**Exhibit10.36**

 

**CONSTRUCTION LOAN ANDSECURITY AGREEMENT**

 

ThisConstruction Loan and Security Agreement is made as of February 6th,2009, by and between Tradeport Development III, LLC, a Connecticut limitedliability company, with a usual place of business at 204 West Newberry Road,Bloomfield, Connecticut (the “Borrower”), Griffin Land & Nurseries, Inc.,a Delaware corporation with a usual place of business at 204 West NewberryRoad, Bloomfield, Connecticut (the “Guarantor”) and Berkshire Bank, a Massachusettsbanking corporation, with a usual place of business at 31 Court Street,Westfield, Massachusetts.

 

**1.00 DEFINITIONS AND RULES OF INTERPRETATION.**

 

**1.01 DEFINITIONS**

 

Thefollowing terms shall have the meanings set forth in this Section 1.01 orelsewhere in the provisions of this Agreement or other Loan Documents referredto below:

 

“Advance”shall mean, any disbursement of the proceeds of the Construction Loan made orto be made by the Lender pursuant to this Agreement.

 

“Agreement”shall mean, this Agreement, including the Schedules and Exhibits hereto, all ofwhich are incorporated herein by reference.

 

“Appraisal”shall mean, an appraisal of the value of the Project, determined on an orderlyas stabilized basis, performed by a qualified independent appraiser approved bythe Lender.

 

“Architect’sContract” shall mean, the contract, dated January 19, 2009 betweenthe Borrower and Cutler Associates, Inc. (the “Borrower’s Architect”), toprovide for the design of the Improvements and the supervision of the constructionthereof.

 

“Assignmentof Leases” shall mean, the Assignment of Leases and Rents, dated or to be datedon or prior to the Closing Date, made by the Borrower in favor of the Lender,pursuant to which the Borrower assigns its right, title and interest aslandlord in and to the Leases and the rents, issues and profits of the Project,such Assignment of Leases and Rents to be in form and substance satisfactory tothe Lender.

 

“Assignmentof Project Documents” shall mean, the Assignment of Project Documents, dated orto be dated on or prior to the Closing Date, made by the Borrower in favor ofthe Lender, pursuant to which the Borrower assigns and grants a securityinterest in the Borrower’s right, title and interest in and to the Architect’sContract, the Construction Contract, the Plans and Specifications and theProject Approvals, such Assignment of Project Documents to be in form andsubstance satisfactory to the Lender.

 

“Borrower”shall have the meaning as defined in the preamble hereto.

 

“Borrower’sRequisition”.  See Section 3.01.

 

“BuildingConsultant” shall mean Cutler Associates, Inc., having an address of 43Harvard Street, Worcester, MA 01615.

 

“BuildingContractor shall mean Cutler Associates, Inc., having an address of 43Harvard Street, Worcester, MA 01615.

 

“BusinessDay” shall mean, any day on which the Lender is open for the transaction ofbanking business in Springfield, Massachusetts.

 

“CERCLA”.    See Section 9.15(a).

 

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“ClosingDate” shall mean, the first date on which the conditions set forth in Section 12.00have been satisfied and any Advances are to be made.

 

“Code”shall mean, the Internal Revenue Code of 1986.

 

“Collateral”shall mean, all of (a) the property, rights and interests of the Borrowerthat are or are intended to be subject to the security interests, assignments,and mortgage liens created by the Security Documents, including, withoutlimitation, that which is defined in Section 14.00 hereof.

 

“Commitment”shall mean, the Commitment Letter for the Construction Loan issued by theLender to the Borrower, dated January 22, 2009.

 

“CompletionDate”  shall mean, twelve (12) monthsfrom the Closing Date.

 

“ConstructionContract” shall mean, the contract, dated January 8, 2009 betweenthe Borrower and the Contractor, providing for the construction of theImprovements on the Land, as amended from time to time, with prior approval ofthe Lender.

 

“ConstructionInspector”  shall mean,  Swinerton Management and Consulting or, at theLender’s option, either an officer or employee of the Lender or consultingarchitects, engineers or inspectors appointed by the Lender from time to time.

 

“ConstructionLoan”  shall mean, the construction loanwhich is the subject of this Agreement.

 

“ConstructionLoan Amount” shall mean the lesser of (i)  seventy percent (70%) of totalProject Costs approved by the Lender and the Construction Inspector toconstruct the Improvements; or (ii)  seventy percent (70%) of theappraised value of the land on an as-built basis**,**such sums are not to exceed Twelve Million and 00/100 Dollars ($12,000,000.00).

 

“ConstructionLoan Checking Account”.  See Section 3.03.

 

“ConstructionNote”  shall mean, the Promissory Note inthe principal face amount of the Construction Loan Amount dated or to be datedon or prior to the Closing Date, made by the Borrower to the order of theLender, such Promissory Note to be in form and substance satisfactory to theLender.

 

“ConstructionSchedule”  shall mean, the schedule,broken down by trade, job and subcontractor, of the estimated dates ofcommencement and completion of construction of the Improvements, prepared bythe Contractor, approved by the Lender and attached hereto as Exhibit “A”.

 

“ContingencyReserve” shall mean, the amount(s) allocated as contingency reserve(s) inthe Project Budget, to be advanced only in accordance with the provisions of Section 2.06hereof.

 

“Contractor”shall collectively mean the Site Work Contractor and the Building Contractor.

 

“Contractor’sSubordination Agreement”.  See Section 11.05.

 

“Debt”means, as applied to any Person, as of any date of determination (withoutduplication):

 

(a)                                 all obligationsof such Person for borrowed money (whether or not represented by bonds,debentures, notes, drafts or other similar instruments) or evidenced by bonds,debentures, notes, drafts or similar instruments;

 

(b)                                all obligationsof such Person for all, or any part of, the deferred purchase price of propertyor services, or for the cost of property constructed or of improvementsthereon, other than trade accounts payable incurred, in respect of propertypurchased, in the ordinary course of business, which are not overdue or whichare being contested in good 

 

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faith by appropriate proceedings and are not required to be classifiedon such Person’s balance sheet, in accordance with GAAP, as debt;

 

(c)                                 all obligationssecured by any Lien on or payable out of the proceeds of production fromproperty owned or held by such Person even though such Person has not assumedor become liable for the payment of such obligation;

 

(d)                                all capitallease obligations of such Person;

 

(e)                                 all obligationsof such Person, contingent or otherwise, in respect of any letter of creditfacilities, bankers’ acceptance facilities or other similar credit facilitiesother than any such obligation which relate to an underlying obligation whichotherwise constitutes Debt of such Person hereunder or a current accountpayable of such Person incurred in the ordinary course of business;

 

(f)                                   all obligationsof such Person upon which interest payments are customarily made; and

 

(g)                                all Guarantiesby such Person of or with respect to obligations of the character referred toin the foregoing clauses (a) through (f) of another Person;

 

provided, however,that in determining the Debt of any Person, (i) all liabilities for whichsuch Person is jointly and severally liable with one or more other Persons(including, without limitation, all liabilities of any partnership or jointventure of which such Person is a general partner or co-venturer) shall beincluded at the full amount thereof without regard to any right such Person mayhave against any such other Persons for contribution or indemnity, and (ii) noeffect shall be given to deposits, trust arrangements or similar arrangementswhich, in accordance with GAAP, extinguish Debt for which such Person remainslegally liable.

 

“DebtService Coverage Calculation Period” means twelve (12) calendar monthscommencing on December 1st and ending on November 30th,and it shall be conducted annually thereafter.”

 

“DebtService Coverage Ratio” means on each calculation date for the applicable DebtService Coverage Ratio Calculation Period, by calculating the ratio of (x) theNet Operating Income from the Mortgaged Premises for the immediately precedingDebt Service Coverage Ratio Calculation Period, to (y) the sum of themonthly payments of principal and interest which were due and payable under theNote for the immediately preceding Debt Service Coverage Ratio CalculationPeriod.

 

“Default”shall mean, a condition or event which would, with the giving of notice orlapse of time or both, constitute an Event of Default.

 

“DefaultRate”  shall mean, the default rate ofinterest set forth in the Construction Note.

 

“DirectCosts” shall mean, the costs of the , the Personal Property and all labor,materials, fixtures, machinery and equipment required to construction,equipment and complete the Improvements in accordance with the Plans andSpecifications.

 

“DisbursementSchedule”  shall mean, the schedule ofthe amounts of Advances anticipated to be requisitioned by the Borrower eachmonth during the term of the construction of the Improvements (including anitemization of Direct Costs and Indirect Costs to be included in each suchrequisition), approved by the Lender and attached hereto as Exhibit “B”.

 

“Distribution”  shall mean, the declaration or payment of anydistribution of cash or cash flow to the members of the Borrower, or otherdistribution on or in respect to any membership interests of the Borrower.

 

“DrawdownDate”  shall mean, the date on which anyAdvance is made or is to be made.

 

“DrawRequest”  shall mean that with respect toeach Advance, the Borrower’s Requisition for such Advance, and documentsrequired by this Agreement to be furnished to the Lender as a condition to suchAdvance.

 

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“EmployeeBenefit Plan”  shall mean, any employeebenefit plan within the meaning of Section 3(3) of ERISA maintainedor contributed to by the Borrower or any ERISA Affiliate, other than a Multi-employer Plan.

 

EnvironmentalLaws.  See Section 9.15.(a).

 

“ERISA”shall mean, the Employee Retirement Income Security Act of 1974, as amended andin effect from time to time.

 

“ERISAAffiliate” shall mean, any Person which is treated as a single employer withthe Borrower under Section 414 of the Code.

 

“Eventof Default”.    See Section 15.01

 

“FinancingStatements” shall mean, Uniform Commercial Code Form 1 Financing Statement(s) fromthe Borrower in favor of the Lender giving notice of a security interest in theCollateral, such financing statements to be in form and substance satisfactoryto the Lender.

 

“Fundthe Expansion” means a commitment by Lender to finance the expansion of theProject at the Mortgaged Premises following the issuance of a final Certificateof Occupancy.

 

“FundingDate of Construction Loan” shall mean, the date when the proceeds of theConstruction Loan are actually advanced in accordance with this Agreement.

 

“FundingRequest Documents” .  See Section 3.01.

 

“GenerallyAccepted Accounting Principles” shall mean, principles that are consistent withthe principles promulgated or adopted by the Financial Accounting StandardsBoard and its predecessors, as in effect from time to time; provided that acertified public accountant would, insofar as the use of such accountingprinciples is pertinent, be in a position to deliver an unqualified opinion(other than a qualification regarding changes in generally accepted accountingprinciples) as to financial statements in which such principles have beenproperly applied.

 

“GovernmentalAuthority” shall mean, the United States of America, the State of Connecticut,any political subdivision thereof, the City/Town of Windsor, and any agency,authority, department, commission, board, bureau, or instrumentality of any ofthem.

 

“GrossRevenues” means for each Loan Month, all rents, revenues and other paymentsreceived by, or for the benefit of Borrower in cash or current funds or otherconsideration from any source whatsoever in connection with its ownership,operation and management of the Mortgaged Premises, including all paymentsreceived by Borrower from all tenants or other occupants of the MortgagedPremises; provided, however, secured deposits paid to Borrower by tenants underleases at the Mortgaged Premises and insurance proceeds following a casualty ordamage by fire or other cause at the Mortgaged Premises, shall not be includedin Gross Revenues.

 

“Guarantor”shall mean, Griffin Land & Nurseries, Inc.

 

“Guaranty”shall mean, the Unconditional Guaranty of Payment and Performance, dated or tobe dated on or prior to the Closing Date, made by the Guarantor in favor of theLender, pursuant to which the Guarantor guarantees to the Lender the paymentand performance of the Obligations (such Guaranty to be in form and substancesatisfactory to the Lender) limited to the period of time from the Closing tothe receipt of the Certificate of Occupancy and performance of the completionof the Project.

 

“HazardousMaterials”.    See, Section 9.15(b).

 

“HeadOffice” shall mean 31 Court Street, Westfield, Massachusetts.

 

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“Impositions”  means with respect to Borrower relating tothe Mortgaged Premises, all taxes of every kind and nature, sewer rents,charges for water, for setting or repairing meters and for all other utilitiesserving the Mortgaged Premises, and assessments, levies, inspection and licensefees and all other charges imposed or assessed against the Mortgaged Premisesor any portion thereof, including the income derived from the MortgagedPremises and any stamp or other taxes which might be required to be paid withrespect to the Loan Documents, any of which might, if unpaid, result in a lienon the Mortgaged Premises or any portion thereof, regardless of whom assessed.

 

“Improvements”shall mean, a Class “A” build-to-suit industrial warehouse containing304,200 square feet for the Primary Tenant to be constructed on the Land inaccordance with the Plans and Specifications.

 

“IncipientDefault” means any event or condition which, with the giving of notice or thelapse of time, or both, would become an Event of Default.

 

“Indebtedness”shall mean, all obligations, contingent and otherwise, that in accordance withgenerally accepted accounting principles should be classified upon the Borrower’sbalance sheet as liabilities, or to which reference should be made by footnotesthereto, including in any event and whether or not so classified: (a) alldebt and similar monetary obligations, whether direct or indirect; (b) allliabilities secured by any mortgage, pledge, security interest, lien, charge,or other encumbrance existing on property owned or acquired subject thereto,whether or not the liability secured thereby shall have been assumed; and (c) allguarantees, endorsements and other contingent obligations whether direct orindirect in respect of indebtedness of others, including any obligation tosupply funds to or in any manner to invest in, directly or indirectly, theBorrower, to purchase indebtedness, or to assure the owner of indebtednessagainst loss, through an agreement to purchase goods, supplies, or services forthe purpose of enabling Borrower to make payment of the indebtedness held bysuch owner or otherwise, and the obligations to reimburse the issuer in respectof any letters of credit.

 

“IndemnityAgreement”  shall mean, the IndemnityAgreement Regarding Hazardous Materials, dated or to be dated on or prior tothe Closing Date, made by the Borrower and the Guarantor in favor of theLender, pursuant to which the Borrower and the Guarantor agree to indemnify theLender with respect to Hazardous Materials and Environmental Laws, suchIndemnity Agreement to be in form and substance satisfactory to the Lender.

 

“IndirectCosts”  shall mean, Title insurancepremiums, survey charges, engineering fees, architectural fees, real estatetaxes, appraisal costs, loan fees and interest payable to the Lender under theConstruction Loan, premiums for insurance, marketing, advertising and leasingcosts, brokerage commissions, legal fees, accounting fees, overhead andadministrative costs, and all other expenses which are expenditures relating tothe Project and are not Direct Costs.

 

“InterestCharges” for any period shall mean all interest (including the imputed interestfactor in respect of Capitalized Leases) and all amortization of debt discountand expense on any particular Indebtedness for which such calculations arebeing made. Computations of Interest Charges on a proforma basis forindebtedness having a variable interest rate shall be calculated at the rate ineffect on the day of any determination.

 

“InterestExpense” means for any period, the sum of the following amounts for theBorrower: (a) the aggregate amount of all interest accrued (whether or notactually paid) during such period in respect of Debt (including, withoutlimitation, imputed interest on Capital Leases), plus (b) amortization ofdebt discount and expense.

 

“Investments”shall mean, all expenditures made and all liabilities incurred (contingently orotherwise) for the acquisition of stock or Indebtedness of, or for loans,advances, capital contributions or transfers of property to, or in respect ofany guaranties (or other commitments as described under Indebtedness), orobligations of, any Person. In determining the aggregate amount of Investmentsoutstanding at any particular time:  (a) theamount of any Investment represented by a guaranty shall be taken at not lessthan the principal amount of the obligations guaranteed and still outstanding; (b) thereshall be included as an Investment all interest accrued with respect toIndebtedness constituting an Investment unless and until such interest is paid;(c) there shall be deducted in respect of each such Investment any amountreceived as a return of capital (but only by repurchase, redemption,retirement, repayment, liquidating dividend or liquidating distribution); (d) thereshall not be deducted in respect of any 

 

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Investmentany amounts received as earnings on such Investment, whether as dividends,interest or otherwise, except that accrued interest included as provided in theforegoing clause (b) may be deducted when paid; and (e) there shallnot be deducted from the aggregate amount of Investments any decrease in thevalue thereof.

 

“Land”shall mean, the real property located at 100 International Drive, Windsor, Connecticut,and described in Exhibit “C” to this Agreement.

 

“Lease(s)”shall mean, leases, licenses and agreements, whether written or oral, relatingto the use or occupation of space in the Improvements or on the Land by Personsother than the Borrower, and as of the date hereof, it shall mean that certainLease between the Borrower and the Primary Tenant dated January 9, 2009concerning the Mortgaged Premises.

 

“Lender”  shall mean, Berkshire Bank, its successorsand assigns.

 

“LIBOR”(London Interbank Offered Rate) means the rate for deposits in U.S. Dollars fora period of the Designated Maturity, which appears on Telerate Page 3750as of 11:00 AM. London time, on the day that is two London banking days priorto the Reset Date.  If such rate does notappear on Telerate Page 3750, the rate for that adjustment date will bethe arithmetic mean of the rates quoted by major banks in London, selected bythe Lender for the Designated Maturity, as of 11:00 A.M., London time, onthe day that is two London banking days prior to the Reset Date.

 

“LIBORInterest Rate” means, for the purpose of this Agreement, the 30-day LIBOR Rateas announced in the Telerate from time-to-time, plus two hundred seventy-five(275) basis points; provided, however, for the purposes of this Agreement the30-day LIBOR Rate, plus two hundred seventy-five (275) basis points, shall havea floor of (and shall never be lower then) 4% during the Interest Only Period(as defined in the Note).

 

“LIBORLoan” means any Loan when and to the extent that the interest rate therefore isdetermined by reference to the LIBOR Interest Rate.

 

“LoanDocuments” shall mean, this Agreement, the Construction Note, the IndemnityAgreement and the Security Documents, and all other agreements, documents andinstruments now or hereafter evidencing, securing or otherwise relating to theConstruction Loan.

 

“LondonBanking Day” shall mean any Banking**Day on whichcommercial banks are open for international business (including dealing in U.S.dollar ($) deposits) in London, England and Boston, Massachusetts.

 

“MaturityDate” shall mean, the earlier of (i) the date of the termination of theLender’s obligation to make Advances pursuant to Section 15.02 hereof of (ii) ten(10)  years from the Closing Date, whichever occurs first.

 

“Mortgage”  shall mean, the Open-End ConstructionMortgage, dated or to be dated on or prior to the Closing Date, made by theBorrower in favor of the Lender, pursuant to which the Borrower grants a firstmortgage lien and first security interest in and to the Project, such Mortgageto be in form and substance satisfactory to the Lender.

 

“MortgagedPremises” shall mean the Land, Improvements and other property secured bythe Mortgage.

 

“NetCash Flow” for each Loan Month shall mean, Net Operating Income, reduced by allmonthly payments of principal and interest under the Construction Note.

 

“NetOperating Income”  for each Loan Monthshall be calculated by Lender based upon Lender’s review of Borrower’sfinancial statements provided to Lender, together with such other financialinformation as Lender may request, and shall mean the Gross Revenues for theLoan Month less all Operating Expenses for the Loan Month.  For the purposes of testing Debt ServiceCoverage Ratio for the initial test, annual Net Operating Income shall mean allin-place Gross Revenues evidenced by a current rent roll (annualized) lessbudgeted Operating

 

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Expenses(budget subject to review and approval by Lender) for the upcoming twelve (12)month period, adjusted for interest and non-cash expenses.

 

“Obligations”  shall mean, all indebtedness, obligations andliabilities of the Borrower to the Lender existing on the date of thisAgreement or arising thereafter, direct or indirect, joint or several, absoluteor contingent, matured or unmatured, liquidated or unliquidated, secured orunsecured, arising by contract, operation of law or otherwise, including,without limitation, those arising or incurred under this Agreement or any ofthe other Loan Documents, including without limitation any SWAP Agreement(s) orin respect of any of the Advances or the Construction Note or other instrumentsat any time evidencing any thereof.

 

“Outstanding”shall mean, that with respect to the Advances or the Construction Loan, theaggregate unpaid principal thereof, together with any unpaid and accruedinterest thereon as of any date of determination.

 

“PermittedLiens”  shall mean, liens, securityinterests and other encumbrances, permitted by Section 11.05, as well asthose encumbering the land and Improvements mortgaged to the Lender asdescribed in Exhibit “D”.

 

“Person”shall mean, any individual, corporation, partnership, trust, unincorporatedassociation, business, or other legal entity, and any government or anygovernmental agency or political subdivision thereof.

 

“PersonalProperty”  shall mean, all materials,furnishings, fixtures, furniture, machinery, equipment and all items oftangible personal property now or hereafter owned or acquired by the Borrower,wherever located, and either (i) to be located on or incorporated into theLand or the Improvements, (ii) used in connection with the construction ofthe Improvements or (iii) to be used in connection with the operation ormaintenance of the Land or the Improvements or both.

 

“Plansand Specifications”  shall mean, theplans and specifications for the Improvements prepared by the Borrower’sArchitect and more particularly identified on Exhibit “E” attachedhereto.

 

“PrimaryTenant” means The Tire Rack, Inc.

 

“Project”  shall mean, the Land, Improvements andPersonal Property.

 

“ProjectApprovals”  shall mean, all approvals,consents, waivers, orders, agreements, acknowledgments, authorizations, permitsand licenses required under applicable Requirements or under the terms of anyrestriction, covenant or easement affecting the Project, or otherwise necessaryor desirable, for the ownership and acquisition of the Land and theImprovements, the construction and equipping of the Improvements, and the use,occupancy and operation of the Project following completion of construction ofthe Improvements, whether obtained from a Governmental Authority or any otherPerson.

 

“ProjectBudget”  shall mean, the budget for totalestimated Project Costs, submitted by the Borrower, approved by the Lender andthe Construction Inspector, and attached hereto as Exhibit “F” (asamended from time to time with the prior approval of the Lender), whichincludes: (a) a line item cost breakdown for Direct Costs by trades, jobsand subcontractors; (b) a line item cost break down for Indirect Costs; (c) aconstruction schedule setting forth the anticipated dates of completion ofincremental portions of the various subcategories of work in the constructionand equipping of the Project; and (d) a schedule of the sources of fundsto pay Project Costs, indicating by item the portion of Project Costs to befunded through the Construction Loan and Required Equity Funds.

 

“ProjectCosts”  shall mean, the sum of all DirectCosts and Indirect Costs that have been or will be incurred by the Borrower inconnection with the acquisition of the Land, the construction, equipping andcompletion of the Improvements, the marketing and leasing of leasable space inthe Improvements, and the operation and carrying of the Project through theMaturity Date.

 

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“RealEstate”  shall mean, all real property atany time owned, leased (as lessee or sublessee) or operated by the Borrower.

 

“Record”  shall mean, the grid attached to theConstruction Note, or the continuation of such grid, or any other similarrecord, including computer records, maintained by the Lender with respect tothe Construction Loan.

 

“Release”.  See Section 9.16(c) (iii).

 

“Requirements”shall mean, any law, ordinance, code, order, rule or regulation of anyGovernmental Authority relating in any way to the acquisition and ownership ofthe Project, the construction of the Improvements, or the use, occupancy andoperation of the Project following the completion of construction of theImprovements, including those relating to subdivision control, zoning,building, use and occupancy, fire prevention, health, safety, sanitation,handicapped access, historic preservation and protection, tidelands, wetlands,flood control, access and earth removal, and all Environmental Laws.

 

“RequiredEquity Funds” shall mean, with respect to the Construction Loan, Eight MillionNine Hundred Fifteen Thousand Eight Hundred Ninety One ($8,915,891.00) whichamount shall be infused by Borrower prior to any Advance hereunder.

 

“Retainage”.  See Section 2.03.

 

“SecurityDocuments” shall mean, the Mortgage,  theAssignment of Project Documents, the Assignment of Leases, the FinancingStatements and the Guaranty, and any other agreement, document or instrumentnow or hereafter securing the Obligations.

 

“SiteWork Contractor” shall mean the Simscroft Echo Farms Incorporated.

 

“Survey”  shall mean, an instrument survey of the Landand the Improvements prepared in accordance with the Lender’s surveyrequirements, such survey to be satisfactory to the Lender in form andsubstance.

 

“SurveyorCertificate”  shall mean, with respect toany Survey, a certificate executed by the surveyor who prepares such Surveydated as of a recent date and containing such information relating to theProject as the Lender or the Title Insurance Company may require, suchcertificate to be satisfactory to the Lender in form and substance.

 

“SwapAgreement” means the ISDA Master Agreement (1992 multicurrency — cross border)dated as of February 6, 2009 between Lender and Borrower, together withthe Schedule thereto and the Confirmation thereunder, each dated as of February 6,2009.

 

“Telerate”means, when used in connection with any designated page and any floatingrate option, the display page so designated on Bridge’s Telerate Service(or such other page as may replace that page on that service), orsuch other service as may be nominated as the information vendor, for thepurpose of displaying rates or prices comparable to that floating rate option.

 

“Taking”shall mean, any condemnation for public use of, or damage by reason of, theaction of any Governmental Authority, or any transfer by private sale in lieuthereof, either temporarily or permanently.

 

“TangibleNet Worth” means as of any date of determination, the net value of the Borrower’sStockholder’s Equity, as defined according to GAAP less the book value as ofsuch date of Intangible Assets.

 

“TerminationDate”  shall mean, (i) the MaturityDate, or (ii)  the date of the termination of the Lender’s obligations tomake Advances pursuant to Section 15.02 hereof, whichever date occursfirst.

 

“TitleInsurance Company” shall mean, First American Title Insurance Company.

 

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“TitlePolicy” shall mean, an ALTA standard form title insurance policy issued by theTitle Insurance Company (with such reinsurance or co-insurance as the Lendermay require, any such reinsurance to be with direct access endorsements) in anamount not less than Twelve Million and 00/100 Dollars ($12,000,000.00)insuring the priority of the Mortgage and that the Borrower holds marketablefee simple title to the Project, subject only to such exceptions as the Lendermay approve and which shall not contain exceptions for mechanics liens, personsin occupancy or matters which would be shown by a survey, shall not insure overany matter except to the extent that any such affirmative insurance isacceptable to the Lender in its sole discretion, and shall contain a pendingdisbursements clause or endorsement and such other endorsements and affirmativeinsurance as the Lender in its sole discretion may require.

 

**1.02        RULES OFINTERPRETATION.**

 

(a) Areference to any agreement, budget, document or schedule shall include suchagreement, budget, document or schedule as revised, amended, modified orsupplemented from time to time in accordance with its terms and the terms ofthis Agreement.

 

(b) Thesingular includes the plural and the plural includes the singular.

 

(c) Areference to any law includes any amendment or modification to such law.

 

(d) Areference to any Person includes its permitted successors and permittedassigns.

 

(e) Accountingterms not otherwise defined herein have the meaning assigned to them bygenerally accepted accounting principles applied on a consistent basis by theaccounting entity to which they refer.

 

(f) Thewords “include”, “includes” and “including” are not limiting.

 

(g) Thewords “approval” and “approved”, as the context so determines, means anapproval in writing given to the party seeking approval after full and fairdisclosure to the party giving approval of all material facts necessary inorder to determine whether approval should be granted.

 

(h) Referenceto a particular Section refers to that section of this Agreement unlessotherwise indicated.

 

(i) Thewords “herein”, “hereof”, “hereunder” and words of like import shall refer tothis Agreement as a whole and not to any particular section or subdivision ofthis Agreement.

 

**2.00        AGREEMENT TO MAKEADVANCES; LIMITATIONS.**

 

**2.01**        **AGREEMENT TO MAKE ADVANCES**.

 

Subjectto the terms and conditions of this Agreement and following the infusion of theRequired Equity Funds from the Borrower into the Project, the Lender agrees tolend to the Borrower and the Borrower shall borrow from time to time betweenthe Closing Date and the Termination Date upon submission by the Borrower of aDraw Request in accordance with Section 3.01, such amounts as arerequested by the Borrower up to a maximum aggregate principal amount equal tothe Construction Loan Amount to pay for Project Costs actually incurred by theBorrower and reflected in the Project Budget as being funded by theConstruction Loan. Each Draw Request for an Advance hereunder shall constitutea representation and warranty by the Borrower that the conditions set forth in Section 12.00,in the case of the initial Advance, and Section 13.00, in the case of allother Advances, have been satisfied on the date of such Draw Request.

 

**2.02**        **PROJECT BUDGET**.

 

TheProject Budget reflects, by category and line items, the purposes and theamounts for which funds to be Advanced by the Lender under this Agreement areto be used. The Lender shall not be required to disburse for any 

 

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categoryor line item more than the amount specified therefore in the Project Budget,unless reflected on a revised Project budget previously approved by Lender.

 

**2.03**  **AMOUNT OF ADVANCES**.

 

Inno event shall the Lender be obligated to Advance more than the ConstructionLoan Amount, or, if less, total Project Costs actually incurred by theBorrower, less, in either case, the Required Equity Funds. In no event shallany Advance for Direct Costs of constructing the Improvements exceed an amountequal to (a) the total value of the labor, materials, fixtures, machineryand equipment completed, approved and incorporated into the Land or theImprovements prior to the date of the Draw Request for such Advance, less (b) retainagein an amount equal to five percent (5%) of such total value (“Retainage”), less(c) the total amount of any Advances previously made by the Lender forsuch Direct Costs. Retainage shall not be required to be Advanced by the Lenderto the Borrower.    With respect to anyother Direct Costs and all Indirect Costs, in no event shall any Advance exceedan amount equal to the amount of such Direct Costs and Indirect Costs approvedby the Lender, incurred by the Borrower prior to the date of the Draw Requestfor such Advances, and theretofore paid or to be paid with the proceeds of suchAdvance, less the total amount of any Advances previously made by the Lenderfor such Direct Costs and Indirect Costs.

 

**2.04 QUALITY OF WORK.**

 

NoAdvance shall be due unless all work done at the date the Draw Request for suchAdvance is submitted is done in a good and workmanlike manner and withoutdefects, as confirmed by the report of the Construction Inspector.

