Trinity Place Holdings Inc. (Form: 10-K, Received: 03/15/2018 17:10:01)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark one)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _____

Commission file number 1-08546

TRINITY PLACE HOLDINGS INC.
(Exact name of registrant as specified in its charter)

Delaware (State or Other Jurisdiction of Incorporation or Organization)	No. 22-2465228 (I.R.S. Employer Identification No.)

340 Madison Avenue, New York, New York (Address of Principal Executive Offices)	10173 (Zip Code)

Registrant’s telephone number, including area code: (212) 235-2190

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of each exchange on which registered
Common Stock $0.01 Par Value Per Share	NYSE American

Securities registered pursuant to Section 12 (g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ¨ No x

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.

Yes x No ¨

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).

Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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

Large Accelerated Filer ¨	Accelerated Filer x

Non-Accelerated Filer ¨ (Do not check if a smaller reporting company)	Smaller Reporting Company ¨

Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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

Yes ¨ No x

As of June 30, 2017, the aggregate market value of the registrant’s Common Stock held by non-affiliates of the registrant was approximately $175,834,000.

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distributions of securities under a plan confirmed by a court.

Yes x No ¨

As of March 15, 2018, there were 31,554,643 shares of the registrant’s Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement relating to the registrant’s 2018 Annual Meeting of Shareholders to be filed hereafter are incorporated by reference into Part III of this Annual Report on Form 10-K.

Form 10-K Index

		Page

PART I

Item 1.	BUSINESS	2
Item 1A.	RISK FACTORS	5
Item 1B.	UNRESOLVED STAFF COMMENTS	14
Item 2.	PROPERTIES	14
Item 3.	LEGAL PROCEEDINGS	16
Item 4.	MINE SAFETY DISCLOSURES	16

PART II

Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	16
Item 6.	SELECTED FINANCIAL DATA	17
Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19
Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	29
Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	30
Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	30
Item 9A.	CONTROLS AND PROCEDURES	30
Item 9B.	OTHER INFORMATION	31

PART III

Item 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	32
Item 11.	EXECUTIVE COMPENSATION	32
Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	32
Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	32
Item 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	32

PART IV

Item 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	33
Item 16.	FORM 10-K SUMMARY	35

Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K, including information included or incorporated by reference in this Annual Report on or any supplement to this Annual Report, may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and information relating to us that are based on the beliefs of management as well as assumptions made by and information currently available to management. These forward-looking statements include, but are not limited to, statements about our plans, objectives, expectations and intentions that are not historical facts, and other statements identified by words such as “may,” “will,” “expects,” believes,” “plans,” “estimates,” “potential,” or “continue,” or the negative thereof or other and similar expressions. In addition, in some cases, you can identify forward-looking statements by words or phrases such as “trend,” “potential,” “opportunity,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions. Such statements reflect our current views with respect to future events, the outcome of which is subject to certain risks, including among others:

our limited revenues from operations and reliance on external sources of financing to fund operations in the future;

our ability to execute our business plan, including as it relates to the development of our largest asset, a property located at 77 Greenwich Street (“77 Greenwich”) in Lower Manhattan;

adverse trends in the Manhattan condominium market;

general economic and business conditions, including with respect to real estate, and their effect on the New York City real estate market in particular;

our investment in property development may be more costly than anticipated and investment returns from our properties planned to be developed may be less than anticipated;

competition for new acquisitions;

risks associated with acquisitions and investments in owned and leased real estate generally, including risks related to closing, obtaining suitable financing in connection with and achieving the intended benefits of the potential acquisition of the apartment building located at 237 11th Street, Brooklyn, New York (“237 11 ^th Street”);

our ability to enter into new leases and renew existing leases with tenants at our commercial and residential properties;

risks associated with partnerships or joint ventures;

our ability to receive or maintain certain state tax benefits with respect to our properties, and to obtain required permits, site plan approvals and/or other governmental approvals in connection with the development or redevelopment of our properties;

costs associated with complying with environmental laws and environmental contamination, as well as the Americans with Disabilities Act or other safety regulations and requirements;

loss of key personnel;

our ability to obtain additional financing and refinance existing loans and on favorable terms;

the failure of our subsidiaries to repay outstanding indebtedness;

the effects of new tax laws;

our ability to utilize our net operating loss carryforwards (“NOLs”) to offset future taxable income and capital gains for U.S. Federal, state and local income tax purposes;

risks associated with current political and economic uncertainty;

risks associated with breaches of information technology systems;

stock price volatility;

the influence of certain significant stockholders;

limitations in our certificate of incorporation on acquisitions and dispositions of our common stock designed to protect our ability to utilize our NOLs and certain other tax attributes, which may not succeed in protecting our ability to utilize such tax attributes, and/or may limit the liquidity of our common stock;

certain provisions in our charter documents and Delaware law may have the effect of making more difficult or otherwise discouraging, delaying or deterring a takeover or other change of control of us; and

unanticipated difficulties which may arise and other factors which may be outside our control or that are not currently known to us or which we believe are not material.

In evaluating such statements, you should specifically consider the risks identified under the section entitled “Risk Factors” in this Annual Report on Form 10-K, any of which could cause actual results to differ materially from the anticipated results. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those contemplated by any forward looking statements. Subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements in this paragraph and elsewhere described in this Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission (the “SEC”). All forward-looking statements speak only as of the date of this Annual Report on Form 10-K or, in the case of any documents incorporated by reference in this Annual Report on Form 10-K, the date of such document, in each case based on information available to us as of such date, and we assume no obligation to update any forward-looking statements, except as required by law.

PART I

Item 1.

BUSINESS

Overview

Trinity Place Holdings Inc. (“Trinity,” “we”, “our”, or “us”) is a real estate holding, investment and asset management company. Our business is primarily to acquire, invest in, own, manage, develop or redevelop and sell real estate assets and/or real estate related securities. Our largest asset is currently a property located at 77 Greenwich in Lower Manhattan. 77 Greenwich was a vacant building that was demolished and is under development as a residential condominium tower that also includes plans for retail and a New York City elementary school. We also own a retail strip center located in West Palm Beach, Florida, a property formerly occupied by a retail tenant in Paramus, New Jersey, and, through a joint venture, a 50% interest in a newly constructed 95-unit multi-family property, known as The Berkley, located in Brooklyn, New York (see Item 2. Properties for a more detailed description of our properties). We are also under contract to purchase a newly built 105-unit, 12 story apartment building located at 237 11 ^th Street for $81.0 million, which we expect to close in the spring of 2018 (see Transactions, Development and Other Activities During 2017 - Acquisitions and Divestitures below for more details). We continue to evaluate new investment opportunities.

We also control a variety of intellectual property assets focused on the consumer sector, a legacy of our predecessor, Syms Corp. (“Syms”), including our on-line marketplace at FilenesBasement.com, our rights to the Stanley Blacker® brand, as well as the intellectual property associated with the Running of the Brides® event and An Educated Consumer is Our Best Customer® slogan. We also had approximately $231.0 million of federal NOLs at December 31, 2017.

Business and Growth Strategies

Our primary business objective is to maximize the risk adjusted return on investment in our portfolio properties and new acquisitions and investments across all points of the economic cycle. Our strategies to achieve this objective include, among others, the following:

Legacy Properties . Continue the development, redevelopment and leasing of our legacy properties, including the development of 77 Greenwich and the redevelopment and repositioning of our legacy retail properties;

New Acquisitions and Investments . Identify additional acquisition and investment opportunities, including, but not limited to, the following:

high-quality, multi-family real estate in the boroughs of New York City and other select submarkets, that is designed to meet the demands of today’s tenants who desire newly constructed and efficiently designed apartment buildings located in close proximity to public transportation, and manage those facilities so as to become the landlord of choice for both existing and prospective tenants;

retail and office properties that present opportunities for us to leverage our redevelopment and repositioning expertise; and

opportunistic acquisitions of assets which increase our market share in the markets in which we concentrate, as well as potential new markets, which exhibit an opportunity to improve or preserve returns through repositioning (through a combination of capital improvements and shift in marketing strategy), changes in management focus and leasing, as well as assets or interests in assets that offer strong long-term fundamentals, but which may be out of favor in the short term;

Joint Ventures . Explore joint venture opportunities with existing property owners located in desirable locations, who seek to benefit from the depth of market knowledge and management expertise we are able to provide, and/or to explore joint venture opportunities with strategic institutional partners, leveraging our skills as owners and operators; and

Capital Structure . Enhance our capital structure through our access to a variety of sources of capital and proactively manage our debt maturities.

Competition

The markets in which our properties are located are inherently competitive. With respect to our properties currently located in Paramus, New Jersey; West Palm Beach, Florida; our joint venture property located in Brooklyn, New York, and with respect to any future real estate assets that we acquire or develop, we will be competing for some of the same tenants, contractors, lenders and potential purchasers or investors with respect to other properties within the same markets but owned by other investors.

Competitive factors with respect to 77 Greenwich may have a more material effect on us as it is currently our most significant real estate asset. Various municipal entities are making and have indicated an intent to continue to make significant investments in the immediate vicinity of 77 Greenwich to support the growth of the downtown Manhattan neighborhood as a vibrant 24/7 community to work, visit and live. Several privately funded commercial and residential developments are being constructed or have been proposed to take advantage of the increasing desirability of the neighborhood. The impact of these changing supply and demand characteristics is uncertain, and they could positively or negatively impact our plan to maximize the value of 77 Greenwich.

In addition, we will face competition in identifying and completing new investment and acquisition opportunities, including from larger and more established real estate firms with greater capital resources and access to financing.

Regulatory Matters

Environmental Compliance

Under various federal, state and local laws, ordinances and regulations, a current or previous owner or operator of real-estate may be required to investigate and remediate hazardous or toxic substances at a property, and may be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by the parties in connection with the contamination. These laws often impose liability without regard to whether the owner or operator had knowledge of, or was responsible for, the release of the hazardous or toxic substances. The presence of contamination or the failure to remediate contamination may adversely affect the owner’s ability to sell or lease real estate or to borrow using the real estate as collateral.

Other federal, state and local laws, ordinances and regulations require abatement or removal of asbestos-containing materials in the event of demolition or certain renovations or remodeling, the cost of which may be substantial for certain redevelopment projects that a potential purchaser would want to undertake with respect to any particular parcel of real estate we own. Such laws, ordinances and regulations also govern emissions from and exposure to asbestos fibers in the air. Federal and state laws also regulate the operation and removal of underground storage tanks. In connection with the ownership and management of certain properties, we could be held liable for the costs of remedial action with respect to these regulated substances or related claims.

Zoning and Planning

In connection with any development or redevelopment of our properties, whether currently owned or acquired or invest in the future, we will be required to comply with applicable zoning, land-use, building, occupancy, and other laws and regulations. In many cases we are and will continue to be required to obtain governmental permits, site plan approvals and/or other authorizations, or seek variances, prior to proceeding with planned development, acquisition or other activities.

Chapter 11 Cases and Plan of Reorganization of Syms Corp.

Trinity is the successor to Syms, which also owned Filene’s Basement. Syms and its subsidiaries filed for relief under the United States Bankruptcy Code in 2011. In September 2012, the Syms Plan of Reorganization (the “Plan”) became effective and Syms and its subsidiaries consummated their reorganization under Chapter 11 through a series of transactions contemplated by the Plan and emerged from bankruptcy. As part of those transactions, reorganized Syms merged with and into Trinity, with Trinity as the surviving corporation and successor issuer pursuant to Rule 12g-3 under the Exchange Act.

On or about March 8, 2016, a General Unsecured Claim Satisfaction occurred under the Plan. On March 14, 2016, we made the final Majority Shareholder payment (as defined in the Plan) to the former Majority Shareholder in the amount of approximately $6.9 million. Together these satisfied our remaining payment and reserve obligations under the Plan. In January 2017, we received approximately $1.0 million as part of a settlement concerning, among other things, funds that were being held as collateral by our pre-petition insurance carrier on account of escrows and draws on certain letters of credit. As of December 31, 2017, the amount of remaining multiemployer pension plan claims was $1.7 million (see Note 8 – Pension and Profit Sharing Plans to the Consolidated Financial Statements). In addition, we had other pension liabilities of $2.5 million.

On January 18, 2018, Syms and certain of its subsidiaries (together, the “Reorganized Debtors”) filed with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) a motion (the “Motion”) for entry of a final decree (the “Final Decree”) (i) closing the chapter 11 cases of the Reorganized Debtors; (ii) terminating the services of the claims and noticing agent; and (iii) retaining the Bankruptcy Court’s jurisdiction as provided for in the Plan, including to enforce or interpret its own orders pertaining to the chapter 11 cases including, but not limited to, the Plan and Final Decree. On the same date, the Reorganized Debtors filed a Final Report in support of the Motion. On February 6, 2018, the Bankruptcy Court entered the Final Decree pursuant to which the chapter 11 cases of the Reorganized Debtors were closed.

The descriptions of certain transactions, payments and other matters contemplated by the Plan above and elsewhere in this Annual Report on Form 10-K are summaries only and do not purport to be complete and are qualified in all respects by the actual provisions of the Plan and related documents.

Trademarks

Various trademarks are controlled and/or owned by us, including “Filene’s Basement”®, “Stanley Blacker”®, “Running of the Brides”® and “An Educated Consumer is Our Best Customer,”® and have been registered with the United States Patent and Trademark Office.

Employees

As of December 31, 2017, we had nine full-time employees and one part time employee staffed in executive, management, finance, accounting, operations and administrative capacities.

General Information about Trinity

Trinity was incorporated in Delaware immediately prior to the effective date of the Plan. Trinity maintains its headquarters at 340 Madison Avenue, New York, New York, 10173, and the telephone number is (212) 235-2190.

Available Information

We are a public company and are subject to the informational requirements of the Exchange Act. Accordingly, we file periodic reports and other information with the SEC. Such reports and other information may be obtained by visiting the Public Reference Room of the SEC at 100 F Street, NE, Room 1580, Washington, D.C. 20549 or by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding us and other issuers that file electronically.

Our website address is www.trinityplaceholdings.com or www.tphs.com . We make available without charge, through our website in the “Financials” section, copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such reports are filed with or furnished to the SEC. References in this document to our website are not and should not be considered part of this Annual Report on Form 10-K, and the information on our website is not incorporated by reference into this Annual Report.

Item 1A.

RISK FACTORS

Our business, operations and financial condition are subject to various risks. Some of these risks are described below, and stockholders should take such risks into account in evaluating us or any investment decision involving us. This section does not describe all risks that may be applicable to us, our industry or our business, and it is intended only as a summary of certain material risk factors. Additional risks and uncertainties that we do not presently know about or that we currently believe are not material may also adversely affect our business. More detailed information concerning certain of the risk factors described below is contained in other sections of this Annual Report on Form 10-K. Stockholders should also refer to the other information contained in our periodic reports, including the Cautionary Note Regarding Forward-Looking Statements section, our consolidated financial statements and the related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations section for a further discussion of the risks, uncertainties and assumptions relating to our business.

Risk Factors Related to Our Business

We have not generated a profit and consequently our business plan is difficult to evaluate and our long term viability cannot be assured.

Our prospects for financial success are difficult to assess because we have a limited operating history since we began reporting as a going concern. Our predecessor filed for Chapter 11 relief on November 2, 2011, we were formed, and emerged from bankruptcy on September 14, 2012. We resumed reporting on the going concern basis of accounting on February 10, 2015. Since our formation, we have generated limited revenues and had negative cash flow from operations. The development of our business plan will require substantial capital expenditures. Our business could be subject to any or all of the problems, expenses, delays and risks inherent in the establishment of a new business enterprise, including, but not limited to capital resources. There can be no assurance that our business will be successful, that we will be able to achieve or maintain a profitable operation, or that we will not encounter unforeseen difficulties that may deplete our capital resources more rapidly than anticipated. There can be no assurance that we will achieve or sustain profitability or positive cash flows from our operating activities.

We have generated minimal revenues from operations and have limited cash resources, and will be reliant on external sources of capital to fund ongoing operations.

Our revenue generating activities have not yet produced sufficient funds for profitable operations. In addition, we are required to set aside specified minimum levels of liquidity in connection with the development and financing of 77 Greenwich, and we anticipate that we may be required to do so in connection with the development and financing of other current and future properties as well. While 77 Greenwich is currently our most significant asset, the amounts required to be set aside in other situations could also be substantial. As a result, these amounts would not be available for investment or operating activities. Our continued operation will be dependent upon the success of future operations and will require raising additional capital on acceptable terms. We have relied and may continue to rely substantially upon equity and debt financing to fund our ongoing operations. There can be no assurance that additional sources of capital will be available to us on commercially favorable terms should our capital requirements exceed cash available from operations and existing cash and cash equivalents.

A significant part of our current business plan is focused on the development of 77 Greenwich, and an inability to execute this business plan due to adverse trends in the Manhattan condominium market or otherwise could have a material adverse effect on our financial condition and results of operations.

Our business plan includes the development or redevelopment of our remaining commercial real estate properties and in particular the development of 77 Greenwich, which currently is our largest asset. As a result, our revenues and future growth are heavily dependent on the success of implementing our business plan for 77 Greenwich, which is currently under development.

Our plans for 77 Greenwich currently call for approximately 90 luxury residential condominium apartments, in addition to retail and a New York City elementary school. There are a variety of factors that determine Manhattan condominium trends and that will ultimately impact the sales and pricing of condominiums at 77 Greenwich, including among others, supply, changes in interest rates, the availability of home mortgages, foreign exchange rates and local employment trends, prices and velocity of sales. Sales of condominiums in general, and in particular in Manhattan, have historically experienced greater volatility than detached single family houses, which may expose us to more risk. These and other factors fluctuate over time and their status at the time we actually commence sales, which is itself uncertain, is inherently uncertain. An inability to successfully execute our business plan with respect to 77 Greenwich could have a material adverse effect on our financial condition and results of operations.

Our investment in property development for 77 Greenwich and other properties may be more costly than anticipated.

We intend to continue to develop or redevelop our current and future properties. Our current and future development and construction activities, including with respect to 77 Greenwich, may be exposed to the following risks:

we may be unable to proceed with the development of properties because we cannot obtain financing on favorable terms, or at all;

we may incur construction costs for a development project that exceed our original estimates due to increases in interest rates and increased materials, labor, leasing or other costs, which could make completion of the project less profitable because market rents may not increase sufficiently to compensate for the increase in construction costs;

we may be unable to obtain, or face delays in obtaining, required zoning, land-use, building, occupancy, and other governmental permits and authorizations, which could result in increased costs and could require us to abandon our activities entirely with respect to a project;

we may abandon development opportunities after we begin to explore them and as a result we may lose deposits or fail to recover expenses already incurred;

we may expend funds on and devote management’s time to projects which we do not complete;

we may be unable to complete construction and/or leasing of our rental properties and sales of our condominium projects (currently limited to 77 Greenwich) on schedule, or at all; and

we may suspend development projects after construction has begun due to changes in economic conditions or other factors, and this may result in the write-off of costs, payment of additional costs or increases in overall costs when the development project is restarted.

Investment returns from 77 Greenwich and other properties we may develop may be less than anticipated.

Our properties planned to be developed may be exposed to the following risks:

we may sell condominiums at 77 Greenwich and other future developed properties at prices, and/or lease commercial and residential properties at current or future properties, that are less than the prices projected at the time we decide to undertake the development;

the velocity of leasing at commercial and residential properties, and/or condominium sales at future developed properties may fluctuate depending on a number of factors, including market and economic conditions, and may result in our investments being less profitable than we expected or not profitable at all; and

operating expenses may be greater than projected at the time of development, resulting in our investment being less profitable than we expected.

Competition for new acquisitions may reduce the number of acquisition opportunities available to us and increase the costs of those acquisitions.

We may face competition for acquisition opportunities from other investors, particularly those investors who are willing to incur more leverage, and this competition may adversely affect us by subjecting us to the following risks:

an inability to acquire a desired property because of competition from other well-capitalized real estate investors, including publicly traded and privately held REITs, private real estate funds, domestic and foreign financial institutions, life insurance companies, sovereign wealth funds, pension trusts, partnerships and individual investors; and

an increase in the purchase price for such acquisition property.

If we are unable to successfully acquire additional properties, our ability to grow our business could be adversely affected. In addition, increases in the cost of acquisition opportunities could adversely affect our results of operations.

We face risks associated with acquisitions of and investments in new properties.

We may acquire interests in properties, individual properties and portfolios of properties, including potentially large portfolios that could significantly increase our size and alter our capital structure. Our acquisition and investment activities may be exposed to, and their success may be adversely affected by, the following risks:

we may be unable to complete proposed acquisitions or other transactions due to an inability to meet required closing conditions;

we may expend funds on, and devote management time to, acquisition opportunities which we do not complete, which may include non-refundable deposits;

we may be unable to finance acquisitions and developments of properties on favorable terms or at all;

we may be unable to lease our acquired properties on the same terms as contemplated as part of our underwriting;

acquired properties may fail to perform as we expected;

our estimates of the costs we incur in renovating, improving, developing or redeveloping acquired properties may be inaccurate;

we may not be able to obtain adequate insurance coverage for acquired properties; and

we may be unable to quickly and efficiently integrate new acquisitions and developments, particularly acquisitions of portfolios of properties, into our existing operations, and therefore our results of operations and financial condition could be adversely affected.

In addition, we may acquire properties subject to both known and unknown liabilities and without any recourse, or with only limited recourse to the seller. As a result, if a liability were asserted against us arising from our ownership of such a property, we might have to pay substantial sums to settle it, which could adversely affect our cash flow. Unknown liabilities with respect to properties acquired might include:

claims by tenants, vendors or other persons arising from dealing with the former owners of the properties;

liabilities incurred in the ordinary course of business;

claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties; and

liabilities for clean-up of undisclosed environmental contamination.

Our revenues and the value of our portfolio are affected by a number of factors that affect investments in leased commercial and residential real estate generally.

We are subject to the general risks of investing in and owning leased real estate in connection with our existing shopping centers, the residential property owned by our joint venture and new properties or investments in leased real estate. These risks include the ability to secure leases with new tenants, the non-performance of lease obligations by tenants, leasehold improvements that will be costly or difficult to remove or certain upgrades that may be needed should it become necessary to re-rent the leased space for other uses, rights of termination of leases due to events of casualty or condemnation affecting the leased space or the property or due to interruption of the tenant’s quiet enjoyment of the leased premises, and obligations of a landlord to restore the leased premises or the property following events of casualty or condemnation. The occurrence of any of these events, particularly with respect to larger leases at our commercial real estate properties, could adversely impact our results of operations, liquidity and financial condition.

In addition, if our competitors offer space at rental rates below our current rates or the market rates, we may lose current or potential tenants to other properties in our markets. Additionally, we may need to reduce rental rates below our current rates or offer incentives in order to retain tenants upon expiration of their leases or to attract new tenants. Our results of operations and cash flow may be adversely affected as a result of these factors.

We may be unable to lease vacant space, renew our current leases, or re-lease space as our current leases expire.

We cannot assure you that leases at our properties will be renewed or that such properties will be re-leased at favorable rental rates. If the rental rates for our properties decrease, our tenants do not renew their leases or we do not re-lease a significant portion of our available space, including vacant space resulting from tenant defaults or space that is currently unoccupied, and space for which leases are scheduled to expire, our financial condition, results of operations and cash flows could be materially adversely affected. There are numerous commercial developers, real estate companies, financial institutions and other investors with greater financial resources than we have that compete with us in seeking tenants who will lease space in our properties.

The bankruptcy of, or a downturn in the business of, any of the major tenants at our commercial real estate properties that causes them to reject their leases, or to not renew their leases as they expire, or renew at lower rental rates, may adversely affect our cash flows and property values. In addition, retailers at our properties face increasing competition from e-commerce, outlet malls, discount shopping clubs, direct mail and telemarketing, which could reduce rents payable to us and reduce our ability to attract and retain tenants at our properties leading to increased vacancy rates at our properties.

In addition, if we are unable to renew leases or re-lease a property, the resale value of that property could be diminished because the market value of a particular property will depend in part upon the value of the leases of such property.

We are subject to the risks associated with partnerships and joint ventures.

We formed a joint venture with a third party to acquire and operate The Berkley in Brooklyn, New York. We may become involved in additional partnerships and/or joint ventures in the future with respect to current or future properties. Partnerships and joint venture investments may involve risks not otherwise present for investments made or owned solely by us, including the possibility that our partner or co-venturer might become bankrupt, or may take action contrary to our instructions, requests, policies or objectives. Other risks of joint venture investments include impasse on decisions, such as a sale, because neither we nor a joint venture partner would have full control over the joint venture, activities conducted by a partner that have a negative impact on the joint venture or us, and disputes with our partner. Also, there is no limitation under our organizational documents as to the amount of our funds that may be invested in joint ventures.

We may not receive or be able to maintain certain tax benefits if we are not in compliance with certain requirements of the NYC Department of Housing Preservation and Development.

We may not receive or be able to maintain certain existing or anticipated tax benefits related to The Berkley or our pending acquisition of 237 11 ^th Street if we are not in compliance with certain requirements of the NYC Department of Housing Preservation and Development (the “HPD”). Both of these properties currently benefit from a real estate tax exemption under New York Real Property Tax Law (the “RPTL”) Section 421-a, as a result of a specified percentage of the units in such buildings being designated as affordable rate units or market rate units and/or subject to rent stabilization guidelines, among other requirements. Section 421-a of the New York RPTL provides an exemption from real estate taxes on the amount of the assessed value of newly constructed improvements if certain requirements are met. A property cannot maintain or continue to receive Section 421-a tax benefits without HPD’s determination that all Section 421-a eligibility requirements have and continue to be met. Although the HPD has issued a final Certificate of Eligibility with respect to the 421-a tax benefits for The Berkley property and we are currently in compliance with all applicable 421-a requirements for such property, and the HPD has issued a preliminary Certificate of Eligibility with respect to the 421-a tax benefits for the 237 11th Street property and the seller of the 237 11 ^th Street property has represented to us that it is complying with all applicable 421-a requirements for such property, there can be no assurance that compliance with the 421-a requirements for either property will continue to be maintained. If we are not able to maintain compliance with the requirements of the Section 421-a partial tax exemption program, as applicable to either of the properties, the HPD may find that such property is ineligible to receive the tax exemption benefits related to the Section 421-a partial tax exemption program.

Our ability to develop or redevelop our properties and enter into new leases with tenants will depend on our obtaining certain permits, site plan approvals and other governmental approvals from local municipalities, which we may not be able to obtain on a timely basis or at all.

In order to develop or redevelop our properties, we will be required to obtain certain permits, site plan approvals or other governmental approvals from local municipalities. We may not be able to secure all the necessary permits or approvals on a timely basis or at all, which may prevent us from developing or redeveloping our properties according to our business plan. Additionally, potential acquirors or tenants may also need to obtain certain permits or approvals in order to utilize our properties in the manner they intend to do so. The specific permit and approval requirements are set by the state and the various local jurisdictions, including but not limited to city, town, county, township and state agencies having control over the specific properties. Our inability to obtain permits and approvals to develop or redevelop our properties, or the inability of potential purchasers and tenants of our properties to obtain necessary permits and approvals, could severely and adversely affect our business.

We may incur significant costs to comply with environmental laws and environmental contamination may impair our ability to lease and/or sell real estate.

Our operations and properties are subject to various federal, state and local laws and regulations concerning the protection of the environment, including air and water quality, hazardous or toxic substances and health and safety. Under some environmental laws, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property. The owner or operator may also be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by those parties because of the contamination. These laws often impose liability without regard to whether the owner or operator knew of the release of the substances or caused the release. The presence of contamination or the failure to remediate contamination may impair our ability to sell or lease real estate or to borrow using the real estate as collateral. Other laws and regulations govern indoor and outdoor air quality including those that can require the abatement or removal of asbestos-containing materials in the event of damage, demolition, renovation or remodeling and also govern emissions of and exposure to asbestos fibers in the air. The maintenance and removal of lead paint and certain electrical equipment containing polychlorinated biphenyls (PCBs) are also regulated by federal and state laws. We are also subject to risks associated with human exposure to chemical or biological contaminants such as molds, pollens, viruses and bacteria which, above certain levels, can be alleged to be connected to allergic or other health effects and symptoms in susceptible individuals. We could incur fines for environmental compliance and be held liable for the costs of remedial action with respect to the foregoing regulated substances or related claims arising out of environmental contamination or human exposure to contamination at or from our properties.

Each of our properties has been subject to varying degrees of environmental assessment. To date, these environmental assessments have not revealed any environmental condition material to our business. However, identification of new compliance concerns or undiscovered areas of contamination, changes in the extent or known scope of contamination, human exposure to contamination or changes in clean-up or compliance requirements could result in significant costs to us.

Compliance or failure to comply with the Americans with Disabilities Act or other safety regulations and requirements could result in substantial costs.

The Americans with Disabilities Act (“ADA”) generally requires that public buildings, including our properties, meet certain federal requirements related to access and use by disabled persons. These rules are subject to interpretation and change. Noncompliance could result in the imposition of fines by the federal government or the award of damages to private litigants and/or legal fees to their counsel. If, under the ADA, we are required to make substantial alterations and capital expenditures in one or more of our operating properties, including the removal of access barriers, it could adversely affect our financial condition and results of operations.

Our properties are subject to various federal, state and local regulatory requirements, such as state and local fire and life safety requirements. If we fail to comply with these requirements, we could incur fines or private damage awards. We do not know whether existing requirements will change or whether compliance with future requirements will require significant unanticipated expenditures that will affect our cash flow and results of operations.

The loss of key personnel upon whom we depend to operate our business or the inability to attract additional qualified personnel could adversely affect our business.

We believe that our future success will depend in large part on our ability to retain or attract highly qualified management and other personnel, including in particular our President and Chief Executive Officer, Matthew Messinger. We may not be successful in retaining key personnel or in attracting other highly qualified personnel. Any inability to retain or attract qualified management and other personnel could have a material adverse effect on our business, results of operations and financial condition.

The failure of our subsidiaries to repay or refinance outstanding loans, and any liability we incur as a result of the financing arrangements and our guarantees of those loans, could have a material adverse impact on our financial condition, results of operations and cash flows.

All of our properties secure loan agreements. The failure by our borrower subsidiaries to make scheduled repayments under the loan agreements, or the default of any of the obligations under the loans, would have an adverse impact on our financial condition, results of operations and cash flows. Upon the occurrence of an event of default, the applicable subsidiary may be required to immediately repay all amounts outstanding under the respective loan and the lenders may exercise other remedies available to them, including foreclosing on the respective property securing the loan. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources and Note 10 – Loans Payable and secured line of credit to our consolidated financial statements, for further discussion regarding our financing activities.

New U.S. tax laws.

On December 22, 2017, the U.S. Tax Cuts and Jobs Act was signed into law. This law imposes significant changes on the way we are taxed, including, among other things, changes to U.S. federal tax rates, imposing significant additional limitations on the deductibility of interest, and the migration to a new international system of taxation. There is substantial uncertainty regarding both the timing and the details of how these changes will affect us and the industry in which we operate.

Our ability to utilize our NOLs to reduce future tax payments may be limited as a result of future transactions.

We had approximately $231.0 million of federal NOLs at December 31, 2017. Section 382 of the Internal Revenue Code, or the Code, contains rules that limit the ability of a company that undergoes an ownership change, which is generally any change in ownership by certain stockholders of more than 50% of its stock over a three-year period, to utilize its NOLs after the ownership change. These rules generally operate by focusing on ownership changes involving stockholders who directly or indirectly own 5% or more of the stock of a company and any change in ownership arising from a new issuance of stock by us. Generally, if an ownership change occurs, the annual taxable income limitation on the use of NOLs is equal to the product of the applicable long term tax exempt rate and the value of our stock immediately before the ownership change. If we experience an ownership change, our ability to utilize our NOLs would be subject to significant limitations.

Political and economic uncertainty could have an adverse effect on us.

We cannot predict how current political and economic uncertainty, including uncertainty related to taxation and increases in interest rates, will affect our critical tenants, joint venture partners, lenders, financial institutions and general economic conditions, including consumer confidence and the volatility of the stock market and real estate market.

Political and economic uncertainty poses a risk to us in that it may cause consumers to postpone discretionary spending in response to tighter credit, reduced consumer confidence and other macroeconomic factors affecting consumer spending behavior, resulting in a downturn in the business of our tenants. In the event current political and economic uncertainty results in financial turmoil affecting the banking system and financial markets or significant financial service institution failures, there could be a new or incremental tightening in the credit markets, low liquidity, and extreme volatility in fixed income, credit, currency and equity markets. Each of these could have an adverse effect on our business, financial condition and operating results.

Breaches of information technology systems could materially harm our business and reputation.

We collect and retain on information technology systems certain financial, personal and other sensitive information provided by third parties, including tenants, vendors and employees. We also rely on information technology systems for the collection and distribution of funds.

There can be no assurance that we will be able to prevent unauthorized access to sensitive information or the unauthorized distribution of funds. Any loss of this information or unauthorized distribution of funds as a result of a breach of information technology systems may result in loss of funds to which we are entitled, legal liability and costs (including damages and penalties), as well as damage to our reputation, that could materially and adversely affect our business and financial performance.

Risks Related to Our Common Stock

Our common stock is thinly traded and the price of our common stock may fluctuate significantly.

Our common stock, listed on the NYSE American, is thinly traded. We cannot assure stockholders that an active market for our common stock will develop in the foreseeable future or, if developed, that it will be sustained. As a result stockholders may not be able to resell their common stock. Because our common stock is thinly traded, even small trades can have a significant impact on the market price of our common stock. Volatility in the market price of our common stock may prevent stockholders from being able to sell their shares at or above the price paid for such shares. The market price of our common stock could fluctuate significantly for various reasons, many of which are beyond our control, including:

the potential issuance of additional shares of common stock including at prices that are below the then-current trading price of our common stock;

volatility in global and/or U.S. equities markets;

changes in the real estate markets in which we operate;

our ability to develop or redevelop 77 Greenwich and our other properties;

our ability to identify new acquisition and investment opportunities and/or close on previously announced acquisitions or investments;

our financial results or those of other companies in our industry;

the public’s reaction to our press releases and other public announcements and our filings with the SEC;

new laws or regulations or new interpretations of laws or regulations applicable to our business;

changes in general conditions in the United States and global economies or financial markets, including those resulting from war, incidents of terrorism or responses to such events;

sales of common stock by our executive officers, directors and significant stockholders;

changes in generally accepted accounting principles, policies, guidance, or interpretations; and

other factors described in our filings with the SEC, including among others in connection with the risks noted in this Annual Report on Form 10-K.

In addition, until our common stock is more widely held and actively traded, small sales or purchases may cause the price of our common stock to fluctuate dramatically up or down without regard to our financial health or business prospects.

Stockholders may experience dilution of their ownership interests because of the future issuance of additional shares of our common stock.

In the future, we may issue additional equity securities in capital raising transactions or otherwise, resulting in the dilution of the ownership interests of our present stockholders. We are currently authorized to issue an aggregate of 120,000,000 shares of capital stock consisting of 79,999,997 shares of common stock, two shares of a class of preferred stock (which were redeemed in accordance with their terms and may not be reissued), one share of a class of special stock and 40,000,000 shares of blank-check preferred stock. As of December 31, 2017, there were 31,451,796 shares of our common stock and one share of special stock outstanding.

Any future issuance of our equity securities may dilute then-current stockholders’ ownership percentages and could also result in a decrease in the fair market value of our equity securities, because our assets would be owned by a larger pool of outstanding equity. We may need to raise additional capital through public or private offerings of our common stock or other securities that are convertible into or exercisable for our common stock. We may also issue such securities in connection with hiring or retaining employees and consultants, as payment to providers of goods and services, in connection with future acquisitions and investments, development, redevelopment and repositioning of assets, or for other business purposes. Our board of directors may at any time authorize the issuance of additional common stock without stockholder approval, unless the approval of our common stockholders is required by applicable law, rule or regulation, including NYSE American regulations, or our certificate of incorporation. The terms of preferred equity securities we may issue in future transactions may be more favorable to new investors, and may include dividend and/or liquidation preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect. Also, the future issuance of any such additional shares of common stock or other securities may create downward pressure on the trading price of our common stock. There can be no assurance that any such future issuances will not be at a price or have exercise prices below the price at which shares of the common stock are then traded.

A sale of a substantial number of shares of our common stock may cause the price of our common stock to decline and may impair our ability to raise capital in the future.

Capital-raising transactions resulting in a large amount of newly issued shares that become readily tradable, or other events that cause current stockholders to sell shares, could place downward pressure on the trading price of our stock. In addition, the lack of a robust resale market may require a stockholder who desires to sell a large number of shares of common stock to sell the shares in increments over time to mitigate any adverse impact of the sales on the market price of our stock.

If our stockholders sell, or the market perceives that our stockholders intend to sell for various reasons, including the ending of restrictions on resale of substantial amounts of our common stock in the public market, including shares issued upon the exercise of outstanding options, the market price of our common stock could fall. A significant amount of restricted shares previously issued by us have been registered for resale on registration statements filed with the SEC.

In addition, sales of a substantial number of shares of our common stock may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate, which would impair our ability to raise capital.

More than 50% of our shares of common stock are currently controlled by five of our stockholders who may have the ability to influence the election of directors and the outcome of matters submitted to our stockholders.

More than 50% of our shares of common stock are controlled by five of our stockholders. As a result, these stockholders may have the ability to significantly influence the outcome of issues submitted to our stockholders for a vote. The interests of these stockholders may not always coincide with our interests or the interests of other stockholders, and they may act in a manner that advances their best interests and not necessarily those of other stockholders. The concentration of ownership could also deter unsolicited takeovers, including transactions in which stockholders might otherwise receive a premium for their shares over then current market prices.

The holder of our special stock has the right to appoint a member to our board of directors and, consequently, the ability to exert influence over us.

In connection with the investment in us by Third Avenue Trust, on behalf of Third Avenue Real Estate Value Fund (“Third Avenue”), a beneficial holder of 15.56% of our common stock, Third Avenue was issued one share of a class of special stock and our certificate of incorporation was amended to provide that, subject to the other terms and conditions of our certificate of incorporation, from the issuance of the one share of special stock and until the “Special Stock Ownership Threshold” of 2,345,000 shares of common stock is no longer satisfied, Third Avenue has the right to elect one director to the board of directors. As a result, this stockholder may be able to exert influence over our policies and management, potentially in a manner which may not be in our best interests or the best interests of the other stockholders, until such time as the Special Stock Ownership Threshold is no longer satisfied.

In order to protect our ability to utilize our NOLs and certain other tax attributes, our certificate of incorporation includes certain transfer restrictions with respect to our stock, which may limit the liquidity of our common stock.

To reduce the risk of a potential adverse effect on our ability to use our NOLs and certain other tax attributes for U.S. Federal income tax purposes, our certificate of incorporation contains certain transfer restrictions with respect to our stock by substantial stockholders. These restrictions may adversely affect the ability of certain holders of our common stock to dispose of or acquire shares of our common stock and may have an adverse impact on the liquidity of our stock generally.

We have not paid dividends on our common stock in the past and do not expect to pay dividends on our common stock for the foreseeable future. Any return on investment may be limited to the value of our common stock.

No cash dividends have been paid on our common stock. We expect that any income received from operations will be devoted to our future operations and growth. We do not expect to pay cash dividends on our common stock in the near future. Payment of dividends in the future will depend upon our profitability at the time, cash available for those dividends, and such other factors as our board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on an investor’s investment will only occur if our stock price appreciates.

Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our stock.

Our certificate of incorporation and bylaws and Delaware law contain provisions that could delay or prevent a change in control of us. These provisions could also make it more difficult for stockholders to elect directors and take other corporate actions. In addition to the matters identified in the risk factors above relating to the provisions of our certificate of incorporation, these provisions include:

a classified board of directors with two-year staggered terms;

limitations in our certificate of incorporation on acquisitions and dispositions of our common stock designed to protect our NOLs and certain other tax attributes; and

authorization for blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our common stock.

These and other provisions in our certificate of incorporation and bylaws and under Delaware law could discourage potential takeover attempts, reduce the price that investors might be willing to pay in the future for shares of common stock and result in the market price of the common stock being lower than it would be without these provisions.

Item 1B.

UNRESOLVED STAFF COMMENTS

None.

Item 2.

PROPERTIES

Below is certain information regarding our commercial real estate properties as of December 31, 2017:

Property Location	Type of Property	Building Size (estimated rentable square feet)		Number of Units		Leased at December 31, 2017			Occupancy at December 31, 2017			Occupancy at December 31, 2016

Owned Locations

New York, New York (77 Greenwich) (1)	Property under development		-		-		N/A			N/A			N/A

Paramus, New Jersey (2)	Property under development		77,000		-		100	%		100.0	%		100	%

West Palm Beach, Florida (3)	Retail		112,000		-		67.3	%		67.3	%		67.8	%

Total Owned Square Feet			189,000

Joint Venture

223 North 8th Street, Brooklyn, New York - 50% (4)	Multi-family		65,000		95		94.7	%		94.7	%		72.6	%

Grand Total Square Feet			254,000

(1) 77 Greenwich. We are currently in the development stage for the development of an over 300,000 gross square foot mixed-use building that corresponds to the approximate total of 233,000 zoning square feet. The plans call for the development of approximately 90 luxury residential condominium apartments, 7,500 square feet of street level retail space, a 476-seat elementary school serving New York City District 2, includes the adaptive reuse of the landmarked Robert and Anne Dickey House, and construction of a new handicapped accessible subway entrance on Trinity Place. The school project has obtained city council and mayoral approval. Environmental remediation and demolition was completed in the third quarter of 2017, and excavation and foundation work has begun. On December 22, 2017, we closed on a $189.5 million construction loan. We will draw down proceeds available to us under the construction loan as costs related to the construction are incurred over the next few years. We currently anticipate that the proceeds available under the construction loan, together with equity funded by us to date and future contributions by the New York City School Construction Authority (“SCA”), will be sufficient to finance the construction and development of 77 Greenwich without us making any further equity contributions. (see Note 10 – Loans Payable and Secured Line of Credit for further information).

Through a wholly-owned subsidiary, we also entered into an agreement with the SCA, whereby we will construct a school that will be sold to the SCA as part of our condominium development at the 77 Greenwich property. Pursuant to the agreement, the SCA will pay us $41.5 million which has been allocated to land and reimburse us for the costs associated with constructing the school (including a construction supervision fee of approximately $5.0 million). Payments for construction will be made by the SCA to the general contractor in installments as construction on their condominium progresses. Payments for the land and development fee will be received starting in January 2018 through September 2019. Upon Substantial Completion, as defined, the SCA shall purchase the school condominium unit. We are required to substantially complete construction of the school by September 6, 2023. To secure our obligations, the 77 Greenwich property has been ground leased to the SCA and leased back to us until title to the school is transferred to the SCA. We have also guaranteed certain obligations with respect to the construction. The condominium apartments along with the subway improvements are currently scheduled to be completed by year end 2020.

(2) Paramus Property. The Paramus property consists of a one-story and partial two-story, 73,000 square foot freestanding building and an outparcel building of approximately 4,000 square feet, for approximately 77,000 total square feet of rentable space. The primary building is comprised of approximately 47,000 square feet of ground floor space, and two separate mezzanine levels of approximately 21,000 and 5,000 square feet. The 73,000 square foot building was leased pursuant to a short-term license agreement to Restoration Hardware Holdings, Inc. (NYSE: RH) (“Restoration Hardware”) from October 15, 2015 to February 29, 2016 when the tenant vacated the property. Subsequently, we entered into a new twelve month license agreement with Restoration Hardware that began on June 1, 2016, which is terminable upon one month’s notice to the other party, and which has since been extended to end on March 31, 2019. The outparcel building is leased to a tenant whose lease expires on March 31, 2019. The tenant has been in the space since 1996. The land area of the Paramus property consists of approximately 292,000 square feet, or approximately 6.7 acres. We have entered into an option agreement with Carmax (NYSE:KMX), pursuant to which Carmax will construct a new building after we obtain approvals and demolish the existing buildings. The option agreement includes a fully negotiated lease agreement. This transaction is subject to town approvals based on the potential tenant’s intended use of the site.

(3) West Palm Beach Property. The West Palm Beach property consists of a one-story neighborhood retail strip center that is comprised of approximately 112,000 square feet of rentable area, which includes three outparcel locations with approximately 11,000 combined square feet. The land area of the West Palm Beach property consists of approximately 515,000 square feet, or approximately 11.8 acres. Our redevelopment and repositioning of the center is complete. We will incur additional lease-up costs as the current vacancies are filled. Our two largest tenants are Walmart Marketplace, with 41,662 square feet of space and Tire Kingdom, a national credit tenant who took possession of a 5,400 square feet outparcel.

(4) 223 North 8 ^th Street. Through a joint venture with Pacolet Milliken Enterprises, Inc., we own a 50% interest in the entity formed to acquire and operate The Berkley, a newly constructed 95-unit multi-family property encompassing approximately 99,000 gross square feet (65,000 rentable square feet) on 223 North 8 ^th Street in North Williamsburg, Brooklyn, New York. The Berkley is in close proximity to public transportation and offers a full amenity package. Apartments feature top-of-the-line unit finishes, central air conditioning and heating and most units have private outdoor space. The property benefits from a 25-year 421-a real estate tax exemption.

Lease Expirations

The following chart shows the tenancy, by year of lease expiration, of our retail properties for all tenants in place as of December 31, 2017, excluding the license agreement with Restoration Hardware (dollars in thousands):

		Number of Tenants		Leased Square Feet by Year of Expiration		Annualized Rent in Year of Expiration (A)

2018	(B)		1		1,200	$	13
2019			1		4,000		140
2020			8		12,488		245
2021			2		7,063		119
2022			1		1,200		21
Thereafter			5		53,662		1,066
			18		79,613	$	1,604

(A)

This is calculated by multiplying the rent in the final month of the lease by 12.

(B)

Reflects tenants with a month-to-month tenancy.

Corporate Headquarters

We lease our corporate headquarters in New York, New York (approximately 6,271 square feet). The lease expires in March 2025.

Item 3.

LEGAL PROCEEDINGS

We are a party to routine legal proceedings, which are primarily incidental to our former business. Some of the actions to which we are a party are covered by insurance and are being defended or reimbursed by our insurance carriers. Based on an analysis performed by our actuary and available information and taking into account accruals where they have been established, management currently believes that any liabilities ultimately resulting from this routine litigation will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position or results of operations.

Additionally, as discussed in Item 1. Business, on January 18, 2018, the Reorganized Debtors filed with the Bankruptcy Court a motion (the “Motion”) for entry of the Final Decree (i) closing the chapter 11 cases of the Reorganized Debtors; (ii) terminating the services of the claims and noticing agent; and (iii) retaining the Bankruptcy Court’s jurisdiction as provided for in the Plan, including to enforce or interpret its own orders pertaining to the chapter 11 cases including, but not limited to, the Plan and Final Decree. On the same date, the Reorganized Debtors filed a Final Report in support of the Motion. On February 6, 2018, the Bankruptcy Court entered the Final Decree pursuant to which the chapter 11 cases of the Reorganized Debtors were closed.

Item 4.

MINE SAFETY DISCLOSURES

Not applicable.

PART II

Item 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

On December 21, 2015 our common stock began trading on the NYSE American. The trading symbol of our common stock is “TPHS”.

The following table summarizes the quarterly high and low sales prices per share of the common stock as reported in the NYSE American for the years ended December 31, 2017 and December 31, 2016, respectively.

	For the Year Ended December 31, 2017				For the Year Ended December 31, 2016
	High		Low		High		Low

First Quarter	$	9.97	$	6.65	$	7.18	$	5.25
Second Quarter	$	7.71	$	6.56	$	8.05	$	6.36
Third Quarter	$	7.50	$	6.53	$	10.37	$	6.91
Fourth Quarter	$	7.59	$	6.70	$	10.13	$	8.77

Outstanding Common Stock and Holders

As of March 15, 2018, we had 36,984,753 shares issued and 31,554,643 shares outstanding and there were approximately 177 record holders of our common stock.

Dividends

No dividends were paid during either of the years ended December 31, 2017 and December 31, 2016.

Recent Sales of Unregistered Securities

In accordance with the terms of the employment agreement between us and Matthew Messinger, our President and Chief Executive Officer, on December 29, 2017, Mr. Messinger was granted 30,000 restricted stock unit awards (the “RSU Awards”). The issuance of the RSU Awards was exempt from registration pursuant to Section 4(a)(2) of the Securities Act.

Issuer Purchases of Equity Securities

We did not repurchase any stock during the year ended December 31, 2017.

Performance Graph

The following graph is a comparison of the cumulative return of our shares of common stock from January 1, 2013 through December 31, 2017, the Standard & Poor’s 500 Index (the “S&P 500 Index”) and the FTSE National Association of Real Estate Investment Trusts’ (“NAREIT”) All Equity Index, a peer group index. The graph assumes that $100 was invested on January 1, 2013 in our shares of common stock, the S&P 500 Index and the NAREIT All Equity Index and assumes the reinvestment of all dividends (if applicable), and that no commissions were paid. There can be no assurance that the performance of our shares will continue in line with the same or similar trends depicted in the graph below.

	12/31/2012		12/31/2013		12/31/2014		12/31/2015		12/31/2016		12/31/2017
Trinity Place Holdings Inc.	$	100.00	$	136.36	$	141.41	$	123.83	$	187.27	$	140.40
S&P 500 Index	$	100.00	$	132.39	$	150.51	$	152.59	$	171.84	$	208.14
The NAREIT All Equity Index (FNERTR Index)	$	100.00	$	102.86	$	131.68	$	135.40	$	147.09	$	159.85

Item 6.

SELECTED FINANCIAL DATA

The following table sets forth our selected financial data and should be read in conjunction with our Financial Statements and notes thereto included in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8, “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

The below selected financial data does not include any information prior to February 10, 2015 as we were reporting on the liquidation basis of accounting during the periods prior to February 10, 2015. Under the liquidation basis of accounting, assets are stated at their net realizable value, liabilities are stated at their net settlement amount and estimated costs over the period of liquidation are accrued to the extent reasonably determinable. Our accounting basis reverted to the going concern basis of accounting on February 10, 2015, resulting in all remaining assets and liabilities at that date being adjusted to their net book value less an adjustment for depreciation and/or amortization calculated from the date we entered liquidation through the date we emerged from liquidation. Accordingly, this change in accounting basis resulted in a decrease in the reporting basis of the respective assets and liabilities. Also on November 12, 2015, our Board of Directors approved a change to our fiscal year end from the Saturday closest to the last day of February to a December 31 calendar year end, effective with the year ended December 31, 2015. The period that resulted from this change is March 1, 2015 to December 31, 2015. Because the bases of accounting are non-comparable to each other as well as due to the change in our fiscal year, we are not reporting selected financial data for the periods prior to February 10, 2015.

	For the Year Ended December 31, 2017			For the Year Ended December 31, 2016			For the Period March 1, 2015 to December 31, 2015			For the Period February 10, 2015 to February 28, 2015
	(In thousands, except per share amounts)

Statement of Operations Data

Total revenues	$	1,862		$	1,856		$	841		$	43

Total operating expenses		11,081			9,034			7,583			346

Operating loss		(9,219	)		(7,178	)		(6,742	)		(303	)

Equity in net loss of unconsolidated joint venture		(1,057	)		(308	)		-			-
Interest income (expense), net		215			42			(246	)		(40	)
Interest expense - amortization of deferred finance costs		-			(98	)		(63	)		(17	)
Reduction of claims liability		1,043			132			557			-

Loss before gain on sale of real estate and taxes		(9,018	)		(7,410	)		(6,494	)		(360	)

Gain on sale of real estate		3,853			-			-			-

Tax benefit (expense)		3,144			(26	)		(67	)		(2	)

Net loss available to common stockholders	$	(2,021	)	$	(7,436	)	$	(6,561	)	$	(362	)

Loss per share - basic and diluted	$	(0.07	)	$	(0.29	)	$	(0.32	)	$	(0.02	)

Weighted average number of common shares - basic and diluted		30,451			25,439			20,518			20,016

Balance Sheet Data (in thousands)	December 31, 2017		December 31, 2016		December 31, 2015		February 28, 2015

Real estate, net	$	76,269	$	60,384	$	42,638	$	31,121
Investment in unconsolidated joint venture		12,533		13,939		-		-
Total assets		121,015		85,601		86,571		78,258
Loans payable, net		36,167		48,705		39,615		39,323
Total stockholders' equity		67,290		28,025		24,966		5,201

Cash Flow Data (in thousands)	For the Year Ended December 31, 2017			For the Year Ended December 31, 2016			For the Period March 1, 2015 to December 31, 2015			For the Period February 10, 2015 to February 28, 2015

Cash flows (used in) provided by:
Operating activities	$	(4,640	)	$	(14,842	)	$	(7,034	)	$	(114	)
Investing activities		(9,726	)		(26,214	)		(6,278	)		(511	)
Financing activities		24,961			7,561			27,615			-

Item 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion related to our consolidated financial statements should be read in conjunction with the financial statements appearing in Item 8 of this Annual Report on Form 10-K.

Overview

Trinity Place Holdings Inc. (“Trinity”, “we”, “our”, or “us”) is a real estate holding, investment and asset management company. Our business is primarily to acquire, invest in, own, manage, develop or redevelop and sell real estate assets and/or real estate related securities.

Transactions, Development and Other Activities During 2017

77 Greenwich

Environmental remediation and demolition was completed in the third quarter of 2017, and excavation and foundation work has begun. On December 22, 2017, we entered into a $189.5 million construction loan agreement. We will draw down proceeds available to us as costs related to the construction are incurred for 77 Greenwich over the next few years, in addition to equity already funded by us and future contributions by the SCA. In conjunction with the closing of the construction loan, we repaid in full the outstanding balance, including accrued interest, of our loan from Sterling National Bank in the aggregate amount of $40.1 million. The balance outstanding under this new construction loan agreement was $32.3 million at December 31, 2017 and $36.5 million at February 28, 2018.

Although there can be no assurances, we currently anticipate that the proceeds available under the construction loan, together with equity funded by us to date and future contributions by the SCA, will be sufficient to finance the construction and development of 77 Greenwich without us making any further equity contributions.

Acquisitions and Divestitures

On September 8, 2017, we entered into an agreement pursuant to which we acquired an option to purchase a newly built 105-unit, 12 story apartment building located at 237 11th Street, Brooklyn, New York for a purchase price of $81.0 million. We exercised the option on March 9, 2018. We paid an initial deposit of $8.1 million upon entering into the agreement. The purchase price will be funded through acquisition financing and cash on hand. Following the closing and pursuant to a separate agreement, an affiliate of the seller may continue to manage and promote the 237 11 ^th Street property for a limited period and an affiliate of such manager will have the ability to receive an additional payment based on the performance of the property as it relates to revenues and concessions and other expenses during such period, which is currently estimated to be up to approximately 1% of the purchase price. The acquisition of the 237 11 ^th Street property, which is subject to customary closing conditions, is expected to close in the spring of 2018.

In August 2017, we sold our property located in Westbury, New York for a gross sale price of $16.0 million. The sale resulted in a gain of $3.9 million and generated approximately $15.2 million in net proceeds to us.

Equity Transactions

On February 14, 2017, we issued an aggregate of 3,585,000 shares of common stock in a private placement at a purchase price of $7.50 per share, and received gross proceeds of $26.9 million (the “Private Placement”). On April 5, 2017, we issued an aggregate of 1,884,564 shares of common stock in a rights offering at a purchase price of $7.50 per share and received gross proceeds of $14.1 million (the “Rights Offering”). We have been using the proceeds from the private placement and the Rights Offering for the development of 77 Greenwich, potential new real estate acquisitions and investment opportunities and for working capital.

Secured Debt Transactions

On February 22, 2017, we entered into two secured lines of credit for an aggregate of $12.0 million, with Sterling National Bank as the lender, which were secured by our properties located in Paramus, New Jersey, and Westbury, New York, respectively, and had an original maturity date of February 22, 2018. On August 4, 2017, in connection with the sale of the Westbury, New York property, the $2.9 million line of credit that was secured by this property, and which was undrawn, matured on that date. The $9.1 million line of credit, which is secured by the Paramus, New Jersey property, was increased to $11.0 million in September 2017, and we extended the maturity date to February 22, 2019. The line of credit bears interest, for drawn amounts only, at 100 basis points over Prime (as defined in the loan agreement), with a floor of 3.75%, and is pre-payable at any time without penalty. As of December 31, 2017 and March 15, 2018, this line of credit was undrawn and the full $11 million was available.

Other Developments/Redevelopments

We extended short-term lease and license agreements with our retail tenants at our Paramus property in order to mitigate our carry costs while we evaluate a variety of opportunities.

Results of Operations

Results of Operations for the Year Ended December 31, 2017 Compared to the Year Ended December 31, 2016

The discussion below includes revenue and expenses from the Westbury, New York property as of May 8, 2017 when the property was classified as an asset held for sale through its date of sale on August 4, 2017. In prior periods, this property’s revenues and expenses were capitalized as the property was considered as real estate under development.

Rental revenues were relatively flat for the years ended December 31, 2017 and December 31, 2016, at $1.3 million. Tenant reimbursements increased by $34,000 to $575,000 for the year ended December 31, 2017 from $541,000 for the year ended December 31, 2016. The increase in tenant reimbursements was mainly due to increased tenancy for the full year in 2017 as compared to 2016 at the West Palm Beach, Florida property, as well as the inclusion of the revenues at the Westbury, New York property, partially offset by the reconciliation of real estate tax recoveries in 2016 for certain tenants whose leases commenced in 2015.

Property operating expenses increased by $109,000 to $733,000 for the year ended December 31, 2017 from $624,000 for the year ended December 31, 2016. These amounts consisted of costs incurred for maintenance and repairs, utilities and general operating expenses at our West Palm Beach, Florida property and the Westbury, New York property. The increase was mainly due to the increased tenancy at the West Palm Beach, Florida property and the inclusion of the Westbury, New York property.

Real estate tax expense increased by $192,000 to $467,000 for the year ended December 31, 2017 from $275,000 for the year ended December 31, 2016. The increase related to increased real estate taxes at the West Palm Beach, Florida property and inclusion of the Westbury, New York property.

General and administrative expenses decreased by approximately $1.6 million to $5.8 million for the year ended December 31, 2017 from approximately $7.4 million for the year ended December 31, 2016. For the year ended December 31, 2017, approximately $1.1 million related to stock-based compensation, $2.0 million related to payroll and payroll related expenses, $1.7 million related to other corporate costs including board fees, corporate office rent and insurance and $1.0 million related to legal, accounting and other professional fees. For the year ended December 31, 2016, approximately $2.8 million related to stock-based compensation, $1.6 million related to payroll and payroll related expenses, $1.5 million related to other corporate costs including board fees, corporate office rent and insurance and $1.5 million related to legal, accounting and other professional fees. The overall decrease of approximately $1.6 million is mainly a result of a $1.7 million reduction in stock-based compensation related to restricted stock units (“RSUs”) that were granted in the first quarter of 2016, which included 99,000 RSU grants that vested immediately.

Transaction related costs decreased by $160,000 to $83,000 for the year ended December 31, 2017 from $243,000 for the year ended December 31, 2016. These costs represent professional fees and other costs incurred in connection with formation activities and the underwriting and evaluation of potential acquisitions and investments for deals that were not consummated. The decrease is also due to the adoption of a new accounting standard in 2017 that provides for the capitalization of costs relating to acquisitions that were expensed prior to January 1, 2017 (see Note 2 – Summary of Significant Accounting Policies – Accounting Standards Update).

Depreciation and amortization expense increased by approximately $87,000 to $544,000 for the year ended December 31, 2017 from approximately $457,000 for the year ended December 31, 2016. For the year ended December 31, 2017, approximately $246,000 related to depreciation for the West Palm Beach, Florida property, approximately $3,000 related to computers and furniture and fixtures, and approximately $295,000 related to the amortization of trademarks and lease commissions. For the year ended December 31, 2016, approximately $205,000 related to depreciation for the West Palm Beach, Florida property and approximately $252,000 related to the amortization of trademarks and lease commissions. The increase in depreciation and amortization expense for the year ended December 31, 2017 compared to December 31, 2016 was primarily attributable to depreciation commencing in June 2016 when the assets relating to redevelopment at the West Palm Beach, Florida location were placed in service.

Costs relating to demolished assets for the year ended December 31, 2017 was approximately $3.4 million. This related to the 77 Greenwich property’s acceleration of depreciation of the building and building improvements and the demolition costs at 77 Greenwich which was accelerated due to the completion of demolition of the 57,000 square foot six-story commercial building in 2017.

Operating loss increased by approximately $2.0 million to $9.2 million for the year ended December 31, 2017 from $7.2 million for the year ended December 31, 2016 as a result of the changes in revenues and operating expenses as described above.

Equity in net loss from unconsolidated joint venture increased by approximately $749,000 to $1.1 million for the year ended December 31, 2017 compared to approximately $308,000 for the year ended December 31, 2016. This represents our 50% share in the joint venture of the newly constructed 95-unit multi-family property in Brooklyn, New York purchased on December 5, 2016. For the year ended December 31, 2017 our share of the loss is primarily comprised of operating income before depreciation of $1.2 million offset by depreciation and amortization of $1.5 million, interest expense of $726,000 and other expenses of $6,000. For the year ended December 31, 2016 our share of the loss is primarily due to one-time transaction related costs of $198,000 and depreciation and amortization of $110,000.

Interest income, net increased by approximately $173,000 to $215,000 for the year ended December 31, 2017 from approximately $42,000 for the year ended December 31, 2016. For the year ended December 31, 2017, there was approximately $2.5 million of gross interest incurred, all of which was capitalized, and $215,000 of interest income. For the year ended December 31, 2016, there was approximately $2.1 million of gross interest incurred, of which there was approximately $1.9 million of capitalized interest, and $223,000 of interest income. The increase in interest income, net, for the year ended December 31, 2017 of $173,000 is primarily attributable to a higher percent of capitalized interest for the year ended December 31, 2017 compared to the year ended December 31, 2016.

Interest expense - amortization of deferred finance costs were $0 for the year ended December 31, 2017 compared to $98,000 for the year ended December 31, 2016. For the year ended December 31, 2017, all $742,000 of amortization of debt issuance costs were capitalized to real estate under development. For the year ended December 31, 2016, $345,000 of the $443,000 of amortization was capitalized to real estate under development.

We recorded an adjustment to our claims liability for the year ended December 31, 2017 of $1.0 million due to the settlement with our insurance carrier. We recorded an adjustment to our claims liability for the year ended December 31, 2016 of $132,000 which was due mainly to the positive settlement of the former Majority Shareholder liability.

Gain on sale of real estate for the year ended December 31, 2017 was approximately $3.9 million due to the sale of the Westbury, New York property on August 4, 2017 which generated approximately $15.2 million in net proceeds. No properties were sold during 2016.

We recorded an income tax benefit of approximately $3.1 million for the year ended December 31, 2017. This was due to the Tax Cuts and Jobs Act of 2017 (the “Act”) whereby Alternative Minimum Tax (“AMT”) credit carryforwards will be eligible for a 50% refund through tax years 2018 through 2020. Beginning in tax year 2021, any remaining AMT credit carryforwards would be 100% refundable. As a result of these new regulations, we have released our valuation allowance of $3.1 million formerly reserved against our AMT credit carryforwards. We recorded approximately $26,000 in tax expense for the year ended December 31, 2016.

Net loss available to common stockholders decreased by $5.4 million to $2.0 million for the year ended December 31, 2017 from $7.4 million for the year ended December 31, 2016 as a result of the changes in revenue and expenses detailed above.

Results of Operations for the Year Ended December 31, 2016 Compared to the Ten-Month Period from March 1, 2015 through December 31, 2015

Our fiscal year and that of our predecessor was historically a 52-week or 53-week period ending on the Saturday on or nearest to February 28. On November 12, 2015, our Board of Directors approved a change to a December 31 calendar year end, effective with the year ended December 31, 2015. The transition period that resulted from this change was March 1, 2015 to December 31, 2015. Because the bases of accounting are non-comparable to each other as well as due to the change in our fiscal year, we are excluding all information from the period prior to February 10, 2015 from any disclosure or discussion. Due to the change in our fiscal year end, the comparable period presented only covers the ten-month period from March 1, 2015 to December 31, 2015, which is a shorter period than the twelve months ended December 31, 2016 and thus is not directly comparable.

Total rental revenues and tenant reimbursement revenues for the year ended December 31, 2016 were approximately $1.9 million. Total revenues for the ten-month period ended December 31, 2015 were approximately $841,000. These amounts represent rental revenues and tenant expense reimbursements from our West Palm Beach, Florida and Paramus, New Jersey properties. The relative increase was mainly due to the increased occupancy at the West Palm Beach property since June 2016.

Property operating expenses for the year ended December 31, 2016 were approximately $624,000. Property operating expenses for the ten-month period ended December 31, 2015 were approximately $576,000. These amounts consisted of costs incurred for maintenance and repairs, utilities and general operating expenses at our West Palm Beach, Florida property.

Real estate tax expense for the year ended December 31, 2016 was approximately $275,000 for the West Palm Beach, Florida property. Real estate tax expense for the ten-month period ended December 31, 2015 was approximately $165,000, primarily for the West Palm Beach, Florida property.

General and administrative expenses for the year ended December 31, 2016 were approximately $7.4 million. Of this amount, approximately $2.8 million related to stock-based compensation, $1.6 million related to payroll and payroll related expenses, $1.5 million related to other corporate costs including board fees, corporate office rent and insurance and $1.5 million related to legal, accounting and other professional fees. General and administrative expenses for the ten-month period ended December 31, 2015 were approximately $6.5 million. Of this amount, approximately $1.4 million related to stock-based compensation, $1.5 million related to payroll and payroll related costs, $1.4 million related to other corporate costs including board fees, corporate office rent and insurance and $2.2 million related to legal, accounting and other professional fees. The total increase of $0.9 million in general and administrative expenses from 2015 mainly related to the vesting of stock-based compensation related to RSU grants from the December 2015 rights offering.

Transaction related costs of $243,000 for the year ended December 31, 2016 represent professional fees and other costs incurred in connection with formation activities and underwriting and evaluating potential acquisitions and investments which are required to be expensed in accordance with the accounting for business combinations.

Depreciation and amortization expenses for the year ended December 31, 2016 were approximately $457,000. These costs consisted of depreciation for the West Palm Beach, Florida property of approximately $205,000 and the amortization of trademarks and lease commissions of approximately $252,000. Depreciation and amortization expenses for the ten-month period ended December 31, 2015 were approximately $309,000. These costs consisted of depreciation for the West Palm Beach, Florida property of $122,000, as well as amortization of trademarks and deferred financing costs of $187,000.

Operating loss for the year ended December 31, 2016 was approximately $7.2 million. Operating loss for the ten-month period ended December 31, 2015 was approximately $6.7 million.

Equity in net loss of unconsolidated joint venture for the year ended December 31, 2016 was approximately $308,000. This amount represents our 50% share in the joint venture of the newly constructed 95-unit multi-family property in Brooklyn, New York purchased on December 5, 2016. Our share of the loss is primarily due to one-time transaction related costs of $198,000 and depreciation and amortization of $110,000.

Interest income, net, for the year ended December 31, 2016 was approximately $42,000, which consisted of $2.1 million of gross interest expense offset by $1.9 million of capitalized interest and $223,000 of interest income. Interest expense, net, for the ten-month period ended December 31, 2015 was approximately $246,000 which consisted of $1.5 million of gross interest expense offset by $1.2 million of capitalized interest and $87,000 of interest income.

Interest expense-amortization of deferred finance costs for the year ended December 31, 2016 was approximately $98,000, which consisted of $443,000 of amortization of costs related to obtaining the loans encumbering 77 Greenwich and West Palm Beach, Florida partially offset by $345,000 of capitalized costs. Interest expense-amortization of deferred finance costs for the ten-month period ended December 31, 2015 was approximately $63,000, which consisted of $291,000 of amortization of costs related to obtaining the loan encumbering 77 Greenwich partially offset by $228,000 of capitalized costs.

We recorded an adjustment to our claims liability for the year ended December 31, 2016 of $132,000 which was due mainly to the positive settlement of the former Majority Shareholder liability. We recorded an adjustment to our claims liability for the ten-month period ended December 31, 2015 of $557,000 which was due to the lower settlement of certain claims.

We recorded approximately $26,000 in tax expense for the year ended December 31, 2016. We recorded tax expense for the ten-month period ended December 31, 2015 of approximately $67,000.

Net loss available to common stockholders for the year ended December 31, 2016 was approximately $7.4 million. Net loss available to common stockholders for the ten-month period ended December 31, 2015 was approximately $6.6 million.

Liquidity and Capital Resources

We currently expect that our principal sources of funds to meet our short-term and long-term liquidity requirements for working capital and funds for acquisition and development or redevelopment of properties, tenant improvements, leasing costs, and repayments of outstanding indebtedness will include:

(1)

cash on hand;

(2)

increases to existing financings and/or other forms of secured financing;

(3)

proceeds from common stock or preferred equity offerings, including rights offerings;

(4)

cash flow from operations; and

(5)

net proceeds from divestitures of properties or interests in properties.

Cash flow from operations is primarily dependent upon the occupancy level of our portfolio, the net effective rental rates achieved on our leases, the collectability of rent, operating escalations and recoveries from our tenants and the level of operating and other costs.

As of December 31, 2017, we had total cash of $24.2 million, of which approximately $15.3 million was cash and cash equivalents and approximately $8.9 million was restricted cash. As of December 31, 2016, we had total cash of $8.4 million, of which approximately $4.7 million was cash and cash equivalents and approximately $3.7 million was restricted cash. Restricted cash represents reserves required to be restricted under our loan agreements (see Note 10 – Loans Payable and Secured Line of Credit to our consolidated financial statements), deposit on property acquisitions and tenant related security deposits. The increase in total cash during the year ended December 31, 2017 was primarily the result of the Private Placement and the Rights Offering, in which we raised total net proceeds of approximately $40.6 million, as well as the sale of our Westbury, New York property, which generated approximately $15.2 million in net proceeds. The proceeds generated from these activities were partially offset by payments for operating expenses and pre-development and development activities. As of February 28, 2018, we had total cash of $33.6 million which is comprised of cash and cash equivalents of $25.4 million and restricted cash of $8.2 million.

On December 22, 2017, a wholly-owned subsidiary of ours closed on a $189.5 million construction loan facility for 77 Greenwich (the “77 Greenwich Construction Loan”). We will draw down proceeds available to us as costs related to the construction are incurred for 77 Greenwich over the next few years. In connection with the closing of the 77 Greenwich Construction Loan on December 22, 2017, a portion of the proceeds on the closing date was used to pay in full the outstanding balance, including accrued interest, under our loan with Sterling National Bank, in an aggregate amount of $40.1 million. The balance of the 77 Greenwich Construction Loan was $32.3 million at December 31, 2017 and $36.5 million at February 28, 2018. The 77 Greenwich Construction Loan has a four-year term with one extension option for an additional year under certain circumstances. The collateral for the 77 Greenwich Construction Loan is Borrower’s fee interest in 77 Greenwich, which is the subject of a mortgage in favor of Lender. The 77 Greenwich Construction Loan will bear interest at a rate per annum equal to the greater of (i) 8.25% in excess of LIBOR and (ii) 9.25% (see Note 10 – Loans Payable and Secured Line of Credit to our consolidated financial statements for further discussion). Although there can be no assurances, we currently anticipate that the proceeds available under the 77 Greenwich Construction Loan, together with equity funded by us to date and future contributions by the SCA, will be sufficient to finance the construction and development of 77 Greenwich without us making any further equity contributions.

On February 22, 2017, we entered into two secured lines of credit for an aggregate of $12.0 million, with Sterling National Bank as the lender, which were secured by our properties located in Paramus, New Jersey, and Westbury, New York, respectively, and had an original maturity date of February 22, 2018. On August 4, 2017, we closed on the sale of the Westbury, New York property and the $2.9 million line of credit that was secured by this property, which was undrawn, matured on that date. The $9.1 million line of credit, which is secured by the Paramus, New Jersey property, was increased to $11.0 million in September 2017, and we extended the maturity date to February 22, 2019. The line of credit bears interest, for drawn amounts only, at 100 basis points over Prime, as defined, with a floor of 3.75%, and is pre-payable at any time without penalty. As of December 31, 2017 and March 15, 2018, the $11.0 million line of credit was undrawn.

On May 11, 2016, our subsidiary that owns our West Palm Beach, Florida property, commonly known as The Shoppes at Forest Hill, entered into a loan agreement with Citizens Bank, National Association, as Lender, pursuant to which the Lender agreed to provide a loan in the amount of up to $12.6 million, subject to the terms and conditions as set forth in the loan agreement (the “WPB Loan”). Our subsidiary borrowed $9.1 million at closing. This loan requires interest-only payments and bears interest at the 30-day LIBOR plus 230 basis points. The effective rate at December 31, 2017 and December 31, 2016 was 3.86% and 3.07%, respectively. This loan matures on May 11, 2019, subject to extension until May 11, 2021 under certain circumstances. The balance of the WPB Loan was $9.1 million at both December 31, 2017 and February 28, 2018. The Borrower can prepay the Loan at any time, in whole or in part, without premium or penalty.

We believe our existing balances of cash and cash equivalents, together with proceeds raised from equity issuances, debt issuances, dispositions of properties and/or draws on our $11 million line of credit, will be sufficient to satisfy our working capital needs and projected capital and other expenditures associated with our operations over the next 12 months.

At-The-Market Equity Offering Program

In December 2016, we entered into an “at-the-market” equity offering program (the “ATM Program”), to sell up to an aggregate of $12.0 million of our common stock. During the year ended December 31, 2016, we sold 120,299 shares of our common stock for aggregate gross proceeds of $1.2 million (excluding approximately $218,000 in professional and brokerage fees) at a weighted average price of $9.76 per share. For the year ended December 31, 2017, we issued 2,492 shares of our common stock for aggregate gross proceeds of approximately $23,000 at a weighted average price of $9.32 per share. As of December 31, 2017, $10.8 million of common stock remained available for issuance under the ATM Program. The sale agreement with our broker expired in accordance with its terms on December 31, 2017. We may enter into a similar sale agreement in the future.

Cash Flows

Cash Flows for the Year Ended December 31, 2017 Compared to the Year Ended December 31, 2016

Net cash used in operating activities was approximately $4.6 million for the year ended December 31, 2017 as compared to approximately $14.8 million for the year ended December 31, 2016. The decrease of approximately $10.2 million of net cash used was due mainly to a one-time $6.9 million payment to the former Majority Shareholder made in 2016, which was partially offset by the gain on the sale of the Westbury, New York property of approximately $3.9 million in 2017, as well as a $5.4 million decrease in net loss, a $1.6 million write-off of demolished asset and the release of $3.2 million of restricted cash related to the $40.0 million Prior 77 Greenwich Loan payment, partially offset by the $3.1 million AMT receivable resulting from the ACT.

Net cash used in investing activities for the year ended December 31, 2017 was approximately $9.7 million as compared to approximately $26.2 million for the year ended December 31, 2016. The decrease of approximately $16.5 million mainly pertained to the net proceeds from the sale of the Westbury, New York property on August 4, 2017 of approximately $15.2 million partially offset by approximately $4.9 million more in development work being performed this year at our properties compared to the same period last year. There was also a $14.3 million investment in our unconsolidated joint venture in 2016 as compared to an $8.1 million restricted initial cash deposit for our option to purchase a property at 237 11th Street, Brooklyn, New York in 2017.

Net cash provided by financing activities for the year ended December 31, 2017 was approximately $25.0 million as compared to approximately $7.6 million for the year ended December 31, 2016. This increase mainly results from our Private Placement of common stock in February 2017 in which we raised net proceeds of approximately $26.6 million as well as our Rights Offering in April 2017 in which we raised net proceeds of approximately $13.9 million. Partially offsetting this was the payment in full of the Prior 77 Greenwich Loan in the amount of $40.0 million and the receipt of proceeds of $32.3 million from our new 77 Greenwich Construction Loan, excluding $5.3 million of fees related to this loan.

Contractual Obligations

The following table summarizes our contractual obligations as of December 31, 2017 (dollars in thousands):

	Payments Due by Period
Contractual Obligations	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years

Claims (1)	$	1,735	$	813	$	922	$	-	$	-
Operating lease (2)		3,200		348		1,325		1,527		-
Loans payable (3)		41,402		-		9,100		32,302		-
Interest expense on loans (4)		13,257		3,569		6,554		3,134		-

Total contractual obligations	$	59,594	$	4,730	$	17,901	$	36,963	$	-

(1)

This represents the remaining claims payments we expect to make under the multiemployer pension plan. Payments are made quarterly extending through the beginning of 2020.

(2)

This represents the operating lease payments for our corporate office in New York, New York.

(3)

See Note 10 - Loans Payable and Line of Credit to our consolidated financial statements for further discussion regarding the loans. This excludes $5.2 million of net deferred financing costs.

(4)

This represents the estimated monthly interest expense on the loans that are typically paid on the first business day after the month incurred based on interest rates in effect on December 31, 2017.

Capital Expenditures

We estimate that for the year ending December 31, 2018, we may incur approximately $350,000 of capital expenditures and development or redevelopment expenditures (including tenant improvements and leasing commissions) on existing properties, other than 77 Greenwich. We anticipate funding these capital expenditures through a combination of issuance of equity and cash on hand, additional property level mortgage financings and operating cash flow. We currently anticipate that the proceeds available under the construction loan, together with equity funded by us to date and future contributions by the SCA, will be sufficient to finance the construction and development of 77 Greenwich without us making any further equity contributions. Future property acquisitions may require substantial capital investments for refurbishment and leasing costs.

Inflation

Substantially all of our leases provide for separate real estate tax and operating expense escalations. In addition, many of the leases provide for fixed base rent increases. We believe that inflationary increases will be at least partially offset by the contractual rent increases and expense escalations described above.

Net Operating Losses

We believe that our U.S. Federal NOLs as of the emergence date were approximately $162.8 million and believe our U.S. Federal NOLs at December 31, 2017 were approximately $231.0 million. Pursuant to the Act, AMT credit carryforwards will be eligible for a 50% refund through tax years 2018 through 2020. Beginning in tax year 2021, any remaining AMT credit carryforwards would be 100% refundable. As a result of these new regulations, we have released our valuation allowance of $3.1 million formerly reserved against our AMT credit carryforwards. We have recorded a tax benefit and refund receivable of $3.1 million in connection with this valuation allowance release. Based on management’s assessment, it is more likely than not that the entire deferred tax assets will not be realized by future taxable income or tax planning strategies. Accordingly a valuation allowance of $59.5 million was recorded as of December 31, 2017.

We believe that the rights offering and the redemption of the Syms shares owned by the former Majority Shareholder that occurred in connection with our emergence from bankruptcy on September 14, 2012 resulted in us undergoing an “ownership change,” as that term is used in Section 382 of the Code. However, while the analysis is complex and subject to subjective determinations and uncertainties, we believe that we should qualify for treatment under Section 382(l)(5) of the Code. As a result, we currently believe that our NOLs are not subject to an annual limitation under Code Section 382. However, if we were to undergo a subsequent ownership change in the future, our NOLs could be subject to limitation under Code Section 382.

Notwithstanding the above, even if all of our regular U.S. Federal income tax liability for a given year is reduced to zero by virtue of utilizing our NOLs, we may still be subject to the U.S. Federal alternative minimum tax and to state, local or other non-Federal income taxes.

On February 12, 2015, we amended our certificate of incorporation to, among other things, add a new provision to the certificate of incorporation intended to help preserve certain tax benefits primarily associated with our NOLs (the “Protective Amendment”). The Protective Amendment generally prohibits transfers of stock that would result in a person or group of persons becoming a 4.75% stockholder, or that would result in an increase or decrease in stock ownership by a person or group of persons that is an existing 4.75% stockholder.

Change from Liquidation Accounting to Going Concern Accounting

In response to the Chapter 11 filing, we adopted the liquidation basis of accounting effective October 30, 2011. Under the liquidation basis of accounting, assets are stated at their net realizable value, liabilities are stated at their net settlement amount and estimated costs over the period of liquidation are accrued to the extent reasonably determinable. On February 10, 2015, we changed our basis of accounting from the liquidation basis of accounting to the going concern basis of accounting. Accordingly, our accounting basis for real estate and trademark assets were adjusted to their net book values at the date we changed back to the going concern basis of accounting, adjusted for depreciation and amortization calculated from the date we entered liquidation through the date we emerged from liquidation. This change in accounting basis resulted in a decrease in the reporting basis of the respective assets and liabilities.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that could affect the reported amounts in our consolidated financial statements. Actual results could differ from these estimates. A summary of our significant accounting policies is presented in Note 2 – Summary of Significant Accounting Policies in our consolidated financial statements. Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated financial statements included in this report. Certain of the accounting policies used in the preparation of these consolidated financial statements are particularly important for an understanding of the financial position and results of operations presented in the historical consolidated financial statements included in this report and require the application of significant judgment by management and, as a result, are subject to a degree of uncertainty.

Critical Accounting Policies

As noted above, we resumed reporting on the going concern basis of accounting on February 10, 2015 and adjusted our assets and liabilities back to their historical cost, adjusted for a catchup of depreciation and amortization during the liquidation period.

Real Estate - Real estate assets are stated at historical cost, less accumulated depreciation and amortization. All costs related to the improvement or replacement of real estate properties are capitalized. Additions, renovations and improvements that enhance and/or extend the useful life of a property are also capitalized. Expenditures for ordinary maintenance, repairs and improvements that do not materially prolong the normal useful life of an asset are charged to operations as incurred. Depreciation and amortization are determined using the straight-line method over their estimated useful lives, as described in the table below:

	Category		Terms

	Building and improvements		10 - 39 years
	Tenant improvements		Shorter of remaining term of the lease or useful life

Real Estate Under Development - We capitalize certain costs related to the development and redevelopment of real estate including initial project acquisition costs, pre-construction costs and construction costs for each specific property. Additionally we capitalize operating costs, interest, real estate taxes, insurance and compensation and related costs of personnel directly involved with the specific project related to real estate under development. Capitalization of these costs begin when the activities and related expenditures commence, and cease when the property is held available for occupancy upon substantial completion of tenant improvements, but no later than one year from the completion of major construction activity at which time the project is placed in service and depreciation commences. Revenue earned under short-term license agreements at properties under development is offset against these capitalized costs.

Valuation of Long-Lived Assets – We periodically review long-lived assets for impairment whenever changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. We consider relevant cash flow, management’s strategic plans and significant decreases in the market value of the asset and other available information in assessing whether the carrying value of the assets can be recovered. When such events occur, we compare the carrying amount of the asset to the undiscounted expected future cash flows, excluding interest charges, from the use and eventual disposition of the asset. If this comparison indicates an impairment, the carrying amount would then be compared to the estimated fair value of the long-lived asset. An impairment loss would be measured as the amount by which the carrying value of the long-lived asset exceeds its estimated fair value. No provision for impairment was recorded during either of the years ended December 31, 2017, December 31, 2016 or the period March 1, 2015 to December 31, 2015.

Income Taxes – We account for income taxes under the asset and liability method as required by the provisions of Accounting Standards Codification (“ASC”) 740-10-30, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We provide a valuation allowance for deferred tax assets for which we do not consider realization of such assets to be more likely than not.

Deferred Financing Costs - Deferred financing costs represent commitment fees, legal, title and other third party costs associated with obtaining commitments for mortgage financing which result in a closing of such financing. These costs are being offset against loans payable in the consolidated balance sheets for mortgage financings and are included in prepaid expense and other assets, net for our secured line of credit. These costs are amortized over the terms of the respective financing agreements. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financing transactions which do not close are expensed in the period in which it is determined that the financing will not close.

Revenue Recognition - Leases with tenants are accounted for as operating leases. Minimum rents are recognized on a straight-line basis over the term of the respective leases, beginning when the tenant takes possession of the space. The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in deferred rents receivable. In addition, leases typically provide for the reimbursement of real estate taxes, insurance and certain other property operating expenses. These reimbursements are recognized as revenue in the period the expenses are incurred. We make estimates of the collectability of our accounts receivable related to tenant revenues. An allowance for doubtful accounts has been provided against certain tenant accounts receivable that are estimated to be uncollectible. Once the amount is ultimately deemed to be uncollectible, it is written off.

Stock-based Compensation - We have granted stock-based compensation, which is described in Note 12 – Stock-Based Compensation to the consolidated financial statements. We account for stock-based compensation in accordance with ASC 718-30-30, which establishes accounting for stock-based awards exchanged for employee services. Under the provisions of ASC 718-10-35, stock-based compensation cost is measured at the grant date, based on the fair value of the award on that date, and is expensed at the grant date (for the portion that vests immediately) or ratably over the respective vesting periods.

Accounting Standards Updates

See Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements.

Item 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risks that arise from changes in interest rates, foreign currency exchange rates and other market changes affect market sensitive instruments. In pursuing our business strategies, the primary market risk which we are exposed to is interest rate risk.

Low to moderate levels of inflation during the past several years have favorably impacted our operations by stabilizing operating expenses. At the same time, low inflation has had the indirect effect of reducing our ability to increase tenant rents. However, our tenant leases include expense reimbursements and other provisions to minimize the effect of inflation.

The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates. Of our long-term debt, which consists of secured financings, the 77 Greenwich Construction Loan bears interest at a rate per annum equal to the greater of (i) 8.25% in excess of LIBOR and (ii) 9.25% and the WPB Loan bears interest at the 30-day LIBOR plus 230 basis points. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. From time to time, we may enter into interest rate hedge contracts such as swaps, collars, and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. We would not hold or issue these derivative contracts for trading or speculative purposes. We do not have any foreign operations and thus we are not exposed to foreign currency fluctuations.

As of December 31, 2017, our debt consisted of two variable-rate secured mortgage loans payable, with carrying values of $32.3 million and $9.1 million, which approximated their fair value at December 31, 2017. Changes in market interest rates on our variable-rate debt impact the fair value of the loans and interest incurred or cash flow. For instance, if interest rates increase 100 basis points and our variable-rate debt balance remains constant, we expect the fair value of our obligation to decrease, the same way the price of a bond declines as interest rates rise. The sensitivity analysis related to our variable–rate debt assumes an immediate 100 basis point move in interest rates from their December 31, 2017 levels, with all other variables held constant. A 100 basis point increase in market interest rates would result in a decrease in the fair value of our variable-rate debt by approximately $445,000. A 100 basis point decrease in market interest rates would result in an increase in the fair value of our variable-rate debt by approximately $451,000. These amounts were determined by considering the impact of hypothetical interest rates changes on our borrowing costs, and assuming no other changes in our capital structure.

As of December 31, 2017, the debt on the unconsolidated joint venture, in which we hold a 50% interest, consisted of a variable-rate secured mortgage loan payable, with a carrying value of $42.5 million (see Note 14 – Investment in Unconsolidated Joint Venture to the consolidated financial statements), which approximated its fair value at December 31, 2017. A 100 basis point increase in market interest rates on the loan taken out by the unconsolidated joint venture would result in a decrease in the fair value of the joint ventures’ variable-rate debt by approximately $480,000. A 100 basis point decrease in market interest rates would result in an increase in the fair value of the joint ventures’ variable-rate debt by approximately $485,000. These amounts were determined by considering the impact of hypothetical interest rates changes on borrowing costs, and assuming no other changes in the capital structure of the joint venture.

As the information presented above includes only those exposures that existed as of December 31, 2017, it does not consider exposures or positions arising after that date. The information represented herein has limited predictive value. Future actual realized gains or losses with respect to interest rate fluctuations will depend on cumulative exposures, hedging strategies employed and the magnitude of the fluctuations. As the information presented above includes only those exposures that existed as of December 31, 2017, it does not consider exposures or positions arising after that date. The information represented herein has limited predictive value. Future actual realized gains or losses with respect to interest rate fluctuations will depend on cumulative exposures, hedging strategies employed and the magnitude of the fluctuations.

Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Financial Statements and Supplemental Data on page 33.

Item 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-15(e) of the Exchange Act. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in our periodic reports.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation as of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to the Company that would potentially be subject to disclosure under the Exchange Act and the rules and regulations promulgated thereunder.

Management’s Report on Internal Control Over Financial Reporting

Management of Trinity Place Holdings Inc. is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rule 13(a)-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2017 as required by Exchange Act Rule 13(a)-15(c). In making this assessment, we used the criteria set forth in the framework in Internal Control–Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). Based on our evaluation under the COSO criteria, our management concluded that our internal control over financial reporting was effective as of December 31, 2017 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

BDO USA, LLP, an independent registered public accounting firm that audited our Financial Statements included in this Annual Report on Form 10-K, has issued an attestation report on the effectiveness of our internal control over financial reporting as of December 31, 2017, which appears below in this Item 9A.

