MORTGAGE AND SECURITY AGREEMENT

 

This Mortgage and Security Agreement (collectively, the "Mortgage") is made and
entered into as of this 8th day of June, 2012, by Palmer-Mapletree LLC, a
Delaware limited liability company with its principal place of business at 9
East 40th Street, Suite 900, New York, New, York (the "Mortgagor") in favor of
Country Bank for Savings, a Massachusetts banking institution with a principal
place of business at 75 Main Street, Ware, Hampshire County, Massachusetts (the
"Mortgagee").

 

I.GRANT OF MORTGAGE AND SECURITY INTEREST

 

1.01For good and valuable consideration, and in order to secure the prompt and
complete payment and performance of any and all charges, debts, claims,
agreements, liabilities and obligations of Mortgagor to Mortgagee of every kind,
nature and description, whether now existing or hereafter arising, absolute or
contingent, direct or indirect, and whether as maker or otherwise, including,
without limitation, (i) the payment of a Commercial Note of even date in the
principal amount of $500,000.00; (ii) the payment of a Demand Revolving Line of
Credit Note in the principal amount of $500,000.00; and (iii) all terms,
covenants and agreements contained in this Mortgage, (collectively, the
"Obligations"), Mortgagor does hereby grant to Mortgagee, with MORTGAGE
COVENANTS, the land, with all buildings and improvements now or hereafter
thereon, located at 20 WILBRAHAM STREET, PALMER, HAMPDEN COUNTY, MASSACHUSETTS,
as more particularly described in Exhibit A annexed hereto, and with all
easements, covenants, agreements and rights which are appurtenant to or benefit
such land, and also including any item of Related Personal Property (as
hereinafter defined) constituting a fixture under the Uniform Commercial Code as
enacted in the Commonwealth of Massachusetts (collectively, the "Real Property")
and pledges and assigns to Mortgagee, and grants to Mortgagee a security
interest in, all right, title and interest of Mortgagor in and to all tangible
and intangible personal property (whether now existing or hereafter acquired or
arising, and wherever located) upon, concerning or in any way relating to the
Real Property, including, without limitation, (i) all fixtures, machinery,
equipment, furniture, inventory, building supplies, appliances and other
personal property, including but not limited to, all furnaces, ranges, heaters,
plumbing goods, gas and electric fixtures, screens, screen doors, mantels,
shades, storm doors and windows, awnings, oil burners and tanks or other
equipment, gas or electric refrigerators and refrigerating systems, ventilating
and air conditioning apparatus and equipment, doorbell and alarm systems,
sprinkler and fire extinguishing systems, portable or sectional buildings, and
all fixtures of whatever kind or nature now or hereafter contained in or on the
Real Property; (ii) all machinery, equipment, furniture, fixtures, accounts,
general intangibles, instruments, documents, chattel paper, inventory, building
materials or supplies, and appliances used or useful in the construction,
operation, maintenance or occupation of the Real Property; (iii) all leases,
contracts or agreements relating to the lease, rental, hire or use by Mortgagor
of any of the aforementioned personal property; (iv) all leases, tenancies,
occupancies and license arrangements pertaining to the Real Property or any
portion thereof, and all guaranties and security relating thereto; (v) all
rents, issues, profits and other benefits from the Real Property, any of the
above described personal property, and any of the leases, tenancies,
occupancies, license arrangements and rental agreements relating thereto; (vi)
all contracts, agreements, licenses, permits and approvals, privileges,
warranties and representations relating to the use, operation, management,
construction, repair or service of any of the Real Property or personalty
described above; (vii) any and all agreements to sell the Real Property or any
portion thereof; (viii) all funds held by Mortgagee as tax or insurance escrow
payments or for other purposes; (ix) all insurance policies and all proceeds or
unearned insurance premiums relating thereto; (x) all claims, awards, damages,
proceeds or refunds from any federal, state or local condemnation or other
taking of, and all municipal tax abatements relating to, any or all of the Real
Property or any personalty relating thereto; (xi) all construction contracts,
subcontracts, architectural agreements, labor, material and payment bonds,
guaranties and warranties, and plans and specifications relating to the
construction of improvements upon the Real Property, and (xii) all proceeds,
products, substitutions and accessions to any of the foregoing (collectively,
the "Related Personal Property"). The Real Property and all Related Personal
Property shall hereinafter be collectively referred to as the "Collateral".

