**Exhibit10.29**

 

**MORTGAGE DEED, SECURITY AGREEMENT, FIXTURE FILING,**

**FINANCING STATEMENT**

**AND ASSIGNMENT OF LEASES AND RENTS**

 

THIS MORTGAGE DEED, SECURITY AGREEMENT, FIXTUREFILING, FINANCING STATEMENT AND ASSIGNMENT OF LEASES AND RENTS (this “Mortgage”)is executed as of July 6, 2005, by TRADEPORT DEVELOPMENT II, LLC, aConnecticut limited liability company (“Mortgagor”), in favor of, and for theuse and benefit of, FIRST SUNAMERICA LIFE INSURANCE COMPANY, a New Yorkcorporation (“Mortgagee”).

 

**ARTICLE 1**PARTIES, PROPERTY, AND DEFINITIONS

 

The following terms and references shall have themeanings indicated:

 

**1.1****          Agreement ConcerningMaster Lease:**  The AgreementConcerning Master Lease of even date herewith by and between Mortgagor,Mortgagee, and Guarantor.

 

**1.2****          Application:**  As defined in **Section 9.20**.

 

**1.3****          Chattels:**  All goods, fixtures, inventory, equipment,building and other materials, supplies, and other tangible personal property ofevery nature, to the extent now owned or hereafter acquired by Mortgagor andused or intended for use in the construction, development, or operation of theProperty, together with all accessions thereto, replacements and substitutionstherefor, and proceeds thereof.

 

**1.4****          Controlling Persons:**  Collectively, (a) Guarantor, (b) anyother party directly or indirectly liable for payment of the SecuredObligations, whether as maker, endorser, guarantor, surety, general partner, orotherwise, and (c) any successor to any of the foregoing.  Pursuant to the foregoing, River Bend Associates,Inc., a Connecticut corporation, is not a Controlling Person as of the date ofthis Mortgage.  No shareholder, officer,or director of Guarantor shall be considered a Controlling Person.

 

**1.5****          Default:**  Any matter which, with the giving of notice,passage of time, or both, would constitute an Event of Default.

 

**1.6****          Environmental IndemnityAgreement:**  The EnvironmentalIndemnity Agreement of even date herewith made by Mortgagor and Guarantor forthe benefit of Mortgagee.

 

**1.7****          ERISA:**  The Employee Retirement Income Security Actof 1974, as amended, together with all rules and regulations issued thereunder.

 

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**1.8****          Event of Default:**  As defined in **Article 6**.

 

**1.9****          Guarantor:**  Griffin Land & Nurseries, Inc., aDelaware corporation.

 

**1.10****        Guaranty Agreement:**  The Guaranty Agreement of even date herewithmade by Guarantor for the benefit of Mortgagee.

 

**1.11****        Insurance Agreement:**  The Agreement Concerning InsuranceRequirements of even date herewith executed by Mortgagor for the benefit ofMortgagee.

 

**1.12****        Intangible Personalty:**  To the extent now owned or hereafter acquiredby Mortgagor, the right to use all trademarks and trade names and symbols orlogos used in connection therewith, or any modifications or variations thereof,in connection with the operation of the improvements existing or to beconstructed on the Property, together with all accounts, deposit accounts,letter of credit rights, investment property, monies in the possession ofMortgagee (including without limitation proceeds from insurance, retainages anddeposits for taxes and insurance), Permits, contract rights (including, withoutlimitation, rights to receive insurance proceeds) and general intangibles(whether now owned or hereafter acquired, and including proceeds thereof)relating to or arising from Mortgagor’s ownership, use, operation, leasing, orsale of all or any part of the Property, specifically including but in no waylimited to any right which Mortgagor may have or acquire to transfer anydevelopment rights from the Property to other real property, and anydevelopment rights which may be so transferred.

 

**1.13****        Lease Certificate:**  The certificate of even date herewith made byMortgagor to Mortgagee concerning Leases.

 

**1.14****        Leases:**  Any and all leases, subleases and otheragreements under the terms of which any person other than Mortgagor has oracquires any right to occupy or use the Property, or any part thereof.

