Exhibit 10.3

 

 

 

DAIRYLAND HP LLC

TO

COMMERCIAL LENDING II LLC

LEASEHOLD MORTGAGE AND SECURITY AGREEMENT

AND ASSIGNMENT OF LEASES AND RENTS

Dated: April 26, 2012

Location: 200-240 Food Center Drive, Bronx, New York

The premises are also known as Section 10, Block 2770, p/o Lot 1 and
Section 10,, Block 2781, p/o

Lot 500 on the Tax Map of the County of Bronx, City and State of New York

RECORD AND RETURN TO:

Mayo Crowe LLC

600 North Broadway, Suite 220

White Plains, New York 10603

Attention: Nicholas J. Chivily, Esq.

 

 

 

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LEASEHOLD MORTGAGE AND SECURITY AGREEMENT

AND ASSIGNMENT OF LEASES AND RENTS

THIS LEASEHOLD MORTGAGE AND SECURITY AGREEMENT AND ASSIGNMENT OF LEASES AND
RENTS made the 26th day of April, 2012, between DAIRYLAND HP LLC., a Delaware
limited liability company, having an office located at c/o Dairyland USA
Corporation, 100 East Ridge Road, Ridgefield, CT 06877 (the “Mortgagor”), and
COMMERCIAL LENDING II LLC, a Delaware Limited Liability Company, having an
office at 106 Corporate Park Drive, White Plains, New York 10604 (together with
its subsidiaries and affiliates, successors and/or assigns, the “Mortgagee”).

W I T N E S S E T H:

Whereas the Mortgagor is the owner of a leasehold estate in the premises
described in Exhibit A attached hereto (the “Premises”) under and pursuant to
the provisions of the lease described in Exhibit A-1 attached hereto (the “
Mortgaged Lease”);

NOW THEREFORE, to secure the payment of an indebtedness in the principal sum of
ELEVEN MILLION AND 00/100 DOLLARS ($11,000,000.00), lawful money of the United
States of America, or so much thereof as may be advanced in accordance with the
provisions of the Building Loan Agreement (as hereinafter defined), to be paid
with interest (said indebtedness, interest and all other sums which may or shall
become due hereunder, collectively, the “Debt”) according to a certain Mortgage
Note dated the date hereof given by the Mortgagor to the Mortgagee (as modified,
amended and restated from time to time, the “Note”), the Mortgagor has
mortgaged, given, granted, bargained, sold, aliened, enfeoffed, conveyed,
confirmed and assigned, and by these presents does mortgage, give, grant,
bargain, sell, alien, enfeoff, convey, confirm and assign unto the Mortgagee
forever all right, title and interest of the Mortgagor now owned, or hereafter
acquired, in and to the following property, rights and interest (such property,
rights and interests, collectively, the “Mortgaged Property”):

(a) the Premises;

(b) all buildings and improvements now or hereafter located on the Premises (the
“Improvements”);

(b)(1) the Mortgaged Lease and the leasehold estate created thereunder;

(b)(2) all modifications, extensions and renewals of the Mortgaged Lease and all
credits, deposits, options, purchase options, privileges and rights of the
Mortgagor under the Mortgaged Lease, including, but not limited to, the right,
if any, to renew or extend the Mortgaged Lease for a succeeding term or terms,
or to acquire fee title to or other interest in all or any portion of the
Premises or the Improvements;

(b)(3) all of the Mortgagor’s rights and remedies at any time arising under or
pursuant to Section 365(h) of the Bankruptcy Code, 11 U.S.C. Section 101 et seq.
(the “Bankruptcy Code”), including, without limitation, all of the Mortgagor’s
right thereunder to remain in possession of the Premises and the Improvements;

(c) all of the estate, right, title, claim or demand of any nature whatsoever of
the Mortgagor, either in law or in equity, in possession or expectancy, in and
to the Mortgaged Property or any part thereof;

 

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(d) all easements, rights-of-way, gores of land, streets, ways, alleys,
passages, sewer rights, waters, water courses, water rights and powers, and all
estates, rights, titles, interests, privileges, liberties, tenements,
hereditaments, and appurtenances of any nature whatsoever, in any way belonging,
relating or pertaining to the Mortgaged Property (including, without limitation,
any and all development rights, air rights or similar or comparable rights of
any nature whatsoever now or hereafter appurtenant to the Premises or now or
hereafter transferred to the Premises) and all land lying in the bed of any
street, road or avenue, opened or proposed, in front of or adjoining the
Premises to the center line thereof;

(e) all machinery, apparatus, equipment, fittings, fixtures and other property
of every kind and nature whatsoever and all additions thereto and renewals and
replacements thereof, and all substitutions therefor now owned or hereafter
acquired by the Mortgagor, purchased with the proceeds of the Debt now or
hereafter located upon the Mortgaged Property and whether stored at the
Mortgaged Property or off-site (collectively, the “Equipment”) and all proceeds
and products of any of the above;

(f) all awards or payments, including interest thereon, and the right to receive
the same, which may be made with respect to the Mortgaged Property, whether from
the exercise of the right of eminent domain (including any transfer made in lieu
of the exercise of said right), or for any other injury to or decrease in the
value of the Mortgaged Property;

(g) all leases and other agreements (other than the Mortgaged Lease) affecting
the use or occupancy of the Mortgaged Property now or hereafter entered into
(the “Leases”) and the right to receive and apply the rents, issues and profits
of the Mortgaged Property (the “Rents”) to the payment of the Debt;

(h) all right, title and interest of the Mortgagor in and to (i) all contracts
from time to time executed by the Mortgagor or any manager or agent on its
behalf relating to the ownership, construction, maintenance, repair, operation,
occupancy, sale or financing of the Mortgaged Property or any part thereof and
all agreements relating to the purchase or lease of any portion of the Mortgaged
Property or any property which is adjacent or peripheral to the Mortgaged
Property, together with the right to exercise such options and all leases of
Equipment, (ii) all consents, licenses, building permits, certificates of
occupancy and other governmental approvals relating to construction, completion,
occupancy, use or operation of the Mortgaged Property or any part thereof, and
(iii) all drawings, plans, specifications and similar or related items relating
to the Mortgaged Property;

(i) [reserved];

(j) [reserved];

(k) all proceeds of and any unearned premiums on any insurance policies covering
the Mortgaged Property, including, without limitation, the right to receive and
apply the proceeds of any insurance, judgments, or settlements made in lieu
thereof, for damage to the Mortgaged Property; and

(l) the right, in the name and on behalf of the Mortgagor, to appear in and
defend any action or proceeding brought with respect to the Mortgaged Property
and to commence any action or proceeding to protect the interest of the
Mortgagee in the Mortgaged Property.

TO HAVE AND TO HOLD the above granted and described Mortgaged Property unto and
to the proper use and benefit of the Mortgagee, and the successors and assigns
of the Mortgagee, forever.

AND the Mortgagor covenants and agrees with and represents and warrants to the
Mortgagee as follows:

 

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1. Payment of Debt. The Mortgagor will pay the Debt at the time and in the
manner provided for its payment in the Note and in this Mortgage.

2. Warranty of Title.

(a) Subject only to those exceptions to title specifically set forth in the
title policy issued or to be issued by Stewart Title Insurance Company of New
York to the Mortgagee and insuring the lien of this Mortgage, the Mortgagor
warrants the title to the Premises, the Improvements, the Equipment, the
Mortgaged Lease, and the balance of the Mortgaged Property. In addition, the
Mortgagor represents and warrants that (i) the Mortgaged Lease is in full force
and effect and has not been modified in any manner whatsoever, (ii) there are no
defaults under the Mortgaged Lease beyond any applicable notice and cure periods
and no event has occurred, which but for the passage of time, or notice, or
both, would constitute a default under the Mortgaged Lease, (iii) all rents,
additional rents and other sums due and payable under the Mortgaged Lease have
been paid in full, and (iv) no action has commenced and no notice has been given
or received for the purpose of terminating the Mortgaged Lease. The Mortgagor
also represents and warrants that (i) the Mortgagor is now, and after giving
effect to this Mortgage, will be in a solvent condition, (ii) the execution and
delivery of this Mortgage by the Mortgagor does not constitute a “fraudulent
conveyance” within the meaning of Title 11 of the United States Code as now
constituted or under any other applicable statute, and (iii) no bankruptcy or
insolvency proceedings are pending or contemplated by or against the Mortgagor.

(b) The Mortgagor (and the undersigned representative of the Mortgagor, if any)
additionally represents and warrants that: (i) it has full power, authority and
legal right to execute this Mortgage, and to mortgage, give, grant, bargain,
sell, alien, enfeoff, convey, confirm and assign the Mortgaged Property pursuant
to the terms hereof and to keep and observe all of the terms of this Mortgage on
the Mortgagor’s part to be performed, (ii) if the Mortgagor is a corporation,
the Mortgagor is a duly organized and presently existing corporation and this
Mortgage has been executed by authority of its Board of Directors and with the
requisite consent of the holders of the outstanding shares of its capital stock
entitled to vote thereon, if such consent is required under the provisions of
the certificate of incorporation of the Mortgagor, (iii) if the Mortgagor is a
partnership, the Mortgagor is a duly authorized and validly existing partnership
and this Mortgage has been executed by a duly authorized general partner, and
(iv) if the Mortgagor is a limited liability company, the Mortgagor is a duly
authorized validly existing limited liability company and this Mortgage has been
executed by a duly authorized manager thereof.

3. Insurance. Mortgagor, at its expense, shall maintain and deliver to Mortgagee
policies of insurance providing the following:

(a) Commercial General Liability Insurance with limits of not less than
$1,000,000 per occurrence combined single limit and $5,000,000 in the aggregate
for the policy period, or in whatever higher amounts as may be required by
Mortgagee from time to time by notice to Mortgagor, and extended to cover:
(i) Contractual Liability assumed by Mortgagor with defense provided in addition
to policy limits for indemnities of the named insured, (ii) if any of the work
is subcontracted, Independent Contractors Liability providing coverage in
connection with such portion of the work which may be subcontracted, (iii) Broad
Form Property Damage Liability, (iv) Products & Completed Operations for
coverage, such coverage to apply for two years following completion of
construction, (v) waiver of subrogation against all parties named additional
insured, (vi) severability of interest provision, and (vii) Personal Injury &
Advertisers Liability.

 

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(b) Automobile Liability including coverage on owned, hired and non-owned
automobiles and other vehicles, if used in connection with the performance of
the work, with Bodily Injury and Property Damage limits of not less than
$2,000,000.00 per occurrence combined single limit, with a waiver of subrogation
against all parties named as additional insured.

(c) Umbrella/Excess Liability in excess of Commercial General Liability,
Automobile Liability and Employers’ Liability coverages which is at least as
broad as these underlying policies with a limit of liability of $10,000,000.00.

(d) All-Risk Property (Special Cause of Loss) Insurance on the Improvements in
an amount not less than the full insurable value on a replacement cost basis of
the insured Improvements and personal property related thereto. During the
construction period, such policy shall be written in the so-called “Builder’s
Risk Completed Value Non-Reporting Form” with no coinsurance requirement and
shall contain a provision granting the insured permission to occupy prior to
completion.

(e) Workers’ Compensation and Employer’s Liability Insurance in accordance with
the applicable laws of the state in which the work is to be performed or of the
state in which Mortgagor is obligated to pay compensation to employees engaged
in the performance of the work. The policy limit under the Employer’s Liability
Insurance section shall not be less than $1,000,000.00 for any one accident.

(f) If the Property, or any part thereof, lies within a “special flood hazard
area” as designated on maps prepared by the Department of Housing and Urban
Development, a National Flood Insurance Association standard flood insurance
policy, plus insurance from a private insurance carrier if necessary, for the
duration of the Loan in the amount of the full insurable value of the
Improvements, or the amount of the Loan, whichever is less.

(g) Such other insurance as Mortgagee may require with respect to the Mortgagor
and the Mortgaged Property, which may include, without limitation, errors and
omissions insurance with respect to the contractors, architects and engineers,
earthquake insurance, rent abatement and/or business loss.