 

**2.05 COST OVERRUNS AND SAVINGS.**

 

Ifthe Borrower becomes aware of any change in Project Costs which will increaseor decrease a category or line item of Project Costs reflected on the ProjectBudget (as the Project Budget is revised from time to time and approved by theLender), the Borrower shall immediately notify the Lender in writing andpromptly submit to the Lender for its approval a revised Project Budget. If therevised Project Budget indicates an increase in a category or line item ofProject Costs, no further Advances need be made by the Lender unless and until (a) therevised Project Budget so submitted by the Borrower is approved by the Lender,and (b) the Borrower has deposited with the Lender any additional RequiredEquity Funds required in accordance with this Agreement (if any). If therevised Project Budget indicates a decrease in a category or line item ofProject Costs, no reductions in Project Costs will be made or savingsreallocated by the Borrower unless and until (a) the revised ProjectBudget so submitted by the Borrower is approved by the Lender, and (b) inthe case of decreases in a category or line item of Direct Costs, the Borrowerhas furnished the Lender and the Construction Inspector with evidencesatisfactory to them that the labor performed and materials supplied inconnection with such category or line item of Direct Costs have beensatisfactorily completed in accordance with the Plans and Specifications andpaid for in full.

 

**2.06 CONTINGENCY RESERVE**

 

Theamount allocated as Contingency Reserve in the Project Budget is not intendedto be disbursed and will only be disbursed upon the prior approval of theLender, which approval will not be unreasonably withheld. The disbursement of aportion of Contingency Reserve shall in no way prejudice the Lender fromwithholding disbursement of any further portion of Contingency Reserve.

 

**2.07 OVER ADVANCES**

 

Themaking of loans, Advances or credits by the Lender in excess of theConstruction Loan Amount is for the benefit of the Borrower hereunder and shallbe at the Lender’s sole discretion. Such loans, Advances, and credits shallconstitute Advances and shall be repayable with interest as provided in theConstruction Note. The making of any such loans, Advances or credits in excessof the Construction Loan Amount on any one occasion shall not obligate theLender to make any such loans, Advances or credits on any other occasion norpermit such loans, Advances or credits to remain outstanding.

 

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**2.08  MANDATORY BORROWING**

 

Subjectto Section 10.14, notwithstanding anything to the contrary containedherein, and provided that the Lender has not commenced exercise of itscumulative rights and remedies following an Event of Default, the Borrower mustborrow the Twelve Million and 00/100 Dollars ($12,000,000.00) on or before thelast day of the Interest Only Period (defined in the Construction Note).  In the event that the Borrower completesconstruction for less than the Project Budget, it is still required to drawdown the unused portion of the Loan which shall be held in an interest bearingcash collateral account with the Lender (the “Reserve Account”).  The Borrower, provided no Event of Defaulthas occurred, may use the Reserve Account following the first anniversary ofthe date hereof, to pay its monthly principal obligations to the Lender underthe Construction Note.

 

**2.09 ****FUNDS DEPOSITED WITH LENDER**

 

Allfunds of Borrower which are deposited with Lender pursuant to this Agreement orany other Loan Documents shall be held in an interest bearing account and allfunds which are deposited in the Reserve Account may be co-mingled with Lender’sgeneral funds.  Notwithstanding anyinformation or requirement to the contrary set forth earlier in this Agreement,any interest which accrues on said funds shall, at Lender’s sole option, bepaid to Borrower or be held as part of the applicable funds being held byLender for the same purpose for which the principal sum of said funds are beingheld by the Lender.  To secure all ofBorrower’s Obligations to Lender under the Loan Documents, Borrower herebygrants to Lender a security interest in all funds now or hereafter depositedwith the Lender in the Reserve Account or otherwise in Lender’s possession,custody or control pursuant to the provisions of this Agreement.  So long as any Event of Default exists,Lender shall have such rights with respect to such funds and any interestaccrued thereon as are provided by applicable law and may apply such fundstoward the satisfaction of Borrower’s Obligations hereunder or under any otherLoan Documents in Lender’s sole discretion. Without limiting any of the foregoing provisions, at the exclusiverequest of Lender, Borrower shall execute and deliver from time-to-time suchdocuments as may be necessary or appropriate, in Lender’s sole discretion toassure Lender that it has a first priority perfected security interest in andlien on, all funds deposited in the Reserve Account or otherwise with theLender.

 

**3.00  MAKING THE ADVANCES**

 

**3.01 DRAW REQUEST**

 

Atsuch time as the Borrower shall desire to obtain an Advance, the Borrower shallcomplete, execute and deliver to the Lender the Borrower’s Requisition and theFunding Request Documents in the form of Exhibit “G”  attached hereto (hereinafter referred to as “Borrower’sRequisition”). Each Borrower’s Requisition shall be accompanied by:

 

(a) Ifthe Borrower’s Requisition includes payments for Direct Costs, it shall beaccompanied by a completed and itemized Direct Cost Statement in the form of ScheduleI of Exhibit “G” attached hereto, executed by theBorrower,  together with invoices for allitems of Direct Cost covered thereby; .

 

(b) Ifthe Borrower’s Requisition includes amounts to be paid to the Contractor underthe Construction Contract, it shall be accompanied by: (i) a completed andfully itemized Application and Certificate for Payment (AIA Document G702 orsimilar form approved by the Lender) containing the certification of theContractor and the Borrower’s Architect as to the accuracy of same, and showingall subcontractors and materialmen by name and trade or job, the total amountof each subcontract or purchase order, the amount theretofore paid to eachsubcontractor or materialman as of the date of such application, and the amountto be paid from the proceeds of the Advance to each subcontractor andmaterialman; (ii) a certificate of the Contractor in the form of Exhibit “H”attached hereto; (iii) a certificate of the Borrower’s Architect in theform of Exhibit “I”  attachedhereto; and (iv) copies of requisitions and invoices from subcontractorsand materialmen supporting all items of cost covered by such application;

 

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(c) Ifthe Borrower’s Requisition includes payments for Indirect Costs, it shall beaccompanied by a completed and itemized Indirect Cost Statement in the form of ScheduleII of Exhibit “G” attached hereto, executed by the Borrower,together with invoices for all items of Indirect Costs covered thereby;

 

(d) writtenlien waivers from the Contractor and such laborers, subcontractors andmaterialmen for work done and materials supplied by them which were paid forpursuant to the next preceding Draw Request;

 

(e) awritten request of the Borrower for any necessary changes in the Plans andSpecifications, the Project Budget, the Disbursement Schedule or theConstruction Schedule;

 

(f) copiesof all change orders and construction change directives, accompanied by achange order summary prepared by and executed by the Borrower, copies of allsubcontracts, and, to the extent requested by the Lender, of all inspection ortest reports and other documents relating to the construction of theImprovements, not previously delivered to the Lender;

 

(g) copyof the Construction Inspection Report; and

 

(h) suchother information, documentation and certification as the Lender shallreasonably request.

 

**3.02 NOTICE AND FREQUENCY OF ADVANCES**

 

EachDraw Request shall be submitted to the Lender at least fourteen (14) BusinessDays prior to the date of the requested Advance, and no more frequently thanonce each month.

 

**3.03 DEPOSIT OF FUNDS ADVANCED**

 

TheBorrower shall open and maintain a non-interest bearing Construction Loanchecking account with the Lender (the “Construction Loan Checking Account”).Except as otherwise provided for in Sections 3.04 and 3.05 hereof, the Lendershall deposit the proceeds of each Advance into the Construction Loan CheckingAccount.

 

**3.04****ADVANCES TO CONTRACTOR**

 

Inits sole discretion, following an Event of Default, the Lender may make any orall Advances through the Title Insurance Company and any portion of theConstruction Loan so disbursed by the Lender shall be deemed disbursed as ofthe date on which the Lender makes such disbursement.  At its option, in its sole discretion, theLender may make any or all Advances for Direct Costs incurred under theConstruction Contract directly to Contractor for deposit in an appropriatelydesignated special bank account, and the execution of this Agreement by theBorrower shall, and hereby does, constitute an irrevocable authorization so toadvance the proceeds of the Construction Loan. No further authorization fromthe Borrower shall be necessary to warrant such direct advances to theContractor and all such advances shall satisfy pro tanto the obligations of theLender hereunder and shall be secured by the Mortgage and the other SecurityDocuments as fully as if made directly to the Borrower.

 

**3.05 ADVANCES TO TITLE INSURANCE COMPANY OR TO OTHERS**

 

Inits sole discretion, following an Event of Default, the Lender may make any orall Advances through the Title Insurance Company and any portion of theConstruction Loan so disbursed by the Lender shall be deemed disbursed as ofthe date on which the Lender makes such disbursement.  At its option, the Lender may make Advancesof portions of the proceeds of the Construction Loan to any Person to whom theLender in good faith determines payment is due and any portion of theConstruction Loan so disbursed by the Lender shall be deemed disbursed as ofthe date on which the Lender makes such disbursement.  The execution of this Agreement by theBorrower shall, and hereby does, constitute an irrevocable authorization so toadvance the proceeds of the Construction Loan. No further authorization fromthe Borrower shall be necessary to warrant such direct Advances and all suchAdvances shall satisfy pro tanto the obligations of the Lender hereunder andshall be secured by the Mortgage and the other Security Documents as fully asif made directly to the Borrower.

 

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**3.06 ADVANCES DO NOT CONSTITUTE A WAIVER**

 

NoAdvance made by the Lender shall constitute a waiver of any of the conditionsto the Lender’s obligation to make further Advances nor, in the event theBorrower fails to satisfy any such condition, shall any such Advance have theeffect of precluding the Lender from thereafter declaring such failure tosatisfy a condition to be an Event of Default.

 

**4.00  THE CONSTRUCTION NOTE;INTEREST; MATURITY; SWAP AGREEMENT; PAYMENTS AND PREPAYMENT.**

 

**4.01**  **THE CONSTRUCTION NOTE**

 

Theobligation of the Borrower to pay the Construction Loan Amount or, if less, theaggregate unpaid principal amount of all Advances made by the Lender hereunderplus accrued interest thereon, shall be evidenced by the Construction Note, acopy of which is annexed hereto as Exhibit “J”.  In the event the Construction Note is lost,destroyed or mutilated at any time prior to payment in full of the indebtednessevidenced thereby, the Borrower shall execute a new note substantially in theform of the Note. The Construction Note shall not be necessary to establish theindebtedness of the Borrower to the Lender on account of Advances made underthis Agreement.

 

**4.02  [RESERVED]**

 

**4.03        SWAP AGREEMENT**

 

Borrowershall enter into the Swap Agreement with Lender or its affiliates with respectto all of the Construction Note (any such agreement or arrangement shall be inform and substance reasonably satisfactory to Lender) in order to hedge orminimize risk with respect to the fluctuation of interest rates.  The Swap Agreement shall be for a stipulatedterm equal to the term of the Note shall, at all times, be in a notional amountequal to Twelve Million and 00/100 Dollars ($12,000,000.00).  If the Swap Agreement shall expire and leaveany principal of the Construction Note uncovered thereby, or if for any otherreason any principal portion of the Construction Note be uncovered by the SwapAgreement, such uncovered amount shall be immediately due and payable if theBorrower is unable to negotiate a new Swap Agreement for such uncovered amountwith Lender within four (4) business days following notice from Lender toBorrower.  In the event Lender no longeroffers Swap Agreements, Borrower may negotiate a new Swap Agreement with adifferent lender for such uncovered amount. The Swap Agreement is subject to termination pursuant to certainprovisions described therein, including without limitation, any payment ofprincipal of the Construction Note prior to the due date of such payment.

 

**4.04 THE RECORD**

 

TheBorrower irrevocably authorizes the Lender to make or cause to be made, at orabout the time of the Drawdown Date of any Advance or at the time of receipt ofany payment of the principal of the Construction Note, an appropriate notationon the Lender’s Record reflecting the making of such Advance or (as the casemay be) the receipt of such payment. The outstanding amount of the ConstructionLoan set forth on the Lender’s Record shall be prima facie evidence of theprincipal amount thereof owing and unpaid to the Lender, but the failure torecord, or any error in so recording, any such amount on the Lender’s Recordshall not limit or otherwise affect the obligations of the Borrower here underor under the Note to make payments of principal or interest on the ConstructionNote when due.

 

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**4.05 INTEREST ON ADVANCES**

 

EachAdvance shall bear interest for the period commencing on the Drawdown Date ofsuch Advance until paid in full at the rate or rates set forth in theConstruction Note. The Borrower promises to pay interest on each Advance inarrears in the manner and at the time set forth in the Construction Note.

 

**4.06  CALCULATION AND PAYMENTOF INTEREST**

 

Intereston each LIBOR Loan shall be calculated on the basis of a year of 360 days forthe actual number of days elapsed for the applicable interest period.

 

Intereston the Loans shall be paid in immediately available funds at the PrincipalOffice of the Lender.  Interest shall becalculated daily and payable monthly, in arrears, in accordance with the termsof the Construction Note.

 

**4.07****PRINCIPAL PAYMENTS**

 

Principalpayments shall be made in accordance with the Construction Note.   All unpaid principal and all unpaid and accruedinterest thereon shall be due and payable, in full on the Maturity Date.

 

**4.08 MATURITY**

 

TheBorrower promises to pay the Lender on the Maturity Date, and there shallbecome absolutely due and payable on the Maturity Date, all of the unpaidprincipal on the Construction Loan outstanding on such date together with any andall accrued and unpaid interest thereon.

 

**4.09  FUNDING LOSSINDEMNIFICATION**

 

The Borrower shall also pay to the Lender, upon the request of theLender, such amount or amounts as shall be sufficient (in the reasonableopinion of the Lender) to compensate it for any loss, cost, or expense(including the then present value of any lost interest earnings as a result ofany re-deployment of prepaid funds) incurred as a result of any payment of aLIBOR Loan on a date other than a scheduled principal payment day or the lastday of the interest period for such Loan including, but not limited to,acceleration of the Loans by the Lender pursuant to Section 15.00

 

Uponrequest, Lender will provide Borrower with reasonable documentation of thecalculation of compensation requested and relating hereto.

 

**4.10  PREPAYMENT PREMIUM**

 

TheBorrower may prepay the Construction Note in whole or in part with accruedinterest from the date of such prepayment on the amount prepaid provided thatit pays any termination or adjustment or other breakage fees or costs pursuantto the Swap Agreement as well as any other costs and expenses required underthis Agreement including without limitation those described in section 4.09.

 

**5.00        [RESERVED]**

 

**6.00        LOAN FEES; PAYMENTSAND COMPUTATIONS; CAPITAL ADEQUACY, ETC.**

 

**6.01        LOAN FEE**

 

TheBorrower agrees to pay to the Lender on or before the Closing Date of theConstruction Loan a loan commitment fee in the amount of $60,000.

 

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**6.02        FUNDS FOR PAYMENT**

 

(a) Allpayments of principal, interest, fees and any other amounts due under theConstruction Note or under any of the other Loan Document shall be made to theLender at its Head Office or at such other location that the Lender may fromtime to time designate, in each case not later than 2:00 p.m. (Bostontime) on the date when due in immediately available funds in lawful money ofthe United States.

 

(b) Allpayments by the Borrower under the Construction Note and under any of the otherLoan Documents shall be made without setoff or counterclaim and free and clearof and without deduction for any taxes, levies, imposts, duties, charges, fees,deductions, withholdings, compulsory loans, restrictions or conditions of anynature now or hereafter imposed or levied by any jurisdiction or any politicalsubdivision thereof or taxing or other authority therein unless the Borrower iscompelled by law to make such deduction or withholding. If any such obligationto deduct or withhold is imposed upon the Borrower with respect to any amountpayable by it under the Construction Note or under any of the other LoanDocuments, the Borrower will pay to the Lender, on the date on which suchamount is due and payable under the Construction Note or under such other LoanDocument, such additional amount as shall be necessary to enable the Lender toreceive the same amount which the Lender would have received on such due datehad no such obligation been imposed upon the Borrower. The Borrower willdeliver promptly to the Lender certificates or other valid vouchers for alltaxes or other charges deducted from or paid with respect to payments made bythe Borrower under the Construction Note or under such other Loan Document.

 

**6.03 COMPUTATIONS**

 

Exceptas otherwise provided in this Agreement, the Construction Note, whenever apayment thereunder or under any of the other Loan Documents becomes due on aday that is not a Business Day, the due date for such payment shall be extendedto the next succeeding Business Day, and interest shall accrue during suchextension. The outstanding amount of the Construction Loan as reflected on theRecord from time to time shall be considered correct and binding on theBorrower unless within ten (10) Business Days after receipt of any noticeby the Borrower of such outstanding amount, the Borrower shall notify theLender to the contrary.

 

**6.04 ILLEGALITY**

 

Notwithstandingany other provision in this Agreement, if the Lender determines that anyapplicable law, rule, or regulation, or any change therein, or any change inthe interpretation or administration thereof by any governmental authority,central bank, or comparable agency charged with the interpretation oradministration thereof, or compliance by the Lender (or its Lending Office)with any request or directive (whether or not having the force of law) of anysuch authority, central bank, or comparable agency shall make it unlawful orimpossible for the Lender (or its Lending Office) to (1) maintain theConstruction Loan, then upon notice to the Borrower by the Lender theConstruction Loan shall terminate; or (2) maintain or fund LIBOR Loans,then upon notice to the Borrower by the Lender the outstanding principal amountof the LIBOR Loans, together with interest accrued thereon, and any otheramounts payable to the Lender under this Agreement shall be repaid or convertedto a prime Loan at the option of the Borrower (a) immediately upon demandof the Lender if such change or compliance with such request, in the judgmentof the Lender, requires immediate repayment; or (b) at the expiration ofthe last Interest Period to expire before the effective date of any such changeor request.

 

**6.05 DISASTER**

 

Notwithstandinganything to the contrary herein, if the Lender determines (which determinationshall be conclusive) that quotations of interest rates for the relevantdeposits referred to in the definition of LIBOR is not being provided in the relevantamounts or for the relative maturities for purposes of determining the rate ofinterest on LIBOR Loan as provided in this Agreement then the Lender shallforthwith give notice thereof to the Borrower, whereupon (a) theobligation of the Lender to make LIBOR Loans shall be suspended until theLender notifies the Borrower that the circumstances giving rise to suchsuspension no longer exist; and (b) the Borrower shall repay in full, orconvert to a Loan with a comparable rate of interest, in full, the then outstandingprincipal amount of the Loan, together with accrued interest thereon.

 

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**6.06  ADDITIONAL PAYMENTS**

 

Ifafter the date of this Agreement the Lender determines that (i) theadoption of or change in any law, rule, regulation or guideline regardingcapital requirements for banks or bank holding companies, or any change in theinterpretation or application thereof by any governmental authority chargedwith the administration thereof, or (ii) as a result from any change afterthe date of this Agreement in United States, Federal, State, Municipal orForeign Laws or Regulations (whether or not having the force of law) by anycourt or governmental or monetary authority charged with the interpretation oradministration thereof which changes the basis of taxation of any amountspayable to the Lender under this Agreement, including the ConstructionLoan,  (other than taxes imposed on theoverall net income of the Lender for any of such loans by the jurisdictionwhere the principal office of the Lender is located), then the Lender shallnotify the Borrower thereof.  TheBorrower agrees to pay to the Lender the amount of such reduction in the returnon capital as and when such reduction is determined, upon presentation by theLender of a statement in the amount and setting forth the Lender’s calculationthereof, which statement shall be deemed true and correct absent manifesterror.  In determining such amount, theLender may use reasonable averaging and attribution methods.

 

**7.00  COLLATERAL SECURITY ANDGUARANTY**

 

**7.01 MORTGAGE LIEN**

 

TheObligations shall be secured by, interalia,  (i) a perfected first priority mortgagelien on the Project, (ii) a perfected first absolute assignment of rentalsand leases concerning the Project, and (iii) a first perfected priority securityinterest in all Collateral, whether now owned or hereafter acquired, pursuantto the terms of Section 14.00 of this Agreement and the Security Documentsto which the Borrower is a party.  TheObligations shall also be guaranteed pursuant to the terms of theGuaranty.  This security interest is inaddition to, and not in substitution of, a security interest of even dategranted from Borrower to Lender, pursuant to an Open-End Construction Mortgage andthe definition of “Collateral” therein shall be incorporated herein byreference as if originally stated herein. Any conflict between this Agreement and the Mortgage and SecurityAgreement shall be resolved in each instance, in the sole discretion of theLender.

 

**7.02        CONTROL**

 

Borrowerwill cooperate with Lender, and execute agreements required by Lender, inobtaining control with respect to Collateral consisting of:

 

(i) depositaccounts;

 

(ii) investment property;

 

(iii) letter of credit rights; and

 

(iv) electronic and chattel paper.

 

TheBorrower grants Lender a limited power of attorney to enter into a ControlAgreement on behalf of the Borrower to effectuate the forgoing.

 

Borrowerwill not create any chattel paper without placing a legend on the chattel paperacceptable to Lender, indicating that Lender has a security interest in thechattel paper.

 

**7.03  CROSS DEFAULT**

 

Adefault of any of the terms and conditions of any Obligation, of the Borrowerand/or Guarantor to the Lender (including, without limitation any reimbursementobligations arising out of any Letters of Credit which the Lender may laterissue on behalf of the Borrower and/or Guarantor) or any document or instrumentevidencing such an obligation, shall constitute a default of the ConstructionNote, this Agreement, and all Obligations of the Borrower and Guarantor to theLender whether evidenced by notes or otherwise.

 

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**8.00 CERTAIN RIGHTS OF LENDER**

 

**8.01****RIGHT TO RETAIN THECONSTRUCTION INSPECTOR**

 

TheLender shall have the right to retain, at the Borrower’s cost and expense, theConstruction Inspector to perform the following services on behalf of theLender:

 

(a) toreview and advise the Lender whether in the opinion of the ConstructionInspector, the Project Budget accurately reflects all Project Costs;

 

(b) toreview and advise the Lender whether, in the opinion of the ConstructionInspector, the Plans and Specifications are satisfactory for the intendedpurposes thereof;

 

(c) tomake periodic inspections (approximately at the date of each Draw Request) forthe purpose of assuring that construction of the Improvements to date is inaccordance with the Plans and Specifications and to approve the Borrower’s thencurrent Draw Request as being consistent with the Project Budget and theBorrower’s obligations under this Agreement, and to advise the Lender of theanticipated cost of and time for completion of construction of the Improvementsand the adequacy of any Contingency Reserve;

 

(d) toreview and advise the Lender on any proposed change orders or constructionchange directives; and

 

(e) toreview the Construction Contract and subcontracts, for the purpose of providingthe Lender with an opinion as to the cost of construction to be incurred tocomplete the Project, and also for the purpose of assuring that all suchsubcontracts are for work required by the Plans and Specifications to beperformed.

 

Thefees of the Construction Inspector shall be paid by the Borrower forthwith uponbilling therefore and expenses incurred by the Lender on account thereof shallbe reimbursed to the Lender forthwith upon request therefore, but neither theLender nor the Construction Inspector shall have any liability to the Borroweron account of (i) the services performed by the Construction Inspector, (ii) anyneglect or failure on the part of the Construction Inspector to properlyperform its services, or (iii) any approval by the Construction Inspectorof construction of the Improvements. Neither the Lender nor the ConstructionInspector assumes any obligation to the Borrower or any other Person concerningthe quality of construction of the Improvements or the absence therefrom ofdefects.

 

**8.02  APPRAISAL**

 

Atany time during the term of the Loan, Borrower shall cooperate with Lender anduse reasonable efforts to assist Lender in obtaining an appraisal of theMortgaged Premises.  Such cooperation andassistance from Borrower shall include but not be limited to the obligation toprovide Lender or Lender’s appraiser with the following: (i) reasonableaccess to the Mortgaged Premises, (ii) a current certified rent roll forthe Mortgaged Premises in form and substance satisfactory to Lender, includingcurrent asking rents and a history of change in asking rents and historicalvacancy for the past three years, (iii) current and budgeted income andexpense statements for the prior three years, (iv) a site plan and surveyof Mortgaged Premises and the Building, (v) the building plans andspecifications, including typical elevation and floor plans, (vi) aphotocopy of the transfer documents conveying the beneficial interest in theMortgaged Premises to Borrower, together with the legal description of theMortgaged Premises, (vii) the current and prior year real estate taxbills, (viii) a detailed list of past and scheduled capital improvementsand the costs thereof, (ix) a summary of the then current ownershipentity, (x) all environmental reports and other applicable informationrelating to the Mortgaged Premises and the Building, and (xi) copies ofall recent appraisals/property description information or brochures, includingdescriptions of amenities and services relating to the Mortgaged Premises andthe Building.  The appraiser performingany such appraisal shall be engaged by Lender, and Borrower shall beresponsible for any fees payable to said appraiser in connection with anappraisal of the Mortgaged Premises; provided, however, so long as no Event ofDefault exists, Borrower shall not be required to pay for more than oneappraisal during the initial thirty-six (36) months hereof.

 

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**8.03 CHARGES AGAINST CONSTRUCTION LOAN CHECKING ACCOUNT**

 

TheLender shall have the right, and the Borrower hereby irrevocably authorizes theLender, to charge any account of the Borrower with the Lender, including theConstruction Loan Checking Account referred to in Section 3.03 hereof,without the further approval of the Borrower, for (i) any installment ofprincipal or interest due under the Construction Note, (ii) after theBorrower has been given notice thereof (provided, that no such notice need begiven if there has occurred a Default or Event of Default), any costs orexpenses incurred by the Lender which are to be paid or reimbursed by theBorrower under the terms of this Agreement or any of the other Loan Documents(including, without limiting the generality of the foregoing, all ConstructionInspector, Appraisal and reasonable attorney’s fees) or (iii) after theBorrower has been given notice thereof (provided, that no such notice need begiven if there has occurred a Default or Event of Default), any other sums dueto the Lender under the Construction Note, this Agreement or any of the otherLoan Documents, all to the extent that the same are not paid by the respectivedue dates thereof. The Borrower agrees that at all times, the unadvancedportion of the Construction Loan, together with the collected balance in theConstruction Loan Checking Account shall not be less than the total remainingProject Costs, exclusive of change orders which have been paid for by thePrimary Tenant within fifteen (15) days of the date of the Change Order, whichmonies shall be deposited in the Construction Loan account and if such negativebalance exists, Borrower shall immediately deposit “good funds” into theConstruction Loan Checking Account to remedy the negative balance.

 

**9.00 REPRESENTATIONS AND WARRANTIES**

 

TheBorrower represents and warrants to the Lender as follows with respect toSections 9.01 — 9.41.  The Guarantorrepresents and warrants to the Lender, Sections 9.01, 9.03 and 9.04:

 

**9.01 ORGANIZATION, AUTHORITY, ETC.**

 

(a) Organization;Good Standing. The Borrower is a limited liability company duly organizedpursuant to the Articles of Organization dated October 20, 2008  and filed with the Connecticut Secretary ofState on October 20, 2008, and is validly existing and in good standingunder the laws of the State of Connecticut. The Borrower, (i) has allrequisite power to own its property and conduct its business as now conductedand as presently contemplated, and (ii) is in good standing and is dulyauthorized to do business in the jurisdiction where the Land is located and ineach other jurisdiction where such qualification is necessary.

 

TheGuarantor is a corporation duly organized pursuant to the Articles ofOrganization dated March 10, 1970 and filed with the Delaware Secretary ofState on March 10, 1970 and is validly existing and in good standing underthe laws of the State of Delaware. The Guarantor, (i) has all requisitepower to own its property and conduct its business as now conducted and aspresently contemplated, and (ii) is in good standing and is dulyauthorized to do business in the jurisdiction where the Land is located and ineach other jurisdiction where such qualification is necessary.

 

(b) Authorization.The execution, delivery and performance of this Agreement and the other LoanDocuments to which the Borrower or the Guarantor is or is to become a party andthe transaction contemplated hereby and thereby (i) are within theauthority of such Person, (ii) have been duly authorized by all necessaryproceedings on the part of such Person, (iii) do not conflict with orresult in any breach or contravention of any provision of law, statute, rule orregulation to which such Person is subject or any judgment, order, writ,injunction, license or permit applicable to such Person, (iv) do notconflict with any provision of any operating agreement and articles of organization,or any agreement or other instrument binding upon, such Person, and (v) donot require the approval or consent of, or filing with, any governmental agencyor authority other than those already obtained and the filing of the Mortgage,the Assignment of Leases and the Financing Statements in the appropriate publicrecords with respect thereto.

 

(c) Enforceability.The execution and delivery of this Agreement and the other Loan Documents towhich the Borrower or the Guarantor is or is to become a party will result invalid and legally binding obligations of such Person enforceable against it inaccordance with the respective terms and provisions hereof and thereof, exceptas enforceability is limited by bankruptcy, insolvency, reorganization,moratorium or other laws relating to or 

 

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affectinggenerally the enforcement of creditors’ rights and except to the extent thatavailability of the remedy of specific performance or injunctive relief issubject to the discretion of the court before which any proceeding thereforemay be brought.

 

**9.02 TITLE TO PROJECT AND OTHER PROPERTIES**

 

Excludingthe Permitted Liens:

 

(a) TheBorrower holds good clear record and marketable fee simple absolute title tothe Land and the Improvements, and owns the Personal Property, subject to norights of others, including any mortgages, leases, conditional sale agreements,title retention agreements, liens or other encumbrances.

 

(b) TheBorrower owns all of the assets reflected in any financial statements providedto Lender as at the Balance Sheet Date or acquired since that date (exceptproperty and assets sold or otherwise disposed of in the ordinary course ofbusiness since that date), subject to no rights of others, including anymortgages, leases, conditional sales agreements, title retention agreements,liens or other encumbrances except Permitted Liens.

 

**9.03 FINANCIAL STATEMENTS**

 

Therehas been furnished to the Lender financial information of the Borrower andGuarantor in connection with the application for the Loan (the “FinancialInformation”). Such Financial Information, to the best of Borrower’s knowledge,has been prepared in accordance with generally accepted accounting principlesand fairly present the financial condition of the Guarantor as at the close ofbusiness on the date thereof and the results of operations for the fiscal yearthen ended.

 

**9.04  NO MATERIAL CHANGES, ETC.**

 

Sincethe date of the Financial Information, there has occurred no material adversechange in the financial condition or business of the Guarantor other thanchanges in the ordinary course of business that have not had any materialadverse effect either individually or in the aggregate on the business orfinancial condition of the Guarantor.

 

**9.05  INTELLECTUAL PROPERTY**

 

Borrowerowns or has a valid right to use all patents, copyrights, trademarks, licenses,trade names or franchises now being used or necessary to conduct its business,all of which are listed on Exhibit “K”, hereto and the conduct ofits business as now operated does not conflict with valid patents, copyrights,trademarks, licenses, trade names or franchises of others in any manner thatcould materially adversely affect in any manner the business or assets orcondition, financial or otherwise, of Borrower. True and complete copies of each license and franchise agreement, andevidence of all patents, copyrights, trademarks and trade names, havepreviously been delivered to the Lender.

