the fixed rate of six and one-half percent (6.50%) (the "Interest Rate" ) from the date hereof until the Maturity Date (defined below). Interest shall be calculated on the daily unpaid principal balance of the indebtedness evidenced by this Note on the basis of a three hundred sixty (360) day year, provided that interest shall be due for the actual number of days elapsed during the period for which interest is being charged.

1. PAYMENT OF PRINCIPAL AND INTEREST . Interest from the date hereof through January 31, 2010 shall be due and payable on the date hereof. Commencing on the first day of March, 2010, and continuing to, but not including the Maturity Date, principal and interest at the Interest Rate shall be due and payable on the first day of each month in equal monthly installments of $29,281.67, based on a 25 year amortization schedule. If not sooner paid, the entire unpaid principal amount hereof, together with accrued and unpaid interest thereon and all other amounts payable hereunder, shall be due and payable on January 28, 2020 (the "Maturity Date" ).

2. APPLICATION OF PAYMENTS . Except as otherwise specified herein, each payment or prepayment, if any, made under this Promissory Note (the " Note ") shall be applied to pay late charges, accrued and unpaid interest, principal, escrows (if any), and any other fees, costs and expenses which Borrower is obligated to pay under this Note, in such order as Bank may elect from time to time in its sole discretion.

3. TENDER OF PAYMENT . All payments on this Note are payable on or before the due date thereof, at the office of Bank specified above and shall be credited on the date the funds become available lawful money of the United States. All sums payable to Bank that are due on a day on which Bank is not open for business shall be paid on the next succeeding business day and such extended time shall be included in the computation of interest.

4. LATE CHARGE . In the event that any installment of principal or interest required to be made by Borrower under this Note shall not be received by Bank within five (5) business days after its due date, Borrower shall pay to Bank, on demand, a late charge of five percent (5%) of such delinquent payment. The foregoing right is in addition to, and not in limitation of, any other rights which Bank may have upon Borrower's failure to make timely payment of any amount due hereunder.

5. PREPAYMENT . The principal amount of this Note may be prepaid in whole or in part at any time, and from time to time, upon payment of the following prepayment premium: (a) five percent (5%) of the amount being prepaid, if prepaid prior to the first (1st) anniversary of the date hereof, or (b) four and one-half percent (4.5%) of the amount being prepaid if prepaid on or after the first (1st) anniversary of the date hereof and prior to the second (2nd) anniversary of the date hereof, or (c) four percent (4.0%) of the amount being prepaid, if prepaid on or after the second (2nd) anniversary of the date hereof and prior to the third (3rd) anniversary of the date hereof, or (d) three and one-half percent (3.5%) of the amount being prepaid, if prepaid on or after the third (3rd) anniversary of the date hereof and prior to the fourth (4th) anniversary of the date hereof; (e) three percent (3%) of the amount being prepaid, if prepaid on or after the fourth (4th) anniversary of the date hereof and prior to the fifth (5th) anniversary of the date

hereof (f) two and one-half percent (2.5%) of the amount being prepaid if prepaid on or after the fifth (5th) anniversary of the date hereof and prior to the sixth (6th) anniversary of the date hereof; or (g) two percent (2%) of the amount being prepaid, if prepaid on or after the sixth (6th) anniversary of the date hereof and prior to the seventh (7th) anniversary of the date hereof, or (h) one and one-half percent (1.5%) of the amount being prepaid, if prepaid on or after the seventh (7th) anniversary of the date hereof and prior to the eighth (8th) anniversary of the date hereof, or (i) one percent (1%) of the amount being prepaid, if prepaid on or after the eighth (8th) anniversary of the date hereof and prior to the ninth (9th) anniversary of the date hereof, or (j) one-half of one percent (0.5%) of the amount being prepaid, if prepaid on or after the ninth (9th) anniversary of the date hereof, provided that no prepayment premium shall be due during the last ninety (90) days of the Loan term. Any prepayment shall include accrued and unpaid interest to the date of prepayment on the principal amount prepaid and all other sums due and payable hereunder.