Changes in Internal Controls Over Financial Reporting

There have been no changes in our internal control over financial reporting during the period from September 30, 2017 to December 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Trinity Place Holdings Inc.

New York, New York

Opinion on Internal Control over Financial Reporting

We have audited Trinity Place Holding Inc.’s (the “Company’s”) internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria .

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company and subsidiaries as of December 31, 2017 and 2016, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the years ended December 31, 2017 and December 31, 2016 and the period from March 1, 2015 to December 31, 2015, and the related notes and financial statement Schedule III and our report dated March 15, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ BDO USA, LLP
New York, New York
March 15, 2018

Item 9B.

OTHER INFORMATION

None.

PART III

Item 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

We maintain a code of ethics applicable to our Principal Executive Officer and senior financial and professional personnel (including our Principal Financial Officer, Principal Accounting Officer or controller and persons performing similar functions). Our code of ethics is posted on our website at www.tphs.com under “Financials”. In the event we have any amendments to or waivers from any provision of our code of ethics applicable to our Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer or controller, or persons performing similar functions, we intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K by posting such information on our website.

The other information required by this Item will be set forth in our definitive proxy statement relating to our 2018 Annual Meeting of Stockholders, which will be filed with the SEC pursuant to Regulation 14A under the Exchange Act (the “2017 Proxy Statement”), and is incorporated herein by reference. If such proxy statement is not filed on or before April 30, 2018, the information called for by this Item will be filed as part of an amendment to this Annual Report on Form 10-K on or before such date.

Item 11.

EXECUTIVE COMPENSATION

The information required by this Item will be set forth in the 2018 Proxy Statement and is incorporated herein by reference. If such proxy statement is not filed on or before April 30, 2018, the information called for by this Item will be filed as part of an amendment to this Annual Report on Form 10-K on or before such date.

Item 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Item 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Item 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

PART IV

Item 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1)	Financial Statements filed as part of this Annual Report on Form 10-K:

	Report of Independent Registered Public Accounting Firm	F-1
	Consolidated Balance Sheets as of December 31, 2017 and December 31, 2016	F-2
	Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2017 and December 31, 2016 and the period from March 1, 2015 to December 31, 2015	F-3
	Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2017 and December 31, 2016 and the period from March 1, 2015 to December 31, 2015	F-4
	Consolidated Statements of Cash Flows for the years ended December 31, 2017 and December 31, 2016 and the period from March 1, 2015 to December 31, 2015	F-5
	Notes to Consolidated Financial Statements	F-6

(a)(2)	List of Financial Statement Schedules filed as part of this Annual Report on Form 10-K:

	Schedule III – Consolidated Real Estate and Accumulated Depreciation	F-27

	Schedules other than those listed are omitted as they are not applicable or the required information has been included in the financial statements or notes thereto.

(a)(3)	Exhibits

2.1	Modified Second Amended Joint Chapter 11 Plan of Reorganization of Syms Corp. and its Subsidiaries (incorporated by reference to Exhibit 99.1 of the Form 8-K filed by us on September 6, 2012)

2.2	Agreement and Plan of Merger by and between Syms Corp. and Trinity Place Holdings Inc. dated September 14, 2012 (incorporated by reference to Exhibit 2.1 of the Form 8-K12G3 filed by us on September 19, 2012)

3.1	Amended and Restated Certificate of Incorporation of Trinity Place Holdings Inc. (incorporated by reference to Exhibit 3.1 of the Form 8-K filed by us on February 13, 2015)

3.2	Bylaws of Trinity Place Holdings Inc. (incorporated by reference to Exhibit 3.2 of the Form 8-K filed by us on September 19, 2012)

4.1	Form of Trinity Place Holdings Inc. Common Stock Certificate (incorporated by reference to Exhibit 4.3 of the Registration Statement on Form S-3 filed by us on September 15, 2015)

10.1	Stock Purchase Agreement, dated as of October 1, 2013, between Trinity Place Holdings Inc. and Third Avenue Trust, on behalf of Third Avenue Real Estate Value Fund (incorporated by reference to Exhibit 10.1 of the Form 8-K filed by us on October 2, 2013)

10.2	Motion for an Order (i) Authorizing the Reorganized Debtors to Enter into Secured Debt Financing and Effectuate the Transactions Contemplated Therein; (ii) Authorizing the Reorganized Debtors to Sell Syms Owned Real Estate; and (iii) Granting Related Relief (incorporated by reference to Exhibit 10.1 of the Form 8-K filed by us on December 31, 2014)

10.3	Investment Agreement, by and among MFP Partners, L.P. and the Company, dated as of September 11, 2015 (including the form of Registration Rights Agreement) (incorporated by reference to Exhibit 10.1 of the Form 8-K filed by us on September 15, 2015)

10.4	Investment Agreement, by and among Third Avenue Trust, on behalf of Third Avenue Real Estate Value Fund and the Company, dated as of September 11, 2015 (including the form of Registration Rights Agreement) (incorporated by reference to Exhibit 10.2 of the Form 8-K filed by us on September 15, 2015)

10.5	Employment Agreement, dated as of October 1, 2013, between Trinity Place Holdings Inc. and Matthew Messinger (incorporated by reference to Exhibit 10.2 of the Form 8-K filed by us on October 2, 2013)*

10.6	Amendment to Employment Agreement, dated as of September 11, 2015, by and between Trinity Place Holdings Inc. and Matthew Messinger (incorporated by reference to Exhibit 10.3 of the Form 8-K filed by us on September 15, 2015)*

10.7	Trinity Place Holdings Inc. Restricted Stock Unit Agreement, entered into as of January 28, 2016, by and between Matthew Messinger and Trinity Place Holdings Inc. (incorporated by reference to Exhibit 10.1 of the Form 8-K filed by us on February 1, 2016)*

10.8	Letter Agreement, between Trinity Place Holdings Inc. and Steven Kahn, dated September 16, 2015 (incorporated by reference to Exhibit 10.1 of the Form 8-K filed by us on September 22, 2015)*

10.9	Letter Agreement, between Trinity Place Holdings Inc. (formerly Syms Corp.) and Richard Pyontek, dated June 24, 2011 (incorporated by reference to exhibit 10.2 of the Quarterly Report filed by us on May 10, 2016)*

10.10	Trinity Place Holdings Inc. 2015 Stock Incentive Plan (incorporated by reference to Exhibit 10.4 of the Form 8-K filed by us on September 15, 2015)*

10.11	Form of Restricted Stock Unit Agreement for employees (incorporated by reference to Exhibit 10.6 of the Form 10-K filed by us on May 30, 2014)*

10.12	Limited Liability Company Agreement of Pacolet Trinity 223 Partners, LLC, dated as of October 13, 2016 (incorporated by reference to Exhibit 10.1 of the Quarterly Report filed by us on November 7, 2016)

10.13	Private Placement Agreement, by and among the Company and the investors identified on Schedule A therein, dated as of February 14, 2017 (including the form of Registration Rights Agreement) (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by us on February 21, 2017)

10.14	Option Agreement, dated as of September 8, 2017, by and between 470 4 ^th Avenue Investors LLC and 470 4 ^th Avenue Fee Owner, LLC (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q filed by us on November 8, 2017)

10.15	Master Loan Agreement, between TPHGreenwich Owner LLC, as borrower and Massachusetts Mutual Life Insurance Company, as lender and administrative agent, dated as of December 22, 2017

10.16	Guaranty of Payment and Completion, dated as of December 22, 2017, by Trinity Place Holdings Inc. to and for the benefit of Massachusetts Mutual Life Insurance

10.17	Completion Guaranty, dated as of December 22, 2017, by Trinity Place Holdings Inc. to and for the benefit of New York City School Construction Authority

10.18	School Design, Construction, Funding and Purchase Agreement, between TPHGreenwich Owner LLC, as developer, and New York City School Construction Authority, dated as of December 22, 2017

21.1	List of Subsidiaries

23.1	Consent of BDO USA, LLP

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(b) under the Securities and Exchange Act of 1934 and 18.U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities and Exchange Act of 1934 and 18.U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.10	The following financial statements from the Trinity Place Holdings Inc. Annual Report on Form 10-K for the year ended December 31, 2017, as formatted in XBRL:

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema Document

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	XBRL Taxonomy Extension Label Linkbase Document

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Management contract, compensatory plan or arrangement.

Item 16.

FORM 10-K SUMMARY

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Trinity Place Holdings Inc.

By:	/s/ Matthew Messinger
	Matthew Messinger
	President and Chief Executive Officer

Date:	March 15, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Matthew Messinger	President, Chief Executive Officer and Director	March 15, 2018
Matthew Messinger	(Principal Executive Officer)

/s/ Steven Kahn	Chief Financial Officer	March 15, 2018
Steven Kahn	(Principal Financial Officer)

/s/ Richard G. Pyontek	Chief Accounting Officer	March 15, 2018
Richard Pyontek	(Principal Accounting Officer)

/s/ Alexander Matina	Director (Chairman of the Board)	March 15, 2018
Alexander Matina

/s/ Alan Cohen	Director	March 15, 2018
Alan Cohen

/s/ Joanne Minieri	Director	March 15, 2018
Joanne Minieri

/s/ Keith Pattiz	Director	March 15, 2018
Keith Pattiz

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Trinity Place Holdings, Inc.

New York, New York

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Trinity Place Holdings, Inc. (the “Company”) and subsidiaries as of December 31, 2017 and 2016, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the years ended December 31, 2017 and 2016 and the period from March 1, 2015 to December 31, 2015, and the related notes and financial statement schedule III (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company and subsidiaries at December 31, 2017 and 2016, and the results of their operations and their cash flows for the years ended December 31, 2017 and December 31, 2016 and the period from March 1, 2015 to December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated March 15, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ BDO USA, LLP

We have served as the Company's auditor since 2003.

New York, New York

March 15, 2018

F- 1

TRINITY PLACE HOLDINGS INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value and share amounts)

	December 31, 2017			December 31, 2016

ASSETS

Real estate, net	$	76,269		$	60,384
Cash and cash equivalents		15,273			4,678
Restricted cash		8,916			3,688
Investment in unconsolidated joint venture		12,533			13,939
Receivables, net		3,417			220
Deferred rents receivable		548			543
Prepaid expenses and other assets, net		4,059			2,149
Total assets	$	121,015		$	85,601

LIABILITIES

Loans payable, net	$	36,167		$	48,705
Accounts payable and accrued expenses		13,323			2,935
Pension liabilities		4,235			5,936
Secured line of credit		-			-
Total liabilities		53,725			57,576

Commitments and Contingencies

STOCKHOLDERS' EQUITY

Preferred stock, 40,000,000 shares authorized; no shares issued and outstanding		-			-
Preferred stock, $0.01 par value; 2 shares authorized, no shares issued and outstanding at December 31, 2017 and December 31, 2016		-			-
Special stock, $0.01 par value; 1 share authorized, issued and outstanding at December 31, 2017 and December 31, 2016		-			-
Common stock, $0.01 par value; 79,999,997 shares authorized; 36,803,218 and 30,679,566 shares issued at December 31, 2017 and December 31, 2016, respectively; 31,451,796 and 25,663,820 shares outstanding at December 31, 2017 and December 31, 2016, respectively		368			307
Additional paid-in capital		130,897			87,521
Treasury stock (5,351,422 and 5,015,746 shares at December 31, 2017 and December 31, 2016, respectively)		(53,666	)		(51,086	)
Accumulated other comprehensive loss		(2,732	)		(3,161	)
Accumulated deficit		(7,577	)		(5,556	)

Total stockholders' equity		67,290			28,025

Total liabilities and stockholders' equity	$	121,015		$	85,601

See Notes to Consolidated Financial Statements

F- 2

TRINITY PLACE HOLDINGS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

(In thousands, except per share amounts)

	For the Year Ended December 31, 2017			For the Year Ended December 31, 2016			For the Period March 1, 2015 to December 31, 2015

Revenues
Rental revenues	$	1,287		$	1,315		$	659
Tenant reimbursements		575			541			182

Total revenues		1,862			1,856			841

Operating Expenses
Property operating expenses		733			624			576
Real estate taxes		467			275			165
General and administrative		5,828			7,435			6,533
Transaction related costs		83			243			-
Depreciation and amortization		544			457			309
Costs relating to demolished asset		3,426			-			-

Total operating expenses		11,081			9,034			7,583

Operating loss		(9,219	)		(7,178	)		(6,742	)

Equity in net loss from unconsolidated joint venture		(1,057	)		(308	)		-
Interest income (expense), net		215			42			(246	)
Interest expense - amortization of deferred finance costs		-			(98	)		(63	)
Reduction of claims liability		1,043			132			557

Loss before gain on sale of real estate and taxes		(9,018	)		(7,410	)		(6,494	)

Gain on sale of real estate		3,853			-			-

Tax benefit (expense)		3,144			(26	)		(67	)

Net loss available to common stockholders	$	(2,021	)	$	(7,436	)	$	(6,561	)

Other comprehensive loss:
Unrealized gain (loss) on pension liability		429			(824	)		(861	)

Comprehensive loss available to common stockholders	$	(1,592	)	$	(8,260	)	$	(7,422	)

Loss per share - basic and diluted	$	(0.07	)	$	(0.29	)	$	(0.32	)

Weighted average number of common shares - basic and diluted		30,451			25,439			20,518

See Notes to Consolidated Financial Statements

F- 3

TRINITY PLACE HOLDINGS INC.

CONSOLIDATED STATEMENTS OF STOCKOLDERS' EQUITY

(In thousands)

														Retained			Accumulated
					Additional									Earnings			Other
	Common Stock				Paid-In			Treasury Stock						(Accumulated			Comprehensive
	Shares		Amount		Capital			Shares			Amount			Deficit)			Loss			Total

Balance as of February 28, 2015		24,473	$	245	$	45,375			(4,457	)	$	(47,166	)	$	8,223		$	(1,476	)	$	5,201

Net loss available to common stockholders		-		-		-			-			-			(6,561	)		-			(6,561	)
Sale of common stock, net		5,000		50		29,508			-			-			-			-			29,558
Settlement of stock awards		506		5		-			(281	)		(1,948	)		-			-			(1,943	)
Reclassification of stock-based compensation to liability		-		-		(2,516	)		-			-			-			-			(2,516	)
Reclassification of liability related to stock-based compensation to equity		-		-		1,560			-			-			-			-			1,560
Unrealized loss on pension liability		-		-		-			-			-			-			(861	)		(861	)
Stock-based compensation expense		-		-		528			-			-			-			-			528

Balance as of December 31, 2015 (restated)		29,979	$	300	$	74,455			(4,738	)	$	(49,114	)	$	1,662		$	(2,337	)	$	24,966

Cumulative change in accounting principle (Note 2)		-		-		4,381			-			-			218			-			4,599
Net loss available to common stockholders		-		-		-			-			-			(7,436	)		-			(7,436	)
Sale of common stock, net		120		1		879			-			-			-			-			880
Settlement of stock awards		581		6		-			(278	)		(1,972	)		-			-			(1,966	)
Unrealized loss on pension liability		-		-		-			-			-			-			(824	)		(824	)
Stock-based compensation expense		-		-		7,806			-			-			-			-			7,806

Balance as of December 31, 2016		30,680	$	307	$	87,521			(5,016	)	$	(51,086	)	$	(5,556	)	$	(3,161	)	$	28,025

Net loss available to common stockholders		-		-		-			-			-			(2,021	)		-			(2,021	)
Sale of common stock, net		5,472		55		40,506			-			-			-			-			40,561
Settlement of stock awards		651		6		-			(335	)		(2,580	)		-			-			(2,574	)
Unrealized gain on pension liability		-		-		-			-			-			-			429			429
Stock-based compensation expense		-		-		2,870			-			-			-			-			2,870

Balance as of December 31, 2017		36,803	$	368	$	130,897			(5,351	)	$	(53,666	)	$	(7,577	)	$	(2,732	)	$	67,290

See Notes to Consolidated Financial Statements

F- 4

TRINITY PLACE HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Year Ended December 31, 2017			For the Year Ended December 31, 2016			For the Period March 1, 2015 to December 31, 2015

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss available to common stockholders	$	(2,021	)	$	(7,436	)	$	(6,561	)
Adjustments to reconcile net loss available to common stockholders to net cash used in operating activities:
Depreciation and amortization		544			457			309
Amortization of deferred finance costs		255			98			63
Costs relating to demolished asset		1,585			-			-
Stock-based compensation expense		1,225			2,782			1,446
Gain on sale of real estate		(3,853	)		-			-
Deferred rents receivable		(5	)		(343	)		(200	)
Reduction of claims liability		-			(135	)		(230	)
Equity in net loss from unconsolidated joint venture		1,057			308			-
Distribution from unconsolidated joint venture		419			39			-
Decrease (increase) in operating assets:
Restricted cash		2,872			(88	)		17,978
Receivables, net		(3,197	)		(189	)		59
Prepaid expenses and other assets, net		(2,456	)		(472	)		(517	)
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses		212			(1,544	)		(1,943	)
Pension liabilities		(1,277	)		(1,388	)		(1,241	)
Obligation to former Majority Shareholder		-			(6,931	)		-
Other liabilities, primarily lease settlement liabilities		-			-			(16,197	)
Net cash used in operating activities		(4,640	)		(14,842	)		(7,034	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate		(16,788	)		(11,928	)		(6,278	)
Investment in unconsolidated joint venture		(70	)		(14,286	)		-
Net proceeds from the sale of real estate		15,232			-			-
Restricted cash		(8,100	)		-			-
Net cash used in investing activities		(9,726	)		(26,214	)		(6,278	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of loan		(40,000	)		-			-
Proceeds from loan, net		32,302			9,100			-
Payment of finance costs		(5,328	)		(453	)		-
Settlement of stock awards		(2,574	)		(1,966	)		(1,943	)
Proceeds from sale of common stock, net		40,561			880			29,558
Net cash provided by financing activities		24,961			7,561			27,615

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		10,595			(33,495	)		14,303
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		4,678			38,173			23,870
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	15,273		$	4,678		$	38,173

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	2,467		$	2,073		$	1,483
Taxes	$	37		$	38		$	67

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Adjustment of liability related to stock-based compensation	$	-		$	(5,140	)	$	5,140
Adjustment to accumulated deficit for capitalized stock-based compensation expense	$	-		$	(541	)	$	-
Amounts due related to development costs included in receivables, net	$	-		$	-		$	-
Accrued development costs included in accounts payable and accrued expenses	$	10,175		$	1,195		$	1,866
Capitalized amortization of deferred financing costs	$	487		$	345		$	228
Capitalized stock-based compensation expense	$	1,645		$	5,024		$	3,266

See Notes to Consolidated Financial Statements

F- 5

Trinity Place Holdings Inc.
Notes to Consolidated Financial Statements
December 31, 2017

NOTE 1 – BASIS OF PRESENTATION

General Business Plan

Change in Basis of Accounting

Effective February 9, 2015, we ceased reporting on the liquidation basis of accounting in light of our available cash resources, the estimated range of outstanding payments on unresolved claims, and our ability to operate as a going concern. We resumed reporting on the going concern basis of accounting on February 10, 2015 which resulted in all remaining assets and liabilities at that date being adjusted to their historic carrying values reduced by depreciation and/or amortization calculated from the date we entered liquidation through the date we emerged from liquidation. Accordingly, this change in accounting basis resulted in a decrease in the reporting basis of the respective assets and liabilities.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Period - Our fiscal year and that of our predecessor was historically a 52-week or 53-week period ending on the Saturday on or nearest to February 28. On November 12, 2015, our Board of Directors approved a change to a December 31 calendar year end, effective with the year ended December 31, 2015. The 2017 and 2016 years are based on a calendar year and Fiscal 2015 is based on the period from March 1, 2015 to December 31, 2015.

F- 6

Principles of Consolidation - The consolidated financial statements include our accounts and those of our subsidiaries, which are wholly-owned or controlled by us. Entities which we do not control through our voting interest and entities which are variable interest entities, but where we are not the primary beneficiary, are accounted for under the equity method. Accordingly, our share of the earnings or losses of these unconsolidated joint ventures is included in our consolidated statements of operations (see Note 14 - Investment in Unconsolidated Joint Venture). All significant intercompany balances and transactions have been eliminated.

We consolidate a variable interest entity (the “VIE”) in which we are considered the primary beneficiary. The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. As of December 31, 2017 and December 31, 2016, we had no VIEs.

We assess the accounting treatment for each joint venture. This assessment includes a review of each joint venture or limited liability company agreement to determine which party has what rights and whether those rights are protective or participating. For all VIEs, we review such agreements in order to determine which party has the power to direct the activities that most significantly impact the entity’s economic performance. In situations where we and our partner approve, among other things, the annual budget, receive a detailed monthly reporting package, meet on a quarterly basis to review the results of the joint venture, review and approve the joint venture’s tax return before filing, and approve all leases that cover more than a nominal amount of space relative to the total rentable space at each property, we do not consolidate the joint venture as we consider these to be substantive participation rights that result in shared power of the activities that most significantly impact the performance of the joint venture. Our joint venture agreements may contain certain protective rights such as requiring partner approval to sell, finance or refinance the property and the payment of capital expenditures and operating expenditures outside of the approved budget or operating plan.

Investments in Unconsolidated Joint Ventures - We account for our investments in unconsolidated joint venture under the equity method of accounting (see Note 14 - Investment in Unconsolidated Joint Venture). We also assess our investments in unconsolidated joint venture for recoverability, and if it is determined that a loss in value of the investment is other than temporary, we write down the investment to its fair value. We evaluate our equity investments for impairment based on the joint ventures’ projected cash flows. We do not believe that the value of our equity investment was impaired at either December 31, 2017 or December 31, 2016.

Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates.

Reportable Segments - We operate in one reportable segment, commercial real estate.

Concentrations of Credit Risk - Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. We hold substantially all of our cash and cash equivalents in banks. Such cash balances at times exceed federally-insured limits. We have not experienced any losses in such accounts.

Real Estate - Real estate assets are stated at historical cost, less accumulated depreciation and amortization. All costs related to the improvement or replacement of real estate properties are capitalized. Additions, renovations and improvements that enhance and/or extend the useful life of a property are also capitalized. Expenditures for ordinary maintenance, repairs and improvements that do not materially prolong the normal useful life of an asset are charged to operations as incurred. Depreciation and amortization are determined using the straight-line method over the estimated useful lives, as described in the table below:

	Category		Terms

	Building and improvements		10 - 39 years
	Tenant improvements		Shorter of remaining term of the lease or useful life

F- 7

Real Estate Under Development - We capitalize certain costs related to the development and redevelopment of real estate including initial project acquisition costs, pre-construction costs and construction costs for each specific property. Additionally, we capitalize operating costs, interest, real estate taxes, insurance and compensation and related costs of personnel directly involved with the specific project related to real estate under development. Capitalization of these costs begin when the activities and related expenditures commence, and ceases when the property is held available for occupancy upon substantial completion of tenant improvements, but no later than one year from the completion of major construction activity at which time the project is placed in service and depreciation commences. Revenue earned under short-term license agreements at properties under development is offset against these capitalized costs.

Valuation of Long-Lived Assets - We periodically review long-lived assets for impairment whenever changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. We consider relevant cash flow, management’s strategic plans and significant decreases in the market value of the asset and other available information in assessing whether the carrying value of the assets can be recovered. When such events occur, we compare the carrying amount of the asset to the undiscounted expected future cash flows, excluding interest charges, from the use and eventual disposition of the asset. If this comparison indicates an impairment, the carrying amount would then be compared to the estimated fair value of the long-lived asset. An impairment loss would be measured as the amount by which the carrying value of the long-lived asset exceeds its estimated fair value. No provision for impairment was recorded during either of the years ended December 31, 2017, December 31, 2016 or the period March 1, 2015 to December 31, 2015.

Trademarks and Customer Lists - Trademarks and customer lists are stated at cost, less accumulated amortization. Amortization is determined using the straight-line method over useful lives of 10 years.

Fair Value Measurements - We determine fair value in accordance with Accounting Standards Codification (“ASC”) 820-10-05 for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures.

Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity.

Assets and liabilities disclosed at fair value are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are defined by ASC 820-10-35, are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities. Determining which category an asset or liability falls within the hierarchy requires significant judgment and we evaluate our hierarchy disclosures each quarter.

Level 1 - Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2 - Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 - Valuations based on unobservable inputs reflecting management’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

Cash and Cash Equivalents - Cash and cash equivalents include securities with original maturities of three months or less when purchased.

F- 8

Restricted Cash - Restricted cash represents amounts required to be restricted under our loan agreements and secured line of credit (see Note 10 - Loans Payable and Secured Line of Credit), tenant related security deposits and deposits on property acquisitions.

Revenue Recognition - Leases with tenants are accounted for as operating leases. Minimum rents are recognized on a straight-line basis over the term of the respective leases, beginning when the tenant takes possession of the space. The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in deferred rents receivable. In addition, leases typically provide for the reimbursement of real estate taxes, insurance and other property operating expenses. These reimbursements are recognized as revenue in the period the expenses are incurred. We make estimates of the collectability of our accounts receivable related to tenant revenues. An allowance for doubtful accounts has been provided against certain tenant accounts receivable that are estimated to be uncollectible. Once the amount is ultimately deemed to be uncollectible, it is written off.

Stock-Based Compensation – We have granted stock-based compensation, which is described below in Note 12 – Stock-Based Compensation. We account for stock-based compensation in accordance with ASC 718-30-30, which establishes accounting for stock-based awards exchanged for employee services. Under the provisions of ASC 718-10-35, stock-based compensation cost is measured at the grant date, based on the fair value of the award on that date, and is expensed at the grant date (for the portion that vests immediately) or ratably over the respective vesting periods.

Income Taxes - We account for income taxes under the asset and liability method as required by the provisions of ASC 740-10-30, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We provide a valuation allowance for deferred tax assets for which we do not consider realization of such assets to be more likely than not.

ASC 740-10-65 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-65, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740-10-65 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of both December 31, 2017 and December 31, 2016, we had determined that no liabilities are required in connection with unrecognized tax positions. As of December 31, 2017, our tax returns for the prior three years are subject to review by the Internal Revenue Service.

On December 22, 2017, the President of the United States signed into law P.L. 115-97, commonly referred to as the U.S. Tax Cuts and Jobs Act (the “Act”). The Act modifies several provisions of the Internal Revenue Code related to corporations, including a permanent corporate income tax rate reduction from 35% to 21%, effective January 1, 2018. See Note 5 – Taxes for additional detail on our accounting for income taxes, including additional discussion on the enactment of the Act and the resulting impact on our 2017 financial statements.

We are subject to certain federal, state, local and franchise taxes.

Earnings (loss) Per Share - We present both basic and diluted earnings (loss) per share. Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower per share amount. Shares issuable under restricted stock units that have vested but not yet settled were excluded from the computation of diluted earnings (loss) per share because the awards would have been antidilutive for the periods presented.

F- 9

Deferred Financing Costs – Deferred financing costs represent commitment fees, legal, title and other third party costs associated with obtaining commitments for mortgage financing which result in a closing of such financing. These costs are being offset against loans payable in the consolidated balance sheets for mortgage financings and are included in prepaid expenses and other assets, net for our secured line of credit. These costs are amortized over the terms of the related financing arrangements. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financing transactions which do not close are expensed in the period in which it is determined that the financing will not close.

Deferred Lease Costs – Deferred lease costs consist of fees and direct costs incurred to initiate and renew operating leases and are amortized on a straight-line basis over the related lease term

Underwriting Commissions and Costs – Underwriting commissions and costs incurred in connection with our stock offerings are reflected as a reduction of additional paid-in-capital.

Reclassifications - Certain prior year financial statement amounts have been reclassified to conform to the current year presentation due to the adoption of Accounting Standards Update (“ASU”) 2016-09 as described below.

Change in Estimate - Management periodically reviews the assumptions used in determining the accrued postretirement benefit obligation (see Note 8 – Pension and Profit Sharing Plans). In 2016, management changed the base mortality table used in determining the accrued postretirement benefit obligation to the newer RP-2016 table. The accrued postretirement benefit obligation increased by approximately $0.8 million at December 31, 2016 and was due mainly to the effect of this change in estimate.

Accounting Standards Updates

In August 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. The amendments in the new standard will permit more flexibility in hedging interest rate risk for both variable rate and fixed rate financial instruments. The standard will also enhance the presentation of hedge results in the financial statements. The guidance is effective for fiscal years beginning after December 15, 2018 and early adoption is permitted. We have not yet adopted the guidance and do not expect a material impact on our consolidated financial statements when the new standard is implemented.

In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718), Scope of Modification Accounting. The guidance clarifies the changes to the terms or conditions of a share-based payment award that require an entity to apply modification accounting in Topic 718. The guidance is effective for fiscal years beginning after December 15, 2017 and early adoption is permitted. We have not yet adopted the guidance and do not expect a material impact on our consolidated financial statements when the new standard is implemented.

In February 2017, the FASB issued ASU No. 2017-05, Other Income-Gains and Losses from the De-recognition of Nonfinancial Assets (Subtopic 610-20) to add guidance for partial sales of nonfinancial assets, including partial sales of real estate. Historically, U.S. GAAP contained several different accounting models to evaluate whether the transfer of certain assets qualified for sale treatment. ASU 2017-05 reduces the number of potential accounting models that might apply and clarifies which model does apply in various circumstances. ASU 2017-05 is effective for annual reporting periods after December 16, 2017, including interim reporting period within that reporting period. The adoption of ASU 2017-05 is not expected to have a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The guidance clarifies the definition of a business and provides guidance to assist with determining whether transactions should be accounted for as acquisitions of assets or businesses. The main provision is that an acquiree is not a business if substantially all of the fair value of the gross assets is concentrated in a single identifiable asset or group of assets. Upon the adoption of ASU No. 2017-01 in 2017, we evaluate each acquisition of real estate or in-substance real estate to determine if the integrated set of assets and activities acquired meet the definition of a business and need to be accounted as a business combination. If either of the following criteria is met, the integrated set of assets and activities acquired would not qualify as a business:

Substantially all of the fair value of the gross assets acquired is concentrated in either a single identifiable asset or a group of similar identifiable assets; or

The integrated set of assets and activities is lacking, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs (i.e. revenue generated before and after the transaction).

An acquired process is considered substantive if:

The process includes an organized workforce (or includes an acquired contract that provides access to an organized workforce) that is skilled, knowledgeable, and experienced in performing the process;

The process cannot be replaced without significant cost, effort, or delay; or

The process is considered unique or scarce.

F- 10

Generally, we expect that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The guidance will require entities to show the changes on the total cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between these items on the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. We have not yet adopted this new guidance and are currently evaluating the impact of adopting this new accounting standard on our consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (A Consensus of the FASB Emerging Issues Task Force). The ASU provides final guidance on eight cash flow issues, including debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, distributions received from equity method investees, separately identifiable cash flows and application of the predominance principle, and others. The amendments in the ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We will adopt this new guidance for the year beginning January 1, 2018 and we have determined this new accounting standard will not have a material effect on our consolidated financial statements.

In March 2016, FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods. If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period and the entity must adopt all of the amendments from ASU 2016-09 in the same period. We elected to early adopt ASU 2016-09 as of January 1, 2016 and the adoption has resulted in an adjustment of a reduction in real estate, net of $0.5 million, a reduction in liability related to stock-based compensation of $5.1 million, an increase in additional paid-in capital of $4.4 million and an increase in retained earnings of $0.2 million (see Adoption of New Accounting Principle below).

In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU 2016-02 outlines a new model for accounting by lessees, whereby their rights and obligations under substantially all leases, existing and new, would be capitalized and recorded on the balance sheet. For lessors, however, the accounting remains largely unchanged from the current model, with the distinction between operating and financing leases retained, but updated to align with certain changes to the lessee model and the new revenue recognition standard discussed above. As lessee, we are party to an office lease with future payment obligations aggregating $3.2 million at December 31, 2017 (see Note 9 - Commitments) for which we expect to record right of use assets and liabilities upon adoption of ASU 2016-02. The new guidance also requires that internal leasing costs be expensed as incurred, as opposed to capitalized and deferred. We do not capitalize internal leasing costs. ASU 2016-02 will also require extensive quantitative and qualitative disclosures and is effective beginning after December 15, 2018, but early adoption is permitted.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 does not apply to our lease revenues, but may apply to reimbursed tenant costs. Additionally, this guidance modifies disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 for all entities by one year, until years beginning in 2018, with early adoption permitted but not before 2017. Entities may adopt ASU 2014-09 using either a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients or a retrospective approach with the cumulative effect recognized at the date of adoption. Management believes the majority of our revenue falls outside of the scope of this guidance and does not anticipate any significant changes to the timing of our revenue recognition. We intend to implement the standard on a modified retrospective basis with the cumulative effect recognized in retained earnings at the date of application.

NOTE 3 – REAL ESTATE, NET

As of December 31, 2017 and December 31, 2016, real estate, net consisted of the following (dollars in thousands):

	December 31, 2017		December 31, 2016

Real estate under development		69,783	$	53,712
Building and building improvements		5,817		5,794
Tenant improvements		606		569
Land		2,452		2,452
		78,658		62,527
Less: accumulated depreciation		2,389		2,143
	$	76,269	$	60,384

F- 11

Real estate under development as of December 31, 2017 consisted of the 77 Greenwich and Paramus, New Jersey properties while real estate under development as of December 31, 2016 consisted of the 77 Greenwich, Paramus, New Jersey and Westbury, New York properties. Building and building improvements, tenant improvements and land at both dates consisted of the West Palm Beach, Florida property.

In August 2017, we closed on the sale of our property located in Westbury, New York for a gross sale price of $16.0 million. The sale resulted in a gain of $3.9 million and generated approximately $15.2 million in net proceeds to us.

Depreciation expense amounted to $246,000 and $205,000 for the years ended December 31, 2017 and December 31, 2016, respectively. The increase in depreciation expense related to the West Palm Beach, Florida property.

Costs relating to demolished assets for the year ended December 31, 2017 was approximately $3.4 million. This is related to the 77 Greenwich property’s acceleration of depreciation of the building and building improvements and the demolition costs at 77 Greenwich due to the completion of demolition of the commercial building in 2017.

In September 2017, a wholly-owned subsidiary of ours entered into an agreement pursuant to which it acquired an option to purchase a newly built 105-unit, 12 story apartment building located at 237 11th Street, Brooklyn, New York for a purchase price of $81.0 million. We exercised the option on March 9, 2018. We paid an initial deposit of $8.1 million, which is included in restricted cash on the consolidated balance sheet, upon entering into the agreement. The purchase price will be funded through acquisition financing and cash on hand and may include a joint venture partner. The acquisition of this property, which is subject to customary closing conditions, is expected to close in the spring of 2018.

Through a wholly-owned subsidiary, we also entered into an agreement with the New York City School Construction Authority (the "SCA"), whereby we will construct a school that will be sold to the SCA as part of our condominium development at the 77 Greenwich property. Pursuant to the agreement, the SCA will pay us $41.5 million which has been allocated to land and reimburse us for the costs associated with constructing the school (including a construction supervision fee of approximately $5.0 million). Payments for construction will be made by the SCA to the general contractor in installments as construction on their condominium progresses. Payments for the land and development fee will be received starting in January 2018 through September 2019. Upon Substantial Completion, as defined, the SCA shall purchase the school condominium unit. We are required to substantially complete construction of the school by September 6, 2023. To secure our obligations, the 77 Greenwich property has been ground leased to the SCA and leased back to us until title to the school is transferred to the SCA. We have also guaranteed certain obligations with respect to the construction.

Revenue will not be recognized until control of the asset is transferred to the buyer. This generally will include transfer of title to the property. As payments from the SCA are received, the amounts will be recognized as a deferred liability until sales criteria are satisfied.

NOTE 4 – PREPAID EXPENSES AND OTHER ASSETS, NET

As of December 31, 2017 and December 31, 2016, prepaid expenses and other assets, net include the following (dollars in thousands):

	December 31, 2017		December 31, 2016

Trademarks and customer lists	$	2,090	$	2,090
Prepaid expenses		1,673		867
Lease commissions		1,297		433
Other		1,203		417
		6,263		3,807
Less: accumulated amortization		2,204		1,658
	$	4,059	$	2,149

F- 12

NOTE 5 - TAXES

The provision for taxes is as follows (dollars in thousands):

	Year Ended December 31, 2017			Year Ended December 31, 2016		For the Period March 1, 2015 to December 31. 2015

Current:
Federal	$	-		$	-	$	-
State		38			26		41
	$	38		$	26	$	41
Deferred:
Federal	$	(3,182	)	$	-		-
State		-			-	$	-
	$	(3,182	)	$	-	$	-

Tax (benefit) expense	$	(3,144	)	$	26	$	41

The following is a reconciliation of income taxes computed at the U.S. Federal statuary rate to the provision for income taxes:

	Year Ended December 31, 2017			Year Ended December 31, 2016			For the Period March 1, 2015 to December 31. 2015

Statuary federal income tax rate		35.0	%		35.0	%		35.0	%
State taxes		-0.7	%		7.5	%		16.2	%
Permanent non-deductible expenses		-10.5	%		-6.9	%		-7.4	%
Federal rate change		-654.5	%		0.0	%		0.0	%
AMT credit calculation allowance release		61.6	%		0.0	%		0.0	%
Change of valuation allowance		630.0	%		-35.7	%		-44.4	%

Effective income tax rate		60.9	%		-0.1	%		-0.6	%

F- 13

The composition of our deferred tax assets and liabilities is as follows (dollars in thousands):

	Year Ended December 31, 2017			Year Ended December 31, 2016

Deferred tax assets:
Pension costs	$	1,008		$	1,801
Stock-based compensation reserves not currently deductible		(147	)		(220	)
Net operating loss carry forwards		56,462			88,968
Depreciation (including air rights)		1,796			1,685
AMT Credit		-			3,181
Investment in joint venture		254			-
Accrued expenses		220			212

Total deferred tax assets	$	59,593		$	95,627
Valuation allowance		(59,469	)		(95,327	)
Deferred tax asset after valuation allowance	$	124		$	300

Deferred tax liabilities:
Intangibles	$	(124	)	$	(300	)
Other		-			-
Total deferred tax liabilities	$	(124	)	$	(300	)
Net deferred tax assets	$	-		$	-

Current deferred tax assets	$	-		$	-
Long term deferred tax assets		-			-
Total deferred tax assets	$	-		$	-

Effects of the Tax Cuts and Jobs Act

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into U.S. law. ASC Topic 740, Accounting for Income Taxes, requires companies to recognize the effect of tax law changes in the period of enactment even though the effective date for most provisions is for tax years beginning after December 31, 2017, or in the case of certain other provisions of the law, January 1, 2018.

Given the significance of the legislation, the U.S. Securities and Exchange Commission (the "SEC") staff issued Staff Accounting Bulletin ("SAB") No. 118 (“SAB 118”), which allows registrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. However, the measurement period is deemed to have ended prior to the one year term when the registrant has obtained, prepared, and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared, or analyzed.

SAB 118 summarizes a three-step process to be applied at each reporting period to account for and qualitatively disclose: (1) the effects of the change in tax law for which accounting is complete; (2) provisional amounts (or adjustments to provisional amounts) for the effects of the tax law where accounting is not complete, but that a reasonable estimate has been determined; and (3) a reasonable estimate cannot yet be made and therefore taxes are reflected in accordance with law prior to the enactment of the Tax Cuts and Jobs Act.

As part of the Tax Reform, the U.S. corporate income tax rate applicable to us decreased from 35% to 21%. This rate change resulted in the remeasurement of our net deferred tax asset (“DTA”) as of December 31, 2017. The effect was approximately $33.7 million, which was completely offset by a change in our valuation allowance.

Pursuant to the Tax Reform, alternative minimum tax (“AMT”) credit carryforwards will be eligible for a 50% refund through tax years 2018 through 2020. Beginning in tax year 2021, any remaining AMT credit carryforwards would be 100% refundable. As a result of these new regulations, we have released our valuation allowance of $3.1 million formerly reserved against our AMT credit carryforwards. We have recorded a tax benefit and refund receivable of $3.1 million in connection with this valuation allowance release.

Our accounting for the above elements of the Act is complete.

Other significant provisions that are not yet effective but may impact income taxes in future years include, but not limited to, an exemption from U.S. tax on dividends of future foreign earnings, limitation on the current deductibility of net interest expense in excess of 30% of adjusted taxable income and a limitation of net operating losses generated after fiscal 2018 to 80% of taxable income.

At December 31, 2017, we had federal NOLs carry forwards of approximately $231.0 million. These NOLs will expire between 2029 and 2037. At December 31, 2017, we also had state NOL carry forwards of approximately $102.3 million. These NOL’s expire between 2029 and 2037. We also had the New York State and New York City prior net operating loss conversion (“PNOLC”) subtraction pools of approximately $31.1 million and $25.5 million, respectively. The conversion to the PNOLC under the New York State and New York City corporate tax reforms does not have any material tax impact.

Based on management’s assessment, it is more likely than not that the entire deferred tax assets will not be realized by future taxable income or tax planning strategies. Accordingly a valuation allowance of $95.3 million was recorded as of December 31, 2016. The valuation allowance was adjusted by approximately $35.8 million during the year ended December 31, 2017 to $59.5 million, mainly as a result of the change in federal income tax rate applicable to corporations from 35% to 21% effective for 2018.

NOTE 6 – RENTAL REVENUE

Our properties are leased to various national and local companies under leases expiring through 2031. As of December 31, 2017, 17 tenants leased approximately 67.3% of the space at the West Palm Beach, Florida property and two tenants leased/licensed 100% of the space at the Paramus, New Jersey property.

F- 14

Future minimum rentals under non-cancellable terms of tenants’ operating leases (excluding license agreements) as of December 31, 2017 are as follows (dollars in thousands):

Year ended:	Future Minimum Rentals

2018	$	1,177
2019		1,045
2020		960
2021		728
2022		704
Thereafter		4,489
	$	9,103

NOTE 7 – FAIR VALUE MEASUREMENTS

The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, and other liabilities approximated their carrying value because of the short-term nature based on Level 1 inputs. The fair value of the loans payable approximated their carrying values as they are variable-rate instruments.

On an annual recurring basis, we are required to use fair value measures when measuring plan assets of our pension plans. As we elected to adopt the measurement date provisions of ASC 715, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,” as of March 4, 2007, we are required to determine the fair value of our pension plan assets as of December 31, 2017. The fair value of pension plan assets was $12.1 million at December 31, 2017. These assets are valued in active liquid markets.

NOTE 8 – PENSION AND PROFIT SHARING PLANS

Pension Plans - Syms sponsored a defined benefit pension plan for certain eligible employees not covered under a collective bargaining agreement. The pension plan was frozen effective December 31, 2006. As of December 31, 2017 and December 31, 2016, we had a recorded liability of $2.5 million and $3.4 million, respectively, which is included in pension liabilities on the accompanying consolidated balance sheets. This liability represents the estimated cost to us of terminating the plan in a standard termination, which would require us to make additional contributions to the plan so that the assets of the plan are sufficient to satisfy all benefit liabilities.

We had contemplated other courses of action, including a distress termination, whereby the Pension Benefits Guaranty Corporation (“PBGC”) would take over the plan. On February 27, 2012, Syms notified the PBGC and other affected parties of its consideration to terminate the plan in a distress termination. However, the estimated total cost associated with a distress termination was approximately $15 million. As a result of the cost savings associated with the standard termination approach, Syms elected not to terminate the plan in a distress termination and formally notified the PBGC of this decision. We will maintain the Syms pension plan and make all contributions required under applicable minimum funding rules; provided, however, that we may terminate the Syms pension plan from and after January 1, 2017. In the event that we terminate the Syms pension plan, we intend that any such termination shall be a standard termination. Although we have accrued the liability associated with a standard termination, we have not taken any steps to commence such a termination and have made no commitment to do so by a certain date.

In accordance with minimum funding requirements and court ordered allowed claims distributions, we paid approximately $4.1 million to the Syms sponsored plan from September 17, 2012 through December 31, 2017 of which approximately $0.5 million was funded during the year ended December 31, 2017 to the Syms sponsored plan.

F- 15

Presented below is financial information relating to this plan for the periods indicated (dollars in thousands):

	Year Ended December 31, 2017			Year Ended December 31, 2016

CHANGE IN BENEFIT OBLIGATION:
Net benefit obligation - beginning of period	$	14,278		$	13,394
Interest cost		697			653
Actuarial loss		295			867
Gross benefits paid		(650	)		(636	)
Net benefit obligation - end of period	$	14,620		$	14,278

CHANGE IN PLAN ASSETS:
Fair value of plan assets - beginning of period	$	10,889		$	10,254
Employer contributions		460			575
Gross benefits paid		(650	)		(636	)
Actual return on plan assets		1,421			696
Fair value of plan assets - end of period	$	12,120		$	10,889

Un-funded status at end of period	$	(2,500	)	$	(3,389	)

The pension expense includes the following components (dollars in thousands):

	Year Ended December 31, 2017			Year Ended December 31, 2016

COMPONENTS OF NET PERIODIC COST:
Interest cost	$	697		$	653
Gain on assets		(1,421	)		(696	)
Amortization of loss		1,241			478
Net periodic cost	$	517		$	435

WEIGHTED-AVERAGE ASSUMPTION USED:
Discount rate		5.0	%		5.0	%
Rate of compensation increase		0.0	%		0.0	%

The expected long-term rate of return on plan assets was 6% for both the years ended December 31, 2017 and December 31, 2016.

F- 16

As of December 31, 2017 the benefits expected to be paid in the next five fiscal years and then in the aggregate for the five fiscal years thereafter are as follows (dollars in thousands):

Year	Amount

2018	$	996
2019		999
2020		997
2021		1,017
2022		1,028
2023-2027		5,132

The fair values and asset allocation of our plan assets as of December 31, 2017 and December 31, 2016 and the target allocation for fiscal 2017, by asset category, are presented in the following table. All fair values are based on quoted prices in active markets for identical assets (Level 1 in the fair value hierarchy) (dollars in thousands):

		December 31, 2017					December 31, 2016
				% of Plan					% of Plan
Asset Category	Asset Allocation	Fair Value		Assets			Fair Value		Assets

Cash and equivalents	0% to 10%	$	768		6	%	$	648		6	%
Equity securities	40% to 57%		6,848		57	%		5,871		54	%
Fixed income securities	35% to 50%		4,369		36	%		4,150		38	%
Alternative investments	1% to 10%		135		1	%		220		2	%
Total		$	12,120		100	%	$	10,889		100	%

Under the provisions of ASC 715, we are required to recognize in our consolidated balance sheets the unfunded status of a benefit plan. This is measured as the difference between plan assets at fair value and the projected benefit obligation. For the pension plan, this is equal to the accumulated benefit obligation.

Certain employees covered by collective bargaining agreements participate in multiemployer pension plans. Syms ceased to have an obligation to contribute to these plans in 2012, thereby triggering a complete withdrawal from the plans within the meaning of section 4203 of the Employee Retirement Income Security Act of 1974. Consequently, we are subject to the payment of a withdrawal liability to these pension funds. We had a recorded liability of $1.7 million and $2.5 million which is included in pension liabilities on the accompanying consolidated balance sheets as of December 31, 2017 and December 31, 2016, respectively, and is included as part of the net claims distribution. We are required to make quarterly distributions in the amount of $0.2 million until this liability is completely paid to the multiemployer plan by the beginning of 2020. In accordance with minimum funding requirements and court ordered allowed claims distributions, we paid approximately $5.2 million to the multiemployer plans from September 17, 2012 through December 31, 2017 of which $0.8 million was funded to the multiemployer plan during each of the years ended December 31, 2017 and December 31, 2016.

401(k) Plan – We have established a 401(k) plan for all of our employees. Eligible employees are able to contribute a percentage of their salary to the plan subject to statutory limits. We paid approximately $55,000 and $54,000 in matching contributions to this plan during the years ended December 31, 2017 and December 31, 2016, respectively.

NOTE 9 – COMMITMENTS

Leases - The lease for our corporate office located at 340 Madison Avenue, New York, New York expires in March 2025. Rent expense paid for this operating lease and our terminated lease at 717 Fifth Avenue, New York, New York was approximately $256,000 for the year ended December 31, 2017, $300,000 for the year ended December 31, 2016 and $225,000 during the period from March 1, 2015 to December 31, 2015. The remaining lease obligation for our corporate office is as follows (dollars in thousands):

Year	Amount

2018	$	348
2019		439
2020		439
2021		447
2022		470
Thereafter		1,057
	$	3,200

F- 17

Legal Proceedings – We are a party to routine litigation incidental to our business. Some of the actions to which we are a party are covered by insurance and are being defended or reimbursed by our insurance carriers. See Item 3. Legal Proceedings, for additional information on legal proceedings.

NOTE 10 – LOANS PAYABLE AND SECURED LINE OF CREDIT

Mortgages

77 Greenwich Construction Loan

On December 22, 2017, a wholly-owned subsidiary of ours closed on a $189.5 million construction loan (the “77 Greenwich Construction Loan”) with Massachusetts Mutual Life Insurance Company, as lender and administrative agent. We will draw down proceeds available to us as costs related to the construction are incurred for 77 Greenwich over the next few years for the construction of our new mixed-use building containing approximately 300,000 square feet of gross floor area, which is expected to include 90 luxury residential condominium apartments and a public elementary school, and includes the adaptive reuse of the landmarked Robert and Anne Dickey House, 7,500 square feet of street level retail space, and construction of a new handicapped accessible subway entrance at Trinity Place. A portion of the proceeds on the closing date for the 77 Greenwich Construction Loan was used to pay in full the outstanding balance, including accrued interest, under our loan with Sterling National Bank, in an aggregate amount of $40.1 million. There was a balance of approximately $32.3 million on the 77 Greenwich Construction Loan at December 31, 2017 and $36.5 million at February 28, 2018.

The 77 Greenwich Construction Loan has a four-year term with one extension option for an additional year under certain circumstances. The collateral for the 77 Greenwich Construction Loan is the borrower’s fee interest in the 77 Greenwich, which is the subject of a mortgage in favor of the lender. The 77 Greenwich Construction Loan will bear interest at a rate per annum equal to the greater of (i) 8.25% in excess of LIBOR and (ii) 9.25%. The effective interest rate on the 77 Greenwich Loan was 9.81% as of December 31, 2017. The 77 Greenwich Construction Loan provides for certain interest payments to be advanced under the 77 Greenwich Construction Loan as an interest holdback and to the extent that the cash flow from the 77 Greenwich is insufficient to pay the interest payments then due and payable, funds in the interest holdback will be applied by the lender as a disbursement to the borrower to make the monthly interest payments on the 77 Greenwich Construction Loan, subject to certain conditions. The 77 Greenwich Construction Loan may be prepaid in part in certain circumstances such as in the event of the sale of residential and retail condominium units. Pursuant to the 77 Greenwich Construction Loan, we are required to achieve completion of the construction work and the improvements for the Project on or before a completion date that is forty-two (42) months following the closing of the 77 Greenwich Construction Loan, subject to certain exceptions. The 77 Greenwich Construction Loan also includes additional customary affirmative and negative covenants for loans of this type and our agreements with the SCA. We also entered into certain completion and other guarantees with the Lender and the SCA in connection with the 77 Greenwich Construction Loan.

On December 22, 2017, we entered into an interest rate cap agreement as required under the 77 Greenwich Construction Loan. The interest rate cap agreement provides the right to receive cash if the reference interest rate rises above a contractual rate. We paid a premium of approximately $393,000 for the 2.5% interest rate cap for the 30-day LIBOR rate on the notional amount of $189.5 million. The fair value of the interest rate cap as of December 31, 2017 is approximately $344,000 and is recorded in prepaid expenses and other assets, net in our consolidated balance sheet. We did not designate this interest rate cap as a hedge and are recognizing the change in estimated fair value in interest expense. During the year ended December 31, 2017, the approximate $49,000 change in value of this instrument has been recorded as interest and capitalized to real estate, net.

F- 18

Prior 77 Greenwich Loan

On February 9, 2015, our wholly-owned subsidiary that owns 77 Greenwich and related assets entered into a loan agreement with Sterling National Bank, as lender and administrative agent, and Israel Discount Bank of New York, as lender, pursuant to which we borrowed $40.0 million (the “Prior 77 Greenwich Loan”). The Prior 77 Greenwich Loan, which was scheduled to mature on November 8, 2017, was extended to February 8, 2018 after having satisfied certain conditions. The Prior 77 Greenwich Loan was paid off in full on December 22, 2017 in conjunction with the closing of the 77 Greenwich Construction Loan. The effective interest rate on the Prior 77 Greenwich Loan was 5.00% as of December 31, 2016.

West Palm Beach, Florida Loan

On May 11, 2016, our subsidiary that owns our West Palm Beach, Florida property commonly known as The Shoppes at Forest Hill (the “TPH Forest Hill Borrower”), entered into a loan agreement with Citizens Bank, National Association, as lender (the “WPB Lender”), pursuant to which the WPB Lender will provide a loan to the TPH Forest Hill Borrower in the amount of up to $12.6 million, subject to the terms and conditions as set forth in the loan agreement (the “WPB Loan”). TPH Forest Hill Borrower borrowed $9.1 million under the WPB Loan at closing. The WPB Loan requires interest-only payments and bears interest at the 30-day LIBOR plus 230 basis points. The effective rate was 2.75% at December 31 2016 and 3.86% at December 31, 2017. The WPB Loan matures on May 11, 2019, subject to extension until May 11, 2021 under certain circumstances. The TPH Forest Hill Borrower can prepay the WPB Loan at any time, in whole or in part, without premium or penalty.

The collateral for the WPB Loan is the TPH Forest Hill Borrower’s fee interest in our West Palm Beach, Florida property. The WPB Loan requires the TPH Forest Hill Borrower to comply with various customary affirmative and negative covenants and provides for certain events of default, the occurrence of which permit the WPB Lender to declare the WPB Loan due and payable, among other remedies. As of December 31, 2017, the TPH Forest Hill Borrower was in compliance with all WPB Loan covenants.

On May 11, 2016 we entered into an interest rate cap agreement as required under the WPB Loan. The interest rate cap agreement provides the right to receive cash if the reference interest rate rises above a contractual rate. We paid a premium of $14,000 for the 3.0% interest rate cap for the 30-day LIBOR rate on the notional amount of $9.1 million. The fair value of the interest rate cap as of December 31, 2017 is recorded in prepaid expenses and other assets, net in our consolidated balance sheets. We did not designate this interest rate cap as a hedge and are recognizing the change in estimated fair value in interest expense. During the year ended December 31, 2017, we recorded interest expense of approximately $4,000 related to this change in value.

Secured Line of Credit

On February 22, 2017, we entered into two secured lines of credit for an aggregate of $12.0 million, with Sterling National Bank as the lender, which were secured by our properties located in Paramus, New Jersey, and Westbury, New York, respectively, and had an original maturity date of February 22, 2018. On August 4, 2017, in connection with the sale of the Westbury, New York property, the $2.9 million line of credit that was secured by this property, and which was undrawn, matured on that date. The remaining $9.1 million line of credit is secured by the Paramus, New Jersey property. This line of credit was increased to $11.0 million in September 2017, and we extended the maturity date to February 22, 2019. The line of credit bears interest, for drawn amounts only, at 100 basis points over Prime, as defined in the loan agreement, with a floor of 3.75%, and is pre-payable at any time without penalty. This line of credit was undrawn as of December 31, 2017.

F- 19

Interest Expense

Interest expense, excluding capitalized interest, was comprised of the following (dollars in thousands):

	Year Ended December 31, 2017			Year Ended December 31, 2016			For the Period March 1, 2015 through December 31, 2015

Interest expense	$	2,488		$	2,110		$	1,534
Interest capitalized		(2,488	)		(1,929	)		(1,201	)
Interest income		(215	)		(223	)		(87	)
Interest (income) expense, net	$	(215	)	$	(42	)	$	246

NOTE 11 – STOCKHOLDERS’ EQUITY

Capital Stock

Our authorized capital stock consists of 120,000,000 shares, $0.01 par value per share, consisting of 79,999,997 shares of common stock, $0.01 par value per share, two (2) shares of preferred stock, $0.01 par value per share (which have been redeemed in accordance with their terms and may not be reissued), one (1) share of special stock, $0.01 par value per share, and 40,000,000 shares of a new class of blank-check preferred stock, $0.01 par value per share. As of December 31, 2017 and December 31, 2016, there were 36,803,218 shares and 30,679,566 shares of common stock issued, respectively, and 31,451,796 shares and 25,663,820 shares of common stock outstanding, respectively.

On February 14, 2017, we issued an aggregate of 3,585,000 shares of common stock in a private placement at a purchase price of $7.50 per share, and received gross proceeds of $26.9 million. On April 5, 2017, we issued an aggregate of 1,884,564 shares of common stock in a rights offering at a purchase price of $7.50 per share and received gross proceeds of $14.1 million (the “Rights Offering”). We have been using the proceeds from the private placement and the Rights Offering for the development of 77 Greenwich, potential new real estate acquisitions and investment opportunities and for working capital.

At-The-Market Equity Offering Program

In December 2016, we entered into an “at-the-market” equity offering program (the “ATM Program”), to sell up to an aggregate of $12.0 million of our common stock. During the year ended December 31, 2016, we issued 120,299 shares of our common stock for aggregate gross proceeds of $1.2 million (excluding approximately $218,000 in professional and brokerage fees) at a weighted average price of $9.76 per share. For the year ended December 31, 2017, we issued 2,492 shares of our common stock for aggregate gross proceeds of approximately $23,000 at a weighted average price of $9.32 per share. As of December 31, 2017, $10.8 million of common stock remained available for issuance under the ATM Program. The sale agreement with our broker expired in accordance with its terms on December 31, 2017. We may enter into a similar sale agreement in the future.

Preferred Stock

We were authorized to issue two shares of preferred stock (one share each of Series A and Series B preferred stock), one share of special stock and 40,000,000 shares of blank-check preferred stock. The share of Series A preferred stock was issued to a trustee acting for the benefit of our creditors. The share of Series B preferred stock was issued to the former Majority Shareholder. The share of special stock was issued and sold to Third Avenue, and enables Third Avenue or its affiliated designee to elect one member of the Board of Directors.

F- 20

On or about March 8, 2016, a General Unsecured Claim Satisfaction (as defined in the Plan) occurred. On March 14, 2016, we made the final Majority Shareholder payment (as defined in the Plan) to the Majority Shareholder in the amount of approximately $6.9 million. Following the General Unsecured Claim Satisfaction and payment to the former Majority Shareholder, we satisfied our payment and reserve obligations under the Plan. Upon the occurrence of the General Unsecured Claim Satisfaction, the share of Series A Preferred Stock was automatically redeemed in accordance with its terms and may not be reissued. In addition, upon the payment to the former Majority Shareholder, the share of Series B Preferred Stock was automatically redeemed in accordance with its terms and may not be reissued.

NOTE 12 – STOCK-BASED COMPENSATION

Stock Incentive Plan

We adopted the Trinity Place Holdings Inc. 2015 Stock Incentive Plan (the “SIP”), effective September 9, 2015. Prior to the adoption of the SIP, we granted restricted stock units (“RSUs”) to our executive officers and employees pursuant to individual agreements. The SIP, which has a ten year term, authorizes (i) stock options that do not qualify as incentive stock options under Section 422 of the Code, or NQSOs, (ii) stock appreciation rights, (iii) shares of restricted and unrestricted common stock, and (iv) RSUs. The exercise price of stock options will be determined by the compensation committee, but may not be less than 100% of the fair market value of the shares of common stock on the date of grant. The SIP authorizes the issuance of up to 800,000 shares of our common stock. Our SIP activity was as follows:

	Year Ended December 31, 2017					Year Ended December 31, 2016
	Number of Shares			Weighted Average Fair Value at Grant Date		Number of Shares			Weighted Average Fair Value at Grant Date

Balance available, beginning of period		614,500			-		770,000			-
Granted to employees		(48,600	)	$	7.34		(105,500	)	$	5.29
Granted to non-employee directors		(18,938	)	$	6.88		(50,000	)	$	9.85
Deferred under non-employee director's deferral program		(5,643	)	$	6.88		-			-
Balance available, end of period		541,319			-		614,500			-

Restricted Stock Units

We have typically granted RSUs to certain employees and executive officers each year as part of compensation. These grants have vesting dates ranging from immediate vest at grant date to five years, with a distribution of shares at various dates ranging from the time of vesting up to seven years after vesting.

During the year ended December 31, 2017, we granted 48,600 RSUs to certain employees. These RSUs vest and settle over various times over a two to three year period, subject to each employee’s continued employment. Approximately $63,000 in compensation expense related to these shares was amortized during the year ended December 31, 2017, of which approximately $20,000 was capitalized in real estate under development for the year ended December 31, 2017.

In April, 2015, we issued 238,095 shares of common stock to the CEO to settle vested RSUs from previous RSU grants. In connection with that transaction, we repurchased/withheld (from the 238,095 shares issued) 132,904 shares to provide for the CEO’s withholding tax liability. In accordance with ASC Topic 718, Compensation-Stock Compensation, the repurchase or withholding of immature shares (i.e. shares held for less than six months) by us upon the vesting of a restricted share would ordinarily result in liability accounting. ASC 718 provides an exception, if the fair value of the shares repurchased or withheld is equal or less than the employer’s minimum statutory withholding requirements. The aggregate fair value of the shares repurchased/withheld (valued at the then current fair value of $8.00 per share) was in excess of the minimum statutory tax withholding requirements and as such we were required to account for the restricted stock awards as a liability. At each reporting period in fiscal 2015, we re-measured the liability, until settled, with changes in the fair value recorded as stock compensation expense in the statement of operations. As of January 1, 2016, we adopted ASU 2016-09 which resulted in a reduction in real estate, net, of $0.5 million, a reduction in liability related to stock-based compensation of $5.1 million, an increase in additional paid-in capital of $4.4 million and an increase in retained earnings of $0.2 million as of the date of adoption.

F- 21

Stock-based compensation expense recognized in the consolidated statements of operations during the years ended December 31, 2017, December 31, 2016 and the period ended December 31, 2015 totaled $1.1 million, $2.8 million and $1.4 million, respectively, which is net of $1.6 million, $5.0 million and $3.3 million, respectively, capitalized as part of real estate under development. Our RSU activity is as follows:

	Year ended December 31, 2017					Year ended December 31, 2016					Period from March 1, 2015 through December 31, 2015
	Number of Shares			Weighted Average Fair Value at Grant Date		Number of Shares			Weighted Average Fair Value at Grant Date		Number of Shares			Weighted Average Fair Value at Grant Date

Non-vested at beginning of period		1,621,235		$	6.38		1,220,097		$	6.65		1,244,463		$	6.48
Granted RSUs		48,600		$	7.46		1,289,669		$	6.02		393,095		$	7.02
Vested		(992,101	)	$	6.45		(888,531	)	$	6.23		(417,461	)	$	6.47
Non-vested at end of period		677,734		$	6.44		1,621,235		$	6.38		1,220,097		$	6.65

As of December 31, 2017, there was approximately $1.6 million of total unrecognized compensation cost related to unvested RSUs which is expected to be recognized through December 2020.

During the year ended December 31, 2017, we issued 636,355 shares of common stock to employees and executive officers to settle vested RSUs from previous RSU grants. In connection with those transactions, we repurchased 339,375 shares to provide for the employees’ withholding tax liability.

Director Deferral Plan

We adopted our Non-Employee Director’s Deferral Program (the “Deferral Program”) on November 2, 2016. Under the Deferral Program, our non-employee directors may elect to defer receipt of their annual equity compensation. The non-employee directors’ annual equity compensation, and any deferred amounts, are paid under the SIP. Compensation deferred under the Deferral Program is reflected by the grant of stock units under the SIP equal to the number of shares that would have been received absent a deferral election. The stock units, which are fully vested at grant, generally will be settled for an equal number of shares of common stock within 10 days after the participant ceases to be a director. In the event that we distribute dividends, each participant shall receive a number of additional stock units (including fractional stock units) equal to the quotient of (i) the aggregate amount of the dividend that the participant would have received had all outstanding stock units been shares of common stock divided by (ii) the closing price of a share of common stock on the date the dividend was issued.

During the year ended December 31, 2017, 5,643 stock units were deferred under the Deferral Program.

NOTE 13 – RELATED PARTY TRANSACTIONS

Former Majority Shareholder

On March 8, 2016, a General Unsecured Claim Satisfaction (as defined in the Plan) occurred. Under the Plan, a General Unsecured Claim Satisfaction occurs when all of the allowed creditor claims of Syms Corp. and Filene’s Basement, LLC, have been paid in full their distributions provided for under the Plan and any disputed creditor claims have either been disallowed or reserved for by Trinity. On March 14, 2016, we made the final payment to the former Majority Shareholder (as defined in the Plan) in the amount of approximately $6.9 million. Following the General Unsecured Claim Satisfaction and final payment to the former Majority Shareholder, we satisfied our payment and reserve obligations under the Plan and we have no further liability to the former Majority Shareholder.

F- 22

NOTE 14 – INVESTMENT IN UNCONSOLIDATED JOINT VENTURE

Through a wholly-owned subsidiary, we own a 50% interest in a joint venture formed to acquire and operate 223 North 8th Street, Brooklyn, New York, a newly constructed 95-unit multi-family property, known as The Berkley, encompassing approximately 99,000 gross square feet. On December 5, 2016, the joint venture closed on the acquisition of The Berkley through a wholly-owned special purpose entity (the “Property Owner”) for a purchase price of $68.885 million, of which $42.5 million was financed through a 10-year loan (the “Loan”) secured by The Berkley and the balance was paid in cash (half of which was funded by us). The non-recourse Loan bears interest at the 30-day LIBOR rate plus 216 basis points, is interest only for five years, is pre-payable after two years with a 1% prepayment premium and has covenants and defaults customary for a Freddie Mac financing. We and our joint venture partner are joint and several recourse carve-out guarantors under the Loan pursuant to Freddie Mac’s standard form of guaranty. The effective interest rate was 3.72% at December 31, 2017 and 2.93% at December 31, 2016.

This joint venture is a voting interest entity. As we do not control this joint venture, we account for it under the equity method of accounting.

The balance sheets for the unconsolidated joint venture at December 31, 2017 and December 31, 2016 are as follows (in thousands):

	December 31, 2017			December 31, 2016

ASSETS

Real estate, net	$	53,137		$	54,310
Cash and cash equivalents		218			77
Restricted cash		361			52
Tenant and other receivables, net		21			101
Prepaid expenses and other assets, net		71			169
Intangible assets, net		12,829			14,362
Total assets	$	66,637		$	69,071

LIABILITIES

Mortgage payable, net	$	40,963		$	40,799
Accounts payable and accrued expenses		608			403
Total liabilities		41,571			41,202

MEMBERS' EQUITY

Members' equity		27,795			28,485
Accumulated deficit		(2,729	)		(616	)
Total members' equity		25,066			27,869

Total liabilities and members' equity	$	66,637		$	69,071

Our investment in unconsolidated joint venture	$	12,533		$	13,939

F- 23

The statement of operations for the unconsolidated joint venture, for the year ended December 31, 2017 and from December 5, 2016 through December 31, 2016, is as follows (in thousands):

	For the Year Ended December 31, 2017			For the Period from December 5, 2016 to December 31, 2016

Revenues
Rental revenues	$	3,367		$	238
Other income		5			-

Total revenues		3,372			238

Operating Expenses
Property operating expenses		944			107
Real estate taxes		47			3
General and administrative		15			24
Interest expense, net		1,452			106
Transaction related costs		11			395
Amortization		1,706			126
Depreciation		1,310			93

Total operating expenses		5,485			854

Net loss	$	(2,113	)	$	(616	)

Our equity in net loss from unconsolidated joint venture	$	(1,057	)	$	(308	)

F- 24

NOTE 15 – QUARTERLY FINANCIAL DATA (unaudited)

The following table reflects quarterly condensed consolidated statements of operations for the periods indicated (in thousands, except per share amounts):

	For the Year Ended December 31, 2017
	January 1, 2017 to March 31, 2017			April 1, 2017 to June 30, 2017			July 1, 2017 to September 30, 2017			October 1, 2017 to December 31, 2017

Total revenues	$	460		$	495		$	507		$	400

Total operating expenses		1,762			1,838			5,391			2,090

Operating loss		(1,302	)		(1,343	)		(4,884	)		(1,690	)

Equity in net loss from unconsolidated joint venture		(271	)		(237	)		(296	)		(253	)
Interest (expense) income, net		(68	)		(41	)		20			304
Interest expense - amortization of deferred finance costs		(82	)		(118	)		(145	)		345
Reduction of claims liability		1,043			-			-			-

Loss before gain on sale of real estate and taxes		(680	)		(1,739	)		(5,305	)		(1,294	)

Gain on sale of real estate		-			-			3,853			-

Tax (expense) benefit		(1	)		(37	)		-			3,182

Net (loss) income available to common stockholders	$	(681	)	$	(1,776	)	$	(1,452	)	$	1,888

(Loss) income per share - basic and diluted	$	(0.02	)	$	(0.06	)	$	(0.05	)	$	0.06

Weighted average number of common shares - basic and diluted		27,560			31,290			31,446			31,452

	For the Year Ended December 31, 2016
	January 1, 2016 to March 31, 2016			April 1, 2016 to June 30, 2016			July 1, 2016 to September 30, 2016			October 1, 2016 to December 31, 2016

Total revenues	$	475		$	398		$	536		$	447

Total operating expenses		2,519			1,892			1,906			2,717

Operating loss		(2,044	)		(1,494	)		(1,370	)		(2,270	)

Equity in net loss from unconsolidated joint venture		-			-			-			(308	)
Interest income (expense), net		73			22			(12	)		(41	)
Interest expense - amortization of deferred finance costs		(2	)		(20	)		(38	)		(38	)
Reduction of claims liability		135			(1	)		(2	)		-

Loss before taxes		(1,838	)		(1,493	)		(1,422	)		(2,657	)

Tax expense		-			-			-			(26	)

Net loss available to common stockholders	$	(1,838	)	$	(1,493	)	$	(1,422	)	$	(2,683	)

Loss per share - basic and diluted	$	(0.07	)	$	(0.06	)	$	(0.06	)	$	(0.11	)

Weighted average number of common shares - basic and diluted		25,284			25,458			25,483			25,531

F- 25

NOTE 16 – SUBSEQUENT EVENTS

In January 2018, we received approximately $8.4 million from the SCA for reimbursement of pre-development costs incurred by us (See Note 3 - Real Estate, net for further discussion). In addition, we were reimbursed approximately $3.2 million due to an overfunding of equity in connection with the closing of the 77 Greenwich Loan. As a result of these transactions, at February 28, 2018 we had total cash of approximately $33.6 million of which cash and cash equivalents was approximately $25.4 million and restricted cash was approximately $8.2 million. The balance on the 77 Greenwich loan was $36.5 million at February 28, 2018.

On March 9, 2018, we exercised our option to purchase 237 11 ^th Street. The acquisition of this property, which is subject to customary closing conditions, is expected to close in the spring of 2018 (see Note 3 - Real Estate, net for further discussion).

F- 26

Schedule III - Consolidated Real Estate and Accumulated Depreciation

(dollars in thousands)

			Initial Cost								Amounts at which Carried at December 31, 2017
Property Description	Encumbrances		Land		Real Estate Under Development		Building, Building and Tenant Improvements (1)		Cost Capitalized Subsequent to Acquisition		Land		Real Estate Under Development		Building, Building and Tenant Improvements (1)		Total		Accumulated Depreciation		Date of Acquisition (A) / Construction (C)

77 Greenwich, NY	$	32,302	$	-	$	16,634	$	-	$	47,333	$	-	$	63,967	$	-	$	63,967	$	-		1990

Paramus, NJ		-		-		1,548		-		4,268		-		5,816		-		5,816		-		1980 (A) / 1984 (C)

West Palm Beach, FL		9,100		2,452		-		3,707		2,716		2,452		-		6,423		8,875		2,389		2001

	$	41,402	$	2,452	$	18,182	$	3,707	$	54,317	$	2,452	$	69,783	$	6,423	$	78,658	$	2,389

(1)

Depreciation on buildings and improvements reflected in the consolidated statements of operations is calculated on the straight-line basis over estimated useful lives of 10 to 39 years.

(2)

(a) Reconciliation of Total Real Estate Properties:

The following table reconciles the activity for the real estate properties for the periods reported (dollars in thousands):

	Year Ended December 31, 2017			Year Ended December 31, 2016

Balance at beginning of period	$	62,527		$	44,576
Additions		28,522			17,951
Sold real estate		(10,806	)		-
Write-off of demolished building		(1,585	)		-
Balance at end of period	$	78,658		$	62,527

The aggregate cost of land, real estate under development, building and improvements, before depreciation, for federal income tax purposes at December 31, 2017 and December 31, 2016 was $78.7 million (unaudited) and $53.4 million (unaudited), respectively.

(b) Reconciliation of Accumulated Depreciation:

The following table reconciles the accumulated depreciation for the periods reported (dollars in thousands):

	Year Ended December 31, 2017		Year Ended December 31, 2016

Balance at beginning of period	$	2,143	$	1,938
Depreciation related to real estate		246		205
Balance at end of period	$	2,389	$	2,143

F- 27

Exhibit 10.15

EXECUTION VERSION

Mortgage Loan No.: 17602

MASTER LOAN AGREEMENT

between

TPHGREENWICH OWNER LLC ,

as Borrower

and

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY ,

as Lender and Administrative Agent

Dated as of December 22, 2017

Relating to Property Located at:

77 Greenwich Street

(also known as 67 Greenwich Street and 28-42 Trinity Place) (Block 19, Lots 11 and 13)

and Air Rights acquired from 81 Greenwich Street (Block 19, Lot 18)

New York, New York

TABLE OF CONTENTS

		Page

ARTICLE 1	CERTAIN DEFINITIONS	4

Section 1.1	Certain Definitions	4

Section 1.2	Interpretation	30

ARTICLE 2	LOAN TERMS	31

Section 2.1	The Loan and the Note	31

Section 2.2	Interest Rate; Late Charge; Default Rate	32

Section 2.3	Terms of Payment	33

Section 2.4	Loan Term	34

Section 2.5	Prepayment	35

Section 2.6	Security	38

Section 2.7	Payments	39

Section 2.8	LIBOR Provisions	40

Section 2.9	Interest Reserve	43

Section 2.10	Reserve Account	43

Section 2.11	Control Accounts	44

ARTICLE 3	DISBURSEMENTS TO BORROWER	45

Section 3.1	Funding of Disbursements to Borrower	45

Section 3.2	Required Equity	46

Section 3.3	Conditions to Disbursements to Borrower	46

Section 3.4	Requests for Disbursements to Borrower	53

Section 3.5	Disbursements to Borrower for Hard Costs	55

Section 3.6	Disbursements for Payment of Interest from the Interest Holdback and Interest Reserve	56

Section 3.7	Final Disbursement to Borrower for Hard Costs and Soft Costs	57

Section 3.8	Deliveries after Completion of the Construction Work	57

Section 3.9	Contingency: Reallocations	58

Section 3.10	Developer Fee	59

Section 3.11	Balancing; Loan Reserve	59

- i -

Table of Contents

(continued)

		Page

Section 3.12	Manner of Disbursement	60

Section 3.13	Expenses, Fees and Interest	60

Section 3.14	Use of Funds	60

Section 3.15	Responsibility For Application of Funds	60

Section 3.16	Governmental Set Asides	61

Section 3.17	Punch List Sub Reserve	61

Section 3.18	Funding for Deposits	61

Section 3.19	Personal to Borrower	61

Section 3.20	EB-5 Investments	61

Section 3.21	Union Labor	61

Section 3.22	Change in Scope of Project	61

ARTICLE 4	CONSTRUCTION OF IMPROVEMENTS	62

Section 4.1	Commencement and Completion of Construction	62

Section 4.2	Change Orders	63

Section 4.3	Progress Reports	64

Section 4.4	Access to Borrower’s Books and Records	64

Section 4.5	Inspections	64

Section 4.6	Corrective Work	65

Section 4.7	Liens	65

Section 4.8	Disputes Endangering Completion	65

Section 4.9	Restriction	66

Section 4.10	Punch List Items	66

Section 4.11	Completion	66

ARTICLE 5	INSURANCE AND CONDEMNATION	66

Section 5.1	Insurance Requirements	66

Section 5.2	Damage, Destruction and Restoration	70

Section 5.3	Condemnation	74

ARTICLE 6	ENVIRONMENTAL MATTERS	75

Section 6.1	Terms Incorporated By Reference	75

ARTICLE 7	CERTAIN PROPERTY MATTERS	75

- ii -

Table of Contents

(continued)

		Page

Section 7.1	Lease Covenants and Limitations	75

Section 7.2	The Master Lease, Sublease and School Unit Purchase Agreement	77

Section 7.3	Intentionally omitted	82

Section 7.4	Triparty Agreement	83

Section 7.5	Sales and Marketing Agreement/Management Agreement	83

Section 7.6	Impositions	83

Section 7.7	Operating Expenses	85

ARTICLE 8	REPRESENTATIONS, WARRANTIES AND COVENANTS	85

Section 8.1	Organization and Authority	85

Section 8.2	Maintenance of Existence	86

Section 8.3	Title	86

Section 8.4	Mortgage Taxes	87

Section 8.5	Payment of Liens	87

Section 8.6	Representations Regarding Mortgaged Property	87

Section 8.7	Operating Accounts	88

Section 8.8	Indemnification	88

Section 8.9	Estoppel Certificates	88

Section 8.10	ERISA	88

Section 8.11	Terrorism and Anti-Money Laundering	89

Section 8.12	Special Purpose Entity Requirements	90

Section 8.13	Notices/Proceedings	93

Section 8.14	Business Purpose of Loan	94

Section 8.15	Legal Requirements and Maintenance of Mortgaged Property	94

Section 8.16	Solvency	95

Section 8.17	Interest Rate Cap Agreement	95

Section 8.18	Representations Regarding the Construction Work	97

Section 8.19	Limitations on Distributions	98

Section 8.20	Condominium	98

Section 8.21	Sales Pace Covenant	101

- iii -

Table of Contents

(continued)

		Page

ARTICLE 9	FINANCIAL REPORTING	101

Section 9.1	Financial Statements; Records	101

ARTICLE 10	CONVEYANCES, ENCUMBRANCES AND BORROWINGS	103

Section 10.1	Prohibition Against Conveyances, Encumbrances and Borrowing	103

Section 10.2	Permitted Transfer	104

ARTICLE 11	EVENTS OF DEFAULT	106

Section 11.1	Events of Default	106

ARTICLE 12	REMEDIES	109

Section 12.1	Remedies	109

Section 12.2	Lender’s Right to Perform the Obligations	110

Section 12.3	Waiver of Marshalling of Assets	110

Section 12.4	Advances	110

Section 12.5	Participation In Proceedings	111

ARTICLE 13	LIMITATIONS ON LIABILITY	111

Section 13.1	Limitation on Liability	111

ARTICLE 14	MISCELLANEOUS	115

Section 14.1	Notices	115

Section 14.2	Counterparts	116

Section 14.3	Successors and Assigns	117

Section 14.4	Joint and Several Liability	117

Section 14.5	Captions	117

Section 14.6	Further Assurances	117

Section 14.7	Severability	117

Section 14.8	Borrower’s Obligations Absolute	117

Section 14.9	Amendments; Consents	118

Section 14.10	Other Loan Documents and Exhibits	118

Section 14.11	Merger	118

Section 14.12	Time of the Essence	118

Section 14.13	Transfer of Loan	118

Section 14.14	Cooperation	119

- iv -

Table of Contents

(continued)

		Page

Section 14.15	Register	120

Section 14.16	Limitation on Interest	120

Section 14.17	Survival	121

Section 14.18	WAIVER OF JURY TRIAL	121

Section 14.19	Governing Law	121

Section 14.20	Consent to Jurisdiction and Venue	121

Section 14.21	Intentionally omitted	122

Section 14.22	Entire Agreement	122

Section 14.23	Pledge and Grant of Security Interest	122

Section 14.24	Confidentiality	122

Section 14.25	Broker	122

Section 14.26	Defaulting Lender	123

ARTICLE 15	THE ADMINISTRATIVE AGENT	124

Section 15.1	Appointment, Powers and Immunities	124

Section 15.2	Reliance by Borrower on Administrative Agent	124

Section 15.3	Rights as a Lender	124

ARTICLE 16	CONDOMINIUM UNIT RELEASE PROVISIONS	125

Section 16.1	The Offering Plan	125

Section 16.2	Contracts of Sale	126

Section 16.3	Conditions for Release of Units	130

Section 16.4	Subordination of Mortgage; Merging of Tax Lots	131

LIST OF EXHIBITS

EXHIBIT A	-	LEGAL DESCRIPTION OF PROPERTY
EXHIBIT B	-	APPROVED BUDGET
EXHIBIT C	-	RESIDENTIAL UNIT MINIMUM SALES PRICE SCHEDULE
EXHIBIT D	-	SALES PACE COVENANT
EXHIBIT E	-	CONSTRUCTION TIMELINE
EXHIBIT F	-	LIST OF APPROVED PLANS AND SPECIFICATIONS
EXHIBIT G	-	FORM OF DRAW REQUEST
EXHIBIT H	-	BORROWER CERTIFICATION
EXHIBIT I	-	DISBURSEMENTS FOR DEPOSITS
EXHIBIT J	-	SURVEY REQUIREMENTS

- v -

Table of Contents

(continued)

Page

EXHIBIT K	-	PHASE I REQUIREMENTS
EXHIBIT L	-	LIST OF OPERATING AGREEMENTS
EXHIBIT M	-	LIST OF EASEMENT AGREEMENTS
EXHIBIT N	-	BORROWER ORGANIZATIONAL CHART
EXHIBIT O	-	PROFORMA OPERATING BUDGET
EXHIBIT P	-	FORM OF ASSIGNMENT OF EXCLUSIVE SALES AGREEMENT
EXHIBIT Q	-	FORM OF ASSIGNMENT OF MANAGEMENT AGREEMENT
EXHIBIT R	-	FORM OF CONDOMINIUM DECLARATION AND BYLAWS
EXHIBIT S	-	FORM OF PURCHASE AGREEMENT DEPOSIT ESCROW AGREEMENT
EXHIBIT T	-	FORM OF PURCHASE AGREEMENT DEPOSIT ESCROWEE ACKNOWLEDGMENT
EXHIBIT U	-	BUSINESS PLAN
EXHIBIT V	-	FORM OF ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT
EXHIBIT W	-	SCHEDULE OF AMORTIZING NOTIONAL AMOUNTS

- vi -

MASTER LOAN AGREEMENT

This Master Loan Agreement (this “ Agreement ”) is entered into as of December 22, 2017 by and between TPHGREENWICH OWNER LLC , a Delaware limited liability company (“ Borrower ”) and MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY a Massachusetts corporation (“ Lender ” and, to the extent applicable pursuant to Article 15 , “ Administrative Agent ”).

RECITALS:

A. Borrower is the owner of certain real property containing approximately 1.23 acres located at 77 Greenwich Street (also known as 67 Greenwich Street and 28-42 Trinity Place) designated as Block 19, Lots 11 and 13 in the New York City Tax Map in the City, County and State of New York as more particularly described on Exhibit A attached hereto (the “ Land ”) and the existing improvements located thereon. The Land is part of a “zoning lot”, as defined in the Zoning Resolution of the City of New York consisting of the Land and the parcel of real property designated on the New York City Tax Map in the City, County and State of New York as Lot 18, Block 19.

B. Borrower and the New York City School Construction Authority, a public benefit corporation of the State of New York (the “ SCA ”) are parties to (i) that certain School Design, Construction, Funding and Purchase Agreement dated as of the date hereof, together with that certain letter agreement dated as of the date hereof between Borrower and SCA (collectively, as amended, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement, the “ School Unit Purchase Agreement ”) pursuant to which Borrower shall, inter alia , complete the construction of the School Improvements (as defined below), (ii) that certain Agreement of Lease dated as of the date hereof (as amended, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement, the “ Master Lease ”) pursuant to which Borrower, as landlord, ground leases the Land to the SCA, as tenant, subject to Borrower’s right to perform its obligations under the School Unit Purchase Agreement and the Sublease, and (iii) that certain Sublease dated as of the date hereof (as amended, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement, the “ Sublease ”) pursuant to which the SCA, as sublandlord, subleases the Land excluding what is intended to be the School Unit to Borrower, as subtenant.

C. Borrower intends to construct (i) a new mixed-use building containing approximately 300,400 square feet of gross floor area on the Land (the “ Building ”) which Building shall include (1) approximately 207,000 square feet of gross floor area of residential space to be located predominantly on portions of floors 11 through 38 (the “ Residential Improvements ”), (2) the core and shell of the approximately 86,000 square feet of gross floor area of school improvements to be located predominantly on a portion of the cellar and ground floor and portions of floors 2 through 8 of the Building as more particularly described in the School Unit Purchase Agreement (the “ School Improvements ”), the completion of such School Improvements to include, without limitation (a) certain modifications to the existing Robert and Anne Dickey House which has been designated a landmark by the New York City Landmarks Preservation Commission (the “ Dickey House ”), (b) certain modifications to the exterior of the Dickey House, and (c) the incorporation of a portion of the Dickey House into the School Unit, (3) approximately 4,900 square feet of gross floor area for retail space to be located on a portion of the cellar and ground floor of the Building (the “ Retail Improvements ”), and (ii) construction of a new subway stair and/or elevator entrance on Trinity Place pursuant to the terms and conditions of the Transit Improvement Agreement (the “ Subway Entrance ”; together with the Building, the “ Improvements ”). The construction work contemplated by the Approved Plans and the 100% School Base Building CD’s, including without limitation, the construction of the Improvements is referred to herein collectively as the “ Project ”.

D. The Improvements are to be (i) constructed substantially in accordance with the Approved Plans, including without limitation, the 100% School Base Building CD’s, pursuant to a certain Construction Management Agreement dated March 16, 2017 by and between Borrower, as owner, and Gilbane Residential Construction LLC (the “ Contractor ”), as construction manager, as amended by that certain Amendment No. 1 to Agreement between Owner and at Risk Construction Manager for Construction of 42 Trinity Place, New York, New York dated October 24, 2017 (as the same may be amended, modified, supplemented or replaced, from time to time, in accordance with this Agreement, the “ Construction Contract ”), and substantially in accordance with the Business Plan and the Approved Budget, and (ii) Completed prior to the Completion Date.

E. Upon substantial completion of the School Improvements pursuant to the School Unit Purchase Agreement, the Project shall be submitted to the provisions of the Condominium Act to create a condominium of the Project (excluding the Subway Entrance) which shall be governed by and subject to the provisions of this Agreement, the Condominium Laws and the Condominium Documents. The Condominium shall initially be comprised of the following Condominium Units: (i) one (1) residential condominium unit (the “ Residential Unit ”) containing the Residential Improvements, which Residential Unit may be further subdivided subject to the terms of this Agreement into not fewer than ninety (90) and not greater than ninety-three (93) residential condominium units in connection with the Residential Subdivision (each such subdivided residential unit being herein referred to as a “ Subdivided Residential Unit ”; and collectively, the “ Subdivided Residential Units ”), (ii) one (1) school condominium unit containing the School Improvements (the “ School Unit ”), and (iii) one (1) retail condominium unit containing the Retail Improvements (the “ Retail Unit ”; together with the Residential Unit (or the Subdivided Residential Units subsequent to the Residential Subdivision, as the case may be) and the School Unit, the “ Condominium Units ” and each, a “ Condominium Unit ”). Simultaneously therewith, (i) Borrower shall convey its fee interest in the School Unit to the SCA in accordance with the provisions of the School Unit Purchase Agreement, (ii) the Master Lease and Sublease shall terminate and terminations of the memoranda thereof shall be recorded in the Register’s Office, and (iii) the Loan Documents may be amended (to reference the termination of the leasehold and subleasehold interests created under the Master Lease and Sublease, to reflect the conversion of the Premises to Condominium Units and their appurtenant interests, and to secure development and declarant rights).

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F. In order to finance the development of the Project and the construction of the Improvements, Borrower has applied to Lender for a loan and subject to the terms of this Agreement and the other Loan Documents, Lender has agreed to make (i) a Term Loan to Borrower in the original principal amount of $32,302,285.00, (ii) a Building Loan to Borrower in the maximum principal amount of up to $128,197,878.00 to reimburse Borrower for (or to pay directly) certain construction costs in connection with the construction of the Improvements on the Land in accordance with the Approved Plans, and (iii) a Project Loan to Borrower in the maximum principal amount of up to $28,999,837.00 to reimburse Borrower for (or to pay directly) certain other costs incurred by Borrower in connection with the construction of the Improvements on the Land in accordance with the Approved Plans, each such loan which shall be secured, in part, by all of Borrower’s assets.