 

**9.06 LITIGATION**

 

Thereare no actions, suits, proceedings or investigations of any kind pending orthreatened against the Borrower before any court, tribunal or administrativeagency or board that, if adversely determined, might, either in any case or inthe aggregate, adversely affect the properties, assets, financial condition orbusiness of such Person or materially impair the right of such Person to carryon business substantially as now conducted by it, or result in any liabilitynot adequately covered by insurance, or for which adequate reserves are notmaintained on the balance sheet of such Person, or which question the validityof this Agreement or any of the other Loan Documents, any action taken or to betaken pursuant hereto or thereto, or any lien or security interest created orintended to be created pursuant hereto or thereto, or which will adverselyaffect the ability of the Borrower to construct, use and occupy theImprovements or to pay and perform the Obligations in the manner contemplatedby this Agreement and the other Loan Documents.

 

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**9.07 NO MATERIALLY ADVERSE CONTRACTS, ETC.**

 

TheBorrower is not subject to any charter, corporate or other legal restriction,or any judgment, decree, order, rule or regulation that has or is expectedin the future to have a materially adverse effect on the business, assets orfinancial condition of the Borrower. The Borrower is not a party to anycontract or agreement that has or is expected, in the judgment of the Borrower’sofficers, to have any materially adverse effect on the business of theBorrower.

 

**9.08 COMPLIANCE WITH OTHER INSTRUMENTS**

 

TheBorrower is not in violation of any provision of its Certificate of Organizationor Operating Agreement or any agreement or instrument to which it may be subjector by which it or any of its properties may be bound or any decree, order,judgment, statute, license, rule or regulation, in any of the foregoingcases in a manner that could result in the imposition of penalties ormaterially and adversely affect the financial condition, properties or businessof the Borrower

 

**9.09 TAX STATUS**

 

TheBorrower (a) has made or filed all federal and state income and all othertax returns, reports and declarations required by any jurisdiction to which itis subject, (b) has paid all taxes and other governmental assessments andcharges shown or determined to be due on such returns, reports anddeclarations, except those being contested in good faith and by appropriateproceedings. There are no unpaid taxes in any material amount claimed to be dueby the taxing authority of any jurisdiction, and the officers of the Borrowerknows of no basis for any such claim.

 

**9.10 NO EVENT OF DEFAULT**

 

NoDefault or Event of Default has occurred and is continuing.

 

**9.11 INVESTMENT COMPANY ACT**

 

TheBorrower is not an “investment company”, or an “affiliated company” or a “principalunderwriter” of an “investment company”, as such terms are defined in theInvestment Company Act of 1940.

 

**9.12 ABSENCE OF FINANCING STATEMENTS, ETC.**

 

Thereis no financing statement, security agreement, chattel mortgage, real estatemortgage or other document filed or recorded with any filing records, registry,or other public office, that purports to cover, affect or give notice of anypresent or possible future lien on, or security interest in, (a) anyCollateral or (b) any other assets or property of the Borrower or anyrights relating thereto, except with respect to Permitted Liens.

 

**9.13 SETOFF, ETC.**

 

TheCollateral and the Lender’s rights with respect to the Collateral are notsubject to any setoff, claims, withholdings or other defenses. The Borrower isthe owner of the Collateral free from any lien, security interest, encumbranceand any other claim or demand.

 

**9.14 CERTAIN TRANSACTIONS**

 

Exceptas set forth on Exhibit “L” hereto, none of the officers, trustees, directors, partners, members oremployees of the Borrower are presently a party to any transaction with theBorrower (other than for services as employees, officers and directors),including any contract, agreement or other arrangement providing for thefurnishing of services to or by, providing for rental of real or personalproperty to or from, or otherwise requiring payments to or from any officer,trustee, director, partner or such employee or, to the knowledge of theBorrower, any corporation, partnership, trust or other entity in which anyofficer, trustee, director, partner, member or any such employee has asubstantial interest or is an officer, director, trustee, member or partner

 

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**9.15.       EMPLOYEE BENEFITPLANS MULTI-EMPLOYER PLANS GUARANTEED PENSION PLANS**

 

Neitherthe Borrower nor any ERISA Affiliate other than the Guarantor, maintains orcontributes to any Employee Benefit Plan, Multi- employer Plan or GuaranteedPension Plan.

 

**9.16 ENVIRONMENTAL COMPLIANCE**

 

TheBorrower has taken all necessary action to investigate the past and presentcondition and usage of the Real Estate and the operations conducted thereonand, based upon such diligent investigation, makes the following representationsand warranties to its knowledge.

 

(a) Noneof the Borrower, or any operator of the Real Estate, or any operations thereon,is in violation, or alleged violation, of any judgment, decree, order, law,license, rule or regulation pertaining to environmental matters, includingwithout limitation, those arising under the Resource Conservation and RecoveryAct (“RCRA”), the Comprehensive Environmental Response, Compensation andLiability Act of 1980 as amended (“CERCLA”), the Superfund Amendments and ReauthorizationAct of 1986 (“SARA”), the Federal Clean Water Act, the Federal Clean Air Act,the Toxic Substances Control Act or any state or local statute, regulation,ordinance, order or decree relating to health, safety or the environment(hereinafter “Environmental Laws”), which violation involves the Land or wouldhave a material adverse effect on the environment or the business, assets orfinancial condition of the Borrower.

 

(b) TheBorrower has not received notice from any third party including, withoutlimitation any federal, state or local governmental authority, (i) that ithas been identified by the United States Environmental Protection Agency (“EPA”)as a potentially responsible party under CERCLA with respect to a site listedon the National Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii) thatany hazardous waste, as defined by 42 U.S.C. § 9601(5), any hazardoussubstances as defined by 42 U.S.C. § 9601(14), any pollutant or contaminant asdefined by 42 U.S.C.§ 9601(33) or any toxic substances, oil or hazardousmaterials as defined by M.G.L. c. .21E, or other chemicals or substancesregulated by any Environmental Laws (“Hazardous Materials”) which it hasgenerated, transported or disposed of have been found at any site at which afederal, state or local agency or other third party has conducted or hasordered that the Borrower or the Guarantor conduct a remedial investigation,removal or other response action pursuant to any Environmental Laws; or (iii) thatit is or shall be a named party to any claim, action, cause of action,complaint, or legal or administrative proceeding (in each case, contingent orotherwise) arising out of any third party’s incurrence of costs, expenses,losses or damages of any kind whatsoever in connection with the release ofHazardous Materials.

 

(c) Exceptas set forth on Exhibit “M” attached hereto: (i) no portion ofthe Real Estate has been used for the handling, processing, storage or disposalof Hazardous Materials except in accordance with applicable Environmental Laws;and no underground tank or other underground storage receptacle for HazardousMaterials is located on any portion of the Real Estate; (ii) in the courseof any activities conducted by the Borrower, or the operators of theirproperties, no Hazardous Materials have been generated or are being used on theReal Estate except in accordance with applicable Environmental Laws; (iii) therehas been no past or present releasing, spilling, leaking, pumping, pouring,emitting, emptying, discharging, injecting, escaping, disposing or dumping (a “Release”)or threatened Release of Hazardous Materials on, upon, into or from the RealEstate, which Release would have a material adverse effect on the value of anyof the Real Estate or adjacent properties or the environment; (iv) to thebest of the Borrower’s knowledge, there have been no Releases on, upon, from orinto any real property in the vicinity of any of the Real Estate which, throughsoil or groundwater contamination, may have come to be located on, and whichwould have a material adverse effect on the value of, the Real Estate; and (v) anyHazardous Materials that have been generated on any of the Real Estate havebeen transported off-site only by carriers having an identification numberissued by the EPA, treated or disposed of only by treatment or disposalfacilities maintaining valid permits as required under applicable EnvironmentalLaws, which transporters and facilities have 

 

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beenand are, to the best of the Borrower’s knowledge, operating in compliance withsuch permits and applicable Environmental Laws.

 

(d) Exceptas set forth in Exhibit M, none of the Real Estate is or shall be subjectto any applicable environmental clean-up responsibility law or environmentalrestrictive transfer law or regulation, by virtue of the transactions set forthherein and contemplated hereby.

 

**9.17 MEMBERS AND MANAGERS**

 

Themembers and managers of the Borrower are:

 
| **Members & Managers**         | ** ** | **Class** | ** ** | **Percentage of Ownership** | ** ** |
|----------------------------------------------|------------|-----------|------------|---------------------------------------|------------|
|                                         |       |      |       |                                  |       |
| Griffin Land & Nurseries, Inc. |       | N/A       |       | 100                                   | %          |

 

Ineach case, the named Member/Manager is the Manager for the Class owned.

 

**9.18 AVAILABILITY OF UTILITIES**

 

Allutility services necessary and sufficient for the construction, development andoperation of the Project for its intended purposes are presently (or will beprior to the issuance of the final Certificate of Occupancy) available to theboundaries of the Land through dedicated public rights of way or throughperpetual private easements, approved by the Lender, with respect to which theMortgage creates a valid and enforceable first lien, including, but not limitedto, water supply, storm and sanitary sewer, gas, electric and telephonefacilities, and drainage.

 

**9.19 ACCESS**

 

Therights of way for all roads necessary for the full utilization of theImprovements for their intended purposes have either been acquired by theappropriate Governmental Authority or have been dedicated to public use andaccepted by such Governmental Authority, and all such roads shall have beencompleted, or all necessary steps have been taken by the Borrower and suchGovernmental Authority to assure the complete construction and installationthereof prior to the date upon which access to the Project via such roads willbe necessary. All curb cuts, driveways and traffic signals shown on the Plansand Specifications are existing or have been fully approved by the appropriateGovernmental Authority.

 

**9.20 CONDITION OF PROJECT**

 

Neitherthe Project nor any part thereof is now damaged or injured as result of anyfire, explosion, accident, flood or other casualty or has been the subject ofany Taking, and to the knowledge of the Borrower, no Taking is pending orcontemplated.

 

**9.21 COMPLIANCE WITH REQUIREMENTS**

 

ThePlans and Specifications and construction of the Improvements pursuant theretoand the use and occupancy of the Project contemplated thereby comply with allRequirements.

 

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**9.22 PROJECT APPROVALS**

 

Exceptas set forth on Exhibit “N” hereto, the Borrower has obtained allProject Approvals. All Project Approvals obtained by the Borrower are listedand described on Exhibit “O” hereto, have been validly issued and are in full force and effect. TheBorrower has no reason to believe that any of the Project Approvals notheretofore obtained by the Borrower will not be obtained by the Borrower in theordinary course following completion of the construction of the Improvements inaccordance with the Plans and Specifications. No Project Approvals willterminate, or become void or voidable or terminable, upon any sale, transfer orother disposition of the Project, including any transfer pursuant toforeclosure sale under the Mortgage.

 

**9.23 CONSTRUCTION CONTRACT**

 

TheConstruction Contract is in full force and effect and both the Borrower and theContractor are in full Compliance with their respective obligations under theConstruction Contract. The work to be performed by the Contractor under theConstruction Contract is the work called for by the Plans and Specifications,and all work required to complete the Improvements in accordance with the Plansand Specifications is provided for under the Construction Contract.

 

**9.24 ARCHITECT’S CONTRACT**

 

TheArchitect’s Contract is in full force and effect and both the Borrower and theBorrower’s Architect are in full Compliance with their respective obligationsunder the Architect’s Contract.

 

**9.25 OTHER CONTRACTS**

 

TheBorrower has made no contract or arrangement of any kind or type whatsoever(whether oral or written, formal or informal), the performance of which by theother party thereto could give rise to a lien or encumbrance on the Project.

 

**9.26 REAL PROPERTY TAXES; SPECIAL ASSESSMENTS**

 

Thereare no unpaid or outstanding real estate or other taxes or assessments on oragainst the Project or any part thereof which are payable by the Borrower(except only real estate taxes not yet due and payable). The Borrower hasdelivered to the Lender true and correct copies of real estate tax bills forthe Project for the past fiscal tax year. No abatement proceedings are pendingwith reference to any real estate taxes assessed against the Project. There areno betterment assessments or other special assessments presently pending withrespect to any part of the Project, and the Borrower has received no notice ofany such special assessment being contemplated.

 

**9.27 VIOLATIONS**

 

TheBorrower has received no notices of, or has any knowledge of, any violations ofany applicable Requirements or Project Approvals.

 

**9.28 PLANS AND SPECIFICATIONS**

 

TheBorrower has furnished the Lender with true and complete sets of the Plans andSpecifications. The Plans and Specifications so furnished to the Lender complywith all Requirements, all Project Approvals, and all restrictions, covenantsand easements affecting the Project, and have been approved by the Contractor,the Borrower’s Architect, the Primary Tenant, the Lender, and such GovernmentalAuthority as is required for construction of the Improvements.

 

**9.29 PROJECT BUDGET**

 

Tothe best of Borrower’s knowledge, the Project Budget accurately reflects allProject Costs.

 

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**9.30 FEASIBILITY**

 

Eachof the Construction Schedule and the Disbursement Schedule is realistic andfeasible, and is accurate to date.

 

**9.31 EFFECT ON DRAW REQUEST**

 

EachDraw Request submitted to the Lender as provided in Section 3.01 hereofshall constitute an affirmation that the representations and warrantiescontained in Section 9.00 of this Agreement and in the other LoanDocuments remain true and correct as of the date thereof; and unless the Lenderis notified to the contrary, in writing, prior to the Drawdown Date of therequested Advance or any portion thereof, shall constitute an affirmation thatthe same remain true and correct on the Drawdown Date.

 

**9.32 PRINCIPAL DEPOSITORY**

 

TheBorrower further agrees that it shall conduct its principal (majority) bankingbusiness with the Lender, including, without limitation, retaining the Lenderas its principal depository savings accounts, checking accounts, general demanddepository accounts, and such other accounts as are utilized by the Borrowerfrom time-to-time.

 

**9.33  FINANCIAL STATEMENTS**

 

Thebalance sheet of the Guarantor and the related statements of income andretained earnings and cash flow of the Guarantor for the fiscal year thenended, and the accompanying footnotes, together with any interim financialstatements of the Guarantor, copies of which have been furnished to the Lender,are complete and correct and fairly present the financial condition of theGuarantor as at such dates and the results of the operations of the Guarantorfor the periods covered by such statements, all in accordance with GAAPconsistently applied (subject to year-end adjustments in the case of theinterim financial statements), and there has been no material adverse change inthe condition (financial or otherwise), business, or operations of theGuarantor since the presentation to the Lender of the most recently dated financialstatements, nor are there any liabilities of the Guarantor , fixed orcontingent, which are material but are not reflected in such financialstatements or in the notes thereto, other than liabilities arising in theordinary course of business. No information, exhibit or report furnished by theGuarantor to the Lender in connection with the negotiation of this Agreementcontained any material misstatement of fact or omitted to state a material factor any fact necessary to make the statement contained therein not materiallymisleading.

 

**9.34  LABOR DISPUTES AND ACTSOF GOD**

 

Neitherthe business nor the properties of the Borrower are affected by any fire,explosion, accident, strike, lockout or other labor dispute, drought, storm,hail, earthquake, embargo, act of God or of the public enemy, or other casualty(whether or not covered by insurance), materially and adversely affecting suchbusiness or properties or the operation of the Borrower.

 

**9.35  OTHER AGREEMENTS**

 

TheBorrower is not a party to any indenture, loan or credit agreement, or to anylease or other agreement or instrument, or subject to any charter or limitedliability company restriction which could have a material adverse effect on thebusiness, properties, assets, operations, or conditions, financial orotherwise, of the Borrower, or the ability of the Borrower to carry out itsobligations under the Loan Documents to which it is a party. The Borrower isnot in default in any material respect in the performance, observance, orfulfillment of any of the obligations, covenants, or conditions contained inany agreement or instrument material to its business to which it is a party.

 

**9.36  LITIGATION**

 

Thereis no pending or threatened action or proceeding against or affecting theBorrower before any court, governmental agency, or arbitrator, which may, inany one case or in the aggregate, materially adversely affect the 

 

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financialcondition, operations, properties, or business of the Borrower, or the abilityof the Borrower to perform their obligations under the Loan Documents to whichit is a party.

 

**9.37  NO JUDGMENTS**

 

TheBorrower has satisfied all judgments, and the Borrower is not in default withrespect to any judgment, writ, injunction, decree, rule or regulation ofany court, arbitrator, or Federal, state, municipal, or other governmentalauthority, commission, board, bureau, agency, or instrumentality, domestic orforeign.

 

**9.38  ERISA**

 

TheBorrower is to the best of its knowledge in compliance in all material respectswith all applicable provisions of ERISA. Neither a Reportable Event nor a Prohibited Transaction has occurred andis continuing with respect to any Plan; no notice of intent to terminate a Planhas been filed, nor has any Plan been terminated; no circumstances exist whichconstitute grounds entitling the PBGC to institute proceedings to terminate, orappoint a trustee to administer, a Plan, nor has the PBGC instituted any suchproceedings; the Borrower, nor any Commonly Controlled Entity has completely orpartially withdrawn from a Multiemployer Plan; the Borrower and each CommonlyControlled Entity have met their minimum funding requirements under ERISA withrespect to all of their Plans and the present value of all vested benefitsunder each Plan does not exceed the fair market value of all Plan assetsallocable to such benefits, as determined on the most recent valuation date ofthe Plan and in accordance with the provisions of ERISA; and neither theBorrower, nor any Commonly Controlled Entity has incurred any liability to thePBGC under ERISA.

 

**9.39  DEBT**

 

Setforth in the financial statements referred to in this Agreement, to the extentrequired by GAAP, is a complete and correct list of all Debt in respect ofwhich the Borrower is in any manner directly or contingently obligated; and themaximum principal or face amounts of the credit in question, which areoutstanding and which can be outstanding, are correctly stated, and all Liensof any nature given or agreed to be given as security therefore are correctlydescribed or indicated in such financial statements.   Exhibit “P” correctly lists allsecured and unsecured Debt of the Borrower outstanding as of the date of thisAgreement, and shows, as to each item of Debt listed thereon, the obligor andobligee, the aggregate principal amount outstanding on the date hereof.

 

**9.40 EXECUTIVE AGREEMENTS**

 

Noneof the executive officers of the Borrower is subject to any agreement in favorof anyone, other than Borrower, which limits or restricts that person’s rightto engage in the type of business activity conducted or proposed to beconducted by such Borrower or to use therein any property or confidentialinformation or which grants to anyone other than the Borrower any rights in anyinventions or other ideas susceptible to legal protection developed orconceived by any such officer.

 

**9.41  FOREIGN ASSET CONTROLREGULATIONS**

 

Neitherthe execution of this Agreement nor the use of the proceeds thereof violatesthe Trading With the Enemy Act of 1917, as amended, nor any of the ForeignAssets Control Regulations promulgated thereunder or under the InternationalEmergency Economic Powers Act or the U.N. Participation Act of 1945.

 

**10.00   AFFIRMATIVE COVENANTSOF THE BORROWER**

 

TheBorrower covenants and agrees that, so long as the Construction Loan isoutstanding or the Lender has any obligation to make any Advances:

 

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**10.01 PUNCTUAL PAYMENT**

 

TheBorrower will duly and punctually pay or cause to be paid the principal andinterest on the Construction Loan and all other amounts provided for in theConstruction Note, this Agreement and the other Loan Documents to which theBorrower is a party, all in accordance with the terms of the Construction Note,this Agreement and such other Loan Documents.

 

**10.02 COMMENCEMENT, PURSUIT AND COMPLETION OF CONSTRUCTION**

 

TheBorrower will commence construction of the Improvements within ten (10) daysafter the Construction Loan Closing Date, will diligently pursue constructionof the Improvements in accordance with the Construction Schedule, and willcomplete construction of the Improvements prior to the Completion Date, all inaccordance with the Plans and Specifications, in full compliance with all restrictions,covenants and easements affecting the Project, all Requirements, and allProject Approvals, and with all terms and conditions of the Loan Documents,without deviation from the Plans and Specifications unless the Borrower obtainsthe prior approval of the Lender, and the Primary Tenant.  The Borrower will pay all sums and performall such acts as may be necessary or appropriate to complete such constructionof the Improvements in accordance with the Plans and Specifications and in fullCompliance with all restrictions, covenants and easements affecting theProject, all Requirements and all Project Approvals, and with all terms andconditions of the Loan Documents, all of which shall be accomplished on orbefore the Completion Date, free from any liens, claims or assessments (actualor contingent) asserted against the Project for any material, labor or otheritems furnished in connection therewith. The Borrower will furnish evidence ofsatisfactory Compliance with this Section 10.02 to the Lender on or beforethe Completion Date.

 

**10.03 CORRECTION OF DEFECTS**

 

TheBorrower will promptly correct or cause to be corrected all defects in theImprovements or any departure from the Plans and Specifications not previouslyapproved by the Lender. The Borrower agrees that any Advance made by theLender, whether before or after such defects or departures from the Plans andSpecifications are discovered by, or brought to the attention of, the Lender,shall not constitute a waiver of the Lender’s right to require Compliance withthis Section 10.03.

 

**10.04 MAINTENANCE OF OFFICE**

 

Afterthe Completion Dates, the Borrower will maintain its chief executive office inBloomfield, Connecticut or at such other place in the United States of Americaas the Borrower shall designate upon written notice to the Lender, wherenotices, presentations and demands to or upon the Borrower in respect of theLoan Documents may be given or made.

 

**10.05 RECORDS AND ACCOUNTS**

 

TheBorrower will (a) keep true and accurate records and books of account inwhich full, true and correct entries will be made in accordance with generallyaccepted accounting principles and (b) maintain adequate accounts andreserves for all taxes (including income taxes), depreciation and amortizationof its properties, contingencies, and other reserves.

 

**10.06 FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION**

 

TheBorrower (as indicated), at its sole expense, will deliver to the Lender:

 

(a)  within fifteen (15) days after the filing ofits Form 10K with the Securities Exchange Commission, the Guarantor willprovide Lender with its audited financial statement;

 

(b) within one hundred twenty (120) days of fiscalyear end, the internal statement of 

 

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operations, statement of cash flow and balance sheets ofBorrower;

 

(c) within thirty (30) days after the receipt ofthe Primary Tenant’s audited financial statements, the Borrower shall providethem to Lender; and

 

(d) from time to time such other reasonablefinancial data and information as the Lender may request.

 

**10.07 NOTICES**

 

(a) Defaults.The Borrower will promptly notify the Lender in writing of the occurrence ofany Default or Event of Default, specifying the nature and existence of suchDefault or Event of Default and what action the Borrower is taking or proposesto take with respect thereto. If any Person shall give any notice or take anyother action in respect of a claimed default (whether or not constituting anEvent of Default) under this Agreement or under any note, evidence ofindebtedness, indenture or other obligation to which or with respect to whichthe Borrower is a party or obligor, whether as principal or surety, and suchdefault would permit the holder of such note or obligation or other evidence ofindebtedness to accelerate the maturity thereof,  the Borrower shall forthwith give writtennotice thereof to the Lender, describing the notice or action and the nature ofthe claimed default.

 

(b) EnvironmentalEvents. The Borrower will promptly give notice to the Lender (i) of anyviolation of any Environmental Law that the Borrower reports in writing or isreportable by such Person in writing (or for which any written reportsupplemental to any oral report is made) to any federal, state or localenvironmental agency and (ii) upon becoming aware thereof, of any inquiry,proceeding, investigation, or other action, including a notice from any agencyof potential environmental liability, or any federal, state or localenvironmental agency or board, that in either case involves the Project or hasthe potential to materially affect the assets, liabilities, financialconditions or operations of the Borrower or such general partner or the Lender’sliens or security interests pursuant to the Security Documents.

 

(c) Notification of Claims against Collateral.  The Borrower will, immediately upon becomingaware thereof, notify the Lender in writing of any material setoff, claims,withholdings or other defenses to which any of the Collateral, or the Lender’srights with respect to the Collateral, are subject.

 

(d) Noticeof Nonpayment. The Borrower will immediately notify the Lender in writing ifthe Borrower receives any notice, whether oral or written, from any laborer,subcontractor or materialman to the effect that such laborer, subcontractor ormaterialman has not been paid when due for any labor or materials furnished inconnection with the construction of the Improvements

 

(e) Noticeof Litigation and Judgments.  TheBorrower will give notice to the Lender in writing within fifteen (15) days ofbecoming aware of any litigation or proceeding threatened in writing or anypending litigation and proceedings affecting the Project or affecting theBorrower or to which the Borrower is or is to become a party involving an uninsuredclaim against the Borrower that could reasonably be expected to have amaterially adverse effect on the Borrower or any of its general partners andstating the nature and status of such litigation or proceedings. The Borrowerwill give notice to the Lender, in writing, in form and detail satisfactory tothe Lender, within ten (10) days of any judgment not covered by insurance,final or otherwise, against the Borrower in an amount in excess of $10,000.00.

 

(f) Noticeof Occupancy by Tenants. Excluding the Primary Tenant, the Borrower will givewritten notice to the Lender at least ten (10) days prior to thecommencement of, and again on the date of, occupancy of the Improvements by anytenant under a Lease, stating the name of the tenant, the date of occupancy,and the area so occupied.

 

**10.08 EXISTENCE**

 

TheBorrower will do or cause to be done all things necessary to preserve and keepin full force and effect its existence as a Connecticut limited liabilitycompany. The Borrower will do or cause to be done all things 

 

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necessaryto preserve and keep in full force all of its rights and franchises. TheBorrower (a) will cause all of its properties used or useful in theconduct of its business to the maintained and kept in good condition, repairand working order and supplied with all necessary equipment, (b) willcause to be made all necessary repairs, renewals, replacements, betterments andimprovements thereof, all as in the judgment of the Borrower may be necessaryso that the business carried on in connection therewith may be properly andadvantageously conducted at all times, and (c) will continue to engageprimarily in the businesses now conducted by it and in related businesses.

 

**10.09 INSURANCE; BONDS**

 

**10.09.1  CONTRACTOR AND ARCHITECTINSURANCE**

 

(a) TheBorrower will require the Contractor to obtain and maintain at all times duringthe construction of the Improvements the insurance required by the ConstructionContract and such other insurance as may be required by the Lender (including,without limitation, commercial general liability insurance, comprehensiveautomobile liability insurance, all-risk contractor’s equipment floaterinsurance, workmen’s compensation insurance and employer liability insurance),all such insurance to be in such amounts and form, to include such coverage andendorsements, and to be issued by such insurers as shall be approved by theLender, and to contain the written agreement of the insurer to give the Lenderthirty (30) days prior written notice of cancellation, nonrenewal, modificationor expiration. The Borrower will provide or will cause the Contractor toprovide the Lender with certificates evidencing such insurance upon the requestof the Lender.

 

(b) The Borrower will require the Borrower’s Architect or any other architect,engineer or design professional providing design or engineering services inconnection with the construction of the Improvements, to obtain and maintainprofessional liability insurance covering any claims asserted with respect tothe Project for a period of not less than five (5) years after the date ofcompletion of the Improvements, such insurance to be in such amounts and form,to include such coverage and endorsements, and to be issued by such insurers asshall be approved by the Lender, and to contain the written agreement of theinsurer to give the Lender thirty (30) days prior written notice ofcancellation, nonrenewal, modification or expiration.  The Borrower will provide or will cause the Borrower’sArchitect or such other design professional to provide the Lender withcertificates evidencing such insurance upon the request of the Lender.

 

**10.09.2  INSURANCE**.   Borrower, at its sole cost and expense,shall, or shall cause the Primary Tenant to insure and keep insured theMortgaged Premises, against such perils and hazards, and in such amounts andwith such limits, as Lender may from time to time reasonably require.   Borrower shall also carry such other insurance,and in such amounts, as Lender may from time to time reasonably require,against insurable risks which at the time are commonly insured against in thecase of premises similarly situated, due regard being given to the availabilityof insurance and to the type of construction, location, utilities, use andoccupancy of the Mortgaged Premises or any replacements or substitutionstherefor (“Additional Insurance”). Such Additional Insurance may include flood,earthquake, , business interruption and demolition and shall be obtained within30 days after demand by Lender. Otherwise, Borrower shall not obtain anyseparate or additional insurance which is contributing in the event of loss,unless it is properly endorsed and otherwise reasonably satisfactory to Lenderin all respects.  Except as otherwiserequired under the existing Lease with the Primary Tenant, any proceeds ofinsurance in excess of Two Hundred Fifty Thousand and 00/100 Dollars($250,000.00) paid on account of any damage to or destruction of the MortgagedPremises or any portion thereof shall be paid over to the Lender and shall beapplied and distributed as provided for herein and in the Mortgage.

 

**10.09.2(a)              EVIDENCEOF COVERAGE**.  Theinsurance shall be evidenced by the original policy or a true and certifiedcopy of the original policy, or in the case of liability insurance, bycertificates of insurance. Certificates evidencing such insurance shall bedelivered to Lender at or prior to Closing and certified copies or originalpolicies shall be delivered to Lender within thirty (30) days followingClosing. On or before the stated due date, Borrower or the Primary Tenant shallpay all premiums and fees for the insurance policies required hereunder.Borrower shall deliver certified copies of all policies and renewals (orcertificates evidencing the same) to Lender at least thirty (30) days beforethe expiration of existing policies. Each such policy shall provide that suchpolicy may

 

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notbe canceled or materially changed except upon 30 days prior written notice ofintention of non-renewal, cancellation or material change to Lender, and thatno act or thing done by Borrower shall invalidate the policy as againstLender.  Lender shall be named asMortgagee, loss payee and addtional insured on all such policies.  Notwithstanding anything to the contrarycontained herein or in any provision of law, the proceeds of insurance policiescoming into the possession of Lender and which are not to be used for the Work(as hereinafter defined) shall not be deemed trust funds and Lender shall beentitled to dispose of such proceeds as hereinafter provided and as set forthin the Mortgage. If Lender has not received satisfactory evidence of suchrenewal or substitute insurance in the time frame herein specified, Lendershall have the right, but not the obligation, to purchase such insurance forLender’s interest only. Any amounts so disbursed by Lender pursuant to this Section 10.09shall be deemed to be a part of the Loan and shall bear interest at the DefaultRate. Nothing contained in this Section 10.09 shall require Lender toincur any expense or take any action hereunder, and inaction by Lender shallnever be deemed a waiver of any rights accruing to Lender on account of this Section 10.09.