6. SECURITY FOR THE NOTE .

6.1. This Note is executed and delivered in accordance with a commercial transaction. As security for the payment of the monies owing under this Note, Borrower has delivered or has caused to be delivered to Bank the following (each a "Loan Document" ; and collectively with this Note, and any other guaranty, document, certificate or instrument executed by Borrower or any other obligated party in connection with the Loan, together with all amendments, modifications, renewals or extensions thereof, the "Loan Documents" ): a Mortgage and Security Agreement (the "Mortgage" ) on certain real property, and the improvements situated thereon, located at 871 Nestle Way in the Town of Breinigsville, County of Lehigh, Commonwealth of Pennsylvania, as more fully described in the Mortgage (the "Property" ); a Collateral Assignment of Leases and Rentals affecting the Property; a Security Agreement relating to personal property located at and/or relating to the Property; an Environmental Compliance And Indemnity Agreement; and an Assignment of Contracts, Warranties, Permits and Approvals.

6.2. Borrower hereby grants to Bank a continuing security interest in all property of Borrower, now or hereafter in the possession of Bank, as security for the payment of this Note and any other liabilities of Borrower to Bank, which security interest shall be enforceable and subject to all the provisions of this Note, as if such property were specifically pledged hereunder.

6.3. Notwithstanding any other provision of this Note or other Loan Documents to the contrary, the execution of this Note shall impose no personal liability on the Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent or affiliate of Borrower or any person owning, directly or indirectly, any legal or beneficial interest in Borrower, or any successors or assigns of any of the foregoing (the " Exculpated Parties ") for payment of the indebtedness evidenced hereby or secured by the Mortgage. Bank shall look only to the Property and to the rents, issues and profits thereof, and other collateral identified in the Mortgage and the other Loan Documents, and upon an Event of a Default will not seek any deficiency or personal judgment against Borrower or any of the Exculpated Parties, except such judgment or decree as may be necessary to foreclose and bar Borrower's interests in the Property. Notwithstanding the foregoing, the Borrower shall remain personally liable for all expenses, damages, losses and costs (including, without limitation, reasonable attorney’s fees) incurred by Bank in connection with:

(i)	fraud or gross negligence on behalf of or by Borrower in connection with Borrower’s application for or obtaining the Loan or in the performance of Borrower’s obligations thereunder;

(ii)	obtaining and using insurance loss or condemnation proceeds other than as provided for in the Mortgage;

(iii)

misappropriation of rents or security deposits from the Property while an Event of Default is continuing;

(iv)	intentional physical waste of the Property on behalf of or by Borrower;

(v)	Borrower’s breach of the warranties, covenants and representations made under the Environmental Compliance And Indemnity Agreement between Borrower and Bank of even date herewith; and

(vi)	failure to pay any taxes, assessments or other charges with respect to the Property.

7. DEFAULT RATE . From and after the Maturity Date or from and after the occurrence of an Event of Default hereunder until such Event of Default is cured, irrespective of any declaration of maturity, all amounts remaining unpaid or thereafter accruing hereunder, shall, at Bank's option, bear interest at a default rate of three percent (3%) per annum above the interest rate then in effect as set forth herein (the "Default Rate" ), or the highest permissible rate under applicable usury law, whichever is less. Such default rate of interest shall be payable upon demand, but in no event later than when scheduled interest payments are due, and shall also be charged on the amounts owed by Borrower to Bank pursuant to any judgments entered in favor of Bank with respect to this Note.

8. COVENANTS .

8.1. Operating Accounts . Borrower , or an affiliate of Borrower, shall maintain a business checking account at Bank. Bank will deposit the Loan proceeds into said account and Borrower shall deposit all rents and other income received from the Property monthly into said account. Borrower shall also deposit all tenant security deposits in an account or accounts at Bank.

8.2. Financial Statements; Compliance Certificate .

8.2.1. Borrower shall furnish to Bank the following financial information, in each instance prepared in accordance with generally accepted accounting principles consistently applied:

(a) Not later than one hundred twenty (120) days after the end of each fiscal year, financial information of Borrower including, without limitation, an operating statement, a cash flow statement and a balance sheet and any other information reasonably requested by Bank, prepared by Borrower's chief financial officer or if Borrower has no such officer, the chief financial officer of Borrower's manager .

(b) Such other information respecting the operations of Borrower and/or the Property as Bank may from time to time reasonably request.

