601 Lexington Avenue, New York, NY 10022

tel +1 212-812-5700 fax +1 312-601-1479

January 16, 2011

Rivercross Tenants’ Corp.

531 Main Street
New York, NY 10044

Re: Rivercross , Roosevelt Island, New York (“Rivercross”): Ground Sublease

Gentlemen:

Roosevelt Island Operating Corp (“RIOC”) has requested that Jones Lang LaSalle (“JLL”) prepare
this DRAFT term sheet, which is based on an extension of the current ground sublease (“Ground
Sublease”) with the Rivercross Tenants’ Corp (“RTC”).

RIOC and RTC recognize the benefits of this Ground Sublease extension including, but not limited to
the following:

• RTC will be able to refinance Rivercross’ present mortgage in order to take advantage of the low
interest rates currently available in the market, thereby enhancing affordability for all its residents.

• A portion of the refinancing proceeds will be used for major capital improvements to the Premises,
including improvements needed for a building of Rivercross’ age as well as energy efficiency
improvements, all of which RIOC supports as part of its mission to maintain quality housing stock
on Roosevelt Island

• For as long as Rivercross elects to stay in the Mitchell Lama (“M-L”) Program RTC will maintain
low Ground Sublease payments and, as part of its mission, RIOC will maintain affordable housing
stock on Roosevelt Island.
.

1. Sublandlord: RIOC

2. Sublessee: Rivercross Tenants’ Corp.

3. Premises: Rivercross - 531 Main Street

4. Premises Area: 501,817 Rentable Square Feet (“RSF”) (total residential area)

5. Units: 365 residential Units

6. Extension Term: Approximately Forty (40) years through December 22, 2068.

7. Commencement Upon the approval of RIOC and execution and delivery of a Ground
Date: Sublease.
.
8. Refinancing: The Ground Sublease extension is necessary in order for RTC to
refinance its present mortgage of approximately $20 million at 5.45%

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interest rate and take advantage of lower interest rates currently available
in the market as detailed in Exhibit A, thereby enhancing affordability
and building conditions for all its residents. Such RTC refinancing is
subject to the approval of DHCR under M-L regulations and the related
mortgaging of the Ground Sublease extension is subject to approval of
RIOC.

9. Ground Rent: For as long as Rivercross elects to stay in the M-L program the Ground
Rent payments will be due as follows:

A. Base Ground Rent: Effective on the Commencement Date, the Base

Ground Rent payable by RTC to RIOC shall remain at its current level of
$2,624.48 per month and shall escalate at four percent (4%) compounded
annually beginning on the first (1st) anniversary of the Commencement
Date and each anniversary date thereafter until the expiration of the Term.
In addition, RTC has stated that it shall pay to ESDC the current level of
Base Ground Rent of $5,655.00 per month until expiration of the Term.

B. Additional Ground Rent: None.

C. Rent Adjustment Date: as defined in the current Restated Ground

Lease dated November 30, 1977, the Rent Adjustment Date will not
occur, or be deemed to have occurred.

10. Tax Equivalency For as long as Rivercross elects to stay in the M-L program RTC will
Payment continue to pay TEP to ESDC as presently determined by the “Shelter
(“TEP”): Rent” Formula, until expiry of the Term in accordance with the letter
agreement between ESDC and RTC dated February 5, 2008 attached as
Exhibit D.

11. Sublessee’s This Ground Sublease extension is necessary for Sublessee to refinance
Work: its present mortgage. Such refinancing is expected to provide a source of
funding for the Sublessee to perform the capital improvements to the
Premises as outlined in Exhibit B

12. Public Safety Sublessee to continue to pay the current monthly public safety fee of
Fee: $13,454.50 ($161,454 annually). The public safety fee shall escalate at
three percent (3%) compounded annually beginning on the first (1st)
anniversary of the Commencement Date and each anniversary date
thereafter until the expiration of the Term.

13. Retail Space: RIOC and RTC will continue to honor the terms and conditions of the
existing sublease through 2018. RIOC will currently exercise its option to
extend the current sub-sublease from 2018 to October 1, 2028 (the “Retail
Sublease Extension”), the expiration of the current Ground Sublease, after
which the Current RIOC Space described in Exhibit C, would revert to
RIOC for the Extension Term and the parties have agreed to the
following terms for the Extension Term:

A. The sublease arrangement for the Current RIOC Space between the
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parties will continue through the Extension Term.