 

**1.15****        Loan:**  The loan from Mortgagee to Mortgagorevidenced by the Note.

 

**1.16****        Loan Documents:**  The Note, all of the deeds of trust,mortgages and other instruments and documents securing or executed anddelivered in connection with the Note, including this Mortgage; the InsuranceAgreement; the Environmental Indemnity Agreement; the Guaranty Agreement; theLease Certificate; Agreement Concerning Master Lease (as defined in **Section 1.1** above); Tenant Improvements and LeasingCommissions Escrow Agreement (as defined in **Section 1.25**below) and each other document executed or delivered in connection with thetransaction pursuant to which the Note has been executed and delivered.  The term “Loan Documents” also includes allmodifications, extensions, renewals, and replacements of each document referredto above.

 

**1.17****        Mortgagee:**  The Mortgagee named in the introductoryparagraph of this Mortgage, whose legal address is c/o AIG GlobalInvestment Corp., 1 SunAmerica Center, 38th Floor,Century City, Los Angeles, California 90067-6022, together withany future holder of the Note.

 

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**1.18****        Mortgagor:**  The Mortgagor named in the introductoryparagraph of this Mortgage (Taxpayer Identification No. 20-2650579;Organizational I.D. No. 0814512), whose legal address is 204 WestNewberry Road, Bloomfield, Connecticut 06002-1308, together with anyfuture owner of the Property or any part thereof or interest therein.

 

**1.19****        Note:**  Mortgagor’s promissory note of even dateherewith, payable to the order of Mortgagee in the principal face amount of$12,700,000.00, the last payment under which is due on August 1, 2015, or,if extended by Mortgagee pursuant to its terms, August 1, 2020, unlesssuch due date is accelerated, together with all renewals, extensions andmodifications of such promissory note. All terms and provisions of the Note are incorporated by this referencein this Mortgage.

 

**1.20****        Permits:**  All permits, licenses, certificates andauthorizations necessary for the beneficial development, ownership, use,occupancy, operation and maintenance of the Property.

 

**1.21****        Permitted Exceptions:**  The matters (excluding matters of survey) setforth in Schedule B-I of the title insurance policy insuring the liencreated by this Mortgage, in form and substance satisfactory to, and acceptedby, Mortgagee, that Mortgagor has caused to be delivered to Mortgagee inconnection with the Loan.

 

**1.22****        Property:**  The tract or tracts of land described in Exhibit Aattached, together with the following:

 

(a)           All buildings,structures, and improvements now or hereafter located on such tract or tracts,as well as all rights-of-way, easements, and other appurtenances thereto;

 

(b)           All of Mortgagor’sright, title, and interest in and to any land lying between the boundaries ofsuch tract or tracts and the center line of any adjacent street, road, avenue,or alley, whether opened or proposed;

 

(c)           All of the rents,income, receipts, revenues, issues and profits of and from such tract or tractsand improvements;

 

(d)           To the extent now ownedor hereafter acquired by Mortgagor, all (i) water and water rights(whether decreed or undecreed, tributary, nontributary or not nontributary,surface or underground, or appropriated or unappropriated); (ii) ditchesand ditch rights; (iii) spring and spring rights; (iv) reservoir andreservoir rights; and (v) shares of stock in water, ditch and canalcompanies and all other evidence of such rights, and which are appurtenant toor which have been used in connection with such tract or tracts orimprovements;

 

(e)           Any minerals, crops,timber, trees, shrubs, flowers, and landscaping features now or hereafterlocated on, under or above such tract or tracts;

 

(f)            Subject to the rightsof any utility or public service provider, all machinery, apparatus, equipment,fittings, fixtures (whether actually or constructively attached, and includingall trade, domestic, and ornamental fixtures) now or hereafter located in,upon, or

 

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undersuch tract or tracts or improvements and used or usable in connection with anypresent or future operation thereof, including but not limited to all heating,air-conditioning, freezing, lighting, laundry, incinerating and powerequipment; engines; pipes; pumps; tanks; motors; conduits; switchboards;plumbing, lifting, cleaning, fire prevention, fire extinguishing,refrigerating, ventilating, cooking, and communications apparatus; boilers,water heaters, ranges, furnaces, and burners; appliances; vacuum cleaningsystems; elevators; escalators; shades; awnings; screens; storm doors andwindows; stoves; refrigerators; attached cabinets; partitions; ducts andcompressors; rugs and carpets; draperies; and all additions thereto and replacementstherefor, except any such items owned by tenants under Leases or leased by suchtenants from any entity other than Mortgagor;

 

(g)           Any development rightsassociated with such tract or tracts, whether previously or subsequentlytransferred to such tract or tracts from other real property or now orhereafter susceptible of transfer from such tract or tracts to other realproperty;

 

(h)           Subject to the rightsof tenants under Leases, any awards and payments, including interest thereon,resulting from the exercise of any right of eminent domain or any other publicor private taking of, injury to, or decrease in the value of, any of suchproperty; and

 

(i)            Any other and greaterrights and interests of every nature in such tract or tracts and in the possessionor use thereof and income therefrom, to the extent now owned or subsequentlyacquired by Mortgagor.