 

**10.09.2(b)              SEPARATEINSURANCE**.  Borrowershall not carry any separate insurance on the Mortgaged Premises concurrent inkind or form with any insurance required hereunder or contributing in the eventof loss without Lender’s prior written consent, and any such policy shall haveattached a standard non-contributing mortgagee clause, with loss payable toLender, and shall meet all other requirements set forth herein.

 

**10.09.2(c)              DAMAGETO OR DESTRUCTION OF MORTGAGED PREMISES**.    In the event of any damage to or destructionof the Mortgaged Premises, Borrower shall give prompt written notice to Lenderand provided that no Event of Default has occurred hereunder, Lender shallrelesae any insurance proceeds received by it to the Borrower provided that theBorrower uses it strictly in compliance with its obligations under the Leasewith the Primary Tenant, Borrower shall promptly commence and diligentlycontinue to complete the repair, restoration and rebuilding of the MortgagedPremises so damaged or destroyed in full compliance with all legal requirementsand with the provisions of the Lease and as set forth in Section 10.9.2(d) below,and free and clear from any and all liens and claims. Such repair, restorationand rebuilding of the Mortgaged Premises are sometimes hereinafter collectivelyreferred to as the “Work.” Borrower shall not adjust, compromise or settle anyclaim for insurance proceeds without the prior written consent of Lender, whichconsent shall not be unreasonably withheld or delayed.

 

**10.09.2(d)              RESTORATION.** Borrowerwarrants, covenants and represents that:

 

(i) Duringthe period following a casualty until the Work has been completed, Borrowershall cause the insurance proceeds, together with any additional sums depositedby Borrower with the Lender in respect of the applicable casualty to equal orexceed such estimated cost of effecting such repair and restoration, or suchportion thereof as then remains to be completed and paid for;

 

(ii) Uponcompletion of the Work, the monthly rents from all Leases remaining in fullforce and effect shall, in Lender’s reasonable judgment, be sufficient to payall Operating Expenses of the Mortgaged Premises and all regularly scheduledprincipal, interest and other sums due and payable under the Construction Note,this Agreement and the other Loan Documents.

 

(iii) Atall times, there shall be in force and effect for the benefit of Borrower andLender rental interruption insurance sufficient to provide coverage for onehundred percent (100%) of all rental income lost as a consequence of suchcasualty for a total of at least twelve (12) months;

 

(iv) TheWork will be effected pursuant to plans and specifications reasonably approvedin writing by Lender, and by a general contractor and major subcontractors, andpursuant to contracts, approved in writing by Lender; and

 

(v) TheWork can be effected in compliance with all applicable laws and Borrower shallhave obtained all licenses, permits, consents and approvals from all applicablegovernmental authorities or private parties required to permit Borrower toeffect such restoration and repair and to use, operate and occupy the repairedand restored premises upon completion thereof (other than those which willissue in the ordinary course upon completion) and that the same shall be infull force and effect.

 

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**10.09.2(e)              DISTRIBUTIONOF PROCEEDS. **If anyinsurance Proceeds are used for the Work, Borrower warrants, covenants andrepresents:

 

(i) Ifthe Work is structural or if the cost of the Work is reasonably estimated byLender to exceed Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00),the Work shall be conducted under the supervision of a certified and registeredarchitect or engineer. Before Borrower commences any Work, other than temporarywork to protect property or prevent interference with business, Lender shallhave approved in writing the plans and specifications for the Work, whichapproval shall not be unreasonably withheld or delayed, it being neverthelessunderstood that such plans and specifications shall provide for Work so that,upon completion thereof, the Mortgaged Premises shall be at least equal invalue and general utility to the Mortgaged Premises prior to the damage ordestruction.

 

(ii) Borrowershall deliver to Lender a certificate of the architect or engineer in (i) above(or a certificate given by Borrower if no architect or engineer is so required)stating (A) that all of the Work completed has been done in compliancewith the approved plans and specifications, if required under (i) above, (B) thatthe proceeds to be distributed are justly required to reimburse the Borrowerfor payments made by Borrower, or are justly due to the contractor,subcontractors, materialmen, laborers, engineers, architects or other personsrendering services or materials for the Work (giving a brief description ofsuch services and materials), and that when added to all sums previously paidout by the Lender does not exceed the value of the Work done to the date ofsuch certificate, (C) if the sum to be distributed is to cover paymentrelating to repair and restoration of personal property required or relating tothe Mortgaged Premises, that title to the personal property items covered bythe requested payment is vested in Borrower, and (D) that the amount ofsuch proceeds remaining in the hands of the Lender will be sufficient oncompletion of the Work to pay for the same in full (giving in such reasonabledetail as Lender may require an estimate of the cost of such completion).Additionally, Borrower shall deliver to Lender a statement signed by Borrowerapproving both the Work done to date and the Work covered by the payment inquestion.

 

(iii) Borrowershall deliver waivers of lien satisfactory to Lender covering that part of theWork for which payment or reimbursement is being requested and, if required byLender, a search prepared by a title company, or by other evidence satisfactoryto Lender that there has not been filed with respect to the Mortaged Premisesany mechanics’ or other lien or instrument for the retention of title relatingto any part of the Work not discharged of record. Additionally, as to anypersonal property covered by the request for payment, Lender shall be furnishedwith evidence of payment therefor and such further evidence satisfactory toassure Lender of its valid first lien on the personal property.

 

(iv) Lenderor its designee shall have the right to inspect the Work at all reasonabletimes. The reasonable cost of any such inspection of the Work shall be paid byBorrower upon demand. Neither the approval by Lender of the plans andspecifications for the Work nor the inspection by Lender of the Work shall makeLender responsible for the preparation of such plans and specifications or thecompliance of such plans and specifications, or of the Work, with anyapplicable law, regulation, ordinance, covenant or agreement.

 

(v) Borrowershall deliver a copy or copies of any certificate or certificates required bylaw to render occupancy and full operation of the Mortgaged Premises legal.

 

**10.09.2(f)                              MISCELLANEOUSINSURANCE PROVISIONS**.

 

(i) Theinsurance requirements contained in this Section 10.9.2(f) are inaddition to, and supplement the insurance requirements contained in theMortgage.

 

(ii) Inthe event of the foreclosure of the Mortgage or other transfer of title to orassignment of the Mortgaged Premises in extinguishment of the debt due Lenderin whole or in part, all right, title and interest of Borrower in and to allpolicies of insurance required by this Agreement and any insurance proceedsshall inure to the benefit of and pass to Lender or any purchaser or transfereeof the Mortgaged Premises.

 

(iii) Borrowerhereby authorizes Lender, during all periods in which an Event of Default hasoccurred and remains uncured, to settle any insurance claims, to obtaininsurance proceeds, and to endorse any 

 

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checks,drafts or other instruments representing any insurance proceeds whether payableby reason of loss thereunder or otherwise.

 

**10.10 TAXES**

 

(a) TheBorrower will pay, or cause to be paid and discharged, all taxes, assessmentsand other governmental charges imposed upon it with respect to the Project orimposed upon the Project at the time and in the manner required by theMortgage, before the same shall become overdue. The Borrower will promptly payand discharge (by bonding or otherwise) all claims for labor, material orsupplies that if unpaid might by law become a lien or charge against theProject or any part thereof or might affect the priority of the lien created bythe Mortgage with respect to any Advance made or to be made by the Lender underthis Agreement.

 

(b) TheBorrower will duly pay and discharge, or cause to be paid and discharged,before the same shall become overdue, all taxes, assessments and other governmentalcharges imposed upon it and its other real properties, sales and activities, orany part thereof, or upon the income or profits therefrom, as well as allclaims for labor, materials, or supplies that if unpaid might by law become alien or charge upon any of its property; provided that any such tax,assessment, charge, levy or claim with respect to properties other than theProject need not be paid if the validity or amount thereof shall currently becontested in good faith by appropriate proceedings and if the Borrower shallhave set aside on its books adequate reserves with respect thereto; andprovided further that the Borrower will pay all such taxes, assessments,charges, levies or claims forthwith upon the commencement of proceedings toforeclose any lien that may have attached as security therefore.

 

**10.11 INSPECTION OF PROJECT, OTHER PROPERTIES AND BOOKS**

 

(a) TheBorrower shall permit the Lender and the Construction Inspector, at theBorrower’s expense, to visit and inspect the Project and all materials to beused in the construction thereof and will cooperate with the Lender and theConstruction Inspector during such inspections (including making availableworking drawings of the Plans and Specifications); provided that this provisionshall not be deemed to impose on the Lender or the Construction Inspector anyobligation to undertake such inspections.

 

(b) TheBorrower shall permit the Lender at the Borrower’s expense to visit and inspectany of the other properties of the Borrower to examine the books of account ofthe Borrower (and to make copies thereof and extracts therefrom) and to discussthe affairs, finances and accounts of the Borrower with, and to be advised asto the same by, its officers, all at such reasonable times and intervals as theLender may reasonably request.

 

**10.12 COMPLIANCE WITH LAWS, CONTRACTS, LICENSES AND PERMITS**

 

TheBorrower will comply with, (a) the applicable laws and regulationswherever its business is conducted, including all Environmental Laws and, inthe case of the Borrower, all Requirements, (b) the provisions of itsoperating agreement and other charter documents and by-laws, (c) allagreements and instruments by which it or any of its properties may be bound,including, in the case of the Borrower, the Architect’s Contract, theConstruction Contract and all restrictions, covenants and easements affectingthe Project, (d) all applicable decrees, orders and judgments, and (e) alllicenses and permits required by applicable laws and regulations for theconduct of its business or the ownership, use or operation of its properties,including, in the case of the Borrower, all Project Approvals.

 

**10.13 PROJECT APPROVALS**

 

TheBorrower will promptly obtain all Project approvals not heretofore obtained bythe Borrower (including those listed and described on Exhibit “N”  hereto and any other Project Approvals whichmay hereafter become required, necessary or desirable) and will furnish theLender with evidence that the Borrower has obtained such Project Approvalspromptly upon its request. The Borrower will give all such notices to, and takeall such other actions with respect to, such Governmental Authority as may berequired under applicable Requirements to construct the Improvements and touse, occupy and operate the Project following the completion of theconstruction 

 

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ofthe Improvements. The Borrower will also promptly obtain all utilityinstallations and connections required for the operation and servicing of the Projectfor its intended purposes, and will furnish the Lender with evidence thereof.The Borrower will duly perform and comply with all of the terms and conditionsof all Project Approvals obtained at any time, including all Project Approvalslisted and described on Exhibit “Q” hereto.

 

**10.14 USE OF PROCEEDS**

 

TheBorrower will use the proceeds of the Construction Loan solely for the purposeof paying for Project Costs in accordance with the Project Budget.  Additionally, the Lender agrees that shouldactual construction costs be less than the approved Construction Budget (the “ConstructionSavings”) and the Lender has not fully Advanced the Loan, the Borrower shall beentitled to recoup equity up to Five Hundred Thousand and 00/100 Dollars($500,000.00) (on a dollar-for-dollar basis, equal to the Construction Savings)at the time of issuance of a final Certificate of Occupancy.

 

**10.15 PROJECT COSTS**

 

TheBorrower will pay all Project Costs in excess of the Construction Loan Amount,regardless of the amount, and prior to the same being overdue.

 

**10.16 INSUFFICIENCIES OF CONSTRUCTION LOAN PROCEEDS**

 

TheBorrower will deposit funds with the Lender as follows: If at any time whilethe Construction Loan is outstanding or the Lender has any obligation to makeAdvances hereunder, the Lender shall in its reasonable discretion determinethat the remaining undisbursed portion of the Construction Loan, together withthe Required Equity Funds and any other sums previously deposited by theBorrower with the Lender in connection with the Construction Loan, is or willbe insufficient to fully complete and equip the Improvements in accordance withthe Plans and Specifications, to operate and carry the Project after completionof the Improvements until payment in full of the Construction Loan by theBorrower, to pay all other Project Costs, to pay all interest accrued or toaccrue on the Construction Loan during the term of the Construction Loan fromand after the date hereof, and to pay all other sums due or to become due underthe Loan Documents (or as to any budget category or line item), regardless ofhow such condition may be caused, the Borrower will, within seven (7) daysafter written notice of such determination from the Lender, deposit with theLender such sums of money in cash as the Lender may require, in an amountsufficient to remedy the condition described in such notice, and sufficient topay any liens for labor and materials alleged to be due and payable at the timein connection with the Improvements, and, at the Lender’s option, no furtherAdvances of the Construction Loan shall be made by the Lender until theprovisions of this Section 10.16 have been fully complied with. All suchdeposited sums shall stand as additional security for the Obligations and shallbe disbursed by the Lender in the same manner as Advances under this Agreementbefore any further Advances of the Construction Loan proceeds shall be made.The Lender shall have no obligation to pay the Borrower any interest withrespect to such deposited funds.

 

**10.17 LEASES**

 

TheBorrower will take or cause to be taken all steps within the power of theBorrower to market and lease the leasable area of the Improvements to suchtenants and upon such terms and conditions as may be approved by the Lender.  Any proposed standard form of lease to beused by the Borrower in connection with the Improvements shall be submitted toand approved by the Lender prior to its submission to any proposed tenant, andthe Borrower will make such amendments, modifications or additions thereto asmay be required by the Lender. The leases to any tenant who will lease oroccupy thirty percent (30%) or more of the net leasable area of theImprovements (other than the Primary Tenant) will require that such tenantprepare and deliver to the Borrower and the Lender annual financial statementscertified by an independent certified public accountant within 120 daysfollowing the end of each fiscal year of such tenant. The Borrower willrequire, and each Lease will require, each tenant to enter into aNondisturbance, Attornment and Subordination Agreement upon the request of theLender.  The Lender shall have 

 

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theright, and the Borrower hereby authorizes the Lender, to communicate directly withany tenant under a Lease to verify any information delivered to the Lender bythe Borrower concerning such tenant or such tenant’s Lease.

 

**10.18 LABORERS, SUBCONTRACTORS AND MATERIALMEN**

 

TheBorrower will furnish to the Lender, upon request at anytime, and from time totime, affidavits listing all laborers, subcontractors, materialmen, and anyother Persons who might or could claim statutory or common law liens and arefurnishing or have furnished labor or material to the Project or any partthereof, together with affidavits, or other evidence satisfactory to theLender, showing that such parties have been paid all amounts then due for Laborand materials furnished to the Project. The Borrower will also furnish to theLender, at any time and from time to time upon demand by the Lender, lienwaivers bearing a then current date and prepared on a form satisfactory to theLender from the Contractor and such subcontractors or materialmen as the Lendermay designate.

 

**10.19 DEPOSIT OF INCOME**

 

TheBorrower will deposit with the Lender, upon request at any time following anEvent of Default, any sums (other than base rent, which is being paid to a lockbox) received by the Borrower from tenants under Leases (other than amountspaid by tenants to reimburse the Borrower for construction work performed fortenants the cost of which has not been disbursed to the Borrower by the Lenderunder the Construction Loan), in a special account, from which no funds shallbe drawn by the Borrower without the Lender’s prior approval, and which sumsshall stand as additional security for the Obligations.  It is expressly agreed that at the Lender’soption, such sums shall be disbursed in the same manner as Advances before anyfurther Advance of the Construction Loan is made.

 

**10.20 PUBLICITY**

 

TheBorrower will permit the Lender to obtain publicity in connection with theconstruction of the Improvements through press releases and participation insuch events as ground breaking and opening ceremonies. The Borrower will givethe Lender ample advance notice of such events and will cooperate with andprovide to the Lender as much assistance as possible in connection withobtaining such publicity.

 

**10.21 SIGN REGARDING CONSTRUCTION FINANCING**

 

Ifrequested by the Lender, the Borrower will, at its cost and expense, erect andmaintain on a suitable location on the Land a sign indicating that theconstruction financing for the Project is being provided by the Lender, suchlocation and sign to be subject to the approval of the Lender.

 

**10.22 FURTHER ASSURANCES**

 

(a) RegardingConstruction. The Borrower will furnish or cause to be furnished to the Lenderall instruments documents, boundary surveys, footing or foundation surveys,certificates, plans and specifications, title and other insurance, reports andagreements and each and every other document and instrument required to befurnished by the terms of this Agreement or the other Loan Documents, all atthe Borrower’s expense.

 

(b) RegardingPreservation of Collateral. The Borrower will execute and deliver to the Lendersuch further documents, instruments, assignments and other writings, and willdo such other acts necessary or desirable, to preserve and protect theCollateral at any time securing or intended to secure the Obligations, as theLender may require.

 

(c) Regarding title. If at any time the Lender or the Lender’s counsel has reasonto believe that any Advance is not secured or will or may not be secured by theMortgage as a first lien or security interest on the Project, then the Borrowershall, within ten (10) days after written notice from the Lender, do allthings and matters necessary, to assure to the satisfaction of the Lender andthe Lender’s counsel that any Advance previously made hereunder or to be madehereunder is secured or will be secured by the Mortgage as a first lien orsecurity interest on the Project, and the Lender, at its option, may decline tomake further Advances hereunder until the Lender has received such assurance,but nothing in this Section 10.22 shall limit the Lender’s right torequire endorsements extending the effective date of the Title Policy as hereinset forth.

 

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(d) Regardingthis Agreement. The Borrower will cooperate with, and will do such further actsand execute such further instruments and documents as the Lender shallreasonably request to carry out to its satisfaction the transactionscontemplated by this Agreement and the other Loan Documents.

 

**10.23  NO MERGER ORACQUISITION**

 

Borrowerwill not merge or consolidate or be merged or consolidated with or into anyother corporation or business entity, nor acquire substantially all of theassets and/or stock of another corporation or other business entity, unlessspecifically authorized by Lender, in writing, in advance.

 

**10.24  NO SUBSTITUTION**

 

ThisAgreement may but need not be supplemented by separate assignments and pledgesand, if such assignments and pledges are given, the rights and securityinterests given thereby shall be in addition to and not in limitation of therights and security interests given by this Agreement.  This Agreement shall not act to terminate,cancel, revoke, nor otherwise cause a novation, estoppel, or waiver of any orall prior security interests granted by Borrower to Lender in and to anycollateral contemplated by these presents, or other, wholly or in part, andwithout exception; and any and all such security interests shall continue toremain properly perfected by Borrower to Lender in their terms and withoutinterruption.

 

**10.25  PROTECTION OFCOLLATERAL**

 

Borrowerwill maintain all Collateral in a condition which is comparable to that whichexists on the date of the issuance of the final Certificate of Occupancy, andmake any necessary repairs thereto, or replacements thereof; ordinary wear andtear and obsolescence excepted.

 

Borrowerwill at the request of Lender, promptly furnish Lender the receipted bills forall payments required by this Agreement. At its option, but without liability so to do, Lender may discharge taxes,assessments, liens or security interests or other encumbrances at any timelevied or placed on the Collateral, may pay for insurance on the Collateral andmay pay for the maintenance and preservation of the Collateral. Borrower agreesto reimburse Lender on demand for any payments made by Borrower, or anyexpenses including attorneys’ fees incurred by Lender pursuant to the foregoingauthorization, and upon failure of Borrower so to reimburse Lender, any suchsums paid or advanced by Lender shall be deemed secured by the Collateral andconstitute part of the Loans.

 

**10.26  COMPLIANCE WITH ERISA**

 

TheBorrower will not:

 

(A) engagein any prohibited transaction (within the meaning of Section 406 of ERISAor Section 4975 of the Code), or commit any other breach of its fiduciaryresponsibility under Part 4 of Title I of ERISA, which could subject theBorrower or any Borrower Group Member to any material liability under Section 406,409, 502(i) or 502(d) of ERISA or Section 4975 of the Code, orunder any agreement or other instrument pursuant to which the Borrower or suchBorrower Group Member could be required to indemnify any Person against anysuch liability or which could otherwise have a Material Adverse Effect on theBorrower or any Plan; or

 

(B) failto make any contribution required to be made by it to any Plan or MultiemployerPlan or permit to exist with respect to any Plan any “accumulated fundingdeficiency” (as such term is defined in Section 412 of the Code or Section 302of ERISA), whether or not waived; or

 

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(C) (i) commenceproceedings to terminate any Plan, other than in a “standard termination”within the meaning of Section 4041 of ERISA, or (ii) permit to existany proceedings instituted by the PBGC to terminate or to have a trusteeappointed to administer any Plan, or (iii) withdraw from any MultiemployerPlan in a manner which could result in the imposition of a withdrawal liabilityunder Part 1 of Subtitle E of Title IV of ERISA.

 

**10.27  FINANCING STATEMENTS**

 

Priorto any loan being made from Lender to Borrower, the Borrower hereby agrees thatLender may file and record at Borrower’s cost, any financing statement, orother notices appropriate under applicable law, in respect of any securityinterest created pursuant to this Agreement or at any other time which may atany time be required by the Lender.  TheBorrower authorizes the Lender to file any and all financing statements onbehalf of the Borrower describing the Collateral, as well as any agriculturalliens or other statutory liens held by Lender. In the event that any re-recording or re-filing thereof (or the filingof any statements of continuation or assignment of any financing statement) isrequired to protect and preserve such lien or security interest, the Borrowershall, at its cost and expense, cause the same to be re-recorded and/orre-filed at the time and in the manner requested by the Lender.  The Borrower hereby irrevocably designatesthe Lender, its agents, representatives and designees as agents andattorneys-in-fact for the Borrower to sign such financing statements, or otherinstruments in connection herewith, on behalf of the Borrower and file thesame, as required.

 

**10.28 TAXES AND IMPOSITIONS**

 

(A) Borrowershall (i) pay and discharge all Impositions prior to delinquency, and (ii) provideLender validated receipts or such other evidence satisfactory to Lender showingthe payment of such Impositions within thirty (30) days after the same wouldhave otherwise become delinquent. Borrower’s obligation to pay the Impositions pursuant to this Agreementshall include, to the extent permitted by applicable law, taxes resulting fromfuture changes in law which impose upon Lender an obligation to pay anyproperty taxes or other Impositions. Should Borrower default on any payment of any Impositions, Lender may(but shall not be obligated to) pay such Impositions or any portion thereof andBorrower shall reimburse Lender on demand for all such payment(s).

 

(B) Borrowershall not be required to pay, discharge or remove any Imposition so long asBorrower contests in good faith such Impositions or the validity, applicabilityor amount thereof by an appropriate legal proceeding which operates to preventthe collection of such amounts and the sale of the Mortgaged Premises, or anyportion thereof; provided, however, that prior to the date on which suchImposition would otherwise have become delinquent, Borrower shall have (i) givenLender prior written notice of such contest and (ii) deposited withLender, and shall deposit such additional amounts as are necessary to keep ondeposit at all times, in an amount equal to at least one hundred percent (100%)of the total of (A) the balance of such Imposition then remaining unpaid,and (B) all interest, penalties, costs and charges accrued or accumulatedthereon.   Lender shall keep saiddeposited amounts in an interest bearing, aggregated account (the “Account”)for the Borrower and shall pay out interest at least annually thereon.  Any such contest shall be prosecuted with duediligence, and Borrower shall promptly pay from the Account, the amount of suchImposition as finally determined, together with all interest and penaltiespayable in connection therewith.  Lendershall have full power and authority to apply any amount deposited with Lenderpursuant to this clause to the payment of any unpaid Imposition to prevent thesale or forfeiture of the Mortgaged Premises or any portion thereof fornon-payment thereof.  Lender shall haveno liability, however, for failure to so apply any amount deposited.  Any surplus retained by Lender after paymentof the Imposition for which a deposit was made, shall be repaid to Borrowerunless an Event of Default shall have occurred, in which case said surplus maybe retained by Lender to be applied to the obligations in the sole discretionof the Lender.  Notwithstanding anyprovisions of this clause to the contrary, Borrower shall pay any Impositionwhich it might otherwise be entitled to contest if, in the sole and absolutediscretion of Lender, the Mortgaged Premises, or any portion thereof or anyCollateral, is in jeopardy or in danger of being forfeited or foreclosed.  If Borrower refuses to pay any suchImposition, Lender may (but shall not be obligated to) make such payment andBorrower shall reimburse Lender on demand for all such advances.

 

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**10.29  MAINTENANCE OF RECORDS**

 

Keepadequate records and books of account, in which complete entries will be madein accordance with GAAP consistently applied, reflecting all financialtransactions of the Borrower.

 

**10.30  MAINTENANCE OFPROPERTIES**

 

Maintain,preserve and keep, its properties which are used or useful in the conduct ofits business (whether owned in fee or a leasehold interest) in good repair andworking order and from time-to-time will make all necessary repairs,replacements, renewals and additions so that at all times the efficiencythereof shall be maintained.  Borroweragrees that it will maintain and repair the Collateral and the MortgagedPremises and keep all of the same in good and serviceable condition and in atleast as good condition and repair as same were on the date hereof or in suchbetter condition and repair as same may have been put thereafter.  Borrower will not waste or destroy or sufferthe waste or destruction of the Collateral or the Mortgaged Premises or anypart thereof.  Borrower will not use anyof the Collateral or the Mortgaged Premises in violation of any insurancethereon.  In the event of damage to ordestruction of all or any part of the Collateral or the Mortgaged Premises fromany cause, the Borrower shall repair, replace, restore and reconstruct theCollateral and the Mortgaged Premises to the extent necessary to restore eachportion of same to its condition immediately prior to such damage ordestruction and this obligation shall not be limited by the amount of anyinsurance proceeds available.

 

**10.31  COMPLIANCE WITH LAWS**

 

Promptlypay and discharge all lawful taxes, assessments and governmental charges orlevies imposed upon the Borrower, or upon, or in respect of, all or any part ofthe property or business of the Borrower, all trade accounts payable inaccordance with usual and customary business terms, and all claims for work,labor or materials, which if unpaid might become a lien or charge upon anyproperty of the Borrower; provided the Borrower shall not be required to payany such tax, assessment, charge, levy, account payable or claim if (i) thevalidity, applicability or amount thereof is being contested in good faith byappropriate actions or proceedings which will prevent the forfeiture or sale ofany property of the Borrower or any material interference with the use thereofby the Borrower, and (ii) the Borrower shall set aside on its books,reserves deemed by it to be adequate with respect thereto. The Borrower willpromptly comply with all laws, ordinances or governmental rules andregulations to which it is subject, including without limitation, theOccupational Safety and Health Act of 1970, ERISA, the Americans withDisabilities Act and all Environmental Laws in all applicable jurisdictions,the violation of which would materially and adversely affect the properties,business, prospects, profits or condition of the Borrower or would result inany lien or charge upon any property of the Borrower.

 

**10.32  ENVIRONMENT**

 

Notifythe Lender immediately of any notice of a hazardous discharge or environmentalcomplaint received from any governmental agency or any other party; notify theLender immediately of any hazardous discharge from or affecting its premises;immediately contain and remove the same, in compliance with all applicablelaws; promptly pay any fine or penalty assessed in connection therewith, exceptsuch assessments as are being contested in good faith, against which adequatereserves have been established; upon receipt of such notification, permit theLender to inspect the premises, and to inspect all books, correspondence, andrecords pertaining thereto; and at the Lender’s request, and at the Borrower’sexpense, provide a report of a qualified environmental engineer, satisfactoryin scope, form, and content to the Lender, arid such other and furtherassurances reasonably satisfactory to the Lender that the condition has beencorrected.

 

**10.33  PAYMENT OF LOANS**

 

TheBorrower will duly and punctually pay the Principal of, and interest on theLoans in accordance with the terms of the Loans and this Agreement.

 

**10.34  [RESERVED]**

 

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**10.35  MORTGAGE TAXES**

 

Borrowershall pay all taxes, charges, filing, registration, recording fees, excises andlevies imposed upon Lender by reason of their respective interest in, ormeasured by amounts payable under the Note, this Agreement, the Mortgage or anyother Loan Document (other than income, franchise and doing business taxes),and shall pay all stamp taxes and other taxes required to be paid on the Note,this Agreement, the Mortgage or the other Loan Documents.  If Borrower fails to make such payment withinfive days after notice thereof from Lender, Lender may (but shall not beobligated to) pay the amount due, and Borrower shall reimburse Lender on demandfor all such Advances.  If applicable lawprohibits Borrower from paying such taxes, charges, filing, registration andrecording fees, excises, levies, stamp taxes or other taxes, then Lender maydeclare the Indebtedness then unpaid to be immediately due and payable.  In such event, no Prepayment Fee (as definedin the Note) shall be charged.

 

**10.36  LENDER’S EXPENSES**

 

Borrowershall pay, on demand by Lender, all reasonable expenses, charges, costs andfees in connection with the negotiation, documentation and closing of the Loan,including all registration, recording fees and insurance consultant fees, ifany, environmental consultant fees, costs of appraisals, costs of engineeringreports, fees and disbursements of all counsel (both local and special) ofLender, escrow fees, cost of surveys, fees and expenses of Lender’s Consultantor others employed by Lender to inspect the Collateral from time to time andreasonable out-of-pocket travel expenses incurred by Lender and Lender’s agentsand employees in connection with the Loan. At Closing, Lender may pay directly from the proceeds of the Loan eachof the forgoing expenses.

 

**10.37      OPERATING BUDGET**. On or before December 31stof each year during the term of the Loan Borrower shall submit to Lender forLender’s review and approval Borrower’s Operating Budget for the MortgagedPremises for the following calendar year. The Operating Budget shall includeall budgeted Gross Revenues, Operating Expenses and capital expenditures forthe Mortgaged Premises.   OperatingExpenses and capital expenditures shall be in a detailed line item format, andthe Operating Budget shall include a comparison to the immediately precedingyear.

 

**11.00 NEGATIVE COVENANTS OF THE BORROWER**

 

TheBorrower covenants and agrees that, so long as the Construction Loan isoutstanding or the Lender has any obligation to make any Advances:

 

**11.01 RESTRICTION ON CHANGE ORDERS**

 

TheBorrower will not cause, permit or suffer to exist any deviations from thePlans and Specifications, which will result in a decrease in the Project Costsof Fifty Thousand and 00/100 Dollars ($50,000.00) or an increase in the ProjectCosts of Fifty Thousand and 00/100 Dollars ($50,000.00) and will not approve orconsent to any change order or construction change directive except where thesame is being paid for by the Borrower and has in fact been fully paid by theBorrower simultaneous with the request for a change order or constructionchange directive without the prior approval which will not be unreasonablywithheld or delayed, of the Lender.