G. Under the terms of the School Unit Purchase Agreement, the SCA is obligated to make the following payments to the Borrower in connection with the completion of the School Unit: an amount equal to the aggregate of (i) $41,546,032.00 in monthly installments beginning on the Closing Date in accordance with the guidelines set forth in Exhibit H of the School Unit Purchase Agreement (collectively, the “ Land Value Payment ”) representing SCA’s payment to Borrower for a portion of the Land value determined in accordance with Exhibit G of the School Unit Purchase Agreement, (ii) Pre-Development Costs, interest on SCA’s allocable share of Pre-Development Costs, and all soft costs incurred for the School Improvements more particularly set forth in Exhibit O of the School Unit Purchase Agreement in an amount equal to $6,912,523 (as such amount may be adjusted pursuant to the terms of the School Unit Purchase Agreement, the “ School Base Building Soft Costs ”), as such School Base Building Soft Costs have been allocated to the School Improvements in accordance with Exhibit G of the School Unit Purchase Agreement (the “ School Base Building Soft Cost Payment ”), (iii) a construction supervision fee (the “ School Construction Supervision Fee ”) of five percent (5%) of each Requisition (as defined in the School Unit Purchase Agreement) (subject to the holdback provisions of Section 5.02(f) of the School Unit Purchase Agreement) payable by the SCA in periodic installments in accordance with and subject to the guidelines set forth in Exhibit H of the School Unit Purchase Agreement (the “ School Construction Supervision Fee Payment ”), and (iv) up to $50,933,787.00 payable based on percentage completion (as such amount may be adjusted pursuant to the terms of the School Unit Purchase Agreement, the “ School Base Building Hard Cost Payment ”; together with the Land Value Payment, the School Construction Supervision Fee Payment, the School Base Building Soft Cost Payment and any other payment made by the SCA under the School Unit Purchase Agreement, the “ School Cost Payments ”) to pay Borrower SCA’s portion of hard costs attributable to the School Improvements in accordance with Exhibit G of the School Unit Purchase Agreement (excluding the School Construction Supervision Fee and the Land Value Payment, the “ School Base Building Hard Costs ”; together with the Pre-Development Costs, the School Base Building Soft Costs, and any other Public School Project Costs, the “ School Costs ”). As a condition to making the Loan, Lender has required that all amounts required to be paid by the SCA under the School Unit Purchase Agreement representing Land Value Payments and School Construction Supervision Fee Payments be deposited into the School Purchase Control Account and that all remaining amounts required to be paid by the SCA under the School Unit Purchase Agreement (including, without limitation, the Pre-Development Costs, the School Base Building Soft Costs and the School Base Building Hard Costs) be deposited into the School Cost Control Account pursuant to the terms of this Agreement and the Triparty Agreement.

H. The Recitals are a material part of this Agreement.

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NOW, THEREFORE, in consideration of the terms and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and agreed to, the parties agree to be bound as follows:

ARTICLE 1

CERTAIN DEFINITIONS

Section 1.1 Certain Definitions . As used in this Agreement, the following terms shall mean:

“ 100% School Base Building CD’s ” is defined in the School Unit Purchase Agreement.

“ Acceleration Event ” is defined in Section 2.5(b) .

“ Acceptable Invoice ” means an invoice or bill that (i) is in writing, (ii) contains the vendor’s name and address, (iii) contains the Project name and location, and (iv) except in the case of the initial Draw Request, is dated not more than 90 days prior to the date of the applicable Draw Request.

“ Access Laws ” means the Americans with Disabilities Act of 1990, the Fair Housing Amendments Act of 1988, all state and local laws and ordinances related to handicapped access and all rules, regulations, and orders issued pursuant thereto including, without limitation, the Americans with Disabilities Act Accessibility Guidelines for Buildings and Facilities, as may heretofore or hereafter may be amended.

“ ACH ” is defined in Section 2.7(a) .

“ Actual Debt Service ” means with respect to any particular period of time, principal (if applicable) and interest payments made under the Notes and this Agreement for such period.

“ Additional Equity ” means amounts credited to Borrower as additional equity contributions after the Closing Date as provided hereunder and which will include, without limitation, the SCA Contributed Equity.

“ Adjusted Rate ” means the Federal Funds Rate as such Federal Funds Rate may change from time to time, plus the Rate Spread .

“ Administrative Agent ” means Massachusetts Mutual Life Insurance Company, or any successor pursuant to Article 15 .

“ Administrator ” means PNC Bank, N.A.

“ Advances ” means (other than (i) Loan proceeds, (ii) equity contributed by Borrower to the Project, (iii) School Cost Payments, and (iv) all other amounts funded by Borrower or any Affiliate thereof) all amounts of money advanced or paid and all costs and expenses incurred by Administrative Agent or Lender, as provided in this Agreement or in any other Loan Document, upon failure of Borrower to pay or perform any obligation or covenant contained herein or in such other Loan Document.

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“ Affiliate ” means any Person Controlled by, in Control of or under common Control with any other Person.

“ Agreement ” means this Master Loan Agreement, as amended from time to time.

“ Anti-Money Laundering Laws ” means the USA Patriot Act of 2001, as amended, the Bank Secrecy Act, as amended, Executive Order 13324 – Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, as amended, and other federal laws and regulations and executive orders administered by OFAC which prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals (such individuals include OFAC Prohibited Persons), specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanction and embargo programs), and such additional laws and programs administered by OFAC which prohibit dealing with individuals or entities in certain countries regardless of whether such individuals or entities appear on any of the OFAC lists.

“ Application ” means the Term Sheet dated as of April 5, 2017, executed by or on behalf of Borrower and Lender for the Loan.

“ Approved Budget ” means the Line Item breakdown of the total direct and indirect costs of the Project attached hereto as Exhibit B and made a part hereof, including all Hard Costs, all Soft Costs and the Interest Holdback under the Loan, as the same shall be amended by Lender from time to time to reflect (i) Change Orders approved by Lender in accordance with this Agreement or that do not require Lender’s approval hereunder and (ii) reallocations of Available Cost Savings and from the Contingency Line Item which are expressly permitted in accordance with the terms of this Agreement.

“ Approved Form of Contract of Sale ” is defined in Section 16.2(a) .

“ Approved Plans ” means the final signed architectural, civil, structural, foundation, plumbing, electrical and mechanical plans and specifications listed on Exhibit F , as the same may be amended and supplemented from time to time in accordance with Section 3.3(a)(ii) and to reflect Change Orders approved by Lender (or which do not require Lender’s approval) in accordance with the terms of this Agreement.

“ Appurtenances ” is defined in the Granting Clauses of the Mortgage.

“ Architect ” means FXFowle Architects, LLP, and any other architect for the construction of the Improvements approved by Lender (which approval shall not be unreasonably withheld, conditioned or delayed).

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“ Architect’s Consent ” means the consent executed and delivered by the Architect to Lender in connection with the Loan, pursuant to which the Architect has, among other things, consented to the assignment of the Architect’s Contract from Borrower to Lender.

“ Architect’s Contract ” means that certain Architectural Services Agreement dated as of December 18, 2015 between Borrower and Architect, as may be amended, supplemented or otherwise modified, from time to time, in accordance with this Agreement or any other contract between Borrower and Architect approved by Lender (which approval shall not be unreasonably withheld, conditioned or delayed).

“ Assignment of Architect Contract ” means the Assignment of Architect Contract of even date herewith from Borrower to Lender, as it may be amended, supplemented or otherwise modified, from time to time.

“ Assignment of Construction Contract ” means the Assignment of Construction Contract of even date herewith from Borrower to Lender, as it may be amended, supplemented or otherwise modified, from time to time.

“ Assignment of Demolition Contract ” means the Assignment of Demolition Contract of even date herewith from Borrower to Lender, as it may be amended, supplemented or otherwise modified, from time to time.

“ Assignment of Design Contract ” means the Assignment of Interior Design and Architectural Services Agreement of even date herewith from Borrower to Lender, as it may be amended, supplemented or otherwise modified, from time to time.

“ Assignment of Engineer’s Contract ” means collectively, (i) with respect to the Stantec Contract, the Assignment of Professional Services Agreement of even date herewith from Borrower to Lender, as it may be amended, supplemented or otherwise modified, from time to time, (ii) with respect to the Langan Contract, the Assignment of Engineer’s Contract of even date herewith from Borrower to Lender, as it may be amended, supplemented or otherwise modified, from time to time, and (iii) with respect to the Tomasetti Contract, the Assignment of Engineer’s Contract of even date herewith from Borrower to Lender, as it may be amended, supplemented or otherwise modified, from time to time.

“ Assignment of Exclusive Sales Agreement ” means the Assignment and Subordination of Exclusive Sales and Marketing Agreement to be executed by Borrower, Lender and the Sales Agent in connection with the Loan substantially in the form attached hereto as Exhibit P , pursuant to which the Sales Agent shall, among other things, consent to the assignment and subordination of the Sales Agreement.

“ Assignment of Leases and Rents ” means collectively, the Term Loan Assignment of Leases and Rents, the Building Loan Assignment of Leases and Rents and the Project Loan Assignment of Leases and Rents.

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“ Assignment of Licenses and Contracts ” means the Assignment of Licenses, Permits, Approval, Contracts and Agreements of even date herewith from Borrower to Lender, as it may be amended, modified, consolidated or extended from time to time.

“ Assignment of Management Agreement ” means the Assignment and Subordination of Management Agreement to be executed by and among Borrower, Lender and the Property Manager in connection with the Loan substantially in the form attached hereto as Exhibit Q , pursuant to which the Property Manager shall, among other things, consent to the assignment and subordination of the Management Agreement.

“ Assignment of Rate Cap Agreement ” is defined in Section 8.17(d) .

“ Assignment of Services Contract ” means the Assignment of Services Contract of even date herewith from Borrower to Lender, as it may be amended, supplemented or otherwise modified, from time to time.

“ Assumed Debt Service ” means the product of the most recent regularly scheduled monthly payment of interest on the Loan and the applicable number of months for which the Assumed Debt Service is being calculated; provided, however, Assumed Debt Service shall be measured at the maximum interest rate as set forth in the Interest Rate Cap Agreement or if no Interest Rate Cap Agreement is required or in place then the greater of the then current Contract Rate and nine and 25/100 percent (9.25%).

“ Attorney General ” means the New York State Office of the Attorney General, Department of Law, Real Estate Finance Bureau.

“ Available Cost Savings ” means any cost savings achieved by Borrower with respect to any Line Item in the Approved Budget which has not previously been reallocated as permitted in this Agreement. Borrower shall not be deemed to have achieved any cost savings in any Line Item in the Approved Budget unless the work or the materials to which those cost savings relate has been completed or purchased in accordance with the requirements of this Agreement or until such cost savings have been otherwise documented to the reasonable satisfaction of Lender.

“ Bankruptcy Proceeding ” means any proceeding, action, petition or filing under the Federal Bankruptcy Code or any similar state or federal law now or hereafter in effect relating to bankruptcy, reorganization or insolvency, or the arrangement or adjustment of debts.

“ Barings ” means Barings LLC, a Delaware limited liability company.

“ Borrower ” is defined in the introductory paragraph on page one of this Agreement, and also includes any subsequent owner of the Mortgaged Property and its or their respective permitted successors and assigns.

“ Borrower Certification ” means a certification in the form attached to this Agreement as Exhibit H , together with all accompanying documentation reasonably required by Lender.

“ Building ” is defined in paragraph C of the Recitals.

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“ Building Loan ” means that certain loan evidenced by the Building Loan Note in the maximum principal amount of up to $128,197,878.00 made by Lender to Borrower to finance Hard Costs, which Building Loan is secured by, among other things, the Building Loan Mortgage.

“ Building Loan Advance(s) ” is defined in Section 2.1(b) .

“ Building Loan Agreement ” means that certain Building Loan Agreement of even date herewith between Borrower and Lender, as the same may be amended, restated, or modified from time to time.

“ Building Loan Assignment of Leases and Rents ” means the Building Loan Assignment of Leases and Rents from Borrower to Lender of even date herewith, as the same may be amended, modified, consolidated or extended from time to time.

“ Building Loan Documents ” means collectively, this Agreement, the Building Loan Agreement, the Building Loan Note, the Building Loan Mortgage, the Building Loan Assignment of Leases and Rents, the Environmental Indemnification Agreement, the Recourse Guaranty Agreement, the Completion Guaranty, the Equity Funding Guaranty, the Carry Guaranty, and all other documents now or hereafter executed by Borrower, Indemnitor or any other Person to evidence or secure the repayment of the Indebtedness or the performance of Borrower in connection with the Building Loan.

“ Building Loan Interest Holdback ” is defined in Section 3.6 .

“ Building Loan Note ” means that certain Building Loan Promissory Note of even date herewith executed and delivered by Borrower to Lender in the original principal amount of up to $128,197,878.00, as the same may be modified, amended, split, consolidated, replaced, substituted or extended from time to time.

“ Building Loan Mortgage ” means the Fee and Leasehold Building Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing of even date herewith executed by Borrower in favor of Lender, as the same may be modified, amended, split, consolidated, replaced, substituted or extended from time to time.

“ Bulk Sale ” means the sale of more than five Subdivided Residential Units to any one Residential Unit Purchaser.

“ Breakage Fee ” is defined in Section 2.5(a)(iii) .

“ Business Day ” means any day other than a Saturday, Sunday or other day on which national banks in the State are not open for business.

“ Business Plan ” means the business plan as shown on Exhibit U attached hereto and made a part hereof, as the same is updated annually by Borrower in accordance with the provisions of Section 9.1(a)(i) and approved by Lender (not to be unreasonably withheld, conditioned or delayed other than with respect to requests to amend the Major Points of Business Plan, which may be granted or withheld in Lender’s sole and absolute discretion), and such other updates as approved by Lender (not to be unreasonably withheld, conditioned or delayed other than with respect to requests to amend the Major Points of Business Plan, which may be granted or withheld in Lender’s sole and absolute discretion).

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“ Bylaws ” means the by-laws of the Condominium approved by Lender in the form attached as part of Exhibit R , which by-laws shall be attached as an exhibit to the Declaration, as the same may be amended or modified from time to time in accordance with the terms and provisions of this Agreement.

“ Carry Guaranty ” means the Carry Guaranty of even date herewith from Indemnitor for the benefit of Lender, as amended from time to time.

“ Change Order ” is defined in Section 4.2 .

“ Closed Period Prepayment Fee ” is defined in Section 2.5(b) .

“ Closed Prepayment Date ” is defined in Section 2.5(a) .

“ Closed Refinancing Prepayment Date ” is defined in Section 2.5(a) .

“ Closing Date ” means the date that the Loan (or the initial portion thereof) is advanced to Borrower.

“ Collateral ” is defined in the Granting Clauses of the Mortgage.

“ Collusive Insolvency ” is defined in Section 13.1(c) .

“ Comparable Condominium Projects ” means first class condominium projects located in Manhattan that are comparable to the Project in location, price, size, facilities, amenities and quality.

“ Completion ”, “ Complete ” or “ Completed ” means the substantial completion of the Project and Construction Work (excluding SCA Pre- and Post-Turnover Work) free and clear of mechanics’ liens and comparable liens (other than those that have been bonded, otherwise discharged or are being contested pursuant to Section 4.7 hereof) in accordance with the Approved Budget (taking into account Available Cost Savings and permitted reallocations from Contingency as set forth in Section 3.9 ), the Approved Plans, with all necessary Permits and certificates of occupancy for the Subdivided Residential Units (which may be temporary) and in compliance in all material respects with all applicable Legal Requirements and Permits, and subject only to the completion of Punch List Items. Completion shall specifically require that the Condominium Documents (other than the Offering Plan) have been submitted for recordation in Register’s Office, the School Unit has been conveyed to the SCA in accordance with the School Unit Purchase Agreement, the Master Lease and the Sublease have been terminated and terminations of the memoranda thereof have been recorded in the Register’s Office, and that the Borrower has satisfied all of its obligations under the School Unit Purchase Agreement (other than the SCA Pre- and Post-Turnover Work and any obligation that the SCA has waived).

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“ Completion Date ” means June 19, 2021, as the same may be extended to the Outside Completion Date solely due to Force Majeure.

“ Completion Guaranty ” means the Guaranty of Completion and Payment of even date herewith from Indemnitor for the benefit of Lender, as amended from time to time.

“ Condominium ” means the condominium to be established by Borrower pursuant to the Condominium Declaration consisting of the Condominium Units and common elements and limited common elements described therein, in accordance with the terms and conditions of this Agreement.

“ Condominium Act ” means Article 9-B of the New York Real Property Law (339-d et seq.), together with the administrative rules promulgated thereunder, and all amendments and replacements thereof, and all regulations with respect thereto now or hereafter promulgated.

“ Condominium Association ” means the condominium association to be established pursuant to the Condominium Documents.

“ Condominium Board of Managers ” means the persons to be responsible for the administration and operation of the Condominium Association who are to be designated by the Unit Owners in accordance with the Bylaws of the Condominium to be attached to the Declaration.

“ Condominium Documents ” means, collectively, the Declaration, the Bylaws, the Condominium Plans, the Offering Plan, drawings and any other documents relating to the submission of the Improvements to the condominium form of ownership and the regulation and administration of the Improvements after submission, all of which must be reasonably acceptable to Lender and accepted for filing by any agency whose approval and acceptance is required by the Condominium Laws, including without limitation, the Attorney General.

“ Condominium Laws ” means all applicable local and state laws, rules and regulations which affect the establishment and maintenance of condominiums in the State and the offering and sale of condominiums in the State, including, without limitation, the Condominium Act and the Martin Act, as same may be amended and in effect from time to time.

“ Condominium Plans ” means the floor plans of the Condominium Units to be prepared and certified by the Architect and to be approved by the Tax Map Unit and filed in the Division of Land Records Office of the Department of Finance of the City of New York, and also filed in the Register’s Office as a Condominium Plan, all in accordance with the terms and conditions of this Agreement.

“ Condominium Unit ” is defined in paragraph E of the Recitals.

“ Construction Contract ” is defined in paragraph D of the Recitals.

“ Construction Work ” means the construction of the Project in accordance with the Approved Plans, which includes, without limitation, the construction of the Improvements.

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“ Contingency Line Item ” is defined in Section 3.9 .

“ Contractor ” is defined in paragraph D of the Recitals.

“ Contract Rate ” is defined in Section 2.2(a) .

“ Control ” means the power to direct the decision-making, management and policies of a Person, directly or indirectly, whether through the ownership of voting securities, by contract, relation to individuals or otherwise; and the terms “Controlling” or “Controlled” have meanings correlative to the foregoing.

“ Control Account(s) ” means collectively, (i) the School Cost and Purchase Control Account, (ii) the School Purchase Control Account, (iii) the School Cost Control Account, (iv) any deposit account established pursuant to Section 2.11(d) , and (v) any other control account established for the benefit of Lender in accordance with the terms of this Agreement.

“ Control Agreement ” means collectively, any deposit control account established in connection with the Loan and controlled by Lender, which may be subject to the terms of a deposit account control agreement in a form reasonably acceptable to Lender, to be executed and delivered by Borrower, Lender and the bank at which the account that is the subject of such agreement is held, as each of the foregoing may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“ Control Bank ” means as of the date hereof, PNC Bank, N.A., so long as it satisfies the Rating Criteria, or any other bank designated by Lender and reasonably acceptable to Borrower that satisfies the Rating Criteria.

“ Conversion Costs ” is defined in Section 2.8(c) .

“ Conveyance ” is defined in Section 10.1 .

“ CP ” is defined in the School Unit Purchase Agreement.

“ Cure Notice ” is defined in Section 11.1(c) .

“ Current LIBOR ” is defined in Section 2.5(a)(iii) .

“ Declaration ” means the declaration establishing a plan for condominium ownership approved by Lender in the form attached as Exhibit R in accordance with the terms and conditions of Section 8.20 of this Agreement and to be recorded in the Register’s Office, all in conformance with the Condominium Act, with such modifications thereto as shall be approved by Lender in accordance with this Agreement.

“ Default Rate ” is defined in Section 2.2(c) .

“ Defaulting Lender ” means any Lender that fails or refuses to perform its obligation to fund its share of a Disbursement to Borrower in accordance with the terms and conditions of this Agreement within the time period specified for such funding and such failure or refusal continues for a period of ten (10) Business Days following written notice from Borrower to said Lender and to the Administrative Agent.

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“ Deficiency Amount ” is defined in Section 5.2(d)(iv) .

“ Demolition Contract ” means that certain AIA101-2007 Standard Form of Agreement Between Owner and Contractor executed as of March 30, 2016 between Borrower and Demolition Contractor, as may be amended, supplemented or otherwise modified, from time to time, in accordance with this Agreement or any other contract between Borrower and Demolition Contractor approved by Lender under this Agreement.

“ Demolition Contractor ” means Alba Services, Inc., and any other demolition contractor approved by Lender under this Agreement.

“ Demolition Contractor’s Consent ” means the consent executed and delivered by the Demolition Contractor to Lender in connection with the Loan, pursuant to which the Demolition Contractor has, among other things, consented to the assignment of the Demolition Contract from Borrower to Lender.

“ Designer ” means Deborah Berke & Partners Architects LLP, and any other designer approved by Lender under this Agreement.

“ Designer’s Consent ” means the consent executed and delivered by the Designer to Lender in connection with the Loan, pursuant to which the Designer has, among other things, consented to the assignment of the Designer’s Contract from Borrower to Lender.

“ Designer’s Contract ” means that certain Agreement for Interior Design and Architecture Services dated as of August 5, 2015 between Borrower and Designer, as may be amended, supplemented or otherwise modified, from time to time, in accordance with this Agreement or any other contract between Borrower and Designer approved by Lender under this Agreement.

“ Developer Event of Default ” means any event of default by Borrower under the Triparty Agreement, the School Unit Purchase Agreement, the Master Lease or the Sublease, following any required notice to Borrower and following the expiration of any applicable cure periods specified therein.

“ Developer Fee ” is defined in Section 3.10 .

“ Dickey House ” is defined in paragraph C of the Recitals.

“ Disbursement to Borrower ” means the disbursement of Funds by Lender to Borrower in accordance with the provisions of Article 3 , from the Loan Reserve, Reserve Account or as a Loan Advance.

“ Disbursement Date ” is defined in Section 3.1(b) .

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“ Dollars ” and “ $ ” means lawful money of the United States of America.

“ Draw Request ” means a request for payment in the form attached to this Agreement as Exhibit G , together with all accompanying documentation reasonably required by Lender.

“ Easement Agreements ” is defined in Section 8.3 .

“ Easements ” is defined in Section 8.3 .

“ Engineer ” means collectively, Stantec Consulting Services Inc. (“ Stantec ”), Langan Engineering, Environmental, Survey and Landscape Architecture, DPC (“ Langan ”) and Thornton Tomasetti, Inc. (“ Tomasetti ”) or any substitute or replacement engineer designated by Borrower and approved by Lender (which approval shall not be unreasonably withheld, conditioned or delayed).

“ Engineer’s Consent ” means the consent executed and delivered by each Engineer to Lender in connection with the Loan, pursuant to which each Engineer has, among other things, consented to the assignment of the applicable Engineer’s Contract from Borrower to Lender.

“ Engineer’s Contract ” means collectively, (i) that certain Professional Services Agreement dated March 13, 2017 by and between Borrower, as Owner, and Stantec, as Consultant (the “ Stantec Contract ”), (ii) that certain Proposal to Owner dated September 10, 2015 from Langan and agreed to by Borrower, as supplemented by that certain letter agreement dated November 5, 2015 from Borrower to Langan (the “ Langan Contract ”), (iii) that certain Letter Agreement dated December 18, 2015 by and between Borrower, as Owner, and Tomasetti, as Consultant, as supplemented by that certain Proposal to Provide Engineering Services dated August 9, 2017 accepted by Colliers International, as agent for Borrower (the “ Tomasetti Contract ”), and (iv) any other agreement between (or on behalf of) Borrower and any other Engineer approved by Lender (which approval shall not be unreasonably withheld, conditioned or delayed).

“ Enumerated Permitted Prepayment ” is defined in Section 2.5(a) .

“ Environmental Indemnification Agreement ” means the Environmental Indemnification Agreement of even date executed by Borrower and Indemnitor in favor of Lender and the Lender Parties and Administrative Agent, as applicable, as amended from time to time.

“ Equipment ” is defined in the Granting Clauses of the Mortgage.

“ Equity Deposit ” means any amount required from time to time after the date hereof to be deposited in cash with Lender to pay the costs of the Project which are (i) not paid out of the proceeds of the Loan, (ii) necessary to pay for Change Orders, (iii) required to be made under Section 3.3(t) , or (iv) to satisfy Borrower’s Required Equity obligations under Section 3.2(b) , including any equity payments required to be made by Borrower under Section 3.11 in order to prevent the Loan from being Out of Balance.

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“ Equity Funding Guaranty ” means that certain Equity Funding Guaranty of even date herewith from Indemnitor for the benefit of Lender, as amended from time to time.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time.

“ ERISA Affiliate ” means any corporation or trade or business that is a member of any group of organizations (a) described in Section 414(b) or (c) of the IRS Code, of which Borrower is a member, and (b) solely for purposes of potential liability or any lien arising under Section 302 of ERISA and Section 412 of the IRS Code, described in Section 414(m) or (o) of the IRS Code, of which Borrower is a member.

“ Evidence of Sufficient Funds ” is defined in the School Unit Purchase Agreement.

“ Event of Default ” means any one or more of the events described in Section 11.1 .

“ Excess Rate ” is defined in Section 8.17(e) .

“ Exit Fee ” is defined in Section 2.5(a)(ii) .

“ Extended Term ” is defined in Section 2.4(b) .

“ Extension Conditions ” is defined in Section 2.4(b) .

“ Extension Fee ” means an extension fee equal to one-half of one percent (.5%) of the outstanding principal balance of the Loan on the Initial Maturity Date, as reasonably calculated by Lender.

“ Extension Notice ” is defined in Section 2.4(b) .

“ Extension Option ” is defined in Section 2.4(b) .

“ Federal Bankruptcy Code ” means Title 11 of the United States Code, as the same may be amended from time to time or any successor statute.

“ Federal Funds Rate ” means the rate published in The Wall Street Journal as the average federal funds rate in the Money Rates section as of the applicable date. If The Wall Street Journal is not in publication on the applicable date, or ceases to publish such average rates, then any other publication acceptable to Lender quoting daily market average federal funds rates will be used.

“ Final Architect’s Certificate ” means an AIA Certificate of Completion issued by the Architect and verified by the Inspector, indicating that the Project is in compliance with all applicable Legal Requirements and that based upon personal inspections at adequate intervals (not less frequently than monthly) during construction, the Construction Work has been completed in a good and workmanlike manner and substantially in accordance with the Approved Plans and in accordance with all applicable Legal Requirements.

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“ Financial Information ” is defined in Section 9.1 .

“ Financial Information Fee ” is defined in Section 9.1(c) .

“ First Month ” is defined in Section 2.2(a) .

“ Fiscal Year ” means each calendar year during the term of this Agreement, or such other fiscal year of Borrower as Borrower may select from time to time with the prior written consent of Lender, which consent shall not be unreasonably withheld, delayed or conditioned. During the first year of the term of this Agreement, Borrower’s Fiscal Year shall be deemed to have commenced on the date of this Agreement and shall end on the regular Fiscal Year ending date as indicated in the immediately preceding sentence.

“ Foreign Taxes ” is defined in Section 2.8(d) .

“ Force Majeure ” means a delay or inability of Borrower to perform its obligations under the Loan Documents that is not the result of any failure to timely satisfy any monetary obligation of Borrower, the Principals or their respective Affiliates, but rather is the result of Acts of God, acts of nature, strikes or similar labor disturbance, acts of terrorism, embargo or blockades, delays in transportation or information distribution, governmental regulation or restriction, strike, riot, fire or explosions, or inability to obtain labor or materials, arbitrary or capricious interpretations or actions of governmental authorities including, without limitation, moratoriums, delays in issuing Permits or making inspections (which delays are not caused by the failure to timely make requests or application, Borrower error or incomplete filings), or changes in laws, or any substantively like event, if and to the extent beyond the reasonable control of Borrower or Indemnitor.

“ Funds ” means the proceeds of the Loan, Required Equity and any other amounts in the Loan Reserve or Reserve Account.

“ Governmental Authority ” is defined in Section 2.8(d) .

“ Hard Costs ” means amounts payable to the Contractor under the Construction Contract for the Construction Work and other budgeted hard costs, excluding without limitation, any School Costs.

“ Impositions ” means all taxes or payments in lieu of taxes of every kind and nature, sewer rents, charges for water, for setting or repairing meters and for all other utilities serving the Premises, and assessments, levies, inspection and license fees and all other charges imposed upon or assessed against the Mortgaged Property or any portion thereof (including the Property Income but specifically excluding income, franchise and doing business taxes) by a Governmental Authority, in each case relating to the Mortgaged Property, and any stamp, mortgage or other taxes which might be required to be paid, or with respect to any of the Loan Documents, any of which might, if unpaid, affect the enforceability of any of the remedies provided in this Agreement or any other Loan Documents or result in a lien on the Mortgaged Property or any portion thereof, regardless of to whom assessed.

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“ Improvements ” is defined in paragraph C of the Recitals.

“ Increased Costs ” is defined in Section 2.8(b) .

“ Indebtedness ” means the aggregate of all principal and interest payments that accrue or are due and payable in connection with the Loan, together with all other obligations and liabilities and all amounts of money advanced or paid or due and all costs and expenses incurred by Lender hereunder or under any other Loan Document.

“ Indemnitor ” means Trinity Place Holdings Inc.

“ Indemnitor’s Financial Covenants ” means the financial covenants to be satisfied by Indemnitor as same are set forth in Section 12 of the Recourse Guaranty Agreement.

“ Initial Maturity Date ” is defined in Section 2.4(a) .

“ Initial Required Equity ” means an amount equal to or greater than $61,754,677.00.

“ Inspector ” means the independent inspector retained by Lender for the benefit of Lender at Borrower’s cost to perform the functions described in Section 4.5 .

“ Institutional Real Estate Investor ” means (i) any bank, insurance company, pension fund or other similar non-individual investor, provided that said entity conducts business in the United States, or (ii) a United States based real estate fund that is comprised of investors that are Institutional Real Estate Investors.

“ Intangibles ” is defined in the Granting Clauses of the Mortgage.

“ Interest Holdback ” is defined in Section 3.6 .

“ Interest Reserve ” is defined in Section 2.9 .

“ Interest Period ” means the initial period commencing on and including the Closing Date to and including the last day in the month in which the Closing Date occurs, and thereafter, each one (1) calendar month period to the Maturity Date. Each Interest Period shall commence on the day immediately following the last day of the next preceding Interest Period, and shall end on the day immediately prior to the first day of the next Interest Period, and, provided further that, if any such Interest Period would otherwise end after the Maturity Date, such Interest Period shall end on the Maturity Date.

“ Interest Rate Cap Agreement ” is defined in Section 8.17(a) .

“ Investor ” is defined in Section 14.13 .

“ IRS Code ” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute.

“ Issuer ” is defined in Section 8.17(a) .

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“ Land ” is defined in paragraph A of the Recitals.

“ Land Value Payment ” is defined in paragraph G of the Recitals.

“ Late Charge ” is defined in Section 2.2(b) .

“ Lease Period ” means any period during the Loan Term when the Master Lease or the School Unit Purchase Agreement is in full force and effect.

“ Leases ” is defined in the Granting Clauses of the Mortgage and shall include, without limitation, the Master Lease and the Sublease.

“ Legal Requirements ” means all applicable existing and future federal, state and local laws, ordinances, rules and regulations and court orders affecting the Mortgaged Property, the Borrower or the Indemnitor including those pertaining to zoning, landmarks, historical sites, wetlands, subdivision, land use, environmental, traffic, fire, building, union collective bargaining agreements (which are binding upon trade contractors performing work at the Mortgaged Property), occupational safety and other applicable labor laws (including any applicable minimum or prevailing wage laws), health and Americans with Disabilities Act.

“ Lender ” means, collectively, Massachusetts Mutual Life Insurance Company, any other holders from time to time of the Note and their respective successor and assigns.

“ Lender Parties ” means Lender, Barings, any present and future Administrative Agent, loan participants, co-lenders, loan servicers, custodians and trustees, and each of their respective directors, officers, employees, shareholders, agents, affiliates, heirs, legal representatives, successors and assigns.

“ LIBOR ” means the interest rate per annum equal to the 1-month London Interbank Offered Rate, as reported by the ICE Benchmark Administration Limited (the “ IBA ”) (or the successor thereto if IBA is no longer making LIBOR available), on Bloomberg (or such other financial service acceptable to Lender as may be nominated by the IBA as the information vendor for the purpose of displaying IBA’s interest settlement rates for U.S. Dollar deposits) and except as expressly set forth herein, LIBOR shall be determined at 11:00 a.m. (New York time) on the day that is two (2) Business Days prior to the date that the applicable LIBOR is to be effective pursuant to the terms hereof (or the last day prior thereto on which Bloomberg is published, if it is not published on the applicable Business Day).

“ Lien ” means any security interest or encumbrance of or in the Mortgaged Property securing an obligation owed to, or a claim by, any Person other than the owner of the Mortgaged Property, whether such interest is based on common law, statute or contract, including the lien or security interest arising from a deed of trust, mortgage, assignment, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes, or under any ground leases and any other lease forming a part of the Mortgaged Property, or arising from any claims and demands of mechanics, materialmen, laborers and others.

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“ Line Item ” means a line item of cost and expense, as set forth in the Approved Budget.

“ Loan ” means collectively, the Term Loan, the Building Loan and the Project Loan made by Lender to Borrower under this Agreement and the other Loan Documents and all other amounts secured by the Loan Documents.

“ Loan Advance ” means Building Loan Advances and Project Loan Advances.

“ Loan Documents ” means collectively, this Agreement, the Building Loan Agreement, the Project Loan Agreement, the Notes, the Mortgage, the Assignments of Leases and Rents, the Assignment of Licenses and Contracts, the Assignment of Architect Contract, the Assignment of Construction Contract, the Assignment of Demolition Contract, the Assignment of Design Contract, the Assignment of Engineer’s Contract, the Assignment of Services Contract, the Architect’s Consent, the Contractor’s Consent, the Demolition Contractor’s Consent, the Engineer’s Consent, the Designer’s Consent, the Owner’s Representative Consent, the Environmental Indemnification Agreement, the Recourse Guaranty Agreement, the Completion Guaranty, the Assignment of Management Agreement (once entered into), the Carry Guaranty, the Equity Funding Guaranty, the Triparty Agreement, the Assignment of Exclusive Sales Agreement (once entered into), the Assignment of Rate Cap Agreement, the Pledge Agreement, the Power of Attorney, the Uniform Commercial Code Financing Statement naming Indemnitor as debtor and Lender as secured party, the Uniform Commercial Code Financing Statements naming Borrower as debtor and Lender as secured party and all other documents now or hereafter executed by Borrower, Indemnitor or any other Person to evidence or secure the payment of the Indebtedness or the performance of Borrower or otherwise now or hereafter executed in connection with the Loan and all amendments, modification, restatements, extensions, renewals and replacements of the foregoing.

“ Loan Reserve ” means an interest bearing reserve account established with Lender or Administrator at a financial institution selected by Lender (subject to Borrower’s approval, not to be unreasonably withheld, conditioned or delayed), which financial institution must meet the Rating Criteria, in which Lender holds a perfected security interest for the benefit of Lender, and into which all Equity Deposits, Punch List Sub Reserves, and Set Aside Funds will be deposited pursuant to Sections 3.16 and 3.17 .

“ Loan Term ” means the term of the Note from the date of the Note through and including the Maturity Date.

“ Loan to Value Ratio ” means, as reasonably determined by Lender, the ratio, expressed as a percentage, of (a) the Maximum Loan Amount less (i) any portion of the Loan that is not available to be funded to Borrower, and (ii) the amount of any Loan repayments from Residential Unit Net Sale Proceeds or the sale of the Retail Unit or otherwise in accordance with this Agreement, to (b) the value of the Mortgaged Property based on an appraisal of the Mortgaged Property made within thirty (30) days of the applicable date of calculation that is reasonably acceptable to Lender, prepared by an independent appraiser holding the MAI designation, and engaged directly by Lender, at Borrower’s sole cost.

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“ Losses ” means all actual claims, suits, liabilities, actions, proceedings, obligations, debts, losses, costs, fines, penalties, charges, fees, expenses, judgments, awards, and damage amounts paid in settlement and damages of every kind and nature (including, but not limited to, reasonable out-of-pocket attorneys' fees and the costs and all expenses of collection and enforcement), but excluding punitive damages.

“ Major Points of Business Plan ” means the following: (i) building a luxury residential condominium project materially in accordance with the Approved Plans and all applicable Legal Requirements, (ii) obtaining Attorney General’s acceptance for filing of the Offering Plan, (iii) constructing the School Improvements in accordance with the School Unit Purchase Agreement, (iv) materially adhering to the Approved Budget, (v) selling Subdivided Residential Units in accordance with the Sales Pace Covenant at or above the Residential Unit Minimum Sales Price (subject to the provisions of Section IV of the Business Plan), (vi) achieving the Milestone Construction Hurdles on or before the respective Milestone Deadlines, subject to extension for Force Majeure.

“ Major Subcontractor ” means any sub-contractor or material supplier with a contract value in excess of Five Hundred Thousand Dollars ($500,000.00) and for the avoidance of doubt, will include (notwithstanding such contract value) any contract relating to the drywall, carpentry, electrical, plumbing and HVAC Line Items in the Approved Budget.

“ Management Agreement ” means the management agreement to be entered into by Borrower and Property Manager in accordance with the terms and conditions of this Agreement.

“ Martin Act ” means Article 23-A of New York General Business Law (352-e et seq.) and the regulations promulgated pursuant thereto, all as amended from time to time, governing the offering and sale of cooperative and condominium interest in real property in the State.

“ Master Lease ” is defined in paragraph B of the Recitals.

“ Master Leased Premises ” is defined in the Triparty Agreement.

“ Material Adverse Effect ” means any set of circumstances or events which singly or in conjunction with any other circumstances or events (i) has caused a material adverse change regarding the validity or enforceability of any Loan Document, (ii) is material and adverse to the Project, (iii) would materially impair the ability of Borrower or Indemnitor to duly and punctually pay and/or perform its respective Obligations, (iv) would materially impair Lender’s ability to enforce its legal and/or contractual rights and remedies pursuant to any Loan Document, or (v) has caused a material adverse change in the financial condition of the Borrower or Indemnitor. For the avoidance of doubt, changes in general market conditions shall not be taken into account in determining whether a Material Adverse Effect has occurred.

“ Maturity Date ” means the Initial Maturity Date, as may be extended in accordance with Section 2.4 .

“ Maximum Loan Amount ” is defined in Section 2.1(d) .

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“ Milestone Construction Hurdle ” is defined in Section 4.1(b) .

“ Milestone Deadline ” is defined in Section 4.1(b) .

“ Minimum Cap Amount ” is defined in Section 8.17(a)(i) .

“ Minimum Multiple Fee ” is defined in Section 2.5(a)(i) .

“ Monthly Developer Fee ” is defined in Section 3.10 .

“ Mortgage ” means collectively, the Term Loan Mortgage, the Building Loan Mortgage and the Project Loan Mortgage, as the same may be amended, modified, consolidated, extended, substituted or replaced from time to time.

“ Mortgaged Property ” means the Premises and the Collateral.

“ Net Effective Rent ” means, with respect to any Lease demising all or any portion of the Retail Unit entered into by the Borrower after the date of this Agreement, the quotient of (a) all base rent payable under such Lease (taking into account scheduled escalations of base rent (including without limitation, contractual increases in rent set forth in such Lease)) during the initial term of such Lease (not taking into account any portion of the term that is subject to a tenant termination option (other than a termination option that may only be exercised if and when a certain event (such as casualty, condemnation or landlord event of default occurs) or a certain circumstance exists (such as a failure of a tenant to receive utility service for some period of time)) as of the date that such Lease was executed (a “ Tenant Termination Option ”)) minus all tenant improvement expenses and tenant improvement allowances (if any) payable by Borrower, as landlord, thereunder (but only to the extent such tenant improvement expenses and tenant improvement allowances exceed the amount therefor set forth in the Approved Budget) divided by (b) the rentable square footage demised by such Lease divided by (c) the number years (or fractions thereof) in the initial term of such Lease (not taking into account any portion of the term that is subject to a Tenant Termination Option (other than a termination option that may only be exercised if and when a certain event (such as casualty, condemnation or landlord event of default occurs) or a certain circumstance exists (such as a failure of a tenant to receive utility service for some period of time)) as of the date that such Lease was executed). For the avoidance of doubt, “base rent” under the immediately preceding sentence shall not include any so-called “free rent”.

“ NFIP ” is defined in Section 5.1(a) .

“ Note ” or “ Notes ” means collectively, the Term Loan Note, the Building Loan Note and the Project Loan Note, each of even date executed and delivered by Borrower in the aggregate maximum principal amount of $189,500,000.00, as the same may be modified, amended, split, consolidated, replaced, substituted or extended from time to time in accordance with the terms hereof.

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“ Obligations ” means all amounts now or hereafter payable by Borrower or Indemnitor under the Loan Documents and any and all obligations of Borrower or Indemnitor under or related to any Loan Documents.

“ OFAC ” means the United States Department of the Treasury, Office of Foreign Assets Control, or any successor or replacement agency.

“ OFAC Prohibited Person ” means, a country, territory or Person that is or that is owned, controlled by, acting on behalf of or affiliated with any Person (i) listed on, included within or associated with any of the countries, territories, individuals or entities referred to on The Office of Foreign Assets Control’s List of Specially Designated Nationals and Blocked Persons or any other prohibited person lists maintained by governmental authorities, or otherwise prohibited by OFAC or any other Anti-Money Laundering Laws, or (ii) which is obligated to pay, donate, transfer or otherwise assign any property, money, goods, services, or other benefits from any of the Mortgaged Property, directly or indirectly, to any countries, territories, individuals or entities on or associated with anyone on such list or prohibited by such laws.

“ Offering Plan ” means that certain Condominium Offering Plan for the sale of Units in the Condominium, which is to be approved by Lender and accepted for filing by the Attorney General, as the same may be further amended, restated or modified from time to time pursuant to Section 16.1 .

“ Operating Account ” means an operating account established, maintained by and under the exclusive dominion and control of Borrower at a financial institution selected by Lender (subject to Borrower’s approval, not to be unreasonably withheld, conditioned or delayed), which financial institution must meet the Rating Criteria. As of the Closing Date, the Operating Account shall be maintained at PNC National Bank, N.A.

“ Operating Agreements ” means the management agreements, easement agreements, reciprocal easement agreements, leasing commission agreements, and other agreements concerning the Mortgaged Property set forth in Exhibit L .

“ Origination Fee ” means an amount equal to one and a quarter percent (1.25%) of the Maximum Loan Amount, payable by Borrower to Lender at Closing.

“ Organizational Chart ” means the organizational chart attached hereto as Exhibit N that sets forth the direct and indirect ownership interests in Borrower and the Upstream Owners.

“ Out of Balance ” is defined in Section 3.11 .

“ Outside Completion Date ” is defined in Section 4.1 .

“ Owner’s Representative ” means Gorton & Partners LLC, doing business as Colliers International.

“ Owner’s Representative’s Consent ” means the consent executed and delivered by Owner’s Representative to Lender in connection with the Loan, pursuant to which the Owner’s Representative has, among other things, consented to the assignment of the Services Contract from Borrower to Lender.

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“ Participation ” is defined in Section 14.13 .

“ Payment and Performance Bond ” means with respect to any subcontractor that does not qualify for Subcontractor Default Insurance, a dual obligee payment and performance bond in the form of AIA Document 312, issued by a surety company or companies authorized to do business in the state in which the Improvements are located, having a minimum rating of “A”, with no less than $5,000,000 of Treasury listing capacity or $50,000,000 of Statutory GAAP Equity and otherwise acceptable to Lender in its reasonable discretion, and in an amount not less than the full contract price under the applicable contract and otherwise in form and substance reasonably acceptable to Lender.

“ Payment Date ” means February 1, 2018 and the first Business Day of each calendar month thereafter to and including the Maturity Date.

“ Permits ” means, collectively, all authorizations, consents and approvals given by and licenses and permits issued by Governmental Authorities that are required for the construction of the Improvements in accordance with the Approved Plans, this Agreement, the School Unit Purchase Agreement, the other Loan Documents, all Legal Requirements, all Condominium Laws, the Condominium Documents (to the extent they contain requirements applicable to the construction of the Improvements, including without limitation the following work permit number 121191021-01-FO issued on August 30, 2017 by the New York City Department of Buildings).

“ Permitted Encumbrances ” means with respect to the Premises, only the outstanding Liens, easements, restrictions, security interests and other exceptions to title expressly set forth in Schedule B of the Title Policies approved by Lender on or prior to the Closing Date issued by the Title Company insuring the Mortgage for the benefit of Lender, together with the Liens and security interests in favor of Lender created by the Loan Documents and such other matters as are expressly set forth in the Loan Documents.

“ Person ” means and includes any individual, corporation, partnership, joint venture, limited liability company, association, bank, joint-stock company, trust, unincorporated organization or government, or an agency or political subdivision thereof.

“ Plan Assets Regulation ” is defined in Section 8.10(a) .

“ Pledge Agreement ” means that certain Pledge Agreement of even date herewith from Pledgor for the benefit of Lender.

“ Pledgor ” means TPHGreenwich Holdings LLC, a Delaware limited liability company.

“ Potential Event of Default ” means any event or occurrence with respect which Lender has provided Borrower with written notice that Borrower’s failure to take all corrective action prior to the expiration of an applicable cure period would be or become an Event of Default under any Loan Document.

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“ Power of Attorney ” means collectively, (i) that certain Power of Attorney of even date herewith from Pledgor to Lender and (ii) that certain Power of Attorney of even date herewith from Borrower to Lender.

“ Pre-Development Costs ” is defined in the School Unit Purchase Agreement.

“ Premises ” means the Land, the Improvements and the Appurtenances.

“ Prepayment Date ” means the date set forth in Borrower’s written notice to Lender (as required under Section 2.5 ) of Borrower’s intention to make a prepayment of the Loan, or if no such notice is required or provided, the date of any prepayment of the Loan, in whole or in part.

“ Price Change Amendment ” shall have the meaning set forth in Section 8.20(b)(i) hereof.

“ Principal ” means (a) Borrower, (b) Indemnitor, and (c) in the event that Indemnitor is no longer a publicly traded company, each Person that directly or indirectly Controls Borrower or Indemnitor.

“ Proceeds ” is defined in the Granting Clauses of the Mortgage.

“ Proforma Operating Budget ” means the proforma operating budget for 2018 as set forth in the business plan approved by Lender and attached as Exhibit U .

“ Project ” is defined in paragraph C of the Recitals.

“ Project Loan ” means that certain loan evidenced by the Project Loan Note in the maximum principal amount of up to $28,999,837.00 made by Lender to Borrower to finance certain Soft Costs, which Project Loan is secured by, among other things, the Project Loan Mortgage.

“ Project Loan Advance(s) ” is defined in Section 2.1(c) .

“ Project Loan Agreement ” means that certain Project Loan Agreement of even date herewith between Borrower and Lender, as the same may be amended, restated, or modified from time to time.

“ Project Loan Assignment of Leases and Rents ” means the Project Loan Assignment of Leases and Rents from Borrower to Lender of even date herewith, as it may be amended, modified, consolidated or extended from time to time.

“ Project Loan Documents ” means collectively, this Agreement, the Project Loan Agreement, the Project Loan Note, the Project Loan Mortgage, the Project Loan Assignment of Leases and Rents, the Environmental Indemnification Agreement, the Recourse Guaranty Agreement, the Completion Guaranty, the Equity Funding Guaranty, the Carry Guaranty, and all other documents now or hereafter executed by Borrower, Indemnitor or any other Person to evidence or secure the repayment of the Indebtedness or the performance of Borrower now or hereafter executed in connection with the Project Loan.

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“ Project Loan and Term Loan Interest Holdback ” is defined in Section 3.6 .

“ Project Loan Mortgage ” means the Fee and Leasehold Project Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing of even date herewith executed by Borrower in favor of Lender, as the same may be modified, amended, split, consolidated, replaced, substituted or extended from time to time.

“ Project Loan Note ” means that certain Project Loan Promissory Note of even date herewith executed and delivered by Borrower to Lender in the original principal amount of up to $28,999,837.00, as the same may be modified, amended, split, consolidated, replaced, substituted or extended from time to time.

“ Projected Repayment Date ” shall mean January 1, 2021.

“ Property Income ” is defined in the Granting Clauses of the Mortgage.

“ Property Manager ” means a property manager designated by Borrower in accordance with the terms and provisions of this Agreement and approved by Lender.

“ Public School Project Costs ” is defined in the School Unit Purchase Agreement.

“ Punch List Items ” means Lender’s list of normal and customary punch list items totaling not more than $4,000,000 to complete in the aggregate.

“ Punch List Sub Reserve ” is defined in Section 3.17 .

“ Purchase Agreement Deposit ” means a deposit pursuant to a Residential Unit Contract of Sale or a Retail Unit Contract of Sale, as applicable.

“ Purchase Agreement Deposit Accounts ” means the escrow/trust account(s) established pursuant to the Residential Unit Contract of Sale or a Retail Unit Contract of Sale, as applicable.

“ Purchase Agreement Deposit Agreement ” is defined in Section 16.3(e) .

“ Purchase Agreement Deposit Escrowee ” means Kramer Levin Naftalis & Frankel LLP or such other Person as shall be compliant with Legal Requirements and reasonably acceptable to Lender to act as escrow agent under a Residential Unit Contract of Sale or Retail Unit Contract of Sale, as applicable, and hold the Purchase Agreement Deposits and the Residential Unit Net Sale Proceeds or Retail Unit Net Sale Proceeds, as applicable.

“ Purchase Agreement Deposit Escrowee Acknowledgment ” means the acknowledgement of Purchase Agreement Deposit Escrowee in the form attached hereto as Exhibit T .

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“ Purchase Agreement Deposit Escrowee Bank ” means any financial institution selected by Borrower (and subject to reasonable approval of Lender) where the Purchase Agreement Deposit under each Residential Unit Contract of Sale and/or Retail Unit Contract of Sale will be deposited by Purchase Agreement Deposit Escrowee.

“ Qualified Real Estate Investor ” means, with respect to any proposed transferee or its principal or Affiliate, as applicable, any reputable entity (as determined by Lender in the exercise of its reasonable discretion) which is domiciled in the U.S. and which is reasonably determined by Lender to have satisfied all of the following conditions: said entity or entities, as applicable (1) shall be an Institutional Real Estate Investor or another Person approved in writing by Lender, which approval shall not be unreasonably withheld, conditioned or delayed, with an allocation to United States commercial real estate and prior experience investing in commercial real estate in the United States; (2) have (a) total assets, excluding the Mortgaged Property, with a current market value of not less than $200,000,000, (b) have a net worth, excluding the Mortgaged Property of not less than $100,000,000, and (c) liquid assets of not less than $35,000,000; and (3) is not and has not been (w) in default beyond any required notice and the expiration of any applicable cure period on any indebtedness or loan from Lender or any affiliate of Lender, (w) involved as a debtor or as the principal of a debtor in any bankruptcy, reorganization or insolvency proceeding, (x) the subject of any criminal charges or proceedings, (y) involved in litigation which is reasonably deemed to (i) cause Lender reputational risk in the commercial real estate market, (ii) prevent or materially impair Borrower’s ability to achieve the Milestone Construction Hurdles prior to the Milestone Deadlines, or (iii) if adversely determined would cause said entity to be unable to satisfy the financial thresholds set forth in clause (2) herein, or (z) listed on, included within or associated with any of the persons or entities referred to in Executive Order 13324 – Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, as amended by the United States Department of the Treasury, Office of Foreign Assets Control through the date the determination of Qualified Real Estate Investor is made.

“ Rate Cap Rating Criteria ” is defined in Section 8.17(e) .

“ Rate Spread ” means the positive difference, if any, between (a) the Contract Rate then in effect during the Interest Period in which the conversion of the Interest Rate takes place and (b) the Federal Funds Rate on the day that is two (2) Business Days prior to the first day of such Interest Period. The Rate Spread shall be determined one time ( i.e. , shall not be adjusted during the Loan Term).

“ Rating Agency ” means any nationally-recognized statistical rating agency which has been approved by Lender.

“ Rating Criteria ” with respect to any Person shall mean that (i) the short-term unsecured debt obligations or commercial paper of which are rated at least A-3 by S&P, P-3 by Moody’s and F3 by Fitch, if deposits are held in the account for a period of less than 30 days or (ii) the long-term unsecured debt obligations of which are rated at least “BBB-” by S&P and Fitch and Baa3 by Moody’s, if deposits are held in the account for a period of 30 days or more. Notwithstanding the foregoing, Sterling National Bank shall be deemed to satisfy the Rating Criteria so long as its long-term unsecured debt obligations are rated at least “BBB” by Kroll Bond Rating Agency (regardless of any rating by S&P, Moody’s or Fitch).

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“ Recourse Guaranty Agreement ” means that certain Recourse Guaranty Agreement of even date from Indemnitor for the benefit of Lender, as amended from time to time.

“ Register ” is defined in Section 14.15 .

“ Register’s Office ” means the Office of the City Register of the City of New York.

“ Reserve Account ” is defined in Section 2.9 .

“ Residential Improvements ” is defined in paragraph C of the Recitals.

“ Residential Subdivision ” is defined in the Bylaws.

“ Residential Unit ” is defined in paragraph E of the Recitals.

“ Residential Unit Contract of Sale ” means any executed contract for the sale of a Subdivided Residential Unit, to be in the form required pursuant to the Condominium Documents and Section 16.2 of this Agreement.

“ Residential Unit Minimum Sales Price ” means an amount no less than the per unit sale price detailed in the Residential Unit Minimum Sales Price Schedule attached hereto as Exhibit C .

“ Residential Unit Net Sale Proceeds ” means the difference between (a) the actual gross sales price for the sale of the Subdivided Residential Unit in question to a third party in an arm’s length transaction (or subject to Lender’s approval rights in Section 16.2(b)(x) , to an Affiliate of Borrower, Indemnitor or a Principal), which gross sales price shall not be less than the Residential Unit Minimum Sales Price and (b) the reasonable and customary expenses incurred by Borrower and paid to unaffiliated third parties (or subject to Lender’s approval rights in Section 16.2(b)(x) , to an Affiliate of Borrower, Indemnitor or a Principal) in connection with the sale of the Subdivided Residential Unit and any credit given to unaffiliated arm’s length third party purchaser in connection with the sale of the applicable Subdivided Residential Unit (i) shall not exceed eight percent (8%) of the gross sales price for said Subdivided Residential Unit, (ii) may include items such as transfer taxes, attorney’s fees and commissions to salespersons or brokers, if such items are customarily paid by seller, and (iii) shall exclude any costs in excess of those customarily and reasonably incurred by sellers in connection with the sale of residential condominium units in Comparable Condominium Projects.

“ Residential Unit Purchaser ” means any person or entity that purchases a Subdivided Residential Unit. Any partners, Affiliates, related entities, subsidiaries, entities under common ownership or control of the applicable Residential Unit Purchaser, as well as any relations or relatives of natural persons by blood or marriage of the applicable Residential Unit Purchaser shall constitute one and the same Residential Unit Purchaser for purposes of this Agreement.

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“ Retail Improvements ” is defined in paragraph C of the Recitals.

“ Retail Unit ” is defined in paragraph E of the Recitals.

“ Retail Unit Contract of Sale ” is defined in Section 16.2(c) .

“ Retail Unit Minimum Sales Price ” means an amount no less than $7,000,000.00.

“ Retail Unit Net Sale Proceeds ” means the difference between (a) the actual gross sales price for the sale of the Retail Unit in question to a third party in an arm’s length transaction (or subject to Lender’s approval rights in Section 16.2(c)(vii) , to an Affiliate of Borrower, Indemnitor or a Principal), which gross sales price shall not be less than the Retail Unit Minimum Sales Price and (b) the reasonable and customary expenses incurred by Borrower and paid to unaffiliated third parties (or subject to Lender’s approval rights in Section 16.2(c)(vii) , to an Affiliate of Borrower, Indemnitor or a Principal) in connection with the sale of the Retail Unit, which expenses (i) shall not exceed eight percent (8%) of the gross sales price for said Retail Unit, (ii) may include items such as transfer taxes, attorney’s fees and commissions to salespersons or brokers, if such items are customarily paid by seller, and (iii) shall exclude any costs in excess of those customarily and reasonably incurred by sellers in connection with the sale of non-residential condominium units in Comparable Condominium Projects.

“ Retainage ” is defined in Section 3.5 (c) .

“ Required Equity ” means an amount equal to or greater than $102,827,998.00.

“ Requisition ” is defined in the School Unit Purchase Agreement.

“ Sales Agent ” means The Marketing Directors, Inc.

“ Sales Agreement ” means that certain Exclusive Sales Agreement dated as of July 1, 2015 by and among Sales Agent and Borrower.

“ Sales Pace Covenant ” is defined in Section 8.21 .

“ Sales Projections ” is defined in Section 8.17(a) .

“ SCA ” is defined in paragraph B of the Recitals.

“ SCA Change Order ” is defined in Section 4.2 .

“ SCA Contributed Equity ” means amounts available to be disbursed by Lender to Borrower from the School Purchase Control Account and applied towards the payment of costs of the Project (actually billed) other than School Costs.

“ SCA Pre- and Post-Turnover Work ” is defined in the School Unit Purchase Agreement.

“ SCA’s Project Representative ” is defined in the School Unit Purchase Agreement.

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“ School Base Building Hard Cost Payment ” is defined in paragraph G of the Recitals.

“ School Base Building Hard Costs ” is defined in paragraph G of the Recitals.

“ School Base Building Soft Cost Payment ” is defined in paragraph G of the Recitals.

“ School Base Building Soft Costs ” is defined in paragraph G of the Recitals.

“ School Construction Supervision Fee ” is defined in paragraph G of the Recitals.

“ School Construction Supervision Fee Payment ” is defined in paragraph G of the Recitals.

“ School Cost ” is defined in paragraph G of the Recitals.

“ School Cost and Purchase Control Account ” is defined in Section 2.11 .

“ School Cost Control Account ” is defined in Section 2.11(c) .

“ School Cost Payments ” is defined in paragraph G of the Recitals.

“ School Improvements ” is defined in paragraph C of the Recitals.

“ School Payment Disbursement ” is defined in Section 2.11(b) .

“ School Purchase Control Account ” is defined in Section 2.11(b) .

“ School Unit ” is defined in paragraph E of the Recitals.

“ School Unit Purchase Agreement ” is defined in paragraph B of the Recitals.

“ Securities ” is defined in Section 14.13 .

“ Securitization ” is defined in Section 14.13 .

“ Services Contract ” means that certain Owner’s Representative Agreement dated January 1, 2016 by and between Borrower and Owner’s Representative, as may be amended, supplemented or otherwise modified, from time to time, in accordance with this Agreement or any other contract between Owner’s Representative and Borrower approved by Lender (which approval shall not be unreasonably withheld, conditioned or delayed).

“ Soft Costs ” means all costs and expenses of construction of the Improvements, as set forth in the Approved Budget, other than Hard Costs, Actual Debt Service paid from the Interest Holdback and any School Costs, but including the Developer Fee.

“ SPE Requirements ” is defined in Section 8.12 .

“ State ” means the state or commonwealth in which the Land is situated.

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“ Stored Materials ” is defined in Section 3.5(d) .

“ Strike Price ” is defined in Section 8.17(a) .

“ Subcontractor Default Insurance ” means the insurance policies covering subcontractors under the Construction Contract that is provided by Zurich Insurance Company, or such other provider that Lender may approve (which approval shall not be unreasonably withheld, conditioned or delayed) from time to time, satisfying the requirements of Section 5.1(d) .

“ Subdivided Residential Unit ” is defined in paragraph E of the Recitals.

“ Sublease ” is defined in paragraph B of the Recitals.

“ Subway Entrance ” is defined in paragraph C of the Recitals.

“ Supplemental Interest Rate Cap Agreement ” is defined in Section 8.17(a) .

“ TBTA Agreement ” means that certain Agreement dated March 22, 2017 by and between Borrower and Triborough Bridge and Tunnel Authority, as may be amended, restated and replaced in accordance with the terms and provisions of Section 8.3 .

“ Term Loan ” means that certain loan evidenced by the Term Loan Note in the principal amount of $32,302,285.00 made by Lender to Borrower to finance the repayment of an existing mortgage loan secured by the Mortgaged Property, which Term Loan is secured by, among other things, the Term Loan Mortgage.

“ Term Loan Assignment of Leases and Rents ” means the Term Loan Assignment of Leases and Rents from Borrower to Lender of even date herewith, as it may be amended,

“ Term Loan Documents ” means collectively, this Agreement, the Term Loan Note, the Term Loan Mortgage, the Term Loan Assignment of Leases and Rents, the Environmental Indemnification Agreement, the Recourse Guaranty Agreement, the Completion Guaranty, the Equity Funding Guaranty, the Carry Guaranty, and all other documents now or hereafter executed by Borrower, Indemnitor or any other Person to evidence or secure the repayment of the Indebtedness or the performance of Borrower now or hereafter executed in connection with the Term Loan.

“ Term Loan Mortgage ” means the Amended, Restated and Consolidated Fee and Leasehold Term Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing of even date herewith executed by Borrower in favor of Lender, as the same may be modified, amended, split, consolidated, replaced, substituted or extended from time to time.

“ Term Loan Note ” means the Amended, Restated and Consolidated Term Loan Promissory Note of even date herewith executed and delivered by Borrower to Lender in the original principal amount of up to $32,302,285.00.

“ Title Company ” means Fidelity National Title Insurance Company.

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“ Title Policy ” means collectively, (i) the title policy insuring the Term Loan Mortgage, (ii) the title policy insuring the Building Loan Mortgage, and (iii) the title policy insuring the Project Loan Mortgage, each as approved by Lender and issued by the Title Company.

“ Transit Improvement Agreement ” means that certain Transit Improvement Agreement dated as of April 5, 2017 by and between Borrower and New York City Transit Authority.

“ Transfer ” is defined in Section 14.13 .

“ Treasury Issue ” means United States Treasury issued bills, notes and bond instruments specifically excluding any strips, inflation indexed issues and other types of derivative instruments.

“ Triparty Agreement ” means that certain Interparty Agreement of even date by and among Borrower, Lender and the SCA, as amended, supplemented or otherwise modified from time to time.

“ TRIPRA ” is defined in Section 5.1(a) .

“ Unit Owners ” is defined in the Declaration.

“ Upstream Owner ” means any Person having a direct or indirect legal, beneficial or other ownership interest in Borrower (e.g., if Borrower is a limited liability company, and one of Borrower’s members is a limited partnership, whose partner is a corporation, then such limited partnership, corporation and the shareholders of such corporation would each be an Upstream Owner); provided, however, to the extent Indemnitor remains a publicly traded company, Upstream Owner shall not include any shareholder of, or Person having a direct or indirect legal and/or beneficial ownership interest in, Indemnitor.

“ Work ” is defined in Section 5.2(a) .

Section 1.2 Interpretation .

For all purposes under and pursuant to this Agreement and each other Loan Document, except as otherwise expressly required or unless the context clearly indicates a contrary intent:

(a) the capitalized terms defined in this Article have the meanings assigned to them in this Article, include the plural as well as the singular, and, when used with respect to any instrument, contract or agreement, include all extensions, modifications, amendments and supplements from time to time thereto;

(b) the words “herein”, “hereof”, and “hereunder” and other words of similar import refer to this Agreement and each other Loan Document as a whole and not to any particular Article, Section, or other subdivision;

(c) the words “include” and “including” and other words of similar import shall be construed as if followed by the phrase “, without limitation,”;

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(d) Lender’s consent, approval, acceptance or determination under the Loan Documents shall be in Lender’s sole discretion, unless a different standard for consent, approval, acceptance or determination is expressly set forth in the Loan Documents; and

(e) any provision of the Loan Documents permitting the recovery of “attorneys’ fees”, “attorneys’ fees and expenses”, “attorneys’ fees and costs” or “attorneys’ fees, costs and expenses” or any similar term shall: (i) include all reasonable out-of-pocket costs and expenses, including attorneys’ fees, costs and expenses related or incidental to, or incurred in any judicial, arbitration, administrative, probate, appellate, bankruptcy, insolvency or receivership proceeding, as well as in any post-judgment proceeding to collect or enforce any judgment or order relating to the Indebtedness or any of the Loan Documents, as well as any defense or assertion of the rights or claims of Lender in respect of any thereof, by litigation or otherwise; and (ii) be separate and several and survive merger into judgment.

(f) references to any Section, Article or Exhibit in a Loan Document shall mean a section, article or exhibit to such Loan Document, unless provided otherwise.

ARTICLE 2

LOAN TERMS

Section 2.1 The Loan and the Note .

(a) Lender agrees, on the terms and conditions of this Agreement, to advance the Term Loan, and Borrower agrees to accept the entire principal amount of the Term Loan, in the amount of THIRTY TWO MILLION THREE HUNDRED TWO THOUSAND TWO HUNDRED EIGHTY FIVE AND 00/100 DOLLARS ($32,302,285.00) , and to repay the Term Loan in accordance with this Agreement, the Term Loan Note and the other Term Loan Documents. The Term Loan Note evidences the indebtedness of Borrower under the Term Loan. Borrower acknowledges and agrees that the entire principal amount of the Term Loan was advanced by Lender and received by Borrower on the date of this Agreement and that the Term Loan is fully funded in the stated principal amount thereof.

(b) Lender agrees, on the terms and conditions of this Agreement, to make advances of proceeds from the Building Loan (each, a “ Building Loan Advance ”), and Borrower agrees to accept Building Loan Advances, in the maximum, aggregate principal amount of up to ONE HUNDRED TWENTY EIGHT MILLION ONE HUNDRED NINETY SEVEN THOUSAND EIGHT HUNDRED SEVENTY EIGHT AND 00/100 DOLLARS ($128,197,878.00) and to repay the Building Loan in accordance with this Agreement, the Building Loan Agreement, the Building Loan Notes and the other Building Loan Documents. All Building Loan Advances shall be made upon the terms and conditions set forth in Article 3 . The Building Loan Note evidences the indebtedness of Borrower under the Building Loan.

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(c) Lender agrees, on the terms and conditions of this Agreement, to make advances of proceeds from the Project Loan (each, a “ Project Loan Advance ”), and Borrower agrees to accept Project Loan Advances, in the maximum, aggregate principal amount of up to TWENTY EIGHT MILLION NINE HUNDRED NINETY NINE THOUSAND EIGHT HUNDRED THIRTY SEVEN AND 00/100 DOLLARS ($28,999,837.00) and to repay the Project Loan in accordance with this Agreement, the Project Loan Agreement, the Project Loan Note and the other Project Loan Documents. All Project Loan Advances shall be made upon the terms and conditions set forth in Article 3 . The Project Loan Note evidences the indebtedness of Borrower under the Project Loan.

(d) The maximum, aggregate principal amount of the Loan shall not exceed ONE HUNDRED EIGHTY-NINE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($189,500,000.00) (the “ Maximum Loan Amount ”), which Loan shall be evidenced by the Term Loan Note, the Building Loan Note and the Project Loan Note.

(e) For the avoidance of doubt, the outstanding principal balance of the Loan shall not include any Loan proceeds that have not been advanced until such time as the same are advanced pursuant to the terms and conditions of this Agreement.

Section 2.2 Interest Rate; Late Charge; Default Rate .

(a) Except for any time when the Default Rate or the Adjusted Rate is applicable pursuant to the terms of this Agreement, the outstanding principal balance of the Loan (including any amounts added to principal under the Loan Documents) shall bear interest at the Contract Rate. All interest accruing on the Loan shall be calculated on the basis of a three hundred sixty (360) day year and the actual number of days in the applicable period for which interest is being calculated. The “ Contract Rate ” shall be (unless otherwise calculated pursuant to the provisions of Section 2.8(a)(i) ) (i) for the period from and including the Closing Date until and including the last day of the calendar month in which the Closing Date occurs (the “ First Month ”), an interest rate per annum equal to the greater of (A) eight and one-fourth percent (8.25%) in excess of LIBOR on the day that is two (2) London Banking Days prior to the Closing Date and (B) nine and one-fourth percent (9.25%), and (ii) for each Interest Period thereafter, an interest rate per annum equal to the greater of (A) eight and one-fourth percent (8.25%) in excess of LIBOR on the day that is two (2) London Banking Days prior to the commencement of such Interest Period and (B) nine and one-fourth percent (9.25%).

(b) If any regular monthly installment of principal or interest due under this Agreement, or any monthly deposit for taxes, ground rent, insurance, replacements and other sums if required under any Loan Document (other than the principal balance of the Loan on the Maturity Date), shall not be paid as required under this Agreement or any other Loan Document within five (5) days following the date the same is due (except to the extent that there are sufficient funds available in the Interest Holdback or the Reserve Account and Borrower otherwise satisfies the conditions to a Disbursement to Borrower in accordance with Section 3.6 ), Borrower shall pay to Lender a late charge (the “ Late Charge ”) of four cents ($0.04) for each dollar so overdue in order to compensate Lender for its loss of the timely use of the money and frustration of Lender in the meeting of its financial commitments and to defray part of Lender’s incurred cost of collection occasioned by such late payment. Any Late Charge incurred shall be immediately due and payable. If, however, during any consecutive twelve (12) month period Borrower on more than two (2) occasions shall pay any such installment or deposits after the due date thereof (whether prior to or after the time that the Late Charge is payable as above), then the time period after which a Late Charge will be charged and paid shall thereafter be reduced from five (5) days to two (2) Business Days after the applicable due date. Nothing herein contained shall be deemed to constitute a waiver or modification of the due date for such installments or deposits or the requirement that Borrower make all payment of installments and deposits as and when the same are due and payable. If there are sufficient funds in the Interest Holdback and the Interest Reserve and Borrower has satisfied all conditions to the disbursement by Lender of an amount sufficient to pay a regular monthly installment of interest in accordance with the provisions of Sections 2.9 and 3.6 of this Agreement at least one (1) Business Day prior to the date such monthly installment is due and payable, Borrower shall not be deemed to have made a late payment under this Section 2.2(b) .

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(c) Upon an Event of Default or on the Maturity Date, the unpaid principal balance of the Loan shall thereafter bear interest at the per annum interest rate (the “ Default Rate ”) equal to the lesser of:

(i)

the highest rate permitted by law to be charged on a promissory note secured by a commercial mortgage, or

(ii)

the sum of five percent (5%) plus the Contract Rate.

Interest at the Default Rate as provided in this Section shall be immediately due and payable to Lender and shall constitute additional Indebtedness evidenced by the Note and secured by the Loan Documents.

(d) Each determination of the Contract Rate (i.e. LIBOR (plus the applicable spread) or the Adjusted Rate, as the case may be) shall be made by Lender and shall be conclusive and binding upon Borrower absent manifest error.

Section 2.3 Terms of Payment . The Loan shall be payable by Borrower as follows:

(a) On the date the Loan is made, a payment of interest only shall be due and payable for the period from such date to, but not including, the first (1st) day of the next calendar month;

(b) Successive monthly installments of interest (in arrears) only shall be made on each Payment Date;

(c) Upon the sale of each Subdivided Residential Unit in accordance with the provisions of Article 16, Borrower shall pay Lender the Residential Unit Net Sale Proceeds, to be applied by Lender on the date Lender actually receives such funds in accordance with the provisions of Section 2.7(d) ; provided, however, so long as no Event of Default exists, Borrower may elect upon the sale of any Subdivided Residential Unit to deliver the Residential Unit Net Sale Proceeds to Lender to be held in escrow by Lender in a non-interest bearing account until the last day of the then current Interest Period, at which time, the Residential Unit Net Sale Proceeds shall be applied by Lender in accordance with the provisions of Section 2.7(d) . If Borrower does not elect to have the Residential Condominium Unit Net Sale Proceeds held in escrow by Lender, as aforesaid, and the Residential Condominium Unit Net Sale Proceeds are paid to Lender on a day other than the last day of an Interest Period, then Borrower shall also pay Lender the Breakage Fee with respect to the partial prepayment of the Loan;

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(d) On the Maturity Date or on any earlier date as a result of an Acceleration Event, Borrower shall pay all outstanding principal, accrued and unpaid interest, and any other amounts due under the Loan Documents. Borrower acknowledges that, since the Loan is interest only and no principal payments are required to be made prior to the Maturity Date or an earlier date as a result of an Acceleration Event, all or a substantial portion of the principal amount of the Loan will be due on the Maturity Date.

Section 2.4 Loan Term .

(a) Initial Loan Term . The Loan Term shall commence on the date hereof and terminate on January 2, 2022 (the “ Initial Maturity Date ”), unless otherwise extended under the provisions of Section 2.4(b) .

(b) Extension Option . Upon satisfaction of all of the terms and conditions set forth in this Subsection 2.4(b) , Borrower shall have one (1) option (an “ Extension Option ”) to extend the Loan Term for an additional one (1) year beyond the Initial Maturity Date (the “ Extended Term ”). During the Extended Term and except for any time when the Default Rate or the Adjusted Rate is applicable pursuant to the terms of this Agreement, the Loan (including any amounts added to principal under the Loan Documents) shall bear interest at the Contract Rate. In order to exercise the Extension Option, Borrower must provide Lender with written notice (the “ Extension Notice ”) of Borrower’s intent to exercise the Extension Option not less than sixty (60) days prior to the Initial Maturity Date but no more than ninety (90) days prior to the Initial Maturity Date, TIME BEING OF THE ESSENCE . In consideration thereof, Borrower shall pay Lender the Extension Fee on or prior to the first day of the Extended Term, which Extension Fee shall be earned by Lender as of the date of the Extension Notice; provided, however, if Borrower does not satisfy the Extension Conditions below, no Extension Fee shall be payable, although Borrower shall remain liable for the payment of the costs set forth in Section 2.4(b)(xi) .

In connection with the exercise by Borrower of the Extension Option, Borrower must satisfy each of the following conditions (the “ Extension Conditions ”):

(i)

No Event of Default or Potential Event of Default shall exist as of the date of the Extension Notice and on the first day of the Extended Term;

(ii)

Borrower has Completed the Improvements;

(iii)

(A) The Declaration and Condominium Plans have been recorded and the SCA has taken title to the School Unit, (B) Borrower has no further liability associated with the construction and/or delivery of the School Unit (other than the SCA Pre- and Post-Turnover Work), (C) the Master Lease and Sublease have been terminated and memoranda of termination have been submitted for filing in the forms attached to the School Unit Purchase Agreement or in another form(s) reasonably satisfactory to Lender.

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(iv)

The Offering Plan has been submitted to and accepted for filing by the Attorney General and the Subdivided Residential Units are being marketed for sale;

(v)

The Improvements shall be in compliance, in all material respects, with the Business Plan and the Approved Budget;

(vi)

Borrower is in compliance with the Sales Pace Covenant.

(vii)

All financial statements required to be delivered pursuant to Section 9.1(a) and 9.1(b) of this Agreement have been received and Indemnitor continues to satisfy the Indemnitor’s Financial Covenants;

(viii)

Lender shall have received a title continuation from the Title Company that issued the Title Policy indicating that there has been no undischarged new or intervening liens or encumbrances or other matter not previously approved or consented to by Lender in writing (unless contested in accordance with the terms of this Agreement), any cost of such title continuation being the sole responsibility of Borrower;

(ix)

The Loan to Value Ratio, measured as of the Initial Maturity Date, shall not be greater than fifty percent (50%). Subject to payment by Borrower of any applicable Breakage Fee, but otherwise without Borrower being required to pay the Minimum Multiple Fee or other fee or penalty, Borrower shall be permitted to prepay the Loan or post cash security or a letter credit, acceptable to Lender in each case, in an amount necessary to satisfy the foregoing Loan to Value Ratio requirement.

(x)

If required under Section 8.17 , Borrower has entered into an Interest Rate Cap Agreement satisfying the terms of Section 8.17 (or extended the term of the Interest Rate Cap Agreement in place if one was required at the time of the Extension Term so that it is coterminous with the remaining Loan Term), which Interest Rate Cap Agreement shall be issued by an Issuer satisfying the Rate Cap Rating Criteria and otherwise reasonably satisfactory to Lender; and

(xi)

Borrower shall pay all reasonable out-of-pocket costs and expenses incurred by Lender in connection with Borrower exercising its rights under this Section 2.4(b) .

Section 2.5 Prepayment . There are no full or partial prepayment privileges of the principal amount of the Loan except as set forth in this Agreement:

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(a) Except for a prepayment resulting from a casualty or condemnation pursuant to Section 5.2 or 5.3 , from a sale of Subdivided Residential Units pursuant to Section 16.2 , from a sale of the Retail Unit pursuant to Section 16.2 , from a prepayment made to satisfy the Sales Pace Covenant, or from a prepayment made pursuant to Section 2.8(b) (each of the foregoing, collectively, an “ Enumerated Permitted Prepayment ”), Borrower shall not prepay the Loan in full or in part prior to June 22, 2020 (the “ Closed Prepayment Date ”). Borrower shall pay Lender a Breakage Fee in connection with any Enumerated Permitted Prepayment that occurs on a day that is not the last day of an Interest Period prior to the Closed Prepayment Date (subject to the further provisions of this paragraph (a)) . From and after the Closed Prepayment Date, Borrower shall have the right to prepay the Loan (i) in full on any Business Day in connection with an arm’s length sale of the Mortgaged Property to a third party (and specifically excluding any refinancing of the Loan or a sale of the Mortgaged Property to any Affiliate of Borrower, Indemnitor or a Principal), provided that Borrower gives Lender at least thirty (30) days prior written notice of its intention to make any such prepayment, the Prepayment Date and the amount to be prepaid, and that Borrower also pays to Lender, as consideration for the privilege of making such prepayment, the Exit Fee and the Minimum Multiple Fee and, if the Prepayment Date is not the last day of an Interest Period, that Borrower also pays to Lender, as consideration for the privilege of making such prepayment, a Breakage Fee, (ii) in part on any Business Day in connection with a sale of a Subdivided Residential Unit to a Residential Unit Purchaser pursuant to Section 16.2 or a sale of the Retail Unit pursuant to Section 16.2 , provided that Borrower satisfies all applicable conditions set forth in Sections 16.2 and 16.3 , and, if the Prepayment Date is not the last day of an Interest Period, that Borrower also pays to Lender, as consideration for the privilege of making such prepayment, a Breakage Fee, and (iii) in whole or part (as applicable) in respect of any other Enumerated Permitted Prepayment and if the Prepayment Date is not the last day of an Interest Period, that Borrower also pays to Lender, as consideration for the privilege of making such prepayment, a Breakage Fee. In lieu of paying the Breakage Fee pursuant to clauses (i), (ii) and (iii) above in this Section 2.5(a) , or any Enumerated Permitted Prepayment prior to the Closed Prepayment Date, Borrower may elect by at least three (3) Business Days prior written notice to Lender to have Lender hold the amount prepaid in the Reserve Account for the sole purpose of applying said amount to the prepayment of the Loan on the last day of the then current Interest Period, as long as no Event of Default exists. If Borrower makes the foregoing election, interest will continue to accrue and be payable by Borrower on the amount held by Lender in the Reserve Account until said amount is applied to the prepayment of the Loan in accordance with the provisions of this Section 2.5 . Unless the Loan is repaid in full with insurance or casualty Proceeds, if the Exit Fee shall be due and payable by Borrower at the time of the repayment of the Loan in full, the payment of the Exit Fee shall be a condition precedent to the release by Lender of the Mortgages and other collateral securing the Loan, except for the release of the School Unit, the Retail Unit and individual Subdivided Residential Units, each in accordance with the terms and conditions of this Agreement. Borrower shall not have the right to prepay the Loan in full or in part in connection with any refinancing of the Loan until September 22, 2021 (the “ Closed Refinancing Prepayment Date ”). From and after the Closed Refinancing Prepayment Date, without limiting Borrower’s rights set forth above, Borrower shall have the right to prepay the Loan in full (but not in part) on any Business Day as long as no Event of Default exists and Borrower gives Lender at least thirty (30) days prior written notice of its intention to make any such prepayment, the Prepayment Date and the amount to be prepaid, and Borrower also pays to Lender, as consideration for the privilege of making such prepayment, the Exit Fee and the Minimum Multiple Fee and, if the Prepayment Date is not the last day of an Interest Period, that Borrower also pays to Lender, as consideration for the privilege of making such prepayment, a Breakage Fee. In connection with any prepayment permitted under this Section 2.5(a) or Section 2.4(b)(ix) , Borrower shall also reimburse Lender for any actual out-of-pocket costs Lender may incur in connection with such prepayment. For the avoidance of doubt, the Minimum Multiple Fee shall not be payable (x) in connection with a prepayment of the Loan pursuant to subclause (ii) of this Section 2.5(a) , even if the Loan is ultimately repaid in full through the sale of Subdivided Residential Units and/or the Retail Unit pursuant to Section 16.2 , or in connection with a prepayment made to satisfy the Sales Pace Covenant; provided, however, that such prepayment is limited to the Residential Unit Net Sale Proceeds, Retail Unit Net Sale Proceeds or an amount sufficient to satisfy the Sales Pace Covenant, as applicable, or (y) subject to the provisions of Section 2.5(d) , in connection with any other Enumerated Permitted Prepayment. For the avoidance of doubt, no Exit Fee shall be payable in connection with a prepayment to satisfy the Sales Pace Covenant or Section 2.4(b)(ix) .

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(i) The “ Minimum Multiple Fee ” shall mean an amount equal to the (A) the product of (1) .18 multiplied by (2) the Maximum Loan Amount, less (B) the sum of the following payments actually received by Lender: (1) all interest payments through the date of prepayment at the Contract Rate (but specifically excluding any Default Interest or Late Charge), (2) the Origination Fee, and (3) the Exit Fee.

(ii) The “ Exit Fee ” shall mean an amount equal to one-quarter of one percent (.25%) of the Maximum Loan Amount.

(iii) The “ Breakage Fee ” shall be calculated as follows:

Breakage Fee = ((R-L) x P) x D

360

Where:

R = Contract Rate on the Prepayment Date

L = Current Libor

P = The amount to be prepaid on the Prepayment Date

D = Number of days remaining in the Interest Period

As used herein, “ Current LIBOR ” means LIBOR determined as reported at 11:00 a.m. on the day that is two (2) London Banking Days prior to the Prepayment Date for the period commencing with the Prepayment Date and extending through the end of the Interest Period.

(b) If the Maturity Date is accelerated by Lender because of the occurrence of an Event of Default prior to the Closed Prepayment Date (an “ Acceleration Event ”), the acceleration shall be deemed to be an election on the part of Borrower to prepay the Loan. Accordingly, there shall be added to the amount due after an Event of Default prior to the Closed Prepayment Date and resulting acceleration, the Closed Period Prepayment Fee and the Breakage Fee (but not the Minimum Multiple Fee or the Exit Fee), each, calculated as set forth in this Section 2.5 and using as the Prepayment Date the date on which any tender of payment is made, and Borrower agrees to pay same. Any tender of payment made (or judgment entered) after such acceleration, by or on behalf of Borrower (including payment by any guarantor or purchaser at a foreclosure sale), shall include the Closed Period Prepayment Fee, as applicable and the Breakage Fee (but not the Minimum Multiple Fee or the Exit Fee), each computed as provided in this Section 2.5 .

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(i)

The “ Closed Period Prepayment Fee ” shall be an amount equal the product of (A) one hundred thirty percent (130%) and (B) the Minimum Multiple Fee.

(c) There will be due with any principal prepayment, all accrued and unpaid interest on the portion of the principal being prepaid and all other fees, charges and payments due under the Loan Documents.

(d) No Minimum Multiple Fee, Exit Fee or Closed Period Prepayment Fee, as applicable, shall be required to be paid in connection with payment of fire, casualty, or condemnation Proceeds to Lender which Lender requires to be applied to the Indebtedness in accordance with the provisions of this Agreement, except if such application to the Indebtedness is after an Event of Default.

(e) Borrower acknowledges and agrees that all of the economic terms set forth in the Loan Documents, including the Contract Rate, have been agreed to by Lender based on Lender’s expectation that the Loan will not be repaid prior to the Maturity Date. However, in order to accommodate Borrower, Lender has agreed to permit Borrower to repay the Loan prior to the Maturity Date in accordance with, and subject to, the terms set forth above provided that, and as consideration for such agreement, Borrower agrees to pay Lender the Minimum Multiple Fee, Exit Fee or Closed Period Prepayment Fee, as applicable. Borrower acknowledges and agrees that, even if Lender is able to loan the amount prepaid by Borrower to another Person on the same terms and conditions as herein provided, Lender shall not have fully recovered Lender’s lost profits, costs, expenses and damages suffered as a result of such early prepayment; therefore, Borrower and Lender have agreed on the Minimum Multiple Fee and Exit Fee (or the Closed Period Prepayment Fee) as compensation for Lender’s estimated lost profits, costs, expenses and damages resulting from such prepayment. The Minimum Multiple Fee, Exit Fee or Closed Period Prepayment Fee, as applicable, shall be paid without prejudice to the right of Lender to collect any other amounts provided to be paid under this Agreement or the other Loan Documents, or pursuant to the provisions of law.

Section 2.6 Security . The Loan shall be secured by inter alia (i) the Mortgage creating a first priority lien on the Mortgaged Property, (ii) the Assignment of Leases and Rents creating a first priority lien on the Leases and the Property Income, (iii) the Environmental Indemnification Agreement, (iv) the Recourse Guaranty Agreement, (v) the Carry Guaranty, (vii) the Equity Funding Guaranty, (vii) the Completion Guaranty, and (viii) the other Loan Documents.

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Section 2.7 Payments .

(a) All payments of principal, interest and other amounts to be made by Borrower under the Loan Documents, shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Lender. Unless otherwise made from the Interest Holdback or the Interest Reserve, all such payments that are regularly scheduled monthly payments of principal, interest or reserves shall be made by Borrower by automatic clearing house (“ ACH ”) debit of a bank account of Borrower of which Lender has received at least thirty (30) days’ prior written notice. All other payments from Borrower to Lender shall be made by wire transfer of immediately available funds to an account designated by Lender in writing to Borrower.

(b) If the due date of any payment under the Loan Documents would otherwise fall on a day that is not a Business Day, such date shall be extended to the next succeeding Business Day, and interest shall accrue and be payable for any principal so extended for the period of such extension.

(c) Except for payments received by Lender from the sale by Borrower of Subdivided Residential Units or the Retail Unit and applied by Lender in accordance with the provisions of Section 2.7(d) below, each payment received by Lender under the Loan Documents which is not paid by Borrower with respect to a specific Obligation, shall be applied in the following order:

(i)

First, to the interest due on any Advances made by Lender under the Loan Documents;

(ii)

Next, to the principal amount of any Advances made by Lender under the Loan Documents;

(iii)

Next, to Late Charges, attorneys’ fees or any other amount due under any Loan Document save for the amounts described in clauses (iv), (v) and (vi) immediately below;

(iv)

Next, to any Minimum Multiple Fee, Exit Fee or Closed Period Prepayment Fee, as applicable and any Breakage Fee then due and payable under this Agreement;

(v)

Next, to accrued interest due Lender under the Loan Documents; and

(vi)

Finally, to the principal balance of the Loan.

Notwithstanding the foregoing, during the continuance of an Event of Default or in the event that Borrower does not pay the outstanding principal balance and accrued interest due under this Agreement, when due, whether on the Maturity Date or on any earlier date as a result of any Acceleration Event, Lender, at its option, shall apply any payments it then receives in such order as Lender deems appropriate in its sole discretion.

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(d) To the extent Borrower has sold a Subdivided Residential Unit or the Retail Unit and pays Residential Unit Net Sale Proceeds or the Retail Unit Net Sales Proceeds, as applicable, to Lender in accordance with this Agreement, such payments shall be applied in the following order:

(i)

First, to the interest due on any Advances made by Lender under the Loan Documents;

(ii)

Next, to the principal amount of any Advances made by Lender under the Loan Documents;

(iii)

Next, to Late Charges, attorneys’ fees or any other amount due under any Loan Document save for the amounts described in clauses (iv) and (v) immediately below;

(iv)

Next, to any Exit Fee or Closed Period Prepayment Fee, as applicable and any Breakage Fee then due and payable under this Agreement;

(v)

Next, to the payment of accrued interest then due Lender under the Loan Documents, to the extent that the Interest Holdback or Interest Reserve is insufficient, in Lender’s reasonable discretion; and

(vi)

Finally, to the principal balance of the Loan.