B. RTC shall pay to RIOC an amount equal to fifty percent (50%) of the
then fair market value rent for 517 Main Street and twenty-five percent
(25%) of the then fair market value rent for 535 Main Street. RTC shall
also pay all Ground Rent, TEP and utilities for 517 Main Street and 535
Main Street. Fair market value shall mean the then fair market annual rent
as of October 1, 2028 for each space based on comparable space on Main
Street with the space considered vacant and in "as is"
condition taking into account all relevant factors, including but not
limited to, the period of the Extension Term, escalations and rent
adjustment, and RTC’s payment of the utilities, Ground Rent and TEP on
both its units.

C. 517 and 535 Main Street shall be used exclusively by RTC and RTC
shall have no right to sublease 517 Main Street and/or 535 Main Street or
to terminate, individually or together, at any time during the Extension
Term.

D. RIOC will pay utilities, Ground Rent and TEP on the Current RIOC
Space.

14. PILOMRT: In the event that a transaction involving any property on Roosevelt Island
where RIOC is the property’s Sublessor is entitled to an abatement or
exemption of any mortgage recording tax (“MRT”) due to RIOC’s status,
the Sublessee will be required to pay RIOC a payment in lieu of MRT
(“PILOMRT”) in accordance with the Ground Lease. RTC represents to
RIOC that as a M-L housing company Rivercross is exempt from MRT
and thus PILOMRT so long as it remains in the M-L program.

15. PILOST: In the event that a transaction involving any property on Roosevelt Island
where RIOC is the property’s Sublessor is entitled to an abatement or
exemption of any sales and compensating use taxes on construction
materials incorporated during renovation due to RIOC’s status, the
Sublessee will be required to pay such tax payment to RIOC as a payment
in lieu of sales and use tax (“PILOST”).

16. Expenses: The Sublessee agrees to reimburse RIOC for any reasonable costs
incurred with respect to the transaction including but not limited to
appraisers, outside real estate consultants and outside legal counsel.
Subject to executing a separate expenses reimbursement agreement that
includes a cap on such expenses at $100,000, Sublessee shall reimburse
RIOC the balance due on such expenses reimbursement agreement upon
the execution of final Ground Lease extension documents.

17. General The finalization of a Ground Sublease extension is subject to:

Conditions: 1. A written appraisal of the real property to be completed by a
qualified, independent third-party appraiser who will take into
account all relevant economic terms and the Affordability
structure of the transaction
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2. Compliance with the Public Authorities Law of the State of New

York and other applicable law and guidelines concerning the
disposition of real property
3. Assurances satisfactory to RIOC which may include, without
limitation, indemnifications, title insurance and legal opinions, in
respect of compliance with all applicable laws
4. Authorization by RIOC’s Board
5. Consent of ESDC
6. The execution of a Ground Sublease extension agreement

18. M-L The terms contained herein are subject to Rivercross remaining in the M-
Conversion: L program. However the expiration of the Extension Term will remain
Dec 22, 2068 even if Rivercross leaves the M-L program.

In the event Rivercross exits the M-L program, the Ground Sublease shall
be renegotiated based on the form of conversion RTC utilizes.
Renegotiation of the Ground Sublease’s financial terms shall generally
include the Ground Rent, TEP and other fees and charges that RIOC
typically receives for similarly structured non-M-L residential properties
such as capital event fees for building sales and refinancings and transfer
fees for the sale of cooperative and condominium units. The renegotiated
Ground Sublease shall be subject to the General Conditions above.

19. Confidentiality: This term sheet, the terms and conditions contained herein and
details of ensuing negotiations will remain confidential among the
parties to the transaction and no terms sheet , lease drafts, leases or
summaries of any kind will be distributed, copied or otherwise
transmitted, orally or in writing, to any entity or person, except
authorized employees or agents of RIOC and RTC, and, to the extent
deemed necessary by RTC's Board of Directors, to shareholders of
RTC.

We look forward to concluding this transaction expeditiously.

Sincerely

Executive Vice President

Cc Leslie Torres
Kenneth Leitner, Esq.
Richmond McCurnin
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EXHIBIT A
Description of Refinancing Plan
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EXHIBIT B
Capital and Energy Conservation Improvements
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EXHIBIT C
Retail Space Description

At-Grade
Address Current Occupant SF

Current RIOC Space

503 Vacant 1,978
507 (511) Dr. Flanigan 808
513 Vacant-Retail/Office 920
521 Vacant 1,887
523 Beauty Salon of RI 1,294
527 Riva Gallery 1,630
Sub-Total 8,517

Current RTC Space

517 Rivercross Tenant's Corp. 1,725
535 Rivercross Tenant's Corp. 2,250
Sub-Total 3,975

Grand Total 12,492

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EXHIBIT D
TEP Letter Agreement between RTC and ESDC