 

**1.23****        Secured Obligations:**  The principal sum of $12,700,000.00 and allother present and future obligations of Mortgagor to Mortgagee evidenced by orcontained in the Note, the Environmental Indemnity Agreement, this Mortgage andall other Loan Documents, whether stated in the form of promises, covenants,representations, warranties, conditions, or prohibitions or in any other form.  If the maturity of the Note secured by thisMortgage is accelerated, the Secured Obligations shall include an amount equalto any prepayment premium which would be payable under the terms of the Note asif the Note were prepaid in full on the date of the acceleration.  If under the terms of the Note no voluntaryprepayment would be permissible on the date of such acceleration, then theprepayment fee or premium to be included in the Secured Obligations shall beequal to one hundred fifty percent (150%) of the highest prepayment fee orpremium set forth in the Note, calculated as of the date of such acceleration,as if prepayment were permitted on such date.

 

**1.24****        State:**  The State in which the Property is located.

 

**1.25****        Tenant Improvements andLeasing Commissions Escrow Agreement:** The Tenant Improvements and Leasing Commissions Escrow Agreement of evendate herewith by and between Mortgagor, Mortgagee, and the “Escrow Agent” namedtherein.

 

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**Article 2**GRANTING CLAUSE

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**2.1****          Grant to Mortgagee.**  As security for the Secured Obligations,Mortgagor hereby gives, grants, bargains, sells, conveys, mortgages, assigns,confirms and warrants unto Mortgagee the entire right, title, interest andestate of Mortgagor in and to the Property, whether now owned or hereafteracquired; TO HAVE AND TO HOLD the same, together with all and singular therights, hereditaments, and appurtenances in anywise appertaining or belongingthereto, unto Mortgagee and Mortgagee’s successors, substitutes and assignsforever, to its and their own proper use and behoof.

 

**2.2****          Security Interest toMortgagee.**  As additional securityfor the Secured Obligations, Mortgagor hereby grants to Mortgagee a securityinterest in the Property, Chattels and Intangible Personalty.  To the extent any of the Property, Chattels orthe Intangible Personalty may be or have been acquired with funds advanced byMortgagee under the Loan Documents, this security interest is a purchase moneysecurity interest.  This Mortgageconstitutes a Security Agreement under the Uniform Commercial Code of the statein which the Property is located (the “Code”) with respect to any part of theProperty, Chattels and Intangible Personalty that may or might now or hereafterbe or be deemed to be personal property, fixtures or property other than realestate (all collectively hereinafter called “Collateral”); all of the terms,provisions, conditions and agreements contained in this Mortgage pertain andapply to the Collateral as fully and to the same extent as to any otherproperty comprising the Property, and the following provisions of this Section shallnot limit the generality or applicability of any other provisions of thisMortgage but shall be in addition thereto:

 

(a)           The Collateral shall beused by Mortgagor solely for business purposes, and all Collateral (other thanthe Intangible Personalty) shall be installed upon the real estate comprisingpart of the Property for Mortgagor’s own use or as the equipment andfurnishings furnished by Mortgagor, as landlord, to tenants of the Property;

 

(b)           Subject to **Section 5.7** below, the Collateral (other than theIntangible Personalty) shall be kept at the real estate comprising a part ofthe Property, and shall not be removed therefrom without the consent ofMortgagee (being the Secured Party as that term is used in the Code); and theCollateral (other than the Intangible Personalty) may be affixed to such realestate but shall not be affixed to any other real estate;

 