Section 2.8 LIBOR Provisions .

(a) If (i) any requirement of law or any change therein, or in the interpretation or application thereof, shall hereafter make it unlawful for Lender in good faith to make or maintain the Loan bearing interest at LIBOR (plus the applicable spread), or (ii) Lender shall have determined (which determination shall be conclusive and binding upon Borrower absent manifest error) that by reason of circumstances affecting the interbank Eurodollar market, U.S. dollar deposits, in an amount approximately equal to the outstanding principal balance of the Loan, are not generally available at such time in the interbank Eurodollar market or that adequate and reasonable means do not exist for ascertaining LIBOR for any particular Interest Period, then (x) the obligation of Lender hereunder to make the Loan bearing interest at LIBOR (plus the applicable spread) shall be canceled forthwith and (y) the Contract Rate shall (notwithstanding anything provided in Section 2.2 to the contrary) automatically convert to the Adjusted Rate commencing on the first day of the next succeeding Interest Period or within such earlier period as required by law. Borrower hereby agrees promptly to pay Lender, upon demand, any additional amounts necessary to compensate Lender for any reasonable third party costs incurred by Lender in making any conversion in accordance with this Agreement, including any interest or fees payable by Lender to lenders of funds obtained by it in order to make or maintain the Loan. Upon written demand from Borrower, Lender shall demonstrate in reasonable detail the circumstances giving rise to Lender’s determination and the calculation substantiating the Adjusted Rate and any additional costs incurred by Lender in making the conversion, which, upon written notice thereof from Lender, as certified to Borrower, shall be conclusive absent manifest error. In the event Lender shall determine in its good faith (which determination shall be conclusive and binding upon Borrower) that the aforesaid circumstances no longer exist, the Contract Rate shall be converted back to LIBOR plus the applicable spread (determined as provided in Section 2.2(a) ) commencing on the first day of the Interest Period which occurs at least three (3) days after such determination by Lender.

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(b) In the event that any change in any requirement of law or in the interpretation or application thereof other than charges relating to income, excise, franchise or other taxes applicable to Lender, or compliance in good faith by Lender with any request or directive (whether or not having the force of law) hereafter issued by any central bank or other Governmental Authority:

(i)

shall hereafter impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, or deposits or other liabilities in or for the account of, advances or loans by, or other credit extended by, or any other acquisition of funds, by any office of Lender which is not otherwise included in the determination of LIBOR hereunder;

(ii)

shall hereafter have the effect of reducing the rate of return on Lender’s capital as a consequence of its obligations hereunder to a level below that which Lender could have achieved but for such adoption, change or compliance (taking into consideration Lender’s policies with respect to capital adequacy) by any amount deemed by Lender to be material; or

(iii)

shall hereafter impose on Lender any other condition

and the result of any of the foregoing is to increase the cost to Lender of making, renewing or maintaining loans or extensions of credit or to reduce any amount receivable hereunder, then, in any such case, Borrower shall promptly pay Lender, upon demand, any additional amounts necessary to compensate Lender for such additional cost or reduced amount receivable as determined by Lender (collectively, “ Increased Costs ”). Any determination under this Section 2.8(b) shall be made in good faith and not on an arbitrary or capricious basis. If Lender becomes entitled to claim any Increased Costs pursuant to this Section, Lender shall provide Borrower with not less than thirty (30) days’ written notice specifying in reasonable detail the event or circumstance by reason of which it has become so entitled and the additional amount required to fully-compensate Lender for such Increased Costs. A certificate as to any Increased Costs submitted by Lender to Borrower shall be conclusive in the absence of manifest error. Such certificate shall set forth Lender’s method of calculating the amount of such Increased Costs. In the event Lender makes a request for compensation of Increased Costs in an amount that is greater than ten percent (10%) of the principal balance of the Loan, Borrower shall, upon payment of the same, have the right to prepay the Loan in full without penalty or premium. This provision shall survive the repayment of the Loan and the satisfaction of all other obligations of Borrower under the Loan Documents.

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(c) Borrower shall indemnify Lender and hold Lender harmless from, and be responsible for paying, any Conversion Costs, which obligation shall survive payment of the Loan in full and the satisfaction of all other obligations of Borrower under the Loan Documents. As used herein “ Conversion Costs ” means any reasonable interest, cost, loss or expense which Lender sustains, incurs or must pay as a consequence of (i) any default by Borrower in payment of the principal of or interest on the Loan while bearing interest at LIBOR (plus the applicable spread), including any such interest, fee and expense arising from interest or fees payable by Lender to any lender providing Lender with its LIBOR funds, (ii) any prepayment (whether voluntary or mandatory) of the Loan on a day other than on last day of an Interest Period, or without sufficient prior written notice as required under this Agreement (without duplication of the Breakage Fee), and (iii) the conversion (for any reason whatsoever and whether voluntary or involuntary) of LIBOR (plus the applicable spread) to the Adjusted Rate on a day other than on the last day of the Interest Period with respect to any portion of the outstanding principal amount of the Loan then bearing interest at LIBOR (plus the applicable spread), including any arising from interest or fees payable or which would be payable by Lender to any lender providing Lender with its LIBOR funds. Conversion Costs shall include any applicable Prepayment Fee or Closed Period Prepayment Fee, calculated by multiplying (A) the Prepayment Fee or Closed Period Prepayment Fee, as applicable required to be paid under Section 2.5 determined as if the entire principal amount of the Loan were being prepaid, by (B) a fraction the numerator of which shall be the amount then being prepaid and the denominator of which shall be the then outstanding principal balance of the Loan prior to such prepayment.

(d) All payments made by Borrower under the Loan Documents shall be made free and clear of, and without reduction for or on account of, Foreign Taxes, excluding, in the case of Lender, taxes measured by its income, and franchise taxes imposed on it. If any non-excluded Foreign Taxes are required to be withheld from any amounts payable to Lender under the Loan Documents, the amounts so payable to Lender shall be increased to the extent necessary to yield to Lender (after payment of all non-excluded Foreign Taxes) interest or any such other amounts payable under the Loan Documents at the rate or in the amounts specified hereunder. Whenever any non-excluded Foreign Tax is payable pursuant to applicable law by Borrower, as promptly as possible thereafter, Borrower shall send to Lender an original official receipt, if available, or certified copy thereof showing payment of such non-excluded Foreign Tax. Borrower shall indemnify Lender and hold Lender harmless from, and be responsible for paying, any incremental taxes, interest or penalties that may become payable by Lender which may result from any failure by Borrower to pay any such non-excluded Foreign Tax when due to the appropriate taxing authority, or any failure by Borrower to remit to Lender the required receipts or other required documentary evidence. Lender’s inability to notify Borrower of any such Foreign Tax in accordance with the immediately preceding sentence shall in no way relieve Borrower of its obligations under this Section. As used herein “ Foreign Taxes ” means, collectively, income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions, reserves or withholdings imposed, levied, collected, withheld or assessed by any Governmental Authority, which are imposed, enacted or become effective after the date hereof. As used herein “ Governmental Authority ” shall mean any court, board, agency, commission, office or other authority of any nature whatsoever, or any governmental unit (federal, state, county, district, municipal, city or otherwise) whether new or hereafter in existence. Notwithstanding anything contained herein to the contrary, the foregoing obligation to pay such additional amounts resulting from the payment of Foreign Taxes and to indemnify Lender shall not apply to any Foreign Tax that is imposed on amounts payable to the Lender under the Loan Documents on the date of this Agreement (or on the date that it becomes a Lender hereunder) or is attributable solely to Lender’s failure to provide Borrower with proper and sufficient evidence under the IRS Code to establish that it is exempt from (or eligible for a reduced rate of) Foreign Tax with respect to amounts payable under the Loan Documents.

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Section 2.9 Interest Reserve . Whenever the amount of unfunded Loan Advances available to Borrower under the Interest Holdback is less than One Million Two Hundred Fifty Thousand and 00/100 Dollars ($1,250,000.00), Borrower shall fund a reserve (the “ Interest Reserve ”) within five (5) Business Days following Lender’s request in an amount equal to Three Million Seven Hundred Fifty Thousand and 00/100 Dollars ($3,750,000.00). The Interest Reserve funds shall be held by Lender in an interest bearing account established by and under the sole control of Lender at a financial institution selected by Lender (subject to Borrower’s approval, not to be unreasonably withheld, conditioned or delayed), which financial institution must meet the Rating Criteria (the “ Reserve Account ”). If at any time the balance in the Interest Reserve falls below One Million Two Hundred Fifty Thousand and 00/100 Dollars ($1,250,000.00), Borrower shall make an additional deposit sufficient to replenish the balance of the Interest Reserve to an amount equal to Three Million Seven Hundred Fifty Thousand and 00/100 Dollars ($3,750,000.00) within five (5) Business Days following Lender’s request; provided, however, that once the Maximum Loan Amount (or if Borrower waives the right to request any further Disbursements to Borrower in writing, the outstanding principal balance of the Loan on the date that Borrower has so waived its right) has been repaid through Residential Unit Net Sale Proceeds and/or Retail Unit Net Sales Proceeds (i) by fifty percent (50%), if the balance in the Interest Reserve falls below $1,250,000, Borrower shall be required to make an additional deposit sufficient to replenish the balance of the Interest Reserve to an amount equal to Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00) within five (5) Business Days following Lender’s request, and (ii) by seventy-five percent (75%), if the balance in the Interest Reserve falls below $1,250,000, Borrower shall be required to make an additional deposit sufficient to replenish the balance of the Interest Reserve to an amount equal to One Million Two Hundred Fifty Thousand and 00/100 Dollars ($1,250,000.00) within five (5) Business Days following Lender’s request, in the case of each of clauses “(i)” and “(ii)”, in lieu of being required to replenish the Interest Reserve to an amount equal to $3,750,000. The Interest Reserve and Borrower’s replenishment obligation hereunder will terminate and any funds remaining in the Interest Reserve shall be returned to Borrower upon full repayment of the Indebtedness.

Section 2.10 Reserve Account . The Reserve Account shall be under the sole dominion and control of Lender. All interest earned on the Reserve Account shall be allocated to Borrower for income tax purposes, but it shall be added to and disbursed as a part of the Interest Reserve. Borrower hereby assigns and grants Lender a security interest in the Interest Reserve funds in the Reserve Account as security for payment and performance of Borrower’s obligations under the Loan Documents. All Interest Reserve funds in the Reserve Account shall be additional security for the Loan, and upon the occurrence of an Event of Default, Lender shall be authorized to apply such funds to Borrower’s obligations under the Loan Documents in such order and priority as Lender may elect in its sole discretion. Lender shall have a perfected first priority security interest in the Reserve Account.

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Section 2.11 Control Accounts . The Control Accounts shall be under the sole dominion and control of Lender. The Control Accounts shall be opened in the name of Lender, provided that Borrower shall be the owner of all funds on deposit in such Control Accounts for federal and applicable state and local tax purposes. The Control Bank at which the Control Accounts will be held shall be selected by Lender (subject to Borrower’s approval, not to be unreasonably withheld, conditioned or delayed). Other than as otherwise set forth in this Agreement, neither Borrower nor Indemnitor nor any party claiming on behalf of, or through Borrower or Indemnitor, shall have any right to transfer, withdraw, access or otherwise direct the disposition of funds on deposit in the Control Accounts or have any other right or power with respect to the Control Accounts and all out-of-pocket costs and expenses for establishing and maintaining the Control Accounts shall be paid by Borrower. Lender shall have no liability for any loss or damage with respect to such funds (including, without limitation, with regard to the Control Bank) (except to the extent such funds are actually disbursed into the Control Accounts and either (i) Lender fails to disburse same in accordance with the terms of this Agreement after Borrower has satisfied all conditions precedent to a Disbursement to Borrower or a School Payment Disbursement, as applicable, or (ii) Lender disburses such funds in a manner which is inconsistent with the provisions of this Agreement and such disbursement was not otherwise agreed to or requested by Borrower in writing), the disbursement thereof in accordance with the terms of this Agreement or the application of any such funds by Borrower or SCA to the extent disbursed to either of them.

(a) School Cost and Purchase Control Account . Pursuant to the terms of Section 2.2 of the Triparty Agreement, and unless otherwise directed by Lender after an Event of Default occurs, all School Cost Payments shall be paid by SCA depositing such funds on or before the due date thereof under the School Unit Purchase Agreement directly into an account designated by Lender in writing at the Control Bank (the “ School Cost and Purchase Control Account ”).

(b) School Purchase Control Account . Lender shall instruct the Control Bank to transfer all School Cost Payments representing Land Value Payments and School Construction Supervision Fee Payments into a subaccount (the “ School Purchase Control Account ”) with the Control Bank. Provided that Borrower has satisfied all of the conditions to a Disbursement to Borrower under this Agreement, amounts deposited into the School Purchase Control Account shall be available as a disbursement to Borrower (such disbursement, a “ School Payment Disbursement ”) from the School Purchase Control Account to pay (or reimburse Borrower) the costs of the Project (actually billed) other than School Costs in accordance with the Line Items specified in the Approved Budget. School Payment Disbursements shall be credited towards the Additional Equity contributions required to be made by Borrower under this Agreement. At any time when an Event of Default exists, Lender shall be entitled to disburse amounts deposited into the School Purchase Control Account directly to the payment of costs associated with the Project in any manner and in such amounts determined by Lender in its sole and absolute discretion. All funds in the School Purchase Control Account shall be additional security for the Loan, and upon the occurrence of an Event of Default, Lender shall be authorized to apply such funds to Borrower’s obligations under the Loan Documents in such order and priority as Lender may elect in its sole discretion.

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(c) School Cost Control Account . Lender shall instruct the Control Bank to transfer all other School Cost Payments (i.e., School Cost Payments that do not consist of Land Value Payments and School Construction Supervision Fee Payments) into a subaccount (the “ School Cost Control Account ”) with the Control Bank. Provided that no Event of Default or Potential Event of Default has occurred, on each Business Day on which available funds are on deposit in the School Cost Control Account, Control Bank shall transfer all such available funds to Borrower’s Operating Account. Borrower shall use all amounts disbursed from the School Cost Control Account into Borrower’s Operating Account solely for (or to reimburse Borrower for) the payment of School Costs in accordance with the applicable Requisition and terms and conditions of the School Unit Purchase Agreement. At any time while an Event of Default or Potential Event of Default exists, Lender shall have the right, in its sole discretion, to instruct the Control Bank, to immediately cease all transfers from the School Cost Control Account into Borrower’s Operating Account and, while an Event of Default exists, to disburse amounts deposited directly to the payment of School Costs for which such funds were deposited (to the extent such School Costs were not already paid) as identified in the applicable Requisition or to return such funds to the SCA.

(d) At any time when an Event of Default exists or if Borrower does not otherwise satisfy the conditions precedent to a Disbursement to Borrower from the Interest Reserve or the Interest Holdback set forth in Section 3.6 of this Agreement, Lender may deduct interest payments due under this Agreement from the School Purchase Control Account.

(e) Upon Borrower’s conveyance of the School Unit to the SCA in accordance with the terms of the School Unit Purchase Agreement, any funds remaining in the School Purchase Control Account and School Cost Control Account will be transferred to a deposit account established by Lender with the Control Bank or a bank reasonably acceptable to Lender and Borrower and satisfying the Rating Criteria, which shall be under Lender’s sole dominion and control or that of Lender’s agent and pursuant to the terms of a deposit control account agreement acceptable to Lender. Funds shall be disbursed from such Control Account in the same manner and under the same conditions as a Disbursement to Borrower but must first be exhausted prior to making any Disbursement to Borrower pursuant to the terms of this Agreement.

ARTICLE 3

DISBURSEMENTS TO BORROWER

Section 3.1 Funding of Disbursements to Borrower .

(a) Disbursements to Borrower of Loan Advances shall be made by Lender to pay the costs of the Project (actually billed) net of School Costs in accordance with the Line Items specified in the Approved Budget on the terms and conditions herein provided. At no point shall Loan Advances exceed ONE HUNDRED TWENTY EIGHT MILLION ONE HUNDRED NINETY SEVEN THOUSAND EIGHT HUNDRED SEVENTY EIGHT AND 00/100 DOLLARS ($128,197,878.00) under the Building Loan and TWENTY EIGHT MILLION NINE HUNDRED NINETY NINE THOUSAND EIGHT HUNDRED THIRTY SEVEN AND 00/100 DOLLARS ($28,999,837.00) under the Project Loan. Subject to the terms and conditions of this Agreement, Line Items on the Approved Budget shall be funded in an amount equal to 100% of the costs paid, or to be paid by Borrower, net of School Costs, less Additional Equity then required to be contributed under this Agreement.

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(b) Each date of a Disbursement to Borrower is herein referred to as a “ Disbursement Date ”.

(c) Each Disbursement to Borrower shall be added to the outstanding principal balance of the applicable Loan and will be subject to the terms and provisions of the Loan Documents.

Section 3.2 Required Equity .

(a) Initial Required Equity at Closing . Borrower shall not be entitled to the Term Loan proceeds until (in addition to satisfying all other conditions applicable to such disbursement) Borrower has delivered evidence, satisfactory to Lender in its reasonable discretion, that Borrower has contributed the Initial Required Equity into the Project. Borrower acknowledges that, as of the Closing Date, the evidence provided by Borrower remains subject to verification and that the foregoing sentence shall not be deemed an acknowledgement by Lender that such Initial Required Equity has in fact been contributed to the Project. Lender shall not be obligated to make any Disbursements to Borrower under this Agreement until any shortage in the Initial Required Equity required to be contributed as of the Closing Date is actually contributed.

(b) Additional Equity Requirements after the Closing Date . No later than October 22, 2021, Borrower shall have either (i) contributed the Required Equity into the Project or (ii) deposited with Lender the positive difference, if any, between (A) Required Equity less (B) the sum of (1) the Initial Required Equity, (2) the School Construction Supervision Fee which is still scheduled to be contributed under the School Unit Purchase Agreement, and (3) all Additional Equity contributed to date.

Section 3.3 Conditions to Disbursements to Borrower . Lender shall have no obligation to make any Disbursements to Borrower under the Building Loan and/or the Project Loan unless each of the following conditions has been and remains satisfied as of the date of the Disbursement to Borrower. Each of said funding conditions is for the benefit of Lender and may be waived by Lender in Lender’s sole discretion. Lender may make a Disbursement to Borrower without requiring satisfaction of each condition, but in the absence of a written waiver signed by Lender, Lender may condition further Disbursements to Borrower upon satisfaction of all such conditions. The waiver of a condition by Lender with respect to a Disbursement shall not be deemed a waiver of such condition in the future in the absence of such written waiver signed by Lender. All of the documents and agreements required below shall be in form and substance satisfactory to Lender in its reasonable discretion.

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(a)

Project Documents .

(i)

Budget and Business Plan . The Approved Budget and Business Plan shall remain in full force and effect and shall not have been modified without Lender’s prior written consent in Lender’s reasonable discretion (other than with respect to requests to modify the Major Points of Business Plan, which may be granted or withheld in Lender’s sole and absolute discretion) or as otherwise permitted in accordance with this Agreement. A rental strategy shall not be permitted.

(ii)

Plans . Neither the Approved Plans nor the certification from the Architect that the Improvements will comply with all applicable laws, including all applicable Access Laws, if constructed substantially in accordance with the Approved Plans, shall have been modified without the prior written consent of Lender, which consent shall not be unreasonably withheld, conditioned or delayed (other than with respect to requests to modify the Major Points of Business Plan or with respect to requests to modify the Approved Plans that require SCA’s approval under the School Unit Purchase Agreement but have not been approved by the SCA, which may be granted or withheld in Lender’s sole and absolute discretion). Notwithstanding the foregoing but subject to Lender’s prior written approval, Borrower may revise the Approved Plans to provide 91, 92 or 93 Subdivided Residential Units and in connection therewith, the Residential Unit Minimum Sales Price Schedule attached hereto as Exhibit C shall be adjusted accordingly so that the total Residential Unit Minimum Sales Price will remain the same but will be allocated based on the new unit-mix and square footage.

(iii)

Permits and Utilities . All Permits shall remain in full force and effect and all other permits, approvals and clearances then required for the continued construction of the Improvements shall have been issued and provided to Lender, together with evidence reasonably satisfactory to Lender that (A) the Project continues to comply with all applicable zoning ordinances, building and use restrictions and codes and any requirements with respect to licenses, permits, and agreements necessary for the lawful use and operation of the Project, and (B) all necessary utilities and municipal services required for the Project are in place, or will be in place by the Completion of the Construction Work and are available at budgeted cost.

(iv)

Architect’s Contract . Until all work thereunder has been performed, the Architect’s Contract shall remain in full force and effect, shall not have been modified without Lender’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, and no material default or event of default shall exist thereunder by Borrower. During the continuance of an event of default by Architect under the Architect’s Contract (following any required notice to Architect and the expiration of any applicable cure period), Lender shall be entitled to withhold the portion of a Disbursement to Borrower which would be otherwise payable to the Architect absent such event of default.

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(v)

Engineer’s Contract . Until all work thereunder has been performed, the Engineer’s Contract shall remain in full force and effect, shall not have been modified without Lender’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, and no material default or event of default shall exist thereunder by Borrower. During the continuance of an event of default by an Engineer under an Engineer’s Contract (following any required notice to such Engineer and the expiration of any applicable cure period), Lender shall be entitled to withhold the portion of a Disbursement to Borrower which would be otherwise payable to such Engineer absent such event of default.

(vi)

Designer’s Contract . Until all work thereunder has been performed, the Designer’s Contract shall remain in full force and effect, shall not have been modified without Lender’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, and no material default or event of default shall exist thereunder by Borrower. During the continuance of an event of default by Designer under the Designer’s Contract (following any required notice to such Designer and the expiration of any applicable cure period), Lender shall be entitled to withhold the portion of a Disbursement to Borrower which would be otherwise payable to the Designer absent such event of default.

(vii)

Demolition Contract . Until all work thereunder has been performed, the Demolition Contract shall remain in full force and effect, shall not have been modified without Lender’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, and no material default or event of default shall exist thereunder by Borrower. During the continuance of an event of default by Demolition Contractor under the Demolition Contract (following any required notice to such Demolition Contractor and the expiration of any applicable cure period), Lender shall be entitled to withhold the portion of a Disbursement to Borrower which would be otherwise payable to the Demolition Contractor absent such event of default.

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(viii)

Construction Contract . Until all work thereunder has been performed, the Construction Contract shall remain in full force and effect, shall not have been modified without Lender’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed (other than with respect to requests to modify the Construction Contract that require SCA’s approval under the School Unit Purchase Agreement but have not been approved by the SCA, which may be granted or withheld in Lender’s sole and absolute discretion), and no material default or event of default shall exist thereunder by Borrower. During the continuance of an event of default by the Contractor under the Construction Contract (following any required notice to the Contractor and the expiration of any applicable cure period), Lender shall be entitled to withhold the portion of a Disbursement to Borrower which would be otherwise payable to the Contractor absent such event of default. The Construction Contract must be on a guaranteed maximum price basis with a minimum of 65% buyout of subcontracts, and with allowances totaling not more than 10% of total trade costs. The Construction Contract must also include a contingency of not less than four percent (4%) of trade costs which will be independent from the Contingency Line Item in the Approved Budget.

(ix)

Services Contract . Until all work thereunder has been performed, the Services Contract shall remain in full force and effect, shall not have been modified without Lender’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, and no material default or event of default shall exist thereunder by Borrower. During the continuance of an event of default by Owner’s Representative under the Services Contract (following any required notice to Owner’s Representative and the expiration of any applicable cure period), Lender shall be entitled to withhold the portion of a Disbursement to Borrower which would be otherwise payable to the Owner’s Representative absent such event of default.

(x)

Subcontractors and Material Suppliers . All changes to the list of Major Subcontractors that was approved by Lender as of the Closing Date shall have been approved by Lender in writing, which approval shall not be unreasonably withheld, conditioned or delayed. With respect to each such change to a subcontractor or material supplier, the list shall include the name, address and telephone number, a general statement of the nature of the work to be performed, the labor and materials to be supplied, and the cost of the labor and work. Borrower shall promptly advise Lender of new names as such subcontracts are awarded or any changes in the information regarding such subcontractors and suppliers.

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(xi)

Consents to Assignments . The Architect’s Consent, the Designer’s Consent, the Demolition Contractor’s Consent, the Engineer’s Consent, the Owner’s Representative’s Consent and the Contractor’s Consent shall each remain in full force and effect with no event of default (following any required notice to the Architect, the Designer, the Demolition Contractor, the Engineer, the Owner’s Representative or the Contractor, as applicable, and the expiration of any applicable cure period) thereunder.

(xii)

Zoning . The zoning status of the Land and the Project shall continue to permit the Construction Work to be Completed and permit the intended use of the Improvements.

(xiii)

Bonding . Lender shall have received and approved (which approval shall not be unreasonably withheld, conditioned or delayed) a Payment and Performance Bond for each subcontractor which does not qualify for Subcontractor Default Insurance.

(xiv)

Subcontractor Default Insurance . Subject to the next following sentence, the Subcontractor Default Insurance for all subcontractors (including, without limitation, all Major Subcontractors) shall have been delivered to and approved by Lender (which approval shall not be unreasonably withheld, conditioned or delayed) and shall remain in full force and effect in accordance with Section 5.1(d). Notwithstanding the foregoing, if any subcontractor does not qualify for Subcontractor Default Insurance, a Payment and Performance Bond shall be obtained.

(b) Borrower has delivered evidence, satisfactory to Lender in its reasonable discretion, that Borrower has contributed the Required Equity then required in accordance with Section 3.2 .

(d) The Loan is not Out of Balance, such determination to be made in Lender’s reasonable discretion and will be based upon information provided to Lender by the Inspector, Administrator, Borrower and Lender’s own analysis.

(e) Within forty-five (45) days following the first Disbursement to Borrower subsequent to the completion of foundations and footings, Lender shall have received and approved (which approval shall not be unreasonably withheld, conditioned or delayed) a supplemental survey that complies with Lender’s reasonable survey requirements showing that all foundations and footings of the Project are within the boundaries of the Land and comply with all applicable setback lines and showing that no buildings or improvements are to be constructed within the area of any easement, together with, to the extent then available, a survey endorsement to the Title Policy. Provided Borrower ordered the supplemental survey promptly upon the commencement of the foregoing forty-five (45) day period, Lender will extend said forty-five (45) day period to sixty (60) days subsequent to the completion of the foundations and footings if the survey is not completed within said forty-five (45) day period.

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(f) Within thirty (30) days after the pouring of concrete for any Improvements, Borrower shall cause break tests to be completed with respect to said poured concrete, and Borrower shall use commercially reasonable efforts to cause the written reports containing the break test results to be delivered to Lender promptly following said tests. Said test results must be reasonably satisfactory to Lender and the Inspector. Borrower shall also provide Lender with ongoing break tests over the ensuing one hundred twenty (120) days, the results of which break tests shall be provided to Lender and shall be reasonably satisfactory to Lender and Inspector. Lender acknowledges and agrees that if the results yield a low break, Lender and Inspector shall approve such results if Borrower’s structural engineer of record approves same based on the structural design of the Improvements.

(g) The requested Disbursement to Borrower, together with the Term Loan and all prior Disbursements to Borrower and the Interest Holdback, shall not cause the outstanding principal balance of the Loan to exceed the Maximum Loan Amount, such determination to be made in Lender’s reasonable discretion.

(h) Lender is reasonably satisfied that the percentage of the Approved Budget allocated to the Hard Costs already funded (the sum of Building Loan Advances, Project Loan Advances and Additional Equity funded for the payment of Hard Costs on or after the date of this Agreement) is no more than the percentage of the Improvements already completed, and that the sum of the Funds allocated to Hard Costs and not yet advanced as Disbursements to Borrower and the then unfunded portion of Additional Equity allocated to Hard Costs and are sufficient to pay all the unpaid Hard Costs set out in the Approved Budget.

(i) Lender, in its reasonable opinion, is not prohibited from advancing Funds as Disbursements to Borrower under any Legal Requirements (including, without limitation, applicable lien laws or stop notice statutes).

(j) Intentionally omitted.

(k) All representations and warranties of Borrower and Indemnitor under this Agreement and under the other Loan Documents are true and correct in all material respects as of the date of each Disbursement to Borrower (subject to such changes as may have resulted from acts, omissions, events or circumstances that do not have a Material Adverse Effect and does not constitute a Potential Event of Default or Event of Default hereunder).

(l) Other than Disbursements to Borrower from the Interest Holdback and Interest Reserve, which shall be disbursed by Lender to pay interest under the Notes in accordance with Section 3.6 , Borrower has submitted to Lender a Draw Request and a Borrower Certification for such Disbursements to Borrower, together with all supporting documents required under this Agreement.

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(m) None of the Milestone Construction Hurdles remain unsatisfied beyond the applicable Milestone Deadline, subject to extension for Force Majeure in accordance with Section 4.1(b) .

(n) Borrower has provided Lender with evidence of payment to the Contractor and each Major Subcontractor for the amounts covered by all prior Disbursements to Borrower for which payment is due.

(o) The Improvements are being constructed in a good and workmanlike manner substantially in accordance with the Plans and all required inspections and approvals pursuant to Legal Requirements and this Agreement have been obtained as and when necessary.

(p) Inspector has received a title search continuation which shows no new or intervening liens or encumbrances, other than those approved in writing by Lender or which are bonded or otherwise discharged in accordance with Legal Requirements and shows the payment status of all Impositions.

(q) If any Permits are issued after the initial disbursement of the Loan, Lender shall have received copies of all such Permits.

(r) No notice of a material default by Borrower (as determined by Lender in its reasonable discretion) that remains outstanding has been received by Borrower or Lender under the School Unit Purchase Agreement, the Master Lease or the Sublease.

(s) Borrower shall have paid (or concurrently with the requested Disbursement to Borrower shall pay) all of Lender’s reasonable costs and expenses incurred in connection with the Disbursement to Borrower including, without limitation, actual outside reasonable attorneys’ fees (if any), costs and expenses to inspect the Project, recording and filing charges, title company charges and the costs of any endorsements to Lender’s Title Policy.

(t) If any Change Order increases the payment obligation of SCA under the School Unit Purchase Agreement, Lender may condition any approval required or permitted of Lender under this Agreement or the other Loan Documents and any Disbursement to Borrower upon the receipt by Lender of Evidence of Sufficient Funds with respect to said increased payment obligation. If pursuant to the terms of the School Unit Purchase Agreement, Borrower is obligated to pay any increase in the hard costs related to the School Fit-Out Work (as defined in the School Unit Purchase Agreement), Lender may condition any approval of any Change Order which has the result of increasing such costs or any Disbursement to Borrower upon the receipt by Lender of an Equity Deposit in an amount equal to such increased cost, disbursable by Lender to pay (or reimburse Borrower for the payment of) such increased cost, once due and payable.

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(u) In the event that the Master Lease, Sublease and School Unit Purchase Agreement are not executed contemporaneously with the Closing Date, prior to Lender making the initial Disbursement to Borrower following the Closing Date, Borrower shall provide Lender with an estoppel certificate from the SCA, as tenant under the Master Lease, as sublandlord under the Sublease and as SCA under the School Unit Purchase Agreement, stating that (i) each of the School Unit Purchase Agreement, the Sublease and the Master Lease is in full force and effect and is unmodified; (ii) there is no violation of or default by the SCA or, to SCA’s knowledge, Borrower under the Master Lease, the Sublease or the School Unit Purchase Agreement; (iii) there is no presently exercisable credit or offset and that the SCA has no knowledge of any circumstances which would give rise to any credit or set-off against any future obligations of the SCA under the Master Lease or School Unit Purchase Agreement; (iv) there is no voluntary or involuntary Bankruptcy Proceeding pending against the SCA; (v) the term of each of the Master Lease and the Sublease has commenced and the full rental thereunder has been paid; (vi) the SCA has accepted possession of the Master Leased Premises, subject to the terms of the Master Lease, the School Unit Purchase Agreement and the Sublease; (vii) there are no tenant allowances under the Master Lease and that there are no current payments to be made by Borrower to the SCA thereunder or under the Master Agreement which have not been paid; (viii) the address for notices to be sent to the SCA is as set forth therein; (ix) the SCA has not subleased all or any part of the Master Leased Premises other than to Borrower, as subtenant, pursuant to the Sublease; (x) the SCA has not assigned the Master Lease, the Sublease or the School Unit Purchase Agreement or any interest therein or any of its rights or obligations thereunder, nor has the SCA granted any mortgage, deed of trust, security agreement or security interest in, on or to the SCA’s leasehold estate under the Master Lease or the SCA’s interest in the Master Lease or the Master Leased Premises; (xii) Borrower has no obligations to SCA under the Master Lease, Sublease or School Unit Purchase Agreement other than as set forth therein; and (xiii) the SCA has not subordinated its interest in the Master Lease to any mortgage, deed of trust or security agreement other than as set forth in the Triparty Agreement.

Section 3.4 Requests for Disbursements to Borrower .

(a) Between the Closing Date and September 22, 2021, Borrower may request a Disbursement to Borrower to pay costs of the Project set forth in the Approved Budget by delivering a Draw Request to Lender.

(b) Each Draw Request (i) must specifically request the portion of the Disbursement to Borrower to be made under the Building Loan, the portion of the Disbursement to Borrower to be made under the Project Loan, and the amount of the School Payment Disbursement to be made from the School Purchase Control Account (which allocation shall be subject to confirmation by Lender and shall be made in accordance with the terms of this Agreement), (ii) except for the final Disbursement to Borrower, must be for an amount equal to or greater than $250,000.00, and (iii) shall not be submitted more often than once a month. Lender shall diligently and reasonably promptly process each Draw Request following receipt by Lender of the Draw Request and all required accompanying information and materials in compliance with the provisions of this Article 3. Lender shall use reasonable efforts to confirm the satisfaction all conditions precedent to a given Disbursement set forth in this Agreement within five (5) Business Days following such satisfaction, and, in all events, Lender shall confirm the satisfaction of such conditions precedent within seven (7) Business Days following such satisfaction. Lender shall make such Disbursement to Borrower within five (5) Business Days after Lender has confirmed the satisfaction of the conditions precedent thereto set forth herein as set forth in the immediately preceding sentence. Disbursements to Borrower and School Payment Disbursements are not permitted to be used for the payment of any School Costs.

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(c) Each Draw Request shall be accompanied by (i) a progress report (as described in Section 4.3 hereof), (ii) to the extent not previously furnished to Lender, the most current quarterly or annual, as applicable, financial statements for Borrower, as well as a balance sheet, (iii) to the extent not previously furnished to Lender, copies of certified income and expense statements for the Property; (iv) detailed line item descriptions of the costs to be reimbursed or paid with the Disbursement to Borrower and School Payment Disbursement and the corresponding Line Items under which such costs fall, (v) any Additional Equity, if required to be deposited with Lender under this Agreement or an Equity Deposit, if required to be deposited under Section 3.3(t) relating to an increase in the hard costs related to the School Fit-Out Work (as defined in the School Unit Purchase Agreement); and (vi) such documents and instruments as Lender may reasonably request to establish that each person performing labor or supplying materials has been paid or will be paid (to the extent payment is due) from the funds advanced pursuant to said Draw Request for all work performed and materials supplied through the date of the Draw Request, including without limitation, Acceptable Invoices, paid invoices, applicable AIA forms, and conditional or unconditional lien waivers from the Contractor, Major Subcontractors and other subcontractors, as applicable. Each Draw Request shall be deemed to be a renewal of all Borrower’s warranties and representations in this Agreement and the other Loan Documents, as updated to reflect changed facts which do not have a Material Adverse Effect. To the extent an Equity Deposit has been made by Borrower into the Loan Reserve, Disbursements to Borrower shall be made first from such Equity Deposits.

(d) Each Draw Request must also include a Borrower Certification, which, inter alia , includes a representation and warranty (i) that SCA has approved and funded (or Borrower has funded or caused to be funded) the Public School Project Costs included in all prior Requisitions and attaching a copy of each Requisition delivered to and approved by the SCA with respect to said Public School Project Costs, to the extent required under the School Unit Purchase Agreement, (ii) that identifies the Public School Project Costs paid (or reimbursed) from the Control Accounts, (iii) that such Draw Request does not violate the provisions of the School Unit Purchase Agreement, and (iv) that all Change Orders to date either have not required SCA’s prior consent or if such consent was required pursuant to the terms of the School Unit Purchase Agreement, such consent has been obtained in writing and that a copy of any such consent has been delivered to Lender in connection with the applicable Change Order request. School Payment Disbursements shall be made from the School Purchase Control Account, to the extent funds are available in the School Purchase Control Account. To the extent that Borrower satisfies all of the conditions precedent to a Disbursement to Borrower, Lender shall first disburse funds in the School Purchase Control Account until all such funds are exhausted prior to making any Disbursements to Borrower pursuant to the terms of this Agreement. Any School Payment Disbursements made from the School Purchase Control Account shall not constitute a Disbursement to Borrower so as to increase the outstanding principal balance of the Loan. School Payment Disbursements to Borrower shall be used to pay the Contractor concurrently with the payments to the Contractor for costs of the Project (other than School Costs) that are covered by the applicable Draw Request.

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(e) In the event that (x) the SCA fails to fund any School Cost Payments when required under the terms of the School Unit Purchase Agreement, or (y) Lender determines in its reasonable discretion that the SCA will not fund a particular Requisition, as a result of Borrower failing to satisfy a condition precedent to such obligation of the SCA to fund said School Cost Payments or otherwise (the parties agreeing that Lender’s determination shall be deemed reasonable if the SCA has not funded any School Cost Payments for more than seventy-five (75) days after Borrower submitted to SCA a Requisition with respect to such School Cost Payment pursuant to subsection 5.02(c)(iii) of the School Unit Purchase Agreement (but if SCA’s failure to so fund any School Cost Payment falls within an annual payment moratorium of The City of New York pursuant to Section 9.02(a) of the School Unit Purchase Agreement, Lender’s determination shall only be deemed reasonable if the SCA has not funded any School Cost Payments by the later to occur of (i) seventy-five (75) days after Borrower submitted to SCA a Requisition with respect to such School Cost Payment pursuant to subsection 5.02(c)(iii) of the School Unit Purchase Agreement, and (ii) seventy-five (75) days after the date of the expiration of such annual moratoriam)), Borrower shall have twenty (20) Business Days from the date that the SCA is required to fund said unfunded School Cost Payments pursuant to the terms of the School Unit Purchase Agreement in the case of (x) and ten (10) days from said Lender’s determination in the case of (y), to fund such unfunded School Cost Payments into the School Purchase Control Account. Said funds in the School Purchase Control Account shall not be available as a School Payment Disbursement unless and until all of Borrower’s Required Equity shall be contributed. Lender shall not be required to make any Disbursement to Borrower until such unfunded School Cost Payment has been made by Borrower or the SCA. Borrower acknowledges that Lender shall not be deemed to have waived any of its rights and remedies against the SCA relating to said failure by the SCA to fund any School Cost Payment.

Section 3.5 Disbursements to Borrower for Hard Costs .

(a) Each Draw Request for Hard Costs shall be accompanied by a Contractor’s Application for Payment together with AIA form G702 and AIA form G703 signed by the Contractor and the Architect, and indicating the percentage of completion of each Hard Cost Line Item set forth in the Approved Budget;

(b) Each Draw Request for Hard Costs shall be based upon the percentage of completion of the Hard Cost Line Items. The percentage of completion shall be based upon the Architect’s certificate of job progress, or the report of the Inspector, whichever is less;

(c) From each Disbursement to Borrower for the payment of Hard Costs (other than the Contractor’s fee and general conditions costs), Lender shall withhold ten percent (10%) retainage (the “ Retainage ”); provided, however, upon the completion of fifty percent (50%) of the work with respect to any given subcontract, as determined by Borrower (subject to Lender and Inspector approval (not to be unreasonably withheld, conditioned or delayed)), Lender shall withhold zero percent (0%) retainage thereafter with respect to such subcontract. Additionally, upon substantial completion of the work with respect to any given subcontract substantially in accordance with the Approved Plans, as certified by Borrower and confirmed by the Inspector (not to be unreasonably withheld, conditioned or delayed), Lender shall permit Retainage with respect to such subcontract to be disbursed subject to the satisfaction of the other applicable disbursement conditions herein; provided that after substantial completion and until final completion of such subcontractor’s work, Retainage for such subcontract shall equal two and one-half percent (2.5%) of the work under such subcontractor plus 200% of the remaining punch-list work to be performed by such subcontractor.

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(d) If any Draw Request covers, in whole or in part, a payment for materials not incorporated into the Improvements (“ Stored Materials ”), Lender shall have no obligation to make such disbursement unless Lender determines, in its reasonable discretion, from evidence provided by Borrower, that (i) the materials are stored at a location on the Land reasonably acceptable to Lender, (ii) the materials are fully insured under a reasonably satisfactory insurance policy naming Lender and Borrower as loss payees, (iii) the materials are identifiable, and are properly segregated from materials not intended for the Construction Work, (iv) if required by Lender, the Inspector shall have inspected such materials and verified satisfaction of the foregoing requirements (which verification shall not be unreasonably withheld, conditioned or delayed), and (v) Lender has a perfected security interest in the Stored Materials. Subject to the satisfaction of the foregoing conditions but notwithstanding anything herein to the contrary, Lender will fund no more than $5,000,000.00 for Stored Materials at any one time; and

(e) Prior to any Disbursements to Borrower to pay for Hard Costs, Lender must receive, and approve (which approval shall not be unreasonably withheld, conditioned or delayed) the substance and conclusions of, a written report from the Inspector which will include a review and comment on Borrower’s monthly Draw Request, construction progress, percentage complete, conformity with Approved Plans and Legal Requirements, the activity and coordinating among trades, the quality of workmanship, the accuracy of the Borrower’s estimates of the percentage of work completed, a list of all pending and approved Change Orders and confirmation of whether remaining Funds not yet advanced as Disbursements to Borrower, together with School Cost Payments not yet advanced by the SCA, are sufficient for Borrower to achieve Completion of the Construction Work. Lender shall use commercially reasonable efforts to cause Inspector to timely provide the foregoing report.

Section 3.6 Disbursements for Payment of Interest from the Interest Holdback and Interest Reserve . The Approved Budget contains a Line Item for interest payments payable under the Building Loan Note to be advanced under the Building Loan in the amount of up to SEVENTEEN MILLION NINETY FOUR THOUSAND SEVEN HUNDRED TEN AND 00/100 DOLLARS ($17,094,710.00) (the “ Building Loan Interest Holdback ”) and a Line Item for interest payments payable under the Project Loan Note and the Term Loan Note to be advanced under the Project Loan in the amount of up to TWELVE MILLION NINE HUNDRED FIVE THOUSAND TWO HUNDRED NINETY AND 00/100 DOLLARS ($12,905,290.00) (the “ Project Loan and Term Loan Interest Holdback ”; collectively with the Building Loan Interest Holdback, the “ Interest Holdback ”). To the extent there is cash flow from the Property, Borrower shall use said cash flow to pay all Actual Debt Service under the Notes. To the extent that the cash flow from the Property is insufficient to pay the Actual Debt Service, Funds in the Interest Holdback (or if Borrower has funded the Interest Reserve under Section 2.9 , Funds in the Reserve Account, until such Funds are exhausted) shall be applied by Lender as a Disbursement to Borrower to make the monthly interest payments on the Loan that become due and payable prior to the date on which all Disbursements to Borrower from the Interest Holdback have been made provided that the following conditions remain satisfied: (i) no Event of Default exists, (ii) the Loan is not Out of Balance, and (iii) Borrower continues to satisfy the provisions of Section 2.9 . Each Disbursement to Borrower from the Interest Holdback shall increase the outstanding principal balance of the applicable Loan. Nothing herein is intended or shall be construed to alter or limit Borrower’s obligation to make the monthly interest payments on the Loan if the Interest Holdback and the Interest Reserve are inadequate or the conditions under Section 3.3 are not satisfied.

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Section 3.7 Final Disbursement to Borrower for Hard Costs and Soft Costs . The final Disbursement to Borrower from the Building Loan and the Project Loan, including the Retainage (but excluding the Funds necessary pursuant to Section 3.17 below to establish the Punch List Sub Reserve), shall be disbursed only upon Lender’s receipt of the following:

(a) Evidence that the Borrower has achieved Completion of the Construction Work and Project;

(b) Evidence reasonably satisfactory to Lender that Hard Costs other than with respect to Punch List Items shall, upon making the final Disbursement to Borrower, have been paid in full;

(c) An endorsement to the title policy issued by the Title Company updating the coverage through the date of the final disbursement and showing no exceptions to title other than those previously approved by Lender;

(d) Evidence (which may consist of a certified statement by Borrower) that Borrower has accepted the Improvements as complete from the Contractor, subject to completion of Punch List Items; and

(e) Evidence reasonably satisfactory to Lender that the undisbursed portion of the Interest Holdback and, if applicable, the Interest Reserve, is sufficient to pay all Assumed Debt Service on the Loan until the date that Subdivided Residential Units are projected to start to be conveyed to Residential Unit Purchasers.

Section 3.8 Deliveries after Completion of the Construction Work . Within thirty (30) days following Completion of the Construction Work, Borrower shall use commercially reasonable efforts to deliver the following items in form and content acceptable to Lender:

(a) Three copies of an ALTA/ACSM “Class A” Land Title Survey of the Project describing the dimensions and location of all Improvements constructed in place prepared in accordance with the terms of Exhibit J attached hereto;

(b) One set of “as built” plans and specifications for the Improvements (or construction drawings marked to show changes in the course of construction);

(c) A final personal property inventory and evidence of full payment for personal property in which Lender has or is to have a security interest;

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(d) An itemized statement showing the costs of construction incurred for construction of the Project, which statement shall be certified to Lender as materially true and correct by an officer of Borrower and other such additional information Lender may reasonably request in order to verify such cost of construction;

(e) Such certificates and other evidence as Lender may reasonably require that Borrower is in compliance with all insurance requirements under the Loan Documents;

(f) An updated Phase I environmental report dated after Completion of the Construction Work satisfying the requirements set forth in Exhibit K attached hereto and otherwise acceptable to Lender in all material respects as determined in Lender’s reasonable discretion; and

(g) Lender shall have reviewed and approved (which approval shall not be unreasonably withheld, conditioned or delayed) a true, correct and complete copy of the Management Agreement relating to the Project in accordance with the provisions of Section 7.5 .

Section 3.9 Contingency: Reallocations . Borrower shall have the right to recognize up to $500,000.00 per any one Line Item of Available Cost Savings and a total Available Cost Savings of up to $2,000,000.00. Any Available Costs Savings realized in excess of the foregoing amounts must be approved by Lender in its reasonable discretion. Subject to this Section 3.9 , Borrower shall have the right to reallocate Available Cost Savings in Line Items to cost overruns in other Line Items. The Line Item designated “Contingency” (the “ Contingency Line Item ”) represents an amount necessary to provide reasonable assurances to Lender that additional Funds are available to be used if the allowances for certain items in the Construction Contract are not sufficient or if additional costs and expenses are incurred or additional interest accrues on the Loan, or unanticipated events or problems occur. The Approved Budget shall contain a Contingency Line Item equal to a minimum of six and one-half percent (6.5%) of the unpaid Hard Costs to Complete the Project as of the date hereof and five percent (5.0%) of unpaid Soft Costs to Complete the Project as of the date hereof. Borrower may from time to time request that portions of the Contingency Line Item be reallocated to other Line Items. Such requests shall be subject to Lender’s written approval which shall not be unreasonably withheld, conditioned or delayed and shall be granted provided that, in Lender’s reasonable judgment, there are sufficient amounts remaining in the Contingency Line Item, to protect against cost overruns and other unanticipated events or circumstances. Notwithstanding anything to the contrary contained above in this Section 3.9 , Borrower shall in no event or under any circumstances have the right (i) to reallocate any Available Cost Savings in a Line Item for any Hard Costs to a Line Item other than another Line Item for Hard Costs, without in each instance obtaining Lender’s prior written approval, (ii) to reallocate any Available Cost Savings in a Line Item for Soft Costs to a Line Item for Hard Costs without in each instance obtaining Lender’s prior written approval, (iii) to reallocate Funds in the Interest Holdback to other Line Items, or (iv) in any event, to cause a reallocation to occur that in the reasonable opinion of Lender, its counsel or the Title Company, will be in contravention of the Lien Law, or that in the reasonable opinion of Lender, its counsel or the Title Company will adversely affect or impair the lien or the priority of lien of the Mortgage.

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Section 3.10 Developer Fee . The Developer Fee set forth in the Approved Budget shall not exceed $4,500,000.00 (the “ Developer Fee ”) in the aggregate and subject to the satisfaction of all the conditions of a Disbursement to Borrower, will be funded as follows: (i) not more than $1,000,000 of the Developer Fee shall be funded by Lender on the Closing Date and (ii) the remainder of the Developer Fee shall be paid on a straight line monthly basis in equal installments over the 42-month period of construction of the Project (the “ Monthly Developer Fee ”), commencing as of the date of issuance to the Contractor of a notice to proceed. In the event of any revision to the Construction Timeline approved by Lender, the amount of the Monthly Developer Fee to be paid to Borrower each month shall be equitably recalculated, and Borrower shall submit for Lender’s approval a revised payment schedule which uniformly allocates the applicable unpaid portion of the then projected Monthly Developer Fee to the remaining duration of the applicable Construction Timeline. The timing and amount of such installment of the Monthly Developer Fee may be further adjusted, from time to time, based on Borrower’s reasonable revisions to the Construction Timeline that are approved in writing by Lender.

Section 3.11 Balancing; Loan Reserve . If at any time during the term of the Loan, Lender reasonably determines that the Loan is Out of Balance (taking into account any Interest Rate Protection Agreements in place, amounts remaining in the Contingency Line Item available for the Project on a percentage complete basis and Available Cost Savings), Borrower shall, prior to any further Disbursements to Borrower being made by Lender, make an additional Equity Deposit in an amount sufficient to bring the Loan “in balance” for deposit into the Loan Reserve within twenty (20) Business Days following demand from Lender. Such additional Equity Deposits shall not be counted towards Borrower’s Required Equity. Anything contained in this Agreement to the contrary notwithstanding: (i) it is expressly understood and agreed that Borrower shall cause the Loan to be “in balance” at all times, and (ii) Lender shall not be obligated to make any Disbursements to Borrower if the Loan is Out of Balance. The Loan shall be deemed “ Out of Balance ” if the ratio, expressed as a percent, of (a) the remaining costs to achieve Completion of the Construction Work, inclusive of required interest due under the Loan at the Contract Rate, each as reasonably determined by Lender, to (b) the sum of (i) the unfunded portion of the Building Loan and the Project Loan (inclusive of any undisbursed portion of the Interest Holdback but specifically excluding, however, unfunded amounts of the Building Loan and the Project Loan that are budgeted for the payment of leasing commissions, tenant improvement allowances and tenant improvement work), (ii) the remaining Additional Equity to be funded by Borrower plus the Equity Deposits, if any, then held by Lender, (iii) the Interest Reserve and (iv) the School Cost Payments that remain to be funded by the SCA under the School Unit Purchase Agreement (so long as no default by the SCA shall have occurred thereunder which continues after the giving of any applicable notice and expiration of the applicable cure period; provided, however, that School Cost Payments that the SCA fails to fund when required under the terms of the School Unit Purchase Agreement or which Lender reasonably determines under Section 3.4(e)(y) will not be funded by the SCA shall not be taken into account in the forgoing calculation), is greater than one-hundred percent (100%). The unfunded portions of the Building Loan, the Project Loan and the Additional Equity will include the required Contingency, as reasonably determined by Lender based upon the then current percent of completion, and Available Cost Savings. Notwithstanding anything to the contrary contained in Section 3.4(e) or this Section 3.11 , the Loan shall not be deemed to be Out of Balance due to the fact that a default by SCA under the School Unit Purchase Agreement shall have occurred which continues after the giving of any applicable notice and expiration of the applicable cure period, SCA shall have failed to fund any School Cost Payments when required under the terms of the School Unit Purchase Agreement or Lender has reasonably determined under Section 3.4(e)(y) that certain School Cost Payments will not be funded by SCA, in any such case, so long as Borrower or SCA thereafter funds each School Cost Payment on or prior to the later to occur of (x) the date upon which such School Cost Payment would have been payable by SCA under the School Unit Purchase Agreement if not for such default by SCA, failure to fund by SCA or determination by Lender or (y) the date upon which Borrower is required to make such payment pursuant Section 3.4(e)(y) .

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Section 3.12 Manner of Disbursement . Lender shall make Disbursements to Borrower directly into Borrower’s Operating Account; provided, that if an Event of a Default exists and Lender elects to make a Disbursement to Borrower in its sole discretion, Lender may, at its option, make said Disbursement to Borrower through a title insurance company, or directly or by joint payee check to contractors, material suppliers, laborers and other persons entitled thereto.

Section 3.13 Expenses, Fees and Interest . Borrower shall pay all of Lender’s reasonable out-of-pocket costs and expenses incurred in connection with the Disbursements to Borrower, including, without limitation, the Control Accounts, Administrator’s fees, Inspector’s fees, actual out-of-pocket attorneys’ fees, actual out-of-pocket costs and expenses to inspect any new or renovated Improvements, any recording and filing charges and any title insurance company charges. Notwithstanding any other provision of this Agreement, upon ten (10) days prior notice to, but without authorization from, Borrower, Lender may elect to use the Funds to pay when due any fees owed by Borrower to Lender, the Administrator or the Inspector under this Agreement or any other Loan Document, interest on the Loan, reasonable legal fees and costs of Lender’s or Lender’s attorneys which are payable by Borrower, and such other sums as may be payable from time to time by Borrower to Lender or the Administrator under the Loan Documents if such payment is not made by Borrower within such ten (10)-day period. Such payments, at the option of Lender, may be made by debiting or charging the Funds in the amount of such payments without first disbursing such amount to Borrower and shall be deemed to be a Disbursement to Borrower.

Section 3.14 Use of Funds . All Disbursements to Borrower shall be used only to pay the costs set out in the Approved Budget and only in accordance with a Draw Request approved by Lender (which approval shall not be unreasonably withheld, conditioned or delayed).

Section 3.15 Responsibility For Application of Funds . Lender shall not have any obligation to assure that Disbursements to Borrower are applied against the costs shown in the Draw Request, and Borrower accepts sole and full responsibility for and warrants proper application of all such disbursements. Borrower hereby releases and agrees to hold harmless, protect, indemnify, and defend Lender and its officers, directors, employees, attorneys, and agents from all Losses, demands, claims, and expenses that arise out or are related to any alleged misapplication or misuse of Funds by Borrower or anyone acting on behalf of Borrower.

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Section 3.16 Governmental Set Asides . In the event that any Funds are set aside (“ Set Aside Funds ”) for purposes of meeting any governmental requirements to pay for performance obligations imposed on Borrower, such Set Aside Funds shall be treated as Disbursements to Borrower on the date they are set aside. The Set Aside Funds shall, in Lender’s sole discretion, either be held in the Loan Reserve (and not be eligible to be used for Disbursements to Borrower), and shall be under the sole dominion and control of Lender. Borrower hereby grants to Lender a security interest in the Set Aside Funds to secure the Obligations. Upon the satisfaction by Borrower of all work and other governmental requirements that are secured by the Set Aside Funds, as long as no Event of Default exists, the Set Aside Funds shall be released by Lender from the Loan Reserve and disbursed by Lender from the Loan Reserve in accordance with the terms of this Agreement.

Section 3.17 Punch List Sub Reserve . Upon Completion, Borrower shall deposit into the Loan Reserve (which deposit, as long as the Loan is not Out of Balance, may be funded by available Loan proceeds from the applicable line items for the costs in question as well as contingency line item in the Approved Budget) an amount equal to one hundred twenty-five percent (125%) of Lender’s estimate of costs to complete the Punch List Items (such amounts deposited in the Loan Reserve, the “ Punch List Sub Reserve ”). Funds in the Punch List Sub Reserve shall be disbursed to Borrower, in a single disbursement, upon completion of the Punch List Items in accordance with the requirements of Section 4.10 of this Agreement, as confirmed by Lender in its reasonable discretion.

Section 3.18 Funding for Deposits . If any Draw Request covers, in whole or in part, the payment of a deposit or deposits to a vendor or supplier of construction materials, supplies or components for the Construction Work, Lender shall have no obligation to make such disbursement unless (i) said deposit and the vendor or supplier that is the payee are identified in the Draw Request, and (ii) said deposit is identified on and does not exceed the amount set forth on Exhibit I .

Section 3.19 Personal to Borrower . Disbursements to Borrower are personally available to and for the sole benefit of TPHGreenwich Owner LLC, a Delaware limited liability company, and shall not be available to or assignable to any other person or party. Any right to request a Disbursement to Borrower shall terminate and become null and void upon any transfer of title to the Mortgaged Property, or any portion thereof in violation of this Agreement, or upon any unauthorized Conveyance.

Section 3.20 EB-5 Investments . EB-5 investors shall not be permitted to contribute any equity to the Project without Lender’s prior written approval, which approval may be withheld in Lender’s sole and absolute discretion.

Section 3.21 Union Labor . Lender encourages Borrower to seek competitive union bids where applicable on any subcontracts for Construction Work estimated to cost over Five Million and 00/100 Dollars ($5,000,000.00).

Section 3.22 Change in Scope of Project . In the event that the SCA has materially defaulted under the School Unit Purchase Agreement, Borrower may request that Lender consent to a change in the scope of the Project, which consent may be withheld in Lender’s sole and absolute discretion.

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ARTICLE 4

CONSTRUCTION OF IMPROVEMENTS

Section 4.1 Commencement and Completion of Construction .

(a) If not already commenced, Borrower shall use good faith efforts to commence the Construction Work within thirty (30) days following the Closing Date and Borrower shall thereafter diligently and continuously pursue the achievement of Completion. The Construction Work shall be performed and the Improvements shall be constructed in a good and workmanlike manner, free from all material defects in materials or workmanship. The Construction Work shall conform in all material respects to the Business Plan, the School Unit Purchase Agreement, the Approved Plans and all Legal Requirements, as same may be modified in accordance with the terms of this Agreement. The Construction Work shall proceed diligently and Borrower shall achieve Completion of the Construction Work and the Improvements on or before the Completion Date. In the case that there is a Force Majeure event, the Completion Date shall be extended on a day-for-day basis for each calendar day that Borrower is unable to complete the Construction Work by the Completion Date provided that (i) written notice of each such delaying cause is received by Lender within twelve (12) Business Days after Borrower first becomes aware of the commencement of each such delaying cause and again within twelve (12) Business Days after Borrower becomes aware of any termination or cessation thereof and (ii) the Completion Date shall in no event be extended beyond the date which is 45 months following the Closing Date (i.e., September 19, 2021) (the “ Outside Completion Date ”), TIME BEING OF THE ESSENCE , and (iii) the Loan is not Out of Balance (or sufficient Additional Equity has been contributed such that the Loan is no longer Out of Balance).

(b) Borrower shall achieve each of the following conditions on or before the date specified therefor (each such condition shall be referred to individually as a “ Milestone Construction Hurdle ” and the corresponding dates for Borrower to achieve such Milestone Construction Hurdle are referred to individually as a “ Milestone Deadline ”) in each case, as such date may be extended due to Force Majeure on a day-for-day basis for each day that Borrower is unable to achieve the applicable Milestone Construction Hurdle by the applicable Milestone Deadline; provided, however, no Milestone Deadline shall be extended due to a Force Majeure event (i) beyond the applicable “ Outside Milestone Date ” set forth below, or (ii) beyond the Outside Completion Date:

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	ID	Milestone Construction Hurdle	Schedule Date	Milestone Deadline	Outside Milestone Date
	(from Construction Timeline)	(from Construction Timeline)	(from Construction Timeline)

1	24	SOE Work completed	2/2/2018	6/30/2018	12/30/2018

2	26	Caisson Operation completed	5/21/2018	9/30/2018	3/30/2019

3	28 & 29	Foundation walls complete and Slab on grade poured	10/4/2018	2/28/2019	8/28/2019

4	38	Superstructure completed through Flr 9 and 9M	2/12/2019	6/30/2019	12/30/2019

5	44, 45 & 58	Superstructure topped out, crane removed and Curtainwall installation complete through curtainwall crown	9/23/2019	1/30/2020	4/30/2020

6	109	SCA Turnover aka Substantial Completion of School Base Building Work – T1	9/17/2019	12/31/2019	3/31/2020

7	75 & 110	MEP Work Completed and SCA Post Turnover Work – T2	3/5/2020	6/30/2020	9/30/2020

8	111 & 114	SCA Post Turnover Work – T3 and Resi TCO1	9/21/2020	12/31/2020	3/31/2021

9	116	Project Completion	12/29/2020	Completion Date	Outside Completion Date

Section 4.2 Change Orders . All requests for changes (“ Change Orders ”) in the Approved Plans (other than minor field changes involving no extra cost (provided that if SCA’s approval of such change is required under the School Unit Purchase Agreement, Borrower shall have obtained SCA’s written approval thereof and provided a copy thereof to Lender )) shall be in writing, signed by Borrower and the Architect, and delivered to Lender and to the Administrator promptly after execution. Borrower shall obtain the SCA’s approval or consent to all Change Orders that affect the School Unit or the School Program (as defined in the School Unit Purchase Agreement) (an “ SCA Change Order ”) in writing and a copy of such approval or consent shall be delivered to Lender as an attachment to the applicable Change Order request. Borrower agrees to not permit any work pursuant to any “material” Change Order without Lender’s prior written approval. A Change Order shall be deemed “material” if it (i) adversely affects the value or changes the use of the Improvements, (ii) alters the unit count below ninety (90) residential units or above ninety-three (93) residential units, (iii) is inconsistent with a luxury residential condominium development as set forth in the Business Plan, (iv) increases or decreases the cost of the Construction Work by more than $500,000.00, (v) when added to other Change Orders not requiring the approval of Lender (other than Change Orders that Lender approved in writing), it increases or decreases the cost of the Construction Work by more than $2,500,000.00 (except that Change Orders necessary to satisfy Legal Requirements of Governmental Authorities shall be permitted to be in excess of the foregoing limit subject to an aggregate cap of $3,000,000.00), (vi) will cause Borrower to be unable to achieve Completion of the Construction Work on or before the Completion Date, (vii) requires any consent or approval of the SCA under the School Unit Purchase Agreement that was not obtained, (viii) causes an increase in the hard costs of the School Fit-Out Work (as defined in the School Unit Purchase Agreement) for which Borrower is responsible under the School Unit Purchase Agreement, or (ix) constitutes an SCA Change Order. If the cost of the Construction Work is increased by any Change Order and there are insufficient Funds (after any permitted re-allocations of Available Cost Savings and excluding the Contingency Line Item in the Approved Budget) to pay the increased cost, Borrower shall make an Equity Deposit in the amount of the increased cost with Lender in cash before permitting any work pursuant to the Change Order. The cash deposited with Lender shall be added to the Loan Reserve.

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Section 4.3 Progress Reports . Borrower shall deliver to Lender not less frequently than monthly during construction, a report of the progress of construction of the Improvements, the cost of the Improvements compared to the Line Items in the Approved Budget, the Change Order and pending Change Order logs, the promotion and merchandising efforts for marketing the Subdivided Residential Units of the Project, current leasing reports (if applicable) with respect to the Retail Unit, and such other data and information concerning the Project as may be reasonably requested by Lender. Such reports shall be provided on a monthly basis or more frequently if required by Lender.

Section 4.4 Access to Borrower’s Books and Records . Lender and its representatives shall have reasonable access to the books, records, contracts, sub contracts, invoices, bills and statements of Borrower, including any supporting or related vouchers or other instruments. If Lender so requires, copies of such items shall be delivered to Lender or its representatives for audit, examination, inspection, and photocopying.

Section 4.5 Inspections . Lender, Administrator, Inspector and their respective representatives shall at reasonable times upon reasonable prior notice and, at Borrower’s option, accompanied by a representative of Borrower, have the right of entry and access to the Project, and the right to inspect all work done, labor performed and materials furnished on or about the Project; provided that such entry and access to any Condominium Unit that has been conveyed shall be subject to the terms of the Condominium Documents. The Inspector will make periodic inspections of the Construction Work and the Improvements during construction to review and comment on the construction progress and percentage of completion, the conformity with the Approved Plans and Legal Requirements, the activity and coordination among trades, the quality of workmanship, and the accuracy of Borrower’s estimates of the percentage of work completed. The Inspector will review monthly Borrower Draw Requests and perform such other duties as Lender deems necessary or desirable. Borrower shall pay the reasonable fees of the Inspector in connection with Borrower’s request for a Disbursement to Borrower. Borrower acknowledges and agrees that all inspections by Lender or its representatives, including but not limited to Inspector, are solely for the purpose of protecting the security of Lender. No such inspection shall constitute a representation by Lender to any person that the Improvements comply with the Approved Plans and the Legal Requirements, or that the construction is free from faulty materials or workmanship, nor shall any inspection by Lender or its representatives, including but not limited to Inspector, constitute approval of any certification or representation given to Lender or relieve any person making such certification or representation from the responsibility therefor. Lender shall use commercially reasonable efforts not to interfere with (and shall cause its representatives and agents not to interfere with) the Construction Work.

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Section 4.6 Corrective Work . If any portion of the Construction Work does not materially conform with the requirements of this Agreement, Lender shall have the right to require corrective work by delivery of written demand to Borrower. If Lender reasonably determines that the corrective work is likely to delay completion of the Construction Work beyond the Completion Date, no further construction except corrective work shall be performed without the prior written consent of Lender, and the corrective work shall be completed to Lender’s reasonable satisfaction within fifteen (15) days from the date of the written demand or, if the corrective work is not reasonably capable of being completed within fifteen (15) days, within such additional time as is reasonably necessary, but not exceeding sixty (60) days, unless Borrower demonstrates to Lender’s reasonable satisfaction that any time in excess of sixty (60) days to complete the corrective work will not cause Borrower to fail to satisfy a Milestone Construction Hurdle by the applicable Milestone Deadline.

Section 4.7 Liens . Borrower shall keep the Project free from all Liens (other than Permitted Encumbrances), whether or not superior to the Mortgage, other than as expressly set forth in this Section 4.7 . If any Lien that is not a Permitted Encumbrance is filed or placed against the Project, Borrower shall obtain a release or discharge of the Lien in accordance with all applicable Legal Requirements, within thirty (30) days following the earlier of the date on which Borrower first receives notice of such lien or the date of written notice by Lender to Borrower of the existence of the Lien. At any time within such thirty (30) day period, Lender may refuse to make any disbursements of Funds until the Lien is so released or discharged in accordance with all applicable Legal Requirements. If Borrower does not cause the release or discharge of such Lien within said thirty (30) days, Lender may elect to disburse Funds to pay such Lien. Lender’s rights under this Section shall not be affected by any claim of Borrower that the Lien is invalid, it being understood that the decision of Lender to pay or withhold is to be made by Lender in its sole discretion, subject only to Borrower’s right to obtain the release and satisfaction of, or discharge of, such Lien as provided above.

Section 4.8 Disputes Endangering Completion . If an Event of Default exists and any dispute arises under a contract or subcontract for which there is either no expedited arbitration or such arbitration proceeding has not concluded in the time frames set forth in such contract or subcontract, Lender may: (i) disburse Funds for the account of Borrower without prejudice to Borrower’s rights, if any, to recover from the party to whom paid, and (ii) without limitation, indemnify a title insurer against possible assertion of Liens, or agree to pay any disputed amounts to contractors or subcontractors if Borrower is unable or unwilling to pay the same. All sums paid or agreed to be paid under this Section 4.8 shall be for the account of Borrower and constitute an Advance, and Borrower agrees to reimburse Lender for all such Advances, together with interest at the Default Rate until the date of reimbursement. Such Advances, whether or not in excess of the Funds, shall be secured by the Mortgage.

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Section 4.9 Restriction . Without Lender’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed, Borrower shall not purchase or install any materials, equipment, fixtures, or any other part of the Improvements under conditional sales agreements or other arrangements wherein the right is reserved to remove or repossess any such items.

Section 4.10 Punch List Items . Borrower shall complete all Punch List Items no later than one hundred twenty (120) days following the date on which Completion of the Construction Work occurs (subject to reasonable extensions if Borrower is diligently pursuing the completion of such Punch List Items), or such earlier date as required under the School Unit Purchase Agreement.

Section 4.11 Completion . Borrower shall achieve Completion of the Construction Work on or before the Completion Date, or, if applicable due to a Force Majeure event, the Outside Completion Date.

ARTICLE 5

INSURANCE AND CONDEMNATION

Section 5.1 Insurance Requirements .

(a) Property Insurance . During any period of construction, renovation, or alteration of the Improvements or the performance by Borrower of the Construction Work, Borrower shall maintain Builders Risk insurance insuring one hundred percent (100%) of the insurable replacement cost of the Improvements, including coverages for Hard and Soft Costs, materials used for construction whether located on-site or off-site and while in transit, Delay in Completion, Permission To Occupy, Collapse During Construction, Terrorism, Named Windstorm, Flood, Sinkhole (if applicable) and Earthquake (if applicable). Borrower shall cause the Contractor to maintain the following coverages: Commercial General Liability, Auto Liability (if applicable), Workers Compensation including Employers Liability, Contractor Pollution Liability, Crane Liability, and Umbrella or Excess Liability. In addition, Lender will require proof of the Architect’s and Designer’s Professional Liability Insurance.

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Upon Completion of the Construction Work, Borrower shall maintain or cause the Condominium Association to maintain either “All Risk” or “Special Form” real and personal property insurance and “Boiler and Machinery Insurance”, insuring one hundred percent (100%) of the insurable replacement cost value of the Improvements and the Equipment, excluding foundations, and with a deductible not to exceed $100,000 with the exception for Earthquake, Named Windstorm and Flood, providing no coinsurance or similar penalty. Such insurance shall also cover “Rent Loss” or “Business Interruption” and “Extra Expense” on an “Actual Loss Sustained Basis” (including Rent Loss), in an amount equal to at least eighteen (18) months of the Property Income, and an extended period of indemnity of at least three hundred sixty-five (365) days. Covered perils shall include, but not be limited to, “Windstorm” (including “Named Windstorm”), “Boiler and Machinery Insurance” and “Acts of Terrorism”; provided that for so long as the Terrorism Risk Insurance Program Reauthorization Act of 2015, as amended (“ TRIPRA ”), is in effect (including any extensions), Lender shall accept terrorism insurance which covers against “covered acts” as defined therein, and during any period in which TRIPRA or other similar government legislation is no longer in effect, Borrower shall only be required to maintain, or cause to be maintained, the amount of terrorism insurance which can be purchased with a premium that does not exceed an amount equal to two (2) times the amount of the then-current premium for the property insurance required hereunder (excluding any terrorism component thereof) and further provided that such insurance shall not have a deductible in excess of fifty thousand and 00/100 dollars ($50,000.00). Lender may from time to time also require that Borrower maintain insurance acceptable to Lender for “Builder’s Risk” during the period of any construction, renovation or alteration of the Improvements. If the Mortgaged Property is defined to be in Seismic Zone 3 or 4, or its equivalent, earthquake insurance shall also be maintained by Borrower. If the Mortgaged property is located within a Special Hazard Flood Area, National Flood Insurance Program (“ NFIP ”) insurance is required. In addition, the Property policy must provide an maintain a Flood Limit in excess of NFIP that is acceptable to Lender.

(b) All insurance coverages, limits and deductibles must be reasonably satisfactory to Lender.

(i)

During any period of construction, renovation, or alteration of the Improvements or the performance by Borrower or Contractor, Borrower shall maintain or cause the Contractor to maintain General Liability insurance (including contractual liability and “Acts of Terrorism”) in an amount equal to at least $2,000,000 per occurrence, $4,000,000 in the aggregate and $4,000,000 products completed operations aggregate, which must be in effect throughout the statute of repose in New York, with a Per Location/Contractor Per Project aggregate endorsement. In addition, Borrower shall maintain or cause the Contractor to maintain Umbrella or Excess Liability insurance in an amount Lender determines to be reasonable from time to time but in no event less than $50,000,000. If applicable, Lender may, from time to time also require that Borrower maintain insurance acceptable to Lender for “Commercial Auto”, “Workers Compensation”, and such other insurance as Lender may reasonably require. In addition, Lender will require proof of the Architect’s and Designer’s Professional Liability Insurance. Further, Borrower shall maintain railroad protective liability insurance in amounts and limits required by any Permits or Operating Agreements.

(ii)

Upon Completion of the Construction Work, Borrower shall maintain or cause the Condominium Association to maintain General Liability insurance (including “Acts of Terrorism”) in an amount equal to at least $1,000,000 per occurrence and $2,000,000 in the aggregate, with a Per Location aggregate endorsement. In addition, Borrower shall maintain or cause the Condominium Association to maintain Umbrella or Excess Liability insurance in an amount Lender determines to be reasonable from time to time but in no event less than $50,000,000.

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(iii)

Contractor Liability . Borrower shall cause the General Contractor to maintain the following insurance coverages: (i) Workers Compensation with statutory limits including Employers Liability insurance, and (ii) Contractor Pollution Liability in an amount equal to $15,000,000 per occurrence, and $20,000,000 in the aggregate naming both Borrower and Lender as additional insured. General Contractor will cause the Crane Operator to maintain and provide lender with proof of Crane Operators Liability coverage with limits as required by the municipality in New York City, New York.

(d) Subcontractor Default Insurance . Borrower shall obtain and thereafter maintain in full force and effect Subcontractor Default Insurance for all subcontractors with limits of no less than $50,000,000 per claim and $100,000,000 in the aggregate and include a “Financial Interest Endorsement” naming Lender as insured party. The Project will be enrolled as of the commencement of the Construction Work. In addition, Borrower must provide Lender with semi-annual reporting on Subcontractor Default Insurance exposure, claims and losses thereunder (or more often as may be requested by Lender, provided such request shall not exceed more than once each quarter). Enrolled subcontractors must be covered under the Subcontractor Default Insurance policy at all times; provided, however, that if a subcontractor (which is not a Major Subcontractor) is not eligible for coverage under the Subcontractor Default Insurance, Lender will require a Payment and Performance Bond acceptable to Lender.

(e) Evidence of Insurance by Acceptable Insurers . At all times during the term of the Loan, Borrower shall or shall cause the Condominium Association to provide to Lender the following evidences of insurance to Lender: (i) an ACORD 28 (current version) Evidence of Property Insurance provided by an authorized insurance agent, broker or insurance company or, where ACORD 28 (current version) is not available, other evidence of insurance confirming the same rights as are provided by ACORD 28 (current version) and all applicable policy endorsements; and (ii) an ACORD 25 (current version) Certificate of Liability Insurance, provided by an authorized insurance agent, broker or insurance company confirming coverages are maintained for liability insurance as required to be carried by Borrower. Any ACORD or equivalent evidencing a Blanket insurance policy shall specifically identify the replacement cost of the improvements and the annual gross rents. The foregoing evidence shall be provided to Lender at least five (5) Business Days prior to the expiration date of each such policy. Each evidence of insurance and certificate must include a mortgagee clause and a loss payee clause satisfactory to Lender, and any Certificate of Liability Insurance must name Lender as an Additional Insured for Commercial General Liability with respect to the Premises. Each insurance company providing coverage must have an A. M. Best rating of A-X or better.

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(f) Blanket Insurance Policies . Borrower’s insurance requirements under this Article 5 may be satisfied by maintaining either individual policies covering only the Premises, or blanket insurance policies covering multiple properties, provided that with respect to any blanket insurance policies Borrower also covenants to either immediately reinstate any limits and coverages which are used, reduced or cancelled back up to the blanket policy limits approved by Lender (which shall not be unreasonably withheld, conditioned or delayed), or to secure individual policy coverages for the Premises satisfying these insurance requirements. Borrower will deliver to Lender a Schedule of Locations Insured under any blanket insurance policy together with the related certificates of insurance.

(g) Miscellaneous Insurance Requirements . All insurance policies and endorsements required pursuant to this Agreement must be reasonably satisfactory to Lender and shall: (i) be endorsed to name Lender as an additional insured thereunder, as its interest may appear, with, in the case of property insurance, loss payable to Lender, without contribution, under a long-form, non-contributory mortgagee clause, or otherwise endorsed as Lender may reasonably require; (ii) be fully paid for and contain such provisions and expiration dates and be in such form and issued by such insurance companies licensed to do business in the State; and (iii) without limiting the foregoing, provide that such policy or endorsement may not be canceled or materially changed except upon at least thirty (30) days’ (or, in the case of cancellation for nonpayment of the applicable premium, ten (10) days’) prior written notice of intention of non-renewal, cancellation or material change to Lender, and that no act or thing done by Borrower or Lender shall invalidate the policy as against Lender. Within ten (10) Business Days following a request by Lender, Borrower shall deliver to Lender all original policies including all endorsements and renewals thereof, or copies thereof certified by the insurance company or authorized agent, together with all endorsements required hereunder and any other insurance policy information and other related information (such as “Probable Maximum Loss” or “Scenario Upper Loss” studies) as Lender may reasonably request from time to time. Borrower may request an extension of time not exceeding sixty (60) days to deliver the foregoing policies, endorsements and renewals or certified copies thereof if (1) Borrower has done all things reasonably necessary to obtain the issuance of the policies, endorsements and renewals including the payment of all premiums therefor, and (2) Borrower has delivered to Lender within the above ten (10) day period an insurance binder and evidence of insurance reasonably satisfactory to Lender issued by the insurer showing all required coverage to be in full force and effect for the succeeding twelve (12) month period along with evidence reasonably satisfactory to Lender of payment in full of all premiums. If Borrower fails to maintain insurance in compliance with this Agreement, Lender may (but shall not be obligated to) obtain such insurance and make Advances to pay the premium therefore. Notwithstanding anything to the contrary contained herein or in any provision of law, the Proceeds of insurance policies coming into the possession of Lender shall not be deemed trust funds and Lender shall be entitled to dispose of such Proceeds as hereinafter provided.

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Section 5.2 Damage, Destruction and Restoration .

(a) In the event of any damage to or destruction of the Premises and/or Equipment, Borrower shall give prompt written notice to Lender and subject to the terms of (i) the Triparty Agreement during the Lease Period and (ii) subsequent to the recordation of the Declaration, the Condominium Documents, Borrower shall promptly commence and diligently continue to completion the repair, restoration and rebuilding of the Premises and/or Equipment so damaged or destroyed in full compliance with all Legal Requirements and with the provisions of Sections 5.2(e) , (f) and (h) . Such repair, restoration and rebuilding of the Premises are sometimes hereinafter collectively referred to as the “ Work ”. Except as expressly permitted under Section 5.2(h) , Borrower shall not adjust, compromise or settle any claim for insurance Proceeds without the prior written consent of Lender, which consent shall not be unreasonably withheld, conditioned or delayed so long as no Event of Default exists. Except as set forth in Section 5.2(h) , Borrower shall include Lender in all material meetings, conferences, telephone conferences and correspondence with the applicable insurer(s) following any casualty until all of the applicable insurance proceeds are disbursed by such insurer. Subject to Sections 5.2(d) and 5.2(h) of this Agreement and (i) the Triparty Agreement during the Lease Period and (ii) subsequent to the recordation of the Declaration, the Condominium Documents, Lender shall have the option in its sole discretion to apply any insurance Proceeds it may receive pursuant to this Agreement (less any reasonable out-of-pocket costs to Lender of recovering and paying out such Proceeds, including reasonable out-of-pocket attorneys’ fees, costs and expenses) to the payment of the Indebtedness or to allow all or a portion of such Proceeds to be used for the Work. If any insurance Proceeds are applied to reduce the Indebtedness, provided no Event of Default shall have occurred and be continuing, Lender shall apply the same, without any Minimum Multiple Fee, Exit Fee or Closed Period Prepayment Fee, as applicable, in accordance with the provisions of Section 2.7(c) of this Agreement. Notwithstanding the foregoing, if an Event of Default shall have occurred and be continuing, Lender, at its option, may apply any insurance Proceeds to the Indebtedness in such order and priority as Lender deems appropriate in its sole discretion and a Minimum Multiple Fee, Exit Fee or Closed Period Prepayment Fee, as applicable, or Breakage Fee shall be due and payable in accordance with the terms of Section 2.5 in connection with any such prepayment. Notwithstanding anything to the contrary contained in Section 5.6(c) of the Interparty Agreement, in no event shall Borrower be entitled to any portion of the Net Proceeds (as defined in the Triparty Agreement) prior to the payment in full of all amounts that would otherwise be due and payable to Lender under this Section 5.2 but for Section 5.6(c) of Triparty Agreement.

(b) In the event of the foreclosure of the Mortgage or other transfer of title to or assignment of the Mortgaged Property in extinguishment of the Indebtedness in whole or in part, all right, title and interest of Borrower in and to all policies of insurance required by this Agreement and any insurance Proceeds shall inure to the benefit of and pass to Lender or any purchaser or transferee at the foreclosure sale of the Mortgaged Property to the extent allowed by such policies.

(c) Lender may notify any and all insurers under casualty and liability insurance policies that Lender has a security interest pursuant to the provisions of this Agreement in and to such insurance policies and any proceeds thereof, and, subject to Section 5.2(h) , that any payments under those insurance policies are to be made directly to Lender. Lender’s rights under this Section 5.2 may be exercised by Lender or a court appointed receiver appointed upon the request of Lender if an Event of Default shall have occurred under this Agreement.

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(d) Notwithstanding the provisions of Section 5.2(a) , but subject to Section 5.2(h) , the Triparty Agreement during the Lease Period and subsequent to the recordation of the Declaration, the Condominium Documents, if in Lender’s reasonable judgment the cost of the Work shall not exceed the greater of $50,000,000 and fifty percent (50%) of the then outstanding principal balance of the Loan, then Lender shall, upon request by Borrower, permit Borrower to use the Proceeds for the Work (subject to the provisions of, and less Lender’s costs described in, Section 5.2(e) ), so long as:

(i)

no Event of Default shall then exist;

(ii)

if Completion of the Construction Work was achieved prior to the fire or casualty in question, the Work can be completed, as determined by Lender in its reasonable discretion, by the date which is three (3) months prior to the Maturity Date;

(iii)

if Completion of the Construction Work was not achieved prior to the fire, casualty or condemnation in question, the Construction Work (substantially in accordance with the Approved Plans) and the Work can be completed, as determined by Lender in its reasonable discretion, by the Outside Completion Date with each Milestone Construction Hurdle met by the applicable Outside Milestone Date;

(iv)

all sums necessary to effect the Work over and above any available Proceeds or Proceeds that are committed to be made available by the insurer, as determined by Lender in its reasonable discretion (the “ Deficiency Amount ”) shall be at the sole cost and expense of Borrower and Borrower shall deposit the Deficiency Amount, as estimated by Lender in its reasonable discretion, with Lender prior to commencing any Work and at all applicable times thereafter;

(v)

at all times during any such Work, Borrower shall maintain (or cause the Contractor to maintain), at its sole cost and expense, workers’ compensation, builders risk and public liability insurance in accordance with the provisions of Section 5.1 ;

(vi)

at all times during any such Work, business income and extra expense including rental value insurance, if applicable, shall be in full force and effect and available to cover any loss of business income and rents resulting from the damage to or destruction of the Premises and/or Equipment (or Borrower deposits any deficiency with Lender); and

(vii)

if Completion of the Construction Work was achieved prior to the casualty in question, the Improvements shall be restored to the same size, character and condition that existed prior to the damage or destruction except for immaterial changes as determined by Lender in its reasonable judgment.

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(e) In addition to satisfying all applicable conditions to Disbursements to Borrower if the fire, casualty or condemnation in question occurred prior to Borrower achieving Completion of the Construction Work, if any insurance Proceeds are used for the Work, then, unless Section 5.2(h) applies, such Proceeds together with any Deficiency Amount shall be held by Lender and shall be paid out from time to time to Borrower as the Work progresses (less any reasonable out-of-pocket costs to Lender of recovering and paying out such Proceeds and/or Deficiency Amount, including reasonable out-of-pocket attorneys’ fees, costs and expenses and costs allocable to inspecting the Work and the plans and specifications therefor), subject to each of the following conditions:

(i)

the Work shall be conducted under the supervision of a certified and registered architect or engineer reasonably satisfactory to Lender (Lender hereby approves the Architect and Engineer engaged by Borrower on the date hereof). Before Borrower commences any Work, other than temporary work to protect property or prevent interference with business, Lender shall have approved the plans and specifications for the Work (if the Work shall be different than that shown on the Approved Plans), which approval shall not be unreasonably withheld, conditioned or delayed;

(ii)

each request for payment shall be made on not less than seven (7) Business Days prior written notice to Lender and shall be accompanied by a certificate of the architect or engineer in (i) above and/or contractor stating: (A) that all of the Work completed has been done in compliance with, in all material respects, the approved plans and specifications, if required under (i) above; (B) that the sum requested is justly required to reimburse Borrower for payments by Borrower, or is justly due to the contractor, subcontractors, materialmen, laborers, engineers, architects or other Persons rendering services or materials for the Work (giving a brief description of such services and materials), and that when added to all sums previously paid out by Lender does not exceed the value of the Work done to the date of such certificate; (C) if the sum requested is to cover payment relating to repair and restoration of Equipment required or relating to the Premises, that title to the items of Equipment covered by the request for payment is vested in Borrower; and (D) that the amount of such Proceeds together with any Deficiency Amount remaining in the hands of Lender are anticipated to be sufficient on completion of the Work to pay for the same in full (giving in such reasonable detail as Lender may require an estimate of the cost of such completion). Additionally, each request for payment shall contain a statement signed by Borrower approving both the Work done to date and the Work covered by the request for payment in question;

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(iii)

each request for payment shall be accompanied by waivers of lien or conditional waivers of lien reasonably satisfactory to Lender covering that part of the Work for which payment or reimbursement is being requested and, if required by Lender, a search prepared by a title insurance company or licensed abstractor, or by other evidence reasonably satisfactory to Lender that there has not been filed with respect to the Premises any mechanics’ or other lien relating to any part of the Work not discharged of record. Additionally, as to any Equipment covered by the request for payment, Lender shall be provided with evidence of payment therefor and such further evidence satisfactory to assure Lender of its valid first lien on the Equipment;

(iv)

Lender shall have the right to inspect the Work at all reasonable times and may condition any disbursement of Proceeds upon the satisfactory completion, as determined by Lender’s reasonable discretion, of any portion of the Work for which payment or reimbursement is being requested. Neither the approval by Lender of the plans and specifications for the Work nor the inspection by Lender of the Work shall make Lender responsible for the preparation of such plans and specifications or the compliance of such plans and specifications, or of the Work, with any applicable law, regulation, ordinance, covenant or agreement;

(v)

Proceeds shall not be disbursed more frequently than every thirty (30) days; and

(vi)

any request for payment made after the Work has been completed shall be accompanied by a copy or copies of any certificate or certificates required by law to render occupancy and full operation of the Premises legal.

(f) Upon any failure on the part of Borrower to promptly commence the Work following the receipt by Borrower or Lender, as applicable, of the Proceeds or to proceed diligently and continuously (subject to Force Majeure) to completion of the Work in accordance with this Section 5.2 or upon the occurrence of any Event of Default, at Lender’s option, Lender shall be entitled to apply at any time all or any portion of the Proceeds it then or thereafter holds to the repayment of the Indebtedness or to the curing of any Event of Default.

(g) Subject to Section 2.5(d) , upon completion of the Work and payment in full therefor any unexpended Proceeds, at Lender’s option, shall either be paid over to Borrower or shall be applied to the reduction of the Indebtedness without any Minimum Multiple Fee, Exit Fee or Closed Period Prepayment Fee, as applicable that would otherwise be applicable to a prepayment of the Loan at that time.

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(h) Notwithstanding any other provision of this Section 5.2 , but subject to: (i) the terms of the Triparty Agreement during the Lease Period, or (ii) the Condominium Documents subsequent to the recordation of the Declaration, if no Event of Default or Potential Event of Default shall exist and be continuing and in Lender’s reasonable judgment the cost of the Work is less than the lesser of: (x) $3,790,000, and (y) ten percent (10%) of the then outstanding principal balance of the Loan (but not less than $1,000,000), and the Work can be completed in less than one hundred eighty (180) days (or such longer time as may be necessary in Lender’s reasonable opinion to complete the Work as long as Borrower is diligently pursuing completion of the Work, and, if Completion did not occur prior to the casualty in question, Lender reasonably determines that Borrower’s efforts will result in completion of the Work without Borrower failing to meet each Milestone Construction Hurdle prior to the applicable Outside Milestone Date), then Lender shall, upon request by Borrower, permit Borrower to apply for, compromise, settle, adjust and receive the insurance Proceeds directly from the insurer (and Lender shall advise the insurer to pay over such Proceeds directly to Borrower), provided that Borrower shall apply such insurance Proceeds solely to the prompt and diligent commencement and completion of such Work.