 

**11.02 RESTRICTIONS ON EASEMENTS, COVENANTS AND RESTRICTIONS**

 

TheBorrower will not create or suffer to be created or to exist any easement,right of way, restriction, covenant, condition, license or other right in favorof any Person which affects or might affect title to the Project or the use andoccupancy of the Project or any part thereof without (i) submit ting tothe Lender and the proposed instrument creating such easement, right of way,covenant, condition, license or other right, accompanied by a survey showingthe exact proposed location thereof and such other information as the Lendermay reasonably request, and (ii) obtaining the prior approval of theLender.

 

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**11.03 NO AMENDMENTS, TERMINATIONS OR WAIVERS**

 

(a) TheBorrower will not amend, supplement or otherwise modify, whether by changeorder or otherwise, any of the terms and conditions of the Architect’s Contractor the Construction Contract without in each case the prior approval of theLender, and in the case of the Construction Contract, without the priorapproval of the Lender.

 

(b) TheBorrower will not, directly or indirectly, terminate or cancel, or cause orpermit to exist any condition which would result in the termination orcancellation of, or which would relieve the performance of any obligations ofany other party under, the Architect’s Contract or the Construction Contract.

 

(c) TheBorrower will not, directly or indirectly, waive or agree or consent to thewaiver of, the performance of any obligations or any other party under theArchitect’s Contract of the Construction Contract.

 

**11.04 RESTRICTIONS ON INDEBTEDNESS**

 

Excludinga mortgage, junior to the Lender’s mortgage, when it does not agree to Fund theExpansion (the “Expansion Mortgage” the Borrower will not create, incur,assume, guarantee or be or remain liable, contingently or otherwise, withrespect to any Indebtedness other than:

 

(a) Indebtednessto the Lender arising under any of the Loan Documents;

 

(b) currentliabilities of the Borrower incurred in the ordinary course of business but notincurred through (i) the borrowing of money, or (ii) the obtaining ofcredit except for credit on an open account basis customarily extended and infact extended in connection with normal purchases of goods and services;

 

(c) Indebtednessin respect of taxes, assessments, governmental charges or levies and claims forlabor, materials and supplies to the extent that payment therefore shall not atthe time be required to be made in accordance with the provisions of Section 10.10(provided, however, that with respect to any Indebtedness to the Contractor,the Contractor shall have entered into a subordination agreement (the “Contractor’sSubordination Agreement”), in form and substance satisfactory to the Lender,subordinating the Borrower’s obligation to pay Retainage to the full paymentand performance of the Obligations);

 

(d) Indebtednessin respect of judgments or awards that have been in force for less than theapplicable period for taking an appeal so long as execution is not leviedthereunder or in respect of which the Borrower shall at the time in good faithbe prosecuting an appeal or proceeding for review and in respect of which astay of execution shall have been obtained pending such appeal or review;

 

(e) endorsementsfor collection, deposit or negotiation and warranties of products or services,in each case incurred in the ordinary course of business; and

 

(f) unsecuredIndebtedness of the Borrower owing to any member of the Borrower (including theRequired Equity Funds), that is expressly subordinated and made junior to thepayment and performance in full of the Obligations and evidenced as such by awritten instrument containing subordination provisions in form and substanceapproved by the Lender.

 

**11.05 RESTRICTIONS ON LIENS, ETC.**

 

Excludingthe Expansion Mortgage, the Borrower will not (a) create or incur orsuffer to be created or incurred or to exist any lien, encumbrance, mortgage,pledge, charge restriction or other security interest of any kind upon any ofits property or assets of any character whether now owned or hereafteracquired, or upon the income or profits therefrom; (b) transfer any of itsproperty or assets or the income or profits therefrom for the purpose ofsubjecting the same to the payment of Indebtedness or performance of any otherobligation in priority to payment of its general creditors; (c) acquire oragree or have an option to acquire, any property or assets upon conditionalsale or other title retention or purchase money security agreement, device orarrangement; (d) suffer to exist for a period of more than thirty (30)days after the same shall have been incurred any Indebtedness or claim ordemand against it that if unpaid might by law or upon bankruptcy or insolvency,or otherwise, be given any priority whatsoever over 

 

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itsgeneral creditors; or (e) sell, assign, pledge or otherwise transfer anyaccounts, contract rights, general intangibles, chattel paper or instruments,with or without recourse; provided that the Borrower may create or incur orsuffer to be created or incurred or to exist, the following Permitted Liens:

 

(i) liensto secure taxes, assessments and other governmental charges or claims forlabor, material or supplies in respect of obligations not overdue;

 

(ii) depositsor pledges made in connection with, or to secure payment of, workmen’scompensation, unemployment insurance, old age pensions or other social securityobligations;

 

(iii) liensof carriers, warehousemen, mechanics and materialmen, and other like liens onproperties other than the Project in existence less than 120 days from the dateof creation thereof in respect of obligations not overdue;

 

(iv) encumbranceson properties other than the Project consisting of easements, rights of way,covenants, restrictions on the use of real property and defects andirregularities in the title thereto, landlord’s or lessor’s liens under leasesto which the Borrower is a party, and other minor liens or encumbrances onproperties other than the Project none of which in the opinion of the Borrowerinterferes materially with the use of the property affected in the ordinaryconduct of the business of the Borrower, which defects do not individually orin the aggregate have a materially adverse effect on the business of theBorrower;

 

(v) liens in favor of the Lender under the Loan Documents; and

 

(vi) otherliens on the Project consisting of easements, rights of way, covenants andrestrictions if and to the extent the same have been approved by the Lender.

 

**11.06 RESTRICTIONS ON INVESTMENTS**

 

TheBorrower will not make or permit to exist or to remain outstanding anyInvestment except Investments in:

 

(a) marketabledirect or guaranteed obligations of the United States of America that maturewithin one (1) year from the date of purchase by the Borrower;

 

(b) demanddeposits, certificates of deposit, bankers acceptances and time deposits ofUnited States banks having total assets in excess of $1,000,000,000; and

 

(c) securitiescommonly known as “commercial paper” issued by a corporation organized andexisting under the laws of the United States of America or any state thereofthat at the time of purchase have been rated and the ratings for which are notless than “P 1” if rated by Moody’s Investors Services, Inc., and not lessthan “A 1” if rated by Standard and Poor’s.

 

**11.07 MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS**

 

(a) TheBorrower will not become a party to any merger or consolidation, or agree to oreffect any asset acquisition or stock acquisition (other than the acquisitionof assets in the ordinary course of business consistent with past practices).

 

(b) TheBorrower will not become a party to or agree to or effect any disposition ofthe Project or any part thereof, unless such agreement provides for thepayment, in full, of all of Borrower’s Obligations.

 

(c) TheBorrower will not become a party to or agree to effect any disposition ofassets, other than the disposition of assets not included in the Project in theordinary course of business, consistent with the past practices.

 

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**11.08 SALE AND LEASEBACK**

 

TheBorrower will not enter into any arrangement, directly or indirectly, wherebythe Borrower shall sell or transfer any property owned by it in order then orthereafter to lease such property or lease other property that the Borrowerintends to use for substantially the same purpose as the property being sold ortransferred.

 

**11.09 COMPLIANCE WITH ENVIRONMENTAL LAWS**

 

Exceptas set forth on Exhibit “M”, the Borrower will not do any of thefollowing: (a) use any of the Real Estate or any portion thereof as afacility for the handling, processing, storage or disposal of HazardousMaterials, (b) cause or permit to be located on any of the Real Estate anyunderground tank or other underground storage receptacle for HazardousMaterials except in full compliance with Environmental laws, (c) generateany Hazardous Materials on any of the Real Estate except in full compliancewith Environmental Laws, or (d) conduct any activity at any Real Estate oruse any Real Estate in any manner so as to cause a Release.

 

**11.10 DISTRIBUTIONS**

 

TheBorrower will not make any Distributions during the tenure of its ConstructionLoan; provided, however, that during the tenure of the Construction Loan, theBorrower may make distributions provided that (i) no Event of Default hasoccurred and (ii) the Borrower has complied with all terms, covenants andconditions of this Agreement, including, without limitation, the covenants setforth in Section 17.01 hereof.

 

**11.11  NO GUARANTEES**

 

Borrowerwill not assume, guaranty, endorse or otherwise become directly or contingentlyliable, or permit any of its subsidiaries to assume, guaranty, endorse, orotherwise become directly or contingently liable (including, withoutlimitation, liable by way of agreement, contingent or otherwise, to purchase,to provide funds for payment, to supply funds to or otherwise invest in anydebtor or otherwise to assure any creditor against loss) in connection with anyDebt of any other Person.

 

**11.12 CORPORATE LOANS**

 

Subjectto Section 11.04, the Borrower agrees that it shall neither make anyloans,  nor investments in othercorporations, business entities or to any other Persons, until all Obligationsare fully paid.

 

**11.13 ADVERSE TRANSACTIONS**

 

TheBorrower shall not enter into any transaction which adversely affects theCollateral or its ability to repay the Obligations in full as and when due.

 

**11.14  PREPAYMENT**

 

TheBorrower shall not prepay any Debt other than the Obligations, except in theordinary course of business and to the extent that it does not have a materialadverse effect on the financial condition of the Borrower.

 

**11.15 AFFILIATE TRANSACTIONS**

 

Excludingdistributions to the sole member where no Event of Default has occurred or willoccur after giving effect to the distribution, the Borrower shall not, sell,transfer, distribute or pay any money or property to any Affiliate or invest in(by capital contribution or otherwise) or purchase or repurchase any stock ordebt, or any property, of any Affiliate, or become liable on any guaranty ofthe indebtedness, dividends or other obligation of any Affiliate.

 

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**12.00 CONDITIONS TO INITIAL ADVANCE**

 

Theobligation of the Lender to make the initial Advance shall be subject to the satisfactionof the following conditions precedent:

 

**12.01 LOAN DOCUMENTS**

 

Eachof the Loan Documents shall have been duly executed and delivered by therespective parties thereto, shall be in full force and effect and shall be inform and substance satisfactory to the Lender. The Lender shall have received afully executed copy of each such document.

 

**12.02 CONSTRUCTION DOCUMENTS**

 

Eachof the Architect’s Contract and Construction Contract shall have been dulyexecuted and delivered by the respective parties thereto, shall be in fullforce and effect, and shall be in form and substance satisfactory to theLender. The Lender shall have received a certified or a fully executed copy ofeach such document. The Borrower’s Architect and the Contractor shall have dulyexecuted and delivered to the Lender a consent to the assignment of theArchitect’s Contract and the Construction Contract, in form and substancesatisfactory to the Lender, and the Lender shall have received a fully executedcopy thereof.

 

**12.03 SUBCONTRACTS**

 

TheBorrower shall have delivered to the Lender, and the Lender shall haveapproved, a list of all subcontractors and materialmen who have been or, to theextent identified by the Borrower, will be supplying labor or materials for theProject, a copy of the standard form of subcontract to be used by theContractor, and correct and complete photocopies of all executed subcontractsand contracts.

 

**12.04 OTHER CONTRACTS**

 

TheBorrower shall have delivered to the Lender correct and complete photocopies ofall other executed contracts with contractors, engineers or consultants for theProject, the Project Budget, and of all development, management, brokerage,sales or leasing agreements for the Project.

 

**12.05 EQUITY INFUSION**

 

Borrowershall have contributed its equity into the Project and the amount of the loan,less the Interest Reserve is sufficient to fully build out the Project inaccordance with the Budget.

 

**12.06 CERTIFIED COPIES OF ORGANIZATION DOCUMENTS**

 

TheLender shall have received from the Borrower, a copy, certified as of a recentdate by the appropriate officer of the State in which the Borrower isorganized, to be true and complete, of its operating agreement and any other ofits organization documents as in effect on such date of certification.

 

**12.07 RESOLUTIONS**

 

Allaction necessary for the valid execution, delivery and performance by theBorrower of this Agreement and the other Loan Documents to which it is or is tobecome a party shall have been duly and effectively taken, and evidence thereofsatisfactory to the Lender shall have been provided to the Lender. The Lendershall have received from the Borrower, true copies of the resolutions adoptedby its members authorizing the transactions described herein, each certified asof a recent date to be true and complete.

 

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**12.08 INCUMBENCIES CERTIFICATE; AUTHORIZED SIGNERS**

 

TheLender shall have received from the Borrower and each of its members, anincumbency certificate, dated as of the Closing Date, signed by a dulyauthorized members of the Borrower and giving the name and bearing a specimensignature of each individual who shall be authorized: (a) to sign, in thename and on behalf of the Borrower, each of the Loan Documents to which suchPerson is or is to become a party; (b) in the case of the Borrower, tomake Draw Requests; and (c) to give notices and to take other action onits behalf under the Loan Documents.

 

**12.09 VALIDITY OF LIENS**

 

TheSecurity Documents shall be effective to create in favor of the Lender a legal,valid and enforceable first lien and security interest in the Collateral andfirst mortgage on the Project. All filings, recordings, deliveries ofinstruments and other actions necessary or desirable in the opinion of the Lenderto protect and preserve such lien and security interest shall have been dulyeffected. The Lender shall have received evidence thereof in form and substancesatisfactory to the Lender.

 

**12.10   DELIVERY OF DOCUMENTS**

 

Thefollowing items or documents shall have been delivered to the Lender by theBorrower and shall be in form and substance satisfactory to the Lender:

 

(a) Plansand Specifications. Two complete sets of the Plans and Specifications andapproval thereof by any necessary Governmental Authority, with a certificationfrom the Borrower’s Architect that the Improvements to be constructed complywith all Requirements and Project Approvals.

 

(b) TitlePolicy. The Title Policy, together with proof of payment of all fees andpremiums for such policy and true and accurate copies of all documents listedas exceptions under such policy.

 

(c) OtherInsurance. Duplicate originals or certified copies of all policies ofinsurance required by the Mortgage to be obtained and maintained by theBorrower during the construction of the Improvement; provided, however, at theClosing, Binders of insurance policies and/or Certificates of Insurance will beprovided.  Photocopies will be deliveredwithin fifteen (15) days following the Closing, and certificates of insuranceevidencing the insurance required by Sections 10.09(b) and (c) to beobtained and maintained by the Contractor and the Borrower’s Architect.

 

(d) Evidenceof Sufficiency of Funds.  Evidencethat the proceeds of the Construction Loan, together with the Required EquityFunds delivered to the Lender on the Closing Date, will be sufficient to coverall Project Costs reasonably anticipated to be incurred to complete theImprovements prior to the Completion Date, to carry the Project through theMaturity Date and to satisfy the obligations of the Borrower to the Lenderunder this Agreement.

 

(e) Evidenceof Access, Availability of Utilities, Project Approvals.  Evidence as to:

 

(i) themethods of access to and egress from the Project, and nearby or adjoining publicways, meeting the reasonable requirements of the Project and the status ofcompletion of any required improvements to such access;

 

(ii) theavailability of water supply and storm and sanitary sewer facilities meetingthe reasonable requirements of the Project;

 

(iii) theavailability of all other required utilities, in location and capacitysufficient to meet the reasonable needs of the Project; and

 

(iv) theobtaining of all Project Approvals which are required, necessary or desirablefor the construction of the Improvements and the access thereto, together withcopies of all such Project Approvals.

 

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(f) EnvironmentalReport. An environmental site assessment report or reports of one or morequalified environmental engineering or similar inspection firms approved by theLender, which report or reports shall indicate a condition of the Land and anyexisting improvements thereon in all respects satisfactory to the Lender in itssole discretion and upon which report or reports the Lender is expresslyentitled to rely.

 

(g) Soils Report.  A soils report forthe Land prepared by a soils engineer approved by the Lender, which reportshall indicate that, based upon actual surface and subsurface examinations ofthe Land, the soils conditions are fully satisfactory for the proposedconstruction and operation of the Improvements in accordance with the Plans andSpecifications.

 

(h) Surveysand Taxes. A Survey of the Land (and any existing improvements thereon) andSurveyor’s Certificate, and evidence of payment of all real estate taxes andmunicipal charges on the Land (and any existing improvements thereon) whichwere due and payable prior to the Closing Date.

 

(i) DrawRequest. A Draw Request complying with the provisions of Section 3.01hereof.

 

**12.11  [RESERVED]**

 

**12.12 CONSTRUCTION INSPECTOR REPORT**

 

TheLender shall have received a report or written confirmation from theConstruction Inspector that (a) the Construction Inspector has reviewedthe Plans and Specifications, (b) the Plans and Specifications have beenreceived and approved by each Governmental Authority to which the Plans andSpecifications are required under applicable Requirements to be submitted, (c) theConstruction Contract satisfactorily provides for the construction of theImprovements, and (d) in the opinion of the Construction Inspector,construction of the Improvements can be completed on or before the CompletionDate for an amount not greater than the amount allocated for such purpose in theProject Budget.

 

**12.13 LEGAL OPINIONS**

 

TheLender shall have received favorable opinions in form and substancesatisfactory to the Lender and the Lender’s counsel, addressed to the Lenderand dated as of the Closing Date, from Borrower’s legal counsel, opining tothose matters described on Exhibit “R”.

 

**12.14 LIEN SEARCH**

 

TheLender shall have received a certification from Title Insurance Company orcounsel satisfactory to the Lender (which shall be updated from time to time atthe Borrower’s expense upon request by the Lender) that a search of the publicrecords disclosed no conditional sales contracts, security agreements, chattelmortgages, leases of personalty, financing statements or title retentionagreements which affect the Collateral.

 

**12.15 NOTICES**

 

Allnotices required by any Governmental Authority under applicable requirements tobe filed prior to commencement of construction of the Improvements shall havebeen filed.

 

**12.16 APPRAISAL**

 

TheLender shall have received an Appraisal, in form and substance satisfactory tothe Lender, stating that the Project, assuming completion in accordance withthe Plans and Specifications, has a fair market value of at least SeventeenMillion One Hundred Forty Two Thousand Eight Hundred Fifty Seven and 00/100 Dollars($17,142,857.00).

 

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**12.17 PERFORMANCE; NO DEFAULT**

 

TheBorrower shall have performed and complied with all terms and conditions hereinrequired to be performed or complied with by it on or prior to the DrawdownDate of the initial Advance, and on the Drawdown Date of the initial Advance,there shall exist no Default or Event of Default.

 

**12.18 REPRESENTATIONS AND WARRANTIES**

 

Therepresentations of warranties of the Borrower and the Guarantor in the LoanDocuments or otherwise made by or on behalf of the Borrower or the Guarantor inconnection therewith or after the date thereof shall have been true and correctin all material respects when made and shall be true and correct in allmaterial respects on the Drawdown Date of the initial Advance.

 

**12.19 PROCEEDINGS AND DOCUMENTS; COSTS**

 

Allproceedings in connection with the transactions contemplated by this Agreementand the other Loan Documents shall be satisfactory to the Lender and the Lender’scounsel in form and substance, and the Lender shall have received allinformation and such counterpart originals or certified copies of suchdocuments and such other certificates, opinions or documents as the Lender andthe Lender’s counsel may reasonably require. The Borrower shall reimburseLender on demand for all reasonable costs and expenses incurred by Lender inconnection with the Construction Loan, including, without limitation, legal,engineering, inspection and appraisal fees.

 

**12.20   LEASES/SUBORDINATIONAGREEMENTS AND ESTOPPELS**

 

Certifiedcopies of all Leases, together with a Subordination, Nondisturbance and AttornmentAgreements executed by the Primary Tenant located at the Mortgaged Premises asare required by the title company in order to confirm that no Lease haspriority over the Mortgage all as more fully described in Exhibit S.”

 

**12.21 LICENSES, PERMITS AND APPROVALS**

 

Acopy of the final unconditional Certificate of Occupancy (“CO”) issued withrespect to the Mortgaged Premises if (a CO has been issued and is reasonablyavailable from the City authorities), together with such other applicablelicenses, permits and approvals as Lender or any governmental authority mayrequire.

 

**13.00 CONDITIONS OF SUBSEQUENT ADVANCES**

 

Theobligation of the Lender to make any Advance after the initial Advance shall besubject to the satisfaction of the following conditions precedent:

 

**13.01 PRIOR CONDITIONS SATISFIED**

 

Allconditions precedent to the initial Advance and any prior Advance shallcontinue to be satisfied as of the Drawdown Date of such subsequent Advance.

 

**13.02 PERFORMANCE; NO DEFAULT**

 

TheBorrower shall have performed and complied with all terms and conditions hereinrequired to be performed or complied with by it on or prior to the DrawdownDate of such Advance, and on the Drawdown Date of such Advance there shallexist no Default or Event of Default.

 

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**13.03 REPRESENTATIONS AND WARRANTIES**

 

Eachof the representations and warranties made by the Borrower in the LoanDocuments or otherwise made by or on behalf of the Borrower and/or Guarantor inconnection therewith after the date thereof shall have been true and correct inall respects on the date on when made and shall also be true and correct in allmaterial respects on the Drawdown Date of such Advance (except to the extent ofchanges resulting from transactions contemplated or permitted by the LoanDocuments and changes occurring in the ordinary course of business that singlyor in the aggregate are not adverse).

 

**13.04 NO DAMAGE**

 

TheImprovements shall not have been injured or damaged by fire, explosion,accident, flood or other casualty.

 

**13.05 RECEIPT OF LENDER**

 

TheLender shall have received:

 

(a) DrawRequest. A Draw Request complying with the requirements hereof, includingthose set forth in Section 3.01 hereof;

 

(b) Endorsementto Title Policy. A “date down” endorsement to the Title Policy indicatingno change in the state of title and containing no survey exceptions notapproved by the Lender, which endorsement shall, expressly or by virtue of aproper “pending disbursements” clause of endorsement in the Title Policy,increase the coverage of the Title Policy to the aggregate amount of allproceeds of the Construction Loan advanced on or before the effective date ofsuch endorsement, and prior to the final advance, an endorsement which confirmsthat the Project is located as set forth in the “as built” survey.

 

(c) CurrentSurvey. An updated Survey if required by the Title Insurance Company or theLender and prior to the last advance, an “as built”  survey;

 

(d) Approvalby Construction Inspector. Approval of the Draw Request for such Advance bythe Construction Inspector, accompanied by a certificate or report from theConstruction Inspector to the effect that in its opinion, based on on-siteobservations and submissions by the Contractor, the construction of theImprovements to the date thereof was performed in a good and workmanlike mannerand in accordance with the Plans and Specifications, stating the estimatedtotal cost of construction of the Improvements, stating the percentage ofin-place construction of the Improvements, and stating that the remainingnon-disbursed portion of the Construction Loan and Required Equity Fundsallocated for such purpose in the Project Budget is adequate to complete theconstruction of the Improvements;

 

(e) Approval by Lender.  At the optionof the Lender, inspection of work in place;

 

(f) Contracts.Evidence that one hundred percent (100%) of the cost of the remainingconstruction work is covered by firm fixed price or guaranteed maximum pricecontracts or subcontracts, or orders for the supplying of materials, withcontractors, subcontractors, materialmen or suppliers satisfactory to theLender; and

 

(g) ChangeOrders. Documentation to the effect that the Borrower has paid for the costof any change orders relating to the Project.

 

**14.00 SECURITY INTEREST**

 

Borrower, for valuable consideration received, herebypledges, assigns, transfers and grants to Lender a continuing lien and securityinterest in all tangible and intangible personal property of Borrower (whethernow existing or hereafter acquired or arising, and wherever located) upon,concerning or in any way relating to, or unrelated to, the Mortgaged Premises,including, without limitation, (i) all fixtures, machinery, equipment,furniture, inventory, building supplies, appliances and other personalproperty, including, but not limited to, furnaces, ranges, heaters, plumbinggoods, gas and electric fixtures, screens, screen doors, mantels, shades, stormdoors and windows, 

 

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awnings, oil burners and tanks, gas or electricrefrigerators and refrigerating systems, ventilating and air conditioningapparatus and equipment, doorbell and alarm systems, sprinkler and fireextinguishing systems, portable or sectional buildings, and all other fixturesand equipment of whatever kind or nature now or hereafter located in or on theMortgaged Premises, or used or intended to be used in connection with the use,operation, construction or enjoyment of the Mortgaged Premises, all of whichshall be deemed fixtures and a part of the Mortgaged Premises as between theparties hereto and all persons claiming by, through or under them, (ii) allleases, contracts or agreements relating to the lease, rental, hire or use byBorrower of any of the aforementioned personal property, (iii) all leases,tenancies, occupancies and license arrangements heretofore or hereafter enteredinto affecting the use, enjoyment or occupancy of or the conduct of anyactivity upon or in to the Mortgaged Premises or any portion thereof, and allguaranties and security relating thereto (individually, a “Lease” andcollectively, the “Leases”), (iv)  all rents, issues, profits and otherbenefits from the Mortgaged Premises, any of the personal property describedherein, and any of the leases, tenancies, occupancies, license arrangements andrental agreements relating thereto, (v) all contracts, agreements, accounts,chattel paper, general intangibles, licenses, rights, permits and approvals,privileges, warranties and representations relating to the ownership, use,operation, management, construction, repair or service of any of the MortgagedPremises or personal property described herein, (vi) any and allagreements to sell the Mortgaged Premises or any portion thereof, (vii) allfunds held by Lender as tax or insurance escrow payments or for other purposes,(viii) all insurance policies and all proceeds or unearned insurancepremiums relating thereto, (ix) all claims, awards, damages or proceedsresulting from any condemnation or other taking of, or for any damage to, anyof the Mortgaged Premises or personal property described herein, (x) allclaims to rebates, refunds or abatements of any property taxes relating to anyof the Mortgaged Premises or personal property described herein, (xi) allconstruction contracts, subcontracts, architectural agreements, labor, materialand payment bonds, guaranties and warranties, and plans and specificationsrelating to the construction of improvements upon the Mortgaged Premises, (xii) allproceeds, products, substitutions and accessions to any of the foregoing,together with, and whether or not related to the Mortgaged Premises, and allmachinery, equipment, goods, inventory, accounts, including health careinsurance receivables, chattel paper, general intangibles, including paymentintangibles and amounts owed by other than customers, regardless of whether ornot they constitute proceeds of other collateral; all chose-in-action, cash,cash deposits, deposit accounts, investment property, including withoutlimitation, securities, stocks, bonds, warrants, options, documents, documents of title, instruments, includingpromissory notes, deposits, debts, refunds, letter of credit rights, supportingobligations,  policies and certificatesof insurance, obligations and liabilities in whatever form owing from anyperson, corporation, or other legal entity; all books, records, evidences oftitle, goodwill and all papers relating to the operation of the Borrower’sbusiness; all federal, state, and local tax refunds and/or abatements and anyloss carryback tax refunds; all patents, patents rights, trade secrets,know-how, trademarks, trade names, logos, registrations, customer lists,computer programs, and assignments of patents all intellectual property asdefined in 11 USC 101 (53) to the extent that such intellectual property isassignable; all fixtures, real estate leases, any and all equipment leases,rentals and other sums payable thereunder, other chattel paper, purchase optionpayments, lessor’s interest in leased equipment and insurance proceeds; anylicenses or interests in real estate; all liens, guarantees, securities,rights, remedies and privileges pertaining to all of the foregoing, allproperty allocable to unshipped orders and all merchandise returned by orreclaimed by or repossessed from customers, all rights of stoppage intransit, replevin, repossession and reclamation and all other rights of anunpaid vendor or lienor; and all interest of the Borrower in goods ormerchandise as to which an account receivable for goods sold or delivered hasarisen;

 

Andall of the above, wherever located, whether now owned or now due or hereafterarising or acquired or coming due and including the products and proceedsthereof (if any) and all accessions and additions thereto and all replacementsand substitutions therefore, cash and stock dividends (if applicable), and allproceeds of credit, fire, casualty, or other insurance upon said property, orany of the above which are acquired with any cash proceeds or othercollateral.  The term “proceeds” shallinclude, without limitation, all types or classifications of non-cash proceedsacquired with cash proceeds (all of the foregoing shall collectively bereferred to as the “Collateral”).

 

**14.01**  The securityinterest granted hereby is to secure payment and performance of all Obligationsfrom Borrower to Lender, together with all interest, fees, charges and expensesincluding the reasonable expenses of the Lender’s counsel in the maintaining,foreclosing and selling of any of the Collateral.

 

**14.02**  IT IS THETRUE, CLEAR, AND EXPRESS INTENTION OF THE Borrower that the continuing grant ofthis security interest remain as security for payment and performance of allObligations, whether now existing, or which may hereinafter be incurred byfuture advances, or otherwise; and whether, or not, such obligation 

 

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isrelated to the transaction described in this Agreement, by class, or kind, orwhether or not contemplated by the parties at the time of the granting of thissecurity interest.  The notice of thecontinuing grant of this security interest therefore shall not be required tobe stated on the face of any document representing any such obligation, norotherwise identified it as being secured hereby.

 

**15.00 EVENTS OF DEFAULT AND REMEDIES**

 

**15.01 EVENTS OF DEFAULT**

 

Theoccurrence of any one or more of the following conditions or events shallconstitute an “Event of Default”:

 

(a) anyfailure by the Borrower to pay when due and payable any interest on orprincipal of or other sum payable under the Construction Note; or

 

(b) anyfailure by the Borrower following five (5) days notice from Lender toBorrower to deposit with the Lender any funds required by Section 10.16hereof to be deposited with the Lender, at the time and otherwise in accordancewith Section 10.16; or

 

(c) anyfailure by the Borrower following five (5) days notice from Lender toBorrower to pay as and when due and payable any other sums to be paid by theBorrower to the Lender under this Agreement or any of the Loan Documents; or

 

(d) titleto the Collateral is or becomes unsatisfactory to the Lender by reason of anylien, charge, encumbrance, title condition or exception (including withoutlimitation, any mechanic’s, materialmen’s or similar statutory or common lawlien or notice thereof), and such matter causing title to be or become unsatisfactoryis not cured or removed (including by bonding) within thirty (30) days afternotice thereof from the Lender to the Borrower; or

 

(e) anyrefusal by the Title Insurance Company to insure any Advance as being securedby the Mortgage as a valid first lien and security interest on the Project andcontinuance of such refusal for a period of thirty (30) days after noticethereof by the Lender to the Borrower; or

 

(f) theImprovements are not completed by the Completion Date or, in the reasonablejudgment of the Lender, construction of the Improvements will not be completedby the Completion Date; or

 

(g) theProject or any part thereof is injured by fire, explosion, accident, flood orother casualty, provided, however, no Event of Default under this Agreement orany of the Loan Documents has occurred, and there are sufficient insuranceproceeds to restore the Project and the cost to remedy the casualty is lessthen available insurance proceeds then, in this case, this Section 15.01(g) shallnot constitute an Event of Default; or

 

(h) theProject or any part thereof is subject to a Taking, provided, however, Lenderagrees to allow payments to be made in accordance with the terms of theMortgage

 

;or

 

(w) anyof the members of the Borrower and/or any Guarantor shall be convicted for afederal crime, a punishment for which could include the forfeiture of any ofits assets; or

 

(x) anyfailure by the Borrower and/or any Guarantor to duly observe or perform anyother term, covenant, condition or agreement under this Agreement andcontinuance of such failure for a period of thirty (30) days after noticethereof from the Lender; or

 

**15.02 TERMINATION OF COMMITMENT AND ACCELERATION**

 

Ifany one or more of the Events of Default shall occur, the Lender may declare itsobligations to make Advances hereunder to be terminated, whereupon the sameshall terminate and the Lender shall be relieved of all

 

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obligationsto make Advances to the Borrower, and/or declare all unpaid principal of andaccrued interest on the Construction Note, together with all other amountsowing under the Loan Documents, to be immediately due and payable, whereuponsame shall become and be immediately due and payable, and without presentment,protest, demand or other notice of any kind, all of which are hereby expresslywaived by the Borrower.