(c)           No financing statementcovering any of the Collateral or any proceeds thereof is on file in any publicoffice; and Mortgagor will, at its cost and expense, upon demand, furnish toMortgagee such further information and will execute and deliver to Mortgageesuch financing statements and other documents in form satisfactory to Mortgageeand will do all such acts and things as Mortgagee may at any time or from timeto time reasonably request or as may be necessary or appropriate to establishand maintain a perfected first-priority security interest in the Collateral assecurity for the Secured Obligations, subject to no adverse liens orencumbrances; and Mortgagor will pay the cost of filing the same or filing orrecording such financing statements or other documents and this instrument inall public offices wherever filing or recording is deemed by Mortgagee to benecessary or desirable;

 

(d)           The terms andprovisions contained in this Section and in **Section 7.6**of this Mortgage shall, unless the context otherwise requires, have themeanings and be construed as provided in the Code; and

 

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(e)           This Mortgageconstitutes a financing statement under the Code with respect to theCollateral.  As such, this Mortgagecovers all items of the Collateral that are or are to become fixtures.  The filing of this Mortgage in the realestate records of Windsor, Connecticut, where the Property is located shallconstitute a fixture filing in accordance with the Code.  Information concerning the security interestscreated hereby may be obtained at the addresses set forth in **Article 1** of this Mortgage. Mortgagor is the “Debtor” and Mortgagee is the “Secured Party” (as thoseterms are defined and used in the Code) insofar as this Mortgage constitutes afinancing statement.

 

THE CONDITION OF THIS DEED IS SUCH THAT Mortgagor isindebted to Mortgagee in the principal sum of TWELVE MILLION SEVEN HUNDREDTHOUSAND DOLLARS and NO/100THS DOLLARS, as evidenced by the Note and isindebted for the other Secured Obligations, and Mortgagor further covenants andagrees as follows:

 

**ARTICLE 3MORTGAGOR’S REPRESENTATIONS AND WARRANTIES**

 

**3.1****          Warranty of Title.**  Mortgagor represents and warrants toMortgagee that:

 

(a)           Mortgagor has good andmarketable fee simple title to the Property, and such fee simple title is freeand clear of all liens, encumbrances, security interests and other claimswhatsoever, subject only to the Permitted Exceptions;

 

(b)           Mortgagor is the soleand absolute owner of the Chattels and the Intangible Personalty, free andclear of all liens, encumbrances, security interests and other claimswhatsoever, subject only to the Permitted Exceptions;

 

(c)           This Mortgage is avalid and enforceable first lien and security interest on the Property,Chattels and Intangible Personalty, subject only to the Permitted Exceptions;

 

(d)           Mortgagor, for itselfand its successors and assigns, hereby agrees to warrant and forever defend,all and singular of the property and property interests granted and conveyedpursuant to this Mortgage, against every person whomsoever lawfully claiming,or to claim, the same or any part thereof; and

 

The representations, warranties and covenantscontained in this Section shall survive foreclosure of this Mortgage, andshall inure to the benefit of and be enforceable by any person who may acquiretitle to the Property, the Chattels, or the Intangible Personalty pursuant toany such foreclosure.

 

**3.2****          Due Authorization.**  If Mortgagor is other than a natural person,then each individual who executes this document on behalf of Mortgagorrepresents and warrants to Mortgagee that such execution has been duly authorizedby all necessary corporate, partnership, limited liability company or otheraction on the part of Mortgagor. Mortgagor represents that Mortgagor has obtained all consents andapprovals required in connection with the execution, delivery and performanceof this Mortgage;

 

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**3.3****          Other Representationsand Warranties.**  Mortgagor representsand warrants to Mortgagee as follows:

 

(a)           Mortgagor is a limitedliability company, duly organized, validly existing and in good standing underthe laws of the State of Connecticut. The sole Controlling Person of Mortgagor is Guarantor.  Guarantor is a corporation, duly organized,validly existing and in good standing under the laws of the State of Delaware;

 

(b)           The execution, deliveryand performance by Mortgagor of the Loan Documents are within Mortgagor’s powerand authority and have been duly authorized by all necessary action;

 

(c)           This Mortgage is, andeach other Loan Document to which Mortgagor or Guarantor is a party will, whendelivered hereunder, be valid and binding obligations of Mortgagor andGuarantor enforceable against Mortgagor and Guarantor in accordance with theirrespective terms, except as limited by equitable principles and bankruptcy,insolvency and similar laws affecting creditors’ rights;

 