 

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1.02It is expressly intended by Mortgagor that this Mortgage shall at all times
secure all of the Obligations, whether now existing or hereafter incurred by
future advance or otherwise, whether or not any of the Obligations are related
to the present transaction pertaining to this Mortgage or contemplated by
Mortgagor or Mortgagee at the time of this Mortgage, and whether or not this
Mortgage is referenced within any document evidencing any of such Obligations.
To the extent any of the Obligations shall be that of less than all parties
constituting the Mortgagor herein, any such co-mortgagor not liable for any of
such Obligations hereby expressly hypothecates his/her/its ownership interest in
the Collateral to the extent of all Obligations. It is also intended that the
lien of this Mortgage shall at all times take priority over any other lien
hereafter granted by Mortgagor upon any of the Collateral, whether or not the
Obligations secured hereby are incurred prior to or after the grant of such
junior lien.

 

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II.REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Mortgagor hereby further covenants, warrants and agrees with Mortgagee as
follows:

 

2.01Mortgagor shall pay when due, and fully and promptly perform all of the
provisions, agreements and covenants of, the Obligations.

 

2.02Mortgagor is, and shall hereafter remain, the owner of the Collateral free
and clear of all liens and encumbrances, except for the mortgage and security
interest created hereby and liens for real estate taxes and municipal
betterments not yet due and payable. Mortgagor has the full right, power, and
authority to execute and deliver this Mortgage. Mortgagor shall defend the
Collateral and Mortgagee forever against all claims and demands of all persons
and indemnify Mortgagee against any losses or expenses resulting from such
claims and demands.

 

2.03Mortgagor shall pay when due all taxes, charges for water, sewer and other
municipal services, and assessments, now or hereafter assessed or imposed
against any of the Collateral, any interest therein, or any obligations secured
thereby. Mortgagor shall deliver to Mortgagee, upon request, evidence of such
payments.

 

2.04At Mortgagee's request, Mortgagor shall pay monthly, in addition to any
other payment due upon the Obligations, an amount equal to one-twelfth (1/12) of
the estimated yearly taxes, assessments and other charges which may be levied
against the Collateral. Such funds shall be held by Mortgagee, without
obligation to pay interest thereon and free of liens and claims of all other
creditors of Mortgagor, to pay such taxes, assessments and charges when due, but
only to the extent of such funds actually held by Mortgagee. Such funds shall
not be, nor deemed to be, trust funds but may at any time be commingled with the
general funds of Mortgagee. Such funds are pledged as additional security for
the Obligations and may at any time be applied, at Mortgagee's option and
without notice to Mortgagor, to the payment of the Obligations. If at any time
the funds held by Mortgagee hereunder shall be less than the amount deemed
necessary by Mortgagee to pay such taxes, assessments and charges when due,
Mortgagor shall pay to Mortgagee, within five (5) days after notice from
Mortgagee to Mortgagor requesting payment thereof, any amount necessary to make
up the deficiency.

 

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2.05Mortgagor, at his own expense, shall keep the Collateral, other than
intangible property, insured at all times against fire and all other casualties
and contingencies as Mortgagee shall require, and by such insurance companies,
in such amounts, in such form and substance, and with such coverages,
endorsements, deductibles and expiration dates as are acceptable to Mortgagee,
in its sole and exclusive discretion. Mortgagor shall deposit all such policies
and/or certificates evidencing such coverages with Mortgagee on the binding
thereof and shall deliver, at least thirty (30) days before the expiration, new
policies and certificates for any coverage about to expire. All such insurance
policies shall be first payable in case of loss to Mortgagee pursuant to
standard mortgagee and loss payee clauses in favor of Mortgagee and shall
provide that such policies shall not be cancelled or amended without at least
thirty (30) days prior written notice to Mortgagee. In the event of any loss or
damage to any of the Collateral, Mortgagor shall immediately notify Mortgagee
and the insurer in writing. Mortgagor irrevocably authorizes and empowers
Mortgagee as attorney in fact for Mortgagor, at Mortgagee's option and sole
discretion, to settle and adjust any claim under such insurance polices, to
appear and prosecute any action arising therefrom, and to collect and receive
all proceeds thereof unless the casualty is under $50,000 in which case
Mortgagor may settle without Mortgagee’s consent. Mortgagor further authorizes
Mortgagee, at Mortgagee's option, to apply such proceeds to the Obligations or
to make such proceeds available, upon such terms and conditions as Mortgagee
shall determine, for the repair, restoration or replacement of Collateral.
Mortgagor also authorizes and empowers Mortgagee, at Mortgagee's option,
following any Event of Default (as hereinafter defined) under this Mortgage, to
cancel or transfer any insurance policy and/or to retain unearned premiums for
application to the Obligations.