All insurance policies (the “Policies”) shall (i) be issued by an insurance
company licensed to do business in the state where the Mortgaged Property is
located having a rating of “A-” VIII or better by A.M. Best Co., in Best’s
Rating Guide, (ii) name “Commercial Lending II LLC., any and all subsidiaries as
their interest may appear” as additional insureds on all liability insurance and
as mortgagee and loss payee on all All-Risk Property and flood insurance,
(iii) be endorsed to show that Mortgagor’s insurance shall be primary and all
insurance carried by Mortgagee is strictly excess and secondary and shall not
contribute with Mortgagor’s insurance, (iv) provide that Mortgagee is to receive
thirty (30) days written notice prior to non-renewal or cancellation, (v) be
evidenced by a certificate of insurance to be provided to Mortgagee along with a
copy of the policy for All-Risk Property coverage, (vi) include either policy or
binder numbers on the ACORD form, and (vii) be in form and amounts acceptable to
Mortgagee. Mortgagor shall deliver to Mortgagee, at least ten (10) days before
the expiration of an existing policy, evidence acceptable to Mortgagee of the
continuation of the coverage of the expiring policy. If Mortgagee has not
received satisfactory evidence of such continuation of coverage in the time
frame herein specified, Mortgagee shall have the right, but not the obligation,
to purchase such insurance for Mortgagee’s interest only. Any amounts so
disbursed by Mortgagee pursuant to this Section shall be repaid by Mortgagor
within 10 days after written demand therefor. Nothing contained in this Section
shall require Mortgagee to incur any expense or take any action hereunder, and
inaction by Mortgagee shall never be considered a waiver of any right accruing
to Mortgagee on account on this Section. The payment by Mortgagee of any
insurance premium for insurance

 

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which Mortgagor is obligated to provide hereunder but which Mortgagee believes
has not been paid, shall be conclusive between the parties as to the legality
and amounts so paid. Mortgagor agrees to pay all premiums on such insurance as
they become due, and will not permit any condition to exist on or with respect
to the Mortgaged Property which would wholly or partially invalidate any
insurance thereon. Unless Mortgagor provides Mortgagee with evidence
satisfactory to Mortgagee of the insurance coverage required by this Agreement,
Mortgagee may purchase insurance at Mortgagor’s expense to protect Mortgagee’s
interest in the Mortgaged Property. This insurance may, but need not, protect
Mortgagor’s interest in the Mortgaged Property. The coverages that Mortgagee
purchases may not pay any claim that Mortgagor makes or any claim that is made
against Mortgagor in connection with the Mortgaged Property. Mortgagor may later
cancel any insurance purchased by Mortgagee, but only after providing Mortgagee
with evidence satisfactory to Mortgagee that Mortgagor has obtained insurance as
required by this Agreement. If Mortgagee purchases insurance for the Mortgaged
Property, Mortgagor will be responsible for the costs of that insurance,
including any charges imposed by Mortgagee in connection with the placement of
insurance, until the effective date of the cancellation or expiration of such
insurance. The costs of the insurance may, at Mortgagee’s discretion, be added
to Mortgagor’s total principal obligation owing to Mortgagee, and in any event
shall be secured by the liens on the Mortgaged Property created by the Mortgage.
It is understood and agreed that the costs of insurance obtained by Mortgagee
may be more than the costs of insurance Mortgagor may be able to obtain on its
own. Mortgagee shall not by the fact of approving, disapproving, accepting,
preventing, obtaining or failing to obtain any such insurance, incur any
liability for the form or legal sufficiency of insurance contracts, solvency of
insurers, or payment of losses, and Mortgagor hereby expressly assumes full
responsibility therefor and all liability, if any, thereunder. Mortgagor hereby
absolutely assigns and transfers to Mortgagee all of Mortgagor’s right, title
and interest in and to any unearned premiums paid on policies required hereunder
and any claims thereunder and Mortgagee shall have the right, but not the
obligation, to assign any then existing claims under the same to any purchaser
of the Mortgaged Property at any foreclosure sale; provided, however, that so
long as no Event of Default exists and is continuing hereunder, Mortgagor shall
have the right under a license granted hereby, and Mortgagee hereby grants to
Mortgagor a license, to exercise rights under said policies and in and to said
premiums subject to the provisions of this Agreement. Said license shall be
revoked automatically upon the occurrence and during the continuance of an Event
of Default hereunder. Mortgagor shall not carry any separate insurance on the
Mortgaged Property concurrent in kind or form with any insurance required
hereunder or contributing in the event of loss without Mortgagee’s prior written
consent, and any such policy shall have attached a standard non-contributing
mortgagee clause, with loss payable to Mortgagee, and shall otherwise meet all
other requirements set forth herein. Blanket insurance policies shall not be
acceptable for the purposes of this paragraph unless otherwise approved to the
contrary by the Mortgagee. The Mortgagor shall at all times comply with and
shall cause the Improvements and Equipment and the use, occupancy, operation,
maintenance, alteration, repair and restoration thereof to comply with the
terms, conditions, stipulations and requirements of the Policies. If the
Mortgaged Property shall be damaged or destroyed, in whole or in part, by fire
or other property hazard or casualty, the Mortgagor shall give prompt notice
thereof to the Mortgagee. Sums paid to the Mortgagee, subject to the terms of
the Mortgaged Lease, by any insurer may be retained and applied by the Mortgagee
toward payment of the Debt whether or not then due and payable in such order,
priority and proportions as the Mortgagee in its discretion shall deem proper
or, at the discretion of the Mortgagee, the same may be paid, either in whole or
in part, to the Mortgagor for such purposes as the Mortgagee shall designate. If
the Mortgagee shall receive and retain such insurance proceeds, the lien of this
Mortgage shall be reduced only by the amount thereof received and retained by
the Mortgagee and actually applied by the Mortgagee in reduction of the Debt.
The provisions of subsection 4 of Section 254 of the Real Property Law of New
York covering the insurance of buildings against loss by fire shall not apply to
this Mortgage. Notwithstanding anything to the contrary set forth in the
Mortgage Lease or herein, in the event that insurance proceeds are paid to the
Mortgagor for restoration, such proceeds shall be applied, and such restoration
completed with twelve months from the date of such casualty, subject however to
delays resultant from a Force Majeure as provided in Paragraph 7 of the Building
Loan Agreement.

 

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4. Payment of Taxes, etc. The Mortgagor shall pay all taxes, assessments, water
rates, sewer rents and other charges, including vault charges and license fees
for the use of vaults, chutes and similar areas adjoining the Premises, now or
hereafter levied or assessed against the Mortgaged Property and all insurance
premiums relating to the Policies (collectively, the “Taxes”) prior to the date
upon which any fine, penalty, interest or cost may be added thereto or imposed
by law for the nonpayment thereof. The Mortgagor shall deliver to the Mortgagee,
upon request, receipted bills, canceled checks and other evidence satisfactory
to the Mortgagee evidencing the payment of the Taxes prior to the date upon
which any fine, penalty, interest or cost may be added thereto or imposed by law
for the nonpayment thereof.

5. [Reserved]

6. Condemnation. Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise, the Mortgagor shall continue to
pay the Debt at the time and in the manner provided for its payment in the Note
and this Mortgage and the Debt shall not be reduced until any award or payment
therefor shall have been actually received and applied by the Mortgagee to the
discharge of the Debt. The Mortgagee may, subject to the terms and conditions of
the Mortgaged Lease and the Recognition Agreement between the , apply the entire
amount of any such award or payment to the discharge of the Debt whether or not
then due and payable in such order, priority and proportions as the Mortgagee in
its discretion shall deem proper. If the Mortgaged Property is sold, through
foreclosure or otherwise, prior to the receipt by the Mortgagee of such award or
payment, the Mortgagee shall have the right, whether or not a deficiency
judgment on the Note shall have been sought, recovered or denied, to receive
such award or payment, or a portion thereof sufficient to pay the Debt,
whichever is less. The Mortgagor shall file and prosecute its claim or claims
for any such award or payment in good faith and with due diligence and cause the
same to be collected and paid over to the Mortgagee. The Mortgagor hereby
irrevocably authorizes and empowers the Mortgagee, in the name of the Mortgagor
or otherwise, to collect and receipt for any such award or payment and to file
and prosecute such claim or claims. Although it is hereby expressly agreed that
the same shall not be necessary in any event, the Mortgagor shall, upon demand
of the Mortgagee, make, execute and deliver any and all assignments and other
instruments sufficient for the purpose of assigning any such award or payment to
the Mortgagee, free and clear of any encumbrances of any kind or nature
whatsoever. Notwithstanding anything to the contrary set forth in the Mortgaged
Lease or herein, in the event that condemnation proceeds are paid to the
Mortgagor for restoration, such proceeds shall be applied, and such restoration
completed with twelve months from the date of such condemnation, subject however
to delays resultant from a Force Majeure as provided in Paragraph 7 of the
Building Loan Agreement.

7. Leases and Rents. (a) Mortgagor hereby absolutely and unconditionally
assigns, sells, transfers and conveys all of the right, title and interest in
and to all existing and future leases and subleases, tenancies and occupancy
agreements, however denominated, affecting all or a portion of the Premises and
all renewals, replacements and guarantees thereof (the “Leases”) along with all
of the rents, income and profits due thereunder (the “Rents”) to Mortgagee. This
assignment is absolute in nature and not an assignment for additional security
only. The Mortgagee waives the right to enter the Mortgaged Property for the
purpose of collecting the Rents, and grants the Mortgagor the right to collect
the Rents. The Mortgagor shall hold the Rents, or an amount sufficient to
discharge all current sums due on the Debt, in trust for use in payment of the
Debt. The right of the Mortgagor to collect the Rents may be revoked by the
Mortgagee without notice upon any Event of Default by the Mortgagor under the
terms of the Note or this Mortgage. Following such revocation the Mortgagee may
retain and apply the Rents toward payment of the Debt in such order, priority
and proportions as the Mortgagee, in its discretion, shall deem proper, or to
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operation, maintenance and repair of the Mortgaged Property, and irrespective of
whether the Mortgagee shall have commenced a foreclosure of this Mortgage or
shall have applied or arranged for the appointment of a receiver. The Mortgagor
shall not, except as provided below, without the consent of the Mortgagee, make,
or suffer to be made, any Leases or modify any Leases or cancel any Leases or
modify or cancel any Leases or accept prepayments of installments of the Rents
for a period of more than one (1) month in advance or further assign the whole
or any part of the Rents. Notwithstanding the foregoing, but subject in all
respects to the terms and conditions of Section E. 10. of that certain Loan
Agreement of even date herewith made by and among the Mortgagor, Mortgagee and
Guarantors (the “Loan Agreement”), the Mortgagor may, without the prior written
consent of the Mortgagee (i) sublease the entire Mortgaged Property to Dairyland
USA Corporation pursuant to an operating lease (the “Operating Lease”) approved
by the Mortgagee dated the date hereof and (ii) enter into subleases under the
Operating Lease to affiliates of Dairyland USA Corporation for all or portions
of the Improvements and (iii) enter into subleases with non affiliates for
portions of the Improvements, expressly subordinate to this Mortgage, at market
rates provided the aggregate of such subleases is not in excess of (a) twenty
five percent (25%) of the rentable square feet of the Improvements provided that
such subleases and the subtenants are not in a Tenant Excluded Business and are
otherwise in conformance with the Loan Agreement and the provisions therein
requiring conformance with the New Market Tax Credit laws, rules and regulations
or (b) after the termination of the subleases in (iv) and (v), twenty five
percent (25%) of the rentable square feet of the Improvements provided that such
subleases and the subtenants are not in a Tenant Excluded Business and are
otherwise in conformance with the Loan Agreement and the provisions therein
requiring conformance with the New Market Tax Credit laws, rules and regulations
and (iv) a short term sublease or license by the Mortgagor to A.L. Bazzini Co.
Inc. for a sublease term not to exceed one hundred twenty (120) days and (v) the
sublease covering a portion of the Mortgaged Property held by R Best which shall
remain in place until the Full Vacate Date (as defined in the Mortgaged Lease)
(all of the foregoing hereinafter referred to as “Permitted Subleases”). The
Mortgagee shall have all of the rights against tenants of the Mortgaged Property
as set forth in Section 291-f of the Real Property Law of New York. The
Mortgagor shall (a) fulfill or perform each and every provision of the Leases on
the part of the Mortgagor to be fulfilled or performed, (b) promptly send copies
of all notices of default which the Mortgagor shall send or receive under the
Leases to the Mortgagee, and (c) enforce, short of termination of the Leases,
the performance or observance of the provisions thereof by the tenants
thereunder. The Mortgagor shall from time to time, but not less frequently than
once every year, provide to the Mortgagee a complete and detailed leasing status
report with respect to the Improvements, which leasing status report shall be in
form and substance satisfactory in all respects to the Mortgagee. In addition to
the rights which the Mortgagee may have herein, upon any Event of Default under
this Mortgage, the Mortgagee, at its option, may require the Mortgagor to pay
monthly in advance to the Mortgagee, or any receiver appointed to collect the
Rents, the fair and reasonable rental value for the use and occupation of such
part of the Mortgaged Property as may be in possession of the Mortgagor. Upon an
Event of Default in any such payment, the Mortgagor will vacate and surrender
possession of the Mortgaged Property to the Mortgagee, or to such receiver, and,
in default thereof, the Mortgagor may be evicted by summary proceedings or
otherwise. Nothing contained in this paragraph shall be construed as imposing on
the Mortgagee any of the obligations of the lessor under the Leases or of a
“mortgagee in possession”.

(b) The Mortgagor acknowledges and agrees that, upon recordation of this
Mortgage, the Mortgagee’s interest in the Rents shall be deemed to be fully
perfected, “choate” and enforced as to the Mortgagor and all third parties,
including without limitation any subsequently appointed trustee in any case
under the Bankruptcy Code, without the necessity of (i) commencing a foreclosure
action with respect to this Mortgage, (ii) furnishing notice to the Mortgagor or
tenants under the Leases, (iii) making formal demand for the Rents, (iv) taking
possession of the Premises as a mortgagee-in-possession, (v) obtaining the
appointment of a receiver of the rents and profits of the Premises,
(vi) sequestering or impounding the Rents, or (vii) taking any other affirmative
action.

 

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(c) For purposes of Section 552(b) of the Bankruptcy Code, the Mortgagor and the
Mortgagee agree that this Mortgage shall constitute a “security agreement,” that
the security interest created by such security agreement extends to property of
the Mortgagor acquired before the commencement of a case in bankruptcy and to
all amounts paid as Rents and that such security interest shall extend to all
Rents acquired by the estate after the commencement of a case in bankruptcy.