 

**15.03 COMPLETION OF PROJECT**

 

Ifany one or more of the Events of Default shall have occurred and continue pastany applicable grace period,  and whetheror not the Lender shall have terminated its obligations to make Advances andaccelerated the maturity of the Construction Loan pursuant to Section 15.02,the Lender, if the construction of the Improvements has not been fullycompleted, may cause the Project to be completed and may enter upon the Landand construct, equip and complete the Project in accordance with the Plans andSpecifications, with such changes therein as the Lender may, from time to time,and in its sole discretion, deem appropriate. In connection with anyconstruction of the Project undertaken by the Lender pursuant to the provisionsof this Section 15.03, the Lender may:

 

(a) useany funds of the Borrower, including any balance which may be held by theLender as security or in escrow, and any funds remaining unadvanced under theConstruction Loan;

 

(b) employexisting contractors, subcontractors, agents, architects, engineers, and thelike, or terminate the same and employ others;

 

(c) employsecurity watchmen to protect the Project;

 

(d) makesuch additions, changes and corrections in the Plans and Specifications asshall, in the judgment of the Lender, be necessary or desirable;

 

(e) takeover and use any and all Personal Property contracted for or purchased by theBorrower, if appropriate, or dispose of the same as the Lender sees fit;

 

(f) executeall applications and certificates on behalf of the Borrower which may berequired by any Governmental Authority or Requirements or contract documents oragreements;

 

(g) pay,settle or compromise all existing or future bills and claims which are or maybe liens against the Project, or may be necessary for the completion of theImprovements or the clearance of title to the Project;

 

(h) completethe marketing and leasing of leasable space in the Improvements, enter into newLeases, and modify or amend existing Leases, all as the Lender shall deem to benecessary or desirable;

 

(i) prosecuteand defend all actions and proceedings in connection with the construction ofthe Improvements or in any other way affecting the Land; and

 

(j) takesuch action hereunder, or refrain from acting hereunder, as the Lender may, inits sole and absolute discretion, from time to time determine, and without anylimitation whatsoever, to carry out the intent of this Section 15.03.

 

TheBorrower shall be liable to the Lender for all costs paid or incurred for theconstruction, equipping and completion of the Project, whether the same shallbe paid or incurred pursuant to the provisions of this Section 15.03 orotherwise, and all payments made or liabilities incurred by the Lenderhereunder of any kind whatsoever shall be deemed Advances made to the Borrowerunder this Agreement and shall be secured by the Mortgage and the otherSecurity Documents. To the extent that any costs so paid or incurred by theLender, together with all other Advances made by the Lender hereunder, exceedthe Construction Loan Amount, the amount of such excess costs shall be added tothe Construction Loan Amount, and the Borrower’s obligation to repay the same,together with interest thereon at the Default Rate, shall be deemed to beevidenced by this Agreement and secured by the Mortgage and the other SecurityDocuments. In the event the Lender takes possession of the Project and assumescontrol of such construction as aforesaid, it shall not be obligated tocontinue such construction longer than it shall see fit and may 

 

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thereafter,at any time, change any course of action undertaken by it or abandon suchconstruction and decline to make further payments for the account of theBorrower whether or not the Project shall have been completed. For the purposeof this Section 15.03, the construction, equipping and completion of theProject shall be deemed to include any action necessary to cure any Event ofDefault by the Borrower under any of the terms and provisions of any of theLoan Documents.

 

**15.04 OTHER REMEDIES**

 

Ifany one or more of the Events of Default shall have occurred, and whether ornot the Lender shall have terminated its obligations to make Advances oraccelerated the maturity of the Construction Loan pursuant to Section 15.02,the Lender may proceed to protect and enforce its rights and remedies underthis Agreement, the Construction Note or any of the other Loan Documents bysuit in equity, action at law or other appropriate proceeding, whether for thespecific performance of any covenant or agreement contained in this Agreementand the other Loan Documents or any instrument pursuant to which theObligations are evidenced, including as permitted by applicable law theobtaining of the ex parte appointment of a receiver, and, if any amount owed tothe Lender shall have become due, by declaration or otherwise, proceed toenforce the payment thereof or any other legal or equitable right of theLender. No remedy conferred upon the Lender or the holder of the Note in thisAgreement or in any of the other Loan Documents is intended to be exclusive ofany other remedy and each and every remedy shall be cumulative and shall be inaddition to every other legal or equitable right of the Lender. No remedyconferred upon the Lender or the holder of the Construction Note in thisAgreement or in any of the other Loan Documents is intended to be exclusive of anyother remedy and each and every remedy shall be cumulative and shall be inaddition to every other remedy given hereunder or thereunder or now orhereafter existing at law or in equity or by statute or any other provision oflaw.

 

**15.05 RIGHTS AS TO COLLATERAL**

 

Uponthe occurrence of an Event of Default and after any applicable grace period,and at any time thereafter, in addition to other rights and remedies the Lenderhas under this Agreement, the Lender may:

 

**15.05.1**  Notifyaccount debtors at Borrower’s expense, that the Collateral has been assigned toLender and that payments shall be made directly to Lender and upon request ofLender, Borrower will so notify such account debtor that their accounts must bepaid to Lender.  This right may beexercised by the Lender at any time, even prior to default.  Borrower will immediately upon receipt of allchecks, drafts, cash and other remittances deliver the same in kind to theLender. Lender shall have full power to collect, compromise, endorse, sell orotherwise deal with the Collateral or proceeds thereof in its own name or inthe name of Borrower and Borrower hereby, for consideration paid, irrevocablyappoints the Lender its attorney-in-fact for this purpose.

 

**15.05.2**  Withoutnotice to Borrower, enter and take possession of all Collateral and the Projecton which they are now or hereafter located, including without limitation,breaking the close and changing and replacing locks as may be required withoutthe same being considered as a trespass, as Borrower hereby expressly providesauthority for the same.  The Lender, atits sole discretion, may operate and use Borrower’s equipment, complete work inprocess and sell inventory without being liable to the Borrower on account ofany losses, damage or depreciation that may occur as a result thereof so longas Lender shall act reasonably and in good faith and may lease or license theCollateral to third persons or entities for such purposes; and in any event,Lender may at its option and without notice to Borrower, except as specificallyherein provided, sell, lease, assign and deliver, the whole or any part of theCollateral, or any substitute therefore, or any addition thereto, at public orprivate sale, for cash, upon credit, or for future delivery, at such prices andupon such terms as Lender deems advisable, including without limitation theright to sell or lease in conjunction with other property, real or personal,and allocate the sale proceeds or leases among the items of property soldwithout the necessity of the Collateral being present at any such sale, or inview of prospective purchasers thereof. Lender shall give Borrower timely notice by hand delivery to Borrower orby United States mail, postage prepaid (in which event notice shall be deemedto have been given when so deposited in the mail), at the address specifiedherein, of the time and place of any public or private sale or otherdisposition unless the Collateral is perishable, threatens to decline speedilyin value, or is the type customarily sold in a recognized market.  Upon such sale, Lender may become thepurchaser of the whole or any part of the Collateral sold, discharged from allclaims and free from any right of redemption. In case of any such sale by

 

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Lenderof all or any of said Collateral on credit, or for future delivery, suchproperty so sold may be retained by Lender until the selling price is paid bythe purchaser.  The Lender shall incur noliability in case of the failure of the purchaser to take up and pay for theCollateral so sold.  In case of any suchfailure, the said Collateral may be again, from time-to-time, sold.

 

**15.05.3.** Continue tooccupy and use all premises which the Borrower now occupies or may hereafterhave or occupy, to the extent Borrower could legally do so, and may use alltrademarks, service marks, trade names, trade styles, logos, goodwill, tradesecrets, franchises, licenses and patents which the Borrower now has or mayhereafter acquire, including the following rights:

 

(i)  the rights in said marks, name, styles, logos and goodwillacquired by the common law of the United States or of any state thereof orunder the law of any foreign nation, organization, or subdivision thereof;

 

(ii)  the rights acquired by registrations of said marks, names,styles, and logos under the statute of any foreign country, or the UnitedStates, or any state or subdivision thereof;

 

(iii)  the rights acquired in each and every form of said mark,name, style and logo as used by the Borrower notwithstanding that less than allof such forms would be registered and notwithstanding the form of said mark,name and style;

 

(iv)  the right to use or license any party to the use of all orany of said marks, names, styles, logos and goodwill in connection with thesale of goods and/or the rendering of services in the conduct of servicesadvertising, promotion and the like anywhere in the world;

 

(v) the right to use said marks, names, styles, logos and goodwill either inconnection with or entirely independent from the Collateral;

 

(vi)  the right to assign, transfer and convey a partial interestor the entire interest in any one or more of said marks, names, styles orlogos;

 

(vii) the right to seek registration, foreign or domestic, of any of said marks,names, styles or logos which was not registered as of the date hereof orregistered subsequently;

 

(viii)  the right to prosecute pending trademark applications forforeign or domestic registration (federal or state) of any of said marks,names, styles or logos.

 

**15.05.4**  Act asattorney-in-fact for Borrower for the purposes herein described, and Borrowerdoes hereby make, constitute and appoint any officer or agent of Lender asBorrower’s true and lawful attorney-in-fact, with full power: to endorse the nameof Borrower or any of Borrower’s officers or agents upon any assignments,notes, checks, drafts, money orders, or other instruments of payment orCollateral that may come into possession of Lender for purposes of suchrecovery of accounts receivable monies; to sign and endorse the name ofBorrower or any of Borrower’s officers or agents upon any negotiableinstrument, invoice, freight or express bill, bill of lading, storage orwarehouse receipts, drafts, assignments, verifications and notices in connectionwith accounts, and any instruments or documents relating thereto or to Borrower’srights therein; to give notice to the United States Post Office to effectchanges of address so that mail addressed to the Borrower may be permanentlydelivered directly to the Lender for purposes of accepting same, and obtainingaccess to contents, in order to take possession of such accounts receivablemonies, and all other collateral, with full power to do any and all thingsnecessary to be done in and about the premises as fully and effectually asBorrower might or could do; and Borrower does hereby ratify all that Lendershall lawfully do, or cause to be done by virtue hereof.

 

**15.05.5 **Make allObligations immediately due and payable, without presentment, demand, protest,hearing or notice of any kind and exercise the remedies of a Lender afforded bythe Uniform Commercial Code and other applicable law or by the terms of anyagreement between Borrower and Lender.

 

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**15.05.6**  In the caseof any sale or disposition of the Collateral, or the realization of fundstherefrom, the proceeds thereof shall first be applied to the payment of thereasonable expenses of re-taking, maintaining, and foreclosure of Collateral,and costs, fees and expenses of such sale, commissions, reasonable attorney’sfees and all charges paid or incurred by Lender pertaining to said sale,including any taxes or other charges imposed by law upon the Collateral and/orthe owning, holding or transferring thereof; secondly, to pay, satisfy, anddischarge the Obligations secured hereby pro rata in accordance with the unpaidamount thereof; and thirdly, to pay the surplus, if any, to Borrower, providedthat the time of any application of the proceeds shall be at the sole andabsolute discretion of the Lender.  Tothe extent such proceeds do not satisfy the foregoing items, Borrower herebypromises and agrees to pay the deficiency.

 

**15.05.7**  The Lenderand the holders of the Obligations may take or release other security, mayrelease any party primarily or secondarily liable for any of the Obligations,may grant extensions, renewals or indulgences with respect to the Obligations,or may apply to the Obligations the proceeds of the Collateral or any amount receivedon account of the Collateral by the exercise of any right permitted hereunder,without resorting or regard to other security or sources of reimbursement.

 

**15.05.8**  Require theBorrower to assemble the Collateral in a single location at a place to bedesignated by Lender and make the Collateral at all times secure and availableto the Lender.

 

**15.05.9**  The Lendershall hereby also be granted a security interest in, and right of set offagainst any balance on any deposit, deposit account, agency, reserve, holdback,or other account maintained by, or on behalf of, the Borrower with the Lenderand the Lender shall have the right to apply the proceeds of such foreclosureor set off against such items of Borrowers’ Obligations as Lender may select.

 

**15.05.10** All rights and remedies of Lender whether providedfor herein or in other agreements, instruments, or documents, or conferred bylaw, are cumulative and not alternative and may be enforced successively.

 

**15.05.11**The parties agree that in the event that adetermination of Adequate Protection of Lender is required under Section 362or 363 of the Bankruptcy Reform Act of 1978 (Code), its successor, orBankruptcy Rules in connection therewith, that:

 

A.  The bargain of the parties at the time oflien creation hereunder in order to provide the Lender with adequate protectionto induce it to make the loan(s), included stated ratios herein.

 

B.  That in the event of any proceeding under theCode, that the said ratio of the value (as determined by the Lender in its solediscretion) Collateral secured to Lender to the amount of the Obligation (“Collateral-To-ObligationRatio”), must be increased by an additional one hundred ten percent (110%) inorder to continue to provide minimum levels of Adequate Protection to Lenderdue to the reduced expectation for present and future prospects of lienenforcement resulting from the existence of proceedings under the Code.  This agreed minimum increase in said ratioshall not act to bar Lender from presenting evidence that even such increase isinsufficient and leaves the Lender without Adequate Protection, based upon thedeteriorating nature or kind of Collateral, wholly or in part, in any instance.

 

C.  That the parties agree that the costs ofliquidating and collecting of Collateral, as well as the potential for rapidCollateral deterioration if Borrower is, at any time, subject to the Code, allrequire that the original Collateral-To-Obligation Ratio be increased, asaforesaid, as a requirement of minimum Adequate Protection, in addition to suchother additional Adequate Protection as may be required by the Lender.

 

D.  The parties agree that these covenants shallbe conclusive evidence in any proceeding to determine minimum AdequateProtection under the Code, as to the intention and agreement of the parties atboth this time, and at all times hereinafter, until the Obligations to theLender, are paid in full.

 

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E.  That these agreements may be submitted to theCourt in any such proceeding, by the Lender, in its sole and exclusivediscretion, as conclusive evidence as to the agreement of the parties at thetime of such hearing, concerning minimum Adequate Protection to be provided tothe Lender at the time of presentment. PROVIDED, HOWEVER, that such submission shall not constitute a waiver ofany default or breach hereunder, or of any other agreement by the Borrower tothe Lender, but shall remain only as evidence for the limited purposes statedherein.

 

F.  PROVIDED, FURTHER that at all times theLender reserves, and does not waive Borrower’s obligation to provide AdequateProtection prior to the Borrower’s use of “cash collateral” as defined in Section 363of the Code.

 

**15.05.12**   The Lenderhas no obligation to attempt to satisfy the Obligations by collecting from anyother Person liable for them and Lender may release, modify or waive anyCollateral provided by any other Person to secure any of the Obligations, allwithout affecting Lender’s rights against Borrower.  Borrower waives any right it may have torequire Lender to pursue any third Person for any of the Obligations.

 

**15.05.13 **Lender maycomply with any applicable state or federal law requirements in connection witha disposition of the Collateral and compliance will not be considered adverselyto affect the commercial reasonableness of any sale of the Collateral.

 

**15.05.14 **Lender may sellthe Collateral without giving any warranties as to the Collateral.  The Lender may specifically disclaim anywarranties of title or the like.  Thisprocedure will not be considered adversely to affect, the commercialreasonableness of the sale of the Collateral.

 

**15.05.15 **If Lenderagrees with a purchaser to sell the Collateral upon credit, Borrower will becredited only with payments actually made by the purchaser, received by Lenderand applied to the indebtedness of the purchaser.  In the event that purchaser fails to pay forthe Collateral, Lender may resell the Collateral and Borrower shall be creditedwith the net proceeds of the sale.

 

**15.05.16 **In the eventLender purchases any of the Collateral being sold, Lender may pay for theCollateral by crediting some or all of the Obligations of the Borrower.

 

**15.05.17 **Lender has noobligation to marshall any assets in favor of Borrower or in payment of any ofthe Obligations or any other obligations owed to Lender by Borrower or anyother person.

 

**15.06 DISTRIBUTION OF COLLATERAL PROCEEDS**

 

Inthe event that, following the occurrence or during the continuance of anyDefault or Event of Default, the Lender receives any monies in connection withthe enforcement of any the Security Documents, or otherwise with respect to therealization upon any of the Collateral, such monies shall be distributed forapplication as follows:

 

(a) First,to the payment of, or (as the case may be) the reimbursement of the Lender foror in respect of all reasonable costs, expenses, attorneys fees, disbursementsand losses which shall have been incurred or sustained by the Lender inconnection with the collection of such monies by the Lender,  for the exercise, protection or enforcementby the Lender of all or any of the rights, remedies, powers and privileges ofthe Lender under this Agreement or any of the other Loan Documents or inrespect of the Collateral or in support of any provision of adequate indemnityto the Lender against any taxes or liens which by law shall have, or may have,priority over the rights of the Lender to such monies;

 

(b) Second,to all Obligations in such order or preference as the Lender may determine inits sole discretion; provided, however, that the Lender may in its discretionmake proper allowance to take into account any Obligations not then due andpayable;

 

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(c) Third,upon payment and satisfaction in full or other provisions for payment in fullsatisfactory to the Lender of all of the Obligations, to the payment of anyobligations required to be paid pursuant to Article IX of the UniformCommercial Code of the Commonwealth of Massachusetts; and

 

(d) Fourth,the excess, if any, shall be returned to the Borrower or to such other Personsas are entitled thereto.

 

**15.07 POWER OF ATTORNEY**

 

Forthe purposes of carrying out the provisions and exercising the rights,remedies, powers and privileges granted by or referred to in this Section 15.07,the Borrower hereby irrevocably constitutes and appoints the Lender its trueand lawful attorney-in-fact, with full power of substitution, to execute,acknowledge and deliver any instruments and do and perform any acts which arereferred to in this Section 15.07, in the name and on behalf of theBorrower. The power vested in such attorney-in-fact is, and shall be deemed tobe, coupled with an interest and irrevocable.

 

**15.08 WAIVERS**

 

TheBorrower hereby waives to the extent not prohibited by applicable law (a) allpresentments, demands for performance, notices of nonperformance (except to theextent required by the provisions hereof or of any of the other LoanDocuments), protests and notices of dishonor, (b) any requirement ofdiligence or promptness on the Lender’s part in the enforcement of its rights(but not fulfillment of its obligations) under the provisions of this Agreementor any of the other Loan Documents, and (c) any and all notices of everykind and description which may be required to be given by any statute or rule oflaw and any defense of any kind which the Borrower may now or here after havewith respect to its liability under this Agreement or under any of the otherLoan Documents.

 

**16.00**      **FINANCING STATEMENTS**

 

Priorto any Advance the Borrower hereby agrees to execute, deliver, and pay the costof filing any financing statement, or other notices appropriate underapplicable law, in respect of any security interest created pursuant to thisAgreement or at any other time which may at any time be required or which, inthe opinion of the Lender, may at any time be desirable.  In the event that any re-recording orre-filing thereof (or the filing of any statements of continuation or assignmentof any financing statement) is required to protect and preserve such lien orsecurity interest, the Borrower shall, at its cost and expense, cause the sameto be re-recorded and/or re-filed at the time and in the manner requested bythe Lender.  The Borrower herebyirrevocably designates the Lender, its agents, representatives and designees asagents and attorneys-in-fact for the Borrower to sign such financingstatements, or other instruments in connection herewith, on behalf of theBorrower and file the same, as required.

 

**17.00**      **FINANCIAL COVENANTS**

 

**17.01      COVENANTS AS TOBORROWER**

 

Borrower, agrees to comply with the following financial ratios thedefault of which shall constitute a default of this Agreement:

 

(a) Maximum loan-to-value ratio shall at alltimes not be in excess of seventy percent (70%).

 

(b) Commencing at 2010 fiscal year end, theBorrower will be tested for compliance with the Debt Service Coverage Ratiowhich shall not be less than 1.15:1.00.

 

**18.00      TENURE**

 

Borrower’s liability under this Agreement shall commencewith the date hereof and continue in full force and effect and be binding uponBorrower until all Obligations whether now in existence, or createdhereinafter, shall

 

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have been fully paid and satisfied, and until so paidand satisfied, Lender shall be entitled to retain the security interest grantedhereby in all Collateral.  At any time,either party may advise the other that no further loans or advances are to bemade, but such notice shall in no way cause any and all obligations of theBorrower to Lender to be waived.

 

**19.00      SETOFF**

 

Regardlessof the adequacy of any Collateral, and at all times, any deposits (general orspecific, time or demand, provisional or final, regardless of currency,maturity, or the branch of the Lender where such deposits are held) or othersums credited by or due from the Lender to the Borrower and any securities orother property of the Borrower in the possession of the Lender may be applied toor set off against the payment of the Obligations and any and all otherliabilities, direct, or indirect, absolute or contingent, due or to become due,now existing or hereafter arising, of the Borrower to the Lender.

 

**20.00      EXPENSES**

 

TheBorrower agrees to pay (a) the reasonable costs of producing andreproducing this Agreement, the other Loan Documents and the other agreementsand instruments mentioned herein, (b) any taxes (including any interestand penalties in respect thereto) payable by the Lender (other than taxes basedupon the Lender’s net income), including any recording, mortgage or intangiblestaxes in connection with the Mortgage, or other taxes payable on or withrespect to the transactions contemplated by this Agreement, including any taxespayable by the Lender after the Closing Date (the Borrower hereby agreeing toindemnify the Lender with respect thereto), (c) all title insurancepremiums, and the reasonable fees, expenses and disbursements of the Lender’scounsel or any local counsel to the Lender incurred in connection with thepreparation, administration or interpretation of the Loan Documents and otherinstruments mentioned herein, the making of each Advance hereunder, andamendments, modifications, approvals, consents or waivers hereto or hereunder, (d) thefees, expenses and disbursements of the Lender incurred in connection with thepreparation, administration or interpretation of the Loan Documents and otherinstruments mentioned herein, and the making of each Advance hereunder (includingall fees paid to the Construction Inspector, Appraisal fees, and surveyor fees)(e) all reasonable out-of-pocket expenses (including reasonable attorneys’fees and costs, which attorneys may be employees of the Lender and the fees andcosts of consultants, accountants, auctioneers, receivers, brokers, propertymanagers, appraisers, investment bankers or other experts retained by theLender in connection with (i) the enforcement of or preservation of rightsunder any of the Loan Documents against the Borrower or the Guarantor or theadministration thereof after the occurrence of a Default or Event of Defaultand (ii) any litigation, proceeding or dispute whether arising hereunderor otherwise, in any way related to the Lender’s relationship with the Borroweror the Guarantor, and (f) all reasonable fees, expenses and disbursementsof the Lender incurred in connection with UCC searches, UCC filings, titlerundowns, title searches or mortgage recordings. The covenants of this Section 20.00shall survive payment or satisfaction of payment of all amounts owing withrespect to the Construction Note. The Lender shall act reasonably in incurringany costs and expenses described in this Section 20.00 which are to bepaid by the Borrower.

 

**21.00      INDEMNIFICATION**

 

Except for gross negligence committed by Lender, theBorrower agrees to indemnify and hold harmless the Lender from and against anyand all claims, actions and suits, whether groundless or otherwise, and fromand against any and all liabilities, losses, damages and expenses of everynature and character arising out of this Agreement or any of the other LoanDocuments or the transactions contemplated hereby and thereby including,without limitations, (a) any brokerage, leasing, finders or similar fees, (b) anydisbursement of the proceeds of any of the Advances, (c) any condition ofthe Project whether related to the quality of construction or otherwise, (d) anyactual or proposed use by the Borrower of the proceeds of any of the Advances, (e) anyactual or alleged violation of any Requirements or Project Approvals, (f) theBorrower entering into or performing this Agreement or any of the other LoanDocuments or (g) with respect to the Borrower and Guarantor, theirrespective properties and assets, the violation of any Environmental Law, theRelease or threatened Release of any Hazardous Materials or any action, suit,proceeding or investigation brought or threatened with respect to any HazardousMaterials (including, but not limited to claims with respect to wrongful death,personal injury or damage to property), in each case including, withoutlimitation, the reasonable fees and disbursements of counsel and allocatedcosts of internal counsel incurred in connection with any such investigation,litigation or other proceeding. In litigation, or the preparation therefore, 

 

54

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the Lender shall be entitled to select its own counseland, in addition to the foregoing indemnity, the Borrower agrees to paypromptly the reasonable fees and expenses of such counsel. The obligations ofthe Borrower under this Section 21.00 shall survive the repayment of theConstruction Loan and shall continue in full force and effect so long as thepossibility of such claim, action or suit exists. If, and to the extent thatthe obligations of the Borrower under this Section 21.00 are unenforceablefor any reason, the Borrower hereby agrees to make the maximum contribution tothe payment in satisfaction of such obligations which is permissible underapplicable law.

 

**22.00      LIABILITY OF THELENDER**

 

Noaction shall be commenced by the Borrower or Guarantor for any claim againstthe Lender under the terms of this Agreement unless written notice thereof,specifically setting forth the claim of the Borrower, shall have been given tothe Lender at least fifteen (15) Business Days prior to the commencement ofsuch action.   The liability of theLender to the Borrower and Guarantor for any breach of the terms of thisAgreement by the Lender shall not exceed a sum equal to the amount which theLender shall be determined to have failed to Advance in consequence of a breachby the Lender of its obligations under this Agreement, together with interestthereon at the rate payable by the Borrower under the terms of the Note forAdvances which the Borrower is to receive hereunder, computed from the datewhen the Advance should have been made by the Lender to the date when theAdvance is, in fact, made by the Lender and upon the making of any such paymentby the Lender to the Borrower, the same shall be treated as an Advance underthis Agreement, in the same fashion as any other Advance under the terms ofthis Agreement.  In no event shall theLender be liable to the Borrower and/or Guarantor, or anyone claiming by, underor through the Borrower and/or Guarantor, for any special, exemplary, punitiveor consequential damages, whatever the nature of the breach of the terms ofthis Agreement by the Lender, such damages and claims therefore being expresslywaived by the Borrower and Guarantor.

 

**23.00      RIGHTS OF THIRDPARTIES**

 

Allconditions to the performance of the obligations of the Lender under thisAgreement, including the obligation to make Advances, are imposed solely andexclusively for the benefit of the Lender and no other Person shall havestanding to require satisfaction of such conditions in accordance with theirterms or be entitled to assume that the Lender will refuse to make Advances inthe absence of strict compliance with any or all thereof and no other Personshall, under any circumstances, be deemed to be a beneficiary of suchconditions, any and all of which may be freely waived in whole or in part bythe Lender at any time if in its sole discretion it deems it desirable to doso. In particular, the Lender makes no representations and assumes noobligations as to third parties concerning the quality of the construction bythe Borrower of the Improvements or the absence therefrom of defects.

 

**24.00      SURVIVAL OFCOVENANTS, ETC.**

 

Allcovenants, agreements, representations and warranties made herein,  in the Construction Note, in any of the otherLoan Documents or in any documents or other papers delivered by or on behalf ofthe Borrower or the Guarantor pursuant hereto and thereto shall be deemed tohave been relied upon by the Lender, notwithstanding any investigationheretofore or hereafter made by it, and shall survive the making by the Lenderof the Advances, as herein contemplated, and shall continue in full force andeffect so long as any amount due under this Agreement or the Note or any of theother Loan Documents remains outstanding or the Lender has any obligation tomake any Advances. All statements contained in any certificate or other paperdelivered to the Lender at any time by or on behalf of the Borrower or theGuarantor pursuant hereto or in connection with the transactions contemplatedhereby shall constitute representations and warranties by the Borrower or theGuarantor hereunder.

 

**25.00      PARTICIPATION; ETC.**

 

**25.01**    **PARTICIPATIONS**

 

TheLender may sell participations to one or more banks or other entities in all ora portion of the Lender’s rights and obligations under this Agreement and theother Loan Documents; Provided that (a) any such sale or participationshall not affect the rights and duties of the Lender hereunder to the Borrowerand (b) the only rights granted to the participant pursuant to suchparticipation arrangements with respect to waivers, amendments or modificationsof the Loan Documents shall be the right to approve waivers, amendments ormodifications that 

 

55

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wouldreduce the principal of or the interest rate on the Construction Loan, extendthe term or increase the amount of the Construction Loan or extend anyregularly scheduled payment date for principal or interest.

 

**25.02 PLEDGE BY THE LENDER**

 

TheLender may at any time pledge all or any portion of its interest and rightsunder this Agreement (including all or any portion of the Note) to any of thetwelve Federal Reserve Banks organized under Section 4 of the FederalReserve Act, 12 U.S.C., § 341. No such pledge or the enforcement thereof shallrelease the Lender from its obligations hereunder or under any of the otherLoan Documents.

 

**25.03 NO ASSIGNMENT BY THE BORROWER**

 

TheBorrower shall not assign or transfer any of its rights or obligations underany of the Loan Documents without the prior approval of the Lender.

 

**26.00 RELATIONSHIP**

 

Therelationship between the Lender and the Borrower is solely that of a lender andborrower, and nothing contained herein or in any of the other Loan Documentsshall in any manner be construed as making the parties hereto partners, jointventurers or any other relationship other than lender and borrower.