 

2.06Mortgagor shall (i) not commit or permit any physical waste of the
Collateral; (ii) keep the Collateral in good operating order and condition at
all times; (iii) restore or repair promptly, fully and in a good workmanlike
manner the Collateral after any damage or loss thereto; (iv) comply at all times
with all laws, ordinances, regulations, requirements and restrictions applicable
to the Collateral; and (v) not remove any of the Related Personal Property
(unless replaced with equal or better Related Personal Property) or demolish or
materially alter any improvements to the Real Property. Mortgagee may, at
Mortgagor's sole expense, make or cause to be made reasonable entries upon the
Real Property for inspections of the Collateral during normal business hours or
at any other time when necessary to protect and preserve any of the Collateral.

 

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2.07Mortgagor represents and warrants to Mortgagee that, except for the
environmental conditions disclosed in writing to Mortgagee, no condition,
activity or conduct exists on or in connection with any of the Collateral which
violates any Environmental Law (as hereinafter defined), that no Hazardous
Material (as hereinafter defined) was ever, or is now, stored or otherwise
present (except in compliance with all Environmental Laws), or disposed of, upon
the Real Property, that there has been no release, or threat of release, or any
Hazardous Material upon, into or from any of the Collateral, or upon, into or
from any premises adjacent to the Real Property, and that Mortgagor has not
received any notice of any such release or threat of release or of any violation
of any Environmental Law. Mortgagor shall at all times comply with all
Environmental Laws, shall not store (except in the ordinary course of
Mortgagor's business and in compliance with all Environmental Laws) or otherwise
allow the presence of Hazardous Material upon, in or from any of the Collateral,
and shall not dispose or release, or allow the disposal or release by any other
party, of any Hazardous Materials upon, into or from any of the Collateral. Upon
receiving notice or obtaining knowledge of the presence, release or threat of
release of any Hazardous Material upon, into or from any of the Collateral, or
of any violation of any Environmental Law, Mortgagor shall immediately notify
Mortgagee in writing. Upon Mortgagee's request from time to time, Mortgagor
shall, at Mortgagor's sole expense, take all such action, including, without
limitation, the conducting of engineering tests and response actions, to confirm
the absence of any Hazardous Material on, in, under or emanating from any of the
Collateral, and if such Hazardous Material is present, to assess, contain and
remove any such Hazardous Material. Mortgagor agrees, at Mortgagor's sole cost
and expense, to indemnify, defend and hold harmless Mortgagee from and against
any and all losses, liabilities, and/or expenses incurred by Mortgagee and
arising directly or indirectly from (i) the presence and/or release of Hazardous
Material upon, into or from any of the Collateral; (ii) the violation of any
Environmental Law; (iii) the Mortgagor's failure to comply with the terms and
conditions of this section and/or Mortgagor's breach of any warranty or
representation made herein; and/or (iv) Mortgagee's enforcement of this section,
including, without limitation, the costs of assessment, containment and/or
removal of any Hazardous Material from all or any portion of the Real Property
or any surrounding area and/or the costs incurred to effectuate compliance with
all Environmental Laws. For purposes of this section, "Environmental Law" or
"Environmental Laws" shall mean all federal, state and local laws and
regulations, or any judicial or administrative decree or decision, whether now
existing or hereafter enacted, promulgated or issued with respect to the use,
storage, disposal, transportation, release, or threat of release, of hazardous
or toxic materials or substances, including, without limitation, the
Massachusetts Oil and Hazardous Material Release Prevention Response Act (M.G.L.
Chapter 21E), as from time to time amended, and "Hazardous Material" or
substances constituting hazardous or toxic materials or substances under any
Environmental Law, including, without limitation, asbestos, urea formaldehyde
insulation, and leaded paint. All representations, warranties and indemnities
set forth in this section shall survive the payment and performance of the
Obligations and shall not merge with any deed given by Mortgagor to Mortgagee in
lieu of foreclosure or any deed under a power of sale. All such warranties,
representations and indemnities shall, without notice to or further consent of
Mortgagor, be assignable to Mortgagee's successors and assigns in any subsequent
purchase of all or any portion of the Collateral by, through or under Mortgagee.