(d) The Mortgagor acknowledges and agrees that all Rents shall be deemed to be
“Cash Collateral” under Section 363 of the Bankruptcy Code in the event that the
Mortgagor files a voluntary petition in bankruptcy or is made subject to any
involuntary bankruptcy proceeding. After the filing of such petition, the
Mortgagor may not use Cash Collateral without the consent of the Mortgagee
and/or an order of any bankruptcy court pursuant to Section 363(b)(2) of the
Bankruptcy Code.

8. Maintenance of the Mortgaged Property.

The Mortgagor shall cause the Mortgaged Property to be maintained in good
condition and repair and will not commit or suffer to be committed any waste of
the Mortgaged Property. The Improvements and the Equipment shall not be removed,
demolished or materially altered except (a) for normal replacement of the
Equipment as determined in the reasonable business judgment of the Mortgagee
and/or for renovations contemplated to be made by the Mortgagor with the
reasonable approval of the Mortgagee or (b) if appropriate, in accordance with
the approved plans and specifications or (c) with the prior written consent of
the Mortgagee. The Mortgagor shall promptly comply with all existing and future
governmental laws, orders, ordinances, rules and regulations affecting the
Mortgaged Property, or any portion thereof or the use thereof. The Mortgagor
shall promptly repair, replace or rebuild any part of the Mortgaged Property
which may be damaged or destroyed by fire or other property hazard or casualty
(including any fire or other property hazard or casualty for which insurance was
not obtained or obtainable) or which may be affected by any taking by any public
or quasi-public authority through eminent domain or otherwise, and shall
complete and pay for, within a reasonable time, any structure at any time in the
process of construction or repair on the Premises. If such fire or other
property hazard or casualty shall be covered by the Policies, the Mortgagor’s
obligation to repair, replace or rebuild such portion of the Mortgaged Property
shall be contingent upon the Mortgagee paying the Mortgagor the proceeds of the
Policies, or such portion thereof as shall be sufficient to complete such
repair, replacement or rebuilding, whichever is less. The Mortgagor will not,
without obtaining the prior consent of the Mortgagee, initiate, join in or
consent to any private restrictive covenant, zoning ordinance, or other public
or private restrictions, limiting or affecting the uses which may be made of the
Mortgaged Property or any part thereof.

9. Environmental Provisions.

(a) For the purposes of this paragraph the following terms shall have the
following meanings: (i) the term “Hazardous Material” shall mean any material or
substance that, whether by its nature or use, is now or hereafter defined or
regulated as a hazardous waste, hazardous substance, pollutant or contaminant
under any Environmental Requirement, or which is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise
hazardous or which is or contains petroleum, gasoline, diesel fuel, another
petroleum hydrocarbon product, asbestos, asbestos-containing materials or
polychlorinated biphenyls, (ii) the “Environmental Requirements” shall
collectively mean all present and future laws, statutes, common law, ordinances,
rules, regulations, orders, codes, licenses, permits, decrees, judgments,
directives or the equivalent of or by any Governmental Authority and relating to
or addressing the protection of the environment or human health, and (iii) the
term “Governmental Authority” shall

 

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mean the Federal government, or any state or other political subdivision
thereof, or any agency, court or body of the Federal government, any state or
other political subdivision thereof, exercising executive, legislative,
judicial, regulatory or administrative functions.

(b) The Mortgagor hereby represents and warrants to the Mortgagee that to its
actual knowledge, except as set forth in that certain Phase I environmental site
assessment dated August 31, 2011 prepared by Professional Service Industries
(the “Phase I”) and that certain Phase II site investigation report dated
November, 2008 prepared by Henningson, Durham & Richardson Architecture and
Engineering, P.C. (the “Phase II”), (i) no Hazardous Material is currently
located at, on, in, under or about the Mortgaged Property, (ii) no releasing,
emitting, discharging, leaching, dumping, disposing or transporting of any
Hazardous Material from the Mortgaged Property onto any other property or from
any other property onto or into the Mortgaged Property has occurred or is
occurring in violation of any Environmental Requirement, (iii) no notice of
violation, non-compliance, liability or potential liability, lien, complaint,
suit, order or other notice with respect to the Mortgaged Property is presently
outstanding under any Environmental Requirement, nor does the Mortgagor have
knowledge or reason to believe that any such notice will be received or is being
threatened, and (iv) the Mortgaged Property and the operation thereof are in
full compliance with all Environmental Requirements.

(c) The Mortgagor shall comply, and shall cause all subtenants or other
occupants of the Mortgaged Property claiming through the Mortgagor to comply, in
all respects with all Environmental Requirements, and will not generate, store,
handle, process, dispose of or otherwise use, and will not permit any subtenant
or other occupant of the Mortgaged Property to generate, store, handle, process,
dispose of or otherwise use, Hazardous Materials at, in, on, or about the
Mortgaged Property in a manner that could lead or potentially lead to the
imposition on the Mortgagor, the Mortgagee or the Mortgaged Property of any
liability or lien of any nature whatsoever under any Environmental Requirement.
The Mortgagor shall notify the Mortgagee promptly after becoming aware in the
event of any spill or other release of any Hazardous Material at, in, on, under
or about the Mortgaged Property which is required to be reported to a
Governmental Authority under any Environmental Requirement, will promptly
forward to the Mortgagee copies of any notices received by the Mortgagor
relating to alleged violations of any Environmental Requirement or any potential
liability under any Environmental Requirement and will promptly pay when due any
fine or assessment against the Mortgagee, the Mortgagor or the Mortgaged
Property relating to any Environmental Requirement (subject to the Mortgagor’s
right to contest by appropriate proceedings and as provided in paragraph 58
below) . If at any time it is determined that the operation or use of the
Mortgaged Property is in violation of any applicable Environmental Requirement
or that there are Hazardous Materials located at, in, on, under or about the
Mortgaged Property violates any applicable Environmental Requirement or that
there are Hazardous Materials located at, in, on, under or about the Mortgaged
Property which, under any Environmental Requirement, require special handling in
collection, storage, treatment or disposal, or any form of cleanup or corrective
action, the Mortgagor shall, within thirty (30) days after receipt of notice
thereof from any Governmental Authority or from the Mortgagee, take, at the
Mortgagor’s sole cost and expense, such actions as may be necessary to fully
comply in all respects with all Environmental Requirements, provided, however,
that if such compliance cannot reasonably be completed within such thirty
(30) day period, the Mortgagor shall commence such necessary action within such
thirty (30) day period and shall thereafter diligently and expeditiously proceed
to fully comply in all respects and in a timely fashion with all Environmental
Requirements. Notwithstanding the foregoing, the mere presence of Hazardous
Materials at the Mortgaged Property incident to cleaning, maintenance and/or
operation of the Mortgaged Property or the operation of vehicles or Equipment
therefrom or thereon shall not constitute a violation of these provisions so
long as the same are stored, handled, and disposed of in accordance with the
applicable Environmental Requirements.

 

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(d) If the Mortgagor fails to timely take, or to diligently and expeditiously
proceed to complete in a timely fashion, any such action described in clause
(c) above, the Mortgagee may, in its sole and absolute discretion, make advances
or payments toward the performance or satisfaction of the same, but shall in no
event be under any obligation to do so. All sums so advanced or paid by the
Mortgagee (including, without limitation, reasonable counsel fees and consultant
fees and expenses, investigation and laboratory fees and expenses, and fines or
other penalty payments) and all sums advanced or paid in connection with any
judicial or administrative investigation or proceeding relating thereto, will
immediately, upon demand, become due and payable from the Mortgagor and shall
bear interest at the Default Rate from the date any such sums are so advanced or
paid by the Mortgagee until the date any such sums are repaid by the Mortgagor
to the Mortgagee. The Mortgagor will execute and deliver, promptly upon request,
such instruments as the Mortgagee may deem useful or necessary to permit the
Mortgagee to take any such action, and such additional notes and mortgages, as
the Mortgagee may require to secure all sums so advanced or paid by the
Mortgagee. If a lien is filed against the Mortgaged Property by any Governmental
Authority resulting from the need to expend or the actual expending of monies
arising from an action or omission, whether intentional or unintentional, of the
Mortgagor or for which the Mortgagor is responsible, resulting in the releasing,
spilling, leaking, leaching, pumping, emitting, pouring, emptying or dumping of
any Hazardous Material into the waters or onto land located within or without
the State where the Mortgaged Property is located, then the Mortgagor will,
within thirty (30) days from the date that the Mortgagor is first given notice
that such lien has been placed against the Mortgaged Property (or within such
shorter period of time as may be specified by the Mortgagee if such Governmental
Authority has commenced steps to cause the Mortgaged Property to be sold
pursuant to such lien), either (a) pay the claim and remove the lien, or
(b) furnish a cash deposit, bond, or such other security with respect thereto as
is reasonably satisfactory in all respects to the Mortgagee and is sufficient to
effect a complete discharge of such lien on the Mortgaged Property.

(e) The Mortgagee may, at its option, at intervals of not less than one year, or
more frequently if the Mortgagee reasonably believes that a Hazardous Material
or other environmental condition violates or threatens to violate any
Environmental Requirement, cause an environmental audit of the Mortgaged
Property or portions thereof to be conducted to confirm the Mortgagor’s
compliance with the provisions of this paragraph, and the Mortgagor shall
cooperate in all reasonable ways with the Mortgagee connection with any such
audit. If such audit discloses that a violation of or a liability under an
Environmental Requirement exists or if such audit was required or prescribed by
law, regulation or governmental or quasi-governmental authority, the Mortgagor
shall pay all costs and expenses incurred in connection with such audit;
otherwise, the costs and expenses of such audit shall, notwithstanding anything
to the contrary set forth in this paragraph, be paid by the Mortgagee.

(f) [reserved]

(g) The Mortgagor will defend, indemnify, and hold harmless the Mortgagee, its
co-lenders, participants, employees, agents, officers, and directors, from and
against any and all claims, demands, penalties, causes of action, fines,
liabilities, settlements, damages, costs, or expenses of whatever kind or
nature, known or unknown, foreseen or unforeseen, contingent or otherwise
(including, without limitation, counsel and consultant fees and expenses,
investigation and laboratory fees and expenses, court costs, and litigation
expenses) arising out of, or in any way related to, (i) any breach by the
Mortgagor of any of the provisions of this paragraph 9, (ii) the presence,
disposal, spillage, discharge, emission, leakage, release, or threatened release
of any Hazardous Material which is at, in, on, under, about, from or affecting
the Mortgaged Property, including, without limitation, any damage or injury
resulting from any such Hazardous Material to or affecting the Mortgaged
Property or the soil, water, air, vegetation, buildings, personal property,
persons or animals located on the Mortgaged Property or on any other property or
otherwise, (iii) any personal injury (including wrongful death) or property
damage (real or personal) arising out of or

 

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related to any such Hazardous Material, (iv) any lawsuit brought or threatened,
settlement reached, or order or directive of or by any Governmental Authority
relating to such Hazardous Material, or (v) any violation of any Environmental
Requirement or any policy or requirement of the Mortgagee hereunder provided
however that the above indemnifications shall exclude any of the foregoing
arising out of the gross negligence, bad faith, or willful misconduct of the
Mortgagee, its agents and/or employees. The aforesaid indemnification shall,
notwithstanding any exculpatory or other provision of any other document or
instrument now or hereafter executed and delivered in connection with the loan
evidenced by the Note and secured by this Mortgage, constitute the personal
recourse undertakings, obligations and liabilities of the Mortgagor.

(h) The obligations and liabilities of the Mortgagor under this paragraph 9
shall survive and continue in full force and effect and shall not be terminated,
discharged or released, in whole or in part, irrespective of whether the Debt
has been paid in full and irrespective of any foreclosure of this Mortgage, sale
of the Mortgaged Property pursuant to the provisions of this Mortgage or
acceptance by the Mortgagee, its nominee or affiliate of a deed or assignment in
lieu of foreclosure or sale and irrespective of any other fact or circumstance
of any nature whatsoever. Nothing in this paragraph 9 shall prohibit the
Mortgagor from contesting any alleged violation in good faith and by appropriate
proceedings so long as the Mortgagor is in compliance with the provisions of
Paragraph 58 below.

10. Estoppel Certificates. The Mortgagor, within twenty (20) days after request
by the Mortgagee and at its expense, will furnish the Mortgagee with a
statement, duly acknowledged and certified, setting forth the amount of the Debt
and the offsets or defenses thereto, if any.

11. Transfer or Encumbrance of the Mortgaged Property.

Except for the occupancy of the Mortgaged Property pursuant to the Operating
Lease and Permitted Subleases, and as otherwise hereinafter specifically
provided to the contrary in this paragraph and paragraph 7 of this Mortgage, no
part of the Mortgaged Property nor any interest of any nature whatsoever
therein, shall in any manner, directly or indirectly, be further encumbered,
sold, transferred, assigned, conveyed, let or sublet, or permitted to be further
encumbered, sold, transferred, assigned, conveyed, let or sublet without the
prior consent of the Mortgagee, which consent in any and all circumstances may
be withheld in the sole and absolute discretion of the Mortgagee, except
(i) that as to further subleasing, Mortgagee’s consent shall not be unreasonably
withheld, delayed or conditioned unless the existence of such proposed sublease
would violate paragraph 7 (a) clause (iii) (a) hereof, (ii) to the extent
permitted below in this paragraph 11 and (iii) nothing herein shall prohibit the
granting of licenses to use the Equipment to the person or persons then
operating at the Mortgaged Property.