(d)           The execution, deliveryand performance by Mortgagor and Guarantor of the Loan Documents will notcontravene any contractual or other restriction binding on or affectingMortgagor or any Controlling Person and will not result in or require thecreation of any lien, security interest, other charge or encumbrance (otherthan pursuant hereto) upon or with respect to any of its properties;

 

(e)           The execution, deliveryand performance by Mortgagor and Guarantor of the Loan Documents does notcontravene any applicable law;

 

(f)            No authorization,approval, consent or other action by, and no notice to or filing with, anycourt, governmental authority or regulatory body is required for the dueexecution, delivery and performance by Mortgagor and Guarantor of any of theLoan Documents or the effectiveness of any assignment of any of Mortgagor’srights and interests of any kind to Mortgagee;

 

(g)           No part of theProperty, Chattels, or Intangible Personalty is in the hands of a receiver, noapplication for a receiver is pending with respect to any portion of theProperty, Chattels, or Intangible Personalty, and no part of the Property,Chattels, or Intangible Personalty is subject to any foreclosure or similarproceeding;

 

(h)           Neither Mortgagor norany Controlling Person has made any assignment for the benefit of creditors,nor has Mortgagor or any Controlling Person filed, or had filed against it, anypetition in bankruptcy;

 

(i)            There is no pendingor, to the best of Mortgagor’s knowledge, threatened, litigation, action,proceeding or investigation, including, without limitation, any condemnationproceeding, against Mortgagor or the Property before any court, governmental orquasi-governmental, arbitrator or other authority, and no such action againstany Controlling Person which could have a material adverse effect on itsfinancial condition;

 

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(j)            Mortgagor is a “non-foreignperson” within the meaning of Sections 1445 and 7701 of the United StatesInternal Revenue Code of 1986, as amended, and the regulations issued thereunder;

 

(k)           Access to and egressfrom the Property are available and provided by public streets, and Mortgagorhas no knowledge of any federal, state, county, municipal or other governmentalplans to change the highway or road system in the vicinity of the Property orto restrict or change access from any such highway or road to the Propertywhich would adversely affect the Property, access to the Property or theoperation of the Property as it is currently being used;

 

(l)            All public utilityservices necessary for the operation of all improvements constituting part ofthe Property for their intended purposes are available at the boundaries of theland constituting part of the Property, including water supply, storm andsanitary sewer facilities, and natural gas, electric and telephone facilities;

 

(m)          The Property is locatedin a zoning district designated I-1 (Industrial Zone), by the Town of Windsor,Connecticut.  Such designation permitsthe development, use and operation of the Property as it is currently operatedas a permitted, and not as a non-conforming use.  Mortgagor’s use of the Property and the usesof the Property permitted to tenants under Leases comply in all respects withall zoning ordinances, regulations, requirements, conditions and restrictions,including but not limited to deed restrictions and restrictive covenants,applicable to the Property;

 

(n)           There are no special orother assessments for public improvements or otherwise now affecting theProperty, nor does Mortgagor know of any pending or threatened specialassessments affecting the Property or any contemplated improvements affectingthe Property that may result in special assessments.  There are no tax abatements or exceptionsaffecting the Property;

 

(o)           Mortgagor and each ControllingPerson has filed all tax returns it is required to have filed, and has paid alltaxes as shown on such returns or on any assessment received pertaining to theProperty;

 

(p)           Mortgagor has notreceived any notice from any governmental body having jurisdiction over theProperty as to any violation of any applicable law, or any notice from anyinsurance company or inspection or rating bureau setting forth any requirementsas a condition to the continuation of any insurance coverage on or with respectto the Property or the continuation thereof at premium rates existing atpresent which have not been remedied or satisfied;

 

(q)           Neither Mortgagor norany Controlling Person is in default, in any manner which would adverselyaffect its properties, assets, operations or condition (financial orotherwise), in the performance, observance or fulfillment of any of theobligations, covenants or conditions set forth in any agreement or instrumentto which it is a party or by which it or any of its properties, assets orrevenues are bound;

 