 

**27.00 NOTICES**

 

Eachnotice, demand, election or request provided for or permitted to be givenpursuant to this Agreement (hereinafter in this Section 27.00 referred toas “Notice”) must be in writing and shall be deemed to have been properly givenor served by personal delivery or by sending same by overnight courier or bydepositing same in the United States Mail, postpaid and registered orcertified, return receipt requested, and addressed as follows:

 
| If to the Lender:   | Berkshire  Bank                               |
|---------------------|-----------------------------------------------|
|                | 31  Court Street                              |
|                | Westfield,  MA 01085                          |
|                |                                          |
|                | Attn:  Shaun Dwyer, Vice President            |
|                |                                          |
| with a copy to:     | Peter  W. Shrair, Esquire                     |
|                | Cooley,  Shrair, P.C.                         |
|                | 1380  Main Street                             |
|                | Springfield,  Massachusetts 01103             |
|                |                                          |
| If to the Borrower: | Tradeport  Development III, LLC               |
|                | 204  West Newberry Road                       |
|                | Bloomfield,  CT 06002                         |
|                |                                          |
| With a copy to:     | Thomas  M. Daniells, Esquire                  |
|                | Murtha  Cullina LLP                           |
|                | CitiPlace  1                                  |
|                | 185  Asylum Street                            |
|                | Hartford,  CT 06103                           |
|                |                                          |
| If to Guarantor:    | Griffin  Land & Nurseries, Inc. |
|                | 204  West Newberry Road                       |
|                | Bloomfield,  CT 06002                         |
|                |                                          |
| With a copy to:     | Thomas  M. Daniells, Esquire                  |
|                | Murtha  Cullina LLP                           |
|                | CitiPlace  1                                  |

 

56

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|   | 185  Asylum Street |
|--------|--------------------|
|   | Hartford, CT 06103 |

 

EachNotice shall be effective upon being personally delivered or upon being sent byovernight courier or upon being deposited in the United States Mail asaforesaid. The time period in which a response to such Notice must be given orany action taken with respect thereto (if any), however, shall commence to runfrom the date of receipt if personally delivered or sent by overnight courier,or if so deposited in the United States Mail, the earlier of three (3) BusinessDays following such deposit or the date of receipt as disclosed on the returnreceipt. Rejection or other refusal to accept or the inability to deliver becauseof changed address for which no Notice was given shall be deemed to be receiptof the Notice sent. By giving at least thirty (30) days prior Notice thereof,the Borrower or the Lender shall have the right from time to time and at anytime during the term of this Agreement to change their respective addresses andeach shall have the right to specify as its address any other address withinthe United States of America.

 

**28.00 GOVERNING LAW**

 

ThisAgreement and each of the other Loan Documents, except as otherwisespecifically provided there in, are contracts under the laws of theCommonwealth of Massachusetts and shall for all purposes be construed inaccordance with and governed by the laws of said Commonwealth (excluding thelaws applicable to conflicts or choice of law).

 

**29.00 CONSENT TO JURISDICTION**

 

THEBORROWER AND GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITSTO PERSONAL JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS OVER ANY SUIT,ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THEOTHER LOAN DOCUMENTS, AND (B) WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THELAWS OF ANY STATE (I) TO THE RIGHT, IF ANY, TO TRIAL BY JURY, (II) TOOBJECT TO JURISDICTION WITHIN THE COMMONWEALTH OF MASSACHUSETTS OR VENUE IN ANYPARTICULAR FORUM WITHIN THE COMMONWEALTH OF MASSACHUSETTS, AND (III) TOTHE RIGHT, IF ANY, TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY, PUNITIVE ORCONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL DAMAGES.  THE BORROWER AGREES THAT, IN ADDITION TOANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALLSERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BYCERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED DIRECTED TO THE BORROWERAT THE ADDRESS SET FORTH IN SECTION 27.00 ABOVE, AND SERVICE SO MADE SHALLBE COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL BE SO MAILED. NOTHINGCONTAINED HEREIN, HOWEVER, SHALL PREVENT THE LENDER FROM BRINGING ANY SUIT,ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS AGAINST ANY COLLATERAL ANDAGAINST THE BORROWER, AND AGAINST ANY PROPERTY OF THE BORROWER, IN ANYOTHER STATE. INITIATING SUCH SUIT, ACTION OR PROCEEDING OR TAKING SUCH ACTIONIN ANY STATE SHALL IN NO EVENT CONSTITUTE A WAIVER OF THE AGREEMENT CONTAINEDHEREIN THAT THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS SHALL GOVERN THERIGHTS AND OBLIGATIONS OF THE BORROWER AND THE LENDER HEREUNDER OR THESUBMISSION HEREIN BY THE BORROWER TO PERSONAL JURISDICTION WITHIN THECOMMONWEALTH OF MASSACHUSETTS.

 

**30.00 HEADINGS**

 

Thecaptions in this Agreement are for convenience of reference only and shall notdefine or limit the provisions hereof.

 

**31.00 COUNTERPARTS**

 

ThisAgreement and any amendment hereof may be executed in several counterparts andby each party on a separate counterpart, each of which when so executed anddelivered shall be an original, and all of which together 

 

57

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shallconstitute one instrument. In proving this Agreement it shall not be necessaryto produce or account for more than one such counterpart signed by the partyagainst whom enforcement is sought.

 

**32.00 ENTIRE AGREEMENT, ETC.**

 

TheLoan Documents and any other documents executed in connection herewith ortherewith express the entire understanding of the parties with respect to thetransactions contemplated hereby. Neither this Agreement nor any term hereofmay be changed, waived, discharged or terminated, except as provided in Section 33.00.

 

**33.00 CONSENTS, AMENDMENTS, WAIVERS, ETC.**

 

Exceptas otherwise expressly set forth in any particular provision of this Agreement,any consent or approval required or permitted by this Agreement to be given bythe Lender may be given, and any term of this Agreement or of any otherinstrument related hereto or mentioned herein may be amended, and theperformance or observance by the Borrower of any terms of this Agreement orsuch other instrument or the continuance of any Default or Event of Default maybe waived (either generally or in a particular instance and either retroactivelyor prospectively) with, but only with, the written consent of the Lender. Nowaiver shall extend to or affect any obligation not expressly waived or impairany right consequent thereon. No course of dealing or delay or omission on thepart of the Lender in exercising any right shall operate as a waiver thereof orotherwise be prejudicial thereto. No Advance made by the lender hereunderduring the continuance of any Default or Event of Default shall constitute awaiver there of. No notice to or demand upon the Borrower shall entitle theBorrower to other or further notice or demand in similar or othercircumstances.

 

**34.00 TIME OF THE ESSENCE**

 

Timeis of the essence with respect to each and every covenant, agreement andobligation of the Borrower under this Agreement and the other Loan Documentsand the Guarantor.

 

**35.00 SEVERABILITY**

 

Theprovisions of this Agreement are severable, and if any one clause or provisionhereof shall be held invalid or unenforceable in whole or in part in anyjurisdiction, then such invalidity or unenforceability shall affect only suchclause or provision, or part thereof, in such jurisdiction, and shall not inany manner affect such clause or provision in any other jurisdiction, or anyother clause or provision of this Agreement in any jurisdiction.

 

INWITNESS WHEREOF, the undersigned have duly executed this Agreement as a sealedinstrument as of the date first set forth above.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY ENDS HERE;

SIGNATURE PAGE TO FOLLOW]

 

58

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| BORROWER:                |   | TRADEPORT  DEVELOPMENT III, LLC BY             |
|--------------------------|--------|------------------------------------------------|
|                     |   | GRIFFIN  LAND & NURSERIES, INC., |
|                     |   | ITS  SOLE MEMBER                               |
|                     |   |                                           |
| /s/Thomas  M. Daniels    |   | By:                                            | /s/Frederick  M. Danziger |
| Witness                  |   | Its  duly authorized                           |
|                     |   |                                           |
| /s/Thomas  M. Lescalleet |   |                                           |
| Witness                  |   |                                           |
|                     |   |                                           |
|                     |   |                                           |
| GUARANTOR:               |   | GRIFFIN  LAND & NURSERIES, INC.  |
|                     |   |                                           |
| /s/Thomas  M. Daniels    |   | By:                                            | /s/Frederick  M. Danziger |
| Witness                  |   | Its  duly authorized                           |
|                     |   |                                           |
| /s/Thomas  M. Lescalleet |   |                                           |
| Witness                  |   |                                           |
|                     |   |                                           |
|                     |   |                                           |
| LENDER:                  |   | BERKSHIRE  BANK                                |
|                     |   |                                           |
| /s/Peter  Shrair         |   | By:                                            | /s/Joseph  Marullo |
| Witness                  |   | Its  duly authorized                           |
|                     |   |                                           |
| /s/Candace  Goodreau     |   |                                           |
| Witness                  |   |                                           |

 

59

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**Exhibit A**

**Construction Schedule**

 

**Griffin Land**

**304,000 SF Warehouse**

**Preliminary Schedule**

 
| **ID** | ** ** | **Task Name**                         | ** ** | **Duration** | ** ** | **Completion Date** |
|--------|------------|--------------------------------------------|------------|--------------|------------|--------------------------|
|   |       |                                       |       |         |       |                     |
| 1      |       | Selection  of Construction Manager         |       | 64 days      |       | 01/08/09                 |
| 2      |       | Contract  Construction Manager             |       | 0 days       |       | 01/08/09                 |
| 3      |       | Design                                     |       | 86 days      |       | 02/08/09                 |
| 4      |       | Civil Drawings                             |       | 80 days      |       | 01/30/09                 |
| 5      |       | Structural Drawings                        |       | 20 days      |       | 02/09/09                 |
| 6      |       | Architectural                              |       | 20 days      |       | 02/05/09                 |
| 7      |       | MEP’s                                 |       | 20 days      |       | 02/09/09                 |
| 8      |       | Contract — Sitework                   |       | 1 day        |       | 01/05/09                 |
| 9      |       | Permits                                    |       | 20 days      |       | 02/09/09                 |
| 10     |       | Order  long lead items                     |       | 42 days      |       | 04/08/09                 |
| 11     |       | Structural Steel                           |       | 8 weeks      |       | 04/08/09                 |
| 12     |       | Reinforcing rods                           |       | 20 days      |       | 03/09/09                 |
|   |       |                                       |       |         |       |                     |
| 14     |       | CONSTRUCTION                               |       | 147 days     |       | 07/26/09                 |
| 15     |       | Site work                                  |       | 104 days     |       | 05/24/09                 |
| 16     |       | Erosion control                            |       | 3 days       |       | 01/08/09                 |
| 17     |       | Cuts and fills                             |       | 31 days      |       | 02/20/09                 |
| 18     |       | Prepare building sub-grade                 |       | 10 days      |       | 03/06/09                 |
| 19     |       | Utilities                                  |       | 60 days      |       | 05/29/09                 |
| 20     |       | Site improvements                          |       | 100 days     |       | 07/19/09                 |
| 21     |       | Retaining walls                            |       | 20 days      |       | 04/03/09                 |
| 22     |       | Road gravel                                |       | 10 days      |       | 06/01/09                 |
| 23     |       | Binder course of paving                    |       | 3 days       |       | 06/03/09                 |
| 24     |       | Top course of paving                       |       | 2 days       |       | 07/17/09                 |
| 25     |       | Loam and seed — Landscaping           |       | 10 days      |       | 07/15/09                 |
| 26     |       | Building Construction                      |       | 108 days     |       | 07/26/09                 |
| 27     |       | Building Shell                             |       | 90 days      |       | 07/05/09                 |
| 28     |       | Foundations — warehouse               |       | 20 days      |       | 03/27/09                 |
| 29     |       | Foundation insulation — warehouse     |       | 5 days       |       | 03/27/09                 |
| 30     |       | Underground plumbing & Electrical |       | 20 days      |       | 04/10/09                 |
| 31     |       | Prep. Building slab                        |       | 15 days      |       | 04/10/09                 |
| 32     |       | Building Slab on grade — warehouse    |       | 20 days      |       | 05/08/09                 |
| 33     |       | Form and cast Tilt panels             |       | 20 days      |       | 05/22/09                 |
| 34     |       | Erect tilt panels                          |       | 10 days      |       | 06/05/09                 |
| 35     |       | Structural Steel, deck and joist           |       | 55 days      |       | 06/26/09                 |
| 36     |       | Masonry walls                              |       | 9 days       |       | 04/23/09                 |
| 37     |       | Roofing                                    |       | 30 days      |       | 07/03/09                 |
| 38     |       | Rack Installation begins                   |       | 0 days       |       | 07/01/09                 |
| 39     |       | O.H. doors                                 |       | 9 days       |       | 06/18/09                 |
| 40     |       | Windows                                    |       | 10 days      |       | 06/19/09                 |
| 41     |       | Painting                                   |       | 20 days      |       | 07/03/09                 |
|   |       |                                       |       |         |       |                     |
| 42     |       | Interior work                              |       | 51 days      |       | 07/20/09                 |
| 43     |       | Rough Fire Protection                      |       | 40 days      |       | 07/10/09                 |
| 44     |       | Rough Plumbing                             |       | 10 days      |       | 06/11/09                 |
| 45     |       | Rough HVAC                                 |       | 20 days      |       | 06/11/09                 |

 

60

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| 46 |   | Rough Electrical                         |   | 30 days |   | 06/26/09 |
|----|--------|------------------------------------------|--------|---------|--------|----------|
| 47 |   | Loading dock equipment                   |   | 10 days |   | 07/10/09 |
| 48 |   | Finish Fire Protection                   |   | 15 days |   | 07/24/09 |
| 49 |   | Finish Plumbing                          |   | 20 days |   | 07/09/09 |
| 50 |   | Finish HVAC                              |   | 20 days |   | 07/09/09 |
| 51 |   | Finish Electrical                        |   | 20 days |   | 07/24/09 |
| 52 |   | Inspections                              |   | 14 days |   | 07/26/09 |
| 53 |   | Plumbing                                 |   | 1 day   |   | 07/10/09 |
| 54 |   | Electrical                               |   | 1 day   |   | 07/27/09 |
| 55 |   | Fire Alarm                               |   | 1 day   |   | 07/28/09 |
| 56 |   | Building                                 |   | 1 day   |   | 07/29/09 |
| 57 |   | Project Closeout                         |   | 10 days |   | 07/29/09 |
| 58 |   | As-Built Plans and O & M’s |   | 10 days |   | 07/30/09 |
| 59 |   | Punch List                               |   | 10 days |   | 07/30/09 |
| 60 |   | Certificate of Occupancy                 |   | 1 day   |   | 07/30/09 |
| 61 |   | Certificate of Substantial Completion    |   | 0 days  |   | 07/30/09 |

 

61

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**Exhibit B**

 

**Disbursement Schedule**

 

CostSchedule

 

TireRack

100International Drive

Windsor,CT

 

2/5/2009

 
| **Year** | ** ** | **Month** | ** ** | **Estimated****Costs** | ** ** | **%********Complete** | ** ** | **Lease********Commission** | ** ** | **Bank********Legal** | ** ** | **Bank********Points** | ** ** | **Other** | ** ** | **Total** | ** ** | **%********Complete** | ** ** |
|----------|------------|-----------|------------|------------------------|------------|-----------------------|------------|-----------------------------|------------|-----------------------|------------|------------------------|------------|-----------|------------|-----------|------------|-----------------------|------------|
|     |       |      |       |                   |       |                  |       |                        |       |                  |       |                   |       |      |       |      |       |                  |       |
| 2008     |       | Sept.     |       | $                      | 10,271     |                  | —     |                        |       |                  |       |                   |       |      |       |      | $          | 10,271                |       | — |   |
|     |       | Oct.      |       | $                      | 258,747    |                  | 2          | %                           |       |                  |       |                   |       |      |       |      | $          | 258,747               |       | 2 | % |
|     |       | Nov.      |       | $                      | 148,996    |                  | 1          | %                           |       |                  | $          | 50,000                 |       |      |       |      |       | $                     | 198,996    |   | 1 | % |
|     |       | Dec.      |       | $                      | 12,629     |                  | —     |                        |       |                  |       |                   |       |      |       |      | $          | 12,629                |       | — |   |
| 2009     |       | Jan.      |       | $                      | 1,131,930  |                  | 8          | %                           |       |                  |       |                   |       |      |       |      | $          | 1,131,930             |       | 7 | % |
|     |       | Feb.      |       | $                      | 1,121,881  |                  | 15         | %                           | $          | 270,550               |       | $                      | 35,000     |      | $          | 180,000   |       | $                     | 15,000     |   | $ | 1,622,431 |   | 10 | % |
|     |       | Mar.      |       | $                      | 1,271,113  |                  | 24         | %                           |       |                  | $          | 15,000                 |       |      |       |      |       | $                     | 1,286,113  |   | 8 | % |
|     |       | April     |       | $                      | 2,824,360  |                  | 43         | %                           |       |                  |       |                   |       |      |       |      | $          | 2,824,360             |       | 18 | % |
|     |       | May       |       | $                      | 4,049,162  |                  | 70         | %                           |       |                  |       |                   |       |      |       |      | $          | 4,049,162             |       | 26 | % |
|     |       | June      |       | $                      | 2,795,035  |                  | 89         | %                           |       |                  |       |                   |       |      |       |      | $          | 2,795,035             |       | 18 | % |
|     |       | July      |       | $                      | 950,091    |                  | 95         | %                           |       |                  |       |                   |       |      |       |      | $          | 950,091               |       | 6 | % |
|     |       | Aug.      |       | $                      | 294,685    |                  | 97         | %                           |       |                  |       |                   |       |      |       |      | $          | 294,685               |       | 2 | % |
|     |       | Sept.     |       | —                 |       | —                |       | $                           | 270,550    |                  |       |                   |       |      |       |      | $          | 270,550               |       | 2 | % |
|     |       |      |       | $                      | 14,868,900 |                  |       |                        |       |                  |       |                   |       |      |       |      | $          | 15,705,000            |       |   |   |
|          |            |           |            |                        |            |                       |            |                             |            |                       |            |                        |            |           |            |           |            |                       |            |  |  |  |  |  |  |

 

Note:

 

1.              Total cost includes:environmental remediation, offsite utilities, water tank.

2.              Costs are when work iscompleted.

3.              In January theenvironmental work will require the following cash flow:

 
| 1/19/2009 |   | $ | 100,000   |   |
|-----------|--------|---|-----------|--------|
| 1/21/2009 |   | $ | 100,000   |   |
| 1/23/2009 |   | $ | 100,000   |   |
| 1/26/2009 |   | $ | 125,000   |   |
| 1/28/2009 |   | $ | 125,000   |   |
| 1/30/2009 |   | $ | 125,000   |   |
| 2/03/2009 |   | $ | 125,000   |   |
| 2/05/2009 |   | $ | 125,000   |   |
| 2/10/2009 |   | $ | 89,718    |   |
|      |   | $ | 1,014,718 |   |

 

Paymentwill be required by the receiving facility on the dates above.

 

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**Exhibit C**

 

**The Premises**

 

Thatcertain piece or parcel of land, with the improvements thereon, if any,situated in the Town of Windsor, County of Hartford and State of Connecticut,having a lot area of 58.455 acres and being shown as “100 INTERNATIONAL DRIVE”,ON A CERTAIN MAP ENTITLED: “REVISION TO RESUBDIVISION PLAN PREPARED FOR GRIFFINLAND STONE RD., INTERNATIONAL DR. & RAINBOW RD. WINDSOR,CONNECTICUT SCALE: 1 IN = 200 FT DECEMBER 19, 2005 REVISION PER TOWN STAFF1/10/06” prepared by Ed Lally and Associates, Inc., which map is on filein the Windsor town Clerk’s Office as Map No. 5212 to which reference maybe had for a more particular description.

 

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**Exhibit D**

 

**Permitted Liens**

 

1.              Real estate taxes to theTown of Windsor on the List of October 1, 2008, which taxes are not yetdue and payable.

 

2.              Water use charges as may bedue to the Metropolitan District.

 

3.              Terms and provisions of aRight of Way Agreement by and between American Sumatra Company and NortheasternGas Transmission Company dated May 5, 1952 and recorded in Volume 139 at Page 386of the Windsor Land Records.

 

4.              Caveat, Deferred OutletCharge, by The Metropolitan District dated August 19, 1992 and recorded inVolume 902 at Page 265 of the Windsor Land Records.

 

5.              Terms and provisions of anEasement and Right of Way Agreement by and between River Bend Associates, Inc.and Tennessee Gas Pipeline Company dated September 18, 2000 and recordedin Volume 1247 at Page 519 of the Windsor Land Records.

 

6.              State of ConnecticutDepartment of Transportation Traffic Investigation Report to the State TrafficCommission issued to River Bend Assoc., Inc. and Griffin Land &Nurseries, Inc. dated December 16, 2008 and recorded in Volume 1650at Page 599 of the Windsor Land Records.

 

7.              Fifty (50) foot front yardsetback line, 35-foot rear year setback line and 25-foot side yard setbacklines, as shown on a certain survey entitled, “ALTA/ASCM LAND TITLE SURVEYPREPARED FOR TRADEPORT DEVELOPMENT III, LLC 100 INTERNATIONAL DRIVE WINDSOR<CONNECTICUT SCALE: 1IN = 100 FT FEBRUARY 3, 2009” prepared by ed lally andassociates, inc.

 

8.              Open-End ConstructionMortgage made by Tradeport Development III, LLC in favor of Berkshire Bankdated as of February 6, 2009 and recorded in the Windsor Land Records ofnear date therewith.

 

9.              Collateral Assignment ofRents and Leases between Tradeport Development III, LLC and Berkshire Bankdated as of February 6, 2009 and recorded in the Windsor Land Records ofnear date therewith.

 

10.       Unrecorded written Indentureof Lease between Tradeport Development III, LLC and The Tire Rack, Inc.dated January 9, 2009, which lease has been subordinated to the lien ofthe Mortgage by Subordination, Non-Disturbance and Attornment Agreement datedas of February 6, 2009.

 

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**Exhibit E**

 

**Plans andSpecifications**

 

65

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|  | GRIFFN LAND -  TIRE RACK DISTRIBUTION CENTER |
|--|----------------------------------------------|

 

66

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|  | GRIFFN LAND -  TIRE RACK DISTRIBUTION CENTER |
|--|----------------------------------------------|

 

67

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|  | GRIFFN LAND -  TIRE RACK DISTRIBUTION CENTER |
|--|----------------------------------------------|

 

68

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|  | GRIFFN LAND -  TIRE RACK DISTRIBUTION CENTER |
|--|----------------------------------------------|

 

69

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|  | GRIFFN LAND -  TIRE RACK DISTRIBUTION CENTER |
|--|----------------------------------------------|

 

70

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|  | GRIFFN LAND -  TIRE RACK DISTRIBUTION CENTER |
|--|----------------------------------------------|

 

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**Exhibit F**

 

**Project Budget**

 

**Development Budget**

TireRack

100International Drive

Windsor,CT

304,200Square Feet

 
| ** **                       | ** ** | **Projected Costs**     | ** ** | ** **  | ** ** | ** **                                                                      |
|----------------------------------|------------|------------------------------|------------|-------------|------------|---------------------------------------------------------------------------------|
| ** **                       | ** ** | **(as of 2/5/09)** | ** ** | ** **  | ** ** | ** **                                                                      |
| ** **                       | ** ** | **Subtotal cost**       | ** ** | **Cost/SF** | ** ** | **Notes**                                                                       |
| **BASE BUILDING COSTS**          |       |                         |       |        |       |                                                                            |
|                             |       |                         |       |        |       |                                                                            |
| General Contract                 |       | 9,183,100                    |       | 30.19       |       | Guaranteed  price bid.                                                          |
| Site Construction                |       | 3,596,400                    |       | 11.82       |       | Includes  off site utilities and FP. Excludes remediation (see Land Allocation) |
| Concrete                         |       | 0                            |       | 0.00        |       |                                                                            |
| Masonry                          |       | 0                            |       | 0.00        |       |                                                                            |
| Metals                           |       | 0                            |       | 0.00        |       |                                                                            |
| Wood and Plastics                |       | 0                            |       | 0.00        |       |                                                                            |
| Thermal and Moisture  Protection |       | 0                            |       | 0.00        |       |                                                                            |
| Doors and Windows                |       | 0                            |       | 0.00        |       |                                                                            |
| Finishes                         |       | 0                            |       | 0.00        |       |                                                                            |
| Specialties                      |       | 0                            |       | 0.00        |       |                                                                            |
| Equipment                        |       | 0                            |       | 0.00        |       |                                                                            |
| Furnishings                      |       | 0                            |       | 0.00        |       |                                                                            |
| Special Construction             |       | 0                            |       | 0.00        |       |                                                                            |
| Conveying Systems                |       | 0                            |       | 0.00        |       |                                                                            |
| Mechanical                       |       | 0                            |       | 0.00        |       |                                                                            |
| Electrical                       |       | 0                            |       | 0.00        |       |                                                                            |
| Fees and Permits                 |       | 660,000                      |       | 2.17        |       |                                                                            |
| Sub-total Base Building  Costs   |       | 13,439,500                   |       | 44.18       |       |                                                                            |
|                             |       |                         |       |        |       |                                                                            |
| General Conditions               |       | 150,000                      |       | 0.49        |       | Cap  @ 1.5% of Sub-total Base Building Costs less Fees & Permits.      |
| Contingency                      |       | 136,400                      |       | 0.45        |       | Cap  @ 1% of Sub-total Base Building Costs.                                     |
| **Total  Base Building Costs**   | ** ** | **13,725,900**               | ** ** | **45.12**   |       |                                                                            |
| ** **                       |       |                         |       |        |       |                                                                            |
| **LAND COSTS**                   |       |                         |       |        |       |                                                                            |
| Land Allocation                  |       | 5,000,000                    |       | 16.44       |       | 58  acre parcel. Includes land for Expansion Premises.                          |
| Site Remediation                 |       | 1,143,000                    |       | 3.76        |       | Substantially  incurred. Includes excavation & remediation monitoring. |
| **Total  Land Costs**            | ** ** | **6,143,000**                | ** ** | **20.19**   |       |                                                                            |

 

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| Tire  Rack               | **Development Budget** |
|--------------------------|------------------------|
| 100  International Drive |                   |
| Windsor,  CT             |                   |
|                     |                   |
| 304,200  Square Feet     |                   |

 
| ** **                   | ** ** | **Projected Costs**     | ** ** | ** **  | ** ** | ** **                                                            |
|------------------------------|------------|------------------------------|------------|-------------|------------|-----------------------------------------------------------------------|
| ** **                   | ** ** | **(as of 2/5/09)** | ** ** | ** **  | ** ** | ** **                                                            |
| ** **                   | ** ** | **Subtotal cost**       | ** ** | **Cost/SF** | ** ** | **Notes**                                                             |
| **LEASING COSTS**            |       |                         |       |        |       |                                                                  |
|                         |       |                         |       |        |       |                                                                  |
| Lease Commission             |       | 541,100                      |       | 1.78        |       | As  per commission agreement. Initial rent of $4.70/SF + 3% Annually. |
| Legal                        |       | 60,000                       |       | 0.20        |       |                                                                  |
| **Total  Leasing Costs**     | ** ** | **601,100**                  | ** ** | **1.98**    |       |                                                                  |
|                         |       |                         |       |        |       |                                                                  |
| **FINANCING COSTS**          |       |                         |       |        |       |                                                                  |
| Points                       |       | 180,000                      |       | 0.59        |       | 1.5  pts on $12,000,000.                                              |
| Construction Interest  Carry |       | 200,000                      |       | 0.66        |       | As  per CBRE draw Schedule.                                           |
| Legal                        |       | 50,000                       |       | 0.16        |       |                                                                  |
| Environmental                |       | 2,000                        |       | 0.01        |       | Phase  1 only. All other is provided for under Site Remediation       |
| Bank Appraisal               |       | 6,000                        |       | 0.02        |       | As  per Berkshire Bank.                                               |
| Other Fees                   |       | 7,000                        |       | 0.02        |       | As  per Berkshire. Presumes 7 Inspections.                            |
| **Total  Financing Costs**   | ** ** | **445,000**                  | ** ** | **1.46**    |       |                                                                  |
|                         |       |                         |       |        |       |                                                                  |
| **TOTAL PROJECT COSTS**      | ** ** | **20,915,000**               | ** ** | **68.75**   |       |                                                                  |

 

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**EXHIBIT G**

 
| BORROWER’S  REQUISITION |   |
|------------------------------|--------|
|                         |   |
| BORROWER:                    |   |
|                         |   |
| LENDER:                      |   |
|                         |   |
| PROJECT:                     |   |
|                         |   |
| LOAN  AMOUNT:                | $      |
|                         |   |
| REQUISITION  NO.:            |   |
|                         |   |
| PERIOD  COVERED:             |   |

 

Pursuantto the Construction Loan Agreement for the subject Construction Loan, theBorrower hereby authorizes and requests an Advance against the proceeds of theConstruction Loan for the following purposes and the following amounts:

 
| 1.     | Direct  Costs incurred to the end of period covered (from Schedule I): |   |
|--------|------------------------------------------------------------------------|--------|
|   |                                                                   |   |
| 2.     | Total  Direct Costs incurred:                                          |   |
|   |                                                                   |   |
| 3.     | Less  amount previously advanced:                                      |   |
|   |                                                                   |   |
| 4.     | Account  requisitioned for period covered:                             |   |
|   |                                                                   |   |
| 5.     | Balance  to complete:                                                  |   |
|   |                                                                   |   |
| 6.     | Total  of lines 2 & 5:                                        |   |
|   |                                                                   |   |
| 7.     | Indirect  Costs incurred to end of period covered (from Schedule II):  |   |

 

Detailsof Direct Costs requisitioned are listed on Schedule I attached and, withrespect to Direct Costs incurred under the Construction Contract, on thestandard AIA form attached.

 

Detailsof Indirect Costs are listed on Schedule II attached.

 

Inconnection with and in order to induce the Lender to advance the amountrequested above, and knowing that the Lender will rely thereon in doing so, theBorrower hereby represents, warrants and stipulates as follows:

 

1.There is existing no Event of Default and no condition or event which with thelapse of time or the giving of notice, or both, would constitute an Event ofDefault under, or a violation of, the Construction Loan and Security Agreement,Note, Mortgage, or any of the other Loan Documents. The Borrower has dulycomplied with and observed all of the terms, covenants, and conditions of eachof the Loan Documents required to be performed by the Borrower to the date ofthis requisition, and unless the Lender is notified to the contrary prior tothe disbursement of the advance requested above, will be so on the datethereof.

 

2.The representations and warranties of the Borrower and the Guarantor containedin the Loan Documents are true and correct on the date of this requisition, andunless the Lender is notified to the contrary prior to the disbursement of theamount requested above, will also be true and correct on the date thereof.