In addition, except as otherwise hereinafter specifically provided to the
contrary in this paragraph, but subject at all times to the terms and conditions
of Section E. 24. of the Loan Agreement, no interest of any nature whatsoever in
the Mortgagor or any Guarantor (whether partnership, stock, equity, beneficial,
profit, loss or otherwise) shall in any manner, directly or indirectly, be
encumbered, sold, transferred, conveyed, without the prior consent of the
Mortgagee, which consent in any and all circumstances may be withheld in the
sole and absolute discretion of the Mortgagee provided however that a transfer
or conveyance of the Equity Interests of the Mortgagor or Guarantors shall be
permitted hereunder without the consent of the Mortgagee if such transfer or
conveyance does not result in a prohibited Change of Control (as defined in the
Existing Credit Agreement) or, with respect to the Guarantors is otherwise
permitted under the Existing Credit Agreement. Existing pledges of Equity
Interests under the Existing Credit Agreement (as defined in the Loan Agreement)
or the exercise of the remedies under the Existing Credit Agreement shall not be
deemed a violation of the provisions hereof.

 

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12. Notice. Any notice, request, demand, statement, authorization, approval or
consent made hereunder shall be in writing and shall be sent by Federal Express,
UPS or other reputable nationally recognized overnight delivery service (that
provides written confirmation of receipt) r, r by postage pre-paid or certified
mail, return receipt requested, and shall be deemed given at the following
addresses on the date actually received or, if refused, on the date of such
refusal:

If to the Mortgagor:

Dairyland HP LLC

c/o Dairyland USA Corporation

100 East Ridge Road

Ridgefield, Connecticut 06877

Attention: Kenneth Clark, Chief Financial Officer

With a copy to:

Reed Smith LLP

599 Lexington Avenue, 29th Floor

New York, New York 10022

Attention: Joseph M. Marger, Esq.

If to the Mortgagee:

Commercial Lending II LLC

JPMorgan Chase Bank, N. A.

106 Corporate Park Drive

White Plains, New York, 10604

Attention: Patricia Stone, Senior Vice President

With a copy to:

JPMorgan Chase Bank, N.A.

Legal Department

237 Park Avenue—12th Floor

Mail Code NY1-R065

New York, New York 10017

Attention: Charles J. Janoff, Esq.

Each party may designate a change of address by notice to the other party, given
at least fifteen (15) days before such change of address is to become effective.

13. Sale of Mortgaged Property. If this Mortgage is foreclosed, the Mortgaged
Property, or any interest therein, may, at the discretion of the Mortgagee, be
sold in one or more parcels or in several interests or portions and in any order
or manner.

 

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14. Changes in Laws Regarding Taxation. In the event of the passage after the
date of this Mortgage of any law of the State of New York deducting from the
value of real property for the purpose of taxation any lien or encumbrance
thereon or changing in any way the laws for the taxation of mortgages or debts
secured by mortgages for state or local purposes or the manner of the collection
of any such taxes, and imposing a tax, either directly or indirectly, on this
Mortgage, the Note or the Debt, the Mortgagor shall, if permitted by law, pay
any tax imposed as a result of any such law within the statutory period or
within fifteen (15) days after demand by the Mortgagee, whichever is less,
provided, however, that if, in the opinion of the attorneys for the Mortgagee,
the Mortgagor is not permitted by law to pay such taxes, the Mortgagee shall
have the right, at its option, to declare the Debt due and payable on a date
specified in a prior notice to the Mortgagor of not less than thirty (30) days.

15. No Credits on Account of the Debt. The Mortgagor will not claim or demand or
be entitled to any credit or credits on account of the Debt for any part of the
Taxes assessed against the Mortgaged Property or any part thereof and no
deduction shall otherwise be made or claimed from the taxable value of the
Mortgaged Property, or any part thereof, by reason of this Mortgage or the Debt.
If at any time this Mortgage shall secure less than all of the principal amount
of the Debt, it is expressly agreed that any repayment of the principal amount
of the Debt shall not reduce the amount of the lien of this Mortgage until the
lien amount shall equal the principal amount of the Debt outstanding.

16. [reserved]

17. Other Security for the Debt. The Mortgagor shall observe and perform all of
the terms, covenants and provisions contained in the Note and in all other
mortgages and other instruments or documents evidencing, securing or
guaranteeing payment of the Debt, in whole or in part, or otherwise executed and
delivered in connection with the Note, this Mortgage or the loan evidenced and
secured thereby.

18. Documentary Stamps. If at any time the United States of America, any state
thereof, or any governmental subdivision of any such state, shall require
revenue or other stamps to be affixed to the Note or this Mortgage, the
Mortgagor will pay for the same, with interest and penalties thereon, if any.

19. Right of Entry. Upon prior notice, the Mortgagee and its agents shall have
the right to enter and inspect the Mortgaged Property at all reasonable times.

20. Books and Records. The Mortgagor shall comply with the terms of the Loan
Agreement between Mortgagor and Mortgagee regarding the maintenance of books and
records and disclosure of financial information.

21. Performance of Other Agreements. The Mortgagor shall observe and perform
each and every term to be observed or performed by the Mortgagor pursuant to the
terms of any agreement or recorded instrument affecting or pertaining to the
Mortgaged Property.

22. Events of Default. The Debt shall become due at the option of the Mortgagee
upon the occurrence of any one or more of the following events (herein
collectively referred to as Events of Default):

(a) if any portion of the Debt is not paid when such portion of the Debt is due
and payable;

(b) if the Mortgagor shall fail to pay within twenty (20) days of notice and
demand by the Mortgagee, any installment of any assessment against the Mortgaged
Property for local improvements

heretofore or hereafter laid, which assessment is or may become payable in
annual or periodic installments and is or may become a lien on the Mortgaged
Property, notwithstanding the fact that such installment may not be due and
payable at the time of such notice and demand;

 

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(c) if any Federal tax lien is filed against the Mortgagor, any Guarantor or the
Mortgaged Property and the same is not discharged of record within sixty
(60) days after the same is filed ;

(d) if (except as specifically provided to the contrary in Paragraph 11 above)
without the consent of the Mortgagee (which consent in any and all circumstances
may be withheld in the sole and absolute discretion of the Mortgagee) any part
of the Mortgaged Property or any interest of any nature whatsoever therein or
any interest of any nature whatsoever in the Mortgagor or any Guarantor (whether
partnership, stock, equity, beneficial, profit, loss or otherwise) is in any
manner, by operation of law or otherwise, whether directly or indirectly,
further encumbered, sold, transferred, assigned or conveyed, and irrespective of
whether any such further encumbrance, sale, transfer, assignment or conveyance
is voluntary, by reason or operation of law or is otherwise made;

(e) if without the consent of the Mortgagee any Improvement or the Equipment
(except as provided in paragraph 8 above) is removed, demolished or materially
altered, or if the Mortgaged Property is not kept in good condition and repair
following;

(f) if the Mortgagor shall fail to comply with any requirement or order or
notice of violation of law or ordinance issued by any governmental department
claiming jurisdiction over the Mortgaged Property within three (3) months from
the issuance thereof, or the time period set forth therein, whichever is less;

(g) if the Mortgagor shall be in default with respect to its obligations under
Paragraph 9 of the Mortgage beyond any applicable grace period and/or after the
giving of any applicable notice as stated in Paragraph 9;

(h) if the Policies are not kept in full force and effect, or if the Policies
are not delivered to the Mortgagee upon request;

(i) if on application of the Mortgagee two or more fire insurance companies
lawfully doing business in the State of New York refuse to issue Policies;

(j) if the Mortgagor shall fail to pay the Mortgagee on demand for all Premiums
and/or Taxes paid by the Mortgagee pursuant to this Mortgage, together with any
late payment charge and interest thereon calculated at the Default Rate;

(k) if without the consent of the Mortgagee any Leases are made, canceled or
modified or if any portion of the Rents is paid for a period of more than one
(1) month in advance or if any of the Rents are further assigned;

(l) if any representation or warranty of the Mortgagor, or of any person (herein
referred to as a “Guarantor”) guaranteeing payment of the Debt or any portion
therefor guaranteeing completion of the Improvements as described in the
Building Loan Agreement or guaranteeing performance by the Mortgagor of any of
the terms of this Mortgage made herein or in any such guaranty (a “Guaranty”),
or in any certificate, report, financial statement or other instrument furnished
in connection with the making of the Note, this Mortgage, or any such Guaranty,
shall prove false or misleading in any material respect;

 

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(m) if the Mortgagor or any Guarantor shall make an assignment for the benefit
of creditors;

(n) if a court of competent jurisdiction enters a decree or order for relief
with respect to the Mortgagor or any Guarantor under Title 11 of the United
States Code as now constituted or hereafter amended or under any other
applicable Federal or state bankruptcy law or other similar law, or if such
court enters a decree or order appointing a receiver, liquidator, assignee,
trustee, sequestrator (or similar official) of the Mortgagor or any Guarantor,
or of any substantial part of their respective properties, or if such court
decrees or orders the winding up or liquidation of the affairs of the Mortgagor
or any Guarantor;

(o) if the Mortgagor or any Guarantor files a petition or answer or consent
seeking relief under the Bankruptcy Code as now constituted or hereafter
amended, or under any other applicable Federal or state bankruptcy law or other
similar law, or if the Mortgagor or any Guarantor consents to the institution of
proceedings thereunder or to the filing of any such petition or to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of the Mortgagor or
any Guarantor, or of any substantial part of their respective properties, or if
the Mortgagor or any Guarantor fails generally to pay their respective debts as
such debts become due, or if the Mortgagor or any Guarantor takes any action in
furtherance of any action described in this subparagraph;

(p) if the Mortgagor or any Guarantor shall be in default beyond any applicable
notice and/or cure period under the Note, the Completion Guaranty executed and
delivered by the Guarantors to the Mortgagee, Guaranty of Payment executed and
delivered by the Guarantors to the Mortgagee, the Hazardous Material
Indemnification Agreement executed and delivered by the Borrower and the
Guarantors to the Mortgagee, the Loan Agreement between the Mortgagee and the
Mortgagor and the Guarantors, the Building Loan Agreement or under any other
mortgage, instrument or document evidencing, securing or guaranteeing payment of
the Debt, in whole or in part, or otherwise executed and delivered in connection
with the Note, this Mortgage or the loan evidenced and secured thereby, and any
modification, amendment, restatements, or supplement thereto;

(q) if the Mortgagor or other person shall be in default beyond any applicable
notice and cure period under any mortgage or deed of trust covering any part of
the Mortgaged Property whether superior or inferior in lien to this Mortgage,
and including, without limitation, any such mortgage or deed of trust now or
hereafter held by the Mortgagee;

(r) if the Mortgagor shall default beyond any applicable notice and cure period
in the observance or performance of any term, covenant or condition of the
Mortgaged Lease on the part of the Mortgagor, as ground lessee thereunder, to be
observed or performed, unless any such observance or performance shall have been
waived or not required in writing by the ground lessor under the Mortgaged
Lease, or if any one or more of the events referred to in the Mortgaged Lease
shall occur which would or may cause the Mortgaged Lease to terminate without
notice or action by the ground lessor thereunder or which would entitle the
ground lessor under the Mortgaged Lease to terminate the Mortgaged Lease and the
term thereof by giving notice to the Mortgagor, as ground lessee thereunder, or
if the leasehold estate created by the Mortgaged Lease shall be surrendered, in
whole or in part, or if the Mortgaged Lease shall be terminated or canceled for
any reason or under any circumstance whatsoever, or if any of the terms,
covenants or conditions of the Mortgaged Lease shall in any manner be modified,
changed, supplemented, altered or amended without the consent of the Mortgagee;

(s) if the Mortgagor shall, without the Mortgagee’s prior written approval,
elect to treat the lease as terminated under Section 365(h)(1) of the Bankruptcy
Code. Any such election made by the Mortgagor, as holder of the fee or leasehold
estates in the Mortgaged Property, without the Mortgagee’s prior written
consent, in addition to constituting an Event of Default, shall be void;

 

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(t) if any Guarantor shall terminate or dissolve or suspend their usual business
activities or convey, sell, lease, transfer or otherwise dispose of all or a
substantial part of their property, business or assets other than in the
ordinary course of business or as may be permitted under the Existing Credit
Agreement (as defined in the Loan Agreement); or

(u) if any Guarantor shall be in default under any Guaranty beyond any
applicable notice and cure period provided for therein;

(v) if the Mortgaged Property shall become subject (i) to any tax lien, other
than a lien for local real estate taxes and assessments not due and payable, or
(ii) to any lis pendens, notice of pendency, stop order, notice of intention to
file mechanic’s or materialman’s lien, mechanic’s or materialman’s lien or other
lien of any nature whatsoever and the same shall not either be discharged of
record or in the alternative insured over to the satisfaction of the Mortgagee
by the title company insuring the lien of this Mortgage within a period of
thirty (30) days after the same is filed or recorded, and irrespective of
whether the same is superior or subordinate in lien or other priority to the
lien of this Mortgage and irrespective of whether the same constitutes a
perfected or inchoate lien or encumbered on the Mortgaged Property or is only a
matter of record or notice; or

(w) a default beyond any applicable cure period or at maturity by the Mortgagor
or any Guarantor in any payment of principal or interest due on or in the
performance of any other provision contained in the Existing Credit Agreement
(as defined in the Loan Agreement) including the breach of any covenant
thereunder, if (x) with respect to a payment default, such payment is a payment
at maturity or a final payment, or (y) the effect of such default is to cause
the lender (or lead bank acting as agent) under the Existing Credit Agreement (a
“Holder”) to accelerate the balance due thereunder prior to its stated maturity
(or under any agreement or instrument by which the Existing Credit Agreement is
evidenced or secured) and, in any case, no waiver, extension or forbearance
agreement is then in effect; provided further, that any subsequent waiver,
extension or forbearance agreement or cure by payment or other satisfaction
accepted by the Holder shall be concurrently deemed a cure of the default
created under this clause; or

(x) if the Mortgagor shall continue to be in default under any of the other
terms, covenants or conditions of this Mortgage for ten (10) days after notice
from the Mortgagee in the case of any default which can be cured by the payment
of a sum of money or for thirty (30) days after notice from the Mortgagee in the
case of any other default, provided that if such default cannot reasonably be
cured within such thirty(30) day period and the Mortgagor shall have commenced
to cure such default within such thirty (30) day period and thereafter
diligently and expeditiously proceeds to cure the same, such thirty(30) day
period shall be extended for so long as it shall require the Mortgagor in the
exercise of due diligence to cure such default, it being agreed that no such
extension shall be for a period in excess of one hundred twenty (120) days , and
that nothing contained in this paragraph shall be construed as having the effect
of extending the Completion Date (as defined in the Building Loan Agreement).