Section 5.3 Condemnation . Borrower shall notify Lender within five (5) Business Days after obtaining knowledge thereof of the actual or threatened commencement of any proceedings for the condemnation or taking of the Premises or any portion thereof and shall deliver to Lender copies of any and all papers served in connection with such proceedings. Lender may participate in such proceedings and Borrower shall deliver to Lender all instruments reasonably requested by Lender to permit such participation. Borrower shall not adjust, compromise, settle or enter into any agreement with respect to such proceedings without the prior written consent of Lender, which consent shall not be unreasonably withheld, conditioned or delayed. All Proceeds of any condemnation, or purchase in lieu thereof, of the Premises or any portion thereof are hereby assigned to and shall be paid to Lender. Borrower hereby authorizes Lender to collect and receive such Proceeds, to give proper receipts and acquittances therefor and, in Lender’s sole discretion, subject to the terms of the Triparty Agreement during the Lease Period and subsequent to the recordation of the Declaration, the Condominium Documents, to apply such Proceeds (less any reasonable out-of-pocket costs to Lender of recovering and paying out such Proceeds, including reasonable out-of-pocket attorneys’ fees, costs and expenses allocable to inspecting any repair, restoration or rebuilding work and the plans and specifications therefor) toward the payment of the Indebtedness or to the repair, restoration or rebuilding of the Premises in the manner and subject to the conditions set forth in Section 5.2 . Notwithstanding the foregoing provisions of this Section 5.3 , if Borrower satisfies all of the conditions set forth in Section 5.2(d) upon the taking of a portion of the Premises, Lender shall permit Borrower to use the Proceeds of the condemnation for the Work, and said Proceeds will be disbursed by Lender in accordance with the provisions of Section 5.2(e) . If the Proceeds are used to reduce the Indebtedness, they shall be applied in the order provided in Section 2.7(c) , without any Minimum Multiple Fee, Exit Fee or Closed Period Prepayment Fee, as applicable. Notwithstanding anything to the contrary contained in Section 5.6(c) of the Interparty Agreement, in no event shall Borrower be entitled to any portion of the Net Proceeds (as defined in the Triparty Agreement) prior to the payment in full of all amounts that would otherwise be due and payable to Lender under this Section 5.3 but for Section 5.6(c) of Triparty Agreement. Borrower shall promptly execute and deliver all instruments requested by Lender for the purpose of confirming the assignment of the condemnation Proceeds to Lender.

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ARTICLE 6

ENVIRONMENTAL MATTERS

Section 6.1 Terms Incorporated By Reference .

The terms and provisions of the Environmental Indemnification Agreement are incorporated herein by reference in their entirety.

ARTICLE 7

CERTAIN PROPERTY MATTERS

Section 7.1 Lease Covenants and Limitations .

(a) Borrower shall not enter into any Lease or other occupancy agreement without the prior written consent of Lender, which consent may be granted or withheld in Lender’ sole and absolute discretion. If Lender shall approve a Lease, Borrower shall provide Lender with a complete copy of said Lease within ten (10) Business Days following its execution. Lender hereby approves the Master Lease and the Sublease.

(b) With respect to each Lease so approved in writing by Lender, Borrower shall perform all obligations as lessor or lessee, as applicable, and, to the extent it is commercially reasonable to do so, shall enforce all of the terms, covenants and conditions contained therein on the part of the lessor or lessee thereunder to be performed or observed, short of termination thereof. Borrower shall not take any action which would cause any Lease to cease to be in full force and effect, except with the prior written consent of Lender, which consent shall not be unreasonably withheld, delayed or conditioned, until repayment of the entire Indebtedness. Without Lender’s consent (not to be unreasonably withheld, conditioned or delayed, except for the Master Lease or Sublease), Borrower shall not: (i) cancel, terminate or surrender any Lease, or consent to any cancellation, termination or surrender thereof (except for a termination of the Master Lease and Sublease upon the conveyance of the School Unit to the SCA); (ii) sublease or assign any Lease, or consent to the sublease or assignment thereof; (iii) subordinate any Lease to any mortgage, deed of trust or other security interest that is subordinate to the Mortgage; (iv) amend, modify or renew any existing Lease; (v) waive any material default under or breach of any Lease; (vi) consent to or accept any prepayment or discount of rent or advance rent under any Lease (other than with respect to the Master Lease); (vii) take any other action in connection with any Lease which may impair or jeopardize the validity of such Lease or Lender’s interest therein; or (viii) alter, modify or change the terms of any guaranty, letter of credit or other credit support with respect to any Lease or cancel or terminate such guaranty, letter of credit or other credit support.

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(c) As long as no Event of Default exists, the following parameters for a Lease of the Retail Unit or any portion thereof are hereby pre-approved by Lender: the potential new Lease for the Retail Unit or portion thereof (i) provides for a Net Effective Rent of not less than $65.00; and (ii) has an initial term not longer than twenty (20) years, and any renewal options exercisable by the tenant thereunder for an aggregate term longer than twenty (20) years shall be at no less than ninety percent (90%) of then current fair market rent. Lender shall have the right to review and approve a new Lease for the Retail Unit in all other respects, such approval not to be unreasonably withheld, conditioned or delayed, and such Lease must at a minimum satisfy the following conditions: (i) be an arm’s-length transaction with a bona-fide, independent third party tenant, (ii) not violate any provision of any other lease, restriction, covenant or public or private agreement affecting the Borrower, the Mortgaged Property, or the Declaration; (iii) provide that tenant will unconditionally attorn to a foreclosing lender without requiring Lender to execute a non-disturbance agreement (or else Lender, Borrower and tenant mutually agree to execute an SNDA (as defined below) (Lender hereby agreeing to execute and deliver an SNDA promptly upon request therefore by Borrower); (iv) impose no tenant improvement obligations on the landlord beyond the initial lease-up and occupancy by the tenant; and (v) contain no tenant right to acquire any ownership interest in any of the Mortgaged Property. If, within 7 Business Days after Lender’s receipt of Borrower’s written request for such approval stating: “ TIME SENSITIVE RESPONSE REQUIRED WITHIN 7 BUSINESS DAYS OF RECEIPT OR DEEMED APPROVAL MAY OCCUR ”, together with the following: (i) a true and complete copy of the proposed final Lease, including any amendments, exhibits and side agreements relating thereto executed in connection therewith, (ii) a lease summary describing in reasonable detail all material terms, and (iii) any tenant financial statements or credit reports received by Borrower with respect to the tenant thereunder (collectively, the “ Lease Approval Package ”), Lender does not approve or disapprove such Lease (disapproval to include reasons), Borrower may deliver a second notice to Lender, together with a second Lease Approval Package, stating: “ PURSUANT TO THE TERMS OF SECTION 7.1(c) OF THE MASTER LOAN AGREEMENT EXECUTED BY TPHGREENWICH OWNER LLC, AS BORROWER, DATED DECEMBER 22, 2017, LENDER HAS FAILED TO RESPOND TO THE REQUEST FOR APPROVAL OF A NEW LEASE. FAILURE OF LENDER TO RESPOND TO BORROWER’S REQUEST FOR SUCH APPROVAL WITHIN 5 BUSINESS DAYS OF RECEIPT OF THIS SECOND NOTICE SHALL BE DEEMED TO BE LENDER’S APPROVAL OF SUCH NEW LEASE”. If Lender fails to approve or disapprove (which such disapproval shall include reasons) such Lease within such additional 5 Business Day period, such Lease shall be deemed approved by Lender.

(d) For each Lease, upon Lender’s written request, Borrower shall use commercially reasonable efforts to provide Lender with: (i) a tenant estoppel certificate (which request shall not be made more than once each calendar year absent an Event of Default); and (ii) unless previously provided and still in effect with respect to the same lease, a subordination, non-disturbance and attornment agreement, in either case executed by each tenant, utilizing either Lender pre-approved forms or such other forms as Lender shall reasonably approve (an “ SNDA ”).

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(e) Any ground lease must be approved by Lender in advance in writing. Unless otherwise specifically approved, any ground lease affecting the Mortgaged Property must be or be made to be expressly subject and subordinate to the lien and terms of the Mortgage. Fee owner(s) shall provide Lender with an estoppel and recognition agreement acceptable to Lender.

(f) Lender may require at any time an Event of Default continues to exist uncured that Borrower transfer to Lender all tenant security deposits, including any letters of credit securing tenant lease obligations. Lender may hold and co-mingle such security deposits without interest, except as required by applicable law.

Section 7.2 The Master Lease, Sublease and School Unit Purchase Agreement .

(a) Borrower hereby makes the following representations, warranties, covenants and agreements with respect to the Master Lease, the Sublease and the School Unit Purchase Agreement:

(i)

Borrower has delivered to Lender a true, accurate and complete copy of the Master Lease, the Sublease and the School Unit Purchase Agreement. The Master Lease, Sublease and School Unit Purchase Agreement have not been amended, modified, extended, renewed, substituted or assigned;

(ii)

Borrower shall not amend, modify, terminate, extend or assign the Master Lease, the Sublease or the School Unit Purchase Agreement or surrender its rights thereunder without Lender’s prior written consent, which may be withheld in Lender’s sole and absolute discretion (other than the contemplated termination of the Master Lease and Sublease contemporaneously with the conveyance of the School Unit to the SCA). Borrower shall not enter into any further agreements, contracts, documents or side letters with the SCA which affect Lender’s rights and obligations under the Triparty Agreement without Lender’s prior written consent, which may be withheld in Lender’s sole and absolute discretion. Any attempted action in violation of this section shall be null and void and of no force and effect.

(iii)

Borrower has a valid and enforceable interest as ground lessor under the Master Lease and as lessee under the Sublease. Borrower has obtained all necessary approvals for assignment of Borrower’s interests in the School Unit Purchase Agreement, the Master Lease and the Sublease to Lender. Borrower has not assigned, pledged, mortgaged, hypothecated, encumbered or granted a security interest in the School Unit Purchase Agreement, the Master Lease or the Sublease or any of its right, title, or interest therein other than to Lender pursuant to the Loan Documents. No default by Borrower has occurred and is continuing under the Master Lease, the Sublease or the School Unit Purchase Agreement and no event has occurred which, with the passage of time or the giving of notice, or both, would constitute a default by Borrower under the Master Lease, the Sublease or the School Unit Purchase Agreement. To the best of Borrower’s knowledge, no default by SCA has occurred and no event has occurred which, with the passage of time or the giving of notice, or both, would constitute a default by the SCA under the Master Lease, the Sublease or the School Unit Purchase Agreement. The Master Lease, the Sublease and the School Unit Purchase Agreement are in full force and effect and no consent or approval of any person is required for the execution and delivery of the Master Lease, the Sublease, the School Unit Purchase Agreement or the Triparty Agreement by Borrower, or to Borrower’s knowledge, by SCA;

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(iv)

Borrower shall deliver to Lender and any subsequent holder of any mortgage of all or a portion of the Mortgaged Property all notices from the SCA under the Master Lease, the Sublease or the School Unit Purchase Agreement within five (5) Business Days following receipt thereof.

(v)

If Borrower shall fail to perform its obligations as ground lessor under the Master Lease, as lessee under the Sublease or as developer under the School Unit Purchase Agreement, and an Event of Default exists, Borrower grants Lender the right (but not the obligation), after two (2) Business Days’ notice to Borrower to take any action as may be necessary to prevent or cure any default of Borrower under the Master Lease, the Sublease or the School Unit Purchase Agreement, including the right to enter all or any portion of the Premises at such times and in such manner as Lender reasonably deems necessary, in order to cure any such default (unless Lender is curing a default by acting under Sections 7.6(c) or 8.5 which shall require no notice to Borrower). Borrower shall comply at all times with and timely perform its obligations and enforce its rights and the SCA’s obligations under the Master Lease, the Sublease and the School Unit Purchase Agreement;

(vi)

No action or payment taken or made by Lender to cure any default by Borrower under the Master Lease, the Sublease or the School Unit Purchase Agreement shall remove or waive, as between Borrower and Lender, any default or Event of Default which occurred hereunder by virtue of the default by Borrower under the Master Lease, the Sublease or the School Unit Purchase Agreement. All reasonable out-of-pocket sums expended by Lender in order to cure any such default by Borrower under the Master Lease, the Sublease or the School Unit Purchase Agreement shall be paid by Borrower to Lender, upon demand, with interest thereon at the Default Rate if not paid within five (5) Business Days of demand. All such indebtedness shall be deemed to be secured by the Lien of the Mortgage to the extent permitted by applicable law and the terms of the Mortgage;

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(vii)

Borrower shall notify Lender in writing within five (5) Business Days of (A) Borrower obtaining actual knowledge of a material default by or Borrower’s delivery of a notice (written or otherwise) to the SCA under the Master Lease, Sublease or School Unit Purchase Agreement noting or claiming the occurrence of any event which, with the passage of time or giving of notice, or both, would constitute a default by the SCA thereunder, and (B) the receipt by Borrower of any notice (written or otherwise) from the SCA under the Master Lease, the Sublease or the School Unit Purchase Agreement noting or claiming the occurrence of any default by Borrower under (or any termination of) the Master Lease, the Sublease or the School Unit Purchase Agreement or the occurrence of any event which, with the passage of time or giving of notice, or both, would constitute a default by Borrower thereunder. Borrower shall deliver to Lender a copy of any such written notice of default;

(viii)

Following five (5) days advance written notice to Borrower, Lender shall have the right to intervene and participate in any judicial, arbitration or other proceeding relating to the Master Lease, the Sublease or the School Unit Purchase Agreement;

(ix)

Borrower shall confer with Lender and its attorneys and experts, and reasonably cooperate with them to the extent which Lender deems reasonably necessary for the protection of Lender’s interest in the Master Lease, the Sublease, the School Unit Purchase Agreement, the Triparty Agreement, and the Mortgaged Property. Borrower consents to the agreements between the SCA and Lender contained in the Triparty Agreement and agrees to reasonably cooperate in all respects in carrying out the intents and purposes thereof;

(x)

Borrower shall promptly execute, acknowledge and deliver to Lender, at Borrower’s sole cost and expense, such instruments as may reasonably be required by Lender from time to time to better assure, transfer and confirm unto Lender the rights intended to be granted to Lender under the Triparty Agreement and to permit Lender to cure any default by Borrower under the Master Lease, the Sublease, the School Unit Purchase Agreement or the Triparty Agreement. Borrower hereby irrevocably appoints Lender as its true and lawful attorney-in-fact to do at any time when an Event of Default exists, in its name or otherwise, any and all acts and to execute any and all documents which are necessary to preserve any rights of Borrower under or with respect to the Master Lease, the Sublease or the School Unit Purchase Agreement;

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(xi)

Borrower hereby names and appoints Lender as its attorney-in-fact to, at any time when an Event of Default exists, date, complete, execute and deliver any and all documents, instruments and certificates which are to be executed or delivered by Borrower under the terms of the School Unit Purchase Agreement, the Master Lease or the Sublease which Lender shall deem to be necessary or desirable to cause the SCA to comply with its funding and acquisition obligations in accordance with the terms of the School Unit Purchase Agreement or the Triparty Agreement or to preserve or enforce any rights of Borrower under or with respect to the School Unit Purchase Agreement, the Master Lease or the Sublease. The power of attorney granted hereunder is coupled with an interest and is irrevocable. Borrower hereby agrees to indemnify Lender and hold Lender free and harmless from and against all Losses incurred by Lender in connection with the exercise of the rights granted under this Section 7.2(a)(xi) , excluding those arising from Lender’s gross negligence or willful misconduct.

(xii)

If any action, proceeding, motion or notice shall be commenced or filed in connection with any case under the Federal Bankruptcy Code by or against the SCA, Lender and Borrower shall cooperatively conduct and control any such litigation with counsel reasonably agreed upon between Borrower and Lender in connection therewith. Borrower shall, upon demand, pay to Lender all reasonable out-of-pocket costs and expenses (including reasonable attorneys' fees, costs and expenses) paid or incurred by Lender in connection with the cooperative prosecution or conduct of any such proceedings. All such costs and expenses shall be secured by the Lien of the Mortgage. Borrower shall within five (5) Business Days after obtaining knowledge thereof, notify Lender of any filing by or against the SCA of a petition under the Federal Bankruptcy Code. Said notice shall set forth any information in the possession of Borrower and its counsel as to the date of such filing directly related to such petition including, without limitation, the court in which such petition was filed and the relief sought therein (to the extent the Borrower has knowledge of the foregoing). Borrower shall deliver to Lender, within five (5) Business Days following its receipt thereof, any and all notices, summonses, pleadings, applications and other documents received by Borrower in connection with any such petition and any proceedings relating thereto;

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(xiii)

Subject to the Triparty Agreement, Borrower shall not without the prior written consent of Lender, which consent may be granted or withheld in Lender’s sole and absolute discretion, agree or acquiesce to any rejection or termination of the Master Lease, the Sublease or the School Unit Purchase Agreement in bankruptcy, or elect to treat the Master Lease, the Sublease or the School Unit Purchase Agreement as terminated, whether under Section 365 of the Bankruptcy Code (or other successor provision) or under any similar law or right of any nature or otherwise, in any respect, and any attempt on the part of Borrower to exercise any such right or election without such written consent of Lender shall be null and void and of no effect and shall constitute an Event of Default under this Agreement for which no grace or curative period shall apply; and

(xiv)

Borrower shall promptly send Lender a copy of any material notices delivered by Borrower to the SCA or received by the SCA.

(xv)

Borrower has fulfilled as of the Closing Date and shall at all times fulfill, in all material respects, all of its duties and obligations in, under and to the School Unit Purchase Agreement, the Master Lease, the Sublease and the Triparty Agreement. Borrower shall, at Borrower’s sole cost and expense, appear in and defend Lender and/or any other Lender Party in any action or proceeding in any way connected with the School Unit Purchase Agreement, the Triparty Agreement, the Master Lease or the Sublease (excluding in connection with Lender’s gross negligence or willful misconduct), and shall pay all reasonable costs and expenses, including, without limitation, attorneys’ fees and disbursements which any of the Lender Parties may incur in connection with Lender Party’s appearance, voluntarily or otherwise, in any action or proceeding (including, without limitation, arbitration) in any way connected with the School Unit Purchase Agreement, the Triparty Agreement, the Master Lease or the Sublease (excluding in connection with Lender’s or any other Lender Party’s gross negligence or willful misconduct) or in connection with enforcing Lender’s rights or the SCA’s or Borrower’s obligations under the School Unit Purchase Agreement, the Triparty Agreement, the Master Lease or the Sublease (excluding in connection with Lender’s or any other Lender Party’s gross negligence or willful misconduct).

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(xvi)

In the event Lender cures a Developer Event of Default, Borrower shall reimburse Lender for all reasonable costs and expenses incurred by Lender in curing such Developer Event of Default, together with interest at the Default Rate from the date incurred until paid, within five (5) Business Days following written demand from Lender to Borrower. Without in any way limiting Lender’s other rights and remedies pursuant to the Loan Documents and applicable law, Borrower agrees to reasonably cooperate with Lender in the exercise of Lender’s rights and remedies under the Loan Documents or the Triparty Agreement upon the demand of Lender notwithstanding any disputes, defenses, claims, counterclaims or other matters arising from or in any way related to the School Unit Purchase Agreement, the Master Lease, the Sublease or the Triparty Agreement. Lender shall have absolutely no liability to Borrower for, or in connection with, any such demand or requirement that Borrower perform under the School Unit Purchase Agreement, the Master Lease, the Sublease or the Triparty Agreement, excluding liability resulting from Lender’s or any other Lender Party’s gross negligence or willful misconduct, and such liability shall only be to the extent of Lender’s or any other Lender Party’s gross negligence or willful misconduct.

(xvii)

The Project shall be developed by Borrower pursuant to the terms and conditions of the School Unit Purchase Agreement and the Loan Documents.

(xviii)

Borrower shall not permit the SCA to perform any construction work at the Mortgaged Property prior to the SCA’s acquisition of the School Unit in accordance with the School Unit Purchase Agreement.

(b) Borrower hereby agrees to pay and protect, defend, indemnify and hold Lender and the other Lender Parties harmless from, for and against any and all Losses to which any such Lender Party may become exposed, or which any such Lender Party may incur, in connection with the School Unit Purchase Agreement or in exercising its rights under the Triparty Agreement (including without limitation all such costs and expenses incurred by Lender in connection with the curing of Borrower’s defaults under the School Unit Purchase Agreement, the Master Lease or the Sublease in accordance with the terms thereof or the terms of the Triparty Agreement (subject to the provisions of Section 7.4 hereof), excluding those arising from any Lender Party’s gross negligence or willful misconduct, and such liability shall only be to the extent of such Lender Party’s gross negligence or willful misconduct. All such amounts due from Borrower to Lender pursuant to this Section 7.2(b) shall be payable within ten Business Days of demand and shall accrue interest at the Default Rate from the due date thereof.

Section 7.3 Intentionally omitted .

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Section 7.4 Triparty Agreement . Borrower and Lender acknowledge that the Triparty Agreement shall, in addition to the other Loan Documents, govern the relationship among Borrower and Lender to the extent provided therein (but subject to the provisions of the next following sentence). For the avoidance of doubt, (a) with respect to each reference in the Triparty Agreement to Lender acting as attorney-in-fact for Borrower, Lender shall only so act if, when and to the extent Lender is authorized to do so under the terms of the Loan Documents (other than the Triparty Agreement), (b) where the Triparty Agreement refers to the Lender’s approval or consent rights with respect to any Condominium Documents, the standard for Lender’s granting or withholding of such approval or consent shall be as set forth in this Agreement, (c) where the Triparty Agreement refers to the Subleasehold Lender (as defined in the Triparty Agreement) designated in a notice from Lender to SCA as the Subleasehold Lender having the right to participate in the adjustment of losses with any insurance company with respect to any damage or destruction of the Mortgaged Property, the right to participate in any condemnation proceedings and settlement discussions, and the right to supervise and control the receipt and disbursement of insurance proceeds and condemnation awards and damages payable with respect to the Mortgaged Property, all such rights shall be subject to the terms and conditions of this Agreement, and (d) where the Triparty Agreement refers to the Subleasehold Lender designated by Lender to supervise and control the receipt and disbursement of insurance proceeds and condemnation awards electing not to disburse the net physical damage proceeds or award (after deducting the reasonable costs of adjustment, settlement and collection and any necessary safety measures) for restoration of the improvements, such right so to elect shall be subject to the terms and conditions of this Agreement.

Section 7.5 Sales and Marketing Agreement/Management Agreement . Borrower shall not enter into any management agreement, leasing commission agreement, brokerage agreement or other similar agreement without Lender’s prior written approval in each case, which approval shall not be unreasonably withheld, conditioned or delayed. Prior to the completion of the first Subdivided Residential Unit, Borrower shall enter into (i) a sales and marketing agreement, which sales and marketing agreement must be reasonably satisfactory to Lender, and (ii) a management agreement with a third-party manager, which management agreement must be reasonably satisfactory to Lender. Lender approves the Sales Agreement and the Sales Agent. Any management agreement, leasing commission agreement, brokerage agreement or other similar agreement shall be collaterally assigned to Lender and shall be subordinate to the Mortgage and in substantially the forms, as applicable, attached hereto as Exhibits P and Q . If at any time during the existence of an Event of Default the management company, management agreement or leasing commissions agreement is not satisfactory to Lender, Borrower shall have up to sixty (60) days after written notice to Borrower of Lender’s disapproval, to obtain a management company, management agreement and/or leasing commissions agreement approved by and satisfactory to Lender.

Section 7.6 Impositions .

(a) Borrower shall pay and discharge all Impositions prior to delinquency and shall provide to Lender validated receipts or other evidence reasonably satisfactory to Lender showing the payment of such Impositions within ten (10) Business Days after the same would otherwise have become delinquent. Borrower’s obligation to pay Impositions pursuant to this Agreement shall include, to the extent permitted by applicable law, taxes resulting from future changes in law which impose upon Lender an obligation to pay any property taxes or other Impositions. Should Borrower default in the payment of any Impositions, Lender may (but shall not be obligated to) make an Advance to pay such Impositions or any portion thereof.

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(b) Borrower shall not be required to pay, discharge or remove any Imposition so long as Borrower contests in good faith such Imposition or the validity, applicability or amount thereof by an appropriate legal proceeding which operates to prevent the collection of such amounts and the sale of the Mortgaged Property or any portion thereof; provided , however , that such contest will not result in a tax certificate or other sale of the tax lien and prior to the date on which such Imposition would otherwise have become delinquent Borrower shall have: (i) given Lender prior written notice of such contest; and (ii) deposited with Lender, and shall deposit such additional amounts as are necessary to keep on deposit at all times, an amount equal to at least one hundred five percent (105%) of the total of: (A) the balance of such Imposition then remaining unpaid; plus (B) all interest, penalties, costs and charges accrued or accumulated thereon. Any such contest shall be prosecuted with due diligence, and Borrower shall promptly pay the amount of such Imposition as finally determined, together with all interest, penalties, costs and charges payable in connection therewith. Lender shall have full power and authority to apply any amount deposited with Lender under this Section 7.3(b) to the payment of any unpaid Imposition to prevent the sale of any tax lien or the sale or forfeiture of the Mortgaged Property (or any portion thereof) for non-payment thereof. Lender shall have no liability, however, for failure to so apply any amount deposited unless Borrower requests the application of such amount to the payment of the particular Imposition for which such amount was deposited. Any surplus retained by Lender after payment of the Imposition for which a deposit was made shall be repaid to Borrower unless an Event of Default shall have occurred, in which case said surplus may be retained by Lender to be applied to the Indebtedness. Notwithstanding any provision of this Section 7.3(b) to the contrary, Borrower shall pay any Imposition which it might otherwise be entitled to contest if, in the reasonable opinion of Lender, failure to pay will result in a tax certificate or other sale of the tax lien or the Mortgaged Property (or any portion thereof) is in jeopardy or in danger of being forfeited or foreclosed; or Lender may make an Advance to pay the same. Additionally, in such event, if Lender is prevented by law or judicial or administrative order from paying such Imposition and Borrower fails to pay the same, then Lender, at its option, may declare the entire Indebtedness immediately due and payable.

(c) To the extent cash flow from the Mortgaged Property is insufficient to pay same, real estate taxes, assessments, municipal charges and insurance premiums shall be funded as a Disbursement to Borrower subject to the terms and conditions of disbursement in this Agreement. To the extent Borrower fails to satisfy the conditions of disbursement in this Agreement, Borrower shall pay the real estate taxes, assessments, municipal charges and insurance premiums that would otherwise be funded as a Disbursement to Borrower; provided that if an Event of Default exists, Borrower shall deposit with Lender, monthly, on each Payment Date, 1/12th of the annual charges (as reasonably estimated by Lender) for Impositions and insurance premiums, and, if required by Lender, 1/12th of the annual charges for rent (if Borrower is lessee of an interest in any of the Mortgaged Property) with respect to the Mortgaged Property. If required by Lender, Borrower shall also deposit with Lender, simultaneously with such monthly deposits and/or the execution of this Agreement, a sum of money which together with such monthly deposits will be sufficient to make the payment of each such charge at least fifteen (15) days prior to the date initially due. Should such charges not be ascertainable at the time any deposit is required to be made, the deposit shall be made on the basis of the charges for the prior year or payment period, as reasonably estimated by Lender. When the charges are fixed for the then current year or period, Borrower shall deposit any deficiency on demand. All funds deposited with Lender shall be held without interest (unless the payment of interest thereon is required under applicable law), may be commingled with Lender’s other funds, and shall be applied in payment of the foregoing charges when and as payable provided that no Event of Default shall have occurred and be continuing. Should an Event of Default occur and be continuing, the funds so deposited may be applied in payment of the charges for which such funds shall have been deposited or to the payment of the Indebtedness or any other charges affecting the Mortgaged Property, as Lender in its sole discretion may determine, but no such application shall be deemed to have been made by operation of law or otherwise until actually made by Lender as herein provided. Borrower shall provide Lender with bills and all other documents necessary for the payment of the foregoing charges within ten (10) Business Days following Borrower’s receipt of the same, but in any event at least fifteen (15) days prior to the date on which each payment thereof shall first become due.

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Section 7.7 Operating Expenses . Borrower shall use any cash flow from the Mortgaged Property to pay all operating expenses of the Mortgaged Property and all payments due under the Loan Documents.

ARTICLE 8

REPRESENTATIONS, WARRANTIES AND COVENANTS

Borrower, jointly and severally (if applicable), represents, warrants and covenants that:

Section 8.1 Organization and Authority .

(a) The execution and delivery of the Loan Documents have been duly authorized and there is no provision in Borrower’s organizational documents, as amended, requiring further consent for such action by any other Person.

(b) Borrower is duly organized, validly existing and in good standing under the laws of the state of its formation.

(c) Borrower has all necessary franchises, licenses, authorizations, registrations, Permits and approvals and full power and authority to develop and construct the Property, own and operate the Mortgaged Property, and carry on its business.

(d) The execution and delivery of and performance of its obligations under the Loan Documents: (i) will not result in Borrower being in default under any provision of its organizational documents, as amended, any court order, or any mortgage, deed of trust or other agreement to which it is a party; and (ii) do not require the consent of or any filing with any governmental authority.

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(e) All necessary and required actions have been duly taken by and on behalf of Borrower to make and constitute the Loan Documents, and the Loan Documents constitute, legal, valid and binding obligations enforceable in accordance with their respective terms, subject only to the application of bankruptcy and other laws affecting the rights of creditors generally.

(f) Borrower is, and at all times until repayment in full of the Indebtedness shall be, a “single asset real estate entity”, as defined in Section 101 (51B) of the Federal Bankruptcy Code.

Section 8.2 Maintenance of Existence . So long as it owns the Mortgaged Property, Borrower shall do all things necessary to preserve and keep in full force and effect its existence, franchises, licenses, authorizations, registrations, permits and approvals under the laws of the state of its formation and the State where the Premises is located and shall comply in all material respects with all regulations, rules, ordinances, statutes, orders and decrees of any governmental authority or court now or hereafter applicable to Borrower or to the Mortgaged Property or any portion thereof.

Section 8.3 Title . Borrower has good, marketable and insurable fee simple title to the Premises and good indefeasible title to the balance of the Mortgaged Property, free and clear of all Liens whatsoever, except the Permitted Encumbrances. Borrower represents and warrants that it has accepted possession of the Premises (as defined in the Sublease) and has a valid and enforceable leasehold interest in the leasehold estate created pursuant to the Sublease. To the best of Borrower’s knowledge, the Mortgage creates (1) a valid, perfected Lien on the Mortgaged Property, subject only to Permitted Encumbrances and (2) perfected security interests in and to, and perfected collateral assignments of, all Collateral (including the Leases), all in accordance with the terms hereof, in each case subject only to any applicable Permitted Encumbrances and such other Liens as are permitted pursuant to the Loan Documents. Borrower will preserve such title and will forever warrant and defend the same and validity and priority of the lien hereof to Lender against all claims whatsoever.

Borrower is the owner of or has right to all easements and other appurtenant rights (collectively, the “ Easements ”) created under the agreements listed and described on Exhibit M hereof (collectively the “ Easement Agreements ”). Borrower has delivered to Lender true, correct and complete copies of all Operating Agreements and Easement Agreements, if applicable. To the best of Borrower’s knowledge, (A) no Operating Agreement, Easement Agreement or Easement created thereunder has been modified, amended or supplemented and they are all in full force and effect; and (B) no defaults have occurred under any Operating Agreement or Easement Agreement, and, to Borrower’s knowledge, no event has occurred which with notice or the passage of time would constitute an event of default under any Operating Agreement or Easement Agreement. With respect to each Operating Agreement, Easement Agreement and Permitted Encumbrance Borrower shall, to the extent commercially reasonable to do so: (i) observe, perform and discharge all material obligations, covenants and warranties required to be kept and performed by Borrower, and (ii) enforce or secure the performance of each and every material obligation, term, covenant, condition and agreement to be performed by any other party. Borrower shall also (a) promptly deliver to Lender copies of all material written notices, demands or requests sent or otherwise made by Borrower or any other Person, and (b) timely pay any charges assessed against the Premises as and when finally due pursuant to the Operating Agreements or Easement Agreements or Permitted Encumbrances. Without the prior written consent of Lender, which consent shall not be unreasonably withheld, delayed or conditioned, Borrower will not consent to or enter into any agreement or writing that modifies, amends, supplements, restates, terminates or reduces any: (V) Operating Agreement, (W) Easement Agreement, or (X) any appurtenant rights or interests, including any reversionary interests which Borrower possesses or may acquire.

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Section 8.4 Mortgage Taxes . Borrower shall pay any and all taxes, charges, filing, registration and recording fees, excises and levies imposed upon Lender by reason of its ownership of, or measured by amounts payable under, the Loan Documents (other than income, franchise and doing business taxes), and shall pay all stamp taxes and other taxes required to be paid on the Loan Documents. If Borrower fails to make such payment within five (5) Business Days after notice thereof from Lender, Lender may (but shall not be obligated to) pay the amount due, and Borrower shall reimburse Lender on demand for all such Advances. If applicable law prohibits Borrower from paying (or reimbursing Lender for) such taxes, charges, filing, registration and recording fees, excises, levies, stamp taxes or other taxes, then if the amount in question exceeds $25,000, Lender may declare the Indebtedness then unpaid to be due and payable upon at least one hundred twenty (120) days’ written notice. In such event, no Minimum Multiple Fee, Exit Fee or Closed Period Prepayment Fee, as applicable, shall be payable by Borrower so long as no Event of Default exists.

Section 8.5 Payment of Liens . Borrower shall discharge and pay when due all payments and charges due under or in connection with any Liens in accordance with the provisions of Section 4.7 , or if not so discharged, Lender may (but shall not be obligated to) make Advances to do so. Borrower shall do or cause to be done, at the sole cost of Borrower, everything reasonably necessary to fully preserve the priority of the Lien of the Mortgage. If Borrower fails to make any such payment or if a Lien attaches to the Mortgaged Property or any portion thereof and is not discharged within the thirty (30) day period referenced in Section 4.7 , Lender may (but shall not be obligated to) make such payment or discharge such lien and Borrower shall reimburse Lender on demand for all such Advances.

Section 8.6 Representations Regarding Mortgaged Property .

(a) No part of the Premises has been designated as wetlands under any federal, state or local law or regulation or by any governmental agency, and no portion of the Premises is located within a 100-year flood plain, except as may be disclosed as such on the survey of the Premises delivered to Lender in connection with the closing of the Loan.

(b) Public water supply, storm and sanitary sewers and sanitary sewer capacity, and electrical, gas, cable and telephone facilities are available to the Premises within the boundary lines thereof or by an executed agreement, including without limitation that certain agreement between Triborough Bridge and Tunnel Authority and Borrower, dated as of March 22, 2017.

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(c) Borrower reports, for accounting purposes, on a fiscal year basis commencing on January 1 and terminating on December 31.

(d) There are no actions, suits or proceedings, pending or threatened in writing, affecting Borrower, Indemnitor or the Mortgaged Property at law or in equity, on, before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or other governmental instrumentality that would, if adversely determined, have a Material Adverse Effect on Borrower, Indemnitor or the Mortgaged Property. There are no outstanding judgments, arbitration awards, decrees or awards of any kind pending against any Borrower, any Indemnitor or any of the Mortgaged Property. Borrower, Indemnitor and Principals have never (i) been charged for any criminal offense, (ii) filed for bankruptcy, insolvency or similar relief, and (iii) been involved in a foreclosure, deed-in-lieu or similar transaction.

(e) Guarantor is in full compliance with all of Indemnitor’s Financial Covenants set forth in Section 12 of the Recourse Guaranty Agreement.

(f) Borrower has not entered into a property management agreement as of the Closing Date.

Section 8.7 Operating Accounts . At all times that the Loan remains outstanding, Borrower shall establish and maintain, or cause its Property Manager to maintain the Operating Account, into which all cash proceeds resulting from any and all operations of Borrower and the Project shall be deposited. Borrower shall not maintain any other operating accounts.

Section 8.8 Indemnification . Borrower shall indemnify, defend and hold Lender and the Lender Parties harmless from and against, and be responsible for paying, all Losses which may be imposed upon, asserted against, or incurred or paid by any of them by reason of, on account of or in connection with any act or occurrence relating to the Mortgaged Property or any bodily injury, death, other personal injury or property damage occurring in, upon or in the vicinity of the Mortgaged Property from any cause whatsoever, except to the extent caused by the gross negligence or willful misconduct of any Lender Party.

Section 8.9 Estoppel Certificates . Within ten (10) Business Days following a request by Lender, Borrower shall provide to Lender a duly acknowledged written statement confirming: (a) the original maximum principal amount of the Loan; (b) the unpaid principal amount of the Loan; (c) the rate of interest of the Loan; (d) the maturity date of the Loan; (e) the date installments of interest and/or principal were last paid; (f) that, except as provided in reasonable detail in such statement, to Borrower’s actual knowledge, there are no presently exercisable offsets or defenses against the Indebtedness, Potential Events of Default or Events of Default under the Loan Documents; and (g) such other information that Lender shall reasonably request.

Section 8.10 ERISA .

(a) Borrower shall not engage in any transaction which would cause any obligation, or action taken or to be taken hereunder (or the exercise by Lender of any of its rights under the Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under ERISA and/or Section 4975 of the IRS Code, provided, that Borrower may assume for purposes of this Section 8.10(a) that the Loan proceeds are not “plan assets” within the meaning of 29 C.F.R. § 2510.3-101 (as modified by Section 3(42) of ERISA, the “ Plan Assets Regulation ”).

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(b) Borrower further covenants and agrees to deliver to Lender such certifications and other evidence from time to time, until full repayment of the Indebtedness, as are reasonably requested by Lender that (i) Borrower is not (and is not deemed to include the assets of) an “employee benefit plan” that is subject to Title I of ERISA and/or a “plan” that is subject to Section 4975 of the IRS Code; (ii) Borrower is not a “governmental plan” within the meaning of Section 3(32) of ERISA and is not subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans; and (iii) one or more of the following statements is and remains true:

(i)

Equity interests in Borrower are “publicly offered securities” within the meaning of Plan Assets Regulation; or

(ii)

Less than twenty-five percent (25%) of each outstanding class of equity interests in Borrower are held by “benefit plan investors” (determined in accordance with the Plan Assets Regulation).

(c) Borrower shall not agree to, enter into or consummate any transaction which would render Borrower unable to furnish the certification or other evidence referred to in Section 8.10(b) , to the extent applicable.

(d) Borrower represents, warrants and covenants to each Lender Party that neither Borrower nor any ERISA Affiliate maintains, contributes to, or has any obligation to contribute to, or has any direct or indirect liability with respect to any “employee benefit plan” as defined in Section 3(3) of ERISA (including any “multiemployer plan” as defined in Section 3(37) of ERISA) that is subject to Title IV or Section 302 of ERISA or Section 412 of the IRS Code. Borrower shall take or refrain from taking, as the case may be, such actions as may be necessary to cause the representation and warranty in this Section 8.10 to remain true and accurate until full repayment of the Indebtedness.

(e) Lender Parties shall each have the right to consult with Borrower on significant business issues relating to the operation of the Mortgaged Property and the management of Borrower. Representatives of Borrower shall make themselves available quarterly, either personally or by telephone at mutually agreeable times for such consultations. Such consultations need not result in any changes in Borrower’s decisions or actions. Lender Parties intend to use such rights to satisfy the management rights requirements under the Plan Assets Regulation.

Section 8.11 Terrorism and Anti-Money Laundering .

(a) As of the date hereof and until full repayment of the Indebtedness: (i) Borrower; (ii) any Person Controlling or Controlled by Borrower; (iii) if Borrower is a privately held entity, any Person having a ten percent (10%) or more direct or indirect beneficial interest in Borrower (expressly excluding any direct or indirect shareholders of Indemnitor (collectively, the “ Public Shareholders ”)); or (iv) any Person for whom Borrower is acting as agent or nominee in connection with this transaction, is not an OFAC Prohibited Person.

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(b) To comply with applicable Anti-Money Laundering Laws, all payments by Borrower to Lender or from Lender to Borrower will only be made and received in Borrower’s name and to and from a bank account of a bank based or incorporated in or formed under the laws of the United States or a bank that is not a “foreign shell bank” within the meaning of the U.S. Bank Secrecy Act (31 U.S.C. § 5311 et seq. ), as amended, and the regulations promulgated thereunder by the U.S. Department of the Treasury, as such regulations may be amended from time to time.

(c) Borrower shall provide Lender at any time and from time to time until repayment in full of the Indebtedness with such information as Lender reasonably determines to be necessary or appropriate to comply with the Anti-Money Laundering Laws of any applicable jurisdiction, or to respond to requests for information concerning the identity of Borrower, any Person Controlling or Controlled by Borrower or any Person having a beneficial interest in Borrower (other than Public Shareholders), from any governmental authority, self-regulatory organization or financial institution in connection with its anti-money laundering compliance procedures, or to update such information.

(d) The representations and warranties set forth in this Section 8.11 shall be deemed repeated and reaffirmed by Borrower as of each date that Borrower makes a payment to Lender under the Loan Documents or receives any disbursement of Loan proceeds, reserve funds or other funds from Lender. Borrower agrees promptly to notify Lender in writing should Borrower become aware of any change in the information set forth in these representations.

Section 8.12 Special Purpose Entity Requirements .

All of the provisions of this Section 8.12 are individually and collectively referred to as the “ SPE Requirements ”.

(a) Borrower has not and, until repayment in full of the Indebtedness, shall not:

(i)

engage in any business or activity other than the acquisition, ownership, operation, maintenance, demolition, alteration and development of and sale of condominium units in accordance with the terms of this Agreement with respect to the Mortgaged Property, and activities incidental thereto;

(ii)

acquire or own any material asset other than the Mortgaged Property and such incidental personal property as may be necessary for the operation of the Mortgaged Property;

(iii)

merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure, without in each case obtaining the prior written consent of Lender;

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(iv)

fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its organization or formation, or without the prior written consent of Lender, which consent shall not be unreasonably withheld, delayed or conditioned, terminate the provisions of Borrower’s formation or entity management documents or amend such organizational documents in a manner which would result in a breach of any of the representations, warranties or covenants set forth in this Section 8.12 or that would otherwise adversely affect Borrower’s special purpose entity status;

(v)

own any subsidiary or make any investment in or acquire the obligations or securities of any other Person without the prior written consent of Lender, which consent shall not be unreasonably withheld, delayed or conditioned;

(vi)

commingle its assets with the assets of any of its shareholders, partners, members, Principals, affiliates, or any shareholder, partner, member, principal or affiliate thereof, or of any other Person or transfer any assets to any such Person other than distributions on account of equity interests in Borrower permitted hereunder and properly accounted for;

(vii)

incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the Indebtedness, except as permitted under Section 10.1 , provided that any such debt is satisfied when due and payable, subject to reasonable and customary rights to contest such obligations, and provided further that there is sufficient cash flow from the Property at such time to do so and Borrower’s constituent owners shall not be required to fund or advance any additional capital to satisfy such obligation;

(viii)

except for a payment of the Indebtedness by a guarantor or indemnitor of the Loan, (A) allow any Person to pay its debts and liabilities, or (B) fail to pay its debts and liabilities solely from its own assets;

(ix)

fail to maintain its records, books of account and bank accounts separate and apart from those of its shareholders, partners, members, Principals and Affiliates, or any shareholder, partner, member, principal or Affiliate thereof, and any other Person or fail to prepare and maintain its own financial statements in accordance with generally accepted accounting principles and susceptible to audit, or if such financial statements are consolidated fail to cause such financial statements to contain footnotes disclosing that the Mortgaged Property is actually owned by Borrower;

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(x)

enter into any contract or agreement with any of its shareholders, partners, members, Principals or Affiliates, any guarantor or indemnitor of all or a portion of the Loan or any shareholder, partner, member, principal or Affiliate thereof, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties or otherwise approved by Lender;

(xi)

fail to correct any known misunderstandings regarding the separate identity of Borrower;

(xii)

hold itself out to be responsible or pledge its assets or credit worthiness for the debts of another Person or allow any Person to hold itself out to be responsible or pledge its assets or credit worthiness for the debts of Borrower (except for a guarantor or indemnitor of the Loan);

(xiii)

make any loans or advances to any third party, including any of its shareholders, partners, members, Principals or Affiliates, or any shareholder, partner, member, Principal or Affiliate thereof;

(xiv)

fail to use separate contracts, purchase orders, invoices and checks (other than such documents that bear the name of its manager or managing agent with reference to the Premises);

(xv)

fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not: (A) to mislead others as to the entity with which such other party is transacting business; or (B) to suggest that Borrower is responsible for the debts of any third party (including any of its shareholders, partners, members, principals or Affiliates, or any shareholder, partner, member, principal or Affiliate thereof);

(xvi)

allow any Person to pay the salaries of its own employees or fail to maintain a sufficient number of employees for its contemplated business operations (which may be zero employees);

(xvii)

fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations, provided that there is sufficient cash flow from the Property at such time to do so and Borrower’s constituent owners shall not be required to fund or advance any additional capital to satisfy this obligation;

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(xviii)

seek dissolution or winding up in whole, or in part;

(xix)

file a voluntary petition or otherwise initiate proceedings to have Borrower or any Principal adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against Borrower or any Principal, or file a petition seeking or consenting to reorganization or relief of Borrower or any Principal as debtor under any applicable federal or state law relating to bankruptcy, insolvency, or other relief for debtors with respect to Borrower or Principal; or seek or consent to the appointment of any trustee, receiver, conservator, assignee, sequestrator, custodian, liquidator (or other similar official) of Borrower or any Principal or of all or any substantial part of the properties and assets of Borrower or any Principal, or make any general assignment for the benefit of creditors of Borrower or any Principal, or admit in writing the inability of Borrower or any Principal to pay its debts generally as they become due or declare or effect a moratorium on Borrower or any Principal debt or take any action in furtherance of any such action; or

(xx)

conceal assets from any creditor, or enter into any transaction with the intent to hinder, delay or defraud its creditors or the creditors of any other Person.

(b) If Borrower is a limited partnership, then any general partner of Borrower must also be a special purpose entity and comply with the provisions of this Section 8.12 .

(c) Borrower and any Person required to be a special purpose entity pursuant to the terms of this Section 8.12 shall not amend or modify any of their respective formation or entity management documents in any manner that would result in a breach of any of the representations, warranties or covenants set forth in this Section 8.12 or that would otherwise adversely affect Borrower’s special purpose entity status without the prior written consent of Lender, which consent shall not be unreasonably withheld, delayed or conditioned. Promptly after Lender’s written request from time to time, but not more frequently than once in any calendar year, Borrower shall deliver to Lender evidence reasonably satisfactory to Lender that Borrower and any other Person required to be a special purpose entity pursuant to the terms of this Section 8.12 are in compliance with the provisions of this Section 8.12 .

Section 8.13 Notices/Proceedings . Borrower shall promptly notify Lender in writing of the occurrence of any of the following: (i) receipt of any written notice from any holder of any other lien or security interest in any of the Mortgaged Property; it being understood that no such lien or security interest is ever permitted to exist at any time under any circumstances until after repayment in full of the Indebtedness (except as otherwise specifically provided herein); or (ii) commencement of any judicial or administrative proceedings by, against or otherwise affecting Borrower, Indemnitor or any of the Mortgaged Property, or any other action by any creditor thereof as a result of any default under the terms of any loan.

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Section 8.14 Business Purpose of Loan . Borrower stipulates and warrants that the purpose of the Loan is for the sole purpose of carrying on or acquiring a business, professional or commercial enterprise. Borrower further stipulates and warrants that all proceeds of the Loan will be used for said business, professional or commercial enterprise.

Section 8.15 Legal Requirements and Maintenance of Mortgaged Property . To the best of Borrower’s knowledge, except as disclosed to Lender in writing, the Mortgaged Property is, in all material respects, in compliance with all Legal Requirements. Borrower shall comply with all Legal Requirements in all material respects, subject to Borrower’s right to contest the same in accordance with this Agreement. Borrower shall permit Lender and its agents to enter upon and inspect: (a) the areas of the Mortgaged Property which are open to the public at all reasonable hours without prior notice and (b) subject to the rights of tenants under the Leases and fee simple owners of portions of the Mortgaged Property conveyed in accordance with the terms of this Agreement, all other areas of the Mortgaged Property during regular business hours upon at least 48 hours prior written notice, except that no notice shall be required in the event of an emergency. Except as expressly contemplated herein, Borrower shall not, without the prior written consent of Lender, which consent may be granted or withheld in Lender’s sole and absolute discretion: (a) change the use of the Premises from that contemplated in the Business Plan; (b) cause or permit the use or occupancy of any part of the Premises to be discontinued if such discontinuance would violate any zoning or other law, ordinance or regulation; (c) apply for or consent to any subdivision (other than the contemplated subdivision of the Residential Unit), re-subdivision (other than the contemplated subdivision of the Residential Unit), zoning reclassification, modification or restriction affecting the Premises; (d) commit or knowingly permit any waste, structural or material addition to or material alteration, demolition or removal of the Mortgaged Property (except alterations required pursuant to an Acceptable Lease) or any portion thereof (provided that the Equipment included within the Collateral may be removed if obsolete or if replaced with similar items of equal or greater value); (e) take any action whatsoever to apply for, consent to, or acquiesce in the conversion of the Mortgaged Property, or any portion thereof, to a condominium or cooperative form of ownership, or (f) take any action whatsoever to apply for, consent to or acquiesce in any subdivision (other than the contemplated subdivision of the Residential Unit) or re-subdivision (other than the contemplated subdivision of the Residential Unit) of the Mortgaged Property, or any portion thereof. No provision of this Section 8.15 shall prohibit Borrower from undertaking and completing tenant improvement work authorized under Leases previously approved by Lender or not requiring Lender’s prior approval and the Construction Work in accordance with the terms of this Agreement.

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Section 8.16 Solvency . (1) Neither Borrower nor Indemnitor has entered into the transaction contemplated by this Agreement or any Loan Document with the actual intent to hinder, delay, or defraud any creditor, and (2) Borrower and Indemnitor have each received reasonably equivalent value in exchange for its obligations under the Loan Documents. The fair saleable value of Borrower’s assets is, as of the date hereof, and will, immediately following the making of the initial disbursement of the Loan on the date hereof, be greater than Borrower’s liabilities, including the maximum amount of its contingent liabilities on its debts as such debts become absolute and matured. Borrower’s assets do not and, immediately following the making of the Loan will not, constitute unreasonably small capital for such entity to carry out its business as conducted or as proposed to be conducted. Borrower does not intend to, and does not believe that it will, incur debt and other liabilities (including contingent liabilities and other commitments) beyond its ability to pay such debt and liabilities as they mature (taking into account the timing and amounts of cash to be received by it and the amounts to be payable on or in respect of obligations of such party). Other than the bankruptcy of Indemnitor’s predecessor, Syms Corp., filed in the United States Bankruptcy Court for the District of Delaware in 2011 as In re Filene’s Basement, LLC, et al. , Case No. 11-13511-KJC (Bankr. D. Del), no petition in bankruptcy has been filed against Borrower or any Indemnitor or any Principal and neither Borrower nor any Indemnitor has ever made an assignment for the benefit of creditors or taken advantage of any insolvency act for the benefit of debtors. Neither Borrower nor Indemnitor has been involved in a foreclosure or in a default on any indebtedness owing to Lender or to any affiliate of Lender or, in the case of Borrower, on any other indebtedness obtained for commercial purposes. All financial and other information submitted by or on behalf of Borrower and Indemnitor to Lender in connection with the Loan is true, complete and correct in all material respects. All of Borrower's obligations to creditors, including, but not limited to, all payments and accounts relating to the Premises, are current.

Section 8.17 Interest Rate Cap Agreement .

(a) In the event that LIBOR exceeds one and one-half percent (1.50%), Borrower shall enter into, and Borrower shall thereafter maintain in full force and effect, an “ Interest Rate Cap Agreement ” from an issuer that satisfies the Rate Cap Rating Criteria and is reasonably acceptable to Lender (“ Issuer ”). Such Interest Rate Cap Agreement shall be either:

(i)

at any time when an unpaid principal balance of the Loan is outstanding, in a notional amount equal to at least the lesser of (i) the Maximum Loan Amount and (ii) the sum of (x) the current outstanding principal balance of the Loan and (y) $10,000,000 (or, if less, the amount of the Loan that remains available as a Disbursement to Borrower under this Agreement) (the “ Minimum Cap Amount ”).

(ii)

An “amortizing” Interest Rate Cap Agreement where, as of the first day of the calendar month set forth in row 446 of Exhibit W attached hereto and made a part hereof, the notional amount is equal to or greater than the “Starting Balance” set forth in row 450 of Exhibit W , for such calendar month; provided, however, that if on or after the Projected Repayment Date, an unpaid principal balance remains outstanding on the Loan, Borrower shall maintain an Interest Rate Cap Agreement in a notional amount of no less than the Minimum Cap Amount.

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The Interest Rate Cap Agreement shall provide that if LIBOR then in effect is at any time greater than two and one-half percent (2.5%) (the “ Strike Price ”), then the Issuer shall pay to Lender, on the dates when monthly payments of interest are required to be paid to Lender under Section 2.3 , an amount equal to interest on said notional amount at the Excess Rate (as hereinafter defined). If at any time the current outstanding principal amount of the Loan is equal to or greater than the combined notional amounts of any Interest Rate Protection Agreement(s) in place at the time, Borrower shall enter into a supplemental Interest Rate Cap Agreement (a “ Supplemental Interest Rate Cap Agreement ” and together with any existing or future Interest Rate Cap Agreement, collectively, the “ Interest Rate Cap Agreements ”) in the notional amount equal to the lesser of (i) the Maximum Loan Amount less the current sum of the notional amounts of the Interest Rate Protection Agreements then in place and (ii) the sum of (x) the current outstanding principal balance of the Loan and (y) $10,000,000 (or, if less, the amount of the Loan that remains available to be advanced as a Disbursement to Borrower under this Agreement), less the current sum of the notional amounts of the Interest Rate Cap Agreements then in place. In no instance will any Funds be disbursed under the Loan that would result in the outstanding principal balance of the Loan exceeding the aggregate notional amount of any Interest Rate Cap Agreements in place in accordance with this Section 8.17(a) after such time as LIBOR has exceeded one and one-half percent (1.50%) unless Borrower has made arrangements reasonably acceptable to Lender for the notional amount of such Interest Rate Cap Agreement to be increased accordingly. For the avoidance of doubt, the terms of any Supplemental Interest Rate Cap Agreement including the Strike Price, maturity and counterparty quality will be substantially the same as the then currently existing Interest Rate Cap Agreements.

(b) Not later than sixty (60) days prior to the scheduled expiration of any Interest Rate Cap Agreement, Borrower shall, at Borrower’s cost and expense, replace the same with an Interest Rate Cap Agreement as required by the terms of this Section 8.17 ; provided, however, that Borrower shall be under no such obligation in the event that the scheduled expiration of the Interest Rate Cap Agreement coincides with either (i) the Maturity Date (as same may have been extended by Borrower), or (ii) the Projected Repayment Date, if in Lender’s reasonable judgment, Borrower is reasonably on track to repay the entire Indebtedness on such Projected Repayment Date. In the event that (1) an Interest Rate Cap Agreement is terminated for any reason or is otherwise unenforceable by Lender or (2) the issuer executing the Interest Rate Cap Agreement is not a financial institution satisfying the Rate Cap Rating Criteria, Borrower shall, within sixty (60) days following the occurrence of either such event, obtain from a financial institution that satisfies the Rate Cap Rating Criteria a replacement Interest Rate Cap Agreement in form and substance satisfactory to Lender in its reasonable discretion.

(c) No Interest Rate Cap Agreement shall be secured by a Lien on the Mortgaged Property or any other asset of the Borrower.

(d) Each Interest Rate Cap Agreement and Supplemental Interest Rate Cap Agreement shall be collaterally assigned to Lender pursuant to a Collateral Assignment of Interest Rate Cap Agreement in substantially the form and substance attached hereto as Exhibit V (the “ Assignment of Rate Cap Agreement ”), which Assignment of Rate Cap Agreement shall be consented to by Issuer and delivered to Lender, with respect to any Interest Rate Cap Agreement or Supplemental Interest Rate Cap Agreement, promptly upon receipt by Borrower, and with respect to any replacement Interest Rate Cap Agreement, prior to the expiration of the Interest Rate Cap Agreement then being replaced.

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(e) As used herein, “ Excess Rate ” shall mean an amount equal to LIBOR then in effect under Section 2.2(a) minus the Strike Price. As used herein, “ Rate Cap Rating Criteria ” means with respect to any Person, the long term unsecured debt obligations of the applicable Person are rated at least “A-” by Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto, or at least “A3” by Moody’s Investor Services, Inc., and any successor thereto. If, at any time prior to the Maturity Date, the Issuer no longer satisfies the Rate Cap Rating Criteria, Borrower shall, within sixty (60) days following written notice from Lender, obtain and deliver to Lender a replacement Interest Rate Cap Agreement from an Issuer that satisfies the Rate Cap Rating Criteria and is reasonably acceptable to Lender, and Borrower shall execute and deliver to Lender a replacement Assignment of Interest Rate Cap Agreement in form and substance satisfactory to Lender in its reasonable discretion.

Section 8.18 Representations Regarding the Construction Work . Borrower makes the following representations and warranties to Lender as of the date of this Agreement, and as of the date of each Disbursement to Borrower, as updated to reflect such changes as may have resulted from acts, omissions, events or circumstances that do not constitute a Material Adverse Effect, Potential Event of Default or Event of Default hereunder.

(a) As the date of recordation of the Mortgage, no construction has commenced on the Land and no materials have been delivered to the Land, or if construction has commenced or materials have been delivered, the legal effect of possible mechanics’, materialmen’s or other statutory liens has been negated by title insurance or surety bonds satisfactory to Lender.

(b) Borrower has received all Permits and Approvals to commence construction of the Project and has received all Permits and Approvals for the Project necessary for the stage of construction then underway, except for those, if any, as Lender reasonably determines may be obtained at a later date during the course of construction, so long as such Permits and Approvals as are in effect shall be sufficient to allow the Project to proceed to completion in the ordinary course.

(c) Borrower has delivered a complete set of Approved Plans which Lender has reviewed and approved, which Approved Plans shall not be amended without Lender’s prior written approval (which approval shall not be unreasonably withheld, conditioned or delayed); provided that Lender’s approval shall not be required for (i) any amendment that Borrower is required to make under the School Unit Purchase Agreement which are (1) initiated by the SCA, (2) the cost of which shall be solely borne by the SCA (with respect to which the SCA has evidenced its ability to pay the increased costs to the reasonable satisfaction of Borrower and Lender) or by Borrower with additional equity, and (3) such amendment solely affects the School Unit, and (ii) any amendment in connection with a Change Order permitted hereunder. The Approved Plans include and are consistent with the 100% School Base Building CD’s.

(d) The Approved Budget, as amended with Lender’s written approval (which approval shall not be unreasonably withheld, conditioned or delayed), sets out the total itemized costs, direct and indirect, for the Completion of the Construction Work and the payment and performance of Borrower’s other obligations under the Loan Documents.

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(e) To Borrower’s knowledge, the Initial Required Equity (plus additional equity unconditionally committed to Borrower or deposited or contributed pursuant hereto) and the Loan proceeds are sufficient to pay all the costs set out in the Budget.

Section 8.19 Limitations on Distributions . Until full repayment of the Indebtedness, no Upstream Entity shall receive any cash flow distributions from Borrower or from the Mortgaged Property. Further, until full repayment of the Indebtedness, neither Borrower nor any Upstream Owner shall receive any Residential Unit Net Sale Proceeds. In addition, except for the Development Fee (which may be paid in accordance with the provisions of this Agreement), neither Borrower nor any Affiliate of Borrower shall receive a fee for any acquisition, asset management, disposition, leasing or any other reason related to the Premises until the Indebtedness has been fully repaid.

Section 8.20 Condominium .

(a) Concurrently with the formation of the Condominium, Borrower shall assign all of its right, title and interest in and to the TBTA Agreement to the Condominium Board of Managers. Upon the recording of the Declaration and Condominium Plans in the Register’s Office, Borrower represents and warrants to Lender that the Declaration (including the Bylaws) and the Condominium Plans shall be in full compliance with all Condominium Laws. Lender hereby approves the form of Declaration (including the Bylaws) attached hereto as Exhibit R , which Borrower represents and warrants is the same form attached as Exhibit T to the School Unit Purchase Agreement. On or before December 22, 2019, Borrower shall submit the Condominium Plans to Lender for Lender’s review and approval (which approval shall not be unreasonably withheld, conditioned or delayed). Lender shall complete its review of the Condominium Plans within thirty (30) days following its receipt of same, and shall either approve or disapprove the same within said thirty (30) day period. If Lender disapproves the Condominium Plans, Lender shall provide Borrower with a reasonably detailed explanation for Lender’s disapproval thereof, and Borrower shall then re-submit revised drafts of the same to Lender as soon as reasonably practicable. Borrower shall cause the Condominium Plans to address the reasonable concerns or reasons for Lender’s disapproval of the prior drafts of the same. Lender and Borrower shall repeat this process until the Condominium Plans are approved by Lender. Borrower shall be permitted to record the Declaration in the form of Exhibit R and the Condominium Plans approved by Lender in accordance with this Section 8.20(a) up to thirty (30) days prior to the date of the conveyance of the School Unit to SCA. Borrower shall not modify or amend the form of Declaration (including the Bylaws) and/or the approved form of Condominium Plans prior to recording the Declaration and Condominium Plans without Lender’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, provided (i) no Event of Default exists, (ii) such amendment or modification complies with all Condominium Laws, and (iii) the SCA has approved the amendment in writing to the extent it has approval rights thereto under the School Purchase Agreement. Borrower shall be permitted to record an amended and restated Declaration and amended Condominium Plans (reflecting the subdivision of the Residential Unit), with the City Register after Borrower’s receipt of Lender’s written consent and approval of the Offering Plan, including any amendments thereto, in accordance with the provisions of Article 16 hereof.

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(b) Following the recording of the Declaration and the Condominium Plans in the Register’s Office, Borrower agrees that:

(i)

Borrower shall not, without Lender’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed provided (x) no Event of Default exists and (y) such amendment or modification complies with all Condominium Laws, amend, modify or supplement, or consent to or suffer the amendment, modification or supplementation of any of the Condominium Documents (except with respect to price change amendments to the Offering Plan increasing the Schedule A—Purchase Prices (each a “ Price Change Amendment ”) as provided in Article 16 hereof). Borrower shall not consent to the merger of the Condominium with any other condominium without Lender’s prior written consent, which may be withheld in its sole and absolute discretion. Lender shall endeavor to respond to each request by Borrower for Lender’s approval of an amendment to the Condominium Documents within twenty (20) Business Days following Lender’s receipt of such request and all required documents and information relating to such request. If Lender does not notify Borrower of its approval or disapproval of a proposed amendment to the Condominium Documents within twenty (20) Business Days after request by Borrower and submission by Borrower of all information needed by Lender to evaluate said request, then Borrower may deliver a second request, which request shall state on the top of the first page in bold lettering “ LENDER’S RESPONSE IS REQUIRED WITHIN TEN (10) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF THE MASTER LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER .” If Lender does not notify Borrower of its approval or disapproval of the proposed amendment to the Condominium Documents within ten (10) Business Days after such second request, then as long as no Event of Default or Potential Event of Default exists, the same shall be deemed approved;

(ii)

Borrower will pay, or cause to be paid, all assessments for common charges and expenses made against the Mortgaged Property owned by Borrower pursuant to the Condominium Documents as the same shall become due and payable;

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(iii)

Borrower will comply in all material respects with all of the terms, covenants and conditions on Borrower’s part to be complied with, pursuant to the Condominium Documents and any rules and regulations that may be adopted for the Condominium, as the same shall be in force and effect from time to time;

(iv)

Borrower, or Borrower’s designated members of the Condominium Board of Managers, will take all actions as may be reasonably necessary from time to time to preserve and maintain the Condominium in accordance with the Condominium Laws;

(v)

Borrower will not, without the prior written consent of Lender (which consent may be granted or withheld in Lender’s sole and absolute discretion), take (and hereby assigns to Lender any right it may have to take) any action to terminate the Condominium, withdraw the Condominium from the Condominium Laws, or cause a partition of the Condominium to be so withdrawn;

(vi)

it shall be an Event of Default if (A) pursuant to any judgment, decision, order, rule or regulation of either a court of competent jurisdiction or a governmental agency with jurisdiction over the Premises and following the expiration of all applicable appeal periods, any material provision of the Condominium Documents is held to be invalid and such invalidity shall materially and adversely affect the lien of the Mortgage or Lender’s other security interests under the Loan Documents, or (B) the Condominium shall become subject to any action for partition by any Unit Owner and said action has not been dismissed within ninety (90) days after commencement thereof, or (C) the Condominium is withdrawn from the condominium regime established under the Condominium Laws;

(vii)

Borrower will not, without Lender’s prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed so long as no Event of Default exists, exercise any right it may have to vote for (A) any additions or improvements to the common elements of the Condominium that are not included in the Condominium Plans, except as such additions or improvements may be required by Legal Requirements, (B) any borrowing on behalf of the Condominium or (C) the expenditure of any insurance proceeds or condemnation awards for the repair or restoration of the Improvements (unless Borrower is entitled to utilize such insurance proceeds in accordance with Section 5.2(d) hereof);

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(viii)

Except as may be otherwise provided in the Offering Plan or as may be required by the Condominium Laws, Borrower shall control the Condominium Board of Managers and the Condominium Association formed by the Condominium Documents at least until such time as more than fifty percent (50%) of the Subdivided Residential Units have been sold in accordance with this Agreement;

(ix)

For so long as Borrower controls the Condominium Board of Managers, Borrower will, in accordance with Borrower’s rights under the Condominium Documents, cause the Condominium Board of Managers to maintain insurance on the Condominium in accordance with the Condominium Documents and this Agreement; and

(x)

For so long as Borrower controls the Condominium Board of Managers, Borrower, in accordance with Borrower’s rights under the Condominium Documents, shall cause the Condominium Board of Managers to enforce the Property Management Agreement.

Section 8.21 Sales Pace Covenant . Borrower shall satisfy the minimum sales pace for the sale of Subdivided Residential Units attached hereto as Exhibit D (subject to the cure rights set forth thereon) (the “ Sales Pace Covenant ”).

ARTICLE 9

FINANCIAL REPORTING

Section 9.1 Financial Statements; Records . Borrower shall keep adequate books and records of account in accordance with generally accepted accounting principles related to real estate, consistently applied and shall provide to Lender in both hard copy and in electronic format, if available, via e-mail to addresses specified by Lender, within the time periods set forth, the following (collectively, the “ Financial Information ”):

(a) Financial Information . Borrower shall deliver to Lender the following:

(i)

an annual Business Plan which includes operating and capital budgets (including expected capital expenditures, a detailed project of sales, selling costs and profits), including cash flow projections for the upcoming Fiscal Year, and all proposed capital replacements and improvements, within thirty (30) days prior to the close of each Fiscal Year.

(ii)

an annual financial statement for the Premises and for Borrower, including balance sheets, income statements and itemization of any contingent liabilities, to be prepared by an accountant and certified by an authorized and responsible officer or representative of Borrower in the form approved by Lender in its reasonable discretion, within one hundred twenty (120) days after the close of each Fiscal Year of Borrower;

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(iii)

a monthly Progress Report;

(iv)

a monthly internally prepared income statement and balance sheet, within twenty (20) days following the end of each calendar month (beginning with the first month of leasing activity and no later than three (3) months after the Completion Date);

(v)

Monthly, detailed marketing and sales reports (once sales of the Subdivided Residential Units begin), deposit and escrow accounts, and calculations of selling costs in connection with the sale by Borrower of Subdivided Residential Units commencing on the first month after approval of the Offering Plan by the Attorney General);

(vi)

copies of federal tax returns of the Borrower and Indemnitor, within thirty (30) days following the filing thereof; and

(vii)

detailed financial statements for Indemnitor (including any back-up information above and beyond public filings Indemnitor makes in its 10Q and 10K filings with the Securities and Exchange Commission) and a statement of its Net Worth and Liquidity (as such terms are defined in the Recourse Guaranty Agreement) confirming said Indemnitor’s compliance with Indemnitor’s Financial Covenants, to be prepared and certified by said Indemnitor or if required by Lender following an Event of Default, a statement prepared and certified by an independent certified public accountant acceptable to Lender providing the Net Worth and Liquidity of Indemnitor, within forty-five (45) days following the end of each calendar quarter (other than the fourth calendar quarter) and within eighty (80) days following the end of each calendar year; provided, however, that the foregoing financial deliverables as to Indemnitor may be modified or supplemented by Lender if Indemnitor is no longer a publicly traded company.

(b) Financial Information Upon Request . Upon written request from Lender, Borrower shall deliver the following:

(i)

such other financial or management information from Borrower and Indemnitor as may, from time to time, be reasonably required by Lender and in form and substance reasonably satisfactory to Lender;

(ii)

updates to the financial information delivered under Section 9.1(a)(vii) , within ten (10) days of Lender’s request;

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(iii)

Borrower’s books and records regarding the Premises for examination, review, copying and audit by Lender or its auditors during normal business hours and convenient facilities for such examination review, copying and audit of Borrower’s books and records of account;

(iv)

a statement confirming: (A) that no Borrower or Indemnitor or Principal has, since the date hereof, been the subject of any bankruptcy, reorganization, dissolution or insolvency proceeding; (B) that there does not exist any subordinate, mezzanine or other indebtedness prohibited by any Loan Document; (C) that there has not occurred any transfer, sale, pledge or encumbrance prohibited by any Loan Document, except as previously disclosed to Lender in writing and approved by Lender in writing; and (D) that, to Borrower’s actual knowledge, (1) there is no Event of Default and (2) no condition exists which, following notice to Borrower and following the expiration of any applicable cure period, would constitute an Event of Default, or if an Event of Default or such condition exists, Borrower shall disclose such Event of Default or condition.

(c) Failure to Deliver Financial Information . If Borrower fails to deliver or cause to be delivered to Lender any Financial Information required hereunder within fifteen (15) days following written notice from Lender to Borrower that Borrower has failed to timely deliver said Financial Information, Lender may, in its sole and absolute discretion, charge Borrower (and Borrower shall pay to Lender) a fee equal to $2,500 (the “ Financial Information Fee ”), for each thirty (30) day period or portion thereof during which Borrower fails to timely deliver to Lender any such Financial Information.

ARTICLE 10

CONVEYANCES, ENCUMBRANCES AND BORROWINGS

Section 10.1 Prohibition Against Conveyances, Encumbrances and Borrowing .

(a) Except with the prior written consent of Lender, and except as expressly permitted in Sections 10.2 , neither Borrower nor any other Person shall sell, transfer, convey, assign, mortgage, encumber, pledge, hypothecate, grant a security interest in, grant options with respect to, or otherwise dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) (collectively, a “ Conveyance ”) all or any portion of any legal or beneficial interest in: (a) all or any portion of the Mortgaged Property including the Leases; or (b) all or any ownership interest in Borrower or in any Upstream Owner, except that a Conveyance of any publicly traded shares in (or issuance of any publicly traded equity of) any Upstream Owner (or the issuance of any equity in or debt of a publicly traded Upstream Owner) shall be specifically permitted without the consent of Lender.

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(b) In furtherance of the foregoing, subordinate liens (voluntary or involuntary) secured by any portion of the Mortgaged Property, or any beneficial interest in the Mortgaged Property, and any mezzanine or any other financing, whether unsecured or secured by any ownership interest in Borrower or in any Upstream Owner, shall not be permitted, except with the prior written consent of Lender in each case. Without limiting Lender’s right to withhold its consent to any Conveyance, any Conveyance must not be to a tenancy in common or an OFAC Prohibited Person. All requests for Lender’s consent under this Section 10.1 shall be on a form previously approved by Lender and shall be accompanied by the payment of Lender’s standard processing fee for such transactions then in effect. Lender’s consent to any of the foregoing actions, if given, may be conditioned upon a change in the interest rate, maturity date, amortization period or other terms under this Agreement, the payment of a Conveyance fee and/or any other requirements of Lender. Notwithstanding the foregoing, Lender shall not unreasonably withhold, delay or condition its consent to easements or access licenses (or amendments thereto), nor shall Lender require a change in the terms of the Loan in connection with a request for consent to easements or access licenses (or amendments thereto) so long as such easements or access licenses do not have an adverse impact on the use, operation or value of the Mortgaged Property. In addition to the standard processing fee and the transfer or encumbrance fee referred to in this Section 10.1 , Borrower shall pay or reimburse Lender within five (5) days after demand for all reasonable out-of-pocket expenses (including reasonable out-of-pocket attorneys’ fees, costs and expenses, title search costs, and title insurance endorsement premiums) incurred by Lender in connection with the review, approval and documentation of any such transaction. The foregoing prohibitions are not intended to prevent individual Upstream Owners (other than any general partner or managing member of Borrower or any other Upstream Owner that is required to comply with the provisions of Section 8.12 ) from obtaining personal loans unrelated to Borrower and the Mortgaged Property and are also not intended to prevent Borrower from incurring reasonable and customary equipment leases, trade payables and unsecured operational debt incurred with trade creditors in the ordinary course of its business of owning and operating the Mortgaged Property in such amounts as are reasonable and customary under the circumstances that will be satisfied within sixty (60) days of the date same becomes payable (subject to the right to contest same in good faith), provided that such debt is not evidenced by a note and is paid when due.

Section 10.2 Permitted Transfer .

(a) Notwithstanding the provisions of Section 10.1(a) above, as long as no Event of Default exists, Borrower shall have the right to sell or permit the sale of up to an aggregate of forty-nine percent (49%) of the direct and indirect equity interests in Borrower to one or more third-parties provided that:

(i)

Any new equity investor must be a Qualified Real Estate Investor and any new equity investor must also be an Institutional Real Estate Investor if it will own more than ten percent (10%) of the direct and indirect interests in Borrower;

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(ii)

Lender shall have reviewed and approved (which approval shall not be unreasonably withheld, conditioned or delayed) all relevant joint venture agreements, partnership agreements and limited liability company operating agreements (and other related documents) and must be reasonably satisfied that any decision-making provisions, as well as any major decision rights granted to the equity investor(s), do not result in a change of Control over Borrower and/or the Project;

(iii)

Indemnitor must retain Control and decision-making authority over Borrower and the Project subject to the terms of the joint venture agreement approved by Lender;

(iv)

Such Conveyance shall not be to a tenancy in common or an OFAC Prohibited Person;

(v)

Borrower pays Lender’s standard processing fee (not to exceed $50,000) and pays Lender all reasonable out-of-pocket expenses (including reasonable out-of-pocket attorneys’ fees, costs and expenses, title search costs, and title insurance endorsement premiums) incurred in connection with the review, approval and documentation of any such transaction;

(vi)

In connection with any transfer of a membership interest in Borrower or the admission of any new member to Borrower, Borrower shall cause each such new member of Borrower to execute and deliver to Lender (i) either a pledge agreement substantially in the same form as the Pledge Agreement or execute and deliver to Lender a joinder to the Pledge Agreement in form and substance reasonably satisfactory to Lender, (ii) original membership certificates and an executed endorsement in blank sufficient for such membership interests to be certificated, and (iii) a power of attorney substantially in the same form as the Power of Attorney; and

(vii)

The consent of the SCA is not required or written consent thereof has been obtained and delivered to Lender.

For the avoidance of doubt, any Conveyance of more than forty-nine percent (49%) of the direct and indirect interests in Borrower to one or more third-parties shall be subject to Lender’s prior written approval, which approval may be granted or withheld in Lender’s sole and absolute discretion and which approval, if granted, may be conditioned upon material changes to the terms and conditions of the Loan Documents as may be required by Lender in its sole and absolute discretion.

(b) Notwithstanding the provisions of Section 10.1(a) above, the sale or transfer of the School Unit, the Retail Unit or any Subdivided Residential Unit in accordance with the Business Plan will not be deemed to be a violation of the prohibitions on partial transfers of ownership in the Borrower.

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ARTICLE 11

EVENTS OF DEFAULT

Section 11.1 Events of Default . Each of the following shall constitute an Event of Default under the Loan Documents (each an “ Event of Default ”):

(a) Failure to pay (i) any monthly installment of interest in accordance with Section 2.3 within five (5) Business Days following the date such amount is due; provided, however, if there are sufficient funds available in the Interest Holdback or Reserve Account and Borrower otherwise satisfies all of the conditions to a Disbursement to Borrower, the failure to pay any monthly installment of interest shall not be deemed an Event of Default, (ii) the failure to pay Lender the Residential Unit Net Sale Proceeds in accordance with Section 2.3(c) , or (iii) the entire amount due under the Loan Documents by the Maturity Date;

(b) Except for the payments described in Sections 11.1(a) and 11.1(h) (relating to insurance premiums), failure to pay any other amount due under the Loan Documents within ten (10) days following notice from Lender that such amount is due;

(c) Except as provided in Section 11.1(a) , 11.1(b) and 11.1(d) to 11.1(ff) , inclusive, failure to perform or comply with any term, obligation, covenant or condition contained in this Agreement or any other Loan Documents, within thirty (30) days after the delivery of written notice (“ Cure Notice ”) from Lender of such failure; provided that if such default is not reasonably capable of being cured (without taking into account financial capability) within such thirty (30) day period, such failure shall not constitute an Event of Default so long as Borrower commences the cure of such default within such thirty (30) day period, diligently prosecutes such cure to completion and completes such cure within one hundred twenty (120) days after delivery of the Cure Notice from Lender;

(d) The occurrence of an Event of Default, or default following any required notice to Borrower and following the expiration of any applicable grace or cure period, under any Loan Document;

(e) If any representation, warranty, certification or other written statement made in any Loan Document or in any written statement or certificate at any time given by Borrower, Indemnitor or Pledgor (or any officers or employees thereof, in their capacity as such) to Lender in connection with the Loan shall prove to be untrue or misleading in any material respect at the time when made or given; provided, however, if (i) Borrower, Indemnitor or Pledgor (or any officers or employees thereof, in their capacity as such) makes a good faith, unintentional misrepresentation in any Loan Document or in any such other written statement or certificate, (ii) there is no failure by Borrower to timely pay any sum of money when due under the Loan Documents, and (iii) the underlying facts or situation that rendered such representation inaccurate or untrue can be remedied to Lender’s reasonable satisfaction within thirty (30) days following the earlier to occur of the discovery of such misrepresentation by Borrower or written notice from Lender to Borrower of such misrepresentation and Borrower actually remedies said underlying facts or situation so as to make the original representation in the Loan Document(s) true and correct on a going forward basis prior to the expiration of said thirty (30) day period and there are not remaining material adverse consequences to Lender, the Loan or the Mortgaged Property, then such misrepresentation shall not be deemed to be an Event of Default;

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(f) If Lender fails to have a legal, valid, binding and enforceable first priority lien on the Mortgaged Property or any portion thereof;

(g) Failure to permit Lender or its agents to enter to the Mortgaged Property or to access Borrower’s books and records in accordance with the terms of the Loan Documents, such failure continuing for more than seven (7) Business Days after written notice from Lender to Borrower of such failure;

(h) Failure to maintain insurance or apply insurance proceeds as required by this Agreement;

(i) Intentionally omitted;

(j) Except as permitted in this Agreement or otherwise approved in writing by Lender: (i) any change from the planned use (i.e., school and residential condominiums) of the upper floors of the Improvements, and any material change in the use that is inconsistent with the current lawful permitted use of the planned first floor retail space or causing or permitting the use or occupancy of any part of the Premises to be discontinued if such change of use or discontinuance would violate any zoning or other law, ordinance or regulation; (ii) consent to any zoning reclassification, modification or restriction affecting any of the Premises; or (iii) except as expressly contemplated by Section 8.20 or Article 16 , taking any steps whatsoever to convert any of the Premises, or any portion thereof, to a condominium, cooperative or tenancy in common form of ownership;

(k) Failure by Borrower within ten (10) days following notice from Lender to deliver copies of any material notices from governmental or regulatory authorities in accordance with the terms of the Loan Documents;

(l) Failure to deliver (i) financial statements required by Article 9 within thirty (30) days following written notice from Lender to Borrower of such failure; provided, however, the foregoing thirty (30) day cure period shall be extended by such additional time as may be necessary solely in connection with Borrower’s obligation to deliver items requested by Lender under Sections 9.1(b)(i), (ii) and (iii) as long as Borrower diligently pursues the delivery of said items to Lender, or (ii) the estoppel certificates required by Section 8.9 within five (5) Business Days after the delivery of written notice from Lender, which notice and five (5) Business Day cure period under this Section 11.1(l) shall be in addition to the notice and ten (10) Business Day cure period set forth in Section 8.9 ;

(m) Material violation by Borrower of the terms, obligations, covenants or conditions set forth in Section 8.12 (Single Purpose Entity Requirements) or Article 10 (Conveyances, Encumbrances and Borrowings); or entering into any Lease of all or any portion of the Retail Unit in violation of the provisions of Section 7.1 ;

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(n) If a default or event of default shall occur under any permitted mortgage, or security agreement encumbering all or any portion of the Mortgaged Property which is subordinate or superior to the lien of the Mortgage beyond the expiration of any applicable notice and cure period thereunder, or if any party under any such instrument shall commence a foreclosure or other collection or enforcement action in connection therewith (excluding mechanics’ liens);

(o) Intentionally omitted;

(p) If Borrower or Indemnitor consents to the filing of, or commences or consents to the commencement of, any Bankruptcy Proceeding with respect to any Borrower or any Indemnitor;

(q) If any Bankruptcy Proceeding shall have been filed against Borrower or Indemnitor and the same is not withdrawn, dismissed, canceled or terminated within ninety (90) days of such filing;

(r) If any Borrower or Indemnitor is adjudicated bankrupt or insolvent or a petition for reorganization of any Borrower or any Indemnitor is granted;

(s) If a receiver, liquidator or trustee of Borrower or Indemnitor, or of any of the properties of Borrower or Indemnitor shall be appointed and not dismissed within ninety (90) days of such appointment;

(t) If Borrower or Indemnitor shall make an assignment for the benefit of its creditors;

(u) Except as otherwise permitted herein, if Borrower or any Principal or any Indemnitor shall institute or cause to be instituted any proceeding for the termination or dissolution of Borrower or Indemnitor;

(v) Failure to achieve Completion of the Construction Work by the Completion Date or, to the extent applicable, by the Outside Completion Date;

(w) With respect to the Construction Work, (i) the suspension or discontinuance of the Construction Work for a continuous period of at least forty-five (45) days, for reasons other than Force Majeure, (ii) the occurrence of more than two (2) distinct suspensions or discontinuances of the Construction Work, each lasting for a period of greater than thirty (30) consecutive days, for reasons other than Force Majeure, (iii) the abandonment of the Construction Work, for reasons other than Force Majeure, or (iv) the failure of Borrower to diligently prosecute Completion of the Construction Work in good faith, for reasons other than Force Majeure;

(x) Failure to achieve a Milestone Construction Hurdle by the Milestone Deadline, subject to extensions for Force Majeure, in accordance with the provisions of Section 4.1(b) of this Agreement.

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(y) An event of default by Borrower which continues after the giving of the applicable notice and expiration of the applicable cure period, if any, occurs under the School Unit Purchase Agreement or a notice of termination of the School Purchase Agreement is delivered by the SCA (other than as a result of the Closing occurring thereunder) which Lender reasonably believes is valid and effective;

(z) Failure to adhere to the Major Points of the Business Plan in all material respects within thirty (30) days after the delivery of a Cure Notice from Lender of such failure, or such longer time as may be reasonably necessary to cure such failure provided Borrower promptly commences and diligently pursues such cure, which additional time shall not exceed an additional sixty (60) days, for an aggregate of ninety (90) days;

(aa) The sale of a Subdivided Residential Unit for less than the Residential Unit Minimum Sales Price without Lender’s prior written consent, which may be withheld in Lender’s sole and absolute discretion;

(bb) Failure to satisfy the Sales Pace Covenant;

(cc) An event of default by Borrower which continues after the giving of the applicable notice and expiration of the applicable cure period, if any, occurs under the Master Lease or Sublease or a notice of termination of the Sublease is delivered by the SCA (other than as a result of the Closing occurring thereunder) which Lender reasonably believes is valid and effective;

(dd) A default by Borrower occurs under the Triparty Agreement which continues after the giving of the applicable notice and the expiration of the applicable cure period thereunder;

(ee) Failure of Indemnitor to meet the Indemnitor’s Financial Covenants; or

(ff) An event occurs as provided in Section 8.20 (b)(vi) hereof with respect to the Condominium.

ARTICLE 12

REMEDIES

Section 12.1 Remedies . Upon the occurrence of any Event of Default, Lender may (1) declare the entire Loan to be immediately due and payable without presentment, demand, protest, notice of protest or dishonor, notice of intent to accelerate the maturity thereof, notice of acceleration of the maturity thereof, or other notice of default of any kind, all of which are hereby expressly waived by Borrower, (2) terminate the obligation, if any, of Lender to advance amounts hereunder, and (3) exercise all rights and remedies therefor under this Agreement, the Mortgage and the other Loan Documents and otherwise available at law or in equity. Notwithstanding any arbitration provision in the Triparty Agreement, Lender shall not be precluded from brining any foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Notes, the Loan Agreements, the Mortgages and the other Loan Documents, or in the Mortgaged Property or any other collateral given to Lender pursuant to the Loan Documents. The rights and remedies of Lender under the Triparty Agreement are cumulative and as against Borrower are not in lieu of, but are in addition to, any other rights or remedies which Lender may have under the other Loan Documents, at law, or otherwise. Lender has no duty to Borrower, Indemnitor or any other Person to exercise Lender’s rights under the Triparty Agreement.

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Section 12.2 Lender’s Right to Perform the Obligations . If Borrower shall fail, refuse or neglect to make any payment or perform any act required by the Loan Documents, then while any Event of Default exists, and without notice to or demand upon Borrower and without waiving or releasing any other right, remedy or recourse Lender may have because of such Event of Default, Lender may (but shall not be obligated to) make Advances to make such payment or perform such act, and shall have the right to enter upon the Premises for such purpose and to take all such action thereon and with respect to the Mortgaged Property as it may deem necessary or appropriate. Similarly, in making any payments to protect the security intended to be created by the Loan Documents, Lender shall not be bound to inquire into the validity of any apparent or threatened adverse title, lien, encumbrance, claim or charge before making an advance for the purpose of preventing or removing the same. Borrower shall indemnify, defend and hold Lender harmless from and against, and be responsible for, any and all Losses incurred or accruing by reason of any acts performed by Lender pursuant to the provisions of this Section 12.2 , including those arising from the joint, concurrent, or comparative negligence of Lender, except as a result of Lender’s gross negligence or willful misconduct.

Section 12.3 Waiver of Marshalling of Assets .

(a) To the fullest extent permitted by law, Borrower, for itself and its successors and assigns, waives all rights to a marshalling of the assets of Borrower, and others with interests in Borrower, and of the Mortgaged Property, and agrees not to assert any right under any laws pertaining to the marshalling of assets, homestead exemption, the administration of estates of decedents, to defeat, reduce or affect the right of Lender under the Loan Documents to a sale of the Mortgaged Property for the collection of the Indebtedness without any prior or different resort for collection or of the right of Lender to the payment of the Indebtedness out of the net proceeds of the Mortgaged Property in preference to every other claimant whatsoever. Borrower agrees that the actions, sales, proceedings and foreclosure described herein or in any of the other Loan Documents may be commenced in any order determined by Lender.

Section 12.4 Advances . At any time when an Event of Default exists, Lender shall have the right (but not the obligation) to make Advances and obtain reimbursement for any and all Advances to satisfy any of Borrower’s obligations under this Agreement that Borrower fails to timely satisfy, which Advances shall constitute additions to the Loan. Lender may make an Advance in reliance on any bill, statement or assessment procured from the appropriate governmental authority or other issuer thereof without inquiring into the accuracy or validity thereof. All Advances shall bear interest at the Default Rate from the date that each such Advance or expense is made or incurred to the date of repayment, if not paid within five (5) Business Days after demand. Borrower shall pay or reimburse Lender within five (5) Business Days after written demand for any and all Advances made pursuant to this Agreement, including for all interest thereon and for all costs and expenses (including reasonable out-of-pocket attorneys’ and appraisers’ and receivers’ fees, costs and expenses and the expenses and reasonable fees of any similar official) related or incidental to the collection of the Indebtedness, any foreclosure of the Mortgage or any other Loan Document, any enforcement, compromise or settlement of any Loan Document or the Indebtedness in any judicial, arbitration, administrative, probate, appellate, bankruptcy, insolvency or receivership proceeding, as well as in any post-judgment proceeding to collect or enforce any judgment or order relating to the Indebtedness or any Loan Document, as well as any defense or assertion of the rights or claims of Lender in respect of any thereof, by litigation or otherwise. All Advances made and any reasonable expenses incurred at any time by Lender pursuant to the provisions the Loan Documents or under applicable law shall be secured by the Mortgage as part of the Indebtedness, with equal rank and priority.