8.2.2. Borrower shall furnish to Bank, with financial information described herein, a compliance certificate signed by Borrower's manager certifying that: (i) all representations and warranties of Borrower set forth in this Note or any other Loan Document remain true and correct as of the date of such compliance certificate; (ii) none of the covenants of Borrower contained in this Note or any other Loan Document has been breached; and (iii) to its knowledge, no event has occurred which constitutes an Event of Default (or which, with the giving of notice or the passage of time, or both, would constitute an Event of Default) under this Note or any other Loan Document. In addition, Borrower shall promptly notify Bank of the occurrence of any default, Event of Default, adverse litigation or material adverse change in its financial condition.

8.3. Indemnification .

8.3.1. Borrower hereby indemnifies and agrees to defend and hold harmless Bank, its officers, employees and agents, from and against any and all losses, damages, or liabilities and from any suits, claims or demands, including reasonable attorneys' fees incurred in investigating or defending such claim, suffered by any of them and caused by, arising out of, or in any way connected with the Loan

Documents or the transactions contemplated therein (unless determined by a final judgment of a court of competent jurisdiction to have been caused solely by the negligence or willful misconduct of any of the indemnified parties) including, without limitation: (i) disputes with any architect, general contractor, subcontractor, materialman or supplier, or on account of any act or omission to act by Bank in connection with the Property; (ii) losses, damages (including consequential damages), expenses or liabilities sustained by Bank in connection with any environmental inspection, monitoring, sampling or cleanup of the Property required or mandated by any applicable environmental law; (iii) any untrue statement of a material fact contained in information submitted to Bank by Borrower or the omission of any material fact necessary to be stated therein in order to make such statement not misleading or incomplete; (iv) the failure of Borrower to perform any obligations herein required to be performed by Borrower; and (v) the ownership, construction, occupancy, operation, use or maintenance of the Property.

8.3.2. In case any action shall be brought against Bank, its officers, employees or agents, in respect to which indemnity may be sought against Borrower, Bank or such other party shall promptly notify Borrower and Borrower shall assume the defense thereof, including the employment of counsel selected by Borrower and satisfactory to Bank, the payment of all costs and expenses and the right to negotiate and consent to settlement. Bank shall have the right, at its sole option, to employ separate counsel in any such action and to participate in the defense thereof, all at Borrower's sole cost and expense. Borrower shall not be liable for any settlement of any such action effected without its consent (unless Borrower fails to defend such claim), but if settled with Borrower's consent, or if there be a final judgment for the claimant in any such action, Borrower agrees to indemnify and hold harmless Bank from and against any loss or liability by reason of such settlement or judgment.

9. EVENTS OF DEFAULT . Each of the following shall constitute an event of default hereunder (an "Event of Default" ): (a) the failure of Borrower to pay any amount of principal or interest hereunder when due and payable; or (b) the occurrence of any other default in any term, covenant or condition hereunder and the failure to cure such default within thirty (30) days after notice thereof from Bank, provided that if such cure cannot reasonably be effectuated within said thirty (30) day period, Borrower shall have such additional time as is reasonably necessary to cure such default so long as Borrower has commenced such cure within said thirty (30) day period and is diligently pursuing such cure; or (c) or any Event of Default under the Mortgage or any other Loan Document.

10. REMEDIES . If an Event of Default exists, Bank may exercise any right, power or remedy permitted by law or as set forth herein or in the Mortgage or any other Loan Document including, without limitation, the right to declare the entire unpaid principal amount hereof and all interest accrued hereon, and all other sums secured by the Mortgage or any other Loan Document, to be, and such principal, interest and other sums shall thereupon become, immediately due and payable.

11. MISCELLANEOUS .

11.1. Disclosure of Financial Information . Bank is hereby authorized to disclose any financial or other information about Borrower to any regulatory body or agency having jurisdiction over Bank and to any present, future or prospective participant or successor in interest in any loan or other financial accommodation made by Bank to Borrower. The information provided may include, without limitation, amounts, terms, balances, payment history, return item history and any financial or other information about Borrower.

11.2. Integration . This Note and the other Loan Documents constitute the sole agreement of the parties with respect to the transaction contemplated hereby and supersede all oral negotiations and prior writings with respect thereto.