23. Right to Cure Defaults. If an Event of Default in the performance of any of
the covenants of the Mortgagor herein occurs, the Mortgagee may, at its
discretion, remedy the same and for such purpose shall have the right to enter
upon the Mortgaged Property or any portion thereof without thereby becoming
liable to the Mortgagor or any person in possession thereof holding under the
Mortgagor. If the Mortgagee shall remedy such an Event of Default or appear in,
defend, or bring any action or proceeding to protect its interest in the
Mortgaged Property or to foreclose this Mortgage or collect the Debt, the costs
and expenses thereof (including reasonable attorneys’ fees to the extent
permitted by law), with interest as provided in this

 

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paragraph, shall be paid by the Mortgagor to the Mortgagee upon demand. All such
costs and expenses incurred by the Mortgagee in remedying such Event of Default
or in appearing in, defending, or bringing any such action or proceeding shall
be paid by the Mortgagor to the Mortgagee upon demand, with interest (calculated
for the actual number of days elapsed on the basis of a 360-day year) at a rate
per annum equal to 5% plus the rate of interest provided in the Note (herein
referred to as the Default Rate), provided, however, that the Default Rate shall
in no event exceed the maximum interest rate which the Mortgagor may by law pay,
for the period after notice from the Mortgagee that such costs or expenses were
incurred to the date of payment to the Mortgagee. To the extent any of the
aforementioned costs or expenses paid by the Mortgagee after an Event of Default
by the Mortgagor shall constitute payment of (i) taxes, charges or assessments
which may be imposed by law upon the Mortgaged Property, (ii) premiums on
insurance policies covering the Mortgaged Property, (iii) expenses incurred in
upholding the lien of this Mortgage, including, but not limited to, the costs
and expenses of any litigation to collect the indebtedness secured by this
Mortgage or to prosecute, defend, protect or preserve the rights and the lien
created by this Mortgage, or (iv) any amount, cost or charge to which the
Mortgagee becomes subrogated, upon payment, whether under recognized principles
of law or equity, or under express statutory authority; then, and in each such
event, such costs, expenses and amounts, together with interest thereon at the
Default Rate, shall be added to the indebtedness secured by this Mortgage and
shall be secured by this Mortgage. Notwithstanding anything to the contrary
contained in this Mortgage, the maximum amount of the principal indebtedness
secured by this Mortgage at execution or which under any contingency may become
secured by this Mortgage is ELEVEN MILLION and 00/100 DOLLARS ($11,000,000.00),
plus all amounts expended by the Mortgagee after an Event of Default by the
Mortgagor, as hereinabove set forth in paragraph.

24. Appointment of Receiver. The Mortgagee, in any action to foreclose this
Mortgage or upon the actual or threatened waste to any part of the Mortgaged
Property or upon the occurrence of any Event of Default hereunder, shall be at
liberty, without notice, to apply for the appointment of a receiver of the
Rents, and shall be entitled to the appointment of such receiver as a matter of
right, without regard to the value of the Mortgaged Property as security for the
Debt, or the solvency or insolvency of any person then liable for the payment of
the Debt.

25. Non-Waiver. The failure of the Mortgagee to insist upon strict performance
of any term of this Mortgage shall not be deemed to be a waiver of any term of
this Mortgage. The Mortgagor shall not be relieved of the Mortgagor’s obligation
to pay the Debt at the time and in the manner provided for its payment in the
Note and this Mortgage by reason of (i) failure of the Mortgagee to comply with
any request of the Mortgagor to take any action to foreclose this Mortgage or
otherwise enforce any of the provisions hereof or of the Note or any other
mortgage, instrument or document evidencing, securing or guaranteeing payment of
the Debt or any portion thereof, (ii) the release, regardless of consideration,
of the whole or any part of the Mortgaged Property or any other security for the
Debt, or (iii) any agreement or stipulation between the Mortgagee and any
subsequent owner or owners of the Mortgaged Property or other person extending
the time of payment or otherwise modifying or supplementing the terms of the
Note, this Mortgage or any other mortgage, instrument or document evidencing,
securing or guaranteeing payment of the Debt or any portion thereof, without
first having obtained the consent of the Mortgagor, and in the latter event, the
Mortgagor shall continue to be obligated to pay the Debt at the time and in the
manner provided in the Note and this Mortgage, as so extended, modified and
supplemented, unless expressly released and discharged from such obligation by
the Mortgagee in writing. Regardless of consideration, and without the necessity
for any notice to or consent by the holder of any subordinate lien, encumbrance,
right, title or interest in or to the Mortgaged Property, the Mortgagee may
release any person at any time liable for the payment of the Debt or any portion
thereof or any part of the security held for the Debt and may extend the time of
payment or otherwise modify the terms of the Note or this Mortgage, including,
without limitation, a modification of the interest rate payable on the principal
balance of the Note, without in any manner impairing or affecting this Mortgage
or the lien thereof or the priority of this Mortgage, as so extended and

 

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modified, as security for the Debt over any such subordinate lien, encumbrance,
right, title or interest. The Mortgagee may resort for the payment of the Debt
to any other security held by the Mortgagee in such order and manner as the
Mortgagee, in its discretion, may elect. The Mortgagee may take action to
recover the Debt, or any portion thereof, or to enforce any covenant hereof
without prejudice to the right of the Mortgagee thereafter to foreclose this
Mortgage. The Mortgagee shall not be limited exclusively to the rights and
remedies herein stated but shall be entitled to every additional right and
remedy now or hereafter afforded by law. The rights of the Mortgagee under this
Mortgage shall be separate, distinct and cumulative and none shall be given
effect to the exclusion of the others. No act of the Mortgagee shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision.

26. Liability. If the Mortgagor consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several.

27. Construction. The terms of this Mortgage shall be construed in accordance
with the laws of the State of New York.

28. Security Agreement; Financing Statement. This Mortgage constitutes both a
real property mortgage and a “security agreement,” within the meaning of the
Uniform Commercial Code, and the Mortgaged Property includes both real and
personal property and all other rights and interest, whether tangible or
intangible in nature, of the Mortgagor in the Mortgaged Property. The Mortgagor
by executing and delivering this Mortgage has granted to the Mortgagee, as
security for the Debt, a security interest in the Equipment. Upon any Event of
Default under the Note or this Mortgage, the Mortgagee, in addition to any other
rights and remedies which it may have, shall have and may exercise immediately
and without demand, any and all rights and remedies granted to a secured party
upon default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing, the right to take possession of the Equipment or
any part thereof, and to take such other measures as the Mortgagee may deem
necessary for the care, protection and preservation of the Equipment. Upon
request or demand of the Mortgagee, the Mortgagor shall at its expense assemble
the Equipment and make it available to the Mortgagee at a convenient place
acceptable to the Mortgagee. The Mortgagor shall pay to the Mortgagee on demand
any and all expenses, including legal expenses and attorneys’ fees, incurred or
paid by the Mortgagee in protecting its interest in the Equipment and in
enforcing its rights hereunder with respect to the Equipment. Any notice of
sale, disposition or other intended action by the Mortgagee with respect to the
Equipment sent to the Mortgagor in accordance with the provisions of this
Mortgage at least seven (7) days prior to the date of any such sale, disposition
or other action, shall constitute reasonable notice to the Mortgagor, and the
method of sale or disposition or other intended action set forth or specified in
such notice shall conclusively be deemed to be commercially reasonable within
the meaning of the Uniform Commercial Code unless objected to in writing by the
Mortgagor within five (5) days after receipt by the Mortgagor of such notice.
The proceeds of any sale or disposition of the Equipment, or any part thereof,
may be applied by the Mortgagee to the payment of the Debt in such order,
priority and proportions as the Mortgagee in its discretion shall deem proper.
If any change shall occur in the Mortgagor’s name, the Mortgagor shall promptly
cause to be filed at its own expense, new financing statements as required under
the Uniform Commercial Code to replace those on file in favor of the Mortgagee.

The Mortgage shall also serve as a financing statement as provided for in
Section 9-502(c) of the Uniform Commercial Code.

29. Further Acts, etc. The Mortgagor will, at the cost of the Mortgagor, and
without expense to the Mortgagee, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignments, transfers and assurances as the Mortgagee shall, from time to time,
require for the better assuring, conveying, assigning, transferring and
confirming unto the

 

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Mortgagee the property and rights hereby mortgaged or intended now or hereafter
so to be, or which the Mortgagor may be or may hereafter become bound to convey
or assign to the Mortgagee, or for carrying out the intention or facilitating
the performance of the terms of this Mortgage or for filing, registering or
recording this mortgage and, on demand, will execute and deliver and hereby
authorizes the Mortgagee to execute in the name of the Mortgagor to the extent
the Mortgagee may lawfully do so, one or more financing statements, chattel
mortgages or comparable security instruments, to evidence more effectively the
lien hereof upon the Mortgaged Property.

30. Headings, etc. The headings and captions of various paragraphs of this
Mortgage are for convenience of reference only and are not to be construed as
defined or limiting, in any way, the scope or intent of the provisions hereof.

31. Filing of Mortgage, etc. The Mortgagor forthwith upon the execution and
delivery of this Mortgage and thereafter, from time to time, will cause this
Mortgage, and any security instrument creating a lien or evidencing the lien
hereof upon the Mortgaged Property and each instrument of further assurance to
be filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully to
protect, preserve and perfect the lien hereof upon, and the interest of the
Mortgagee in, the Mortgaged Property. The Mortgagor will pay all filing,
registration and recording fees, and all expenses incident to the preparation,
execution and acknowledgment of this Mortgage, any mortgage supplemental hereto,
any security instrument with respect to the Mortgaged Property, and any
instrument of further assurance, and all Federal, state, county and municipal
taxes, duties, imposts, assessments and charges arising out of or in connection
with the execution and delivery of this Mortgage, any mortgage supplemental
hereto, any security instrument with respect to the Mortgaged Property or any
instrument of further assurance. The Mortgagor shall hold harmless and indemnify
the Mortgagee, its successors and assigns, against any liability incurred by
reason of the imposition of any tax on the making and recording of this
Mortgage.

32. Usury Laws. This Mortgage and the Note are subject to the express condition
that at no time shall the Mortgagor be obligated or required to pay interest on
the principal balance due under the Note at a rate which could subject the
holder of the Note to either civil or criminal liability as a result of being in
excess of the maximum interest rate which the Mortgagor is permitted by law to
contract or agree to pay. If by the terms of this Mortgage or the Note, the
Mortgagor is at any time required or obligated to pay interest on the principal
balance due under the Note at a rate in excess of such maximum rate, the rate of
interest under the Note shall be deemed to be immediately reduced to such
maximum rate and the interest payable shall be computed at such maximum rate and
all prior interest payments in excess of such maximum rate shall be applied and
shall be deemed to have been payments in reduction of the principal balance of
the Note.

33. Sole Discretion of Mortgagee. Except as may otherwise be expressly provided
to the contrary, wherever pursuant to the Note, this Mortgage, the Building Loan
Agreement, or any other document or instrument now or hereafter executed and
delivered in connection therewith or otherwise with respect to the loan secured
hereby, the Mortgagee exercises any right given to it to consent or not consent,
or to approve or disapprove, or any arrangement or term is to be satisfactory to
the Mortgagee, the decision of the Mortgagee to consent or not consent, or to
approve or disapprove, or to decide that arrangements or terms are satisfactory
or not satisfactory, shall be in the sole and absolute discretion of the
Mortgagee and shall be final and conclusive.