 

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2.08Mortgagor shall maintain at all times true and complete books and records
reflecting the results of the operation of the Collateral and copies of all
written contracts, leases and other instruments affecting the Collateral. All
books and records, contracts, leases and other instruments shall be subject to
examination and copying by Mortgagee at any reasonable time by Mortgagee and at
Mortgagor's sole expense.

 

2.09That, except as agreed to in writing by Mortgagee, the legal or beneficial
ownership of the Real Property or any part thereof or interest therein will not
at any time become vested in a person or entity other than Mortgagor. The
foregoing shall include, without limitation, the sale, transfer, assignment or
other conveyance of the Real Property, the sale, transfer or conveyance (whether
voluntary or by operation of law) of legal, partnership, stock or beneficial
interest in and/or of Mortgagor, or security interests, except this Mortgage,
without, in each instance, prior written approval of Mortgagee. Notwithstanding
the foregoing, transfers or issuance of shares of stock in Presidential Realty
Corporation, the sole member of Borrower, shall not require the consent of
Mortgagee. If the legal or beneficial ownership of the Real Property or any part
thereof or any interest therein does become vested in a person or entity other
than Mortgagor, Mortgagee may, without notice to Mortgagor, deal with such
successor(s) in interest with reference to this Mortgage and the Obligations
secured hereby, and in the same manner as with Mortgagor, without in any way
vitiating or discharging Mortgagor's liability hereunder or under the
Obligations secured hereby.

 

2.10Mortgagor will from time to time do all such things and execute such
documents as Mortgagee may reasonably request in order to carry into effect the
provisions and intent of this Mortgage and to protect, perfect and maintain
Mortgagee's interest in and to the Collateral.

 

2.11Mortgagor is not in default under any terms or conditions of any lease or
tenancy upon any of the Real Property and shall, at all times, perform all
Obligations of Mortgagor under any and all such leases or tenancies, with all
such leases and tenancies, and all rents and profits relating thereto, remaining
assigned hereby to Mortgagee as additional security for the Obligations.
Mortgagor will not, without Mortgagee's prior written consent, (i) accept any
prepayment of any rent or other amount due upon any lease or tenancy, except for
the current month's rent; (ii) modify, in any material respect, any provision
of, or cancel or terminate, any lease or tenancy; or (iii) enter into any lease
or tenancy. Upon Mortgagee's request, Mortgagor shall take all action necessary
to obtain agreements (in form and substance satisfactory to Mortgagee) from each
tenant subordinating such lease or tenancy to the lien of this Mortgage.

 

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2.12Mortgagor is, and shall at all times remain, in full compliance with all
federal and state laws and regulations (including, without limitation, Section
15B of Chapter 186 of Massachusetts General Laws, as from time to time amended)
governing security deposits and last month's rents relating to any lease or
tenancy upon the Real Property. Mortgagor agrees, at Mortgagor's sole cost and
expense, to indemnify, defend and hold harmless Mortgagee from and against any
and all losses, liabilities and/or expenses incurred by Mortgagee in connection
with any failure by Mortgagor to comply fully with such laws and regulations.
This indemnity shall survive the payment and performance of the Obligations
and/or any release of this Mortgage.

 

2.13If any of the Collateral shall be damaged or taken through condemnation, or
any conveyance in lieu thereof, Mortgagor authorizes Mortgagee, at Mortgagee's
option, as irrevocable attorney in fact for Mortgagor, to commence, appear in
and/or prosecute, in Mortgagor's or Mortgagee's name, any action or proceeding
leading to such condemnation or other taking of the Collateral and to settle or
compromise any claim in connection thereto. The proceeds of any award or claim
for damages in connection with such condemnation or any other taking, or for
conveyances in lieu of condemnation, are hereby assigned and shall be paid to
Mortgagee to be applied, after deduction of Mortgagee's costs and expenses
incurred in collecting such amounts, at Mortgagee's option, to the payment of
the Obligations, whether or not then due, and/or to the restoration or repair of
the Collateral, with the balance, if any, to Mortgagor.

 

2.14If any portion of the Real Property shall constitute a unit in a condominium
or planned unit development, Mortgagor shall at all times perform all of
Mortgagor's obligations under the declaration, covenants and/or other
constituent documents creating or governing such condominium or planned unit
development, including, without limitation, all by-laws and regulations of the
condominium or planned unit development.