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Section 12.5 Participation In Proceedings . Lender may, after written notice to Borrower: (i) appear in and defend any action or proceeding, in the name and on behalf of either Lender or Borrower, in which Lender is named or which Lender reasonably determines may adversely affect the Mortgaged Property, the Mortgage, the Lien thereof or any other Loan Document; and (ii) institute any action or proceeding which Lender reasonably determines should be instituted to protect its interest in the Mortgaged Property or its rights under the Loan Documents, including foreclosure proceedings.

ARTICLE 13

LIMITATIONS ON LIABILITY

Section 13.1 Limitation on Liability .

(a) Subject to the provisions of this Section 13.1 , in any action or proceedings brought on any Loan Document in which a money judgment is sought, Lender will look solely to the Mortgaged Property and other property described in the Loan Documents (including the Property Income and any other rents and profits from such property) for payment of the Indebtedness and, specifically and without limitation, Lender agrees to waive any right to seek or obtain a deficiency judgment against Borrower.

(b) The provisions of Section 13.1(a) shall not:

(i)

constitute a waiver, release or impairment of any obligation evidenced or secured by any Loan Document;

(ii)

be deemed to be a waiver of any right which Lender may have under Sections 506(a), 506(b), 1111(b) or any other provisions of the Federal Bankruptcy Code to file a claim for the full amount of the Indebtedness evidenced by this Agreement and the Note and secured by the Mortgages or to require that all of the Mortgaged Property shall continue to secure all of the Indebtedness owing to Lender in accordance with the Loan Documents;

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(iii)

impair the right of Lender to name Borrower or Indemnitor as a party or parties’ defendant in any action or suit for judicial foreclosure and sale under the Mortgage;

(iv)

affect the validity or enforceability of, or limit recovery under, any indemnity (including the Environmental Indemnification Agreement), guaranty, master or other lease or similar instrument made in connection with the Loan Documents;

(v)

impair the right of Lender to obtain the appointment of a receiver; or

(vi)

impair Lender’s rights and remedies under this Agreement, the Mortgage or any separate assignment of leases and rents regarding the assignment of Leases and Property Income to Lender.

(c) Notwithstanding any provisions of Section 13.1(a) , Borrower and Indemnitor shall be personally liable to Lender and Lender shall have full recourse to Borrower and Indemnitor in connection with the Loan to the extent provided below in connection with the following:

(i)

Fraud or intentional material misrepresentation in connection with the Application, the Loan Documents or the making of the Loan – Recourse liability for the entire Indebtedness if such fraud or intentional material misrepresentation was performed or made by or at the direction of any officer of Borrower or Indemnitor, and Recourse liability for any Losses incurred by Lender in all other instances of fraud or intentional material misrepresentation performed or made by Borrower or Indemnitor, their respective Affiliates or employees who are not officers of Borrower or Indemnitor, in connection with the Application, the Loan Documents or the making of the Loan;

(ii)

Insurance and/or condemnation Proceeds received by or on behalf of Borrower but not applied in accordance with the terms of the Loan Documents – Recourse liability for any such proceeds which are neither paid over to Lender, nor applied in accordance with the terms of Article 3 ;

(iii)

Failure to apply any security deposits, advances or prepaid rents, cancellation or termination payments and other sums received by Borrower or by an Affiliate of Borrower or on behalf of Borrower in connection with the operation of the Premises in accordance with the terms of the Loan Documents, or misappropriation of any of the aforementioned sums received by Borrower or on behalf of Borrower – Recourse liability for the amount of any such sums not applied in accordance with the terms of the Loan Documents or not paid over to Lender;

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(iv)

Removal of any non-obsolete Equipment from the Mortgaged Property by or on behalf of Borrower or its Affiliates which is not replaced with Equipment of equal or greater utility and value – Recourse liability for the replacement value of any Equipment which is so removed and not so replaced;

(v)

Any act of arson, malicious destruction or intentional physical waste of the Mortgaged Property by the Borrower, Upstream Owners, any Principal, or any general partner, manager or managing member of Borrower – Recourse liability for any Losses incurred by Lender arising out of or related to each such act;

(vi)

Any failure to apply any income or proceeds of the Mortgaged Property received by or by an Affiliate of Borrower on behalf of Borrower to any obligations under the Loan Documents or for capital improvements or operating expenses of the Premises (including any deposits or reserves required by a Loan Document) in violation of this Agreement – Recourse liability to the extent of any such income or proceeds which are not applied as aforesaid; provided that Lender shall not have the right to recover distributions made in good faith to any Upstream Owner (after determining the sufficiency of revenues to cover any such payments) more than 180 days prior to an Event of Default occurring under any Loan Document;

(vii)

Filing by any Borrower, or any Indemnitor, or any general partner or managing member of Borrower of a voluntary bankruptcy or insolvency proceeding, or the filing against any of them, or against any of the Mortgaged Property, of an involuntary bankruptcy or insolvency proceeding by a party other than Lender Parties with respect to which proceeding Borrower, Indemnitor, or any Affiliate of Borrower or Indemnitor has acted in concert with, solicited or caused to be solicited petitioning creditors, or has colluded or conspired with any party to cause the filing thereof (“ Collusive Insolvency ”) which is not dismissed within 90 days of filing – Recourse liability for the entire Indebtedness;

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(viii)

Failure of Borrower to timely maintain, or pay the premiums for, any insurance required to be maintained under Article 5 of this Agreement or any other Loan Document; or to pay any Impositions against the Mortgaged Property – Recourse liability for any Losses incurred by Lender in connection with such failure to timely maintain insurance, pay any Imposition or pay insurance premiums; provided that Borrower shall not be liable for Losses as a result of the foregoing to the extent it has satisfied all of the conditions precedent to a Disbursement to Borrower and Lender has not made a Disbursement to Borrower in accordance with the terms of this Agreement, or to the extent that cash flow from the Mortgaged Property is insufficient to pay same, and Borrower has provided Lender with written notice of the fact that cash flow from the Mortgaged Property is insufficient to pay same and that Borrower does not intend to pay same at least thirty (30) days prior to the due date for the insurance premium or Imposition in question;

(ix)

Violation of the restrictions on transfers of the Mortgaged Property or any ownership interest in Borrower set forth in Section 10.1 – Recourse liability for the entire Indebtedness;

(x)

Violation of the restrictions on subordinate, mezzanine and other financing as described in the Loan Documents – Recourse liability for the entire Indebtedness;

(xi)

Violation of the SPE Requirements– Recourse liability for any Losses incurred by Lender relating to such violation of such SPE Requirements;

(xii)

Borrower, Indemnitor and/or Principal or any of their respective Affiliates takes, in bad faith, any action which impedes, enjoins, prevents, hinders, frustrates, delays, stays or interferes with Lender’s exercise of any rights or remedies under any of the Loan Documents after the earlier to occur of the occurrence of an Event of Default or a Potential Event of Default under any Loan Document (including, without limitation, the Triparty Agreement), at law or in equity, excluding good faith defenses – Recourse liability for any Losses incurred by Lender relating to such action.

(xiii)

Out-of-pocket costs and expenses incurred by Lender in enforcing the SCA’s or Borrower’s obligations under the School Unit Purchase Agreement, the Triparty Agreement, the Master Lease or the Sublease (including, without limitation, any replacement Master Lease or Sublease), including without limitation, out-of-pocket reasonable attorneys’ fees incurred therewith – Recourse liability for any such costs and expenses not paid by Borrower in accordance with this Agreement.

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ARTICLE 14

MISCELLANEOUS

Section 14.1 Notices .

(a) All notices, consents, approvals and requests required or permitted under any Loan Document shall be given in writing and shall be effective for all purposes if hand delivered or sent by: (i) certified or registered United States mail, postage prepaid, return receipt requested; or (ii) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of attempted delivery; addressed in either case as follows:

If to Lender, at the following address:

Massachusetts Mutual Life Insurance Company

c/o Midland Loan Services

10851 Mastin, Suite 300

Overland Park, Kansas 66210

Attention:	Barings Servicing Group
	Loan No. 17602

And to:

Massachusetts Mutual Life Insurance Company

℅ Barings LLC

One Financial Plaza

Hartford, Connecticut 06103

Attention:	Structured Real Estate Loan Servicing
	Loan No.: 17602

And to:

Massachusetts Mutual Life Insurance Company

℅ Barings LLC

One Financial Plaza

Hartford, Connecticut 06103

Attention:	Legal Department
	Loan No.: 17602

If to Borrower, at the following address:

TPHGREENWICH OWNER LLC

c/o Trinity Place Holdings Inc.

340 Madison Avenue

3 ^rd Floor, Suite 3C

New York, New York 10173

Attention:

Steven Kahn

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With a copy to:

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

Attention:

James P. Godman, Esq.

And, in the case of any default notice, with copies to:

New York City School Construction Authority
30-30 Thompson Avenue
Long Island City, New York 11101
Attn: Ross J. Holden, Executive Vice President & General Counsel
Facsimile: (718) 472-8088
E-mail: rholden@nycsca.org

and

Herrick, Feinstein LLP
2 Park Avenue
New York, New York 10016
Attn: Doug Heller, Esq.
Facsimile: (212) 545-3338
E-mail: dheller@herrick.com

or to such other address and person as shall be designated from time to time by Lender or Borrower, as the case may be, in a written notice to the other party in the manner provided for in this Section 14.1 . A notice shall be deemed to have been given: in the case of hand delivery, at the time of actual delivery; in the case of registered or certified mail, three (3) Business Days after deposit in the United States mail; in the case of expedited prepaid delivery, upon the first attempted delivery on a Business Day. A party receiving a notice that does not comply with the technical requirements for notice under this Section 14.1 may elect to waive any deficiencies and treat the notice as having been properly given.

(b) Borrower acknowledges that Lender may elect to correspond or transmit information concerning the Loan or Borrower to Borrower, the Principals, Indemnitors, investors and other third parties via email or the internet. Such transmissions shall be for the convenience of the parties hereto and shall not replace or supplement the required methods of delivering notices provided for above. In addition, Borrower acknowledges that that such information may be transmitted via the internet or by email and with or without any algorithm enhanced security software and Borrower waives any right to privacy in connection therewith.

Section 14.2 Counterparts . This Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one document.

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Section 14.3 Successors and Assigns . This Agreement shall be binding upon Borrower’s successors and assigns and shall inure to the benefit of Lender, the Lender Parties and their respective successors and assigns.

Section 14.4 Joint and Several Liability . If more than one party is executing this Agreement as a Borrower, then each party that executes this Agreement shall be jointly and severally responsible for any and all obligations of any Borrower hereunder.

Section 14.5 Captions . The captions of the sections and Sections of this Agreement are for convenience only and are not intended to be a part of this Agreement and shall not be deemed to modify, explain, enlarge or restrict any of the provisions hereof.

Section 14.6 Further Assurances . Borrower shall do, execute, acknowledge and deliver, at Borrower’s sole cost and expense, such further acts, instruments or documentation, including additional title insurance policies or endorsements, and title reinsurance, as Lender may reasonably require from time to time to better assure, transfer and confirm unto Lender the rights now or hereafter intended to be granted to Lender under any Loan Document.

Section 14.7 Severability . All rights, powers and remedies provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable law, and are intended to be limited to the extent (but only to the extent) necessary so that they will not render this Agreement invalid or unenforceable. If any term, covenant, condition, or provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remaining terms, covenants, conditions and provisions of this Agreement, or the application of such term, covenant, condition or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term, covenant, condition and provision of this Agreement shall be modified and/or limited to the extent necessary to render the same valid and enforceable to the fullest extent permitted by law.

Section 14.8 Borrower’s Obligations Absolute . All sums payable by Borrower hereunder shall be paid without notice (except as otherwise expressly provided), demand, counterclaim, setoff, deduction or defense and without abatement, suspension, deferment, diminution or reduction, and the obligations and liabilities of Borrower hereunder shall in no way be released, discharged, or otherwise affected (except as expressly provided herein) by reason of: (a) any damage to or destruction of or any condemnation or similar taking of the Premises or any portion thereof; (b) any restriction or prevention of or interference with any use of the Premises or any portion thereof; (c) any title defect or encumbrance or any eviction from the Premises or any portion thereof by title paramount or otherwise; (d) any Bankruptcy Proceeding relating to Borrower, any Principal, any Indemnitor or any general partner, manager or managing member of Borrower, or any action taken with respect to any Loan Document by any trustee or receiver of Borrower, any Principal, any Indemnitor or any general partner, manager or managing member of Borrower, or by any court, in any such proceeding; (e) any claim which Borrower has or might have against Lender; or (f) any default or failure on the part of Lender to perform or comply with any of the terms hereof or of any other agreement with Borrower. Except as expressly provided herein, Borrower waives all rights now or hereafter conferred by statute or otherwise to any abatement, suspension, deferment, diminution or reduction of any sum secured hereby and payable by Borrower.

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Section 14.9 Amendments; Consents . This Agreement cannot be altered, amended, modified or discharged orally and no executory agreement shall be effective to modify or discharge it in whole or in part, unless in writing and signed by the party against which enforcement is sought. No consent or approval required under any Loan Document shall be binding unless in writing and signed by the party sought to be bound.

Section 14.10 Other Loan Documents and Exhibits . All of the agreements, conditions, covenants, provisions and stipulations contained in the Loan Documents, and each of them, which are to be kept and performed by Borrower are hereby made a part of this Agreement to the same extent and with the same force and effect as if they were fully set forth in this Agreement, and Borrower shall keep and perform the same, or cause them to be kept and performed, strictly in accordance with their respective terms. The Cover Sheet and each exhibit, schedule and rider attached to this Agreement are integral parts of this Agreement and are incorporated herein by this reference. In the event of any conflict between the provisions of any such exhibit, schedule or rider and the remainder of this Agreement, the provisions of such exhibit, schedule or rider shall prevail.

Section 14.11 Merger . So long as any Indebtedness shall remain unpaid, fee title to and any other estate in the Mortgaged Property shall not merge, but shall be kept separate and distinct, notwithstanding the union of such estates in any Person.

Section 14.12 Time of the Essence . Time shall be of the essence in the performance of all obligations of Borrower under every Loan Document.

Section 14.13 Transfer of Loan . Lender may, at any time, sell, transfer, encumber, pledge or assign the Loan Documents or any portion thereof, and any or all servicing rights with respect thereto (collectively, a “ Transfer ”), or grant participations therein (a “ Participation ”) or issue mortgage pass-through certificates or other securities (the “ Securities ”) evidencing a beneficial interest in a rated or unrated public offering or private placement (a “ Securitization ”). In the case of a Transfer, the transferee shall have, to the extent of such Transfer, the rights, benefits and obligations of “Lender” under the Loan Documents. Lender may forward to each purchaser, transferee, assignee, servicer, participant, investor in such Transfer, Participation or Securitization or any Rating Agency rating such Securitization (collectively, the “ Investor ”) that executes and delivers Lender’s form of (or another customary) non-disclosure agreement and each prospective Investor or any agency maintaining databases on the underwriting and performance of commercial mortgage loans, all documents and information which Lender now has or may hereafter acquire relating to the Loan, the Mortgaged Property, Borrower, any Principal, and any Indemnitor, whether provided by Borrower, any Indemnitor, or otherwise, as Lender reasonably determines necessary or desirable. Borrower irrevocably waives any and all rights it may have under applicable state or federal law to prohibit disclosure in accordance with the provisions of this Section 14.13, including any right of privacy. Further Borrower acknowledges that such information may be transmitted via the internet or by email. Lender will notify Borrower in writing of any Transfer of the Loan or any portion thereof, to the extent such Transfer occurs prior to Completion. Notwithstanding anything to the contrary, provided that no Event of Default exists and prior to Completion, Lender shall not resign as the Administrative Agent without Borrower’s consent, which consent shall not be unreasonably withheld, conditioned or delayed. As long as no Event of Default exists, at all times prior to the Completion of Construction Work and funding of the entire Loan (or if less than the Maximum Loan Amount has been funded on the date the Borrower achieves Completion, Lender having no further obligation to make a Disbursement to Borrower), Lender shall: (i) in connection with a Transfer of a fifty percent (50%) or less interest in the Loan, make such transfer only to an Institutional Real Estate Investor with a net worth of at least $500,000,000 and liquidity (including uncalled capital commitments, commitments from parent entities, and lines of credit) in an amount not less than the lesser of (x) 125% of said entity’s pro-rata share of the then un-funded Loan amount, and (y) the sum of 100% of said entity’s pro-rata share of the then unfunded Loan amount and $10,000,000; and (ii) in connection with the Transfer of greater than a fifty percent (50%) interest in the Loan, make such Transfer only to an Institutional Real Estate Investor with a net worth of at least $1,000,000,000 and liquidity (including uncalled capital commitments, commitments from parent entities, and lines of credit) in an amount not less than the lesser of: (A) 125% of said entity’s pro-rata share of the then unfunded Loan amount, and (B) the sum of 100% of said entity’s pro-rata share of the unfunded Loan amount and $20,000,000.

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Section 14.14 Cooperation . Borrower shall, and shall cause each Principal and Indemnitor to, reasonably cooperate with Lender at no material cost to Borrower in connection with servicing the Loan and any Transfer, Participation, Securitization or any other financing created or obtained in connection with the loan, including:

(a) Estoppel Certificates . Borrower, within ten (10) Business Days following a request by Lender, shall provide Lender or any proposed assignee with an estoppel certificate containing the information set forth in Section 8.9 and such other information that Lender shall reasonably request, duly acknowledged and certified;

(b) Bifurcation of Note . The Note and the Mortgage may, at any time until the same shall be fully paid and satisfied, at the sole election of Lender, be split or divided into two or more notes and two or more security instruments, each of which shall cover all or a portion of the Mortgaged Property to be more particularly described therein. To that end, Borrower, upon written request of Lender, shall execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered by any Indemnitor or the then owner of any of the Mortgaged Property, to Lender and/or its designee or designees substitute notes and security instruments in such principal amounts, aggregating not more than the then unpaid principal amount of Indebtedness, and containing terms, provisions and clauses substantially the same as those contained herein and in the Note, which, in the aggregate, will have economic terms substantially consistent with the Loan, and such other documents and instruments as may be reasonably required by Lender, which have no adverse effect on Borrower. Lender shall reimburse Borrower for its reasonable out-of-pocket costs and expenses incurred in connection with any such Transfer, Participation or Securitization; and

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(c) Transfer of Funds . In the event of a Securitization, all funds held by Lender in connection with the Loan may be deposited in eligible accounts at eligible institutions as then defined and required by any Rating Agency. Borrower and Indemnitor may be required to execute additional documents in connection with any such Transfer, Participation, Securitization or financing, including a new note or notes, which have no material adverse effect on Borrower. Borrower shall not be required to incur any out of pocket costs in connection with any such cooperation.

Section 14.15 Register . Lender shall cause to be kept a register (the “ Register ”) for the registration of ownership and transfer or assignment of the Note or any substitute note or notes secured by the Mortgage. The names and addresses of the registered owners of such notes, the transfers or assignment of such notes and the names and addresses of the transferees of such notes will be registered in the Register under such reasonable regulations as Lender may prescribe. Borrower and Lender shall deem and treat the registered owner of any note as shown in the Register as the absolute owner thereof for all purposes, and neither Borrower nor Lender shall be affected by any notice to the contrary and payment of the principal of, interest on, and Minimum Multiple Fee, Exit Fee or Closed Period Prepayment Fee, as applicable, if any, due on or with respect to the related note shall be made only to or upon the order of such registered owner. All such payments so made shall be valid and effective to satisfy and discharge the liability of Borrower upon such notes to the extent of the sums so paid. Upon reasonable request from time to time, Lender shall permit Borrower to examine the Register.

Section 14.16 Limitation on Interest . It is the intention of the parties hereto to conform strictly to applicable usury laws. Accordingly, all agreements between Borrower and Lender with respect to the Loan are hereby expressly limited so that in no event, whether by reason of acceleration of maturity or otherwise, shall the amount paid or agreed to be paid to Lender or charged by Lender for the use, forbearance or detention of the money to be lent hereunder or otherwise, exceed the maximum amount allowed by law. If the Loan would be usurious under applicable law (including the laws of the State and the laws of the United States of America), then, notwithstanding anything to the contrary in the Loan Documents: (a) the aggregate of all consideration which constitutes interest under applicable law that is contracted for, taken, reserved, charged or received under the Loan Documents shall under no circumstances exceed the maximum amount of interest allowed by applicable law, and any excess shall be credited, without any Minimum Multiple Fee, Exit Fee or Closed Period Prepayment Fee, as applicable, to the outstanding principal of the Loan; and (b) if the Maturity Date is accelerated by reason of an election by Lender in accordance with the terms hereof, or in the event of any prepayment, then any consideration which constitutes interest may never include more than the maximum amount allowed by applicable law. In such case, excess interest, if any, provided for in the Loan Documents or otherwise, to the extent permitted by applicable law, shall be amortized, pro-rated, allocated and spread from the date of advance until payment in full thereof so that the actual rate of interest is uniform through the term hereof. If such amortization, pro-ration, allocation and spreading is not permitted under applicable law, then such excess interest shall be cancelled automatically on the Note as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited, without any Minimum Multiple Fee, Exit Fee or Closed Period Prepayment Fee, as applicable, to the outstanding principal of the Loan. The terms and provisions of this Section 14.16 shall control and supersede every other provision of the Loan Documents. The Loan Documents are contracts made under and shall be construed in accordance with and governed by the laws of the State as set forth in Section 14.19 , except that if at any time the laws of the United States of America permit Lender to contract for, take, reserve, charge or receive a higher rate of interest than is allowed by the laws of the State (whether such federal laws directly so provide or refer to the law of any state), then such federal laws shall to such extent govern as to the rate of interest which Lender may contract for, take, reserve, charge or receive under the Loan Documents.

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Section 14.17 Survival . All of the representations, warranties, covenants, and indemnities of Borrower hereunder (other than relating to environmental matters which are instead addressed in the Environmental Indemnification Agreement) shall survive (a) until full and final repayment of the entire Indebtedness (including satisfaction of any outstanding obligations under the Recourse Guaranty Agreement), (b) the transfer (by sale, foreclosure, conveyance in lieu of foreclosure or otherwise) of any or all right, title and interest in and to the Mortgaged Property to any party, and (c) any assignment by Lender of any interest in the Loan hereunder in accordance with the terms of this Agreement.

Section 14.18 WAIVER OF JURY TRIAL . BORROWER AND LENDER EACH HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS AGREEMENT. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY BORROWER AND LENDER, AND EACH PARTY ACKNOWLEDGES THAT THE OTHER PARTY HAS NOT MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. BORROWER FURTHER ACKNOWLEDGES THAT BORROWER HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS AGREEMENT BY INDEPENDENT LEGAL COUNSEL SELECTED BY BORROWER AND THAT BORROWER HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

Section 14.19 Governing Law . In all respects, including matters of construction and performance of this Agreement and the obligations arising hereunder, this Agreement shall be governed by, and construed in accordance with, the laws of the State in which the Premises are located applicable to contracts and obligations made and performed in such State and any applicable laws of the United States of America. Interpretation and construction of this Agreement shall be according to the contents hereof and without presumption or standard of construction in favor of or against Borrower or Lender.

Section 14.20 Consent to Jurisdiction and Venue . Borrower hereby submits to personal jurisdiction in the State in which the Premises are located for the enforcement of the provisions of this Agreement and irrevocably waives any and all rights to object to such jurisdiction for the purposes of litigation to enforce any provision of this Agreement. Borrower hereby consents to the jurisdiction of and agrees that any action, suit or proceeding to enforce this Agreement may be brought in any state or federal court in the state in which the Premises are located. Borrower hereby irrevocably waives any objection that it may have to the laying of the venue of any such actions, suit, or proceeding in any such court and hereby further irrevocably waives any claim that any such action, suit or proceeding brought in such a court has been brought in an inconvenient forum.

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Section 14.21 Intentionally omitted .

Section 14.22 Entire Agreement . This Agreement and the other Loan Documents embody the entire agreement and understanding between Lender and Borrower and supersede all prior agreements and understandings between such parties relating to the subject matter hereof and thereof. Accordingly, the Loan Documents may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.

Section 14.23 Pledge and Grant of Security Interest . Borrower hereby pledges to Lender, and grants a security interest in, any and all monies now or hereafter deposited with Lender from time to time as additional security for the payment of the Loan, but subject to the rights of tenants with respect to any tenant security deposits under Leases and the rights of Unit Purchasers under Unit Contracts of Sale. Borrower shall not further pledge, assign or grant any security interest in any monies on deposit therein from time to time or permit any lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1 financing statements (except those naming Lender as the secured party) to be filed with respect thereto. Upon the occurrence of an Event of Default, Lender may apply any such sums then deposited with Lender to the payment of the charges for which such funds have been deposited or to the payment of the Loan or any other charges affecting the security of the Loan, as Lender may elect, but no such application shall be deemed to have been made by operation of law or otherwise until actually made by Lender. Until expended or applied as above provided, such funds shall constitute additional security for the Loan.

Section 14.24 Confidentiality . Except to the extent (i) required under applicable Legal Requirements, and/or (ii) in connection with a dispute between Lender/Barings and Borrower, without obtaining the prior written consent of Lender and Barings in each case, neither Borrower, nor any of its Affiliates, Upstream Owners, brokers, attorneys, accountants or other agents or other representatives shall disclose to any Person or party through any means (including, but not limited to, orally or by correspondence, electronic communications, signage, press-releases, interviews or any publicity or advertising), other than to Lender and its representatives: (i) the existence of any business relationship between Borrower and Lender and/or Barings, or (ii) the existence of any connection between the Loan and Lender and/or Barings. Notwithstanding anything to the contrary, Borrower may make such disclosures as Borrower determines are required by law upon advice of counsel due to the fact that Indemnitor is a public company.

Section 14.25 Broker . Borrower shall indemnify, defend and hold harmless Barings and Lender from and against, and shall be responsible for, any Losses arising from any claim or litigation made or threatened by any broker or finder (but excluding any brokers or finders claiming by or through Barings or Lender) in connection with the proposed Loan, and any court costs and reasonable attorneys’ fees (including, without limitation, the cost of post-judgment remedies and appeals) incurred by Barings or Lender in connection with any such claim or litigation.

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Section 14.26 Defaulting Lender . Any Lender who is not a Defaulting Lender shall have the right, but not the obligation, in its sole discretion, to acquire by assignment either (i) all of the Defaulting Lender’s interest in the Loan, or (ii) the Defaulting Lender’s remaining unfunded commitment, including the advance or other amount which, by its failure or refusal to so fund, caused such Defaulting Lender to become a Defaulting Lender (as applicable, the “ Defaulting Lender’s Acquired Interest ”). Any Lender desiring to exercise such right shall give written notice thereof to Administrative Agent and Borrower no sooner than two (2) Business Days and not later than thirty (30) Business Days after such Defaulting Lender becomes a Defaulting Lender. If more than one Lender exercises such right, each such Lender shall have the right to acquire the Defaulting Lender’s Acquired Interest in proportion to the interests in the Loan then held by the Lenders exercising such right. If after such thirtieth Business Day, no Lender has elected to acquire the Defaulting Lender’s Acquired Interest or, if having so elected, the Lender or Lenders that made such election have not within thirty (30) days following such election closed such acquisition of the Defaulting Lender’s Acquired Interest, then Borrower may, by giving written notice thereof to Administrative Agent, to the Defaulting Lender and to the other Lenders, demand that such Defaulting Lender assign to an Institutional Real Estate Investor proposed by Borrower, subject to and in accordance with the provisions of this Section 14.26 for the purchase price provided for below, the Defaulting Lender’s Acquired Interest. Upon any such assignment of all of its interest in the Loan (as opposed to the Defaulting Lender’s unfunded commitment), the Defaulting Lender's interest in the Loan and its rights hereunder (but not its liability in respect thereof or under the Loan Documents to the extent the same relate to the period prior to the effective date of the purchase) shall terminate on the date of purchase. In connection with the purchase of the Defaulting Lender’s Acquired Interest by a Lender or Lenders or by an Institutional Real Estate Investor, the Defaulting Lender shall promptly execute all documents reasonably requested to surrender and transfer the Defaulting Lender’s Acquired Interest to the purchaser or assignee thereof, including an appropriate Assignment and Assumption Agreement, and the Defaulting Lender shall pay to Administrative Agent an assignment fee in the amount of $25,000. If a Lender or Lenders or an Institutional Real Estate Investor purchases all of the Defaulting Lender’s interest in the Loan (as opposed to the Defaulting Lender’s unfunded commitment), the purchase price for said interest of the Defaulting Lender shall be equal to the amount of the principal balance of the principal amounts outstanding and owed by Borrower to the Defaulting Lender. In connection with an assignment of only such Defaulting Lender’s remaining unfunded commitment, the purchase price shall be zero, and the Defaulting Lender shall be entitled to receive any amount owed to it by Borrower under the Loan Documents which accrued prior to the date of the default by the Defaulting Lender, as and when and to the extent the same are received by Administrative Agent from or on behalf of Borrower. There shall be no recourse against any Lender or Administrative Agent for the payment of such sums except to the extent of the receipt of payments from any other party or in respect of the Loans.

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ARTICLE 15

THE ADMINISTRATIVE AGENT

Section 15.1 Appointment, Powers and Immunities . At all times when there is a lender other than (including in addition to) Lender under this Agreement, the Lenders shall be deemed to appoint and authorize the Administrative Agent to act for all purposes as their agent under the Loan Documents. The provisions of this Article 15 shall not apply at any time when the Administrative Agent is the sole Lender.

Section 15.2 Reliance by Borrower on Administrative Agent . At all times when there is more than one Lender, (1) Borrower (a) is entitled to rely on the Administrative Agent for any waiver, amendment, approval or consent given by “Lender” under the Loan Documents, (b) shall adhere only to waivers, amendments, approvals or consents given by Administrative Agent, on behalf of “Lender” under the Loan Documents, and (c) shall make all payments under the Notes and the other Loan Documents to Administrative Agent, as set forth herein, and (2) Administrative Agent shall, on behalf of all of the Lenders, be permitted to take all actions, including exercising all remedies, permitted to be taken by “Lender” under the Loan Documents (either by law or pursuant to the terms of the Loan Documents), and (3) all legal action taken respecting the Loan Documents shall be taken by the Administrative Agent on behalf of the Lenders, and all default notices under the Loan Documents will be provided by the Administrative Agent. Unless and until the Lenders notify Borrower otherwise, the Administrative Agent is Massachusetts Mutual Life Insurance Company. The use of the term “agent” in this Agreement with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. Notwithstanding anything to the contrary contained in the Notes, unless otherwise directed by Administrative Agent in writing, all payments under the Loan Documents shall be made by Borrower to the Administrative Agent in accordance with the provisions of Section 2.7(a) .

Section 15.3 Rights as a Lender . If the Administrative Agent is also a Lender hereunder it shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not acting as the Administrative Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity.

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ARTICLE 16

CONDOMINIUM UNIT RELEASE PROVISIONS

Section 16.1 The Offering Plan .

(a) Lender has reviewed and approved the form of the Declaration (including the Bylaws) attached hereto as Exhibit R (subject to Lender’s review and approval of all missing exhibits thereto). On or before December 22, 2019, Borrower shall submit the Offering Plan and the other Condominium Documents (including all amendments to Declaration, Bylaws, Rules and Regulations, and the Condominium Plans) reflecting the subdivision of the Residential Unit to Lender for its review and approval, which approval shall not to be unreasonably withheld, conditioned or delayed, provided (i) no Event of Default exists and (ii) such amendment or modification complies with all Condominium Laws. Once approved by Lender, Borrower shall not make any amendments or modifications to the Offering Plan (except with respect to a Price Change Amendment to the Offering Plan, increasing the Schedule A—Purchase Prices only), or the other Condominium Documents (including amendments or modifications requested by the Attorney General) without Lender’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed provided (i) no Event of Default exists and (ii) such amendment or modification complies with all Condominium Laws. Lender shall endeavor to complete its review of any drafts, requested amendments or modifications to the Offering Plan and the other Condominium Documents within thirty (30) Business Days for the initial review of the Offering Plan, and twenty (20) Business Days for all other amendments or modifications, following its receipt of same and shall either approve or disapprove the same within aforesaid time periods. If Lender disapproves any requested amendments or modifications to the Offering Plan or any of the other Condominium Documents, Lender shall provide Borrower with a reasonably detailed explanation for Lender’s disapproval thereof, and Borrower shall then re-submit revised drafts of the same to Lender as soon as reasonably practicable. It shall be reasonable for Lender to disapprove any proposed amendment or modification if the SCA has the right to approve same and written evidence of such approval has not been delivered to Lender. Borrower shall cause the revised Offering Plan and the other revised Condominium Documents to address the reasonable concerns or reasons for Lender’s disapproval of the prior drafts of the same. Lender and Borrower shall repeat this process until any such requested amendments or modifications to the Offering Plan and the other Condominium Documents are approved by Lender. If Lender does not notify Borrower of its approval or disapproval of the initial submission of the Offering Plan within thirty (30) Business Days or within twenty (20) Business Days for all other amendments or modifications, as the case may be, after request by Borrower and submission by Borrower of all information needed by Lender to evaluate said request, then Borrower may deliver a second request, which request shall state on the top of the first page in bold lettering “ LENDER’S RESPONSE IS REQUIRED WITHIN TEN (10) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF THE MASTER LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER .” If Lender does not notify Borrower of its approval or disapproval of the Offering Plan or an amendment or modification to the Offering Plan within ten (10) Business Days after such second request, then as long as no Event of Default or Potential Event of Default exists, the same shall be deemed approved.

(b) The Offering Plan and the other Condominium Documents shall be in full compliance in all material respects with all Condominium Laws. The Declaration and Condominium Plans shall be recorded no earlier than thirty (30) days prior to the deed conveying the School Unit to the SCA pursuant to the terms of the School Unit Purchase Agreement, unless otherwise approved in writing by Lender in its sole and absolute discretion. Upon written consent of Lender and the written acceptance for filing of the Attorney General of the Offering Plan (including the amended and restated Declaration, Bylaws and Condominium Plans reflecting the subdivision of the Residential Unit), the Declaration and Condominium Plans, or if the Declaration and Condominium Plans have been recorded previously with the Register’s Office, the amended and restated Declaration and the amended Condominium Plans (as the case may be) may be recorded with the Registers Office.

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(c) Borrower shall not submit an amendment to the Offering Plan to the Attorney General for the purpose of declaring the Offering Plan to be effective or record any of the Condominium Documents without Lender’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed provided (i) no Event of Default exists and (ii) such amendment or modification complies with all Condominium Laws. Lender will endeavor to review and approve or provide comments to the amendment to the Offering Plan declaring the Offering Plan to be effective with ten (10) Business Days from the date of receipt from the Borrower.

(d) Borrower shall deliver to Lender a copy of any Price Change Amendment or other amendment Offering Plan (or other Condominium Documents) within fifteen (15) days after acceptance by the Attorney General, along with a copy of the letter from the Attorney General approving such amendment to the Offering Plan.

Section 16.2 Contracts of Sale .

(a) On or before December 22, 2019, and simultaneously with the submission of the Offering Plan, Borrower shall submit to Lender for Lender’s review and approval (which approval shall not be unreasonably withheld, conditioned or delayed) the standard form of purchase and sale agreement to be used by Borrower in connection with the sale of the Subdivided Residential Units. Lender shall complete its review of the form of purchase and sale agreement within thirty (30) days following its receipt of same and simultaneously with its review of the Offering Plan, and shall either approve or disapprove the same within said thirty (30) day period. If Lender disapproves any such draft, Lender shall provide Borrower with a reasonably detailed explanation for Lender’s disapproval thereof, and Borrower shall then re-submit a revised draft of the same to Lender as soon as reasonably practicable. Borrower shall cause the revised standard form of purchase and sale agreement to address the reasonable concerns or reasons for Lender’s disapproval of the prior drafts of the same. Lender and Borrower shall repeat this process until any such requested draft form of purchase and sale agreement is approved by Lender, which approved form of purchase and sale agreement shall be referred herein to as the “ Approved Form of Contract of Sale ”.

(b) Borrower shall not enter into a Residential Unit Contract of Sale unless said Residential Unit Contract of Sale is in compliance with the terms and conditions of this Agreement. Each Residential Unit Contract of Sale shall be on the Approved Form of Contract of Sale (subject only to customary non-material negotiated revisions to said form that have no material adverse effect on Borrower, Lender or the Project), and all of the following conditions shall have been satisfied:

(i)

The purchase price under such Residential Unit Contract of Sale for a Subdivided Residential Unit shall be greater than or equal to the Residential Unit Minimum Sales Price for such Subdivided Residential Unit;

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(ii)

such Residential Unit Contract of Sale shall not provide for Borrower, as seller, to provide any seller financing or to take back any purchase money mortgages as part of the sales price;

(iii)

such Residential Unit Contract of Sale shall not be subject to cancellation, except as provided in the Offering Plan, by the Condominium Laws (including those requiring disclosures to prospective and actual purchasers) and/or the Approved Form of Contract of Sale;

(iv)

such Residential Unit Contract of Sale shall have no contingencies thereunder, unless otherwise approved by Lender in writing, except (y) Completion of the Construction Work and (z) those set forth in the Approved Form of Contract of Sale or Offering Plan;

(v)

such Residential Unit Contract of Sale requires the applicable Residential Unit Purchaser upon execution thereof, to make a cash deposit of not less than ten percent (10%) of the gross sales price of the Subdivided Residential Unit, unless Borrower obtains Lender’s prior written consent to a deposit in an amount less than ten percent (10%) of the gross sales price of the applicable Subdivided Residential Unit, which consent shall not be unreasonably withheld, conditioned or delayed;

(vi)

such Residential Unit Contract of Sale provides for the entire purchase price and other payments thereunder payable to Borrower, as seller under the Residential Unit Contract of Sale, to be paid by wire transfer, bank check or certified funds at the closing of such Subdivided Residential Unit (either by means of an all-cash sale, or from institutional financing obtained by the purchaser);

(vii)

such Residential Unit Contract of Sale and the proceeds thereof shall have been collaterally assigned to Lender, subject to Legal Requirements and the rights of the purchaser thereunder;

(viii)

the Offering Plan and the other Condominium Documents shall have been submitted to and approved by Lender and the Offering Plan has been accepted for filing by the Attorney General;

(ix)

Borrower shall not enter into a Bulk Sale without Lender’s prior consent, which consent may be granted or withheld in Lender’s sole and absolute discretion; and

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(x)

Notwithstanding anything herein to the contrary, (i) Borrower shall not sell any Subdivided Residential Unit to an Affiliate or relative of Borrower, Indemnitor or any Principal without Lender’s approval, which approval shall be in Lender’s sole and absolute discretion, and (ii) any closing expenses, fees, charges or otherwise incurred by Borrower in connection with the sale of a Subdivided Residential Unit shall only be paid to third parties unaffiliated with Borrower, Indemnitor or any Principal, unless payment of such expense is approved by Lender, which approval shall be in Lender’s sole and absolute discretion.

The approval by Lender of any Residential Unit Contract of Sale shall not obligate Lender to release any Subdivided Residential Unit from the lien of the Mortgage, unless the release requirements of Lender as set forth in this Agreement are satisfied.

(c) Borrower shall not enter into a contract for the sale of the Retail Unit (a “ Retail Unit Contract of Sale ”) unless it has been approved in writing by Lender (which approval shall not be unreasonably withheld, conditioned or delayed) and all of the following conditions shall have been satisfied:

(i)

The purchase price under such Retail Unit Contract of Sale shall be greater than or equal to the Retail Unit Minimum Sales Price for the Retail Unit;

(ii)

such Retail Unit Contract of Sale shall not provide for Borrower, as seller, to provide any seller financing or to take back any purchase money mortgages as part of the sales price;

(iii)

such Retail Unit Contract of Sale shall not be subject to cancellation, except as provided in the Offering Plan, or by the Condominium Laws (including those requiring disclosures to prospective and actual purchasers) and/or pursuant to the terms of the Retail Unit Contract of Sale;

(iv)

such Retail Unit Contract of Sale provides for the entire purchase price and other payments thereunder payable to Borrower, as seller under the Retail Unit Contract of Sale, to be paid by wire transfer, bank check or certified funds at the closing of the Retail Unit (either by means of an all-cash sale, or from financing obtained by the purchaser);

(v)

such Retail Unit Contract of Sale and the proceeds thereof shall have been collaterally assigned to Lender, subject to Legal Requirements and the rights of the purchaser thereunder;

(vi)

unless Borrower shall have receive a so-called “no action” letter from the Attorney General with respect to the sale of the Retail Unit (a “ No Action Letter ”), the Offering Plan and the other Condominium Documents shall have been submitted to and approved by Lender and the Offering Plan shall have been accepted for filing by the Attorney General;

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(vii)

Notwithstanding anything herein to the contrary, (i) Borrower shall not sell the Retail Unit to an Affiliate or relative of Borrower, Indemnitor or any Principal without Lender’s approval, which approval shall be in Lender’s sole and absolute discretion, and (ii) any closing expenses, fees, charges or otherwise incurred by Borrower in connection with the sale of the Retail Unit shall only be paid to third parties unaffiliated with Borrower, Indemnitor or any Principal, unless payment of such expense is approved by Lender, which approval shall be in Lender’s sole and absolute discretion.

The approval by Lender of any Retail Unit Contract of Sale shall not obligate Lender to release the Retail Unit from the lien of the Mortgage unless the release requirements of Lender as set forth in this Agreement are satisfied.

(d) Borrower shall cause the Purchase Agreement Deposit Escrowee to deliver to Lender a Purchase Agreement Deposit Escrowee Acknowledgement promptly after it is first engaged to act as escrowee under any Residential Unit Contract of Sale or Retail Unit Contract of Sale and in any event prior to receipt of any deposit under a Residential Unit Contract of Sale or Retail Contract of Sale.

(e) Borrower shall cause Purchase Agreement Deposit Escrowee to hold (at the Purchase Agreement Deposit Escrowee Bank), maintain and disburse all Purchase Agreement Deposits in accordance with the applicable Residential Unit Contract of Sale (or Retail Unit Contract of Sale), the Offering Plan (in the case of a sale of the Retail Unit, unless Borrower obtained a No Action Letter), the Purchase Agreement Deposit Escrow Agreement and all other Legal Requirements. Borrower hereby grants to Lender a security interest in Borrower’s interest in the Purchase Agreement Deposit Escrow Agreement, and in all rights of Borrower, if any, in and to all Purchase Agreement Deposit Accounts and all sums on deposit therein, including all Purchase Agreement Deposits, Residential Unit Net Sale Proceeds and Retail Unit Net Sale Proceeds and all interest that may accrue thereon, as additional security for the Obligations under the Loan Documents, subject to Legal Requirements and the right of Residential Unit Purchasers under Residential Unit Contracts of Sale or a purchaser of the Retail Unit, as applicable. Borrower shall have no right to release Purchase Agreement Deposits from the Purchase Agreement Deposit Accounts, except as expressly provided in the applicable Residential Unit Contract of Sale or the Retail Unit Contract of Sale, as applicable. The funds on deposit in the Purchase Agreement Deposit Accounts shall be disbursed in accordance with this Article 16 and the Purchase Agreement Deposit Escrow Agreement.

(f) Intentionally omitted.

(g) Once Borrower shall have entered into a Retail Unit Contract of Sale or any Residential Unit Contract of Sale, Borrower shall:

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(i)

comply with all of the obligations, covenants and agreements of Borrower set forth in the Retail Unit Contract of Sale or Residential Unit Contract of Sale, as applicable.

(ii)

make all necessary efforts to cause any sales to be in compliance with all Legal Requirements of any Governmental Authorities having jurisdiction thereof;

(iii)

except for customary non-material negotiated amendments that have no material adverse effect on Borrower, Lender or the Project, not modify, amend or terminate (unless such termination is as a result of a default by purchaser) any Retail Unit Contract of Sale or a Residential Unit Contract of Sale without Lender’s prior written consent (which consent shall not be unreasonably withheld, conditioned, or delayed); and

(iv)

deliver to Lender a true and complete copy of each and every notice of default received or sent by Borrower with respect to the obligations of Borrower or the contract purchaser under any Residential Unit Contract of Sale or Retail Unit.

(h) Borrower shall deliver to Lender, promptly after execution thereof, an executed counterpart of the Retail Unit Contract of Sale and each Residential Unit Contract of Sale and any amendments, modifications and terminations thereof.

Section 16.3 Conditions for Release of Units . After all of the following conditions have been satisfied, and upon Borrower’s written request to Lender, Lender shall release any Subdivided Residential Unit or the Retail Unit, as applicable, from the lien of the Mortgage:

(a) Lender shall have received the Offering Plan and the other Condominium Documents in accordance with the terms and conditions of this Agreement, and the Offering Plan and any amendment thereto shall have been accepted for filing by the Attorney General;

(b) no Potential Event of Default or Event of Default under this Agreement or the other Loan Documents shall then exist;

(c) if such request is made with respect to a Subdivided Residential Unit, Lender shall have received a fully executed counterpart of the Residential Unit Contract of Sale for such Subdivided Residential Unit with a bona fide “third party” Residential Unit Purchaser of the Subdivided Residential Unit (unless otherwise approved by Lender in its sole and absolute discretion), which Residential Unit Contract of Sale shall satisfy the conditions set forth in Section 16.2 hereof;

(d) if such request is made with respect to the Retail Unit, Lender shall have received a fully executed counterpart of the Retail Unit Contract of Sale with a bona fide “third party” purchaser (unless otherwise approved by Lender in its sole and absolute discretion), which Retail Unit Contract of Sale shall satisfy the conditions set forth in Section 16.2 hereof;

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(e) Prior to the first closing of a sale of any Subdivided Residential Unit or the Retail Unit, Borrower, Lender and Purchase Agreement Deposit Escrowee have entered into an escrow agreement in substantially in the form attached hereto as Exhibit S (the “ Purchase Agreement Deposit Escrow Agreement ”).

(f) Borrower shall to notify Lender not later than five (5) Business Days prior to any closing of such Subdivided Residential Unit or the Retail Unit of (i) the proposed closing date for the sale of such Subdivided Residential Unit or the Retail Unit, as applicable, and (ii) the amount of the Residential Unit Net Sale Proceeds or Retail Unit Net Sale Proceeds, as applicable, to be paid to Lender in connection with such sale;

(g) Simultaneously with the closing under the Residential Unit Contract of Sale or the Retail Unit Contract of Sale, as applicable, Lender shall receive the Residential Unit Net Sale Proceeds for the Subdivided Residential Unit in question or the Retail Unit Net Sale Proceeds for the Retail Unit, as applicable, which Residential Unit Net Sale Proceeds or Retail Unit Net Sale Proceeds, as applicable, shall be paid to Lender in immediately available funds, by, at Borrower’s option, wire transfer in accordance with wiring instructions provided by Lender or check by overnight mail and shall, as long as no Event of Default exists, be applied by Lender in accordance with the provisions of Section 2.7(d) .

Section 16.4 Subordination of Mortgage; Merging of Tax Lots . Following the recordation of the Declaration in accordance with the terms of this Agreement, as long as no Event of Default exists, simultaneously with the sale of the School Unit to the SCA, Lender and Borrower shall execute and deliver a subordination and mortgage modification agreement approved by Lender in its reasonable discretion. Borrower shall reimburse Lender for all out-of-pocket costs and expenses incurred in connection with Lender’s negotiation of said subordination agreement. Additionally, if as a condition to recording the Declaration, the New York City Department of Finance requires merging the tax lots currently comprising the Property in advance of recording the Declaration, Lender shall permit Borrower to so merge the tax lots pursuant to documents approved by Lender (which approval shall not be unreasonably withheld, conditioned or delayed).

[No Further Text on this Page.]

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IN WITNESS WHEREOF, Lender and Borrower have executed and delivered this Agreement as of the date first written above.

LENDER AND ADMINISTRATIVE AGENT:

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY ,
a Massachusetts corporation

By:	Barings LLC
	As Investment Adviser

	By:	/s/ William J. Jordan
	Name:	William J. Jordan
	Its:	Managing Director

[Signatures continue on the following page]

Lender’s Signature Page to
Master Loan Agreement

IN WITNESS WHEREOF, Lender and Borrower have executed and delivered this Agreement as of the date first written above.

	BORROWER:

	TPHGREENWICH OWNER LLC,
	a Delaware limited liability company

	By:	/s/ Steven Kahn
	Name:	Steven Kahn
	Its:	Chief Financial Officer

Borrower’s Signature Page to
Master Loan Agreement

EXHIBIT A

LEGAL DESCRIPTION OF PREMISES

FEE PARCEL

PARCEL I (Lot 11 for information only):

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

BEGINNING at a point on the easterly side of Greenwich Street, distant seventy-four (74) feet, eight (8) inches northerly from the corner formed by the intersection of the easterly side of Greenwich Street with the northerly side of former Edgar Street;

RUNNING THENCE northerly along the said easterly side of Greenwich Street forty (40) feet, six (6) inches to the center line of a party wall between these premises and premises now or late of Henry Nayler;

THENCE easterly along the same, seventy-five (75) feet, eight (8) inches to the westerly side of Trinity Place, (formerly Church Street), as extended;

THENCE southerly along the same, thirty-nine feet (39), two (2) inches, to land now or late of S.J. Callender;

THENCE westerly along the same through the center of a party wall seventy (70) feet, six (6) inches to the easterly side of Greenwich Street at the point or place of BEGINNING; be the said several distances and dimensions more or less.

PARCEL II (Lot 13 for information only):

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

BEGINNING at a point on the westerly side of Trinity Place, distant 111 feet 2-1/2 inches southerly from the corner formed by the intersection of the southerly side of Rector Street with the westerly side of Trinity Place;

RUNNING THENCE southerly along the westerly side of Trinity Place 133 feet, 11 inches;

THENCE westerly along a line which forms an interior angle of 90 degrees 30 minutes 30 seconds with the westerly side of Trinity Place, 75 feet 6-3/4 inches to the easterly side of Greenwich Street;

THENCE northerly along the easterly side of Greenwich Street, 134 feet 10-3/4 inches;

THENCE easterly along a line which forms an exterior angle of 98 degrees 21 minutes 30 seconds with the easterly side of Greenwich Street, 97 feet 1-1/4 inches to the westerly side of Trinity Place the point or place of BEGINNING; be the said several distances and dimensions more or less.

Perimeter Description

Parcel I and Parcel II taken together being more particularly described as follows:

RUNNING THENCE southerly along the westerly side of Trinity Place 173 feet, 1 inch to land now or late of S.J. Callender;

THENCE westerly along the same, 70 feet 6 inches to the easterly side of Greenwich Street;

THENCE northerly along the easterly side of Greenwich Street, 175 feet, 4-3/4 inches to a point;

TOGETHER WITH :

The benefits of the light and air easement set forth in that certain Light and Air Easement between Tony Seiden and Syms Corp. dated as of November 28, 2007, recorded in the Register’s Office on January 9, 2008 as CRFN 2008000009878.

SUBLEASEHOLD PARCEL

PARCEL I (Lot 11 for information only):

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

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THENCE easterly along the same, seventy-five (75) feet, eight (8) inches to the westerly side of Trinity Place, (formerly Church Street), as extended;

THENCE southerly along the same, thirty-nine feet (39), two (2) inches, to land now or late of S.J. Callender;

PARCEL II (Lot 13 for information only):

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

RUNNING THENCE southerly along the westerly side of Trinity Place 133 feet, 11 inches;

THENCE westerly along a line which forms an interior angle of 90 degrees 30 minutes 30 seconds with the westerly side of Trinity Place, 75 feet 6-3/4 inches to the easterly side of Greenwich Street;

THENCE northerly along the easterly side of Greenwich Street, 134 feet 10-3/4 inches;

Perimeter Description

Parcel I and Parcel II taken together being more particularly described as follows:

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RUNNING THENCE southerly along the westerly side of Trinity Place 173 feet, 1 inch to land now or late of S.J. Callender;

THENCE westerly along the same, 70 feet 6 inches to the easterly side of Greenwich Street;

THENCE northerly along the easterly side of Greenwich Street, 175 feet, 4-3/4 inches to a point;

TOGETHER WITH :

EXCLUDING that portion of the above described real property shown and labeled as “SCA SPACES” on the Plans (as hereinafter defined) lying both (a) between a lower horizontal boundary having an elevation of approximately 00.00' North American Vertical Datum of 1988 (“NAVD88”) and an upper horizontal boundary having an elevation of approximately 140.67' NAVD88 (being the approximate elevation of the bottom of the proposed floor slab of the 10th floor of the proposed building as shown on the Plans), and (b) within the vertical perimeter boundaries of the “SCA SPACES” shown on the Plans (such excluded portion, the “ Excluded Area ”). As used herein, “ Plans ” means, collectively, those certain plans entitled “M464 at Trinity Place, New York, NY, Area Calculations, December 18, 2017” prepared by Dattner Architects, consisting of thirteen sheets including a cover sheet, a cellar floor plan, floor plans for each of the 1st through 9th floors, Unit Area Analysis and Total Unit Area Analysis, and Area Comparison Chart, with respect to the proposed building to be constructed on the land pursuant to that certain School Design, Construction, Funding and Purchase Agreement by and between TPHGreenwich Owner LLC, as developer and New York City School Construction Authority. The Plans are attached to the memorandum of Sublease referenced below as Exhibit B thereof.

BUT TOGETHER WITH:

Easements in, to, over, across and through the Excluded Area for the purposes of (i) demolishing, constructing, maintaining, operating, altering, repairing, reconstruction and providing structural support for, utility facilities and improvements within, along, across, under or above the above-described land, and (ii) maintenance of any encroachments by improvements now or hereafter erected on, under or within the above-described land (so long as such encroachments do not materially interfere with the use and operation of the Excluded Area), as contained in the Sublease by and between New York City School Construction Authority, as Landlord, and TPHGreenwich Owner LLC , as Tenant, dated on or about the date hereof, a memorandum of which is dated on or about the date hereof and to be recorded.

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Exhibit 10.16

Mortgage Loan No.: 17602

GUARANTY OF PAYMENT AND COMPLETION

THIS GUARANTY OF PAYMENT AND COMPLETION (this “ Guaranty ”) is dated as of December 22, 2017 by TRINITY PLACE HOLDINGS INC. , a Delaware corporation with an address of 340 Madison Avenue, 3rd Floor, Suite 3C, New York, New York 10173, Attention: Steven Kahn (“ Holdings ”), to and for the benefit of MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY , a Massachusetts corporation (“ Lender ” and to the extent applicable under Article 15 of the Master Loan Agreement, “ Administrative Agent ”), and for the benefit of the Lender Parties. As used in this Agreement, “ Lender Parties ” shall mean Administrative Agent, Lender and each of their respective successors and assigns. Borrower and Holdings are hereinafter collectively referred to as “ Guarantor ”.

R E C I T A L S :

A. TPHGREENWICH OWNER LLC, a Delaware limited liability company (“ Borrower ”) and Lender entered into (i) that certain Master Loan Agreement of even date herewith (as amended or modified from time to time, the “ Master Loan Agreement ”), (ii) that certain Building Loan Agreement of even date herewith (as amended or modified from time to time, the “ Building Loan Agreement ”), and (iii) that certain Project Loan Agreement of even date herewith (as amended or modified from time to time, the “ Project Loan Agreement ”; together with the Master Loan Agreement and the Building Loan Agreement, collectively, the “ Loan Agreement ” or “ Loan Agreements ”), pursuant to which Lender agreed to make (x) a term loan in the maximum principal amount of THIRTY TWO MILLION THREE HUNDRED TWO THOUSAND TWO HUNDRED EIGHTY FIVE AND 00/100 DOLLARS ($32,302,285.00), (y) a building loan in the maximum principal amount of up to ONE HUNDRED TWENTY EIGHT MILLION ONE HUNDRED NINETY SEVEN THOUSAND EIGHT HUNDRED SEVENTY EIGHT AND 00/100 DOLLARS ($128,197,878.00), and (z) a project loan in the maximum principal amount of up TWENTY EIGHT MILLION NINE HUNDRED NINETY NINE THOUSAND EIGHT HUNDRED THIRTY SEVEN AND 00/100 DOLLARS ($28,999,837.00) (collectively, the “ Loan ” or “ Loans ”) to Borrower. Capitalized terms used in this Guaranty and not otherwise defined herein shall have the meanings ascribed to them in the Master Loan Agreement.

B. As a condition precedent to Lender’s extension of the Loan to Borrower and in consideration therefor, Lender has required the execution and delivery of (i) this Guaranty, (ii) that certain Amended, Restated and Consolidated Term Loan Promissory Note of even date herewith from Borrower to Lender in the stated principal amount of $32,302,285.00; (iii) that certain Building Loan Promissory Note of even date herewith from Borrower to Lender in the stated principal amount of $128,197,878.00, (iv) that certain Project Loan Promissory Note of even date herewith from Borrower to Lender in the stated principal amount of $28,999,837.00 (as the same may be amended or modified from time to time, collectively, the “ Note ” or “ Notes ”), (v) that certain Amended, Restated and Consolidated Fee and Leasehold Term Loan Mortgage, Security Agreement and Fixture Filing of even date herewith (as amended or modified from time to time, the “ Term Loan Mortgage ”), (vi) that certain Fee and Leasehold Building Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (as amended or modified from time to time, the “ Building Loan Mortgage ”), (vii) that certain Fee and Leasehold Project Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (as amended or modified from time to time, the “ Project Loan Mortgage ”; together with the Term Loan Mortgage and the Building Loan Mortgage, collectively, the “ Mortgage ” or “ Mortgages ”) from Borrower to Lender encumbering the real property, improvements and personalty described therein (the “ Mortgaged Property ”), and (viii) the other Loan Documents.

C. Guarantor, directly or indirectly, owns interests in the sole member of Borrower and, having a financial interest in the Mortgaged Property, has agreed to execute and deliver this Guaranty to Lender.

NOW , THEREFORE , for good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, Guarantor hereby agrees as follows:

1. Completion .

(a) Guarantor absolutely, unconditionally and irrevocably guarantees to Lender (collectively, the “ Guaranteed Obligations ”): (i) Completion of the Project and Construction Work in accordance, in all material respects, with the terms and conditions set forth in the Master Loan Agreement on or prior to the Completion Date, (ii) that the Mortgaged Property shall be free and clear of all liens and filed notices of claims and demands (unless the same shall be bonded over or otherwise discharged in accordance with the Master Loan Agreement) of any and all contractors, subcontractors, laborers, suppliers, mechanics or materialmen under any contract or subcontract for the supply of labor and/or materials with respect to the Project and Construction Work, (iii) the payment, in accordance, in all material respects, with the terms and conditions of the Master Loan Agreement and any applicable contract entered into by Borrower in connection with the Project and the Construction Work, of all costs and expenses of the Project and Construction Work, including without limitation, costs for labor, marketing, development, materials, legal, taxes, equipment, fixtures and architectural and engineering fees (irrespective of the amounts that are set forth in the Approved Budget for each line item or the absence of any such cost from the Approved Budget) but excluding from Guarantor’s obligations under this Guaranty but not under the Carry Guaranty the Guaranteed Obligations (as defined in the Carry Guaranty) (such Guaranteed Obligations as defined in the Carry Guaranty, the “ Carry Obligations ”) and excluding all principal and interest payable under the Loan from the Guaranteed Obligations under this Guaranty; and (iv) Borrower’s obligation to make Equity Deposits pursuant to Section 3.11 of the Master Loan Agreement when the Loan is Out of Balance.

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(b) In the event of any breach by Borrower of the Guaranteed Obligations, Guarantor promptly upon receipt of a written notice thereof from Lender shall diligently and expeditiously proceed to cure the breach of the Guaranteed Obligations at Guarantor’s sole cost and expense including, without limitation, paying and discharging any and all direct and indirect costs payable under Section 1(a) that Borrower failed to pay and performing the other Guaranteed Obligations that remain unperformed (expressly including the payment of all costs and expenses associated with such performance). If Guarantor shall fail in a timely manner to perform any Guaranteed Obligations hereunder, Lender may, at its option, perform on behalf of Guarantor any such Guaranteed Obligations, in which event Guarantor shall, upon demand, pay to Lender all out of pocket sums expended by Lender (except to the extent resulting from any Lender Party’s gross negligence or willful miscondeuct) in the performance of such Guaranteed Obligations to the extent in excess of the Unfunded Construction Loan Proceeds (as defined below).

2. Completion Costs . Notwithstanding anything to the contrary herein, if Guarantor shall at any time default in the performance of, or disclaim, its obligations under Section 1 above, or if Lender shall elect, in its sole and absolute discretion, to demand payment of the Completion Costs (as hereinafter defined) by Guarantor, Guarantor shall, at Lender’s election and upon demand by Lender, pay to Lender an amount equal to the positive difference, if any, between: (x) the Completion Costs, and (y) the sum of the unfunded portions of the Building Loan and the Project Loan (specifically excluding, however, unfunded amounts of the Building Loan and the Project Loan that are budgeted for the payment of leasing commissions, tenant improvement allowances and tenant improvement work) and all Equity Deposits and School Cost Payments held by Lender and School Cost Payments anticipated to be made under the School Unit Purchase Agreement (collectively, the “ Unfunded Construction Loan Proceeds ”). As used herein, the term “ Completion Costs ” means all of Lender’s direct and indirect costs incurred or estimated to be incurred in connection with the Completion of the Construction Work as required of Borrower under the Master Loan Agreement, including, without being limited to, Hard Costs, Soft Costs and School Costs (and specifically including, without limitation: all costs estimated to be incurred to sell the School Unit and the Subdivided Residential Units; all real estate taxes, insurance premiums, Operating Expenses and interest on the Loan that would have become payable during the estimated construction period), all irrespective of the amounts set forth in the Approved Budget for each line item and irrespective of the absence of any particular item of direct or indirect costs from the Approved Budget and irrespective of whether Guarantor’s obligations under the Carry Guaranty have been terminated (but without duplication of amounts payable and actually paid by Guarantor under the Carry Guaranty). Following such demand by Lender for payment by Guarantor of the Completion Costs to Lender and the actual payment by Guarantor of the amount demanded by Lender in accordance with the provisions of this Section 2 (expressly including all amounts set forth in any Demand Notice in accordance with the provisions of subsection 3(a) hereof sent prior to such payment by Guarantor), Guarantor shall be deemed to have satisfied its obligations under Sections 1(a), 1(b) and 3(a) of this Guaranty. For the purpose of this Guaranty, the Completion Costs shall, be deemed to be an amount equal to the amount of such direct and indirect costs as reasonably estimated by a third party construction consultant retained by Lender (the “ Construction Consultant ”) as of the date Lender elects to demand payment of the Completion Costs under this Section 2 ; provided, however, if such payment is not made by Guarantor within ninety (90) days following Lender’s written demand therefor, Lender may, in its sole and absolute discretion, cause the Construction Consultant to re-calculate the Completion Costs as of the date of such re-calculation at any reasonable time following the expiration of said ninety (90) day period. For purposes of this Guaranty, Lender’s direct and indirect costs shall be deemed to include all Hard Costs, Soft Costs, School Costs, real estate taxes, insurance premiums and operating expenses (but without duplication of amounts payable and actually paid by Guarantor under the Carry Guaranty) reasonably estimated by the Construction Consultant to be required to be incurred in order to Complete the Project and the Construction Work in accordance with the Approved Plans and the terms and provisions of the Loan Documents. Guarantor further agrees that any amount estimated by the Construction Consultant as aforesaid, and any determination by the Construction Consultant with respect to industry practices, shall be conclusive (absent manifest error) for purposes of determining Guarantor’s liability hereunder, provided that the Construction Consultant has made such estimate or determination in good faith. Such payment shall be due no later than fifteen (15) Business Days following the giving of a written demand therefor from Lender to Guarantor together with interest at the Default Rate if not paid within said fifteen (15) Business Day period.

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3. General Obligations .

(a) Upon the occurrence of an Event of Default by Borrower under the Loan Documents, Guarantor agrees, on not more than fifteen (15) days’ written demand by Lender (a “ Demand Notice ”) to commence performance of the Guaranteed Obligations set forth in said notice which Borrower failed to perform when required under the Loan Documents and to diligently pursue performance thereof to Completion, as described below. Guarantor shall indemnify, defend and hold Lender harmless from and against any and all Losses Lender may suffer or incur in connection with third party claims brought as a result of Guarantor’s performance of the Guaranteed Obligations. If Guarantor fails to commence and pursue diligently the performance of the Guaranteed Obligations set forth in said notice within fifteen (15) days after its receipt of a Demand Notice, then, either before or after pursuing any other remedy of Lender against Guarantor or Borrower and regardless of whether Lender shall ever pursue any such other remedy, Lender shall have the right to complete all of the Guaranteed Obligations, or call upon any other reputable parties to complete all of the Guaranteed Obligations and shall have the right to expend such sums as Lender in its discretion deems proper in order so to complete all of the Guaranteed Obligations. During the course of any construction undertaken by Lender or by any other reputable party on behalf of Lender, Guarantor shall pay on demand any amounts (except to the extent resulting from any Lender Party’s gross negligence or willful misconduct) due to the contractor, subcontractors and other material suppliers and for permits and licenses necessary to Complete the Project and the Construction Work, to the extent in excess of the Unfunded Construction Loan Proceeds. Lender, at any time prior to Lender performing or causing any Person (other than Borrower or Guarantor) to perform any Guaranteed Obligations, may require Guarantor to perform or cause to be performed the all work necessary to Complete the Project and the Construction Work in lieu of Lender or any party engaged by Lender. Guarantor’s obligations in connection with the Project and the Construction Work shall not be affected by any errors or omissions of Borrower, any contractor, the architect, any subcontractor, or any agent or employee of any of them (but specifically excluding the gross negligence or willful misconduct of any Lender Party or any Person engaged directly or indirectly by a Lender Party) in design, supervision or performance of the Construction Work, it being understood that such risk is assumed by Guarantor. The failure of Borrower or any of said parties to Complete the Construction Work and satisfy the Guaranteed Obligations shall not relieve Guarantor of any liabilities hereunder; rather, such liability shall be continuing, except as otherwise provided herein, and may be enforced by Lender to the end that Construction Work shall be Completed and the Guaranteed Obligations shall be satisfied timely subject to and upon the terms and conditions hereof and of the Master Loan Agreement.

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(b) Guarantor acknowledges and agrees that it will be impossible to measure accurately the damages to Lender resulting from a breach of the covenants of Guarantor set forth in Section 1(a) and 1(b) hereto to complete the Guaranteed Obligations; that such breach will cause irreparable injury to Lender and that Lender has no adequate remedy at law in respect of such breach and, as a consequence, agrees that such covenant shall be specifically enforceable against Guarantor, and Guarantor hereby waives and agrees not to assert any defense denying any of the foregoing in an action for specific performance of the Guaranteed Obligations by Guarantor.

(c) Guarantor agrees, in accordance with the terms and conditions of the Master Loan Agreement, that the Approved Plans and the Approved Budget may be altered, amended, or modified, and revisions to the Approved Plans and the Approved Budget may be prepared in connection with the Project and the Construction Work that are not covered by the Approved Plans and the Approved Budget all without notice to or further consent of Guarantor, and Guarantor will remain bound hereunder (and without limiting the generality of the foregoing, shall be deemed to have guaranteed the Completion of the Project and the Construction Work as and when required by the Master Loan Agreement in accordance with such Approved Plans and the Approved Budget as altered, amended, or modified but subject to and upon the other terms and conditions hereof), notwithstanding any such alteration, amendment, modification or waiver.

(d) Holdings must satisfy the financial covenants in Section 12 of the Recourse Guaranty Agreement at all times until all Obligations of Borrower have been satisfied.

(e) Lender agrees, by acceptance of this Guaranty, to make the undisbursed proceeds of the Building Loan and the Project Loan (specifically excluding, however, unfunded amounts budgeted for payment of tenant improvement allowances and tenant improvement work) available to Guarantor (subject to the satisfaction of all conditions precedent for Disbursements to Borrower pursuant to the Loan Agreement) together with all Equity Deposits and School Cost Payments held by Lender for the purposes of paying for Hard Costs, Soft Costs and School Costs, as contemplated under the Building Loan and the Project Loan, in connection with Completion of the Project and the Construction Work and performance of any other Guaranteed Obligations and Guarantor’s obligation to perform the Guaranteed Obligations shall be conditioned upon Lender continuing to make such disbursements (subject to the satisfaction of all conditions precedent for Disbursements to Borrower pursuant to the Loan Agreement), provided (i) that Guarantor cures any Event of Default under the Loan Agreement or any other Loan Document which is reasonably susceptible to cure by Guarantor, and (ii) provided that prior to Lender making any such disbursement, (x) Guarantor shall deposit with Lender all amounts required under Section 3.11 of the Master Loan Agreement (Balancing; Loan Reserve) such that the Loan will not be Out of Balance (the “ Guarantor Deposit ”), and (y) all Draw Requests shall thereafter be funded first from the Guarantor Deposit and then as provided for in the Loan Agreement. Notwithstanding the foregoing, the conditions to disbursement pursuant to the Loan Agreement shall not be deemed to require that: (i) Guarantor cure any Potential Event of Default or Event of Default which results from a change in the financial condition of Borrower; or (ii) the following representations and warranties in the Loan Documents be true and correct: (A) representations and warranties with respect to the financial condition of Borrower or (B) representations and warranties that are inaccurate because of the existence of the Potential Event of Default or Event of Default which triggered Guarantor’s obligations hereunder. Guarantor acknowledges that all disbursements of Loan proceeds under this Section 3(e) to Guarantor shall be treated for all purposes as disbursements of Loan proceeds to Borrower.

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4. Guarantor’s Waiver of Notice . Guarantor absolutely, irrevocably and unconditionally waives notice of acceptance of this Guaranty and notice of any payment, liability or obligation to which it may apply, and waives presentment, demand of payment, protest, notice of dishonor or nonpayment of such liabilities under this Guaranty or any of the Loan Documents creating the Guaranteed Obligations and any suit or taking other action by the Lender against, and any other notice to, any party liable thereon or any property which may be security therefor.

5. Lender’s Rights . The Lender may at any time and from time to time without the consent of, or notice to, Guarantor, without incurring any responsibility to Guarantor and without impairing or releasing any of the obligations of Guarantor hereunder, upon or without any terms or conditions and in whole or in part:

(a) amend, modify, renew, supplement, extend (including extensions beyond the original term) or accelerate any of the Loan Documents, including without limitation, renew, alter or change the interest rate, manner, time, place or terms of payment or performance of any of the Guaranteed Obligations, or any liability incurred directly or indirectly in respect thereof, whereupon the guaranty herein made shall apply to the Guaranteed Obligations as so changed, extended, renewed or altered;

(b) sell, exchange, release, surrender, and in any manner and in any order realize upon or otherwise deal with the Mortgaged Property or any property at any time directly and absolutely assigned or pledged or mortgaged to secure the Loan;

(c) consent to the transfer of the Mortgaged Property or any portion thereof or any other Collateral (as defined in the Mortgage) described in the Loan Documents;

(d) exercise or refrain from exercising any rights or remedies available to Lender under the Loan Documents or pursuant to any applicable statute against Borrower or any other person (including Guarantor) or otherwise act or refrain from acting with regard to the Loan Documents, Guaranteed Obligations or this Guaranty;

(e) settle or compromise any of the Indebtedness (as defined in the Mortgage), any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or subordinate the payment of all or any part thereof to the payment of any liability of Borrower (whether or not then due) to creditors of Borrower other than the Lender and Guarantor;

(f) release or discharge Borrower from its liability under any of the Loan Documents or release or discharge any Guarantor or endorser or any other party at any time directly or contingently, liable for the repayment of the Loan or any of Borrower’s other obligations under the Loan Documents;

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(g) apply any sums in whatever manner paid or realized to any liability or liabilities of Borrower or Guarantor to the Lender regardless of what liability or liabilities of Borrower or Guarantor remain unpaid;

(h) consent to or waive any breach of or any act, omission or default under the Loan Documents or accept partial performance of any of the obligations under this Guaranty or under any of the other Loan Documents; and/or

(i) sell, convey, participate or assign all or any part of Lender’s interest in this Guaranty and the other Loan Documents.

6. Guarantor Waiver of Defenses . Guarantor unconditionally waives any defense to the enforcement of this Guaranty, including, without limitation:

(a) Any defense arising by reason of Lender’s failure to provide presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of this Guaranty;

(b) Any defense of any statute of limitations affecting the liability of Guarantor hereunder or the liability of Borrower, or any other guarantor under the Loan Documents, or the enforcement hereof, to the extent permitted by law;

(c) Any defense arising by reason of (i) any invalidity or unenforceability of (or any limitation of liability in) any of the Loan Documents or (ii) any defense whatsoever that the Borrower may or might have to the payment of the Indebtedness or to the performance of any of the terms, provisions, covenants and agreements contained in the Loan Documents or (iii) any manner in which Lender has exercised its rights and remedies under the Loan Documents, or (iv) cessation from any cause whatsoever;

(d) Any defense based upon any disability of Borrower or any Guarantor, lack of authority of the officers, directors, partners or agents acting or purporting to act on behalf of Borrower, Guarantor or any principal of Borrower or Guarantor or any defect in the formation of Borrower, Guarantor or any principal of Borrower or Guarantor as a legal entity;

(e) Any defense based upon the application by Borrower of the proceeds of the Loan for purposes other than the purposes represented by Borrower to Lender or intended or understood by Lender or Guarantor;

(f) Any defense based upon an election of remedies by Lender, including any election to proceed by judicial or nonjudicial foreclosure of any security, whether real property or personal property security, or by deed in lieu thereof, and whether or not every aspect of any foreclosure sale is commercially reasonable, or any election of remedies, including remedies relating to real property or personal property security, which destroys or otherwise impairs the subrogation rights of Guarantor to proceed against Borrower or any guarantor for reimbursement, or both;

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(g) Any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in any other aspects more burdensome than that of a principal;

(h) Any defense based upon Lender’s election, in any proceeding instituted under the Federal Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal Bankruptcy Code or any successor statute;

(i) Any defense based upon any borrowing or any grant of a security interest under Section 364 of the Federal Bankruptcy Code;

(j) Any defense based upon any duty of Lender to advise Guarantor of any information known to Lender regarding the financial condition of Borrower and all other circumstances affecting Borrower’s ability to perform its obligations to Lender, it being agreed that Guarantor assumes the responsibility for being and keeping informed regarding such condition or any such circumstances; and

(k) Any defense based on any right, claim or offset which Guarantor may have against Borrower.

7. Bankruptcy .

(a) The obligations of Guarantor hereunder shall remain in full force and effect without regard to, and shall not be affected or impaired by any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to Borrower, Guarantor, any other guarantor (which term shall include any other party at any time directly or contingently liable for any of Borrower’s obligations under the Loan Documents) or any affiliate of Borrower or any action taken with respect to this Guaranty by any trustee or receiver, or by any court, in any such proceeding, whether or not Guarantor shall have had notice or knowledge of any of the foregoing.

(b) Notwithstanding any modification, discharge or extension of the maturity date of the Note or any amendment, modification, stay or cure of the Lender’s rights under the Note, the Loan Agreement, Mortgage or other Loan Document which may occur in any bankruptcy or reorganization case or proceeding affecting the Borrower, whether permanent or temporary, and whether or not assented to by the Lender, Guarantor hereby agrees that Guarantor shall be obligated hereunder to pay the amounts due hereunder in accordance with the terms of this Guaranty as in effect on the date hereof (or as this Guaranty may hereafter be modified or amended).

(c) Guarantor agrees that to the extent that Borrower makes a payment or payments to Lender, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set side or required, for any of the foregoing reasons or for any other reasons, to be repaid or paid over to a custodian, trustee, receiver or any other party under any bankruptcy act, state or federal law, common law or equitable cause, then to the extent of such payment or repayment, the obligation or part thereof intended to be satisfied shall be revived and continue in full force and effect as if such payment had not been made and Guarantor shall be primarily liable for this obligation (but only to the extent that such obligation is a Guaranteed Obligation hereunder).

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8. Subrogation Waiver/Subordination .

(a) Notwithstanding any provision to the contrary contained in the other Loan Documents or this Guaranty, Guarantor hereby unconditionally and irrevocably waives until all obligations under the Loan Documents have been paid and performed in full (i) any and all rights of subrogation (whether arising under contract, 11 U.S.C. §509 or otherwise), to the claims, whether existing now or arising hereafter, the Lender may have against Borrower, and (ii) any and all rights of reimbursement, contribution or indemnity against Borrower or any future guarantors of any obligations under the Loan Documents) which may have heretofore arisen or may hereafter arise in connection with any guaranty or pledge or grant of any lien or security interest made in connection with any obligations under the Loan Documents. Guarantor hereby acknowledges that the waiver contained in the preceding sentence (the “ Subrogation Waiver ”) is given as an inducement to the Lender to enter into the Loan Documents and, in consideration of the Lender’s willingness to enter into the Loan Documents, Guarantor agrees not to amend or modify in any way the Subrogation Waiver without the Lender’s prior written consent. If any amount that is subject to the Subrogation Waiver shall be paid to Guarantor on account of any claim set forth at any time when all of the obligations under the Loan Documents shall not have been paid or performed in full, such amount shall be held in trust by such Guarantor for the Lender’s benefit, shall be segregated from the other funds of Guarantor and shall forthwith be paid over to the Lender to be applied in whole or in part by the Lender against such obligations, whether matured or unmatured. Nothing contained herein is intended or shall be construed to give to Guarantor any rights of subrogation or right to participate in any way in the Lender’s rights, title or interest in the Loan Documents, notwithstanding any payments made by Guarantor under this Guaranty, all such rights of subrogation and participation being hereby expressly waived and released.

(b) In the event that Guarantor shall advance or become obligated to pay any sums with respect to any obligation hereby guaranteed or in the event that for any reason whatsoever Borrower or any subsequent owner of the collateral securing the Loan is now, or shall hereafter become, indebted to Guarantor, Guarantor agrees that the amount of such sums and of such indebtedness together with all interest thereon, shall at all times be subordinate as to the lien, time of payment and in all other respects, to all sums, including principal, interest and other amounts, at any time owing to the Lender under any of the Loan Documents and that Guarantor shall not be entitled to enforce or receive payment thereof until all such sums owing to the Lender have been paid. Nothing herein contained is intended or shall be construed to give to Guarantor any right to participate in any way in the right, title or interest of the Lender in or to the collateral securing the Loan, notwithstanding any payments made by Guarantor under this Guaranty, all such rights of participation being hereby expressly waived and released.

9. Guarantor’s Representations and Warranties . Guarantor makes the following representations and warranties which shall survive the execution and delivery of this Guaranty:

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(a) Guarantor has the power and authority to execute, deliver and carry out the terms and provisions of this Guaranty and has duly authorized, executed, and delivered the same.

(b) Neither the execution and delivery of this Guaranty, nor the consummation of the transactions herein contemplated, nor compliance with the terms and provisions hereof, will contravene any provision of law, statute, rule or regulation to which Guarantor is subject or any judgment, decree, franchise, order or permit applicable to Guarantor, or will conflict or will be inconsistent with, or will result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, security interest, charge or encumbrance upon any of the property or assets of Guarantor pursuant to the terms of, any indenture, mortgage, deed of trust, agreement or other instrument to which Guarantor is a party or may be bound or subject.

(c) No consent or approval of, or exemption by, any governmental or public body or authority is required to authorize, or is required in connection with the execution, delivery and performance of, this Guaranty or of any of the instruments or agreements herein referred to, or the taking of any action hereby contemplated.

10. Transfers, Sales, Etc. Guarantor shall not sell, lease, transfer, convey or assign any of its assets, unless such sale, lease, transfer, conveyance or assignment does not result in a violation of Guarantor’s obligations set forth in Section 12(b) of the Recourse Guaranty Agreement. In addition, Guarantor shall neither become a party to any merger or consolidation, nor acquire all or substantially all of the assets of, a controlling interest in the stock of, or a partnership or joint venture interest in, any other entity, unless such merger, consolidation or acquisition does not result in a violation of Guarantor’s obligations set forth in Section 12(b) of the Recourse Guaranty Agreement. If any transfer or conveyance is made or attempted in contravention of the provisions of this paragraph, such purported transfer or conveyance shall be void ab initio.

11. Guarantor’s Relationship to Borrower . Guarantor is related and/or affiliated with Borrower, has personal knowledge of and is familiar with Borrower’s business affairs and books and records. Guarantor warrants that Borrower is in sound financial condition as of the date of this Guaranty, and that to Guarantor’s knowledge Borrower will perform its obligations under the Loan Documents in accordance with the terms and conditions thereof.

12. Mortgage Priority . Nothing herein contained shall in any manner affect the lien or priority of the Mortgage securing the Note, and upon the occurrence of an Event of Default (as defined in the Mortgage), the Lender may invoke any remedies it may have under the this Guaranty or the other Loan Documents, either concurrently or successively and the exercise of any one or more of such remedies shall not be deemed an exhaustion of such remedy or remedies or a waiver of any other remedy or remedies and shall not be deemed an election of remedies. The exercise by the Lender of any such remedies shall not release or discharge Guarantor from its obligations hereunder unless and until the full amount of the Indebtedness evidenced by the Note and secured by the Mortgage has been fully paid and satisfied.

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13. Duration of Guaranty . This Guaranty shall remain in full force and effect until all of the Guaranteed Obligations have been satisfied in full and are no longer subject to disgorgement under any applicable state or federal creditor rights or bankruptcy laws or the Loan is indefeasibly paid or satisfied in full (whichever first occurs). No delay on the part of the Lender in exercising any options, powers or rights, or the partial or single exercise thereof, shall constitute a waiver thereof. No waiver of any rights hereunder, and no modification or amendment of this Guaranty, shall be deemed to be made by the Lender unless the same shall be in writing, duly signed on behalf of the Lender, and each such waiver (if any) shall apply only with respect to the specific instance involved and shall in no way impair the rights of the Lender or the obligations of Guarantor to the Lender in any other respect at any other time. This Guaranty is binding upon Guarantor, Guarantor’s heirs, personal representatives, successors or assigns, and shall inure to the benefits of the Lender and its successors or assigns including (without limitation) any other holder at any time of the Loan Documents.

14. Guarantor’s Familiarity with the Loan Documents . Guarantor acknowledges that copies of the Loan Documents have been made available to Guarantor and that Guarantor is familiar with their contents. Guarantor affirmatively agrees that upon any transfer of the Mortgaged Property in accordance with the provisions of the Mortgage, it shall not be necessary for Guarantor to reaffirm its continuing obligations under this Guaranty, but Guarantor will do so upon request by Lender.

15. Notices . All notices, consents, approvals and requests required or permitted hereunder shall be given in writing and shall be effective for all purposes if hand delivered or sent by: (a) certified or registered United States mail, postage prepaid, (b) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of attempted delivery; or (c) facsimile provided a confirming copy is sent the same day in the manner set forth in (b) above, addressed in either case as follows:

If to Lender, at the following address:

Massachusetts Mutual Life Insurance Company

c/o Midland Loan Services

10851 Mastin, Suite 300

Overland Park, Kansas 66210

Attention: Barings Servicing Group

Loan No. 17602

And to:

Massachusetts Mutual Life Insurance Company

c/o Barings LLC

One Financial Plaza

Hartford, Connecticut 06103

Attention: Structured Real Estate Loan Servicing

Loan No. 17602

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And to:

Massachusetts Mutual Life Insurance Company

c/o Barings LLC

One Financial Plaza

Hartford, Connecticut 06103

Attention: Legal Department

Loan No. 17602

If to Guarantor, at the following address:

Trinity Place Holdings Inc.

340 Madison Avenue

3rd Floor, Suite 3C

New York, New York 10173

Attention: Steven Kahn

With a copy to:

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

Attention: James P. Godman, Esq.

or to such other address and person as shall be designated from time to time by Guarantor or Lender, as the case may be, in a written notice under this Section 15 . A notice shall be deemed given: in the case of hand delivery or by facsimile, at the time of delivery; in the case of certified or registered mail, three Business Days after deposit in the United States Mail; or in the case of expedited prepaid delivery, upon the first attempted delivery on a Business Day. A party receiving a notice that does not comply with the technical requests for notice under this Section 15 may elect to waive any deficiencies and treat the notice as having been properly given.

16. Successors and Assigns . All references to Lender and Guarantor shall be deemed to include references to their successors and assigns.

17. Governing Law . In all respects, including, without limitation, matters of construction and performance of this Guaranty and the obligations arising hereunder, this Guaranty shall be governed by, and construed in accordance with, the laws of the state in which the Mortgaged Property is located applicable to contracts and obligations made and performed in such state and any applicable laws of the United States of America. Interpretation and construction of this Guaranty shall be according to the contents hereof and without presumption or standard of construction in favor of or against Guarantor or Lender.

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18. Waiver of Trial by Jury . GUARANTOR AND LENDER EACH HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS GUARANTY. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY GUARANTOR AND LENDER, AND EACH PARTY ACKNOWLEDGES THAT THE OTHER PARTY HAS NOT MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. GUARANTOR FURTHER ACKNOWLEDGES THAT GUARANTOR HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS GUARANTY BY INDEPENDENT LEGAL COUNSEL SELECTED BY GUARANTOR AND THAT GUARANTOR HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

19. Jurisdiction . Guarantor hereby submits to personal jurisdiction in the state in which the Mortgaged Property is located for the enforcement of the provisions of this Guaranty and irrevocably waives any and all rights to object to such jurisdiction for the purposes of litigation to enforce any provision of this Guaranty. Guarantor hereby consents to the jurisdiction of and agrees that any action, suit or proceeding to enforce this Guaranty may be brought in any state or federal court in the state in which the Mortgaged Property is located. Guarantor hereby irrevocably waives any objection that they may have to the laying of the venue of any such actions, suit, or proceeding in any such court and hereby further irrevocably waive any claim that any such action, suit or proceeding brought in such a court has been brought in an inconvenient forum.

20. Attorneys’ Fees . In addition to all other amounts payable by Guarantor hereunder, Guarantor hereby agrees to pay to Lender upon demand any and all reasonable attorneys’ fees, costs and expenses, including all fees costs and expenses incurred in all enforcement, probate, appellate and bankruptcy proceedings, as well as any post-judgment proceedings to collect or enforce any judgment or order relating to the obligations of Guarantor under this Guaranty.

21. Partial Invalidity . Should any part of this Guaranty be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity and enforceability of the remaining portion of the Guaranty.

22. Definitions . Any term not defined herein shall have the meaning set forth in the Master Loan Agreement.

23. Joint and Several . In the event there is more than one Guarantor, the obligations of each Guarantor shall be joint and several for all purposes.

24. Counterparts . This Guaranty may be executed in counterparts, which together shall constitute one original agreement.

25. Limitation of Liability . Under no circumstances shall Guarantor’s liability hereunder be reduced by, from or as a result of any payment to or amount realized by any Lender Party from any rents, deposits, insurance proceeds, condemnation awards, proceeds from bankruptcy sale, foreclosure or any conveyance in lieu of foreclosure or from any other profits, avails, revenues or proceeds derived from the Mortgaged Property, in any such case, to the extent such payment or amount is applied to Indebtedness (other than Guarantor’s liability hereunder) or the Mortgaged Property, and only payments made to Lender by Guarantor (and not derived from the Mortgaged Property to the extent such payments are applied to Indebtedness other than Guarantor’s obligations hereunder or to the Mortgaged Property) after demand therefor by Lender shall be applied against such liability. Furthermore, the foregoing limitation on liability shall not limit in any way the liability of Guarantor that may arise out of the obligations set forth in the Environmental Indemnity Agreement, the Recourse Guaranty Agreement, the Equity Funding Guaranty and the Carry Guaranty, each of even date herewith made by Guarantor and if applicable, Borrower, in favor of Lender.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty as of the date first written above.

	GUARANTOR:

	TRINITY PLACE HOLDINGS INC., a Delaware corporation

	By:	/s/ Steven Kahn
		Name: Steven Kahn
		Title: Chief Financial Officer

Guarantor’s Signature Page to Guaranty of Payment and Completion

Exhibit 10.17

COMPLETION GUARANTY

THIS COMPLETION GUARANTY (this “ Completion Guaranty ”) is made as of the 22nd day of December, 2017, by TRINITY PLACE HOLDINGS INC. , a Delaware corporation (“ Guarantor ”) to NEW YORK CITY SCHOOL CONSTRUCTION AUTHORITY , a public benefit corporation of the State of New York, having its principal office at 30-30 Thompson Avenue, Long Island City, New York 11101 (“ SCA ”).