34. Reasonableness. If at any time the Mortgagor believes that the Mortgagee has
not acted reasonably in granting or withholding any approval or consent under
the Note, this Mortgage, the Building Loan Agreement, or any other document or
instrument now or hereafter executed and delivered in

 

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connection therewith or otherwise with respect to the loan secured hereby, as to
which approval or consent either (i) the Mortgagee has expressly agreed to act
reasonably, or (ii) absent such agreement, applicable law would nonetheless
require the Mortgagee to act reasonably, then the Mortgagor’s sole remedy shall
be to seek injunctive relief or specific performance, and no action for monetary
damages or punitive damages shall in any event or under any circumstance be
maintained by the Mortgagor against the Mortgagee.

35. Recovery of Sums Required To Be Paid. The Mortgagee shall have the right
from time to time to take action to recover any sum or sums which constitute a
part of the Debt as the same become due, without regard to whether or not the
balance of the Debt shall be due, and without prejudice to the right of the
Mortgagee thereafter to bring an action of foreclosure, or any other action, for
an Event of Default or Events of Defaults by the Mortgagor existing at the time
such earlier action was commenced.

36. Actions and Proceedings. After an Event of Default, the Mortgagee shall have
the right to appear in and defend any action or proceeding brought with respect
to the Mortgaged Property and to bring any action or proceeding, in the name and
on behalf of the Mortgagor, which the Mortgagee, in its discretion, determines
should be brought to protect its interest in the Mortgaged Property.

37. Inapplicable Provisions. If any term, covenant or condition of this Mortgage
shall be held to be invalid, illegal or unenforceable in any respect, this
Mortgage shall be construed without such provision.

38. Duplicate Originals. This Mortgage may be executed in any number of
duplicate originals and each such duplicate original shall be deemed to
constitute but one and the same instrument.

39. Certain Definitions. Unless the context clearly indicates a contrary intent
or unless otherwise specifically provided in this Mortgage, words used in this
Mortgage shall be used interchangeably in singular or plural form and the word
“Mortgagor” shall mean each of the Mortgagor and any subsequent owner or owners
of the Mortgaged Property or any part thereof or interest therein; the word
“Mortgagee” shall mean the Mortgagee or any subsequent holder of the Note; the
word “Note” shall mean the Note or any other evidence of indebtedness secured by
this Mortgage and any and all modifications, amendments, extensions, renewals,
restatements, consolidations and/or replacements thereof; the word “Guarantor”
shall, in addition to the meaning ascribed to it in Paragraph 22(l) hereof,
include their respective heirs, executors, administrators, legal
representatives, successors and assigns; the word “person” shall include an
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, or other entity; the words “Mortgaged
Property” shall include any portion of the Mortgaged Property or interest
therein; and the word “Debt” shall mean all sums secured by this Mortgage; and
the word “default” shall mean the occurrence of any default by the Mortgagor or
other person in the observance or performance of any of the terms, covenants or
provisions of the Note or this Mortgage on the part of the Mortgagor or such
other person to be observed or performed without regard to whether such default
constitutes or would constitute upon notice or lapse of time, or both, an Event
of Default under this Mortgage. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and vice
versa.

40. Waiver of Notice. The Mortgagor shall not be entitled to any notices of any
nature whatsoever from the Mortgagee except with respect to matters for which
this Mortgage specifically and expressly provides for the giving of notice by
the Mortgagee to the Mortgagor, and the Mortgagor hereby expressly waives the
right to receive any notice from the Mortgagee with respect to any matter for
which this Mortgage does not specifically and expressly provide for the giving
of notice by the Mortgagee to the Mortgagor.

 

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41. No Oral Change. This Mortgage may only be modified, amended or changed by an
agreement in writing signed by the Mortgagor and the Mortgagee, and may only be
released, discharged or satisfied of record by an agreement in writing signed by
the Mortgagee. No waiver of any term, covenant or provision of this Mortgage
shall be effective unless given in writing by the Mortgagee and if so given by
the Mortgagee shall only be effective in the specific instance in which given.
The Mortgagor acknowledges that the Note, this Mortgage, the Building Loan
Agreement and the other documents and instruments executed and delivered in
connection therewith or otherwise in connection with the loan secured hereby set
forth the entire agreement and understanding of the Mortgagor and the Mortgagee
with respect to the loan secured hereby and that no oral or other agreements,
understanding, representation or warranties exist with respect to the loan
secured hereby other than those set forth in the Note, this Mortgage , the
Building Loan Agreement and such other executed and delivered documents and
instruments.

42. Absolute and Unconditional Obligation. The Mortgagor acknowledges that the
Mortgagor’s obligation to pay the Debt in accordance with the provision of the
Note and this Mortgage is and shall at all times continue to be absolute and
unconditional in all respects, and shall at all times be valid and enforceable
irrespective of any other agreements or circumstances of any nature whatsoever
which might otherwise constitute a defense to the Note or this Mortgage or the
obligation of the Mortgagor thereunder to pay the Debt or the obligations of any
other person relating to the Note or this Mortgage or the obligations of the
Mortgagor under the Note or this Mortgage or otherwise with respect to the loan
secured hereby, and the Mortgagor absolutely, unconditionally and irrevocably
waives any and all right to assert any defense, setoff, counterclaim or
crossclaim of any nature whatsoever with respect to the obligation of the
Mortgagor to pay the Debt in accordance with the provisions of the Note and this
Mortgage or the obligations of any other person relating to the Note or this
Mortgage or obligations of the Mortgagor under the Note or this Mortgage or
otherwise with respect to the loan secured hereby in any action or proceeding
brought by the Mortgagee to collect the Debt, or any portion thereof, or to
enforce, foreclose and realize upon the lien and security interest created by
this Mortgage or any other document or instrument securing repayment of the
Debt, in whole or in part (provided, however, that the foregoing shall not be
deemed a waiver of the Mortgagor’s right to assert any compulsory counterclaim
maintained in a court of the United States, or of the State of New York if such
counterclaim is compelled under local law or rule of procedure, nor shall the
foregoing be deemed a waiver of the Mortgagor’s right to assert any claim which
would constitute a defense, setoff, counterclaim or crossclaim of any nature
whatsoever against the Mortgagee in any separate action or proceeding).

43. Trust Fund Pursuant to Section 13 of the Lien Law of New York, the Mortgagor
shall receive the advances secured hereby and shall hold the right to receive
such advances as a trust fund to be applied first for the purpose of paying the
cost of any improvement and shall apply such advances first to the payment of
the cost of any such improvement on the Mortgaged Property before using any part
of the total of the same for any other purpose.

44. Non-Residential Property. This Mortgage does not cover real property
principally improved by one or more structures containing in the aggregate six
(6) or less residential dwelling units having their own separate cooking
facilities.

45. Waiver of Trial by Jury. The Mortgagor hereby irrevocably and
unconditionally waives, and the Mortgagee by its acceptance of the Note and this
Mortgage irrevocably and unconditionally waives, any and all rights to trial by
jury in any action, suit or counterclaim arising in connection with, out of or
otherwise relating to the Note, this Mortgage, the Building Loan Agreement, any
other document or instrument now or hereafter executed and delivered in
connection therewith or the loan secured by this Mortgage.

 

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46. Waiver of Statutory Rights. The Mortgagor shall not and will not apply for
or avail itself of any appraisement, valuation, stay, extension or exemption
laws, or any so-called “Moratorium Laws,” now existing or hereafter enacted, in
order to prevent or hinder the enforcement or foreclosure of this Mortgage, but
hereby waives the benefit of such laws to the full extent that the Mortgagor may
do so under applicable law. The Mortgagor for itself and all who may claim
through or under it waives any and all right to have the property and estates
comprising the Mortgaged Property marshaled upon any foreclosure of the lien of
this Mortgage and agrees that any court having jurisdiction to foreclose such
lien may order the Mortgaged Property sold as an entirety. The Mortgagor hereby
waives for itself and all who may claim through or under it, and to the full
extent the Mortgagor may do so under applicable law, any and all rights of
redemption from sale under any order of decree of foreclosure of this Mortgage
or granted under any statute now existing or hereafter enacted.

47. Brokerage. The Mortgagor covenants and agrees that no brokerage commission
or other fee, commission or compensation is to be paid by the Mortgagee on
account of the loan or other financing obligations evidenced by the Note and/or
secured by this Mortgage and the Mortgagor agrees to indemnify the Mortgagee
against any claims for any of the same.

48. Indemnity. Anything in this Mortgage, the Note, the Building Loan Agreement,
the Loan Agreement or any of the other agreement, document or instrument now or
hereafter executed and/or delivered in connection with the Debt (collectively,
as the same may be amended and modified, restated, replaced or supplemented from
time to time, the “Loan Documents”) to the contrary notwithstanding, the
Mortgagor shall indemnify and hold the Mortgagee harmless and defend the
Mortgagee at the Mortgagor’s sole cost and expense against any loss or
liability, cost or expense (including, without limitation, reasonable attorneys’
fees and disbursements of the Mortgagee’s counsel, whether in-house staff,
retained firms or otherwise), and all claims, actions, procedures and suits
arising out of or in connection with:

(i) any ongoing matters arising out of this Mortgage, the Note, the Building
Loan Agreement, the Loan Agreement, any of the other Loan Documents or the
transaction contemplated hereby or thereby, including, but not limited to, all
costs of appraisal or reappraisal of all or any portion of any collateral for
the Debt (including without limitation, the Mortgaged Property) and all costs of
reappraisal of the Mortgaged Property whether required by law or regulation of
the Mortgagee or any governmental or quasi governmental agency or of the
granting by the Payee, in its sole and absolute discretion, of any lease
non-disturbance agreements,

(ii) any amendment to, or restructuring of, the Debt, this Mortgage, the Note,
the Building Loan Agreement, the Loan Agreement or any of the other Loan
Documents, and

(iii) any and all lawful action that may be taken by the Mortgagee in connection
with the enforcement of the provisions of this Mortgage, the Note, the Building
Loan Agreement, the Loan Agreement or any of the other Loan Documents, whether
or not suit is filed in connection with the same, or in connection with the
Mortgagor, any Guarantor of all or any portion of the Debt and/or any partner,
joint venturer or shareholder thereof becoming subject of a voluntary or
involuntary federal or state bankruptcy, insolvency or similar proceeding;

 

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provided however that the above indemnifications shall exclude any and all loss
or liability, cost or expense (including, but not limited to, reasonable
attorneys’ fees and disbursements of Mortgagee’s counsel, whether in-house
staff, retained firms or otherwise), and all claims, actions, procedures and
suits arising out of the gross negligence, bad faith, or willful misconduct of
the Mortgagee, its agents and employees.

All sums expended by the Mortgagee on account of any of the foregoing shall be
reimbursable on demand, and until reimbursed by the Mortgagor pursuant hereto,
shall be deemed additional principal evidenced hereby and secured by this
Mortgage and shall bear interest at the Default Rate hereinbelow set forth. The
obligations of the Mortgagor under this paragraph shall, notwithstanding any
exculpatory or other provisions of any nature whatsoever which may be set forth
herein, in this Mortgage, the Note, the Building Loan Agreement, the Loan
Agreement or the other Loan Documents, constitute the personal recourse
undertakings, obligations and liabilities of the Mortgagor and shall be secured
by the Mortgage.

49. Enforceability. This Mortgage was negotiated in the State of New York, and
made by the Mortgagor and accepted by the Mortgagee in the State of New York,
and the proceeds of the loan secured hereby were disbursed from the State of New
York, which State the parties agree has a substantial relationship to the
parties and to the underlying transaction embodied hereby, and in all respects,
including, without limiting the generality of the foregoing, matters of
construction, validity and performance, this Mortgage and the obligations
arising hereunder shall be governed by, and construed in accordance with, the
laws of the State of New York applicable to contracts made and performed in such
State and any applicable laws of the United State of America. Whenever possible,
each provision of this Mortgage shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Mortgage
shall be unenforceable or prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such unenforceability,
prohibition or invalidity, without invalidating the remaining provisions of this
Mortgage.

50. Relationship. The relationship of the Mortgagee to the Mortgagor hereunder
is strictly and solely that of lender and borrower and mortgagor and mortgagee
and swap counter-parties and nothing contained in the Note, this Mortgage, the
Building Loan Agreement, or any other document or instrument now or hereafter
executed and delivered in connection therewith or otherwise in connection with
the loan secured hereby is intended to create, or shall in any event or under
any circumstance be construed as creating, a partnership, joint venture,
tenancy-in-common, joint tenancy or other relationship of any nature whatsoever
between the Mortgagee and the Mortgagor other than as lender and borrower and
swap counter-parties.

51. [reserved]

52. USA Patriot Act. The Mortgagee hereby notifies the Mortgagor that pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”), it is required to obtain, verify and
record information that identifies the Mortgagor, which information includes the
name and address of the Mortgagor and other information that will allow the
Mortgagee to identify the Mortgagor in accordance with the Act. The Mortgagor
will not: (a) be or become subject at any time to any law, regulation or list of
any government agency (including, without limitation, the US Office of Foreign
Asset Control List) that prohibits or limits the Mortgagee from making any
advance or extension of credit to the Mortgagor or from otherwise conducting
business with the Mortgagor, or (b) fail to provide documentary and other
evidence of the Mortgagor’s identity as may be requested by the Mortgagee at any
time to enable the Mortgagee to verify the Mortgagor’s identity or to comply
with any applicable law or regulation, including, without limitation,
Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318.