 

2.15If Mortgagor shall fail to perform any of the covenants or agreements
contained in this Mortgage, Mortgagee may (in addition to any other right to
remedy available to Mortgagee hereunder or otherwise) from time to time, and at
Mortgagee's option and without obligation to do so, disburse such amounts and
take such action as Mortgagee may deem necessary to effectuate compliance with
Mortgagor's covenants and agreements herein, including, but not limited to,
paying any taxes or insurance premiums, the payment of which is then due,
satisfying any liens or encumbrances on any part of this Collateral, or entering
upon the Real Property to make repairs or complete improvements. All amounts so
expended or incurred by Mortgagee shall be included in the Obligations of
Mortgagor to Mortgagee, shall be payable upon demand, and shall accrue interest
at the highest rate applicable to any of the Obligations.

 

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III.EVENTS OF DEFAULT

 

3.01The term "Event of Default" as used in this Mortgage shall mean any one or
more of the following conditions or events: (i) the failure of Mortgagor to pay
any amount required to be paid under this Mortgage within ten (10) days of when
due or the failure to pay when due any of the other Obligations after the
expiration of any applicable grace period; (ii) the failure of Mortgagor to
perform any term, covenant, obligation or agreement contained in this Mortgage
or any other agreement with the Mortgagee, provided, however, in the event of
any non-monetary default under this Mortgage which does not pose an imminent
danger to any of the Collateral and provided such default is capable of being
cured within thirty (30) days (as determined by the Mortgagee), the Mortgagor
shall have thirty (30) days after written notice thereof to fully cure such
default; (iii) the occurrence of any default under, or breach of, any term or
condition of this or any other mortgage, note and/or security agreement,
guaranty or any other agreement between the Mortgagee and the Mortgagor or any
guarantors of the Mortgagor, after the expiration of any applicable grace or
cure period; (iv) the Mortgagee’s determination that any representation made by
the Mortgagor to the Mortgagee at any time was not true or accurate in any
material respect when given; (v) the granting of any trust mortgage upon any
assets of Mortgagor, the occurrence of any assignment for the benefit of
Mortgagor's creditors, or the appointment of a custodian, trustee or receiver
with respect to any assets of Mortgagor, or the filing of any petition by or
against Mortgagor under the Bankruptcy Reform Act of 1978 (as amended) or any
other federal or state law by which Mortgagor is or may be relieved from its
debts, provided however, the Mortgagor shall have forty-five (45) days to effect
a final dismissal of any involuntary bankruptcy proceeding; (vi) the service of
any process upon Mortgagee by which any funds of the Mortgagor being held by
Mortgagee may be attached if not dismissed or fully bonded within 30 days; (vii)
the attachment of any other assets of the Mortgagor, where such attachment is
not released, terminated or fully bonded within thirty (30) days of the order
authorizing it; (viii) the entry of any judgment against the Mortgagor which is
not satisfied or appealed from within fifteen (15) days of its entry; (ix) the
dissolution, termination of existence or liquidation of the Mortgagor; (x) the
Real Property, in its entirety, shall be damaged by fire or other casualty or
taken through condemnation or conveyance in lieu thereof; (xi) the occurrence of
any event of default under any other permitted mortgage and/or security
agreement (and/or any of the obligations secured thereby) encumbering any of the
Collateral, after the expiration of an applicable cure or grace period; or (xii)
the breach of the Statutory Condition herein contained.

 

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IV.RIGHTS AND REMEDIES UPON DEFAULT

 