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(r)            Except as set forth inthe Lease Certificate, there are no occupancy rights (written or oral), Leasesor tenancies (other than subleases) presently affecting any part of theProperty.  To Mortgagor’s knowledge,there are no subleases presently affecting any part of the Property.  The Lease Certificate contains a true andcorrect description of all Leases presently affecting the Property (other thansubleases).  No written or oralagreements or understandings exist between Mortgagor and the tenants under theLeases described in the Lease Certificate that grant such tenants any rightsgreater than those described in the Lease Certificate or that are in any wayinconsistent with the rights described in the Lease Certificate;

 

(s)           There are no purchaseoptions, purchase contracts or other similar agreements of any type (written ororal) presently affecting any part of the Property;

 

(t)            There exists nobrokerage agreement with respect to any part of the Property, except as otherwisedisclosed to Mortgagee in writing;

 

(u)           Except as otherwisedisclosed to Mortgagee in writing prior to the date hereof, (i) there areno contracts presently affecting the Property (“Contracts”) having a term inexcess of one hundred eighty (180) days or not terminable by Mortgagor (withoutpenalty) on thirty (30) days’ notice; (ii) Mortgagor has heretoforedelivered to Mortgagee true and correct copies of each of the Contractstogether with all amendments thereto; (iii) Mortgagor is not in default ofany obligations under any of the Contracts; and (iv) the Contractsrepresent the complete agreement between Mortgagor and such other parties as tothe services to be performed or materials to be provided thereunder and thecompensation to be paid for such services or materials, as applicable, andexcept as otherwise disclosed herein, such other parties possess no unsatisfiedclaims against Mortgagor.  Mortgagor isnot in default under any of the Contracts and no event has occurred which, withthe passing of time or the giving of notice, or both, would constitute adefault under any of the Contracts;

 

(v)           Mortgagor has obtainedall Permits required to be obtained by Mortgagor for the operation, use,ownership, development, occupancy and maintenance of the Property as anindustrial distribution center, as it is currently being operated.  None of the Permits has been suspended orrevoked, and all of the Permits are in full force and effect, are fully paidfor, and Mortgagor has made or will make application for renewals of any of thePermits prior to the expiration thereof;

 

(w)          All insurance policiesheld by Mortgagor relating to or affecting the Property are in full force andeffect, and Mortgagor shall keep the property fully insured as requiredhereunder until all Secured Obligations are satisfied.  Mortgagor has not received any notice ofdefault or notice terminating or threatening to terminate any such insurancepolicies.  Mortgagor has made or willmake application for renewals of any of such insurance policies prior to theexpiration thereof;

 

(x)            Mortgagor currentlycomplies with ERISA.  Neither the makingof the Loan and secured by this Mortgage nor the exercise by Mortgagee of anyof its rights under the Loan Documents constitutes or will constitute a non-exempt,prohibited transaction under ERISA; and

 

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(y)           Mortgagor’s exact legalname is correctly set out in the introductory paragraph of this Mortgage.  Mortgagor’s organizational identificationnumber is correctly set forth in the definition of “Mortgagor” set forth in **Article 1** hereof. Mortgagor’s location (as such term is used in **Section 5.8**hereof) is the State of Connecticut.

 

(z)            To the best ofMortgagor’s knowledge, (i) no part of the Property has, at any time duringthe period of three (3) years immediately preceding the date hereof, beenincluded in the “property description” of any real estate contiguous with theProperty (within the meaning of §22a–452a(c) of the Connecticut GeneralStatutes), (ii) no part of the Property is or has been an “establishment”or a “service station” under §22a–134 – *et seq.*–of the Connecticut General Statutes, and (iii) except as disclosed on theEnvironmental Assessment (as defined in the Environmental Indemnity Agreement),no part of the Property contains or has ever contained any underground storagetanks or facilities (as such terms are defined in §22a–449(d) – and §22a-449(d)–101of the Regulations of the State of Connecticut.

 

**3.4****          Continuing Effect.**  Mortgagor shall be liable to Mortgagee forany damage suffered by Mortgagee if any of the foregoing representations areinaccurate as of the date hereof, regardless of when such inaccuracy may bediscovered by, or result in harm to, Mortgagee. Mortgagor further represents and warrants that the foregoing representationsand warranties, as well as all other representations and warranties ofMortgagor to Mortgagee relative to the Loan Documents, shall survivetermination of this Mortgage.

 

**ARTICLE 4MORTGAGOR’S AFFIRMATIVE COVENANTS**

 

**4.1****          Payment of Note.**  Mortgagor will pay all principal, interest,and other sums payable under the Note, on the date when such payments are due,without notice or demand.