 

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53. Building Loan Agreement. This is a building loan and “construction loan”
mortgage, the proceeds of which are loaned for the purpose of financing the
construction of certain improvements on the Premises. This Mortgage is subject
to all of the terms, covenants and conditions of a certain building loan
agreement dated the date hereof entered into between the Mortgagee and the
Mortgagor (herein referred to as the Building Loan Agreement), which Building
Loan Agreement and all of the terms, covenants and conditions thereof are by
this reference incorporated herein and made a part hereof with the same force
and effect as if set forth at length herein. The proceeds of the building loan
secured hereby are to be advanced by the Mortgagee to the Mortgagor in
accordance with the provisions of the Building Loan Agreement. The Mortgagor
shall observe and perform all of the terms, covenants and conditions of the
Building Loan Agreement on the Mortgagor’s part to be observed or performed.
Subject to the limitations and qualifications expressly set forth in paragraph
23 of this Mortgage entitled “Right to Cure Defaults,” all advances made and all
indebtedness arising and accruing under the Building Loan Agreement from time to
time shall be secured hereby. In the event of any conflict or ambiguity between
the terms, covenants and conditions of this Mortgage and the Building Loan
Agreement, the terms, covenants and conditions which shall enlarge the rights
and remedies of the Mortgagee and the interest of the Mortgagee in the Mortgaged
Property, afford the Mortgagee greater financial security in the Mortgaged
Property and better assure payment of the Debt in full, shall control.

54. [Reserved]

55. The Mortgaged Lease.

(a) The Mortgagor shall: (i) pay all rents, additional rents and other sums
required to be paid by the Mortgagor as lessee under and pursuant to the
provisions of the Mortgaged Lease, (ii) diligently perform and observe all of
the terms, covenants and conditions of the Mortgaged Lease on the part of the
Mortgagor, as lessee thereunder, to be performed and observed, unless such
performance or observance shall be waived or not required in writing by the
lessor under the Mortgaged Lease or the same is being contested by the Mortgagor
in good faith and by appropriate proceedings and subject to the provision of
paragraph 58 below, to the end that all things shall be done which are necessary
to keep unimpaired the rights of the Mortgagor, as lessee, under the Mortgaged
Lease, (iii) promptly notify the Mortgagee in writing of any notice of default
received by the Mortgagor or given to the lessor under the Mortgaged Lease in
respect to the performance or observance of any of the terms, covenants or
conditions on the part of, respectively, the Mortgagor or lessor to be performed
or observed under the Mortgaged Lease, (iv) promptly notify the Mortgagee of the
giving of any notice by the lessor under the Mortgaged Lease to the Mortgagor
noting or claiming any default by the Mortgagor in the performance or observance
of any of the terms, covenants or conditions of the Mortgaged Lease on the part
of the Mortgagor, as lessee thereunder, to be performed or observed and deliver
to the Mortgagee a true copy of each such notice, (v) promptly notify the
Mortgagee in writing of any request made by either party to the Mortgaged Lease
for arbitration proceedings, if any, pursuant to the Mortgaged Lease and of the
institution of any arbitration proceedings, as well as of all proceedings
thereunder, and promptly deliver to the Mortgagee a copy of the determination of
the arbitrators in each such arbitration proceeding, it being acknowledged and
agreed that the Mortgagee shall have the right to participate in such
arbitration proceedings in association with the Mortgagor or on its own behalf
as an interested party, (vi) furnish to the Mortgagee, within ten (10) days
after demand, proof of payment of all items which are required to be paid by the
Mortgagor pursuant to the Mortgaged Lease, and (vii) not consent to the
subordination of the Mortgaged Lease to any mortgage of the fee interest of the
lessor under the Mortgaged Lease in the Mortgaged Property except such as agreed
to by the Mortgagee.

(b) The Mortgagor, shall not, without the prior written consent of the
Mortgagee, surrender the leasehold estate created by the Mortgaged Lease or
terminate or cancel the Mortgaged Lease or modify, change, supplement, alter or
amend the Mortgaged Lease, in any respect, either orally or in writing, and the

 

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Mortgagor hereby assigns to the Mortgagee, as further security for the payment
of the Debt and for the performance and observance of the terms, covenants and
conditions of this Mortgage, all of the rights, privileges and prerogatives of
the Mortgagor, as lessee under the Mortgaged Lease, to surrender the leasehold
estate created by the Mortgaged Lease or to terminate, cancel, modify, change,
supplement, alter or amend the Mortgaged Lease, and any such surrender of the
leasehold estate created by the Mortgaged Lease or termination, cancellation,
modification, change, supplement, alteration or amendment of the Mortgaged Lease
without the prior written consent of the Mortgagee shall be void and of no force
and effect.

(c) Supplementing the provisions of subparagraph (b) above, it is understood and
agreed that the Mortgagor shall not, without the Mortgagee’s prior written
consent, elect to treat the Mortgaged Lease as terminated under
Section 365(h)(1) of the Bankruptcy Code. Any such election made without the
Mortgagee’s prior written consent shall be void. The Mortgagor hereby
unconditionally assigns, transfers and set over to the Mortgagee all of the
Mortgagor’s claims and rights to the payment of damages arising under the
Bankruptcy Code from any rejection by the lessor under the Mortgaged Lease. The
Mortgagee shall have the right to proceed in its own name or in the name of the
Mortgagor in respect of any claim, suit, action or proceeding relating to the
rejection of the Mortgaged Lease, including, without limitation, the right to
file and prosecute, to the exclusion of the Mortgagor, any proofs of claim,
complaints, motions, applications, notices and other documents, in any case in
respect of such lessor under the Bankruptcy Code. This assignment constitutes a
present, irrevocable and unconditional assignment of the foregoing claims,
rights and remedies, and shall continue in effect until all of the indebtedness
and obligations secured by the Mortgage shall have been satisfied and discharged
in full. Any amounts received by the Mortgagee as damages arising out of the
rejection of the Mortgaged Lease as aforesaid shall be applied first to all
costs and expenses of the Mortgagee (including, without limitation, reasonable
attorneys’ fees) incurred in connection with the exercise of any of its rights
or remedies under this Paragraph 55 and then shall be applied against the Debt
in such order, priority and proportion as the Mortgagee shall determine. If any
action, motion or notice shall be commenced or filed in respect of the
Mortgagor, as lessee under the Mortgaged Lease, or all or any portion of the
Mortgaged Property in connection with any case under the Bankruptcy Code, the
Mortgagor shall give the Mortgagee prompt written notice thereof and the
Mortgagee shall have the option, to the exclusion of the Mortgagor, exercisable
upon notice from the Mortgagee to the Mortgagor, to conduct and control any such
litigation with counsel of the Mortgagee’s choice. The Mortgagee may proceed in
its own name or in the name of the Mortgagor in connection with any such
litigation, and the Mortgagor agrees to execute any and all powers,
authorizations, consents and other documents required by the Mortgagee in
connection therewith. The Mortgagor shall, upon demand, pay to the Mortgagee all
costs and expenses (including attorneys’ fees) paid or incurred by the Mortgagee
in connection with the prosecution or conduct of any such proceedings. Any such
costs or expenses not paid by the Mortgagor as aforesaid shall be secured by the
lien of the Mortgage and shall be added to the Debt. The Mortgagor shall not
commence any action, suit, proceeding or case, or file any application or make
any motion, in respect of the Mortgaged Lease in any such case under the
Bankruptcy Code without the prior written consent of the Mortgagee. The
Mortgagor shall, immediately after obtaining knowledge thereof, notify the
Mortgagee and its counsel, by telecopy to the numbers set forth in Paragraph 12,
of any filing by or against the lessor under the Mortgaged Lease of a petition
under the Bankruptcy Code. The Mortgagor shall thereafter forthwith give written
notice of such filing to the Mortgagee, setting forth the date of such filing,
the court in which the petition was filed and the relief sought therein. The
Mortgagor shall promptly deliver to the Mortgagee, following receipt, any and
all notices, summonses, pleadings, applications and other documents received by
the Mortgagor in connection with any such petition and any proceedings relating
thereto.

 

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(d) If the Mortgagor shall be in default in the performance or observance of any
term, covenant or condition of the Mortgaged Lease on the part of the Mortgagor,
as lessee thereunder, to be performed or observed beyond any applicable notice
and cure period, then, without limiting the generality of the other provisions
of this Mortgage, and without waiving or releasing the Mortgagor from any of its
obligations hereunder, the Mortgagee shall have the right, but shall be under no
obligation, to pay any sums and to perform any act or take any action as may be
appropriate to cause all of the terms, covenants and conditions of the Mortgaged
Lease on the part of the Mortgagor, as lessee thereunder, to be performed or
observed to be promptly performed or observed on behalf of the Mortgagor, to the
end that the rights of the Mortgagor in, to and under the Mortgaged Lease shall
be kept unimpaired and free from default. If the Mortgagee shall make any
payment or perform any act or take action in accordance with the preceding
sentence, the Mortgagee will notify the Mortgagor of the making of any such
payment, the performance of any such act, or the taking of any such action. All
sums so paid by the Mortgagee and all costs and expenses incurred by the
Mortgagee in connection with the performance of any such act shall be paid by
the Mortgagor to the Mortgagee upon demand with interest at the Default Rate
from the date of the payment or incurrence thereof, and the same shall be deemed
to be secured by this Mortgage and shall be a lien on the Mortgaged Property
prior to any right, title to, interest in or claim upon the Mortgaged Property
attaching subsequent to the lien of this Mortgage. In any such event, subject to
the rights, if any, of lessees and other occupants under the Leases, the
Mortgagee and any person designated by the Mortgagee shall have, and are hereby
granted, the right to enter upon the Mortgaged Property at any time and from
time to time for the purpose of taking any such action. If the lessor under the
Mortgaged Lease shall deliver to the Mortgagee a copy of any notice of default
sent by said lessor to the Mortgagor, as lessee under the Mortgaged Lease, such
notice shall constitute full protection to the Mortgagee for any action taken or
omitted to be taken by the Mortgagee, in good faith, in reliance thereon.

(e) The Mortgagor hereby irrevocably appoints the Mortgagee its true and lawful
attorney-in-fact in its name or otherwise to do any and all acts and to execute
any and all documents which in the reasonable opinion of the Mortgagee may be
necessary or desirable to preserve any rights of the Mortgagor in, to or under
the Mortgaged Lease, or any occupancy lease, license or concession, including,
without limitation, the right (but not the obligation) following a Event of
Default, to cure any defaults of the Mortgagor as lessee under the Mortgaged
Lease, preserve any rights of the Mortgagor whatsoever in respect of any part of
the Mortgaged Property or to execute an extension or renewal of the Mortgaged
Lease as hereinafter set forth. The Mortgagor shall, within ten (10) days of
request by the Mortgagee, obtain from the lessor under the Mortgaged Lease such
certificates of estoppel with respect to compliance by the Mortgagor with the
terms of the Mortgaged Lease as may be requested by the Mortgagee. The Mortgagor
shall exercise each individual option, if any, to extend or renew the term of
the Mortgaged Lease upon demand by the Mortgagee made at any time within one
(1) year of the last day upon which any such option may be exercised, and the
Mortgagor hereby expressly authorizes and appoints the Mortgagee the Mortgagor’s
attorney-in-fact to exercise, either jointly or individually, any such option in
the name of and upon behalf of the Mortgagor, which power of attorney shall be
irrevocable and shall be deemed to be coupled with an interest.

(f) The generality of the provisions of this Paragraph 55 relating to the
Mortgaged Lease shall not be limited by other provisions of this Mortgage or any
other agreement between the Mortgagee and the Mortgagor, setting forth
particular obligations of the Mortgagor which are also required of the Mortgagor
as tenant under the Mortgaged Lease.

56. No Merger of Fee and Leasehold Estates. So long as any portion of the Debt
shall remain unpaid, and unless the Mortgagee shall otherwise consent, the fee
title to the Premises and the Improvements and the leasehold estate therein
created pursuant to the provisions of the Mortgaged Lease shall not merge, but
shall always be kept separate and distinct, notwithstanding the union of such
estates in the Mortgagor or in any other person, by purchase, operation of law
or otherwise. If the Mortgagee shall acquire the fee title to the Premises and
the Improvements and the leasehold estate therein created pursuant

 

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to the provisions of the Mortgaged Lease, by foreclosure of this Mortgage or
otherwise, such estates shall not merge as a result of such acquisition and
shall remain separate and distinct for all purposes after such acquisition
unless and until the Mortgagee shall elect to merge such estates.