WITNESSETH :

WHEREAS, TPHGREENWICH OWNER LLC (“ Developer ”) intends to construct a building, the name of which has not yet been determined (the “ Building ”), on the site comprised of lots 11 and 13 on New York County Tax Block 19 (the “ Land ”); and

WHEREAS, Developer intends to establish a plan of condominium ownership for the Land and the Building; and

WHEREAS, SCA and Developer have entered into that certain School Design, Construction, Funding and Purchase Agreement (“ Agreement ”) dated December 22, 2017, pursuant to which, inter alia, (i) Developer will perform the School Base Building Work (as such term is defined in the Agreement), (ii) SCA will provide certain funding for the School Base Building Work and will perform the School Fit-Out Work, and (iii) upon Substantial Completion (as defined in the Agreement) of the School Unit, SCA will purchase the School Unit from Developer; and

WHEREAS, as an inducement for SCA to enter into the Agreement, SCA has requested that Guarantor execute and deliver this Completion Guaranty.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor and SCA hereby covenant and agree as follows:

1. Construction of the Premises .

(a) If Developer defaults in the construction of the School Base Building Work or any approved Change Order (each as defined in the Agreement) in accordance with the applicable construction requirements of the Agreement, in each such case beyond any applicable notice, grace and/or cure periods as set forth in the Agreement, then upon written demand of SCA (the “ Demand Notice ”) and subject to the terms of Section 15 hereof, Guarantor shall (without duplication):

(i) subject to Force Majeure and SCA Delay (both as defined in the Agreement) but otherwise in accordance with the obligations of Developer under the Agreement, (x) commence or recommence and diligently pursue, as applicable, the School Base Building Work, such Change Orders, or any Punch List Items (as defined in the Agreement) relating thereto, as the case may be, until the same are completed in accordance with the applicable provisions of the Agreement or (y) cause the School Base Building Work, such Change Orders, or the Punch List Items relating thereto, as the case may be, to be so commenced or recommenced, as applicable, and to be diligently pursued until same are completed in accordance with the applicable provisions of the Agreement, and, to the extent of Developer’s obligations therefor under the Agreement, obtain a PCO for the Building (the “ Guaranteed Work ”); and/or

(ii) fully and punctually pay and discharge any and all unpaid Public School Project Costs as the same become due and payable but only to the extent, and in the amount by which, such Public School Project Costs exceed the Public School Project Costs Not-to-Exceed Amount, as and to the extent Developer is obligated to pay for the same pursuant to the Agreement (collectively, the “ Guaranteed Construction Costs ”), which Guaranteed Construction Costs shall be reduced by the sum of (X) the cost of any Change Order for which SCA is responsible pursuant to the Agreement, (Y) any costs related to SCA Delays that SCA is responsible for pursuant to the Agreement, and (Z) any costs otherwise incurred in respect of Public School Project Costs as a result of a breach by SCA of the Agreement; and/or

(iii) in the event that SCA terminates the Agreement, the Master Lease, and the Sublease pursuant to the final sentence of Section 12.04(a) of the Agreement, reimburse SCA for all Public School Project Costs paid by SCA to Developer and not reimbursed by Developer.

The obligations set forth in Section 1(a) are referred to as the “ Guaranteed Obligations .” Notwithstanding anything to the contrary contained herein, in no event shall the “Guaranteed Obligations” include any obligations (for payment, performance or otherwise) in respect of (1) any SCA Pre- and Post-Turnover Work, or (2) any changes to the School Base Building Work which are not made by Developer and which are made after Developer’s construction lender exercises any remedies under its construction loan, which remedies result in Developer no longer controlling the Project.

(b) If Guarantor elects to commence or recommence, as applicable, and diligently pursue the Guaranteed Work pursuant to clause (x) or (y) in Section 1(a)(i) above, then:

(i) Guarantor shall provide written notice of such election to SCA not later than the twentieth (20 ^th ) day following receipt of such Demand Notice from SCA;

(ii) subject to Force Majeure and SCA Delay, Guarantor shall, within forty-five (45) days after receipt of such Demand Notice, commence or recommence, as applicable, the Guaranteed Work (or cause same), and thereafter shall diligently pursue such Guaranteed Work (or cause same to be pursued) until same has been completed in accordance with the Agreement;

(iii) so long as Guarantor is not in default of its obligations under this Completion Guaranty beyond any applicable grace or cure period, SCA shall not exercise any of its rights or remedies under the Agreement or this Completion Guaranty;

(iv) Guarantor shall be entitled to receive, and SCA shall pay to Guarantor, any Public School Project Cost payable by SCA in accordance with the Agreement and/or any documents executed in connection therewith, including, without limitation, all Public School Project Costs up to the Public School Project Costs Not-to-Exceed Amount, Change Order costs for which SCA is responsible and costs related to SCA Delay, all in accordance with the provisions of the Agreement, in the same manner as though Guarantor were Developer thereunder and assuming for purposes hereof and thereof that Guarantor shall have the same rights and obligations as Developer thereunder; and

(v) in the event that Guarantor engages any contractors with respect to the Guaranteed Work, other than the contractors engaged by Developer pursuant to the terms of the Agreement, such contractors shall be subject to the prior approval of SCA, such approval not to be unreasonably withheld, conditioned or delayed and the engagement of such contractor shall be subject to the terms and conditions of the Agreement.

2. Guarantee Absolute .

(a) Subject to the terms of Section 15 hereof, Guarantor guarantees the Guaranteed Obligations, regardless of any law, statute or regulation now or hereafter in effect in any jurisdiction affecting or purporting to affect in any manner any of the terms of the Guaranteed Obligations or the rights or remedies of SCA with respect thereto. This is not a guaranty of payment of any monetary indebtedness of Developer to SCA evidenced by a note or other similar instrument.

(b) Except as otherwise provided in Section 15 hereof, the liability of Guarantor under this Completion Guaranty shall be absolute and unconditional, and shall not be affected, released, terminated, discharged or impaired, in whole or in part, by any or all of the following:

(i) any other completion guaranty now or hereafter executed by Guarantor or any other guarantor or the release of any other guarantor from liability for the payment, performance or observance of any of the Guaranteed Obligations on the part of Guarantor to be paid, performed or observed, as applicable, whether by operation of law or otherwise; or

(ii) any lack of genuineness, regularity, validity, legality or enforceability, or the voidableness of the Agreement or any other agreement or instrument relating thereto as against Developer and its obligations thereunder;

(iii) any dealings or transactions between SCA and Developer, whether or not Guarantor shall be a party to or cognizant of the same;

(iv) any bankruptcy, insolvency, assignment for the benefit of creditors, receivership, trusteeship, or dissolution of or affecting Developer;

(v) any rights, powers or privileges Developer may now or hereafter have against any person, entity or collateral in respect of the Guaranteed Obligations;

(vi) any notice of the creation, renewal or extension of the Guaranteed Obligations and notice of or proof of reliance by SCA upon this Completion Guaranty.

3. Representations and Warranties . Guarantor represents and warrants the following as of the date hereof:

(a) Guarantor is a duly organized, validly existing [corporation] in good standing under the laws of the State of Delaware and has full power, authority and legal right to execute and deliver this Completion Guaranty and to perform fully and completely all of its obligations hereunder.

(b) The execution, delivery and performance of this Completion Guaranty by Guarantor has been duly authorized by all necessary corporate action and will not violate any provision of any law, regulation, order or decree of any governmental authority, bureau or agency or of any court binding on Guarantor, or any provision of the code of regulations of Guarantor, or of any contract, undertaking or agreement to which Guarantor is a party or which is binding upon Guarantor or any of its property or assets, and will not result in the imposition or creation of any lien, charge or encumbrance on, or security interest in, any of its property or assets pursuant to the provisions of any of the foregoing.

(c) This Completion Guaranty has been duly executed and delivered by a duly authorized signatory of the Guarantor and constitutes a legal, valid, and binding obligation of Guarantor, enforceable against it in accordance with its terms, subject as to enforcement of remedies to any applicable bankruptcy, reorganization, moratorium or other laws affecting the enforcement of creditors’ rights generally and doctrines of equity affecting the availability of specific enforcement as a remedy.

(d) All necessary resolutions, consents, approvals and authorizations of any person or entity required in connection with the execution and delivery of this Completion Guaranty have been duly obtained and are in full force and effect.

4. Waivers . Guarantor expressly waives only the following:

(a) notice of acceptance of this Completion Guaranty;

(b) promptness, diligence, and presentment of any of the Guaranteed Obligations;

(c) except as may be expressly set forth in this Completion Guaranty, protest, notice of protest, dishonor, notice of dishonor, notice of default and any other notice with respect to any of the Guaranteed Obligations and/or this Completion Guaranty;

(d) except for the notices required under this Completion Guaranty, any demand for payment under this Completion Guaranty;

(e) the right to interpose all substantive and procedural defenses of the law of guaranty, indemnification and suretyship, except the defenses of prior payment or performance, or cure, bonding over or other contest in accordance with the applicable provisions of the Agreement, by Guarantor of the Guaranteed Obligations that Guarantor is called upon to pay or perform under this Completion Guaranty;

(f) the right to interpose any set-off or counterclaim (other than compulsory counterclaims and the defense of payment or performance in full) of any nature or description in any action or proceeding brought by or on behalf of SCA arising hereunder or with respect to this Completion Guaranty; provided, however, such limitation shall not prohibit Guarantor from bringing a separate action for any such set-off or counterclaim; and

(g) any right or claim of right to cause a marshaling of the assets of Developer.

5. Bankruptcy . Notwithstanding anything to the contrary herein, Guarantor’s liability shall extend to all amounts or other obligations that constitute part of the Guaranteed Obligations that would be owed by, or required to be performed by, Developer under the Agreement but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving Developer. Without limiting the foregoing, neither Guarantor’s obligation to make payment or otherwise perform in accordance with this Completion Guaranty nor any remedy for the enforcement thereof shall be impaired, modified, changed, stayed, released or limited in any manner by any impairment, modification, change, release, limitation or stay of the liability of Developer or its estate in bankruptcy or any remedy for the enforcement thereof, resulting from the operation of any present or future provision of the U.S. bankruptcy code or other statute or from the decision of any court interpreting any of the same.

6. Currency of Payments . Any and all amounts required to be paid by Guarantor hereunder shall be paid in lawful money of the United States of America in immediately available funds to SCA.

7. Amendment in Writing . This Completion Guaranty represents the entire agreement between Guarantor and SCA with respect to the matters set forth herein. No amendment or waiver of any provision of this Completion Guaranty or consent to any departure by Guarantor therefrom shall in any event be effective unless the same is in writing and signed by Guarantor and SCA, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

8. Remedies . The obligations of Guarantor under this Completion Guaranty are independent of Developer’s obligations under the Agreement, and a separate action or actions may be brought and prosecuted against or by the Guarantor to enforce this Completion Guaranty, irrespective of whether any action is brought against or by Developer or whether Developer is joined in any such action or actions. Any one or more successive and/or concurrent actions may be brought hereon against Guarantor either in the same action, if any, brought against Developer or in separate actions, as often as SCA, in its sole discretion, may deem advisable.

9. Certified Statement . Guarantor and SCA each agrees that it will, at any time and from time to time within ten (10) days following request by the other party hereto, execute and deliver to such other party a statement certifying that this Completion Guaranty is unmodified and in full force and effect (or if modified, that the same is in full force and effect as modified and stating such modifications) and such other matters as such other party may reasonably request.

10. Notices . Whenever it is provided in this Completion Guaranty that a notice, demand, request, consent, approval or other communication shall or may be given to or served upon either of the parties (or their respective successors or assigns) by the other, and whenever either of the parties shall desire to give or serve upon the other any notice, demand, request, consent, approval or other communication with respect hereto or to the subject matter hereof, each such notice, demand, request, consent, approval or other communication shall be in writing and shall be sent by national overnight delivery service or personal delivery, addressed as follows:

If to SCA:	New York City School Construction Authority 30-30 Thompson Avenue Long Island City, New York 11101 Attn: Ross J. Holden, Executive Vice President & General Counsel

	with a copy simultaneously to:

	Herrick, Feinstein LLP 2 Park Avenue New York, New York 10016 Attn: Paul M. Shapses, Esq. and Doug Heller, Esq.
If to Guarantor:	c/o Trinity Place Holdings Inc. 340 Madison Avenue, Suite 3C New York, NY 10173 Attn: Matthew Messinger
	with a copy simultaneously to: c/o Trinity Place Holdings Inc. 340 Madison Avenue, Suite 3C New York, NY 10173 Attn: Miriam Harris
	and a copy simultaneously to: Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, New York 10036 Attn: James P. Godman, Esq.

Any notice sent by national overnight delivery service or personal delivery shall be deemed given on the date of receipt or refusal as indicated the receipt of the national overnight delivery service or personal delivery service. Any notice may be given either by a party or by such party’s attorney. Guarantor or SCA may designate, upon not less than five (5) business days’ notice given to the others in accordance with the terms of this Section 10 additional or substituted parties to whom notices should be sent hereunder.

11. Termination of Guaranty; Successors and Assigns .

(a) Guarantor’s liability for any or all of the Guaranteed Obligations under this Completion Guaranty shall automatically terminate upon the earlier to occur of (i) the conveyance of the School Unit to SCA; (ii) the date the Guaranteed Obligations are completed or satisfied in accordance with the applicable provisions of the Agreement; (iii) the default beyond any applicable notice and/or cure periods by SCA of its obligations under the Agreement; or (iv) the termination of the Agreement pursuant to the provisions thereof, except to the extent such termination is caused by a default by Developer for which the Agreement provides for termination, in accordance with Section 9.01 of the Agreement. Notwithstanding any such automatic termination, SCA shall confirm such termination in writing to Guarantor within fifteen (15) days after written demand therefor, but no failure by SCA to confirm such termination shall be deemed to negate any such termination.

(b) This Completion Guaranty shall be binding upon Guarantor and its successors and permitted assigns, and shall inure to the benefit of and be enforceable by SCA and its successors and permitted assigns. Wherever in this Completion Guaranty reference is made to Guarantor or SCA, the same shall be deemed to refer also to the then successor or permitted assign of Guarantor or SCA. Effective upon an assignment pursuant to Section 11(c)(ii) below, the successor “Guarantor” shall be deemed the “Guarantor” hereunder for all intents and purposes and the predecessor “Guarantor” shall be relieved of any and all liability under this Completion Guaranty accruing after the date of such assignment.

(c) Notwithstanding anything herein to the contrary, at any time prior to the date the School Base Building Work is completed:

(i) SCA shall not have the right to assign this Completion Guaranty without the prior written consent of Guarantor, and any purported assignment in violation of the foregoing clause shall be null and void as against Guarantor, except, however, that SCA may assign this Completion Guaranty to any assignee of the Agreement permitted in accordance with Section 15.07(b) thereof: (A) with the consent of Guarantor, if Guarantor’s prior written consent is required to be obtained in accordance with Section 15.07(b) of the Agreement, and (B) without the consent of Guarantor, if Guarantor’s consent to the assignment of the Agreement is not required under Section 15.07 (b) of the Agreement, so long as (1) prior to or simultaneously with such assignment, such assignee shall assume in writing the obligations of SCA hereunder, and (2) SCA shall have assigned, and such assignee shall have assumed, the Agreement; and

(ii) Guarantor shall not have the right to assign this Completion Guaranty without the prior written consent of SCA, which consent shall not be unreasonably withheld or delayed, and any purported assignment in violation of the foregoing clause shall be null and void as against SCA, except, however, Guarantor shall be permitted to assign this Completion Guaranty without the consent of SCA, but upon ten (10) Business Days’ prior written notice, to (A) any corporation or other entity into or with which Guarantor is merged, consolidated or reorganized, (B) any entity to which substantially all of Guarantor’s assets are sold or transferred, or (C) any entity in connection with the sale, transfer or exchange of stock of Guarantor.

12. Governing Law/Consent to Jurisdiction . This Completion Guaranty shall be governed by, and construed in accordance with, the laws of the State of New York applicable to agreements made and to be performed entirely within said state, without regard to principles of conflicts of law. Guarantor and SCA irrevocably and unconditionally agree that any dispute arising out of this Completion Guaranty shall be resolved by binding arbitration in accordance with the procedures set forth in Article VII of the Agreement, as supplemented by Section 15.10 of the Agreement.

13. Severability . If any term, covenant, condition or provision of this Completion Guaranty or the application thereof to any circumstance or to Guarantor is invalid or unenforceable to any extent, the remaining terms, covenants, conditions and provisions of this Completion Guaranty or the application thereof to any circumstances or to Guarantor other than those as to which any term, covenant, condition or provision is held invalid or unenforceable, shall not be affected thereby and each remaining term, covenant, condition and provision of this Completion Guaranty shall be valid and shall be enforceable to the fullest extent permitted by law.

14. Headings . The headings used in this Completion Guaranty are for convenience only and are not to be considered in connection with the interpretation or construction of this Completion Guaranty.

15. Conditions to Guarantor’s Obligations . Notwithstanding anything in this Completion Guaranty to the contrary, Guarantor’s payment for and/or performance of the Guaranteed Work and/or the Guaranteed Obligations pursuant to the terms of this Completion Guaranty shall be subject to the satisfaction of each of the following conditions precedent: (a) SCA shall not be in material default beyond any applicable notice and/or cure periods in the payment or performance of its obligations pursuant to the provisions under this Completion Guaranty, the Agreement or any documents executed in connection therewith, including specifically, without limitation, the full payment by SCA to Developer or Guarantor of the Public School Project Costs then due (up to the amount of the Public School Project Cost Not-to-Exceed Amount) on or before the Requisition Payment Due Date and any other costs and/or reimbursements payable by SCA pursuant to the Agreement or any document executed in connection therewith on or before the Requisition Payment Due Date or any other applicable due date, including without limitation, costs on account of Change Orders that SCA is responsible for pursuant to Section 5.04 of the Agreement and costs on account of SCA Delay(s) for which SCA is responsible pursuant to the Agreement; (b) with respect to Change Orders for which Evidence of Sufficient Funds is required under the Agreement, timely delivery by SCA of such required Evidence of Sufficient Funds only in the event that the CP does not cover such amounts; and/or (c) Developer’s construction lender is funding its construction loan (except that the condition precedent contained in this subclause (c) shall not apply in respect of Developer’s payment obligation expressly set forth in Section 1(a)(iii) above, such that within thirty (30) days after demand by SCA when any sums become due and payable under Section 1(a)(iii) above (i.e. SCA terminates the Agreement, the Master Lease, and the Sublease pursuant to the final sentence of Section 12.04(a) of the Agreement and Guarantor, subject to the limitations expressly set forth in this Guaranty, becomes obligated to reimburse SCA for all Public School Project Costs paid by SCA to Developer and not reimbursed by Developer), Guarantor shall pay such sums to SCA so long as all other conditions to Guarantor’s obligation to pay such sums have been satisfied). In the event that the CP needs to be amended pursuant to this Section 15, SCA shall provide an amended CP.

16. Counterparts . This Completion Guaranty may be executed in several counterparts, each of which shall, collectively and separately, constitute one agreement.

17. Capitalized Terms . Capitalized terms used herein but not defined shall have the meaning ascribed to such terms in the Agreement.

[The signature page follows.]

IN WITNESS WHEREOF, Guarantor and SCA have executed and delivered this Completion Guaranty as of the date first above written.

	GUARANTOR :

	TRINITY PLACE HOLDINGS INC.,
	a Delaware corporation

	By:	/s/ Steven Kahn
	Name:	Steven Kahn
	Title:	Chief Financial Officer

AGREED AND ACCEPTED:

NEW YORK CITY SCHOOL CONSTRUCTION AUTHORITY

By:	/s/ Ross Holden
Name:	Ross Holden
Title:	Executive Vice President & General Counsel

Exhibit 10.18

SCHOOL DESIGN, CONSTRUCTION, FUNDING AND PURCHASE AGREEMENT

between

TPHGREENWICH OWNER LLC,

as developer

and

NEW YORK CITY SCHOOL CONSTRUCTION AUTHORITY

Dated as of December 22, 2017

TABLE OF CONTENTS

		Page

Article I CERTAIN DEFINITIONS		1

Section 1.01	Certain Definitions	1

Article II TERM; LPC APPROVAL; CONSTRUCTION LOAN; MASTER LEASE AND SUBLEASE		9

Section 2.01	Term	9

Section 2.02	LPC Approval .	9

Section 2.03	Construction Loan	9

Section 2.04	Master Lease and Sublease	11

Article III SCHOOL BASE BUILDING WORK AND SCHOOL FIT-OUT WORK; CONSTRUCTION DRAWINGS AND ESTIMATES		12

Section 3.01	School Base Building Work and School Fit-Out Work	12

Section 3.02	School Base Building Design Consultants	14

Section 3.03	School Base Building Construction Drawings	14

Article IV AWARD OF CONTRACTS; COMMENCEMENT AND PERFORMANCE OF SCHOOL BASE BUILDING WORK AND SCHOOL FIT-OUT WORK		17

Section 4.01	Construction Manager for School Base Building Work; Award of Contracts for School Base Building Work	17

Section 4.02	General Contractor f or School Fit-Out Work	18

Section 4.03	Commencement and Performance of School Base Building Work; SCA Termination Option for Failure to Commence Construction; Developer Termination Option for Failure to Obtain Construction Loan	18

Section 4.04	Intentionally omitted	19

Section 4.05	Construction Schedule	19

Section 4.06	Methods and Materials	19

Section 4.07	SCA’s Project Representative; Coordination Meetings	19

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TABLE OF CONTENTS
(continued)

		Page

Article V PUBLIC SCHOOL PROJECT COSTS; REQUISITIONS AND PAYMENT OF REQUISITIONS; SAVINGS; CHANGE ORDERS AND DELAYS		20

Section 5.01	Public School Project Costs; Responsibility for Public School Project Costs; SCA Obligation to Obtain and Deliver CP to Developer	20

Section 5.02	Requisitions and Payment of Public School Project Costs	21

Section 5.03	Intentionally omitted	29

Section 5.04	Change Orders	29

Section 5.05	Delays	32

Section 5.06	SCA Audit Rights	34

Section 5.07	SCA Pre- and Post-Turnover Work	34

Section 5.08	MEP Equipment	34

Article VI SUBSTANTIAL COMPLETION; COMPLETION OF PUNCH LIST ITEMS; ACCESS FOR SCHOOL BASE BUILDING WORK AND SCHOOL F&E WORK: WARRANTIES		35

Section 6.01	Substantial Completion of School Base Building Work and Completion of Punch List Items	35

Section 6.02	“Stand-By” Labor Costs	38

Section 6.03	Beneficial Interest in Warranties	38

Article VII EXPEDITED JAMS ARBITRATION		38

Section 7.01	Expedited Arbitration	38

Section 7.02	Selection of Arbitrators; Arbitration Procedure	39

Article VIII INSURANCE AND INDEMNITIES		39

Section 8.01	Developer’s Insurance Coverages	39

Section 8.02	SCA’s Insurance Coverages	41

Section 8.03	Waiver of Subrogation	42

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TABLE OF CONTENTS
(continued)

		Page

Section 8.04	Indemnification	42

Article IX DEFAULT AND REMEDIES; CERTAIN TERMINATION PROVISIONS		43

Section 9.01	Default by Developer; SCA’s Remedies	43

Section 9.02	Default by SCA; Developer’s Remedies	45

Section 9.03	Certain Termination Provisions	46

Article X CONDITIONS TO CLOSING; CLOSING; PCO		47

Section 10.01	Closing Conditions	47

Section 10.02	Right to Waive Conditions	48

Section 10.03	Closing and Closing Date	48

Section 10.04	Developer’s Closing Deliveries	48

Section 10.05	SCA’s Closing Deliveries	49

Section 10.06	Title Insurance Premiums; Apportionments; “True-Up” Adjustment to Purchase Price	49

Section 10.07	Payment of Common Charges	50

Section 10.08	Developer’s Right of Access	50

Section 10.09	Casualty; Condemnation	50

Section 10.10	PCO	51

Article XI REMOVAL OF TITLE DEFECTS		51

Section 11.01	Curing Title Defects	51

Section 11.02	Title Affidavits	52

Article XII REPRESENTATIONS, WARRANTIES; COVENANTS AND RESTRICTIONS; COMPLETION GUARANTY AND BAD BOY GUARANTY		52

Section 12.01	Developer’s Representations	52

Section 12.02	SCA’s Representations	52

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TABLE OF CONTENTS
(continued)

		Page

Section 12.03	Condominium Documents Covenants	53

Section 12.04	Completion Guaranty; Construction Lender’s Failure to Fund; and Bad Boy Guaranty	53

Article XIII CONDOMINIUM DOCUMENTS		54

Section 13.01	Approval of Condominium Documents	54

Article XIV NOTICES		55

Section 14.01	Notices	55

Section 14.02	All notices shall be deemed effective upon receipt	56

Article XV MISCELLANEOUS		56

Section 15.01	Further Assurances	56

Section 15.02	Governing Law	56

Section 15.03	Amendments and Waivers in Writing	56

Section 15.04	Delays not a Waiver	56

Section 15.05	Execution in Counterparts	57

Section 15.06	Exhibits; Headings	57

Section 15.07	Assignments of this Agreement	57

Section 15.08	Binding on Permitted Successors and Assigns	57

Section 15.09	Remedies	57

Section 15.10	Submission to Jurisdiction	57

Section 15.11	Severability	58

Section 15.12	No Rights in Third Parties; Not Joint Venture Partners	58

Section 15.13	No Construction Against Draftsperson	58

Section 15.14	Broker	58

Section 15.15	Survival	58

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TABLE OF CONTENTS
(continued)

		Page

Section 15.16	Exculpation	58

Section 15.17	Acknowledgment Regarding Play Areas	58

Exhibits

Exhibit A	Legal Description
Exhibit B	Permitted Encumbrances
Exhibit C	Master Lease
Exhibit D	Sublease
Exhibit E	Intentionally Omitted
Exhibit F	Intentionally Omitted
Exhibit G	Description of Hard Cost Allocation and Land Value and Soft Cost Allocation
Exhibit H	Guidelines for Payment of Installments of the Land Value Payment and Construction Supervision Fee
Exhibit I	School Program
Exhibit J	MEP Equipment
Exhibit K	Intentionally Omitted
Exhibit L	SCA Pre- and Post-Turnover Work
Exhibit M	School Fit-Out Construction Drawings
Exhibit N	Construction Schedule
Exhibit O	Breakdown of Public School Project Costs by Category
Exhibit P	Form of Requisition
Exhibit Q	Intentionally Omitted
Exhibit R	Form of Owner’s Title Affidavit
Exhibit S	Completion Guaranty to SCA
Exhibit T	Condominium Declaration and Condominium Bylaws
Exhibit U	Memorandum of Master Lease
Exhibit V	Memorandum of Sublease
Exhibit W	Termination of Memorandum of Master Lease
Exhibit X	Termination of Memorandum of Sublease
Exhibit Y	100% School Base Building CD’s (inclusive of commissioning document and addendums 1-6)

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SCHOOL DESIGN, CONSTRUCTION, FUNDING AND PURCHASE AGREEMENT

THIS SCHOOL DESIGN, CONSTRUCTION, FUNDING AND PURCHASE AGREEMENT (this “ Agreement ”) made as of December 22, 2017 by and between TPHGREENWICH OWNER LLC, a Delaware limited liability company having an address c/o Trinity Place Holdings Inc., 340 Madison Avenue, Suite 3C, New York, NY 10173 (“ Developer ”) and the NEW YORK CITY SCHOOL CONSTRUCTION AUTHORITY, a public benefit corporation of the State of New York having its principal office at IDCNY Center 1, 30-30 Thompson Avenue, Long Island City, New York 11101 (the “ SCA ”).

RECITALS

A. Developer and/or its affiliates are the owners of the Land (as hereinafter defined) and intend to develop the Project (as hereinafter defined) thereon.

B. SCA desires to enter into an agreement with Developer pursuant to which, subject to and upon the terms and conditions hereof, (i) Developer will lease the Land to SCA pursuant to the Master Lease (as hereinafter defined); (ii) SCA will sublease the Land (excluding the space that will comprise the School Unit (as hereinafter defined) to Developer pursuant to the Sublease (as hereinafter defined); (iii) Developer will cause the School Unit (as hereinafter defined) to be designed and constructed by causing performance of the School Base Building Work (as such term is hereinafter defined), and SCA will provide funding for such design and for such construction of the School Base Building Work; and (iv) upon Substantial Completion (as hereinafter defined) of the School Base Building Work (as hereinafter defined) and recordation of the Condominium Declaration (as hereinafter defined), SCA shall purchase the School Unit from Developer and perform the School Fit-Out Work.

C. The parties wish to set forth their understandings regarding, inter alia, (i) the design and construction of the School Unit, (ii) the funding of such design and construction, (iii) the rights and obligations of Developer and SCA in connection with conveyance of the School Unit to SCA, and (iv) such other matters as are set forth in this Agreement.

D. The transaction contemplated by this Agreement has been approved or deemed approved by the Mayor of the City of New York (the “ Mayor ”), following approval of said site plan by the New York City Council (the “ City Council ”) by resolution adopted in accordance with Section 1732 of the New York Public Authorities Law.

NOW, THEREFORE, in consideration of the promises and obligations of Developer and SCA set forth in this Agreement, subject to the terms of this Agreement, and intending to be legally bound hereby, Developer and SCA hereby covenant and agree as follows:

Article I

CERTAIN DEFINITIONS

Section 1.01 Defined Terms . The following words and phrases (to the extent not defined in the first paragraph of this Agreement or the recitals to this Agreement) shall have the following meanings for purposes of this Agreement:

“ 100% School Base Building CD’s ” has the meaning set forth in Section 3.03(g)(i) hereof.

“ Affiliate ” means, with respect to any Person, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, such Person. For purposes hereof, the term “control” (including the related terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of twenty percent (20%) or more of the ownership interest in such entity or the power to direct or cause the direction of management and policies of an entity (whether through the ownership of voting securities or other ownership interest, by contract or otherwise).

“ Agreement ” means this Agreement and the exhibits attached hereto (or subsequently incorporated herein through amendments hereto), as the same may be amended from time to time.

“ Arbitrator ” has the meaning set forth in Section 7.02 hereof.

“ Base Building Hard Cost Allocation ” has the meaning set forth in Section 3.01(a)(ii) hereof.

“ Board of Managers ” means the board of managers or other governing board of the Condominium, elected by the Unit Owners in accordance with the provisions of the Condominium Documents.

“ Building ” means, as the same exists from time to time, the building and other improvements to be constructed on the Land in accordance with this Agreement (including the landmarked Dickey House).

“ Business Days ” means any day other than (1) a Saturday or a Sunday, or (2) a New York City holiday (as determined by the New York City Office of Payroll Administration).

“ Business Hours ” means 7:00 a.m. – 5:00 p.m. on Business Days.

“ Capital Project Certificate ” – see definition of “ Evidence of Sufficient Funds ” below.

“ Catch-Up Requisition ” has the meaning set forth in Section 5.02(a)(i) hereof.

“ Change Order ” has the meaning set forth in Section 5.04 hereof.

“ City ” means The City of New York.

“ City Council ” has the meaning set forth on page 1.

“ Closing ” means the conveyance of the School Unit and the appurtenant undivided interest in the Common Elements by Developer to SCA.

“ Closing Date ” has the meaning set forth in Section 10.03.

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“ Commence[ment of] Construction of the School Base Building Work ” has the meaning set forth in Section 4.03(b).

“ Common Elements ” has the meaning ascribed to it in the Condominium Documents.

“ Completion Guaranty to SCA ” has the meaning set forth in Section 12.04.

“ Condominium ” means the condominium to be created for the Land and Building.

“ Condominium Bylaws ” has the meaning set forth in the Condominium Declaration.

“ Condominium Declaration ” or “ Declaration ” means that certain Condominium Declaration made by Developer, as Declarant, with respect to the Condominium.

“ Condominium Documents ” means collectively the Condominium Declaration, the Condominium Bylaws, and house rules referred to in either of the foregoing that relate to, restrict or govern or otherwise affect the ownership, use or operation of all or any portion of the Condominium, and any other agreements or documents related to the establishment of the Condominium (including, without limitation, tax lot drawings).

“ Construction Commencement Deadline ” has the meaning set forth in Section 4.03(b).

“ Construction Manager ” means Gilbane Residential Construction LLC or its replacement.

“ Construction Schedule ” has the meaning set forth in Section 4.05 hereof.

“ CP ” – see definition of “ Evidence of Sufficient Funds ” below.

“ Deed ” has the meaning set forth in Section 10.04(a) hereof.

“ Developer ” has the meaning set forth on page 1.

“ Construction Supervision Fee ” has the meaning set forth in Section 3.01(c)(i) hereof.

“ Developer Indemnitees ” means Developer, Developer’s consultants and each of their respective trustees, directors, officers, shareholders, partners, members, direct or indirect investors, managers, agents and employees, and their respective successors and assigns.

“ Dispute Notice ” has the meaning set forth in Section 7.02 hereof.

“ Effective Date ” means the date hereof.

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“ Eligible Costs ” means capital costs of the Project consisting of: (a) costs for planning, design, engineering, and architectural services; (b) environmental work including surveys, maps, plans, estimates, and environmental reports; (c) construction costs including materials and labor; (d) costs of a construction manager to perform construction management services; (e) cost of supervising the work of outside vendors; (f) builder’s risk and other applicable insurance; (g) costs of payment and performance bonds required by this Agreement and/or required by the Construction Manager; and (h) services to the extent they are necessary for the operation of the site as a construction site including utilities, snow and debris removal, fire sprinkler tests, security, building protection, and extermination. Notwithstanding anything herein to the contrary, the foregoing costs are considered Eligible Costs only to the extent such costs and expenses are financeable by the City of New York, in the City of New York’s sole discretion, with the proceeds of tax-exempt bonds pursuant to the New York State Local Finance Law, the Internal Revenue Code of 1986, as amended, the City Charter, the directives of the City Comptroller and any other applicable laws or regulations.

“ Evidence of Sufficient Funds ” means evidence of funds then available to SCA for payment of SCA’s obligations under this Agreement, such evidence to consist of (A) one or more so-called “ CP ’s” or Capital Project Certificate (s), executed pursuant to Section 219 of the New York City Charter by the Director of Management and Budget (or any successor thereto) or his or her duly authorized representative, stating that the required funds are available for use by SCA for the designated purposes(s), or (B) such other evidence of funds then available to SCA as shall be acceptable to Developer in Developer’s sole and absolute discretion.

“ F&E ” has the meaning set forth in Section 3.01(b) hereof.

“ Force Majeure ” means any failure of or delay in the availability of any public utility; any strikes or labor disputes; any not reasonably foreseeable delays or shortages encountered in transportation, fuel, material or labor supplies; casualties; condemnations; acts of God or the public enemy; governmental restrictions; injunctions; unanticipated subsurface conditions; unanticipated extent of a subsurface condition; third-party litigation; other acts or occurrences beyond the reasonable control of a party; provided, however, that any of the foregoing events or occurrences shall not be a Force Majeure event if caused, either directly or indirectly, by the party claiming Force Majeure, and in no event shall a failure or delay due to Developer’s lack of funds constitute an event of Force Majeure.

“ Government Entity ” means the United States; the State of New York; the City; any other political subdivision of any of the foregoing; and any agency, authority, department, court, commission or other legal entity of any of the foregoing.

“ Incomplete School Base Building Work ” has the meaning set forth in Section 6.01(b)(ii) hereof.

“ Interparty Agreement ” means that certain Interparty Agreement dated of even date hereof by and among SCA, Developer and Massachusetts Mutual Life Insurance Company, or any similar type agreement entered into among SCA, Developer, its successor or assign, and any Subleasehold Lender with respect to any Subleasehold Mortgage (as defined in the Sublease) permitted under the terms of the Interparty Agreement dated of even date hereof.

“ Land ” means Block 19, Lots 11 and 13, New York, New York (known as 28-42 Trinity Place, New York, New York), and as more particularly described on Exhibit A .

“ Land Value and Soft Cost Allocation ” has the meaning set forth in Section 3.01(a)(ii).

“ Land Value Payment ” has the meaning set forth in Section 5.01(a)(i) hereof.

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“ Legal Requirement(s) ” means laws, statutes and ordinances, including, without limitation, New York City building codes, approvals, permits and zoning regulations (including without limitation the Zoning Resolution of the City of New York), and ordinances; and the orders, rules, regulations, interpretations, directives and requirements of all federal, state, county, city and borough departments, bureaus, boards, agencies, offices, commissions and other sub divisions thereof, or of any official thereof, or of any other governmental public or quasi public authority, whether now or hereafter in force; and all requirements, obligations and conditions of all instruments of record which may be applicable to the Land and the School Unit or the streets, roads, avenues, sidewalks, curbs or areas or vaults adjacent thereto, and any case law. With respect to the School Fit-Out Work (but not the School Base Building Work), “ Legal Requirements ” shall also include, if and to the extent applicable, the pre-qualification of contractors pursuant to Sections 1734 and 1735 of the New York Public Authorities Law and the pre-qualification of contractors, prevailing wages, and provisions of that certain Memorandum of Understanding Between the New York City School Construction Authority and Building & Construction Trade Council of Greater New York dated as of the October 5, 2004.

“ Legal Proceeding ” means an action, litigation, arbitration, administrative proceeding and other legal or equitable proceeding of any kind.

“ Major Event ” means either of the following occurring before the Closing:

(a) a fire or other casualty causing damage or destruction to the Building or

(b) the giving of official notice by a Government Entity of a condemnation or taking under the power of eminent domain of any part of the Land or the Building,

which, in either case, is so substantial that construction or restoration of the Project is not economically practicable (with or without insurance proceeds or condemnation awards), as reasonably determined by Developer.

“ Mayor ” has the meaning set forth on page 1.

“ NYC Indemnitees ” has the meaning set forth in Section 2.03(c).

“ Permitted Encumbrances ” means the encumbrances and other title matters described in Exhibit B attached hereto or as otherwise expressly identified herein.

“ Permitted Lender ” shall mean an EB-5 lender with the experience, track record and resources necessary to complete the contemplated loan transaction, as determined in the reasonable discretion of Developer. Notwithstanding anything to the contrary in the foregoing, in no event shall an Unqualified Person be considered a Permitted Lender.

“ Person ” means an individual person, a corporation, partnership, trust, joint venture, limited liability company, proprietorship, estate, association, land trust, other trust, Government Entity or other incorporated or unincorporated enterprise, entity or organization of any kind.

“ Pre-Development Costs ” means School Base Building Soft Costs incurred prior to the Catch-Up Requisition.

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“ Project ” means the design, construction and development of the Building by Developer.

“ Property ” means the Land and some or all (as the context requires) of the improvements located thereon.

“ Public School ” – see definition of “School Unit” below.

“ Public School Project Costs ” has the meaning set forth in Section 5.01(a) hereof.

“ Public School Project Costs Not-to-Exceed Amount ” means Ninety Seven Million Six Hundred Twenty Two Thousand Four Hundred Sixty One and No Dollars ($97,622,461.00).

“ Punch List Items ” has the meaning set forth in Section 6.01(a) hereof.

“ Purchase Price ” means One Hundred Four Million Three Hundred Sixty One Thousand Nine Hundred Fifty Nine and No Dollars ($104,361,959.00).

“ Qualified Developer ” means an entity that, at the time of the initial determination of its status as a Qualified Developer, (a) (i) is controlled by one or more individuals who have at least ten (10) years of experience (" Developer Experience ") in the development and/or renovation of real estate projects reasonably comparable to the work to be performed by Developer under this Agreement, (ii) with respect to Lender (as defined in the Interparty Agreement), its affiliates or an insurance company of similar size and experience as Lender, retains an owner’s representative with Developer Experience, or (iii) solely with respect to Lender and its affiliates, has an officer with Developer Experience with respect to major construction projects who is responsible for the Project, (b) is (or has an affiliate which is) a construction manager or general contractor or retains a construction manager or general contractor with at least ten (10) years of experience in the development, construction and/or renovation of real estate projects reasonably comparable to the work to be performed by Developer or its construction manager under this Agreement, and (c) is not an Unqualified Person.

“ Qualified Lender ” means (a) a savings and loan association; (b) a savings bank; (c) a commercial bank or trust company (whether acting individually or in a fiduciary capacity); (d) an insurance company; (e) an educational, state, municipal or similar public employees’ welfare, pension or retirement fund or system or any other corporation or organization subject to supervision and regulation by the insurance or banking departments of any State of the United States or the United States Treasury, or any successor department or departments hereafter exercising the same functions as said departments; (f) an investment banking firm or other financial institution, a private equity or investment fund or other entity regularly engaged in the business of providing debt or mezzanine financing or preferred equity, a real estate investment trust, an institution that qualifies as a REMIC under the Internal Revenue Code of 1986, as amended, a trustee or issuer of collateralized mortgage obligations, a loan conduit or other similar investment entity (whether any of the foregoing shall be acting individually or in any fiduciary capacity); (g) any governmental agency or entity insured by a governmental agency; or (h) any entity substantially similar to any of the foregoing and which is generally commercially treated as an institutional investor or institutional trustee, servicer or fiduciary, any combination of the forgoing entities or any other entity or entities all of the equity owners of which are Qualified Lenders under another clause of this definition; provided any of the foregoing Persons in clauses (a) through (h) inclusive: (i) shall be subject to service of process within the United States of America; (ii) (other than in the case of a governmental agency, entity insured by a governmental agency, public benefit corporation or a pass-through conduit for securities issued by a governmental or quasi-governmental agency or public benefit corporation, or any subsidiary of the forgoing) shall have, at the time of the initial determination of its status as a Qualified Lender, either individual or combined net worth, capital, statutory surplus, shareholder's equity, committed capital net of all liabilities, or assets under management net of all liabilities of at least $500,000,000; and (iii) is willing to enter into an Interparty Agreement (as defined in Section 2.03(b)).

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“ Real Estate Taxes ” means all taxes, assessments and special assessments, general or special, ordinary or extraordinary, foreseen or unforeseen, of any kind or nature whatsoever, levied, assessed or imposed at any time upon or against the Property and/or any part thereof

“ Requisition ” has the meaning set forth in Section 5.02(b)(i) hereof.

“ Requisition Payment Due Date ” means within fifteen (15) days after the Public School Project Costs included in a Requisition have been approved or deemed approved, or within fifteen (15) days after an Arbitrator’s determination approving any disputed Public School Project Costs (unless, pursuant to Article VII hereof, SCA is not permitted to withhold such payment pending such dispute, in which event SCA shall make such payment within fifteen (15) days after the determination by Developer’s construction lender as set forth in Article VII hereof), but in no event prior to the date of the closing of the Construction Loan.

“ Retainage ” has the meaning set forth in Section 5.02(d) hereof.

“ SCA ” has the meaning set forth on page 1.

“ SCA Damages Amount ” has the meaning set forth in Section 9.01(d) hereof.

“ SCA Delay ” has the meaning set forth in Section 5.05(a)(i) hereof.

“ SCA Indemnitees ” means SCA, SCA’s consultants and each of their respective trustees, directors, officers, shareholders, partners, members, managers, agents and employees, and their respective successors and assigns.

“ SCA’s Inspection Consultants ” has the meaning set forth in Section 6.01(b)(ii) hereof.

“ SCA Pre- and Post-Turnover Work ” means the work described on Exhibit L annexed hereto.

“ SCA’s Project Representative ” has the meaning set forth in Section 4.07(a) hereof.

“ School Base Building Architect ” has the meaning set forth in Section 3.02 hereof.

“ School Base Building First Confirmation Notice ” has the meaning set forth in Section 6.01(b)(ii) hereof.

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“ School Base Building Hard Costs ” has the meaning set forth in Section 5.01(a)(iv) hereof.

“ School Base Building Initial Notice ” has the meaning set forth in Section 6.01(b)(ii) hereof.

“ School Base Building Soft Costs ” has the meaning set forth in Section 5.01(a)(iii) hereof.

“ School Base Building Substantial Completion Notice ” has the meaning set forth in Section 6.01(b)(ii) hereof.

“ School Base Building Work ” has the meaning set forth in Section 3.01(a)(v) hereof.

“ School Base Building Work Revisions ” has the meaning set forth in Section 3.03(i)(i).

“ School F&E Work ” has the meaning set forth in Section 3.01(b) hereof.

“ School Fit-Out Architect ” means Dattner Architect.

“ School Fit-Out Work ” has the meaning set forth in Section 3.01(b) hereof.

“ School Program ” has the meaning set forth in Section 3.01(b) hereof.

“ School Unit ” means that certain portion of the Building to consist of approximately 87,539 gross square feet, together with the applicable percentage of Common Interest (as defined in the Condominium Documents). The School Unit is sometimes hereinafter referred to as the “ Public School ”.

“ Subleasehold Lender ” shall have the meaning given to such term in the Sublease.

“ Substantial Completion ” and grammatical variations thereof have the meanings set forth in Section 6.01(a) hereof.

“ Substantial Completion Date ” means the date on which Substantial Completion occurs.

“ Title Defect ” means any encumbrance that is not a Permitted Encumbrance and that is recorded against or otherwise affects the School Unit or the Common Elements serving such Unit.

“ Title Insurer ” means Fidelity National Title Insurance Company and, if applicable, any co-insurer.

“ Transfer Tax Forms ” has the meaning set forth in Section 10.04(b) hereof.

“ Unit ” has the meaning ascribed to it in the Condominium Documents.

“ Unqualified Person ” means a Person that (i) is in default or in breach, beyond any applicable grace period, of its material obligations under any material written agreement with SCA (unless such default or breach has been waived in writing by SCA); or (ii) has been convicted in a criminal proceeding for a felony involving fraud or defalcation.

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Article II

TERM; LPC APPROVAL; CONSTRUCTION LOAN; MASTER LEASE AND SUBLEASE

Section 2.01 Term . The term of this Agreement shall commence on the date hereof and shall terminate on the date Developer and Purchaser have satisfied all of their obligations hereunder unless sooner terminated pursuant to an express provision of this Agreement, subject to the survival of any provisions that expressly or by their general intent survive the termination of this Agreement.

Section 2.02 LPC Approval .

(a) SCA acknowledges and agrees that (1) construction of the School Unit is subject to terms and conditions of the approval (the “ LPC Approval ”) of the Landmarks Preservation Commission (“ LPC ”) as evidenced by the Status Update Letter dated March 8, 2016, and (2) any work outside of the LPC Approval may require further approval from LPC.

Section 2.03 Construction Loan

(a) Developer intends to obtain a construction loan (a “ Construction Loan ”) in order to construct the Building. On or prior to the closing of the Construction Loan, the existing mortgage encumbering the Property will be satisfied or assigned to the construction lender. Unless the construction lender shall be a Qualified Lender, SCA shall have the right to approve the construction lender, such approval not to be unreasonably withheld, conditioned or delayed. SCA shall have a further right to approve the loan documents (to the extent the provisions thereof are, in any material respect, inconsistent with Developer’s obligations under this Agreement), such consent not to be unreasonably withheld, conditioned or delayed. Without limitation, SCA may require that the following matters be included in the loan documents for the benefit of SCA:

(i) Subject to Section 3.03(b) below, the construction lender must not permit any changes in the Project specifications or application of Construction Loan proceeds in a manner inconsistent with Section 3.01(a)(vi) hereof regarding the size of the School Unit or that would otherwise adversely affect the School Unit or its functionality or, except to a de minimis extent, operations of the School Program, without the consent of SCA and the City of New York if such change (A) would be inconsistent in any material respect with the 100% School Base Building CD’s (as applicable), or (B)(1) would adversely affect the functionality or, except to a de minimis extent, operations of the School Program and/or (2) would cause the hard costs of the School Fit-Out Work to be increased (unless Developer agrees to pay such excess).

(ii) Performance under the loan documents by Developer must meet the time requirements set forth in this Agreement.

(iii) The construction lender must, if it succeeds to the interest of Developer with respect to the Sublease (as defined below), cause the project to be completed with a deed delivered for the School Unit, regardless of any remedy obtainable by the construction lender, including foreclosure.

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(iv) If the construction lender completes the Building it must use either a Qualified Developer or another developer approved by SCA and the City of New York, such approval not to be unreasonably withheld, conditioned or delayed.

(v) Any purchaser of Developer’s interest in the Sublease in connection with a foreclosure of the mortgage securing the Construction Loan or any successor-in-interest to such purchaser will complete the Building in accordance with this Agreement, deliver a deed for the School Unit to the SCA as contemplated herein, and use either a Qualified Developer or another developer approved by SCA and the City of New York (such approval not to be unreasonably withheld, conditioned or delayed) within a time period approved by SCA (such approval not to be unreasonably withheld, conditioned or delayed).

(vi) SCA will have remedies upon a failure to complete and deliver the School Unit within an agreed upon amount of time, including the right to cancel the Sublease if the construction lender defaults on its obligations and the construction lender fails to take adequate steps to cure after it succeeds to Developer’s interest in the Sublease.

(vii) SCA shall be entitled to terminate the GMP Contract (as defined below) in the event Developer’s construction lender defaults beyond notice and cure in its obligations to SCA after succeeding to Developer’s interest in the Sublease (a “ Construction Lender Event of Default ”). In the event of a Construction Lender Event of Default, SCA may elect to perform the School Base Building Work in accordance with its statutory procurement requirements but such performance by SCA shall not, in any material respect, impair the development of the remainder of the Project.

(viii) Developer’s construction lender will either subordinate its mortgage on the fee interest in the Property to the Master Lease or provide SCA with a subordination non-disturbance and attornment agreement;

(b) SCA will enter into the Interparty Agreement under which, if Developer defaults (beyond notice and cure) in its construction obligations, if and when the construction lender succeeds to Developer’s interest under the Sublease, the construction lender will be required to perform Developer’s construction obligations under this Agreement within a time period reasonably acceptable to SCA. If a party other than a construction lender succeeds to Developer’s interest under the Sublease, that party will have an obligation to fulfill such construction obligations. The Interparty Agreement will include the rights and obligations of the parties in the event the construction lender or a successor does not or cannot complete the School Base Building Work. Also, the Interparty Agreement will address (1) a default by Developer both before and after the conveyance of the School Unit to SCA, and (2) who has priority with respect to the respective guaranties to be provided to each of SCA and the construction lender.

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(c) For the avoidance of doubt, Developer’s financing of the Project may include EB-5 financing, even if the EB-5 lender is not a Qualified Lender. So long as the EB-5 lender meets all of the criteria of a Permitted Lender, it shall have the rights of a Qualified Lender hereunder. If a default under an EB-5 loan has occurred and is continuing, the EB-5 lender shall not be entitled to enforce any of the rights applicable to a Qualified Lender under Article XV of the Sublease unless and until the EB-5 lender shall have provided SCA with the applicable loan default notice. Further, the EB-5 lender shall not be entitled to recognition under the Sublease or a new sublease as contemplated by Article XV of the Sublease, unless and until the EB-5 lender is or engages a Qualified Developer to perform any outstanding work required to be performed by Developer under this Agreement. In the event Developer uses EB-5 financing, Developer agrees to indemnify, defend and hold harmless the SCA Indemnitees, DOE, New York City, and any agency thereof (individually an “ NYC Indemnitee ” and collectively, the “ NYC Indemnitees ”) in the event of any investigation, prosecution or other litigation related to EB-5 financing for the Project (but excluding any of the foregoing arising out of the negligence, willful misconduct or breach of this Agreement by any NYC Indemnitee) and shall use counsel chosen by Developer and reasonably acceptable to SCA, at the expense of the Developer. The foregoing sentence shall survive Closing or termination of this Agreement. At the option of SCA, Developer will cause the EB-5 Lender to enter into an interparty agreement with SCA as is contemplated with respect to a Qualified Lender.

Section 2.04 Master Lease and Sublease

(a) At the closing of the Construction Loan, Developer and SCA shall enter into the lease annexed hereto as Exhibit C (the “ Master Lease ”) and the sublease annexed hereto as Exhibit D (the “ Sublease ”), and will execute, notarize and cause to be recorded the Memorandum of Master Lease annexed hereto as Exhibit U and the Memorandum of Sublease annexed hereto as Exhibit V (which memoranda of lease will be recorded before Developer’s construction lender’s mortgage, with the Memorandum of Master Lease being recorded before the Memoranda of Sublease). Upon any termination of the Master Lease and Sublease (including at Closing), Developer and SCA shall promptly execute, notarize and record the termination of Memorandum of Master Lease annexed hereto as Exhibit W and the termination of Memorandum of Sublease annexed hereto as Exhibit X (collectively, the “ MOL Terminations ”), which obligation shall survive the termination of this Agreement. The parties will complete, execute and record any transfer tax forms required in connection with all of the foregoing. SCA is exempt from State of New York and City of New York transfer taxes with respect to the Master Lease and the Sublease and SCA shall provide such materials (if any) as the applicable governmental authorities shall require to evidence such exemption.

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Article III

SCHOOL BASE BUILDING WORK AND SCHOOL FIT-OUT WORK; CONSTRUCTION DRAWINGS AND ESTIMATES

Section 3.01 School Base Building Work and School Fit-Out Work .

(a) School Base Building Work .

(i) Intentionally omitted .

(ii) School Cost Allocation Methods and Preliminary Hard Cost Estimate . Annexed hereto as Exhibit G is the Description of Hard Cost Allocation for Public School (the “ Base Building Hard Cost Allocation ”), which Base Building Hard Cost Allocation sets forth the parties’ agreed methods for allocating, from time to time, applicable hard costs of constructing the core and shell of the Building to the portions of the core and shell of the Building required for construction of the School Unit. Also annexed hereto as Exhibit G is the Land Value and Soft Cost Allocation for Public School (the “ Land Value and Soft Cost Allocation ”), which Land Value and Soft Cost Allocation, among other things, sets forth the parties’ agreed methods for allocating, from time to time, land value and the parties’ agreed methods for allocating soft costs of constructing the core and shell of the Building to the portions of the core and shell of the Building required for construction of the School Unit.

(iii) Intentionally omitted.

(iv) School Base Building Design and Budget Development Process . As further provided below in Section 3.03, Developer has caused the Base Building Architect (as defined below) to prepare 100% complete school base building construction drawings. Developer has caused an overall estimate to be prepared (including by obtaining bids for major trades) based on 100% complete construction plans and specifications for the Building.

(v) “ School Base Building Work” Defined . For purposes of the design development, estimating, bidding and value engineering process set forth more fully in Section 3.03, “ School Base Building Work ” means the portions of the core and shell of the Building required for construction by or on behalf of Developer of the School Unit in accordance with this Agreement and as may be modified as expressly provided in this Agreement. Upon completion of the design development, estimating, bidding and value engineering process set forth more fully in Section 3.03, “ School Base Building Work ” means the work shown and described on the final 100% School Base Building CD’s (as defined in Section 3.03) and as may be modified as expressly provided in this Agreement.

(vi) Size of School Unit . Notwithstanding anything to the contrary in this Section 3.01 or elsewhere in this Agreement, the parties acknowledge and agree that no changes from the School Program (hereinafter defined) set forth on Exhibit I to the size of the School Unit may (1) adversely affect the functionality or, except to a de minimis extent, operations of the School Program or (2) result in the School Unit not being of sufficient size to accommodate the School Program, in each case without the prior written consent of SCA.

(b) School Fit-Out Work and School F&E Work . (i) SCA shall cause the School Fit-Out Work to be completed in accordance with (A) the spaces designated as “SCA Spaces” on Exhibit I annexed hereto (the “ School Program ”), (B) School Fit-Out Construction Drawings (as defined below), and (C) all applicable Legal Requirements. Notwithstanding anything to the contrary contained in this Agreement, SCA (and not Developer) shall be solely responsible for obtaining a temporary certificate of occupancy for the School Unit, it being understood in furtherance of the foregoing and for purposes of clarification that the issuance of a temporary certificate of occupancy for the School Unit shall not be required for Substantial Completion to have occurred and shall not be a condition to the obligation of SCA to pay Developer the Construction Supervision Fee (including without limitation any Holdback Amount) or to close on the acquisition of the School Unit. For purposes of this Agreement, “ School Fit-Out Work ” means the work necessary to fit out the School Unit for operation of the Public School in accordance with the provisions of this Agreement. School Fit-Out Work and any other work SCA may require including, without limitation, delivering its furniture, fixtures and equipment (“ F&E ”) to the School Unit and installing its F&E (collectively, the “ School F&E Work ”) shall be the sole responsibility of SCA. All School Fit-Out Work shall be performed, and all F&E shall be purchased, delivered and installed, at the sole expense of SCA. This paragraph shall survive the Closing.

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(ii) Subject to the remainder of this paragraph, Developer and SCA shall reasonably cooperate so that the School Fit-Out Work and any work the Developer may be performing at the Building do not interfere with each other, and in order to minimize restrictions and delays with respect to such work. If SCA shall elect to use union labor in respect of any such work at such time as Developer shall have engaged non-union labor, the parties shall reasonably cooperate with each other to establish a “second gate” for SCA’s union labor. In this regard, prior to the commencement of the School Fit-Out Work, the parties shall confer with each other with respect to relevant labor considerations affecting, and necessary for the concurrent and orderly performance of, the Project and the School Fit-Out Work. Nothing in this Agreement, however, shall require Developer to change its desired labor practices and policies in respect of the Project. Notwithstanding anything to the contrary contained in this Agreement, in no event shall SCA perform or cause to be performed any work in or to the Property until the completion of the SCA Pre- and Post-Turnover Work and Punch List Items (as “completion” shall be determined by Developer in its reasonable discretion). Subsequent to the completion of the SCA Pre- and Post-Turnover Work and the Punch List Items, any work by or on behalf of SCA in or to, or requiring access through, a portion of the Property outside of the School Unit (including, without limitation, in connection with School Limited Common Elements (as defined in the Declaration) and School Unit facilities located in the Cellar (as used in the Declaration) or on the 9th Floor (as used in the Declaration), or the School Unit’s dedicated chiller located on the main roof) in which Developer’s construction work is ongoing shall be permitted, provided, in each instance such work: (i) shall not interfere with Developer’s work; (ii) shall be scheduled in advance and coordinated with Developer and Developer’s contractors; (iii) may be subject to periodic and temporary delays or postponements as may be necessary in connection with Developer’s work; and (iv) may be subject to such additional restrictions with respect to access and manner of work permitted as are necessary (in the case of (iii) and (iv) above, as shall be determined by Developer in Developer’s sole discretion). In addition, during Developer’s construction work, Developer shall have the right to shut off the shared sprinkler system for temporary periods and from time to time; provided, however, Developer shall not shut off the shared sprinkler system while school is in session without the implementation of a fire watch or other protections in compliance with applicable laws. This Section 3.01(b)(ii) shall survive Closing.

(i) In connection with Developer’s performance of the School Base Building Work, SCA shall pay a fee to the Developer (the “ Construction Supervision Fee ”) in the amount and in periodic installments in accordance with the guidelines set forth on Exhibit H annexed hereto.

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(ii) Intentionally omitted.

(iii) Developer, with the reasonable cooperation of SCA, shall perform or cause to be performed such value engineering of the hard costs of School Base Building Work as may be necessary to prevent the Public School Project Costs from exceeding the Public School Project Costs Not-to-Exceed Amount.

(d) Sales and Use Tax Exemption for School Base Building Work . SCA has advised Developer that because SCA qualifies as an exempt organization under Section 1116(a) of the New York Tax Law, SCA may be exempt from New York State and New York City sales and use taxes on tangible personal property and services used to improve real property (the “ Sales and Use Taxes ”). SCA and Developer agree to afford all reasonable assistance and cooperation to each other in their efforts to secure a confirmation, satisfactory to Developer and SCA, that SCA’s exemption from Sales and Use Taxes will be available for the School Base Building Work. SCA and Developer further agree, promptly, diligently and with continuity following execution and delivery of this Agreement by the parties, to use all reasonable efforts to secure such confirmation as soon as reasonably practicable. SCA acknowledges and agrees that in the event SCA is not exempt from Sales and Use Taxes, SCA will be responsible for paying the same to the extent allocable to the School Base Building Work.

Section 3.02 School Base Building Design Consultants . The architect for the School Base Building Work shall be FXFowle Architects LLP or such other architect as shall have been selected by Developer in Developer’s sole discretion (“ School Base Building Architect ”). The engineer, code consultant and other design consultants for the School Base Building Work shall be the engineer, code consultant and other design consultants for the School Base Building Work as shall have been selected by Developer in Developer’s sole discretion (together with the School Base Building Architect, collectively, the “ School Base Building Design Consultants ”).

Section 3.03 School Base Building Construction Drawings .

(a) School Fit-Out Construction Drawings . The current version of the School Fit-Out construction drawings (the “ School Fit-Out Construction Drawings ”) are attached hereto as Exhibit M, it being understood that SCA shall be responsible, at SCA’s sole cost and expense, for promptly providing to Developer and the School Base Building Architect any update to the School Fit-Out Construction Drawings.

(b) Code Compliance . Notwithstanding anything to the contrary contained in this Agreement, (I) SCA shall be liable (including, without limitation, for the cost of Change Orders) for (i) any non-compliance (“ SCA Design Non-Compliance ”) of the 100% School Base Building CD’s with applicable codes or other Legal Requirements for the operation of a school, to the extent that such non-compliance arises from any drawings, design or specifications provided to Developer or School Base Building Architect by SCA or its architect or other consultants (“ SCA Design ”), and (ii) any changes to applicable codes or other Legal Requirements solely to the extent such changes pertain to requirements for the operation of a school, which changes are first imposed by the applicable governmental authority after April 30, 2017 (“ Post-April Non-Compliance ”), and (II) solely vis-à-vis SCA, Developer shall be liable (including, without limitation, for the cost of Change Orders) for (a) errors on the 100% School Base Building CD’s that result from School Base Building Architect incorrectly incorporating the SCA Design into the 100% School Base Building CD’s, and (b) any non-compliance of the 100% School Base Building CD’s with applicable codes or other Legal Requirements for the operation of a school in effect as of April 30, 2017, except to the extent that such non-compliance arises from any SCA Design. The foregoing shall in no event limit Developer’s rights and remedies against the School Base Building Architect or any engineer or contractor in connection with subclause (II) above.

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(d) Intentionally omitted .

(e) Intentionally omitted .

(f) Intentionally omitted .

(g) 100% School Base Building CD’s .

(i) Subject to Section 3.03(b) above, the School Base Building Architect has developed the School Base Building Work construction documents (inclusive of an addendum) to be (A) complete and coordinated for architectural and engineering purposes, (B) in conformance with all New York City codes and other applicable Legal Requirements, and (C) a complete set of biddable construction plans and specifications (inclusive of such addendum) (as they may be modified as expressly provided in this Agreement, hereinafter, the “ 100% School Base Building CD’s ”). The 100% School Base Building CD’s are attached hereto as Exhibit Y.

(ii) Developer has furnished SCA with copies of the 100% School Base Building CD’s, together with any bulletins, sketches, letters or narrative summaries issued by the School Base Building Architect in connection therewith.

(h) Codes and Other Legal Requirements . The 100% School Base Building CD’s shall be filed by Developer with the Buildings Department and all other governmental agencies having jurisdiction (or Developer may incorporate the 100% School Base Building CD’s into a CD set for the entire Building for such filing purposes if acceptable to the Buildings Department). Any changes to the 100% School Base Building CD’s required by any governmental agency shall be disclosed by Developer to SCA and shall promptly be incorporated into the 100% School Base Building CD’s by the School Base Building Architect.

(i) School Base Building Work Revisions .

(i) Notwithstanding anything to the contrary in this Section 3.03, Developer may, from time to time, make revisions to the 100% School Base Building CD’s (any such revisions are hereinafter referred to as “ School Base Building Work Revisions ”). Unless such School Base Building Work Revisions are necessary in order to conform the 100% School Base Building CD’s to codes or other Legal Requirements, they shall be subject to the approval of SCA, provided, that SCA’s approval shall not be withheld unless such School Base Building Work Revisions would be inconsistent with Section 3.01(a)(vi) hereof regarding the size of the School Unit or would otherwise adversely affect the functionality or, except to a de minimis extent, operations of the School Program and/or cause the hard costs of the School Fit-Out Work to be increased (unless Developer agrees to pay such excess).

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(ii) SCA shall approve or disapprove any School Base Building Work Revisions within five (5) Business Days after receipt thereof. If SCA disapproves such School Base Building Work Revisions, such disapproval shall state specifically in writing (which may include mark-ups of the School Base Building Work Revisions) the grounds for disapproval and the modifications requested. If SCA shall not have approved or disapproved the School Base Building Work Revisions within five (5) Business Days after receipt thereof, the School Base Building Work Revisions shall be deemed approved.

(iii) If SCA shall have timely disapproved the School Base Building Work Revisions, then within three (3) Business Days after Developer’s written request, Developer, SCA and the School Base Building Architect shall meet at Developer’s office and use diligent efforts, with continuity, to resolve SCA’s objections. If SCA’s objections shall not have been resolved within three (3) Business Days after Developer’s request for such a meeting, then either party may submit the validity of SCA’s objections to expedited arbitration pursuant to Article VII. SCA may withhold payment of any amounts in respect of the costs of implementing School Base Building Work Revisions that are disputed as expressly permitted pursuant to subsection (i) above until SCA’s objections have been resolved in accordance with this Agreement, but all amounts that are not so disputed shall be timely paid by SCA.

(iv) Copies of any modifications to the School Base Building Work Revisions prepared in response to SCA’s objections or prepared in response to the decision of an Arbitrator resolving such objections, shall be furnished to SCA promptly after completion thereof.

(j) Partial School Base Building CD’s . In order to expedite completion of the School Base Building Work, if in the reasonable judgment of the School Base Building Architect the same are complete and integrated enough for SCA to review and comment on, Developer may request SCA to review mechanical, electrical and plumbing plans and specifications, pre-purchase specifications and long lead items. If Developer so requests, it shall submit to SCA specific working drawings for the aspect of the School Base Building Work in question together with, if applicable, a detailed description of the equipment or materials to be purchased (model numbers, names of manufacturers, etc.). Any such partial School Base Building CD’s shall be subject to the approval of SCA, provided, that SCA’s approval shall not be withheld (i) unless such partial School Base Building CD’s would be inconsistent with Section 3.01(a)(vi) hereof regarding the size of the School Unit or would otherwise adversely affect the functionality or, except to a de minimis extent, operations of the School Program or (ii) unless such partial School Base building CD’s would cause the hard costs of the School Fit-Out Work to be increased (unless Developer agrees to pay such excess). SCA shall approve or disapprove Developer’s request within a reasonable period of time, not to exceed five (5) Business Days after SCA’s receipt thereof, such approval not to be unreasonably withheld. If SCA disapproves any such request, SCA shall thereafter approve or disapprove any revised request within three (3) Business Days after SCA’s receipt of such revised request, such approval not to be unreasonably withheld. Any disapproval shall be in writing (which may include mark-ups of the partial plans and specifications submitted for approval) and shall specify the grounds for disapproval and the modifications requested. If SCA fails so to approve or disapprove such partial plans and specifications within such five (5) Business Day or three (3) Business Day period, as the case may be, such partial plans and specifications shall be deemed approved. If any SCA objections to a Developer’s revised request are not resolved within five (5) Business Days after Developer’s receipt thereof, either party may submit SCA’s then remaining objections to expedited arbitration pursuant to Article VII.

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(k) School Exterior Signage . SCA acknowledges Developer’s desire that exterior signage for the Public School be harmonious with Developer’s overall signage criteria for the Building. Accordingly, SCA agrees to afford reasonable cooperation to the School Base Building Architect so that the School Base Building Architect may develop an exterior signage plan for the Public School that meets SCA’s functional requirements and is also integrated with the overall exterior signage plan for the Building. Promptly upon Developer’s request, SCA shall (i) furnish Developer with any required SCA specifications for exterior signage for the Public School, (ii) review and give all reasonable consideration to proposed exterior signage plans for the Public School (and revisions thereto) prepared by the School Base Building Architect, and (iii) meet with Developer and the School Base Building Architect to discuss SCA comments on exterior signage plans for the Public School (or revisions thereto) prepared by the School Base Building Architect. All costs and expenses in connection with the School Exterior Signage shall be borne by SCA (and shall not be considered Public School Project Costs), and all work in connection with the same shall not be considered School Base Building Work. The Condominium Documents set forth the currently agreed upon signage requirements. This paragraph shall survive Closing.

Article IV

AWARD OF CONTRACTS; COMMENCEMENT AND PERFORMANCE OF SCHOOL BASE BUILDING WORK AND SCHOOL FIT-OUT WORK

Section 4.01 Construction Manager for School Base Building Work; Award of Contracts for School Base Building Work .

(a) The construction manager for the School Base Building Work shall be (1) Construction Manager, (2) an Affiliate of Developer engaged on arms-length terms, or (3) such other third party construction manager as Developer shall select in its sole discretion.

(b) Award of Contracts for School Base Building Work . Developer shall promptly commence the award of trade contracts for performance of the School Base Building Work, which trade contracts shall be based substantially on the 100% School Base Building CD’s. In the case of major trades, such contracts shall be entered into with the lowest responsive and responsible bidders then available (as identified by Developer). Developer’s contract with the Construction Manager for the School Base Building Work shall be a guaranteed maximum price contract (the “ GMP Contract ”). For the avoidance of doubt, Developer shall have the right to enter into trade contracts directly, or have the Construction Manager do so.

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Section 4.02 General Contractor for School Fit-Out Work .

(a) General Contractor for School Fit-Out Work .

(i) The general contractor for the School Fit-Out Work shall be selected by SCA.

Section 4.03 Commencement and Performance of School Base Building Work; SCA Termination Option for Failure to Commence Construction; Developer Termination Option for Failure to Obtain Construction Loan .

(a) As soon as reasonably practicable after (i) execution and delivery of this Agreement by the parties, (ii) funding of the first draw under Developer’s construction loan, and (iii) Developer or its Construction Manager having entered into trade contracts for the School Base Building Work, Developer shall commence performance of the School Base Building Work and shall thereafter prosecute the same diligently and with continuity to completion, subject to Force Majeure and to SCA Delays (as hereinafter defined). Notwithstanding anything to the contrary in the preceding sentence, SCA acknowledges and agrees that Developer may elect, in Developer’s sole discretion, to commence the work of early trades such as excavation and foundation prior to the closing of Developer’s construction loan. SCA shall cooperate with Developer as reasonably requested in connection with the performance of the School Base Building Work including, without limitation, in order to obtain a building permit.

(b) If Developer has not Commenced Construction of the School Base Building Work within one hundred eighty (180) days after the Effective Date (the “ Construction Commencement Deadline ”), which Construction Commencement Deadline shall be subject to extension for Force Majeure and SCA Delays, then commencing on the day after the expiration of the Construction Commencement Deadline and continuing thereafter (but prior to any subsequent Commencement of Construction of the School Base Building Work), SCA shall have the right, as SCA’s sole and exclusive remedy, to terminate this Agreement on ninety (90) days prior notice. If Developer shall not have Commenced Construction of the School Base Building Work prior to the expiration of such ninety (90) day period, then (i) this Agreement shall terminate at the close of business on the ninetieth (90th) day, (ii) within thirty (30) days after the termination date, Developer shall pay to SCA, without interest, the aggregate amount of all Requisitions (including the Catch-Up Requisition) previously paid to Developer by SCA, and (iii) neither party shall have any further obligation to the other. “ Commence[ment of] Construction of the School Base Building Work ” means commencement of excavation using heavy equipment.

(c) Developer shall have the right to terminate this Agreement (i) if at any time prior to the Construction Commencement Deadline, Developer notifies SCA that Developer has been unable to obtain a construction loan commitment or fully-executed construction loan term sheet for the Project on terms and conditions acceptable to Developer in Developer’s sole discretion, and/or (ii) in the event that Developer has obtained a construction loan commitment or fully-executed construction loan term sheet for the Project, if at any time prior to the date that is twenty-four (24) months after the Effective Date (which date is subject to extension for Force Majeure and SCA Delays) Developer notifies SCA that Developer has determined, in Developer’s sole discretion, that it is not feasible for Developer to close on a construction loan for the Project. Any such notice shall specify a termination date that is not less than thirty (30) days nor more than ninety (90) days after the date of the notice. Upon the termination date (as specified in the notice), (x) Developer shall pay to SCA, without interest, the aggregate amount of all Requisitions and payments (including the Catch-Up Requisition) previously paid to Developer by SCA, (y) this Agreement shall terminate, and (z) neither party shall have any further obligation to the other.

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Section 4.04 Intentionally omitted .

Section 4.05 Construction Schedule . Annexed hereto as Exhibit N is a schedule for performance of the School Base Building Work (as updated from time to time, the “ Construction Schedule ”). Developer and SCA acknowledge and agree that except as specifically set forth in Section 5.05, the Construction Schedule is for informational purposes only, is not binding on either party and shall not be deemed to modify the rights of either party under this Agreement. Developer shall cause the Construction Schedule to be updated from time to time and shall furnish SCA with all updates of the Construction Schedule promptly after the same are received by Developer.

Section 4.06 Methods and Materials .

(a) Methods and Materials . Developer shall cause the performance of the School Base Building Work in such manner as Developer shall determine in its sole discretion, consistent, however, with the 100% School Base Building CD’s and the provisions of this Agreement.

Section 4.07 SCA’s Project Representative; Coordination Meetings .

(a) SCA’s Project Representative .

(i) SCA shall designate a representative of SCA designated by notice pursuant to Article XIV of this Agreement, as “ SCA’s Project Representative .” SCA’s Project Representative shall administer this Agreement on behalf of SCA, shall attend so-called “pencil requisitions” on behalf of SCA, and shall have the authority (or shall diligently and promptly obtain the required authorization, as needed) to bind SCA with respect to approval of Requisitions, authorization of Change Orders, Substantial Completion, completion of Punch List Items and all other matters requiring SCA consent, approval or authorization as provided in this Agreement. SCA hereby designates Richard Mazur as its initial SCA’s Project Representative.

(ii) Without limiting any rights or obligations of SCA or Developer contained in Section 4.07(b), Section 5.02(b), Section 6.02 or any other provisions of this Agreement, SCA’s Project Representative shall have the right, from time to time without notice, to observe Developer’s performance of the School Base Building Work for the purpose of ensuring that the School Base Building Work is undertaken in accordance with this Agreement, but the parties will reasonably coordinate in order to avoid interference with Developer’s work including, without limitation, the School Base Building Work.

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(b) Coordination Meetings . Commencing the date hereof and continuing until commencement of performance of the School Base Building Work, SCA shall cause SCA’s Project Representative to meet with Developer and Developer’s Construction Manager(s) during business hours once per week in order to review the progress of design, estimating, bidding and contracting of the School Base Building Work. Commencing with commencement of performance of the School Base Building Work and continuing until the School Base Building Work has been Substantially Completed, SCA shall cause SCA’s Project Representative to meet with Developer and Developer’s Construction Manager(s) during business hours once each week in order to review the progress of performance of the School Base Building Work. Any such meetings may be held at the Building if so requested by Developer. Developer shall cause minutes to be prepared for all such meetings and shall provide copies of the same to SCA promptly after receipt thereof by Developer. If SCA’s Project Representative is unable to attend or fails to attend a coordination meeting, Developer shall notify SCA in writing of such absence (including by referencing the same in the minutes) and shall notify SCA in writing (including by referencing the same in the minutes) of any issues that Developer was unable to resolve as a consequence of such absence.

(c) Project Meetings . SCA may attend Developer’s project meetings with its Construction Manager and contractors if and to the extent such meetings address School Base Building Work (or work on the core and shell of the Building other than the School Base Building Work) that would affect the School Fit-Out Work. Developer shall endeavor to give SCA reasonable prior notice of such project meetings, which notice may be oral, by telephone and/or by e-mail.

Article V

PUBLIC SCHOOL PROJECT COSTS; REQUISITIONS AND PAYMENT OF REQUISITIONS; SAVINGS; CHANGE ORDERS AND DELAYS

Section 5.01 Public School Project Costs; Responsibility for Public School Project Costs; SCA Obligation to Obtain and Deliver CP to Developer .

(a) Components of Public School Project Costs . “ Public School Project Costs ” means all Eligible Costs and expenses incurred by Developer in connection with development of the Public School, and, except as expressly provided in Section 5.04, is inclusive of all costs and expenses incurred by Developer in connection with any Change Orders. The Public School Project Costs consist of the following:

(i) SCA’s payment in respect of the Land value (determined in accordance with Exhibit G ), as referenced on the Breakdown of Public School Project Costs by Category annexed hereto as Exhibit O (the “ Land Value Payment ”), which SCA shall pay to the Developer in periodic installments in accordance with the guidelines set forth on Exhibit H annexed hereto;

(ii) Interest on SCA’s allocable share of Pre-Development Costs, as referenced on Exhibit G ;

(iii) All soft costs incurred for the School Base Building Work, as the categories of such costs are more particularly described in Exhibit O and as such costs have been allocated to the School Base Building Work in accordance with Exhibit G (the “ School Base Building Soft Costs ”); and

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(iv) All hard costs of the School Base Building Work, and all accessory costs, as the categories of such costs are more particularly described in Exhibit O and as such costs have been allocated to the School Base Building Work in accordance with Exhibit G (the “ School Base Building Hard Costs ”).

(b) Responsibility for Public School Project Costs .

(i) SCA shall be responsible for all Public School Project Costs up to the Public School Project Costs Not-to-Exceed Amount and Developer shall be responsible for all Public School Project Costs in excess of the Public School Project Costs Not-to-Exceed Amount.

(ii) Notwithstanding anything to the contrary in Section 5.01(b)(i), SCA shall be responsible for the costs of all Change Orders in respect of Public School Project Costs (a) initiated by SCA, (b) consented to by SCA, and/or (c) necessitated by the acts or omissions of SCA or its design professionals.

(iii) Developer shall be responsible for the costs of certain Change Orders as specifically provided in Section 5.04.

(i) Commencing on the Effective Date, and continuing until the date when SCA has delivered to Developer copies of one or more CPs for at least, in the aggregate, the Purchase Price (not including the Land Value Payment), and an omnibus CP (the “ Omnibus CP ”) that covers (but may not specifically reference) an allocation for the Land Value Payment together, in the case of the Omnibus CP, with a letter from SCA in favor of Developer that funds in the amount of the Land Value Payment are available to SCA, pursuant to the Omnibus CP, for payment of the Land Value Payment in accordance with the terms of this Agreement (all of the foregoing, collectively, the “ Required CPs ”) to Developer or until the date when this Agreement shall have been terminated pursuant to Section 5.01(c)(ii), SCA shall use diligent good faith efforts, with continuity, to obtain the Required CPs. SCA shall deliver such CPs to Developer promptly upon SCA’s receipt of same from the Director of Management and Budget.

(ii) If SCA has not delivered copies of the Required CPs to Developer on or before the date that is ninety (90) days after the Effective Date, then commencing on the day after the expiration of such ninety (90) day period and continuing thereafter (but prior to any subsequent delivery by SCA to the Developer of copies of the Required CPs), Developer shall have the right to terminate this Agreement upon fifteen (15) days’ prior notice. If SCA shall not have delivered copies of the Required CPs to Developer prior to the expiration of such fifteen (15) day period, then this Agreement shall terminate upon the close of business on such fifteenth (15th) day.

Section 5.02 Requisitions and Payment of Public School Project Costs .

(a) Initial “Catch-Up” Requisition and Payment .

(i) SCA acknowledges that prior to the execution and delivery of this Agreement, Developer submitted a “catch-up” requisition to SCA for a portion of the Land Value Payment, certain Pre-Development Costs, interest on such Pre-Development Costs and certain other Public School Project Costs incurred through October 31, 2017, in the aggregate amount of Thirteen Million Six Hundred Twenty Six Thousand Five Hundred and No Dollars ($13,626,500) (the “ Catch-Up Requisition ”). SCA further acknowledges that the Catch-Up Requisition has been approved by SCA’s Project Representative.

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(ii) SCA shall pay Developer the amount of the Catch-Up Requisition within fifteen (15) Business Days after the date hereof (the “ Catch-Up Requisition Payment Due Date ”). SCA acknowledges that the Catch-Up Requisition will not be subject to Retainage.

(b) Costs Incurred Prior to First Draw Under Developer’s Construction Loan .

(i) Requisition and Back-Up . Commencing on the Effective Date and continuing until the funding of the first draw under Developer’s construction loan, on or about the seventh (7th) day of each calendar month (unless SCA’s Project Representative agrees to accept the same more frequently), Developer may submit to SCA’s Project Representative a requisition substantially in the form annexed hereto as Exhibit P (hereinafter, a “ Requisition ”) for Public School Project Costs consisting of Pre-Development Costs, interest on Pre-Development Costs, and/or School Base Building Soft Costs. Each such Requisition may include such Public School Project Costs (A) incurred during the previous calendar month, or (B) incurred earlier, but not previously included in a Requisition, or (C) previously included in a Requisition, but not previously approved by SCA’s Project Representative, and shall be accompanied by the following:

(A)

A certification by an officer of Developer setting forth (1) the amount of the requested payment, (2) an itemization of the Public School Project Costs for which payment is being sought, (3) if and to the extent that the prior Requisition(s) covering such costs have been paid by SCA, a statement that all Public School Project Costs for work completed prior to and during the period covered by the immediately prior Requisition have been paid or otherwise satisfied by Developer, and (4) a list of contractors or vendors whose work is covered by the Requisition, indicating the amount requested on behalf of each such contractor or vendor and accompanied by evidence reasonably satisfactory to SCA’s Project Representative that the Public School Project Costs being requisitioned have not previously been reimbursed under this Agreement; and

(B)

True copies of (1) all contracts on account of which payment is being sought (or for contracts that have previously been delivered, a statement to that effect and copies of any amendments thereof), (2) supporting bills, invoices or other customary documentation reflecting the requisitioned Public School Project Costs; (3) a certificate of title continuation for the Property from the Title Insurer indicating no change in the state of title or liens not contemplated by the development of the Public School pursuant to this Agreement or previously approved by SCA’s Project Representative, other than Permitted Encumbrances, and (4) to the extent that the same would have been required under Developer’s construction loan documents if Developer’s construction loan for the Project had closed, lien waivers from contractors payment to which is covered by the Requisition in question.

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In addition, the representations of Developer set forth in Section 12.01 shall be true, correct and complete in all material respects as of the date of submission of the Requisition and as of the date of SCA disbursement pursuant thereto.

(ii) Approval of Requisition . Within five (5) Business Days after receipt of each Requisition, SCA’s Project Representative shall either approve or disapprove the Public School Project Costs included in such Requisition, provided, that all Public School Project Costs included in such Requisition shall be deemed approved unless, and except to the extent that, (A) the allocation of any amounts in respect of the Pre-Development Costs included in such Requisition is inconsistent with the allocation methodology set forth in Exhibit G , (B) the allocation of any School Base Building Soft Costs included in such Requisition is inconsistent with Exhibit G , or (C) the allocation of the Land Value Payment included in such Requisition is inconsistent with Exhibit G . If SCA’s Project Representative disapproves any Public School Project Costs included in such Requisition, the grounds for disapproval shall be stated specifically in writing. If SCA’s Project Representative fails to approve or disapprove the Public School Project Costs included in such Requisition within five (5) Business Days after receipt of such Requisition, all Public School Project Costs included in such Requisition shall be deemed approved.

(iii) Disapproved Public School Project Costs . If SCA’s Project Representative has timely disapproved any Public School Project Costs included in a Requisition in accordance with Section 5.02(b)(ii), Developer, at Developer’s election, may either (A) resubmit the disapproved Public School Project Costs in one or more future Requisitions for approval by SCA’s Project Representative, or (B) submit the disapproved Public School Project Costs to expedited arbitration pursuant to Article VII. In either case, and notwithstanding any such disapproval, SCA shall timely pay all Public School Project Costs covered by the applicable Requisition in accordance with and subject to Section 5.02(b)(iv).

(iv) Payment of Requisition . On or before the Requisition Payment Due Date, SCA shall pay to Developer all amounts in respect of the Pre-Development Costs, interest on Pre-Development costs and School Base Building Soft Costs included in such Requisition or such amount as determined by the Arbitrator (or Developer’s construction lender, as applicable).

(i) Requisition of Hard Costs . Commencing with the first draw under Developer’s construction loan and as the School Base Building Work progresses (and subsequent to Closing, as set forth in Section 5.02(g) below), Developer shall be entitled to requisition School Base Building Hard Costs (including without limitation any trade costs for the work of early trades such as excavation and foundation that have previously been incurred by Developer, at Developer’s election, pursuant to Section 4.03), in accordance with the following provisions of this Section 5.02(c). In addition, the initial such Requisition following the first draw under Developer’s construction loan shall include a “true-up” adjustment, pursuant to Section 5.02(e), for Public School Project Costs previously allocated to SCA pursuant to the Description of Hard Cost Allocation and the Land Value and Soft Cost Allocation attached as Exhibit G .

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(ii) “Pencil” Requisition Meeting and Walk-Through . Commencing with the calendar month prior to the calendar month in which Developer anticipates that funding of the first draw under Developer’s construction loan will occur and continuing until completion of all Punch List Items (as hereinafter defined) (and subsequent to Closing, as applicable, as set forth in Section 5.02(g) below), SCA’s Project Representative shall attend a monthly “pencil” requisition meeting and walk-through of the School Unit, which “pencil” requisition meeting and walk-through shall be conducted by Developer’s construction lender’s inspecting engineer, Developer’s Construction Manager(s) and Developer. Developer presently anticipates that such “pencil” requisition meeting and walk-through will occur on or about the 25 ^th day of each month. At the conclusion of each “pencil” requisition meeting and walk-through: All School Base Building Hard Costs and School Base Building Soft Costs covered by the “pencil” requisition shall be deemed approved, unless and except to the extent any such costs have been specifically disapproved by Developer’s construction lender’s inspecting engineer.

(iii) Requisition and Back-Up . Commencing with the calendar month in which Developer anticipates that funding of the first draw under Developer’s construction loan will occur and continuing until completion of all Punch List Items (and subsequent to Closing, as set forth in Section 5.02(g) below), on or about the seventh (7th) day of each calendar month (unless SCA’s Project Representative agrees to accept the same more frequently), Developer may submit to SCA’s Project Representative a Requisition for any and all Public School Project Costs as defined in Section 5.01(a). Each such Requisition may include Public School Project Costs (A) incurred during the previous calendar month, or (B) incurred earlier, but not previously included in a Requisition, or (C) previously included in a Requisition, but not previously approved by Developer’s construction lender (or its inspecting engineer) or SCA’s Project Representative, and shall be accompanied by the following:

(A)

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(B)

True copies of (1) all contracts on account of which payment is being sought (or for contracts that have previously been delivered, a statement to that effect and copies of any amendments thereof), (2) as applicable, requisitions or applications for payment from trade contractors to Developer’s Construction Manager(s), and/or requisitions or applications for payment from Developer’s Construction Manager(s) to Developer, and/or other supporting bills, invoices or other documentation reflecting the requisitioned Public School Project Costs, (3) as applicable, a true copy of an “Application and Certificate for Payment” substantially in the form of AIA Forms G702 and G703, as such forms may be amended from time to time, completed and executed by Developer’s Construction Manager(s) and the School Base Building Architect with respect to all School Base Building Hard Costs covered by the Requisition, (4) as applicable, copies of any change orders, (5) a certificate of title continuation for the Property from the Title Insurer indicating no change in the state of title or liens not contemplated by the development of the Public School pursuant to this Agreement or previously approved by SCA’s Project Representative (except, with respect to Requisitions made subsequent to Closing, for changes in the state of title not caused by Developer or its contractors), and (6) to the extent required under Developer’s construction loan documents for the Project, lien waivers from contractors payment to which is being sought pursuant to the Requisition in question.

(iv) Approval of Requisition . Within five (5) Business Days after receipt of each Requisition, SCA’s Project Representative shall either approve or disapprove the Public School Project Costs included in such Requisition, provided, that all Public School Project Costs included in such Requisition shall be deemed approved unless, and except to the extent that:

(A)

The allocation of any amounts in respect of the Pre-Development Costs included in such Requisition is inconsistent with the allocation methodology set forth in Exhibit G ; or

(B)

Any School Base Building Soft Costs or School Base Building Hard Costs have previously been disapproved by Developer’s construction lender’s inspecting engineer at the “pencil” requisition meeting and walk-through for such Requisition.

If SCA’s Project Representative disapproves any Public School Project Costs included in such Requisition (other than Public School Project Costs previously disapproved at the “pencil” requisition and walk-through), the grounds for disapproval shall be stated specifically in writing. If SCA’s Project Representative fails to approve or disapprove the Public School Project Costs included in such Requisition (other than Public School Project Costs previously disapproved at the “pencil” requisition and walk-through) within five (5) Business Days after receipt of such Requisition, all such Public School Project Costs included in such Requisition shall be deemed approved.