 

**4.2****          Performance of OtherObligations.**  Mortgagor will promptlyand strictly perform and comply with all other covenants, conditions, andprohibitions required of Mortgagor by the terms of the Loan Documents.

 

**4.3****          Other Encumbrances.**  Mortgagor will promptly and strictly performand comply with all covenants, conditions, and prohibitions required ofMortgagor in connection with any other encumbrance affecting the Property, theChattels, or the Intangible Personalty, or any part thereof, or any interesttherein, regardless of whether such other encumbrance is superior orsubordinate to the lien hereof.

 

**4.4****          Payment of Taxes.**

 

(a)           Property Taxes.  Unless Mortgagor is depositing money intoescrow pursuant to **Section 4.4(b)**,Mortgagor will (i) pay, before delinquency, all taxes and assessments,general or special, which may be levied or imposed at any time againstMortgagor’s interest and estate in the Property, the Chattels, or theIntangible Personalty, and (ii) within ten (10) days after each payment ofany such tax or assessment, Mortgagor will deliver to Mortgagee, without noticeor demand, an official receipt for such payment.  At Mortgagee’s option, Mortgagee may retainthe services of a firm to monitor the payment of all taxes and

 

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assessmentsrelating to the Property.  The cost ofsuch services shall be borne by Mortgagor unless Mortgagor is making depositspursuant to **Section 4.4(b)**.

 

(b)           Deposit for Taxes.  On or before the date hereof, Mortgagor shalldeposit with Mortgagee an amount equal to 1/12th of the amount which Mortgageeestimates will be required to make the next annual payment of taxes,assessments, and similar governmental charges referred to in this Section,multiplied by the number of whole or partial months that have elapsed since thedate one month prior to the most recent due date for such taxes, assessmentsand similar governmental charges. Thereafter, with each monthly payment under the Note, Mortgagor shalldeposit with Mortgagee an amount equal to 1/12th of the amount which Mortgageeestimates will be required to pay the next annual payment of taxes,assessments, and similar governmental charges referred to in this Section.  The purpose of these provisions is to provideMortgagee with sufficient funds on hand to pay all such taxes, assessments, andother governmental charges thirty (30) days before the date on which theybecome past due.  If the Mortgagee, inits sole discretion, determines that the funds escrowed hereunder are, or willbe, insufficient, Mortgagor shall upon demand pay such additional sums asMortgagee shall determine necessary and shall pay any increased monthly chargesrequested by Mortgagee.  Provided noDefault or Event of Default exists hereunder, Mortgagee will apply the amountsso deposited to the payment of such taxes, assessments, and other charges whendue, but in no event will Mortgagee be liable for any interest on any amount sodeposited, and any amount so deposited may be held and commingled withMortgagee’s own funds.

 

(c)           Intangible Taxes.  If by reason of any statutory orconstitutional amendment or judicial decision adopted or rendered after thedate hereof, any tax, assessment, or similar charge is imposed against theNote, Mortgagee, or any interest of Mortgagee in any real or personal propertyencumbered hereby, Mortgagor will pay such tax, assessment, or other chargebefore delinquency and will indemnify Mortgagee against all loss, expense, ordiminution of income in connection therewith. In the event Mortgagor is unable to do so, either for economic reasonsor because the legal provisions or decisions creating such tax, assessment orcharge forbid Mortgagor from doing so, then the Note will, at Mortgagee’soption, become due and payable in full upon thirty (30) days’ notice toMortgagor.

 

(d)           Right to Contest.  Notwithstanding any other provision of thisSection, Mortgagor will not be deemed to be in default solely by reason ofMortgagor’s failure to pay any tax, assessment or similar governmental chargeso long as, in Mortgagee’s reasonable judgment, each of the followingconditions is satisfied:

 

(i)      Mortgagor is engaged in anddiligently pursuing in good faith administrative or judicial proceedingsappropriate to contest the validity or amount of such tax, assessment, orcharge; and

 

(ii)     Mortgagor’s payment of suchtax, assessment, or charge would necessarily and materially prejudice Mortgagor’sprospects for success in such proceedings; and

 

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(iii)    Nonpayment of such tax,assessment, or charge will not result in the loss or forfeiture of any propertyencumbered hereby or any interest of Mortgagee therein; and

 

(iv)    Mortgagor deposits withMortgagee, as security for such payment which may ultimately be required, a sumequal to the amount of the disputed tax, assessment or charge plus theinterest, penalties, advertising charges, and other costs which Mortgageeestimates are likely to become payable if Mortgagor’s contest is unsuccessful.