57. Remedies. Upon the occurrence, and during the continuance (for the purposes
of this Mortgage the term ‘continuance” as used herein shall mean an Event of
Default which has not been cured and/or such cure accepted by the Mortgagee or
such Event of Default waived, in its sole and absolute discretion) of any Event
of Default, Mortgagor agrees that Mortgagee may take such action, without notice
or demand, except as otherwise provided herein, as it deems advisable to protect
and enforce its rights against Mortgagor and in and to the Mortgaged Property,
including, but not limited to, the following actions, each of which may be
pursued concurrently or otherwise, at such time and in such order as Mortgagee
may determine, in its sole discretion, without impairing or otherwise affecting
the other rights and remedies of Mortgagee, in each case, to the extent
permitted by law: (a) declare the entire unpaid Debt to be immediately due and
payable; (b) with or without entry, institute proceedings at law or equity, for
the complete or partial foreclosure of this Mortgage under any applicable
provision of law in which case the Mortgaged Property or any interest therein
may be sold for cash or upon credit in one or more parcels or in several
interests or portions, if applicable, permitted hereunder or under law, and in
any order or manner, any partial foreclosure to be subject to the continuing
lien and security interest of this Mortgage for the balance of the Debt not then
due, unimpaired and without loss of priority; (c) sell for cash or upon credit
the Mortgaged Property or any part thereof and all estate, claim, demand, right,
title and interest of Mortgagor therein and rights of redemption thereof,
pursuant to judicial decree or otherwise, at one or more sales, as an entirety
or in one or more parcels, if applicable; (d) institute an action, suit or
proceeding in equity for the specific performance of any covenant, condition or
agreement contained herein, in the Note or in the other Loan Documents;
(e) recover judgment on the Note either before, during or after any proceedings
for the enforcement of this Mortgage or the other Loan Documents; (f) apply for
the appointment of a receiver, trustee, liquidator or conservator of the
Mortgaged Property, without notice and without regard for the adequacy of the
security for the Debt and without regard for the solvency of Mortgagor, any
Guarantor, indemnitor or of any person, firm or other entity liable for the
payment of the Debt; (g) subject to the rights of any subtenants or other
occupants of the Mortgaged Property, enter into or upon the Mortgaged Property,
either personally or by its agents, nominees or attorneys and dispossess
Mortgagor and its agents and servants therefrom, without liability for trespass,
damages or otherwise and exclude Mortgagor and its agents or servants wholly
therefrom, and take possession of all books, records and accounts relating
thereto and Mortgagor agrees to surrender possession of the Mortgaged Property
and of such books, records and accounts to Mortgagee upon demand, and thereupon
Mortgagee may exercise all rights and powers of Mortgagor with respect to the
Mortgaged Property including, without limitation, (1) the right to use, operate,
manage, control, insure, maintain, repair, restore and otherwise deal with all
and every part of the Mortgaged Property and conduct the business thereat;
(2) the right to make or complete any construction, alterations, additions,
renewals, replacements and improvements to or on the Mortgaged Property, subject
to the provisions of the Mortgaged Lease, as Mortgagee deems advisable; (3) the
right to make, cancel, enforce or modify Leases, obtain and evict tenants, and
demand, sue for, collect and receive all Rents of the Mortgaged Property and
every part thereof; (h) require Mortgagor to pay monthly in advance to
Mortgagee, or any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of such part of the Mortgaged
Property as may be occupied by Mortgagor; (i) require Mortgagor to vacate and
surrender possession of the Mortgaged Property to Mortgagee or to such receiver
and, in default thereof, Mortgagor may be evicted by summary proceedings or
otherwise; (j) apply the receipts from the Mortgagor Property, any deposits and
interest thereon and/or any unearned insurance premiums paid to Mortgagee upon
the surrender of any Policies maintained pursuant to paragraph 3 hereof (it
being agreed that Mortgagee shall have the right to surrender such Policies upon
the occurrence of an Event of Default), to the payment of the Debt, in such
order, priority and proportions as Mortgagee shall deem appropriate in its sole
discretion; (k) exercise any and all rights and remedies granted to a secured
party upon default under

 

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the Uniform Commercial Code, including, without limiting the generality of the
foregoing: (1) the right to take possession of the Equipment or any part
thereof, and to take such other measures as Mortgagee may deem necessary for the
care, protection and preservation of the Equipment, and (2) request Mortgagor at
its expense to assemble the Equipment and make it available to Mortgagee at the
Premises. Any notice of sale, disposition or other intended action by Mortgagee
with respect to the Equipment sent to Mortgagor in accordance with the
provisions hereof at least ten (10) days prior to such action, shall constitute
commercially reasonable notice to Mortgagor. Upon any foreclosure or other sale
of the Mortgaged Property pursuant to the terms hereof, Mortgagee may bid for
and purchase the Mortgaged Property and shall be entitled to apply all or any
part of the secured indebtedness as a credit against the purchase price. In the
event of a sale, by foreclosure, power of sale, or otherwise, of less than all
of the Mortgaged Property, if applicable, this Mortgage shall continue as a lien
and security interest on the remaining portion of the Mortgaged Property
unimpaired and without loss of priority. Notwithstanding the provisions of this
paragraph to the contrary, if any Event of Default as described in Paragraph 22
(m), (n) or (o) shall occur, the entire unpaid Debt shall be automatically due
and payable, without any further notice, demand or other action by Mortgagee.

58. Contest Of Certain Claims. Notwithstanding anything to the contrary herein,
the Mortgagor shall not be in default for failure to pay or discharge Taxes or
mechanic’s or materialman’s lien asserted against the Mortgaged Property or to
comply with an Environmental Requirement if, and so long as, (a) Mortgagor shall
have notified Mortgagee of same within ten (10) days of obtaining knowledge
thereof; (b) Mortgagor shall diligently and in good faith contest the same by
appropriate legal proceedings which shall operate to prevent the enforcement or
collection of the same and the sale of the property or any part thereof, to
satisfy the same; (c) Mortgagor shall promptly upon final determination thereof
pay the amount of any such Taxes, or claim or fine or assessment so determined,
together with all costs, interest and penalties which may be payable in
connection therewith; (d) the failure to pay the Taxes, or mechanic’s or
materialman’s lien claim or fine or assessment does not constitute an Event of
Default under any other Mortgage, the Morgtaged Lease or any other agreement or
security interest covering or affecting any part of the Mortgaged Property; and
(e) notwithstanding the foregoing, Mortgagor shall immediately upon request of
Mortgagee pay (and if Mortgagee shall fail so to do, Mortgagor may, but shall
not be required to, pay or cause to be discharged or bonded against) any such
Taxes, or claim or fine or assessment notwithstanding such contest, if in the
reasonable opinion of Mortgagor, the Mortgaged Property or any part thereof or
interest therein may be in danger of being sold, forfeited, foreclosed,
terminated, canceled or lost. Mortgagor may pay over any such cash deposit or
part hereof to the claimant entitled thereto at any time when, in the judgment
of the Mortgagor, the entitlement of such claimant is established.

[NO FURTHER TEXT ON THIS PAGE]

 

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[Signature Page to Leasehold Mortgage and Security Agreement and Assignment of
Leases and Rents]

IN WITNESS WHEREOF, the Mortgagor has duly executed this Mortgage the day and
year first above written.

 

DAIRYLAND HP LLC, a Delaware limited liability company

By:   DAIRYLAND USA CORPORATION,

a New York corporation,

its sole member and manager

By:   /s/ Christopher Pappas

Name: Christopher Pappas

Title: Chief Executive Officer

 

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STATE OF NEW YORK                 )

                                                           ) ss.:

COUNTY OF NEW YORK             )

On the 16th day of April in the year 2012 before me, the undersigned, a Notary
Public in and for said State, personally appeared Christopher Pappas, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his capacity, and that by his signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.

/s/ Raquel Mehlman

Notary Public

Raquel Mehlman

Notary Public State of New York

New York County

LIC. #01ME6193851

Comm. Exp. 9/22/2012

 

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EXHIBIT A

(Description of Premises)

ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of the Bronx, City and State of New York, being part of Tax
Lot 1 in Block 2770 and part of Tax Lot 500 in Block 2781, and bounded and more
particularly described as follows:

COMMENCING at the intersection of the northerly line of Food Center Drive with
the easterly right-of-way line of Halleck Street (100 feet wide); and

RUNNING THENCE along the northerly right-of-way line of Food Center Drive, North
78 degrees 17 minutes 45 seconds East 1,446.07 feet to a point;

THENCE continuing along the same, North 86 degrees 55 minutes 54 seconds East
180.95 feet to a point of curvature;

THENCE continuing along the same with a curve to the left having a radius of
264.00 feet, an arc length of 39.78 feet and a central angle of 08 degrees 38
minutes 00 seconds to a point of tangency;

THENCE continuing along the same, North 78 degrees 17 minutes 54 seconds East
128.52 feet to a point of curvature;

THENCE continuing along the same with a curve to the right having a radius of
300.00 feet, an arc length of 119.70 feet and a central angle of 22 degrees 51
minutes 39 seconds to a point on the curve;

THENCE along an existing leasehold, North 36 degrees 29 minutes 08 seconds East
89.22 feet to a point;

THENCE continuing along the same, North 13 degrees 12 minutes 58 seconds East
67.43 feet to a point; and

THENCE continuing along the same, North 78 degrees 21 minutes 32 seconds East
39.24 feet to the point of TRUE BEGINNING;

THENCE along the existing leasehold, North 11 degrees 38 minutes 28 seconds West
707.60 feet to a point;

THENCE continuing along the same, North 78 degrees 21 minutes 32 seconds East
17.00 feet to a point;

THENCE continuing along the same, North 11 degrees 56 minutes 13 seconds West
310.20 feet to a point;

THENCE continuing along the same, North 23 degrees 01 minutes 04 seconds West
95.50 feet to a point;

THENCE continuing along the same, North 37 degrees 28 minutes 49 seconds West
85.25 feet to a point;

THENCE continuing along the same, North 41 degrees 35 minutes 56 seconds East
26.80 feet to a point;

THENCE continuing along the same, North 56 degrees 23 minutes 24 seconds West
21.30 feet to a point;

 

 

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THENCE continuing along the same, North 24 degrees 55 minutes 08 seconds East
29.63 feet to a point being 100.37 feet, more or less, upland of the U.S.
Pierhead and Bulkhead line;

THENCE along the proposed leasehold line, South 66 degrees 30 minutes 05 seconds
East 95.49 feet to a point;

THENCE continuing along the same, South 60 degrees 56 minutes 09 seconds East
49.88 feet to a point;

THENCE continuing along the same, South 48 degrees 26 minutes 03 seconds East
67.13 feet to a point;

THENCE continuing along the same, South 63 degrees 04 minutes 48 seconds East
28.21 feet to a point;

THENCE continuing along the same, South 82 degrees 41 minutes 13 seconds East
70.27 feet to a point;

THENCE continuing along the same, South 80 degrees 25 minutes 11 seconds East
57.46 feet to a point;

THENCE continuing along the same, South 38 degrees 59 minutes 27 seconds East
241.02 feet to a point;

THENCE continuing along the same, South 69 degrees 12 minutes 44 seconds East
134.92 feet to a point;

THENCE continuing along the same, South 24 degrees 13 minutes 05 seconds East
627.35 feet to a point on an existing leasehold line and being 31.98 feet, more
or less, from the U.S. Pierhead and Bulkhead line;

THENCE along the leasehold line, South 50 degrees 34 minutes 54 seconds West
654.52 feet to a point;

THENCE continuing along the same, North 39 degrees 25 minutes 06 seconds West
32.00 feet to a point on the Block Line (2770 and 2781);

THENCE along the Block Line, South 50 degrees 34 minutes 54 seconds West 13.65
feet to a point; thence

THENCE along the existing lease line, North 23 degrees 27 minutes 41 seconds
West 144.21 feet to a point; and

THENCE continuing along the same, South 78 degrees 21 minutes 32 seconds West
7.30 feet to the point of TRUE BEGINNING.

TOGETHER WITH a non-exclusive ingress/egress easement to Food Center Drive,
bounded and more particularly described as follows:

BEGINNING at the aforesaid point of TRUE BEGINNING; and

RUNNING THENCE along an existing leasehold, North 78 degrees 21 minutes 32
seconds East 7.30 feet to a point;

THENCE continuing along the same, South 23 degrees 27 minutes 41 seconds East
57.38 feet to a point on a curve;

 

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THENCE along the proposed easement with a non-tangent curve to the left having a
radius of 100.00 feet, an arc length of 107.93 feet, a central angle of 61
degrees 50 minutes 18 seconds and a chord bearing South 22 degrees 46 minutes 53
seconds West 102.77 feet to a point of tangency;

THENCE continuing along the same, South 08 degrees 08 minutes 16 seconds East
40.97 feet to a point on a curve being the northerly right-of-way line of Food
Center Drive;

THENCE along the right-of-way line with a curve to the left having a radius of
300.00 feet, an arc length of 111.48 feet, a central angle of 21 degrees 17
minutes 25 seconds and a chord bearing North 68 degrees 11 minutes 44 seconds
West 110.84 feet to a non-tangent point;

THENCE along an existing leasehold, North 36 degrees 29 minutes 08 seconds East
89.22 feet to a point;

THENCE continuing along the same, North 13 degrees 12 minutes 58 seconds East
67.43 feet to a point; and

THENCE continuing along the same, North 78 degrees 21 minutes 32 seconds East
39.24 feet to the point of TRUE BEGINNING.

 

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EXHIBIT A-1

(Description of Mortgaged Lease)

Agreement of Lease dated as of April 26, 2012 made by and between The City of
New York, acting by and through its Department of Small Business Services, as
lessor, and Dairyland HP LLC, as lessee, a memorandum of which lease dated as of
April 26, 2012 is being recorded immediately prior hereto in the New York City
Register’s office for Bronx County, New York.

 

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