 

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3.The amounts and percentages set forth on Schedules I and II attached hereto aretrue and correct to the best of the Borrower’s knowledge and

 

A.The total amount advanced under the Construction Loan after the honoring ofthis requisition, plus retainage held, plus the Borrower’s Required EquityFunds provided for in the Loan and Security Agreement, shall not exceed theDirect Costs incurred, plus Indirect Costs incurred; and

 

B.After the honoring of this requisition, the Construction Loan amount not yetadvanced, less the retainage held, shall be sufficient to pay for all DirectCosts and Indirect Costs not yet paid and which will be required to completeconstruction of the Project and to carry the Project through the maturity dateof the Construction  Loan as required orcontemplated by the Loan and Security Agreement.

 

4.All sums previously requisitioned have been applied to the payment of theDirect and Indirect Costs heretofore incurred and the proceeds of any advancemade in accordance with this request will be applied to, and solely to, paymentof the Direct Costs and Indirect Costs itemized in this requisition.

 

5.Construction of the Project to date has in every respect been performed fullyin accordance with the Plans and Specifications and the Loan and SecurityAgreement.

 

 
| BORROWER:  |   | TRADEPORT  DEVELOPMENT III, LLC BY             |
|------------|--------|------------------------------------------------|
|       |   | GRIFFIN  LAND & NURSERIES, INC., |
|       |   | ITS  SOLE MEMBER                               |
|       |   |                                           |   |
|       |   | By:                                            |   |
| Witness    |   | Its  duly authorized                           |
|       |   |                                           |
|       |   |                                           |
| Witness    |   |                                           |
|       |   |                                           |
| GUARANTOR: |   | GRIFFIN  LAND & NURSERIES, INC.  |
|       |   |                                           |   |
|       |   | By:                                            |   |
| Witness    |   | Its  duly authorized                           |
|       |   |                                           |
|       |   |                                           |
| Witness    |   |                                           |

 

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**EXHIBIT G**

 

SCHEDULE I

 

Direct Costs

 

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**EXHIBIT G**

 

SCHEDULE I I

 

Indirect Costs

 

77

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**EXHIBIT H**

 

CONTRACTOR’S REQUISITIONCERTIFICATE

 

Application for Payment No.

 
| TO:    | ____________________________________  (“Lender”)                       |
|--------|----------------------------------------------------------------------------------|
|   |                                                                             |
| FROM:  | _______________________________                                                  |
|   | _______________________________  (“Contractor”)                        |
|   |                                                                             |
| RE:    | (Construction  of _______________________________________(the “Owner”) |

 

Weare the general contractor for the Project, and to induce Lender to advanceloan proceeds to assist in funding construction of the Project and knowing thatLender will rely on this certificate in doing so, we hereby certify as follows:

 

1.In reference to our contract dated __________________ with Owner forconstruction of the Project, and the Plans and Specifications therefore, noamendments, modifications or changes have been made with respect to our contractor the Plans and Specifications except such as have had your prior writtenapproval. There are no pending change orders except as follows:

 

2.Our Application for Payment No. , dated ______________,  20____ which we understand is to be includedas an item in the Owner’s requisition to you, is in full compliance with theterms of our contract with Owner, and, upon the payment of same, we will haveno other or additional claim (including claims for so-called “extras”) againstOwner on account of our contract or otherwise for and through the period oftime ending upon the date of our Application for Payment, for all labor andmaterials furnished by us through and including the date of our Application forPayment except as follows:

 

(a) retainagenot exceeding five percent (5%) of the value of labor and materialsincorporated into the Project and covered by applications submitted by us onaccount of the Project for which payment is to be made to us after substantialcompletion of our contract, as provided therein (the amount of said retainage,as of the end of the period covered by our Application for Payment dated ______________,20____ is $_________ ); and

 

(b) [specifyother claims, if any].

 

TheContractor’s right to the payment of any retainage is subordinate to the Lender’sright to repayment of its Loan, together with interest, by the Owner.

 

3.The Owner is not in default of any of the Owner’s obligations to us as of thedate hereof except as follows:

 

4.We have paid in full all our obligations to subcontractors, workmen, suppliersand materialmen for and with respect to all labor and materials suppliedthrough and including the date of our last Application for Payment, except foran amount equal to five  percent (5%)thereof, which we are holding in accordance with the terms of such obligationsand our contract, and our subcontractors have paid their subcontractors,workmen and materialmen in full for and with respect to all labor and materialssupplied through and including the date of our last Application for Payment.

 

5.We waive and release any and all rights to claim any lien for labor done ormaterials furnished up to an amount equal to the amount of our Application forPayment dated ______________, 20___, plus the amount of all our previously funded applications.

 

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Executedas an instrument under seal this ___ day of_________________.

 
| CONTRACTOR: |   |                 |
|-------------|--------|----------------------|
|        |   |                 |
|        | By:    |                 |
|        |   | Its  duly authorized |

 

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**EXHIBIT  I**

 

ARCHITECT’S REQUISITIONCERTIFICATE

 

Application for Payment No.

 
| TO:    | ______________________________________ (“Lender”)                 |
|--------|----------------------------------------------------------------------------------|
|   |                                                                             |
| FROM:  | ________________________________ (“Architect”)                    |
|   | ________________________________                                                 |
| RE:    | (Construction  of _____________________________________ (“Owner”) |

 

Weare the Architect for the Project, and to induce Lender to advance loanproceeds to assist in funding construction of the Project and knowing thatLender will rely on this certificate in doing so, we hereby certify as follows:

 

1.We inspected the Project on ___________, 20____ and found the status of theProject on that date and the progress made on the Project since our lastcertificate to you dated _________, 20___ to be as follows:

 

2.  All work to date has been done in accordancewith the Plans and Specifications and in a good and workmanlike manner. Allmaterials and fixtures usually furnished and installed or stored on site at thecurrent stage of construction have been furnished, installed or stored on site.All of the work to date is hereby approved except as follows:

 

3.We have examined the requisition being submitted herewith to you by Owner,which requisition includes an Application for Payment from __________________________(“Contractor”)respecting construction of the Project. The payment so applied for byContractor does not exceed (when added to the payments heretofore applied forby and paid to Contractor) ___________percent (___%)  of the value of  materials on site, labor and materialsincorporated into the Project.

 

4.We have been advised that as of this date there remains unexpended from theproceeds of your Construction Loan $_________ which are available to fundconstruction costs, from which funds to pay the aforementioned Application forPayment will be deducted. In our opinion, such unexpended portion of your loanproceeds, after deduction of funds sufficient to cover both the currentApplication for Payment and the standard 10 percent retainage heretoforewithheld and to become due on account of previous applications, will besufficient to pay for all construction costs reasonably required to completethe Project, provided that the amount advanced under the current applicationis, in fact, applied against obligations incurred for labor and materials heretoforefurnished on account of construction of the Project.

 

5.All permits, licenses, approvals and the like required to complete constructionof the Project have been validly issued by the appropriate authorities and arein full force and effect, and there is no violation of any of the provisionsthereof or of any legal requirements applicable to the Project of which we havenotice or knowledge as of the date hereof except as follows:

 

Accessto and egress from the Project and all improvements to be constructed thereonare in accordance with all applicable legal requirements. Water, drainage andsanitary sewerage facilities and telephone, gas and electric services of publicutilities are or are due to be installed in the locations indicated on the Plansand Specifications and are adequate to serve the Project. All necessaryapprovals for installation of or connection to said facilities or services havebeen obtained.

 

6.To the best of our knowledge, there are no petitions, actions or proceedingspending or threatened to revoke, rescind, alter or declare invalid any laws,ordinances, regulations, permits, licenses or approvals for or relating to theProject.

 

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7.No amendments, modifications or changes have been made to our contract dated _____________,with Owner except such as have had your prior written approval.

 

8.Owner is not in default of any of Owner’s obligations to us as of the datehereof except as follows:

 

Thiscertificate is rendered based on our examination of this Project, the Plans andSpecifications, the data comprising the Application for Payment and all othermatters which we deem relevant. We are to incur no liability under thiscertificate except for failure to exercise due professional skill anddiligence.

 

Executedas a sealed instrument this ______ day of______________.

 
| ARCHITECT: |   |                 |
|------------|--------|----------------------|
|       |   |                 |
|       | By:    |                 |
|       |   | Its  duly authorized |

 

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**Exhibit J**

 

**Photocopyof Construction Note**

 

82

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**CONSTRUCTION**

**LINE-OF-CREDIT**

**MAXIMUM $12,000,000.00**

** **

**CONSTRUCTION NOTE**

 

AFTER DATE, FOR VALUE RECEIVED, the Undersigned,Tradeport Development III, LLC, a Connecticut limited liability company, havinga usual place of business at 204 West Newberry Road, Bloomfield,Connecticut  (the “Borrower”), promisesto pay to Berkshire Bank, a Massachusetts banking corporation, (“Lender”), ororder, at the Lender’s main office presently located at 31 Court Street,Westfield, Massachusetts, or at such other place as Lender may designate inwriting, the maximum principal sum of Twelve Million and 00/100 Dollars($12,000,000) or so much thereof as may be Advanced (each Advance shall bereferred to as an “Advance” and all such Advances shall collectively bereferred to as the “Advances”) pursuant to a Construction Loan and SecurityAgreement of even date herewith (“Loan Agreement”)  and incorporated by reference herein made betweenBorrower and Lender.  Capitalized termsnot defined herein shall have the meaning given in the Loan Agreement.  The principal outstanding shall be repaid,together with interest thereon as provided in this Note as follows:

 

INTEREST

 

For the entire term of the Loan, the Loan shall bearinterest at an adjustable annual rate equal to thirty (30) day LIBOR, plus TwoHundred Seventy Five (275) basis points (collectively the “Applicable Rate”).  Such adjustments shall become effective onthe  1st day of each month (the “ResetDate”).  Lender shall not be required tonotify Borrower of adjustments in said interest rate.   Notwithstanding the foregoing, at no timeshall the Applicable Rate be less than four percent (4.00%) during the “InterestOnly Period” (defined hereinafter).

 

Subject to, and in accordance with the provisions ofthis Note and the Loan Agreement, accrued and unpaid interest shall be due andpayable monthly, in arrears on the first day of each month.

 

REPAYMENT

 

Principal and interest due Lender hereunder shall bepayable as follows:

 

A.  Commencing on March 1,2009  and thereafter on the same day of 

 

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each succeeding month for a period of twelve (12) months(the “Interest Only Period”), monthly payments of interest only in arrears,calculated at the above rate of interest upon the unpaid principal hereunder.

 

B.  Commencingon  March 1, 2010 and thereafter onthe same day of each succeeding month for a period of one hundred eight (108)months (and based upon an amortization period of twenty-five (25) years, equalmonthly payments of principal in accordance with the attached amortizationschedule, plus accrued interest at the above Applicable Rate.

 

C.  All remainingunpaid principal and all accrued interest thereon shall be due and payable infull ten (10) years from the date hereof.

 

Subject to the terms and conditions contained in theLoan Agreement, the amount of the Borrower’s available construction line ofcredit hereunder shall be subject to the terms set forth in the LoanAgreement.  This Note is the Notereferred to in, and is subject to, and entitled to, the benefits of the LoanAgreement between the Borrower and the Lender. The terms used herein which are defined in the Loan Agreement shall havetheir defined meanings when used herein. The Loan Agreement, among other things, contains provisions foracceleration of the maturity of this Note upon the happening of certain statedevents.

 

Principal sums advanced under this Note shall reduce theamount of principal available under this Note and may not be re-borrowedor re-advanced.  This Note may be prepaidonly in accordance with the provisions set forth in the Loan Agreement whichdoes contain a provision for a Prepayment Premium in accordance with **Section 4.10** of the LoanAgreement.  All prepayments (withprepayment defined herein as any payment of principal in advance of its duedate) shall be applied against the principal payments due hereunder in theinverse order of their maturity.

 

The Lender may, in its sole discretion, andnotwithstanding execution of this Note by the Borrower in its stated maximumPrincipal Sum, act to advance lesser sums thereon to the Borrower in amounts,and at times in accordance with the Loan Agreement.

 

However, nothing herein shall be construed to restrictthe Lender, in its sole and exclusive discretion, from making Advances inexcess of the stated maximum dollar amount, without requirement of execution ofadditional promissory note(s), or otherwise modifying this Note, and its sodoing at any time, or times, shall not waive its rights to insist upon strictcompliance with the terms of this Note, the Loan Agreement, or any otherinstruments executed in connection with this financial transaction, at any othertime, and to further rely upon all collateral secured to it for satisfaction ofall obligations of the Borrower to the Lender, without exception.

 

Borrower agrees that the Lender may, at its sole andexclusive discretion, make loan advances to the Borrower upon verbal, orwritten, authority of any two of the following four individuals:  

 

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Anthony J. Galici, Thomas M. Lescalleet, Frederick M.Danziger and Kelly Poudrette ; may deliver loan proceeds by direct deposit toany demand deposit account of the Borrower with the Lender, or otherwise, as sodirected; and that all such loans and advances as evidenced solely by theLender’s books, ledgers and records shall conclusively represent bindingobligations of the Borrower hereunder.

 

The Lender shall also record as a debit to the Borrower’sLoan Account, in accordance with its customary accounting practice, all otherobligations, debts, charges, expenses, and other items properly chargeable tothe Borrower; and shall credit all payments made by the Borrower on account ofindebtedness evidenced by the Borrower’s Loan Account; as well as all proceedsof collateral which are finally paid to the Lender at its own office in cash orsolvent credits; and other appropriate debits and credits.  The principal balance of the Borrower’s LoanAccount shall reflect the amount of the Borrower’s indebtedness to the Lenderfrom time-to-time by reason of loans and other appropriate chargeshereunder.  At least once each month theLender shall render a statement of account for the Borrower’s Loan Accountwhich statement shall be considered correct and accepted by the Borrower andconclusively binding upon the Borrower, unless the subject of written objectionreceived by Lender, certified mail, return receipt requested, within ten  (10) days after mailing of its statementto Borrower.

 

Borrower does hereby irrevocably grant to the Lender,full power and authority, at its discretion, to debit any deposit account ofthe Borrower with the Lender for the amount of any monthly interest owing onBorrower’s Loan Account referred to herein; for the amount of any principalreduction, or for any repayment of obligations due upon Borrower’s Loan Accountwhich the Lender may require, all without prior notice, or demand upon theBorrower.

 

Any payments received by Lender with respect to thisNote shall be applied first to any costs, charges, or expenses (includingattorney’s fees) due Lender from the Borrower, second to any unpaid interesthereunder, and third to the unpaid Principal Sum.

 

If any payment required hereunder is more than ten  (10) days overdue, (in addition to theinterest accruing hereunder) a late charge of five percent (5%) of the overduepayment shall be charged to the Borrower and be immediately due and payable toLender.  Any payment having a due datefalling upon a Saturday, Sunday, or legal holiday shall be due and payable onthe next business day for which Lender is open for business, and interest shallcontinue to accrue during any such period.

 

If any payment received by Lender with respect to thisNote shall be deemed by a court of competent jurisdiction to have been avoidable preference or fraudulent conveyance under federal or state law, orotherwise due any party other than Lender, then the obligation for which thepayment was made shall not be discharged by the payment and shall survive as anobligation due hereunder, notwithstanding the Lender’s return to the Borroweror any other party of the original of this Note or other instrument evidencingthe obligation for which payment was made.

 

Interest hereunder shall be computed in accordance withthe Loan Agreement.  Upon the occurrenceof an Event of Default hereunder, interest upon the total unpaid principalhereunder shall 

 

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thereafter, at Lender’s option, without notice toBorrower and until payment in full of all obligations hereunder, accrue at arate (“Default Rate”) equal to five percent (5%) above the interest rate thenin effect hereunder at the time of default.

 

It is not intended under this Note to charge interest ata rate exceeding the maximum rate of interest permitted to be charged underapplicable law, but if interest exceeding said maximum rate should be paidhereunder, the excess shall, at Lender’s option, be (a) deemed a voluntaryprepayment of principal not subject to the prepayment premium (if any) setforth herein or (b) refunded to the Borrower.

 

The following described property, in addition toall other collateral now or hereafter provided by the Borrower to Lender, shallsecure this Note and all other present or future obligations of the Borrower toLender: The Loan shall be secured by First Mortgage and Security Interest onthe Premises known as 100 International Drive, Windsor, Connecticut (“MortgagedPremises”), together with a collateral assignment of rents and leases.   The Lender shall also be granted acollateral assignment of all deposits, rights, licenses, permits, constructioncontracts, architect contracts and other governmental approvals necessary forthe construction, development, use and occupancy of the Mortgaged Premises forits intended purpose.

 

As additional collateral for the payment and performanceof this Note and all other obligations, whether now existing or hereafterarising, of the Borrower to Lender, Lender shall at all times have and ishereby granted a security interest in and right of offset against all cash,deposit balances and/or accounts, instruments, securities, or other property ofthe Borrower, now or hereafter in the possession of Lender, whether forsafekeeping or otherwise.  This right ofoffset shall permit Lender at any time, after default, and without notice tothe Borrower to transfer such funds or property as may be deemed by Lender tobe appropriate so as to reduce or satisfy any obligation of the Borrower to theLender.

 

This Note shall be in default, and all unpaid principal,interest, and other amounts due hereunder, shall, at Lender’s option, beimmediately due and payable, without prior notice, protest, or demand, upon theoccurrence of any one or more of the events of default (the “Events of Default”),in accordance with the terms and conditions of the Loan Agreement.  Default upon this Note shall also operate asa default upon all other Obligations of Borrower to Lender.

 

The Borrower (a) waives presentment, demand,notice, protest, and delay in connection with the delivery, acceptance,performance, collection, and enforcement of this Note, and (b) assents toany extension, renewal, modification, or other indulgence permitted by Lenderwith respect to this Note, including, without limitation, any release,substitution, or addition of co-makers, of this Note and any release,substitution, or addition of collateral securing this Note or any otherobligations of the Borrower to Lender, and (c) authorizes Lender, in itssole and exclusive discretion and without notice to the Borrower, to completethis Note if delivered incomplete in any respect.

 

No indulgence, delay, or omission by Lender inexercising or enforcing any of its rights or remedies hereunder shall operateas a waiver of any such rights or remedies or of the right to exercise them atany later time.  No waiver of any defaulthereunder shall operate as a waiver of any other 

 

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default hereunder or as a continuing waiver.  The Lender’s acceptance of any paymenthereunder, following any default, shall not constitute a waiver of such defaultor of any of the Lender’s rights or remedies hereunder (including charginginterest at the Default Rate), unless waived in writing by Lender.

 

All of the Lender’s rights and remedies hereunder andunder any other loan documents, or instruments, shall be cumulative and may beexercised singularly or concurrently, at the Lender’s sole and exclusivediscretion.

 

The Borrower agrees to pay on demand all costs andexpenses, including, but not limited to, reasonable attorney’s fees, incurredby Lender in connection with the protection and/or enforcement of any of Lender’srights or remedies hereunder, whether or not any suit has been instituted byLender.

 

The word “Lender” where used herein shall mean the namedpayee, its successors, assigns, affiliates, and endorsees (and/or the holder ofthis Note if, at any time, it is made payable to bearer), all of whom this Noteshall inure to their benefit as holders in due course.

 

The word “Borrower” where used herein includes itssuccessors and assigns of this Note, and their respective heirs, successors,assigns, and representatives, shall be jointly and severally liablehereunder.  Any reference herein to theBorrower, is a reference to such party or parties individually as well ascollectively.

 

The use of masculine or neuter genders hereunder shallbe deemed to include the feminine, and the use of the singular or the pluralherein shall be deemed to include the other, as the context may require.

 

The Borrower represents that the proceeds of this Notewill not be used for personal, family, or household purposes and that this loanis strictly a commercial transaction.

 

Except as provided in clauses A, B, C, D and E, below,notwithstanding anything else to the contrary contained in this ConstructionNote or in any other document or instrument, the indebtedness evidenced by thisConstruction Note or evidenced or secured thereunder shall be non-recourse tothe Borrower following the receipt of a final certificate of occupancy for theMortgaged Premises after which  Borrowershall be liable upon the indebtedness evidence hereby or evidenced or securedthereby to the full extent (but only to the extent) of the security therefore,the same being the Mortgaged Premises and all rights, estates and intereststherein or related thereto securing the payment of this Construction Note.  If an Event of Default occurs hereunder orunder any of the Obligations, or in the timely and proper performance of anyObligations of Borrower thereunder, any judicial proceedings brought by Lender,or the holder hereof, against Borrower shall be limited to the preservation,enforcement and foreclosure, or any thereof, of the liens, security, title,estates, rights and security interests now or at anytime hereafter securing thepayment of this  Construction Note or theother Obligations of Borrower to Lender, and no attachment, execution or otherwrit of process shall be sought, issued, or levied upon any assets, propertiesor funds of Borrower other than the Mortgaged Premises (except as providedhereafter) and in the event of foreclosure of such liens, 

 

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security, title, estates, rights or security interests,securing the payment of the Construction Note, and/or other Obligations ofBorrower, no judgment for any deficiency upon the indebtedness evidenced herebyor evidenced or secured thereby shall be sought or obtained by Lender, or theholder hereof, against Borrower, unless there has occurred an Event ofDefault.  Borrower shall be  unconditionally liable to Lender for all ofits Obligations due to Lender by reason of, or in connection with theoccurrence of any of the following events:

 

A.  Themisapplication of any insurance proceeds or condemnation awards, including, butnot limited to, the failure to deliver same to Lender, any receiver or anypurchaser at foreclosure, if appropriate;

 

B.  Following anEvent of Default, the misapplication of any tenant rents or security depositsor any other refundable deposits, including, but not limited to, the failure todeliver same to Lender, any receiver or any purchaser at foreclosure, ifappropriate;

 

C.  Themisapplication of any Gross Revenues generated at or by the Mortgaged Premisesafter the occurrence of an Event of Default under the Loan Documents;

 

D.  Waste committedon the Mortgaged Premises or damage to the Mortgaged Premises as a result ofthe intentional misconduct or gross negligence of Borrower or the wrongfulremoval or destruction of any portion of the Mortgaged Premises; or

 

E.  Loss incurredby lender and caused by the material breach of any material representation orwarranty made in connection with the Loan known by Borrower or  its Member to have been false when made ordeemed made, including any material misrepresentation or inaccuracy containedin any financial statement or other document provided to the Lender pursuant tothis Agreement known by Borrower or  itsMember to have been false or inaccurate when provided.

 

THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THECOMMONWEALTH OF MASSACHUSETTS, AND THE BORROWER SUBMITS TO THE JURISDICTION OFITS COURTS WITH RESPECT TO ALL CLAIMS CONCERNING THIS NOTE OR ANY COLLATERALSECURING IT.

 

ALL PARTIES TO THIS NOTE, INCLUDING LENDER, AND ASA NEGOTIATED PART OF THIS TRANSACTION, HEREBY EXPRESSLY WAIVE ALL RIGHTSTO TRIAL BY JURY, AS TO ALL ISSUES, INCLUDING ANY COUNTERCLAIMS, WITHOUTEXCEPTION, IN ANY ACTION OR PROCEEDING RELATING, DIRECTLY OR INDIRECTLY,TO THIS NOTE AND/OR OTHER INSTRUMENTS OR LOAN DOCUMENTS (IF ANY) EXECUTED INCONNECTION HEREWITH.

 

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This Note constitutes a final written expression of allof its terms and is a complete and exclusive statement of those terms.  Any modification or waiver of any of theseterms must be in writing signed by the party against whom the modification orwaiver is to be enforced.

 

The Borrower agrees to be bound by the terms of thisNote and acknowledge receipt of a signed copy hereof.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY ENDSHERE]

 

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Signed as a sealed instrument this 6th day of February, 2009.

 

 
|                    |   |   | TRADEPORT DEVELOPMENT III, LLC               |
|-------------------------|--------|--------|----------------------------------------------|
|                    |   |   | Griffin Land & Nurseries, Inc. |
|                    |   |   |                                         |
| /s/Thomas M. Daniels    |   | By:    | /s/Frederick M. Danziger                     |
| Witness                 |   |   | Its duly authorized                          |
|                    |   |   |                                         |
| /s/Thomas M. Lescalleet |   |   | Frederick M. Danziger                        |
| Witness                 |   |   | Its President                                |

 

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**Exhibit K**

 

**Intellectual Property**

 

None

 

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**Exhibit L**

 

**Affiliate Transactions**

 

None

 

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**Exhibit M**

 

**Environmental Disclosure**

 
| GEOQUEST, Inc. |   |                   |
|---------------------|--------|------------------------|
|                |   | February 5,  2009 |

 

BerkshireBank

31Court Street

Westfield,Massachusetts 01085

 
| Re:    | Soil  Remediation Project                      |
|--------|------------------------------------------------|
|   | 100  International Drive, Windsor, Connecticut |
|   | GeoQuest  Project No. 1508                |

 

Ladies/Gentlemen:

 

Asyou are aware, GeoQuest, Inc. is currently conducting a soil remediationproject on the above referenced property. The excavation and off-site disposal of the contaminated soil iscurrently ongoing.  Upon the completionof the fieldwork and receipt of the laboratory analyses for the confirmationsoil samples, GeoQuest will complete a final report for the project.  A copy of this report will be forwarded toBerkshire Bank for its records.

 

Inorder to comply with wetlands regulations, soil contamination on one portion ofthe site (a 12,000 square foot designated wetland located along the westernexterior wall of the proposed site building) will remain after the currentremediation project is completed.  Basedon field observations, this area contains approximately 1,000 yards ofcontaminated soil.  The final report willinclude site plans depicting the location of the wetland area.  A site plan of this wetlands area isattached.

 

Thecontaminated soil remaining in the wetland area does not pose a health risk tosite occupants and does not require removal in order to comply with currentState or Federal regulations.

 

Ifyou have any questions or would like to discuss the project in further detail,please call me at (860) 243-1757.

 

 
|   | Very  truly yours,  |
|--------|---------------------|
|   | GEOQUEST, INC. |
|   |                |
|   | /s/Marc  I. Casslar |
|   |                |
|   | Marc  I. Casslar    |
|   | President           |

 

Att.

 

3Barnard Lane . P. O. Box 85. Bloomfield, Connecticut 06002 . (860) 243-1757..  Fax: (860) 243-9414

 

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|  | SITE LAYOUT MAP  Proposed Building Area to Remain GeoQuest, inc. P.O. Box 85 Bloomfield, CT  Tel: (860) 243-1757 Fax: (860) 243-9414 Site Location 100 International Drive  Windsor, CT Date February 2009 Project Number 1508 |
|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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**Exhibit N**

 

**Missing Project Approvals**

 

Building Permit

 

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**Exhibit O**

 

**RequiredProject Approvals**

 

Building Permit

 

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**Exhibit O**

 

**Permits and Approvals**

 

1.     Wetland/WatercoursePermit # 793A, Approved by Town of Windsor Inland Wetlands and WatercoursesCommission on November 19, 2008.

 

2.     Determinationof No Hazard to Air Navigation by Federal Aviation Administration, Air TrafficAirspace Branch, Issue Date: 01/05/2009.

 

3.     ConnecticutDepartment of Environmental Protection, Water Discharge — Stormwater Permit#GSN001460.

 

4.     Special Use andSite Plan Revision Approvals by letter dated November 20, 2008 from theTown of Windsor Planning and Zoning Commission.

 

5.     State ofConnecticut State Traffic Commission, STC No. 170-0812-01, Certificate No. 813-B,approved December 16, 2008.

 

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**Exhibit P**

 

**Existing Secured and Unsecured Indebtedness**

 

None

 

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**Exhibit Q**

 

**Authority,Due Execution and Enforceability Opinion Requirements**

 

Theopinion of counsel to the Borrower and the Guarantor as to the authority, dueexecution and enforceability of the Loan Documents shall cover the followingmatters:

 

(a)         The due organization, validexistence and good standing of each of the Borrower and its Guarantor.

 

(b)         That each of the Borrowerand Guarantor have all requisite power to own their property and conduct itsbusiness as now or proposed to be conducted, and to enter and perform itsobligations under the Loan Documents to which it is a party.

 

(c)          That the Borrower andGuarantor are duly qualified to do business in the Commonwealth ofMassachusetts.

 

(d)         That each Loan Document to whichthe Borrower and/or Guarantor are a party, have been duly executed anddelivered to the Lender and is the valid and legally binding obligation of theBorrower and/or Guarantor enforceable in accordance with its terms, except asenforceability is limited by bankruptcy, insolvency, reorganization, moratoriumor similar laws of general application affecting the rights of creditors or bythe discretionary nature of the remedy of specific performance.

 

(e)          That the Guaranty has beenduly executed and delivered to the Lender and is the legal, valid, binding andenforceable obligations of the Guarantor, enforceable in accordance with itsterms, except as enforceability may be limited by bankruptcy, reorganization,moratorium or similar laws of general application affecting the rights ofcreditors or by the discretionary nature of the remedy of specific performance.

 

(f)           That the execution, deliveryand performance of each Loan Document to which the Borrower or the Guarantor isa party and the transactions contemplated thereby (i) has been dulyauthorized by all necessary proceedings on the part of such Person; (ii) doesnot conflict with or result in any breach or contravention of any provision oflaw, statute, rule or regulation to which such Person is subject or anydecree or judgment binding on such Person; (iii) does not conflict withany provision of the applicable organization documents or by-laws of suchPerson, or any indenture agreement or other instrument to which such Person isa party, or which is binding upon such Person or on any of its properties, norwill the same create any lien or security interest under or pursuant to anysuch indenture agreement or other instrument (other than the SecurityDocuments); and (iv) does not require the approval or consent of, orfiling with, any governmental agency or authority.

 

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**EXHIBIT R**

 

**AUTHORITY DUE EXECUTION AND ENFORCEABILITY OPINION REQUIREMENTS**

 

Theopinion of counsel to the Borrower and the Guarantor as to the authority, dueexecution and enforceability of the Loan Documents shall cover the followingmatters:

 

(a) Thedue organization, valid existence and good standing of each of the Borrower andits Guarantor.

 

(b) Thateach of the Borrower and Guarantor have all requisite power to own their  property and conduct is business as now orproposed to be conducted, and to enter and perform its obligations under theLoan Documents to which it is a party.

 

(c) Thatthe Borrower and Guarantor are duly qualified to do business in the State ofConnecticut.

 

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