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(v) Disapproved Public School Project Costs . If Developer’s construction lender’s inspecting engineer has disapproved any Public School Project Costs included in a “pencil” requisition in accordance with Section 5.02(c)(ii), then Developer may resubmit such disapproved Public School Project Costs in one or more future “pencil” requisitions or one or more Requisitions for approval by Developer’s construction lender’s inspecting engineer. If SCA’s Project Representative has timely disapproved any Public School Project Costs included in a “pencil” requisition or a Requisition in accordance with Section 5.02(c)(ii) or (iv), then Developer, at Developer’s election, may either (A) resubmit such disapproved Public School Project Costs in one or more future “pencil” requisitions and/or Requisitions for approval by SCA’s Project Representative, or (B) submit the disputed Public School Project Costs to expedited arbitration pursuant to Article VII. In any such case, and notwithstanding any such disapproval(s), SCA shall timely pay all Public School Project Costs covered by such Requisition (other than disputed amounts permitted to be withheld pursuant to Article VII hereof) in accordance with and subject to Section 5.02(b)(iv), Section 5.02(c)(vi) and Article VII hereof, as applicable.

(vi) Payment of Requisition . On or before the Requisition Payment Due Date, subject to Section 5.02(b)(iv), Section 5.02(c)(v) and Article VII hereof, SCA shall pay Developer: (A) (1) all amounts in respect of Pre-Development Costs, interest on Pre-Development Costs, School Base Building Soft Costs, Land Value Payment and Construction Supervision Fee included in such Requisition, plus (2) the total of all School Base Building Hard Costs attributable to the School Base Building Work completed to the date of the Requisition, based on percentage completion, minus (B) (1) all School Base Building Hard Costs previously paid to Developer, plus (2) the applicable Retainage as defined in Section 5.02(d).

(d) Retainage . “ Retainage ” means an amount equal to the then applicable percentage of School Base Building Hard Costs, exclusive of general conditions, construction management fees, the Construction Supervision Fee, insurance and bonds, Developer’s testing and survey costs and permits, in accordance with the following:

(i) School Base Building Hard Costs .

(A)

Initial Retainage . Commencing with the Requisition following the first draw under Developer’s construction loan, Retainage for the School Base Building Hard Costs shall be the lesser of (1) ten percent (10%), or (2) the amount of retainage required by Developer’s construction lender under Developer’s construction loan.

(B)

Reduction of Retainage . If Developer’s construction loan permits retainage thereunder to be reduced upon Developer’s having achieved a specified percentage of completion of the School Base Building Work (or upon Developer’s satisfaction of other requirements for reduction of retainage), then upon Developer’s having achieved such specified percentage of completion of the School Base Building Work (or upon Developer’s satisfaction of such other requirements), Retainage shall be deemed reduced to the same extent for purposes of this Section 5.02.

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(C)

Early Release of Certain Retainage . If Developer’s construction loan permits release of retainage thereunder attributable to contractors for early trades such as excavation and foundation, or permits retainage to be released for any other contractors whose portion of the School Base Building Work has been completed, or if Developer’s construction lender otherwise approves a request by Developer for release of such retainage, then upon Developer’s satisfaction of Developer’s construction lender’s conditions for release of such Retainage, SCA shall pay Retainage for such early trades, or Retainage for such other contractors whose portion of the School Base Building Work has been completed, to the same extent.

(D)

Release of the Balance of Retainage . Release of the balance of any Retainage remaining upon Substantial Completion of the School Base Building Work, or upon completion of Punch List Items for the School Base Building Work, shall be governed by the terms and conditions of Developer’s construction loan. This subparagraph (D) shall survive the Closing.

(ii) Intentionally Omitted .

(e) “ True-Up” Adjustment for Allocations . As part of the initial Requisition following the first draw under Developer’s construction loan pursuant to Section 5.02(c), there shall be a “true-up” adjustment of Public School Project Costs that have been previously paid by SCA, commencing with the Catch-Up Requisition and ending with the Requisition preceding the first draw under Developer’s construction loan, on the basis of allocations pursuant to the Description of Hard Cost Allocation and the Land Value and Soft Cost Allocation on Exhibit G . The “true-up” adjustment shall reflect any changes to the underlying bases for such allocations ( e.g. , percentage of gross square footage, land allocation percentage) occurring between the Catch-Up Requisition and the Requisition preceding the first draw under Developer’s construction loan. If the “true-up” adjustment results in an amount due Developer, such amount, with interest at Developer’s cost of borrowing, shall be added to the initial Requisition following the first draw under Developer’s construction loan. If the “true-up” adjustment results in an amount due SCA, such amount shall be deducted from the initial Requisition following the first draw under Developer’s construction loan.

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(f) Holdback Amount .

(i) Developer acknowledges and agrees that notwithstanding anything to the contrary in this Agreement, SCA shall not be obligated to pay $1,500,000 of the Construction Supervision Fee until (A) the School Base Building Work has been Substantially Completed in accordance with the provisions of Section 6.01, and (B) SCA has reasonably determined that no conditions then exist, arising solely from construction (other than by SCA or its contractors) then continuing in any Unit other than the School Unit or in portions of the core and shell of the Building other than the School Base Building Work, that would prevent children from safely and appropriately attending at the Public School. The $1,500,000 of the Construction Supervision Fee to be held back pursuant to this Section 5.02(f) is hereinafter referred to as the “ Holdback Amount ”.

(ii) Together with the initial monthly Requisition following the first draw under Developer’s construction loan pursuant to Section 5.02(c), Developer shall submit a projected draw schedule for the then balance of the Construction Supervision Fee to be requisitioned by Developer, which projected draw schedule for the remaining Construction Supervision Fee shall identify a portion of the Construction Supervision Fee still to be requisitioned equal, in the aggregate, to the Holdback Amount. Notwithstanding anything to the contrary in Section 5.02(c)(vi) concerning payment of Requisitions, SCA shall be deemed authorized to hold back the portion of the Construction Supervision Fee so identified by Developer until SCA has held back an amount, in the aggregate, equal to the Holdback Amount, and interest shall not be payable on the amounts so held back, until the Holdback Amount is due and payable pursuant to the provisions of this Section 5.02(f).

(iii) Commencing on the date when the School Base Building Work has been Substantially Completed in accordance with the provisions of Section 6.01 and continuing thereafter until SCA has paid the Holdback Amount, Developer may submit a Requisition for (or including) the Holdback Amount. Payment of the Holdback Amount shall be deemed approved unless SCA’s Project Representative reasonably determines that conditions then exist, arising solely from construction by Developer then continuing in any Unit other than the School Unit or in portions of the core and shell of the Building other than the School Base Building Work, that would prevent children from being safely and appropriately enrolled at the Public School. If SCA’s Project Representative disapproves payment of the Holdback Amount, the grounds for such disapproval (including without limitation the construction conditions being relied on by SCA’s Project Representative) shall be stated specifically in writing. If SCA’s Project Representative fails to approve or disapprove payment of the Holdback Amount within fifteen (15) Business Day’s after receipt of such Requisition, then payment of the Holdback Amount shall be deemed approved.

(iv) If SCA’s Project Representative has timely disapproved payment of the Holdback Amount, then Developer, at Developer’s election, may either (A) resubmit the Holdback Amount for payment in one or more future Requisitions for approval by SCA’s Project Representative, or (B) submit nonpayment of the Holdback Amount to expedited arbitration pursuant to Article VII, it being understood that SCA shall be responsible for causing the NYC Department of Education (sometimes referred to herein as “ DOE ”) to participate as necessary in such arbitration and that the decision of the arbitrator shall be binding irrespective of whether DOE participates in such arbitration. In any such case, and notwithstanding any such disapproval, SCA shall timely pay all Public School Project Costs (if any) covered by the same Requisition in accordance with and subject to Section 5.02(b)(iv), Section 5.02(c)(vi) and Article VII, as applicable.

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(v) On or before the Requisition Payment Due Date, SCA shall pay the Holdback Amount, subject to Section 7.02 hereof. The obligation of SCA to pay Developer the Holdback Amount shall survive Closing or termination of this Agreement; provided, however, that the Holdback Amount shall not be payable in the event SCA terminates this Agreement pursuant to Section 9.01 hereof as a result of Developer’s default.

(g) Requisitions After Closing of Purchase of School Unit . Notwithstanding anything to the contrary in this Article 5, in Article 10 or elsewhere in this Agreement, Developer may submit Requisitions pursuant to this Section 5.02 after closing of the purchase of the School Unit, and SCA shall be responsible therefor to the extent the applicable amounts are not paid by Closing. This Section 5.02(g) shall survive Closing.

Section 5.03 Intentionally omitted .

Section 5.04 Change Orders .

(a) “ Change Order” Defined . “ Change Order ” means any change, addition or alteration in or to (i) the School Base Building Work as shown on the 100% School Base Building CD’s, or (ii) any drawings, plans or specifications, to the extent that any such change, addition or alteration (as opposed to mere correction or clarification) is inconsistent with any of the plans and specifications referenced in subsection (i) and would increase the Public School Project Costs (including without limitation by increasing the fees or reimbursables of the School Base Building Design Consultants) or increase Developer’s costs of designing or constructing the portions of the core and shell of the Building other than the School Base Building Work. Any SCA request that Developer use premium labor to accelerate Substantial Completion of the School Base Building Work shall also be deemed a Change Order.

(b) Requests for Change Orders .

(i) Any SCA request for a Change Order shall be submitted to Developer in writing. SCA requests for Change Orders shall be subject to Developer’s approval, not to be unreasonably withheld, provided, that it shall not be deemed unreasonable for Developer to withhold its approval for any Change Order which:

(A)

Intentionally Omitted.

(B)

Intentionally Omitted.

(C)

Following Commencement of Construction of the School Base Building Work, would, in Developer’s judgment, cause the Public School Project Costs to exceed the Public School Project Costs Not-to-Exceed Amount; or

(D)

Intentionally Omitted.

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(E)

In Developer’s judgment, would adversely affect Developer’s then schedule for (1) Substantial Completion of the School Base Building Work, or (2) substantial completion of portions of the core and shell of the Building other than the School Base Building Work, or (3) substantial completion of any Unit other than the School Unit or work to be performed in any Unit other than the School Unit; or

(F)

In Developer’s judgment, would prevent or delay Developer from obtaining a temporary certificate of occupancy for any Unit (other than the School Unit) or for the Building.

Notwithstanding anything to the contrary in Sections 5.04(b)(i)(A) through (D), if increases in scope contemplated by any Change Order request submitted to Developer would cause the trade costs of the School Base Building Work, or the Public School Project Costs to exceed the limitations set forth in Sections 5.04(b)(i)(A) or (C) respectively, then if so requested by SCA, Developer shall cause the School Base Building Architect promptly, diligently and with continuity to meet with SCA, Developer and Developer’s Construction Manager(s) to effect compensating reductions in scope to the extent necessary to eliminate such excess. Alternately, SCA may notify Developer that it will obtain additional Evidence of Sufficient Funds to the extent necessary to eliminate any such excess not eliminated through compensating reductions in scope.

(ii) As soon as reasonably practicable after receipt of SCA’s request, Developer shall notify SCA whether Developer approves or disapproves the requested Change Order. If Developer approves the requested Change Order, such approval shall be accompanied by a proposal, based upon reasonably detailed cost estimates supported by appropriate back-up from Developer’s Construction Manager, specifying the costs thereof, which costs shall include (A) any increases in Public School Project Costs (as the components thereof are defined in Section 5.01(a)) that would be occasioned by the requested Change Order (including without limitation costs of delays in performance of the School Base Building Work), (B) any costs resulting from adverse effects of the requested Change Order on Developer’s then schedule for (1) Substantial Completion of portions of the core and shell of the Building other than the School Base Building Work, or (2) Substantial Completion of any Unit other than the School Unit, or (3) Substantial Completion of work to be performed in any Unit other than the School Unit, and (C) any costs resulting from delays that would be caused by the requested Change Order in obtaining a temporary certificate of occupancy for any Unit (other than the School Unit) or for the Building. Notwithstanding anything to the contrary in the preceding sentence, but subject to Section 3.03(b) above, in no event shall SCA be responsible for increases in the hard costs of the School Fit-Out Work resulting from a requested Change Order to the School Fit-Out Work, if the requested Change Order is (a) occasioned by Change Orders to the School Base Building Work initiated by Developer after finalization of the 100% School Base Building CD’s in accordance with Section 3.03(h) (unless consented to by SCA or necessitated by the acts or omissions of SCA or its design professionals, or (b) occasioned by construction design defects that are the responsibility of the School Base Building Architect, or (c) occasioned by defects or material deviations in construction of the School Base Building Work.

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(iii) Upon receipt of Developer’s proposal, SCA shall have a reasonable period of time (given the costs of the Change Order as forth in Developer’s proposal), but not to exceed ten (10) Business Days, to accept such proposal or withdraw its request for a Change Order. If requested by SCA, Developer shall meet with SCA, the School Base Building Architect, the School Fit-Out Architect, and Developer’s Construction Manager(s), in order to discuss alternatives to any requested Change Order or to discuss methods that would reduce the costs of any requested Change Order. If acceptance of such proposal would cause the trade costs of the School Base Building Work or the Public School Project Costs to exceed the limitations set forth in Sections 5.04(b)(i)(A) or (C) respectively, then SCA’s acceptance shall be accompanied by Evidence of Sufficient Funds. Upon Developer’s receipt of such Evidence of Sufficient Funds, the Public School Project Costs Not-to-Exceed Amount shall be deemed automatically increased by the amount thereof.

(iv) Upon SCA’s acceptance of Developer’s proposal and upon Developer’s receipt of any required Evidence of Sufficient Funds, (A) Developer shall perform the Change Order diligently and with continuity to completion, and (B) Developer may submit one or more Requisitions therefor, accompanied by applicable back-up and otherwise in accordance with the provisions of Section 5.02, until SCA has fully paid the costs thereof.

(v) If SCA does not accept Developer’s proposal and withdraws its request for a Change Order, SCA shall pay Developer, within thirty (30) days after receipt of Developer’s reasonably detailed invoices therefor, all costs of preparing Developer’s proposal and the costs of Developer’s construction management services in connection with the requested Change Order.

(vi) SCA acknowledges and agrees that notwithstanding SCA’s request for a Change Order, Developer’s performance of the School Base Building Work and of construction of portions of the core and shell of the Building other than the School Base Building Work shall continue without delay or interruption notwithstanding SCA’s request for a Change Order, Developer’s preparation of a proposal in response thereto, SCA’s consideration of Developer’s proposal, or any meetings or consultations in connection therewith.

(c) Responsibility for Costs of Certain Developer Change Orders . Notwithstanding anything to the contrary in Section 5.01(b) or this Section 5.04, but subject to Section 3.03(b) above, Developer shall be responsible for (and shall not submit Requisitions for) any increases in the hard costs of the School Fit-Out Work resulting from Change Orders to the School Base Building Work (1) initiated by Developer after finalization of the 100% School Base Building CD’s in accordance with Section 3.03(h) (unless (I) consented to by SCA or (II) necessitated by the acts or omissions of SCA or its design professionals, any SCA Design Non-Compliance or any Post-April Non-Compliance), or (2) occasioned by construction design defects that are the responsibility of the School Base Building Architect, or (3) occasioned by defects or material deviations in construction of the School Base Building Work; provided that, subject to Section 3.03(b) above, in no event shall Change Orders to the School Base Building Work initiated by Developer (unless (I) consented to by SCA or (II) necessitated by the acts or omissions of SCA or its design professionals, any SCA Design Non-Compliance or any Post-April Non-Compliance) be inconsistent with Section 3.01(a)(vi) hereof regarding the size of the School Unit or otherwise adversely affect the functionality or, except to a de minimis extent, operations of the School Program, unless SCA shall consent thereto in writing.

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(d) Changes Requested by SCA or Otherwise Required . Notwithstanding anything to the contrary contained in this Agreement and without limiting SCA’s other obligations under this Agreement, if any changes to the School Base Building Work (1) requested by SCA, or (2) required due to SCA Design Non-Compliance or Post-April Non-Compliance, result in increased costs or expenses, such increase shall increase the Purchase Price on a dollar-for-dollar basis (with an increase in the Construction Supervision Fee calculated as if such increased costs and expenses were originally part of the Purchase Price), and the Public School Project Costs Not-to-Exceed Amount shall be deemed automatically increased by the amount thereof. The ability, without restriction, of SCA to pay all such increased costs and expenses shall be evidenced to Developer’s reasonable satisfaction as a condition to Developer’s approval of the applicable change.

Section 5.05 Delays .

(a) SCA Delay .

(i) There shall be an “ SCA Delay ” if Developer was actually delayed in achieving Substantial Completion of the School Base Building Work or completion of any Punch List Items, or in achieving substantial completion of any portion of the core and shell of the Building other than the School Base Building Work, or substantial completion of any Unit other than the School Unit, or substantial completion of any work to be performed in any Unit other than the School Unit, as a result of any delays, acts or omissions of SCA or its design professionals or other consultants that occur or are continuing after the date of this Agreement or as a result of any SCA Design Non-Compliance or Post-April Non-Compliance, including without limitation the delays, acts or omissions set forth in subparagraphs (A) through (J) below:

(A)

delays in furnishing written approvals, objections or comments within the time periods provided by Articles 3 or 4;

(B)

delays caused by Change Orders, delays caused by the failure of SCA to comply with SCA’s obligations pursuant to Section 5.04 regarding requested Change Orders, and delays caused by time needed for design, estimating, approval and permitting of requested Change Orders;

(C)

the failure of SCA’s Project Representative to respond within five (5) days after notice with respect to all issues which could not be addressed because of the absence of SCA’s Project Representative from bi-weekly or weekly coordination meetings;

(D)

the performance of work, or failure to perform work, by a person or entity employed by or on behalf of SCA;

(E)

any failure by SCA timely to pay Public School Project Costs covered by Requisitions submitted pursuant to Section 5.02 and required to be paid pursuant to this Agreement, and any failure by SCA to act diligently and in a timely manner, in accordance with SCA’s obligations under Section 5.02, with respect to approval of Requisitions or otherwise;

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(F)

Intentionally omitted.

(G)

any failure by SCA to comply with the obligations of SCA under Section 6.01 with respect to Substantial Completion of the School Base Building Work;

(H)

Intentionally omitted;

(I)

any work or failure to perform work, or any other act or omission of or by SCA, or any violation caused by SCA, which delays Developer in obtaining a temporary certificate of occupancy for any Unit (other than the School Unit) or the Building; and

(J)

the failure of SCA to comply with its obligations with respect to the expedited arbitration procedures set forth in Article VII, or to duly comply with the determination of an Arbitrator pursuant to Article VII.

(ii) Unless SCA knew or reasonably should have known of the events giving rise to an SCA Delay and the fact of such SCA Delay as evidenced by job minutes, correspondence, memoranda or other writings furnished to or issued to SCA (which job minutes, correspondence, etc. specifically refer to such events), SCA shall not become responsible for such delay until Developer notifies SCA of the events giving rise to such SCA Delay, the fact of such SCA Delay and (to the extent then reasonably ascertainable) the estimated costs incurred (or that may be incurred) as a result of such SCA Delay. As soon as reasonably practicable after the date when SCA knew or reasonably should have known, or after Developer shall have notified SCA, of the events giving rise to such SCA Delay and the fact of such SCA Delay, Developer shall furnish SCA with a detailed schedule impact analysis, with written narrative, showing the impacts of any such SCA Delay on the so-called “critical path” of the Construction Schedule as then updated, such analysis to include, without limitation, any concurrent delays or other delays impacting the Construction Schedule as then updated and not caused by SCA. In the case of a continuing SCA Delay, Developer agrees to consult with SCA, and to cause Developer’s Construction Manager(s) to consult with SCA, in an effort to mitigate such continuing SCA Delay.

(iii) Without limiting anything contained in Section 5.04, SCA shall pay, within thirty (30) days after receipt of Developer’s reasonably detailed invoices therefor accompanied by customary back-up (including the detailed schedule impact analysis referred to in Section 5.05(a)(ii)), all increases in Public School Project Costs (including, without limitation, increases in Developer’s Project financing costs) resulting from SCA Delay, as well as any additional costs resulting from SCA Delay incurred by Developer for completion of portions of the core and shell of the Building other than the School Base Building Work, or completion of any Unit other than the School Unit or completion of work in any Unit other than the School Unit.

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(iv) If Developer and SCA are unable to resolve any dispute about SCA Delays or the costs occasioned thereby, or any dispute about whether SCA is required to make a payment of Public School Project Costs under this Agreement, within five (5) Business Days after either party has received written notice of such a dispute from the other party, either party may submit such dispute to expedited arbitration pursuant to Article VII.

(v) Intentionally omitted .

(b) Intentionally omitted .

Section 5.06 SCA Audit Rights . Commencing on the date of Substantial Completion of the School Base Building Work and continuing for twenty-four (24) months thereafter, SCA shall have the right to audit the Public School Project Costs and to examine such books and records of Developer as may be reasonably necessary in order to determine the Public School Project Costs. SCA agrees that any such audit and examination shall be conducted only on reasonable prior notice, during normal business hours, at Developer’s office in New York City and at SCA’s sole cost and expense. This paragraph shall survive Closing.

Section 5.07 SCA Pre- and Post-Turnover Work . Notwithstanding anything to the contrary contained in this Agreement, the SCA Pre- and Post-Turnover Work is being included in the GMP Contract solely as an accommodation to SCA, it being understood that the SCA Pre- and Post-Turnover Work may or may not be commenced or completed by Closing and accordingly it shall not be a condition to SCA’s obligation to close hereunder that the SCA Pre- and Post-Turnover Work has been commenced or Substantially Completed. SCA shall pay Developer a Construction Supervision Fee in respect of the SCA Pre- and Post-Turnover Work in accordance with Exhibit H annexed hereto. Developer and its contractors shall have access to the School Unit subsequent to Closing in order to perform the SCA Pre- and Post-Turnover Work. Notwithstanding anything to the contrary contained herein, in no event shall the cost of the SCA Pre- and Post-Turnover Work be considered in calculating the Public School Project Costs Not-to-Exceed Amount. SCA is responsible for all costs of the SCA Pre- and Post- Turnover Work, and accordingly in the event the actual costs of the same exceed the estimates set forth on Exhibit L annexed hereto, SCA shall be responsible for paying such excess and the Purchase Price shall be increased accordingly; provided that SCA shall have the right to consult with the Construction Manager, in coordination with Developer, in order to minimize such excess costs. This Section 5.07 shall survive Closing.

Section 5.08 MEP Equipment . Developer will, at SCA’s cost and expense, cause factory testing to be performed and extended warranties to be issued (which will be assigned to SCA (if assignable), or Developer will cooperate with SCA to enforce the warranties), with respect to the equipment listed on Exhibit J annexed hereto (collectively, the “ MEP Equipment ”), and will accept delivery of such MEP Equipment and cause the work described on Exhibit J to be performed. Developer’s Construction Manager’s builder’s risk insurance will, in general, cover damage to such MEP Equipment to the extent such damage occurs on-site, but SCA shall be solely responsible for any additional premiums required in order to provide such coverage or any other coverage applicable to such MEP Equipment. Apart from the foregoing provisions of this Section 5.08, SCA shall have all responsibility (and Developer shall have no liability) in connection with such MEP Equipment including, without limitation, with respect to the placement of the same within the Building in the areas designated for the same on the School Fit-Out Construction Drawings. SCA hereby agrees to indemnify, defend and hold Developer and all other Developer Indemnitees harmless from and against any and all losses, damages, claims, liabilities, judgments, Legal Proceedings and other costs and expenses (including, without limitation, reasonable attorneys’ fees and disbursements) of every kind and nature which may be incurred by Developer or any other Developer Indemnitee in connection with the delivery, placement, installation, hook-up, operation, maintenance and/or repair of the MEP Equipment. SCA hereby releases and discharges Developer from any and all obligations, claims and liability in connection with the MEP Equipment including, without limitation, if any warranties in connection with any MEP Equipment are voided for any reason. This Section 5.08 shall survive the Closing or termination of this Agreement.

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Article VI

SUBSTANTIAL COMPLETION; COMPLETION OF PUNCH LIST ITEMS; ACCESS FOR SCHOOL BASE BUILDING WORK AND SCHOOL F&E WORK: WARRANTIES

Section 6.01 Substantial Completion of School Base Building Work and Completion of Punch List Items .

(a) “ Substantial Completion” Defined . For purposes of this Agreement, “ Substantial Completion, ” “ Substantially Complete ,” “ Substantially Completed ” and similar terms means full completion in accordance with the 100% School Base Building CD’s, except for minor details of construction, decoration, mechanical adjustment or installation (“ Punch List Items ”), which Punch List Items shall have been identified in writing by the School Base Building Architect after SCA shall have been afforded access to inspect the School Unit on the School Base Building Walk-Through Date.

(b) Substantial Completion of School Base Building Work .

(i) Substantial Completion of School Base Building Work . The School Base Building Work shall be deemed Substantially Completed as determined in accordance with this Section 6.01(b) or on a date otherwise determined by an Arbitrator pursuant to Article VII hereof.

(ii) Notices to be Delivered; Walk-Through . Developer shall give SCA prompt notice of Developer’s achievement of the following construction milestones shown on the Construction Schedule: Commencement of pouring of foundations; so called “topping out” of the structural frame of the Building; and completion of enclosure of the School Unit. Developer shall notify SCA at least ninety (90) days in advance of the projected date of Substantial Completion of the School Base Building Work (the “ School Base Building Initial Notice ”). At least sixty (60) days prior to the earliest delivery date specified in the School Base Building Initial Notice, Developer shall send to SCA a second notice (the “ School Base Building First Confirmation Notice ”) confirming the date set forth in the School Base Building Initial Notice, or if such delivery date is no longer expected to be met by Developer, such second notice shall set forth the revised anticipated delivery date. At least thirty (30) days prior to the delivery date specified in the School Base Building First Confirmation Notice, Developer shall deliver to SCA a third notice (the “ School Base Building Last Confirmation Notice ”) confirming the date set forth in the School Base Building First Confirmation Notice, or if such delivery date is no longer expected to be met by Developer, such School Base Building Last Confirmation Notice shall set forth the revised anticipated delivery date (which may be later but not earlier than the anticipated delivery date set forth in the School Base Building First Confirmation Notice).

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At least ten (10) days prior to the date Developer believes the School Base Building Work will be Substantially Completed, Developer shall send SCA a notice (a “ School Base Building Substantial Completion Notice ”) setting forth the anticipated School Base Building Substantial Completion Date. Within five (5) Business Days after SCA’ s receipt of such School Base Building Substantial Completion Notice, Developer and SCA shall establish a date reasonably acceptable to Developer and SCA (the “ School Base Building Walk-Through Date ”) on which Developer and SCA shall jointly inspect the School Unit, which School Base Building Walk-Through Date shall be no earlier than the anticipated School Base Building Substantial Completion Date set forth in the School Base Building Substantial Completion Notice and no later than two (2) Business Days after such anticipated School Base Building Substantial Completion Date. In the event the School Base Building Work is Substantially Complete on the School Base Building Walk-Through Date and SCA shall so certify or an Arbitrator shall so determine in accordance with the procedures set forth in Article VII, the Substantial Completion Date for the School Base Building Work shall be the date specified in the School Base Building Substantial Completion Notice. If the School Base Building Work is not Substantially Complete on the School Base Building Walk-Through Date then the Substantial Completion Date for the School Base Building Work shall not occur and Developer, at least five (5) days prior to the date Developer believes the School Base Building Work will be Substantially Complete, shall send to SCA a second School Base Building Substantial Completion Notice setting forth the anticipated School Base Building Substantial Completion Date. Within three (3) days after SCA’s receipt of a second School Base Building Substantial Completion Notice, SCA shall establish a second School Base Building Walk-Through Date, reasonably acceptable to Developer, on which Developer and SCA shall jointly re-inspect the School Unit, which second School Base Building Walk-Through Date shall be no earlier than the anticipated Substantial Completion Date set forth in the second School Base Building Substantial Completion Notice and no later than one (1) Business Day after such anticipated Substantial Completion Date. In the event the School Base Building Work is still not Substantially Complete on the second School Base Building Walk-Through Date, then the procedure set forth in the preceding two sentences shall be repeated as many times as necessary until the School Base Building Work is Substantially Complete.

In the event that following any joint inspection by Developer and SCA, SCA believes the School Base Building Work is not Substantially Complete, then within two (2) Business Days after the completion of such inspection SCA shall furnish Developer with a written list of incomplete work (the “ Incomplete School Base Building Work ”) which SCA believes must be completed. In the event Developer and SCA are unable to agree whether the School Base Building Work is Substantially Completed, either party may refer such dispute to expedited arbitration in accordance with the procedures set forth in Article VII. After the delivery to SCA of any School Base Building Substantial Completion Notice and upon request by Developer, SCA shall use reasonable efforts to meet with Developer and Developer’s Construction Manager at the Building (accompanied by SCA’s Project Representative and such of SCA’s architectural, engineering and/or construction consultants (“ SCA’s Inspection Consultants ”) as Developer shall have reasonably requested), prior to the date specified in such final School Base Building Substantial Completion Notice, to identify any items of Incomplete School Base Building Work.

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(iii) Punch List Items . Developer shall cause the School Base Building Architect to prepare the list of Punch List Items and shall cause the same to be delivered to SCA no later than ten (10) Business Days after the earlier of (i) the date SCA certifies that the School Base Building Work is Substantially Completed, or (ii) the date an Arbitrator, pursuant to Article VII, issues a decision that the School Base Building Work is Substantially Complete. Developer shall cause the Punch List Items to be completed as soon as reasonably practicable after completion of the list of Punch List Items, which obligation shall survive Closing.

(iv) Notwithstanding the forgoing, and without limiting the provisions of Section 5.02(f) regarding the Holdback Amount, Substantial Completion shall be deemed to have occurred even though (A) there remain openings for construction hoists and/or cranes affixed to the Building, which openings shall not prevent the performance of School F&E Work in accordance with the provisions of this Agreement in the School Unit, (B) there remain temporary supports, bracing, vertical transportation, safety or other devices, or other work necessary for completion of construction of the Building or the plazas adjacent thereto in accordance with Legal Requirements and good construction practices, provided that the same shall not materially interfere with the performance of School F&E Work in accordance with the provisions of this Agreement in the School Unit, and that any such work shall be subject to the provisions of Section 6.01(b)(v), or (C) the SCA Pre- and Post-Turnover Work may not have been commenced or completed. Developer agrees that the design for any such construction hoists and/or cranes referred to in subsection (A) of this paragraph will reflect that SCA may be performing the F&E work in the School Unit during a period of time while such construction hoists and/or cranes remain in operation. Accordingly, such construction hoists and/or cranes shall be designed in a manner, consistent with good construction practices, that will minimize interference with SCA’s performance of the School F&E Work in the School Unit after Substantial Completion shall have occurred. In addition, any openings for such construction hoists and/or cranes shall be temporarily sealed and made weather tight for so long as such construction hoists and/or cranes remain in operation, and shall be permanently enclosed, sealed and made weather tight promptly following removal of such hoists and/or cranes, which shall be removed as soon as reasonably practicable. Any such temporary supports, bracing, vertical transportation, safety or other devices, or other work referred to in subsection (B) of this paragraph shall be removed or completed as soon as reasonably practicable in accordance with good construction practices, any damage to the School Unit caused by such removal or caused by completion of any such work shall be promptly repaired by Developer, and any School Base Building Work remaining to be completed following such removal, or following completion of any such work, shall be completed by Developer as soon as reasonably practicable in accordance with good construction practices, which obligation shall survive Closing.

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(v) Developer’s Performance of Work in the Building after Substantial Completion of the School Base Building Work . In completing the Punch List items and in otherwise completing the initial construction of the Building and the plazas adjacent thereto after the date of Substantial Completion of the School Base Building Work, to the extent that DOE is operating in the School Unit, Developer shall (A) except in the case of an emergency, give DOE at least seventy-two (72) hours prior notice of such work if such work will entail an interruption in elevator service, HVAC service, electricity, water or any other utility within the School Unit, provided that in no event shall Developer shut down any such service to the School during a regular school day (except in the case of an emergency), (B) perform such work other than during Business Hours, provided, that such work may be performed during Business Hours (but not while the School is in session) with the consent of DOE, not to be unreasonably withheld, (C) comply with DOE’s security requirements, and (D) use reasonable efforts to minimize any disruption to DOE’s operations in the School Unit for the purposes contemplated by the School Program. If DOE requires that any employee or agent of Developer be accompanied by a representative of DOE when entering any occupied portion of the School Unit to perform work, DOE shall make such representative available for such purposes (1) as soon as reasonably practicable after a request therefor during Business Hours, and (2) within twelve (12) hours after a request therefor at all other times. This paragraph shall survive the Closing.

Section 6.02 “Stand-By” Labor Costs . During any period when SCA shall be performing the School Fit-Out Work, School F&E Work or any other work in the School Unit, SCA shall be solely responsible for all indirect and so-called “stand by” union labor costs occasioned by (i) performance of such School Fit-Out Work, School F&E Work or such other work, (ii) SCA use of any elevators in the School Unit, and (iii) SCA use of Building HVAC systems and any other mechanical, electrical or plumbing systems in the School Unit. SCA shall reimburse Developer for such labor costs within thirty (30) days after SCA’s receipt of Developer’s reasonably detailed invoices therefor. This Section 6.02 shall survive Closing.

Section 6.03 Beneficial Interest in Warranties . To the extent such designation as beneficiary (or co-beneficiary) is commercially available, SCA (or, at SCA’s election, the New York City Department of Education a/k/a the Board of Education of the City School District of the City of New York) shall be named as beneficiary (or as co-beneficiary, to the extent such warranties cover elements of the core and shell of the Building outside the School Unit) in all warranties received by Developer from contractors and suppliers engaged in performance of the School Base Building Work, including but not limited to the warranties specifically required by the 100% School Base Building CD’s. To the extent commercially available, said warranties shall commence not later than the date of Substantial Completion of the School Base Building Work, and shall continue for at least one (1) year after the date of Substantial Completion of the School Base Building Work. Developer agrees to cooperate fully with SCA (or the New York City Department of Education a/k/a the Board of Education of the City School District of the City of New York) and the Board of Managers in the event that SCA (or the New York City Department of Education a/k/a the Board of Education of the City School District of the City of New York) seeks to enforce its rights with respect to such warranties.

Article VII

EXPEDITED JAMS ARBITRATION

Section 7.01 Expedited Arbitration . The parties hereby agree that, notwithstanding anything to the contrary contained herein, all disputes under this Agreement, the Master Lease and the Sublease, and any other document executed by the parties in connection with any of the foregoing, shall be resolved by binding arbitration conducted in The City of New York (and not by litigation), in accordance with the provisions of this Article VII, and judgment upon the award rendered may be entered in any court having jurisdiction thereof.

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Section 7.02 Selection of Arbitrators; Arbitration Procedure . The party hereto desiring to arbitrate a dispute pursuant to this Article VII shall give notice (a “ Dispute Notice ”) to that effect to the other party, and a single arbitrator shall be appointed in accordance with the JAMS Rules (as defined below) to resolve the dispute in question. For purposes of this Agreement, the arbitrator actually serving to resolve any dispute is referred to as the “ Arbitrator .”

Within two (2) Business Days after the Dispute Notice has been delivered, or as soon as the Arbitrator is available to meet, both parties shall meet with the Arbitrator, who shall attempt to mediate a resolution to the dispute acceptable to the parties. Within two (2) Business Days after either party or the Arbitrator certifies in writing that such mediation is at an impasse, the dispute shall be determined by the Arbitrator in accordance with the then effective JAMS Streamlined Arbitration Rules and Procedures (the “ JAMS Rules ”). Copies of the Arbitrator’s decision shall be sent to Developer and to SCA and shall be binding on both. The Arbitrator shall have no power to vary or modify any of the provisions of this Agreement, and his or her powers and jurisdiction are hereby limited accordingly. The Construction Manager may participate in any dispute relating to the agreement between Developer and Construction Manager. During any mediation provided for by this Article VII or the consideration of any issue by the Arbitrator pursuant to this Article VII, SCA and Developer shall observe and perform each and every one of its obligations hereunder, including, without limitation, SCA’s obligation to pay timely all Public School Project Costs or other costs contemplated hereunder (other than amounts being disputed pursuant to this Article VII, unless Developer’s construction lender determines that any amount in dispute is required, under the applicable contract, to be paid, in which case SCA shall be obligated to make such payment within fifteen (15) days after such determination by Developer’s construction lender notwithstanding such dispute, but if the Arbitrator determines that SCA was not required to make such payment, then SCA shall have the right to deduct such amount (to the extent not theretofore refunded to SCA by Developer) from amounts payable by SCA pursuant to future Requisitions, and to the extent that future Requisitions are insufficient, the Holdback Amount, without limiting SCA’s right to seek to collect any deficiency directly from Developer). Any construction lender of Developer, or such lender’s representative, shall have the right to attend any and all mediation and arbitration proceedings conducted pursuant to this Article VII for the purpose of observing such proceedings, provided, however, that such lender shall have no right to participate in any way in any such proceeding.

Article VIII

INSURANCE AND INDEMNITIES

Section 8.01 Developer’s Insurance Coverages .

(a) Developer shall cause its Construction Manager to obtain and maintain through the date of completion of the Punch List Items:

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(i) workers’ compensation and disability benefits insurance as required by the State of New York and employer’s liability insurance in the amount of Five Hundred Thousand Dollars ($500,000) per occurrence;

(ii) commercial general liability insurance against claims for property damage and/or personal injury and/or death arising out of the work performed under this Agreement by or on behalf of Developer, written on an occurrence basis, to afford protection in the amount of Two Million Dollars ($2,000,000) per occurrence, Four Million Dollars ($4,000,000) general aggregate and Four Million Dollars ($4,000,000) products completed operations aggregate;

(iii) automobile liability insurance covering all automobiles and other vehicles licensed for road use used in connection with the work performed under this Agreement by or on behalf of Developer, whether owned, non-owned and/or hired vehicles and automobiles, with endorsement for “Changes in Business Auto and Truckers Coverage Forms - Insured Contract” in the amount of One Million Dollars ($1,000,000) combined single limit per accident for bodily injury and property damage;

(iv) Excess Umbrella Liability policy with limit of not less than Fifty Million Dollars ($50,000,000) each occurrence, and Fifty Million Dollars ($50,000,000) Aggregate. This policy should be excess of Employers Liability, General Liability and Automobile Liability policies.

(v) builder’s risk property insurance on all materials, equipment, machinery and supplies related to the work performed by or on behalf of Developer under this Agreement, insuring against direct physical loss or damage to covered property (e.g., excluding the Land appurtenant thereto) by all risk of physical loss, on a completed value non-reporting form basis, in the amount of the total cost of the work required to be performed by Developer under this Agreement, but the policy may have a deductible feature consistent with the Construction Manager’s customary practices.

(b) Developer shall cause the School Base Building Architect to maintain in full force and effect an errors and omissions policy until the School Base Building Work is completed, including all Punch List Items, and a temporary certificate of occupancy has been obtained for all portions of the Building (excluding the School Unit), in the amount of Two Million Dollars ($2,000,000) per claim and aggregate per policy year. Developer shall not consent to the amendment or termination of such policy to limit or adversely affect SCA’s coverage without SCA’s prior written approval, not to be unreasonably withheld or delayed.

(c) With respect to all insurance policies maintained by Developer’s Construction Manager as required hereunder, Developer shall, within no more than ten (10) Business Days following receipt of a written request therefor, provide SCA with insurance certificates evidencing such insurance policies.

(d) Developer shall deliver to SCA a certificate evidencing the replacement or renewal of any such insurance policy prior to the expiration thereof. Developer and Developer’s Construction Manager shall cause SCA, The City of New York and DOE to be named as additional insureds on all liability insurance policies required hereunder on a primary and non-contributory basis with respect to its work in its defined space;

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(e) If Developer fails to satisfy its obligations set forth in Sections 8.01(a) and (b) above, then upon at least ten (10) Business Days prior notice SCA may, but shall not be obligated to, procure such insurance for such risks and pay the commercially reasonable premiums for any such insurance. All commercially reasonable sums advanced by SCA to pay premiums on insurance policies which Developer is required to cause Developer’s Construction Manager to maintain hereunder shall be due and payable by Developer to SCA within thirty (30) days after demand accompanied by reasonable documentation supporting the amount of any such costs or expenses. If any dispute regarding the interpretation or application of this Section 8.01(e) is not resolved within five (5) Business Days after Developer’s receipt of SCA’s notice, either party may submit such dispute to expedited arbitration in accordance with the procedures set forth in Article VII.

Section 8.02 SCA’s Insurance Coverages .

(a) During the performance of the School Fit-Out Work and School F&E Work, SCA shall maintain or will cause its contractors and sub-contractors to maintain:

(ii) commercial general liability insurance against any and all claims for property damage and/or personal injury and/or death arising out of the work performed under this Agreement by or on behalf of SCA, written on an occurrence basis, to afford protection written on an occurrence basis, to afford protection in the amount of Two Million Dollars ($2,000,000) per occurrence, Four Million Dollars ($4,000,000) general aggregate and Four Million Dollars ($4,000,000) products completed operations aggregate; Coverage shall be primary and shall not contribute to any coverage held by the Developer/Contractor;

(iii) Excess Umbrella Liability policy with limit of not less than Twenty Five Million Dollars ($25,000,000) each occurrence, and Twenty Five Million Dollars ($25,000,000) Aggregate. This policy should be excess of Employers Liability, General Liability and Automobile Liability policies.

(iv) automobile liability insurance covering all automobiles and vehicles used in connection with the work performed under this Agreement by or on behalf of SCA, whether owned, non-owned and/or hired vehicles and automobiles, with endorsement for “Changes in Business Auto and Truckers Coverage Forms - Insured Contract” in the amount of One Million Dollars ($1,000,000) combined single limit per accident for bodily injury and property damage;

(v) builder’s risk property insurance on all materials, equipment, machinery, including coverage for any hot testing, and supplies related to the work performed by or on behalf of SCA under this Agreement, insuring against direct physical loss or damage to the covered property related to the School Unit (e.g., excluding the Land appurtenant thereto) by all risk of physical loss, on a completed value non-reporting form basis, in the amount of the total cost of the work required to be performed by SCA under this Agreement, but the policy may have a deductible feature consistent with SCA’s customary practices. Coverage shall be primary and shall not contribute to any insurance held by the Developer; and

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(b) SCA shall cause SCA’s consultants to maintain in full force and effect an errors and omissions policy until the School Fit-Out Work and School F&E Work is completed, in the amount of One Million Dollars ($1,000,000) per claim and aggregate per policy year. SCA shall not consent to the amendment or termination of such policy to limit or adversely affect Developer’s coverage without Developer’s prior written approval, not to be unreasonably withheld or delayed.

(c) With respect to all insurance policies maintained by SCA as required hereunder: (1) SCA shall, within no more than ten (10) Business Days following receipt of a written request therefor, provide Developer with copies of such polices or insurance certificates evidencing the same, and (2) SCA shall cause Developer, Trinity Place Holdings Inc. and TPHGreenwich Holdings LLC to be named as additional insureds on all liability insurance policies on a primary and non-contributory basis with respect to its work in its defined space and with respect to any equipment of SCA (e.g., MEP Equipment, etc.) located outside of SCA’s space.

(d) SCA shall endeavor to cause each insurance policy contemplated by Section 8.02(a) to provide that it will not expire or terminate or be cancelled without, in each case, the insurer’s providing to SCA at least thirty (30) days’ prior written notice of such expiration, termination or cancellation. SCA shall deliver to Developer a certificate evidencing the replacement or renewal of any such insurance policy prior to the expiration thereof.

(e) If SCA fails to satisfy its obligations set forth in Sections 8.02(a) and (b) above, then upon at least ten (10) Business Days prior notice Developer may, but shall not be obligated to, procure such insurance for such risks and pay the commercially reasonable premiums for any such insurance. All commercially reasonable sums advanced by Developer to pay premiums on insurance policies which SCA is required to maintain hereunder shall be due and payable to Developer by SCA within thirty (30) days after demand accompanied by reasonable documentation supporting the amount of any such costs or expenses. If any dispute regarding the interpretation or application of this Section 8.02(e) is not resolved within five (5) Business Days after SCA’s receipt of Developer’s notice, either party may submit such dispute to expedited arbitration in accordance with the procedures set forth in Article VII.

Section 8.03 Waiver of Subrogation . All policies of insurance required under this Agreement shall include a waiver of the right of subrogation with respect to all the named insureds and additional insureds.

Section 8.04 Indemnification .

(a) Developer hereby agrees to indemnify, hold harmless from, and defend (or cause its insurance carrier to defend) all SCA Indemnitees against any and all losses, damages, claims, liabilities, judgments, Legal Proceedings and other costs and expenses (including, without limitation, reasonable attorneys’ fees and disbursements incurred by such SCA Indemnitees), of every kind and nature which may be incurred by or imposed against any SCA Indemnitees to the extent arising out of or in connection with Developer’s intentional misconduct or negligence in the performance of its obligations hereunder, except to the extent such losses are caused directly or indirectly by (i) such SCA Indemnitees’ intentional misconduct or negligence or (ii) SCA’s consultants in carrying out any of the School Fit-Out Work or School F&E Work.

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(b) SCA hereby agrees to indemnify, hold harmless from, and defend to the fullest extent of the law (or cause its insurance carrier to defend) all Developer Indemnitees against any and all losses, damages, claims, liabilities, judgments, Legal Proceedings and other costs and expenses (including, without limitation, reasonable attorneys’ fees and disbursements incurred by such Developer Indemnitees), of every kind and nature which may be incurred by or imposed against any Developer Indemnitees to the extent arising out of or in connection with the intentional misconduct or negligence of SCA in SCA’s performance of the School Fit-Out Work or School F&E Work or the intentional misconduct or negligence of SCA or its agents, except to the extent such losses are caused by (i) Developer Indemnitees’ intentional misconduct or negligence, or (ii) Developer’s consultants in carrying out any of the Developer’s obligations under this Agreement.

(c) The provisions of this Section 8.04 shall survive the termination or expiration of this Agreement as to matters arising prior to the termination or expiration of this Agreement.

Article IX

DEFAULT AND REMEDIES; CERTAIN TERMINATION PROVISIONS

Section 9.01 Default by Developer; SCA’s Remedies .

(a) If, after the Commencement of Construction of the School Base Building Work, (I) Developer fails to perform the work it is required to perform hereunder as a result of substantially all of the work on the School Unit at the time in question ceasing to be performed for more than forty-five (45) consecutive days, or (II) Developer fails to cause the School Base Building Work to be Substantially Completed no later than September 6, 2023 (provided, however, that any period during which Arbitration over whether Substantial Completion has occurred shall not be considered for purposes of the foregoing deadline to the extent the Arbitrator determines that Substantial Completion occurred on or prior to September 6, 2023), then provided (i) SCA is not then in default under this Agreement beyond any applicable notice and cure period and (ii) no Force Majeure or SCA Delay is then continuing, SCA shall have the right after ten (10) Business Days’ prior written notice to Developer, to (x) terminate this Agreement, the Master Lease and the Sublease and recover all Public School Project Costs paid to Developer and any other actual (but not consequential or punitive) damages incurred or suffered by SCA (it being understood that the termination of the Master Lease shall not be effective until immediately after SCA has been refunded and has recovered all of the foregoing amounts), (y) enforce specific performance, or (z) pursue any right or remedy available to SCA (but in no event shall SCA have the right to consequential or punitive damages), unless, in the case of clause (I) above, (A) work on the School Unit at the time in question has resumed during said ten (10) Business Day period and/or (B) (1) Developer has notified SCA during such ten (10) Business Day period that Developer intends to assign this Agreement pursuant to Section 15.07(a) within thirty (30) days of the date of such notice and such assignment becomes effective within such thirty (30) day period and (2) within five (5) Business Days after the effective date of such assignment, work on the School Unit at the time in question has resumed, it being understood that in either case of (A) or (B) above, SCA shall not be entitled to exercise any of the remedies set forth above. This paragraph shall survive the termination of this Agreement.

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(b) If Developer defaults in its obligation to convey the School Unit to SCA pursuant to Article X for any reason other than due to a default by SCA hereunder or the failure of a condition precedent to Closing which is for the benefit of Developer, then SCA may (i) terminate this Agreement, the Master Lease and the Sublease, and be refunded all Public School Project Costs already paid to Developer and recover any other actual (but not consequential or punitive) damages incurred or suffered by SCA (it being understood that the termination of the Master Lease shall not be effective until immediately after SCA has been refunded and has recovered all of the foregoing amounts), (ii) enforce specific performance, or (iii) pursue any other remedy but in no event shall SCA have the right to consequential or punitive damages. This paragraph shall survive the termination of this Agreement.

(c) If Developer defaults with respect to any of its obligations under this Agreement, the Master Lease or the Sublease other than as set forth in subsections (a) and (b) above, SCA shall not be entitled to terminate this Agreement, the Master Lease or the Sublease, but shall be entitled to seek actual (but not consequential or punitive) damages incurred or suffered by SCA, and (1) in the event such default is not cured within thirty (30) business days after written notice from SCA, then SCA shall have the right to exercise self-help at Developer’s sole cost and expense, except that SCA shall not be entitled to perform any work at the Property in connection with such default by Developer; provided, however, that SCA shall be entitled, as part of its self-help remedy, to perform work solely within the School Unit so long as Developer is not performing or causing to be performed any work in or to any portion of the Property, and such right of SCA shall be subject to the cure right of any Subleasehold Lender (as defined in the Sublease) pursuant to the terms of the Sublease and/or (2) SCA shall have the right to seek specific performance.

(d) Without limiting SCA’s rights and remedies under Section 9.01(a) and (b) above, if this Agreement is terminated by SCA pursuant to Section 9.01 hereof as a result of a default by Developer under this Agreement, and a Qualified Lender does not receive or is not entitled to receive a New Sublease (as defined in the Sublease) (it being understood that the Master Lease shall remain in full force and effect subject to the remainder of this paragraph), then, upon notice from SCA, Developer shall either (1) pay the SCA Damages Amount (as defined below) to SCA within thirty (30) days thereafter (in which event the Master Lease shall automatically terminate and the MOL Terminations shall be filed), or (2) hire a third-party real estate broker reasonably acceptable to SCA to market and sell the Property and thereafter diligently pursue such sale, with the proceeds of such sale to be paid in the following order: (i) first, to SCA to reimburse SCA for any Public School Project Costs paid by SCA to Developer pursuant to Article V of this Agreement and actual (but not consequential or punitive) damages incurred or suffered by SCA (the “ SCA Damages Amount ”) irrespective of any rights of any Qualified Lenders, other lenders or any other Persons (it being understood that SCA shall be entitled to be repaid the SCA Damages Amount before any other person or entity); and (ii) thereafter, to Developer (subject to any rights of Developer’s lenders under the applicable loan documents). Any such sale must be made free and clear of the Master Lease and the Sublease, it being understood that SCA and Developer shall cause the MOL Terminations and any related transfer tax forms to be executed, recorded and/or filed at the closing of the sale of the Property; provided, however, that the Master Lease shall not be terminated and MOL Terminations shall not be filed until either (x) the date of, and concurrently with the closing of, the sale of the Property and payment to SCA of the SCA Damages Amount, if an amount sufficient to pay the SCA Damages Amount is not escrowed prior to such closing under the terms of an escrow agreement reasonably acceptable to SCA or (y) the date the SCA Damages Amount is deposited into an escrow account under the terms of an escrow agreement reasonably acceptable to SCA pending the closing of such sale, at which point the Master Lease shall be terminated and MOL Terminations shall be filed. For the avoidance of doubt, SCA shall have the right to enforce this Section 9.01(d) by specific performance by causing a court to order a sale in accordance with this Section.

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(e) Any exercise of remedies under this Section 9.01 is subject to Article VII hereof.

Section 9.02 Default by SCA; Developer’s Remedies .

(a) If SCA fails to timely satisfy any of its funding obligations under Article V (a “ Funding Failure ”) and such failure remains uncured after fifteen (15) Business Days’ written notice from Developer, then, provided Developer is not then in default under this Agreement beyond any applicable notice and cure period, Developer may (i) terminate this Agreement, the Master Lease and the Sublease, cease all work on the School Base Building Work and be relieved of any obligation to sell the School Unit to SCA, and SCA shall be liable for payment of (w) all then unpaid Requisitions, (x) all then unpaid Retainage, (y) all Public School Project Costs previously incurred by Developer but not yet requisitioned pursuant to Article V (and Developer shall be entitled to retain all sums previously disbursed to Developer), and (z) any other actual (but not consequential or punitive) damages incurred or suffered by Developer, (ii) enforce specific performance or (iii) pursue any other remedy, but in no event shall Developer have the right to consequential or punitive damages (the foregoing clauses (i)-(iii), collectively, the “ Developer Remedies ”). Notwithstanding the foregoing, on two (2) occasions only in a given 12-month period, SCA shall be entitled to receive a second written notice of a Funding Failure and in such case Developer shall not be entitled to enforce the foregoing remedies unless SCA has not cured such Funding Failure within five (5) Business Days after such second notice is given. Notwithstanding anything to the contrary contained herein, (I) any payment properly disputed by SCA as expressly permitted in this Agreement shall not constitute a Funding Failure or a default by SCA under this Agreement unless and until such sum becomes due and payable pursuant to the express terms of this Agreement and is not paid by SCA, and (II) Developer acknowledges that The City of New York has an annual payment moratorium (which typically lasts two weeks) and that, subject to the remainder of this subclause (II), there shall be no Funding Failure or default by SCA under this Agreement in the event that SCA fails to timely pay amounts due under this Agreement because the applicable payment due date falls during such annual moratorium, in which case payment by SCA shall be due and payable within fifteen (15) days after the date of the expiration of such moratorium (and it shall be a Funding Failure and a default by SCA under this Agreement in the event SCA does not so pay by such date); provided, however, that the foregoing shall not be deemed to give SCA any right to delay approval of any Requisition. SCA shall, however, (1) reasonably cooperate with Developer to pay Developer as soon as possible (including prior to the effectiveness of such moratorium to the extent reasonably practical, even if such payment is not due and payable until the moratorium is in effect), and (2) endeavor to promptly notify Developer in writing upon becoming aware of the dates of any such moratorium period but in no event shall the failure to do so be deemed a default by SCA under this Agreement. This paragraph shall survive the termination of this Agreement.

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(b) If SCA defaults in its obligation to acquire the School Unit pursuant to Article X for any reason other than a default by Developer hereunder or the failure of a condition precedent to Closing which is for the benefit of SCA, then Developer may pursue the Developer Remedies. This paragraph shall survive the termination of this Agreement.

(c) Notwithstanding anything to the contrary contained in this Agreement, if Developer exercises any right under this Section 9.02 to terminate this Agreement, then SCA shall pay to Developer, within thirty (30) days after receipt of Developer’s reasonably itemized demand therefor, an amount equal to the sum of (A) Developer’s commercially reasonably projected costs to redesign and reconfigure and, if applicable, retrofit the School Unit, (B) Developer’s reasonably projected carrying costs for a reasonable period ( e.g. , real estate taxes, operating expenses, common charges under the Condominium Documents, debt service and marketing expenses), and (C) any other actual (but not consequential or punitive) damages incurred or suffered by Developer (including, without limitation, any payments due under Developer’s construction loan resulting from SCA’s default). Nothing contained in this Section 9.02(c) shall be deemed to limit any other right or remedy of Developer hereunder. This paragraph shall survive the termination of this Agreement.

(d) If SCA defaults with respect to any of its obligations under this Agreement, the Master Lease or the Sublease other than as set forth in subclauses (a) and (b) above, Developer shall not be entitled to terminate this Agreement, the Master Lease or the Sublease but shall be entitled to seek actual (but not consequential or punitive) damages incurred or suffered by Developer, and (1) in the event such default is not cured within thirty (30) business days after written notice from Developer, then Developer shall have the right to exercise self-help at SCA’s sole cost and expense, and/or (2) Developer shall have the right to seek specific performance.

(e) Any exercise of remedies under this Section 9.02 is subject to Article VII hereof.

Section 9.03 Certain Termination Provisions . Notwithstanding anything to the contrary contained herein:

(a) If this Agreement is terminated by Developer pursuant to Section 9.02 hereof, then the Master Lease and Sublease shall also terminate (and the parties shall promptly execute, notarize and record any and all documents in order to effectuate the same). If this Agreement terminates for any other reason, then, subject to the provisions of subsection 9.01(d) above, at any time after SCA has been paid all amounts owed to SCA under this Agreement, at either party’s election, by written notice to the other party hereto, the Master Lease and Sublease shall terminate (and the parties shall promptly execute, notarize and record any and all documents in order to effectuate the same). Neither Developer nor SCA shall have any right to terminate the Sublease other than in connection with a termination of this Agreement. The foregoing provisions of this Section 9.03(a) are subject, solely as between SCA and the Subleasehold Lenders, to Article XV of the Sublease and any Interparty Agreement that is then in effect.

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(b) For the avoidance of doubt, in the event a Subleasehold Lender or Permitted Designee (as defined in the Sublease) enters into a New Sublease (as defined in the Sublease) the Master Lease shall remain in effect.

Article X

CONDITIONS TO CLOSING; CLOSING; PCO

Section 10.01 Closing Conditions . Developer shall convey, and SCA shall accept conveyance of, the School Unit at a Closing, subject to satisfaction of each of the following Conveyance Conditions at or before the Closing (it being understood that if there is any dispute between the parties regarding whether any such condition has been satisfied, either party may submit the dispute to expedited arbitration pursuant to Article VII):

(a) Substantial Completion of the School Base Building Work has been achieved (which condition is for the benefit of SCA), subject to Section 5.07 hereof;

(b) title to the School Unit is free of Encumbrances other than the Permitted Encumbrances (it being understood that Permitted Encumbrances shall include any exceptions generically or specifically relating to mechanics’ liens that the title company may raise as a result of the SCA Pre- and Post-Turnover Work not being complete); and, if SCA elects, at its cost, title insurer will issue a binding and enforceable ALTA form title policy (showing no Encumbrances other than the Permitted Encumbrances) to SCA, naming SCA as the fee owner (which condition is for the benefit of SCA). SCA acknowledges and agrees that the following agreement shall be a Permitted Encumbrance: that certain Agreement between Triborough Bridge and Tunnel Authority and Developer dated as of March 22, 2017, as the same may be amended and/or replaced.

(c) Developer delivering to SCA the Deed and the other closing deliveries described in this Article X (which condition is for the benefit of SCA);

(d) there not having occurred any Major Event (which condition is for the benefit of both SCA and Developer);

(e) the Condominium Documents shall have been approved by SCA in accordance with and to the extent required by Article XIII hereof and executed by each of the parties thereto (which condition is for the benefit of SCA and Developer);

(f) the Condominium Declaration being recorded and the Condominium being in full force and effect, and there being in force a valid and effective policy of all-risk casualty insurance with standard coverages and endorsements (as specified in the Condominium Declaration) covering the Common Elements to the extent constructed and in existence as of such date, to the extent of the full replacement value thereof (which condition is for the benefit of SCA and Developer);

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(g) payment by SCA to Developer (or Developer’s designee(s)) of any remaining outstanding amount in respect of the Purchase Price, other than with respect to SCA Pre- and Post-Turnover Work which has not been performed as of Closing, it being understood that such amount shall be paid by SCA subsequent to Closing pursuant to Section 5.02(g) hereof (which condition is for the benefit of Developer); and

(h) receipt of a “No Action” letter from the New York State Attorney General’s office (which condition is for the benefit of both SCA and Developer), it being understood, however, that at Developer’s option the sale of the School Unit will be made pursuant to the offering plan, except that this Agreement shall contain all of the terms and conditions pertaining to the sale of the School Unit to SCA and in the event of an inconsistency between the terms and conditions of the offering plan, on the one hand, and the terms and conditions of this Agreement, on the other hand, the terms and conditions of this Agreement shall control. Notwithstanding anything set forth in the offering plan to the contrary, SCA represents that it will not rely on any of the statements, terms, provisions or representations made in the offering plan, and waives and disclaims any of the protections therein and all conditions of the Martin Act (to the fullest extent permitted by law).

Section 10.02 Right to Waive Conditions . Either party hereto shall have the right to waive compliance by the other party hereto with any of the conveyance conditions or with any particular matter included within any of the conveyance conditions. Any such waiver must be in writing and must refer specifically to the condition (or matter) being waived.

Section 10.03 Closing and Closing Date . The Closing shall take place at 10:00 a.m. at the offices of Developer’s counsel, or at another location in the City as may be selected by Developer, on a date (the “ Closing Date ”) following the later of (A) the date that Substantial Completion of the School Base Building Work has been certified by SCA or determined by an Arbitrator, and (B) the filing of the Condominium Declaration with the City Register’s office, after at least five (5) Business Days’ prior written notice given by either party. If the Closing has not occurred by June 1, 2030 and this Agreement has not therefore been terminated, then (a) this Agreement shall automatically terminate on June 1, 2030, and (b) thereafter neither party shall have any further obligations hereunder except for those which expressly survive termination of this Agreement.

Section 10.04 Developer’s Closing Deliveries . Subject to the terms of this Agreement, Developer shall execute and deliver to SCA the following at Closing:

(a) a bargain and sale deed without covenants to the School Unit in recordable form, duly executed and acknowledged (the “ Deed ”), conveying fee simple title to the School Unit to SCA;

(b) such transfer tax forms as shall be required in connection with the Deed (collectively, the “ Transfer Tax Forms ”); SCA having advised Developer that SCA is exempt from State of New York and City of New York transfer taxes with respect to conveyance of the School Unit and that in no event shall any transfer taxes be payable by Developer in connection with such conveyance;

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(d) a certificate of non-foreign status pursuant to Section 1445 of the IRC Code;

(e) a certificate of good standing of Developer and all approvals, authorizations, consents or other actions by or filings with any Person (if any) which are required to be obtained or completed by Developer in connection with the execution and delivery of any Closing documents;

(f) the MOL Terminations and any related transfer tax forms; and

(g) any other instruments or documents to be executed and/or delivered by Developer pursuant to this Agreement at or prior to Closing that have not been executed or delivered as of the Closing Date.

Section 10.05 SCA’s Closing Deliveries . At Closing, SCA shall accept delivery of the Deed and shall execute and deliver to Developer the following:

(a) any unpaid sums due by SCA under this Agreement;

(b) the Transfer Tax Forms;

(d) any other statements or documents to be executed or delivered by SCA at Closing, in accordance with the provisions of this Agreement.

Section 10.06 Title Insurance Premiums; Apportionments; “True-Up” Adjustment to Purchase Price .

(a) At Closing, SCA shall pay the costs for the issuance of the title insurance commitment and the policy issued pursuant thereto (if SCA elects to obtain such insurance).

(b) At Closing, Developer and SCA shall apportion water and real property taxes, sewer charges, utility deposits, and payments under any service contracts, all as shall be customary for transactions of this nature as well as common charges for the School Unit, if any based upon the allocation schedule attached as Exhibit B to the Bylaws of the Condominium. SCA agrees to reasonably cooperate with Developer if Developer endeavors to pursue any real property tax waiver, abatement or exemption. In the event of a credit due Developer, Developer may make application to the NYC Department of Finance for a refund. For purposes of clarification, SCA will be responsible for paying to Developer at Closing SCA’s proportionate share of real estate taxes as of Closing even though SCA may be tax exempt, and SCA will have the right to seek a refund from the taxing authority subsequent to Closing in respect of such payment so made to Developer by SCA, but Developer will have no obligation or liability in the event such refund is not received by SCA.

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(c) The Purchase Price shall be adjusted to reflect a “true-up” of Public School Project Costs that have been previously paid by SCA, during the period commencing after the initial Requisition following the first draw under Developer’s construction loan through the day immediately preceding the Closing, on the basis of allocations pursuant to the Description of Hard Cost Allocation and the Land Value and Soft Cost Allocation on Exhibit G . The “true-up” adjustment shall reflect any changes to the underlying bases for such allocations ( e.g. , percentage of gross square footage, land allocation percentage) occurring between the initial Requisition following the first draw under Developer’s construction loan through the day immediately preceding the Closing. If the “true-up” adjustment results in an amount due Developer, such amount, with interest at Developer’s cost of borrowing, shall be added to the Purchase Price. If the “true-up” adjustment results in an amount due SCA, such amount, with interest at SCA’s cost of borrowing, shall be deducted from the Purchase Price.

Section 10.07 Payment of Common Charges. SCA’s obligation to pay common charges under the Condominium Declaration with respect to the School Unit will commence from and after the Closing Date for the School Unit. This Section 10.07 shall survive the Closing.

Section 10.08 Developer’s Right of Access . Without limiting any right of access provided to Sponsor (as defined in the Condominium Documents), the Board of Managers or any other Unit Owner under the Condominium Documents, Developer hereby reserves unto itself, and SCA acknowledges and agrees to such reservation, a right of reasonable access by Developer and its contractors to the School Unit from time to time and at reasonable times in order to (1) complete the Punch List Items and/or, (2) at SCA’s sole cost and expense, to perform necessary work including, without limitation, installing a hoist or elevators, fire sprinkler loop, infrastructure devices, data gathering panels and/or communicating stairs, in the case of this subclause (2) if the acts or omissions of SCA or its design professionals or other consultants (or any SCA Design Non-Compliance or Post-April Non-Compliance) are delaying Developer’s ability to obtain (a) any temporary certificate of occupancy for any unit or floor other than the School Unit or (b) a PCO (as defined below), it being understood and agreed that, the forgoing notwithstanding, SCA shall be fully responsible for promptly and diligently performing all work necessary within the School Unit in order to enable Developer to obtain (a) all temporary certificates of occupancy for units and floors other than the School Unit and (b) the PCO, but SCA shall not be responsible for performing any work necessitated as a result of the acts or omissions (where there is a duty to act) of another unit owner in the Building. Any such work to complete the Punch List Items or to obtain temporary certificates of occupancy and the PCO shall be undertaken in a manner consistent with SCA’s reasonable security requirements and so as not to interfere with the conduct of SCA’s business in the School Unit for the purposes described in the School Program, provided, however, that in no event shall Developer be obligated to employ any so-called “overtime” labor in connection with the completion of such Punch List Items. This Section 10.08 shall survive the Closing.

Section 10.09 Casualty; Condemnation . (a) If a Major Event occurs and either party exercises its right not to close on the conveyance of the School Unit contemplated by this Agreement, then this Agreement shall terminate and the insurance proceeds or the condemnation award, as the case may be, relating to the School Unit shall be equitably apportioned between SCA and Developer as applicable;

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(b) If (i) a Major Event occurs and Developer exercises its right not to close on the conveyance of the School Unit contemplated by this Agreement, (ii) SCA was not in default beyond applicable notice and cure periods under this Agreement at the time the Major Event occurred and (iii) Developer, on or prior to the second (2nd) anniversary of the date upon which such Major Event occurred, constructs a building on the Land, then, Developer shall not, on or prior to such second (2nd) anniversary, sell or lease such building (or any portion thereof in excess of 50,000 gross square feet) to any party for the primary purpose of operating a pre-K, kindergarten, elementary or middle school through eighth grade (the “ School ”), unless Developer shall have first given SCA written notice thereof (which notice, in Developer’s sole discretion, may be given to SCA at any time after Developer has elected to construct a building on the Land and before consummating a sale or lease of a School to a party other than SCA) containing the material economic and other terms upon which Developer is willing to sell or lease, as applicable, the School (the “ ROFO Notice ”). SCA shall notify Developer not later than thirty (30) days after receipt of the ROFO Notice (the “ ROFO Period ”), TIME BEING OF THE ESSENCE, that it elects to purchase or lease, as applicable, the School, upon the terms and conditions contained in the ROFO notice. If SCA shall timely elect to purchase or lease, as applicable, the School as aforesaid, then Developer shall prepare, and the parties shall execute and deliver a contract of sale or lease, as applicable, containing the terms set forth in the ROFO Notice and other provisions reasonably acceptable to the parties (unless Developer’s ROFO Notice contained a contract of sale or lease document, as applicable, attached thereto, in which case the parties hereto shall execute such contract of sale or lease form after completing any blanks therein in a manner consistent with the ROFO Notice and, to the extent not addressed by the ROFO Notice, otherwise reasonably acceptable to the parties), within sixty (60) days after the giving of notice by SCA of its election to purchase or lease, as applicable, the School in accordance with the provisions of this paragraph. In the event SCA shall fail to elect to purchase or lease, as applicable, the School prior to the end of the ROFO Period, TIME BEING OF THE ESSENCE, or SCA otherwise waives such election in writing prior to the end of the ROFO Period, TIME BEING OF THE ESSENCE, Developer shall be free to sell or lease the Property to any other party or otherwise deal with the Property as Developer sees fit and without regard for any rights of SCA by virtue of this Agreement or otherwise. This Section 10.09(b) shall survive the termination of this Agreement.

Section 10.10 PCO . Subsequent to Closing, and subject to the provisions of Section 10.08 hereof, Developer shall obtain a permanent certificate of occupancy for the Building (“ PCO ”). SCA shall provide reasonable protections so as not to delay Developer’s ability to obtain the PCO and shall use its best efforts to cause the New York State Attorney General’s office to waive any requirement that any funds be deposited in escrow in respect of work to be performed in the School Unit in order for Developer to obtain the PCO. The provisions of this Section 10.10 shall survive the Closing.

Article XI

REMOVAL OF TITLE DEFECTS

Section 11.01 Curing Title Defects . Developer shall remove or cause to be removed of record or bonded or affirmatively insured or omitted as an exception to title by the Title Insurer, at or prior to Closing, any liens or encumbrances that can be removed by payment of a liquidated amount created or suffered by Developer against the School Unit, other than any lien or encumbrance consented to or occasioned (directly or indirectly) by SCA or that constitutes a Permitted Encumbrance. Developer shall have no other obligation to remove any liens, encumbrances or other title exceptions.

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Section 11.02 Title Affidavits . (a) At or before the Closing, Developer shall give the Title Insurer an owner’s affidavit of title substantially in the form attached hereto as Exhibit R (with such edits as may be necessary to reflect the then current state of facts).

(b) If a search of the title discloses judgments, bankruptcies or other returns against other Persons having names similar to those of Developer, on or before the Closing Date, Developer will establish to the satisfaction of the Title Insurer that such judgments, bankruptcies or other returns are not against Developer.

Article XII

REPRESENTATIONS, WARRANTIES; COVENANTS AND RESTRICTIONS; COMPLETION GUARANTY AND BAD BOY GUARANTY

Section 12.01 Developer’s Representations. Developer represents that:

(a) Developer is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and authority to carry on its business as now being conducted. Developer has the requisite limited liability company power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by Developer of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite action (including such requisite action by the direct and indirect members of Developer). This Agreement has been duly executed and delivered by Developer.

(b) There are no approvals, authorizations, consents or other actions by or filings with any Person that are required to be obtained or completed by Developer in connection with the execution and delivery of this Agreement, except those that have been obtained by Developer.

(c) To Developer’s actual knowledge, there are no outstanding judgments, orders, writs, injunctions, or decrees of any Government Entity, no pending Legal Proceedings or material threats of Legal Proceedings, in each instance against Developer which are reasonably likely to have a material adverse effect on Developer’s performance of its obligations under this Agreement.

(d) The representations of Developer in this Section 12.01 are true, correct, and complete in all material respects as of the date of this Agreement.

Section 12.02 SCA’s Representations . SCA makes the representations and warranties set forth below:

(a) SCA is a public benefit corporation created and validly existing under the laws of the State of New York and has all requisite corporate power and authority to carry on its business as now being conducted. SCA has the requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by SCA of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite action. This Agreement has been duly executed and delivered by SCA.

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(b) Except as contemplated by Section 5.01(c) of this Agreement, there are no approvals, authorizations, consents or other actions by or filings with any Person that are required to be obtained or completed by SCA in connection with the execution and delivery of this Agreement or in connection with any action required to be taken by SCA hereunder, except those that have been obtained.

(c) To SCA’s actual knowledge, there are no outstanding judgments, orders, writs, injunctions, or decrees of any Government Entity, no pending Legal Proceedings or material threats of Legal Proceedings, in each instance against SCA that are reasonably likely to have a material adverse effect on SCA’s performance of its obligations under this Agreement.

(d) The representations and warranties of SCA in this Section 12.02 are true, correct, and complete in all material respects as of the date of this Agreement.

Section 12.03 Condominium Documents Covenants. SCA shall reasonably cooperate with Developer and execute and deliver to Developer such documents and affidavits as Developer may reasonably request in connection with the Condominium Documents including, without limitation, in order to obtain a “No Action” letter from the New York State Attorney General’s office. The “No Action” letter will provide that the conveyance of the School Unit will occur without a temporary certificate of occupancy for the School Unit. SCA shall reasonably cooperate with Developer to obtain the Attorney General’s approval of the “No Action” letter. Developer will apply for a “No Action” letter reasonably in advance of the Closing.

Section 12.04 Completion Guaranty; Construction Lender’s Failure to Fund; and Bad Boy Guaranty .

(a) At the closing of the Construction Loan, Developer shall provide a completion guaranty (the “ Completion Guaranty to SCA ”) in favor of SCA with respect to the School Base Building Work (but, for purposes of clarification, excluding the SCA Pre- and Post-Turnover Work) from the same guarantor or guarantors (the “ Guarantor ”) as required by Developer’s construction lender and in the form of Exhibit S hereto, subject to the remainder of this paragraph. Guarantor will not be liable for changes in the scope of any work made after Developer’s construction lender has exercised remedies under the applicable loan documents. The Completion Guaranty to SCA will include a guaranty to obtain a PCO for the Building, to the extent of Developer’s obligation therefor set forth in this Agreement and the guaranteed obligations will be subject to Developer’s construction lender funding the Construction Loan and subject to SCA’s obligations under this Agreement. If, prior to Closing, Developer’s construction lender fails to fund an advance of the Construction Loan in excess of $10,000,000 when the construction lender is required to do so under the construction loan documents, and such failure has not been cured within one (1) year after notice from SCA to Developer and the construction lender (it being understood that such failure may be cured by Developer obtaining replacement funds for such failure), SCA, subject to the terms of the Interparty Agreement, will, unless Developer is diligently attempting to cause the construction lender to remedy such failure or is otherwise diligently seeking to obtain funds from another source as a substitute for such unfunded amount, have the right to terminate the Master Lease, Sublease and this Agreement upon thirty (30) days’ prior written notice to Developer and the construction lender, in which case, unless such failure has been cured within such thirty (30) day period, the Guarantor shall reimburse SCA for all Public School Project Costs paid by SCA to Developer, and thereafter no party shall have any further obligation under the Master Lease, Sublease or this Agreement except for those obligations which expressly survive the termination of the Master Lease, Sublease and/or this Agreement, as applicable.

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(b) At the closing of the Construction Loan, Developer shall provide a “bad boy” guaranty in favor of SCA (the “ Bad Boy Guaranty to SCA ”) from the Guarantor in substantially the same form as provided to the construction lender (to the extent applicable to the School Base Building Work and the transactions contemplated hereby), with respect to actual losses incurred by SCA due to the acts of Developer.

Article XIII

CONDOMINIUM DOCUMENTS

Section 13.01 Approval of Condominium Documents . The parties hereby approve the draft Condominium Declaration, Condominium Bylaws and House Rules (the “ Condominium Documents ”) attached hereto as Exhibit T and agree that Developer may prepare and/or enter into the Condominium Documents attached as Exhibit T , subject to the remainder of this Section 13.01. Prior to Closing, Developer may make any changes to the Condominium Documents that do not directly or adversely affect the School Unit, School Limited Common Elements or General Common Elements (all as described in the Declaration) without the consent of SCA, provided that, subject to Section 3.03(b) above, such changes shall not be inconsistent with Section 3.01(a)(vi) hereof regarding the size of the School Unit or otherwise adversely affect the functionality or, except to a de minimis extent, operations of the School Program. All other changes to the Condominium Declaration and Condominium Bylaws prior to Closing shall require the consent of SCA in its sole discretion. In the event that SCA believes that such changes would directly or adversely affect the School Unit, School Limited Common Elements or General Common Elements or be inconsistent with Section 3.01(a)(vi) hereof regarding the size of the School Unit or otherwise adversely affect the functionality or, except to a de minimis extent, operations of the School Program, subject to Section 3.03(b) above, the issue shall be submitted to Arbitration. Following the Closing, any amendment to the Condominium Documents shall be subject only to the provisions thereof. Developer shall have discretion to determine when on or prior to Closing the Condominium Documents will be submitted for filing and/or recorded. Developer shall have the right to merge existing tax lots comprising the Property in connection with the formation of the condominium, and SCA shall reasonably cooperate in connection therewith. Developer shall have the right, prior to or subsequent to Closing, to file or cause to be filed in the City Register’s Office an amended and restated Condominium Declaration, and file or cause to be filed with the Tax Map Unit of the Department of Finance and the City Register’s Office an amendment to the Floor Plans, that subdivides a portion of the condominium into individual residential units and/or individual retail units and which reflects such additional changes to the Condominium Documents relating solely to the subdivision of the residential and/or retail portions of the Condominium as Developer shall determine in its sole discretion, provided that Developer will comply with the standards set forth in the second sentence of this Section 13.01. Prior to Closing, Developer will provide SCA with written notice at least five (5) business days prior to amending the Condominium Documents in any respect that would affect the School Unit, School Limited Common Elements or General Common Elements. All other changes to the Condominium Documents made prior to Closing shall be provided by Borrower to SCA. This Section 13.01 does not limit the respective rights and obligations of the parties under Article III and Section 5.04 hereof. This Section 13.01 shall survive Closing.

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Article XIV

NOTICES

Section 14.01 Notices . Whenever it is provided in this Agreement that a notice, demand, request, consent, approval or other communication shall or may be given to or served upon either of the parties (or their respective successors or assigns) by the other, and whenever either of the parties shall desire to give or serve upon the other any notice, demand, request, consent, approval or other communication with respect hereto or to the subject matter hereof, each such notice, demand, request, consent, approval or other communication shall be in writing and shall be sent by national overnight delivery service or personal delivery, addressed as follows (or to such other address and person as shall be designated from time to time by SCA or Developer, as the case may be, in a written notice under this Article XIV ):

If to SCA:

	New York City School Construction Authority 30-30 Thompson Avenue Long Island City, New York 11101 Attn: Ross J. Holden, Executive Vice President & General Counsel

	with a copy simultaneously to:

	Herrick, Feinstein LLP 2 Park Avenue New York, New York 10016 Attn: Doug Heller, Esq.
If to Developer:	c/o Trinity Place Holdings Inc. 340 Madison Avenue, Suite 3C New York, NY 10173 Attn: Matthew Messinger

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with a copy simultaneously to:

c/o Trinity Place Holdings Inc.

340 Madison Avenue, Suite 3C

New York, NY 10173

Attn: Miriam Harris

and a copy simultaneously to:

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

Attn: James P. Godman, Esq.

Section 14.02 All notices shall be deemed effective upon receipt . Any notice sent by national overnight delivery service or personal delivery shall be deemed given on the date of receipt or refusal as indicated on the receipt of the national overnight delivery service or personal delivery service. Any notice may be given either by a party or by such party’s attorney. Developer or SCA may designate, upon not less than five (5) business days’ notice given to the others in accordance with the terms of this Article 14 additional or substituted parties to whom notices should be sent hereunder.

Article XV

MISCELLANEOUS

Section 15.01 Further Assurances . Each of the parties shall take such actions and execute and deliver such other instruments and documents as may be reasonable, necessary or appropriate to effectuate the transactions contemplated under, this Agreement, provided, however, that the taking of such acts or the execution of such documents will not result in any cost or liability (other than a de minimis cost or expense) to the respective party that is not otherwise required under this Agreement.

Section 15.02 Governing Law . This Agreement shall be governed and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law.

Section 15.03 Amendments and Waivers in Writing . This Agreement may not be modified, waived, or amended except by written agreement executed by all the parties.

Section 15.04 Delays not a Waiver . Except as expressly provided in this Agreement, no delay on the part of any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof or as a waiver or any other right, power or privilege hereunder, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise hereunder. Except as otherwise provided in this Agreement, the rights and remedies of each party under this Agreement are cumulative and are not exclusive of any rights or remedies that the party may otherwise have at law or in equity.

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Section 15.05 Execution in Counterparts . This Agreement may be executed in counterparts.

Section 15.06 Exhibits; Headings . The exhibits attached hereto or subsequently incorporated herein are (and shall be deemed) parts of this Agreement. The headings of this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

Section 15.07 Assignments of this Agreement . (a) Developer shall not assign this Agreement, or any of its rights or obligations herein or hereunder, except, upon not less than ten (10) Business Days’ prior notice to SCA, to a Qualified Developer. Developer shall also have the right to assign and/or mortgage this Agreement to its lender. Any attempted assignment in violation of this Section 15.07(a) shall be null and void.

(b) SCA shall not assign this Agreement, or any of its rights or obligations herein or hereunder, except that (i) after Substantial Completion of the School Fit-Out Work and performance by SCA of all of its financial obligations under this Agreement, SCA may assign this Agreement or such rights or obligations (including without limitation its rights under Section 6.03) to the New York City Department of Education a/k/a the Board of Education of the City School District of the City of New York, and (ii) SCA may assign this Agreement or such rights or obligations with the prior written consent of Developer. Any such assignee shall assume all of SCA’ s then remaining obligations hereunder and shall confirm such assumption, by a writing satisfactory to Developer, prior to the effective date of such assignment. No such assignment shall relieve SCA of any remaining financial or other obligations hereunder. Any attempted assignment in violation of this Section 15.07(b) shall be null and void.

Section 15.08 Binding on Permitted Successors and Assigns . This Agreement (and all terms thereof, whether so expressed or not), shall be binding upon the respective successors, permitted assigns and legal representatives of the parties and shall inure to the benefit of and be enforceable by the parties and their respective successors, permitted assigns and legal representatives.

Section 15.09 Remedies . Except as specifically provided herein, each party has and may pursue all rights available at law or in equity by reason of the failure, by any other party hereto, to keep or perform such other party’s agreements or obligations under this Agreement.

Section 15.10 Submission to Jurisdiction . Developer and SCA hereby irrevocably and unconditionally (i) agree that the exclusive forum for confirming or challenging an arbitration award pursuant to Article VII hereof shall be the Supreme Court of the State in New York County, (ii) consent to, and waive any and all personal rights under, the laws of any state to object to the jurisdiction of each such court in any such action, and (iii) waive any and all rights to a trial by jury. In furtherance of such agreement, Developer and SCA agree, upon request of the other party, to discontinue (or cause to be discontinued) any such suit, action or proceeding pending in any other jurisdiction or court, and Developer and SCA irrevocably consent to the service of any and all process in any such suit, action or proceeding by service of copies of such process to Developer or SCA, as the case may be, at its address provided herein.

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Section 15.11 Severability . If any term, covenant, condition or provision of this Agreement is determined by a final judgment to be invalid or unenforceable, the remaining terms, covenants, conditions and provisions of this Agreement shall not be affected thereby, and each other term, covenant, condition and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

Section 15.12 No Rights in Third Parties; Not Joint Venture Partners . Nothing in this Agreement, express or implied, is intended: (i) to confer on any Person, other than the parties hereto, any rights, obligations, liabilities, or remedies; (ii) to constitute SCA as a partner or co-venturer of Developer or each other; or (iii) to waive any claim or right of any party hereto against any Person who is not a party hereto.

Section 15.13 No Construction Against Draftsperson . This Agreement shall be construed without regard to any presumption requiring construction against the party drafting this Agreement.

Section 15.14 Broker . Developer and SCA each represents and warrants to the other that it has not dealt with any broker in connection with this contract other than Newmark Grubb Knight Frank (“ Broker ”) and that neither knows of any other broker who has claimed or may have the right to claim a commission in connection with this transaction. Developer and SCA shall indemnify and defend each other against any costs, claims or expenses, including attorneys’ fees, arising out of the breach on their respective parts of the aforesaid representations and warranties. In the event the closing of the sale of the School Unit occurs, each of Developer (pursuant to a brokerage agreement) and SCA (pursuant to a consulting contract) shall make a payment to Broker subject to and upon the terms of the applicable agreement.

Section 15.15 Survival . Those provisions of this Agreement that by their terms or general intent survive any termination or cancellation of this Agreement shall so survive as will any claim that any party may have against the other for a default occurring prior to such termination, all of which shall survive such termination.

Section 15.16 Exculpation . SCA shall look solely to the estate of and property of Developer in the School Unit for the satisfaction of SCA’s remedies for the collection of a judgment (or other judicial process) requiring the payment of money by Developer in the event of a default by Developer under this Agreement, and no other property or assets of any party who could or does constitute Developer shall be subject to levy, execution or other enforcement procedure for the satisfaction of SCA’s remedies under or with respect to this Agreement or the relationship of Developer and SCA hereunder. Accordingly, and not by way of limitation, none of the trustees, directors, officers, shareholders, partners, members, direct or indirect investors, consultants or representatives of Developer or any Affiliate of Developer shall be personally liable for the obligations of Developer hereunder. Nothing contained herein shall be deemed to release the guarantors thereunder from liability under the Completion Guaranty to SCA or Bad Boy Guaranty to SCA.

Section 15.17 Acknowledgment Regarding Play Areas . The parties acknowledge and agree that in no event may the school play areas described in Exhibit I and depicted on Exhibit M be designed or constructed in a manner so as to constitute or qualify as “Floor Area,” as such term is defined in Section 12-10 of the Zoning Resolution of The City of New York.

This Article XV shall survive the Closing or termination of this Agreement.

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IN WITNESS WHEREOF, Developer and SCA have executed this Agreement as of the date first above written.

TPHGREENWICH OWNER LLC

By:	/s/ Steven Kahn
	Name:	Steven Kahn
	Title:	Chief Financial Officer

NEW YORK CITY SCHOOL CONSTRUCTION AUTHORITY

By:	/s/ Ross Holden
	Name:	Ross Holden
	Title:	Executive Vice President & General Counsel

Exhibit 21.1

LIST OF SUBSIDIARIES

470 4 ^th Avenue Fee Owner LLC (DE)
470 4 ^th Avenue Owner LLC (DE)
Filene’s Basement, LLC (DE)

TPH 223 N 8 ^th Investor LLC (DE)

TPH 470 4 ^th Avenue Investor LLC (DE)

TPH Forest Hill LLC (DE)
TPH IP LLC (DE)

TPH Merrick LLC (DE)
TPH Route 17 LLC (DE)

TPHGreenwich Holdings LLC (DE)

TPHGreenwich Owner LLC (DE)

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

Trinity Place Holdings Inc.
New York, New York

We hereby consent to the incorporation by reference in Registration Statement No. 333-207324 on Form S-8 and Registration Nos. 333-193396, 333-206944, 333-208740, 333-214482 and 333-216754 on Form S-3 of our report dated March 15, 2018, relating to the consolidated financial statements, the effectiveness of Trinity Place Holdings Inc.’s internal control over financial reporting, and schedule of Trinity Place Holdings Inc. appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

/s/ BDO USA, LLP

New York, New York
March 15, 2018

Exhibit 31.1

CERTIFICATION

I, Matthew Messinger, certify that:

I have reviewed this Annual Report on Form 10-K of Trinity Place Holdings 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 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:	March 15, 2018

By:	/s/ Matthew Messinger
	Matthew Messinger
	President and Chief Executive Officer
	Trinity Place Holdings Inc.

Exhibit 31.2

CERTIFICATION

I, Steven Kahn, certify that:

I have reviewed this Annual Report on Form 10-K of Trinity Place Holdings 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:	March 15, 2018

By:	/s/ Steven Kahn
	Steven Kahn
	Chief Financial Officer
	Trinity Place Holdings Inc.

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Trinity Place Holdings Inc. (“Trinity”) on Form 10-K for the year ended December 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Matthew Messinger, President and Chief Executive Officer of Trinity, certify, to the best of my knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

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

(2)

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

By:	/s/ Matthew Messinger
	Matthew Messinger
	President and Chief Executive Officer
	Trinity Place Holdings Inc.
	March 15, 2018

A signed original of this written statement required by Section 906 has been provided to Trinity Place Holdings Inc. and will be retained by Trinity Place Holdings Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Trinity Place Holdings Inc. (“Trinity”) on Form 10-K for the year ended December 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven Kahn, Chief Financial Officer of Trinity, certify, to the best of my knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

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

(2)

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

By:	/s/ Steven Kahn
	Steven Kahn
	Chief Financial Officer
	Trinity Place Holdings Inc.
	March 15, 2018