4.01Upon the occurrence of an Event of Default, any and all Obligations shall,
at Mortgagee's option, become immediately due and payable without notice or
demand, and the Mortgagee, with or without taking possession of the Collateral,
may (i) collect all rents, payments in the nature of rents, or account
receivables relating to the Collateral; (ii) sell, lease or otherwise dispose of
any or all of the Collateral in its then condition or following such preparation
or processing as Mortgagee deems advisable; (iii) without assuming the
obligations of Mortgagor thereunder, exercise the rights of Mortgagor under any
contract, lease, permit, license or other beneficial right pertaining to any of
the Collateral; (iv) either directly, by agent, or by appointment of receiver,
and with or without bringing any action or proceeding, maintain, repair and/or
preserve the Collateral, construct the improvements thereon, or otherwise make
alterations thereto, and/or manage, lease or operate the Collateral on such
terms as Mortgagee in its sole discretion deems proper and appropriate; (v)
exercise the Statutory Power of Sale; (vi) foreclose any and all rights of
Mortgagor in and to any of the Collateral; (vii) proceed by a suit or suits at
law or in equity or by other appropriate proceedings or remedy to collect the
Obligations; (viii) require Mortgagor to assemble any or all of the Related
Personal Property and make it available to Mortgagee, at Mortgagor's sole risk
and expense, in a place or places determined by Mortgagee; (ix) take possession
of any or all of the Collateral; and/or (x) exercise any other right or remedy
of a mortgagee or secured party under the laws of the Commonwealth of
Massachusetts.

 

4.02This Mortgage is upon the STATUTORY CONDITION, upon the breach of which
Mortgagee shall have, in addition to all other rights and remedies hereunder,
the STATUTORY POWER OF SALE.

 

4.03All rights and remedies of Mortgagee hereunder shall be cumulative and not
exclusive of any other rights and remedies available to Mortgagee at law or in
equity. No indulgence, delay or omission by Mortgagee in exercising or enforcing
any of its rights or remedies hereunder shall operate as a waiver thereof on
that occasion nor on any other occasion. No waiver of any Event of Default
hereunder shall operate as a waiver of any other Event of Default hereunder, nor
as a continuing waiver.

 

4.04Any sale or other disposition of the Related Personal Property may be at
public or private sale and upon such terms and in such manner as Mortgagee deems
advisable. Mortgagee may conduct such sale or other disposition of the Related
Personal Property upon the Real Property, in which event Mortgagee shall not be
liable for any rent or charge for such use of the Real Property. Mortgagee may
sell any of the Related Personal Property as part of the Real Property, or any
portion or unit thereof, at the foreclosure sale or sales conducted pursuant
hereto. Mortgagor waives any right to require marshalling of any of its assets
in connection with any disposition conducted pursuant hereto, the single total
price for the Collateral, or for such part thereof as is sold, may be accepted
by Mortgagee with no obligation to distinguish between the application of
proceeds amongst the real or personal property comprising the Collateral. If all
or any portion of the Collateral is sold by Mortgagee, Mortgagor shall pay
Mortgagee, on demand, an amount equal to one percent (1.00%) of the purchase
price thereof, in addition to the Obligations and any other amounts due
Mortgagee hereunder. The obligation of Mortgagor to pay such amounts shall be
included in the Obligations and shall accrue interest at the highest rate
applicable to any of the Obligations.

 

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4.05In the event Mortgagee, in the exercise of the Statutory Power of Sale
contained herein, elects to sell the Collateral in parts or parcels, said sales
may be held from time to time, and the power shall not be exhausted until all of
the Collateral not previously sold shall have been sold and the Obligations paid
in full.

 

4.06Mortgagor hereby irrevocably constitutes and appoints Mortgagee as
Mortgagor's true and lawful attorney in fact, to take, after the occurrence of
an Event of Default, any action with respect to the Collateral to preserve,
protect and/or realize upon Mortgagee's interest therein, all at the sole risk,
costs and expense of Mortgagor, and for the sole benefit of Mortgagee. Mortgagee
shall not be obligated to exercise such power, but if Mortgagee so elects to
exercise it, Mortgagee shall not be accountable for more than it actually
receives as a result of such exercise of power and shall not be responsible to
Mortgagor, except for Mortgagee's willful misconduct and actual bad faith. All
powers conferred upon Mortgagee by this Mortgage, being coupled with an
interest, shall be irrevocable until terminated by written instrument executed
by Mortgagee.

 

V.NOTICE

 

5.01All notices required or permitted hereunder shall be in writing and shall be
deemed given when personally delivered or deposited in the United States mail
and, if delivered by mail, shall be mailed by registered or certified mail,
return receipt requested, which is pre-paid and addressed as follows: If to
Mortgagee, to the address hereinabove stated as Mortgagee's address or such
other address as Mortgagee shall designate to Mortgagor in writing for the
receipt of notice pursuant hereto, and if to Mortgagor, to either the address
hereinabove stated as Mortgagor's address, to the Real Property or any portion
thereof, or to such other address as Mortgagor shall designate to Mortgagee in
writing for the receipt of notice pursuant hereto.