11.3. Attorneys' Fees and Expenses . If Bank retains the services of counsel by reason of a claim of a default or an Event of Default hereunder or under any of the other Loan Documents, or on account of any matter involving this Note, or for examination of matters subject to Bank's approval under the Loan Documents, all costs of suit and all reasonable attorneys' fees and such other reasonable expenses so incurred by Bank shall be paid by Borrower, on demand, and shall be deemed part of the obligations evidenced hereby.

11.4. No Implied Waiver . Bank shall not be deemed to have modified or waived any of its rights or remedies hereunder unless such modification or waiver is in writing and signed by Bank, and then only to the extent specifically set forth therein. A waiver in one event shall not be construed as continuing or as a waiver of or bar to such right or remedy in a subsequent event. After any acceleration of, or the entry of any judgment on, this Note, the acceptance by Bank of any payments by or on behalf of Borrower on account of the indebtedness evidenced by this Note shall not cure or be deemed to cure any Event of Default or reinstate or be deemed to reinstate the terms of this Note absent an express written agreement duly executed by Bank and Borrower.

11.5. Waiver . Borrower waives demand, notice (except to the extent expressly required herein), presentment, protest, demand for payment, notice of dishonor, notice of protest and diligence of collection of this Note. Borrower consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Bank with respect to the payment or other provisions of this Note, and to the release of any collateral, with or without substitution. Borrower agrees that makers, endorsers, guarantors and sureties may be added or released without notice and without affecting Borrower's liability hereunder. The liability of Borrower shall not be affected by the failure of Bank to perfect or otherwise obtain or maintain the priority or validity of any security interest in any collateral. The liability of Borrower shall be absolute and unconditional and without regard to the liability of any other party hereto.

11.6. No Usurious Amounts . Anything herein contained to the contrary notwithstanding, Borrower does not agree and shall not be obligated to pay interest hereunder at a rate which is in excess of the maximum rate permitted by law. If by the terms of this Note, Borrower is at any time required to pay interest at a rate in excess of such maximum rate, the rate of interest under this Note shall be deemed to be immediately reduced to such maximum legal rate and the portion of all prior interest payments in excess of such maximum legal rate shall be applied to and shall be deemed to have been payments in reduction of the outstanding principal balance. Borrower agrees that in determining whether or not any interest payable under this Note exceeds the highest rate permitted by law, any non-principal payment, including without limitation, late charges, shall be deemed to the extent permitted by law to be an expense, fee or premium rather than interest.

11.7. Partial Invalidity . The invalidity or unenforceability of any one or more provisions of this Note shall not render any other provision invalid or unenforceable. In lieu of any invalid or unenforceable provision, there shall be added automatically a valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible.

11.8. Binding Effect . The covenants, conditions, waivers, releases and agreements contained in this Note shall bind, and the benefits thereof shall inure to, the parties hereto and their respective heirs, executors, administrators, successors and assigns; provided, however, that this Note cannot be assigned by Borrower without the prior written consent of Bank, and any such assignment or attempted assignment by Borrower shall be void and of no effect with respect to Bank.

11.9. Modifications . This Note may not be supplemented, extended, modified or terminated except by an agreement in writing signed by the party against whom enforcement of any such waiver, change, modification or discharge is sought.

11.10. Jurisdiction . Borrower irrevocably appoints its manager as its attorney upon whom may be served, by regular or certified mail at the address set forth below, any notice, process or pleading in any action or proceeding against it arising out of or in connection with this Note or any other Loan Document; and Borrower hereby consents that any action or proceeding against it be commenced and maintained in any court within the State of Connecticut by service of process on any such manager; and Borrower agrees that the courts of such State shall have jurisdiction with respect to the subject matter hereof and the person of Borrower. Borrower agrees not to assert any defense to any action or proceeding initiated by Bank based upon improper venue or inconvenient forum.

11.11. Notices . All notices and communications under this Note shall be in writing and shall be given by either (a) hand-delivery, (b) first class mail (postage prepaid), or (c) reliable overnight commercial courier (charges prepaid), to the addresses listed in the Mortgage. Notice shall be deemed to have been given and received: (i) if by hand delivery, upon delivery; (ii) if by mail, three (3) calendar days after the date first deposited in the United States mail; and (iii) if by overnight courier, on the date scheduled for delivery. A party may change its address by giving written notice to the other party as specified herein.