 

VI.MISCELLANEOUS

 

6.01In the event Mortgagor is more than one person or entity, all of such
parties constituting Mortgagor shall be jointly and severally liable hereunder,
and each reference in this Mortgage to Mortgagor shall mean each of such
co-mortgagors, individually, as well as collectively.

 

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6.02The proceeds of any collection, sale or disposition of the Collateral or of
any other payments received hereunder, shall be applied to the Obligations in
such order and manner as Mortgagee shall determine in its sole discretion, any
statute, custom or usage to the contrary notwithstanding. Mortgagor shall remain
liable to Mortgagee for any deficiency remaining following such application.

 

6.03This Mortgage and all other instruments executed in connection herewith
incorporate all discussions and negotiations between Mortgagor and Mortgagee
concerning the matters included herein and in such other instruments. No such
discussions or negotiations shall limit, modify or otherwise affect the
provisions hereof. No modification, amendment or waiver of any provision hereof,
or of any provision of any other agreement between Mortgagor and Mortgagee,
shall be effective unless executed in writing by the party to be charged with
such modification, amendment or waiver.

 

6.04Mortgagor shall pay on demand all costs and expenses incurred by Mortgagee
in connection with the preparation, execution and delivery of this Mortgage and
of any other documents and agreements by Mortgagor in favor of Mortgagee,
including, without limitation, reasonable attorneys' fees and expenses, and all
expenses which Mortgagee may hereafter incur in connection with the collection
of the Obligations or the protection or enforcement of any of Mortgagee's rights
and remedies against Mortgagor, any Collateral, and any guarantor or endorser of
the Obligations. Mortgagor authorizes Mortgagee to pay all such fees and
expenses and to charge the same to any account of Mortgagor with Mortgagee.

 

6.05Mortgagor shall, within ten (10) days of written request from Mortgagee,
furnish Mortgagee with a written statement, duly acknowledged, setting forth the
amount of the Obligations, any right to set off, counterclaim or other defense
which may exist or be claimed by Mortgagor against the Obligations.

 

6.06Mortgagee shall not be liable for any loss sustained by Mortgagor resulting
from any action, omission, or failure to act by Mortgagee with respect to the
exercise or enforcement of its rights under this Mortgage or its relationship
with Mortgagor. This Mortgage and Mortgagee's exercise of its rights hereunder
shall not operate to place any responsibility upon Mortgagee for the control,
care, management or repair of the Collateral, nor shall it operate to place any
responsibility upon Mortgagee to perform the obligations of Mortgagor under any
lease, license, or contract, or to make Mortgagee responsible or liable for any
waste committed on the Collateral, any damages or defective condition of the
Collateral, or any negligence in the management, upkeep, repair or control of
the Collateral.

 

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6.07Mortgagor shall indemnify, defend and hold harmless Mortgagee of and from
any and all claims or liabilities (except for such claims or liabilities arising
from Mortgagee's willful misconduct or actual bad faith) asserted against and/or
incurred by Mortgagee in connection with the Obligations, this Mortgage, the
Collateral, or any part thereof, or the exercise by Mortgagee of any of its
rights or remedies hereunder.

 

6.08Mortgagor expressly waives all rights to trial by jury, as to all issues,
including any counterclaims, without exception, in any action or proceeding
relating, directly or indirectly, to the Obligations, this Mortgage, the
Collateral or Mortgagee's relationship with Mortgagor.

 

6.09This Mortgage and Security Agreement shall be binding upon Mortgagor and
Mortgagor's successors and assigns and shall enure to the benefit of Mortgagee
and Mortgagee's successors and assigns.

 

6.10Any determination that any provision of this Mortgage or any application
thereof if invalid, illegal or unenforceable in any respect in any instance
shall not affect the validity, legality and enforceability of such provision in
any other instance, nor the validity, legality or enforceability of any other
provision of this Mortgage.

 

6.11This Mortgage shall be governed by the laws of the Commonwealth of
Massachusetts, and shall take effect as a sealed instrument.

 

 

IN WITNESS WHEREOF, Mortgagor has executed this Mortgage and Security Agreement
under seal as of the day and year first above written.

 

WITNESS:   Palmer-Mapletree LLC                           By: /s/ Nickolas W.
Jekogian, III         Nickolas W. Jekogian, III, Manager                 By: /s/
Alexander Ludwig         Alexander Ludwig, Manager  

 

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