11.12. Governing Law . This Note shall be governed by and construed in accordance with the substantive laws of the State of Connecticut without reference to conflict of laws principles.

11.13. Joint and Several Liability . If Borrower consists of more than one person or entity, the word "Borrower" shall mean each of them and their liability shall be joint and several.

11.14. Continuing Enforcement . If, after receipt of any payment of all or any part of this Note, Bank is compelled or agrees, for settlement purposes, to surrender such payment to any person or entity for any reason (including, without limitation, a determination that such payment is void or voidable as a preference or fraudulent conveyance, an impermissible setoff, or a diversion of trust funds), then this Note and the other Loan Documents shall continue in full force and effect or be reinstated, as the case may be, and Borrower shall be liable for, and shall indemnify, defend and hold harmless Bank with respect to, the full amount so surrendered. The provisions of this Section shall survive the cancellation or termination of this Note and shall remain effective notwithstanding the payment of the obligations evidenced hereby, the release of any security interest, lien or encumbrance securing this Note or any other action which Bank may have taken in reliance upon its receipt of such payment. Any cancellation, release or other such action shall be deemed to have been conditioned upon any payment of the obligations evidenced hereby having become final and irrevocable.

11.15. Waiver of Jury Trial . BORROWER AND BANK AGREE THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT BY BANK OR BORROWER, ON OR WITH RESPECT TO THIS NOTE OR ANY OTHER LOAN DOCUMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY. BANK AND BORROWER EACH HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND INTELLIGENTLY, AND WITH THE ADVICE OF THEIR RESPECTIVE COUNSEL, WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. FURTHER, BORROWER WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. BORROWER ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS NOTE AND THAT BANK WOULD NOT EXTEND CREDIT TO BORROWER IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS NOTE.

11.16. Prejudgment Remedy Waiver . MAKER AND EACH ENDORSER, GUARANTOR AND SURETY OF THIS NOTE, AND EACH OTHER PERSON LIABLE OR WHO SHALL BECOME LIABLE FOR ALL OR ANY PART OF THE INDEBTEDNESS EVIDENCED BY THIS NOTE, HEREBY ACKNOWLEDGE THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED UNDER CONNECTICUT GENERAL STATUTES SECTIONS 52-278a TO 52-278n, INCLUSIVE, OR BY OTHER APPLICABLE LAW, HEREBY WAIVE THEIR RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

[The Remainder of this Page Intentionally Left Blank]

IN WITNESS WHEREOF , Borrower, intending to be legally bound, has duly executed and delivered this Note as of the day and year first above written.

	BORROWER:

	RIVERBEND CROSSINGS III HOLDINGS LLC


	By:	Riverbend Lehigh Valley Holdings I LLC
		Its Sole Member

		By:	Griffin Land & Nurseries, Inc.
			Its Sole Member

By:

/s/Michael Gamzon

				Name:	Michael Gamzon
				Title:	Vice President

Exhibit 31.1

I, Frederick M. Danziger, certify that:

I have reviewed this quarterly report on Form 10-Q of Griffin Land & Nurseries, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 8, 2010	/s/ FREDERICK M. DANZIGER
	Frederick M. Danziger
	President and Chief Executive Officer

Exhibit 31.2

I, Anthony J. Galici, certify that:

I have reviewed this quarterly report on Form 10-Q of Griffin Land & Nurseries, Inc.;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 8, 2010	/s/ ANTHONY J. GALICI
	Anthony J. Galici
	Vice President, Chief Financial Officer and Secretary

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 UNITED STATES CODE SECTION 1350

In connection with the Quarterly Report of Griffin Land & Nurseries, Inc. (the “Company”) on Form 10-Q for the quarter ended February 27, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Periodic Report”), I, Frederick M. Danziger, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

The Periodic Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ FREDERICK M. DANZIGER

Frederick M. Danziger

President and Chief Executive Officer

April 8, 2010

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 UNITED STATES CODE SECTION 1350

In connection with the Quarterly Report of Griffin Land & Nurseries, Inc. (the “Company”) on Form 10-Q for the quarter ended February 27, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Periodic Report”), I, Anthony J. Galici, Vice President, Chief Financial Officer and Secretary of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

The Periodic Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ ANTHONY J. GALICI

Anthony J. Galici

Vice President, Chief Financial Officer and Secretary

April 8, 2010