 

If Mortgagee determines that any one or more of suchconditions is not satisfied or is no longer satisfied, Mortgagor will pay thetax, assessment, or charge in question, together with any interest andpenalties thereon, within ten (10) days after Mortgagee gives notice of suchdetermination.

 

**4.5****          Maintenance ofInsurance.**

 

(a)           CoveragesRequired.  Mortgagor shall maintain orcause to be maintained, with financially sound and reputable insurancecompanies or associations satisfactory to Mortgagee, all insurance requiredunder the terms of the Insurance Agreement, and shall comply with each andevery covenant and agreement contained in the Insurance Agreement.

 

(b)           Renewal Policies.  Not less than five (5) days prior to theexpiration date of each insurance policy required pursuant to the InsuranceAgreement, Mortgagor will deliver to Mortgagee an appropriate renewal binder orpolicy (or a certified copy thereof), together with evidence satisfactory toMortgagee that the applicable premium has been prepaid, which evidence mayfollow up to ten (10) days after such payment has been made.

 

(c)           Deposit forPremiums.  Upon written demand made byMortgagee following the occurrence of any Event of Default, Mortgagor shalldeposit with Mortgagee an amount equal to 1/12th of the amount which Mortgageeestimates will be required to make the next annual payments of the premiums forthe policies of insurance referred to in this Section, multiplied by the numberof whole and partial months which have elapsed since the date one month priorto the most recent policy anniversary date for each such policy.  Thereafter, with each monthly payment underthe Note, Mortgagor will deposit an amount equal to 1/12th of the amount whichMortgagee estimates will be required to pay the next required annual premiumfor each insurance policy referred to in this Section.  The purpose of these provisions is to provideMortgagee with sufficient funds on hand to pay all such premiums thirty (30)days before the date on which they become past due.  If the Mortgagee, in its sole discretion,determines that the funds escrowed hereunder are, or will be, insufficient,Mortgagor shall upon demand pay such additional sums as Mortgagee shalldetermine necessary and shall pay any increased monthly charges requested byMortgagee.  Provided no Default or Eventof Default exists hereunder, Mortgagee will apply the amounts so deposited tothe payment of such insurance premiums when due, but in no event will Mortgageebe liable for any interest on any amounts so deposited, and the money soreceived may be held and commingled with Mortgagee’s own funds.

 

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(d)           Application of HazardInsurance Proceeds.  Mortgagor shallpromptly notify Mortgagee of any damage or casualty to all or any portion ofthe Property or Chattels.  Mortgagee mayparticipate in all negotiations and appear and participate in all judicialarbitration proceedings concerning any insurance proceeds which may be payableas a result of such casualty or damage, and may, in Mortgagee’s reasonablediscretion following any Event of Default, compromise or settle, in the name ofMortgagee, Mortgagor, or both any claim for any such insurance proceeds.  Any such insurance proceeds in excess of$500,000.00 shall be paid to Mortgagee and shall be applied first to reimburseMortgagee for all costs and expenses, including attorneys’ fees, incurred byMortgagee in connection with the collection of such insurance proceeds.  The balance of any insurance proceedsreceived by Mortgagee with respect to an insured casualty may, in Mortgagee’ssole discretion, either (i) be retained and applied by Mortgagee towardpayment of the Secured Obligations, or (ii) be paid over, in whole or inpart and subject to such commercially reasonable construction relatedadvancement conditions as Mortgagee may impose, to Mortgagor to pay for repairsor replacements necessitated by the casualty; provided, however, that if all ofthe Secured Obligations have been performed or are discharged by theapplication of less than all of such insurance proceeds, then any remainingproceeds will be paid over to Mortgagor. Notwithstanding the preceding sentence, if (A) no Default or Eventof Default shall exist hereunder, and (B) the proceeds received byMortgagee (together with any other funds delivered by Mortgagor to Mortgageefor such purpose) shall be sufficient, in Mortgagee’s reasonable judgment, topay for any restoration necessitated by the casualty, and (C) eitherMortgagor is obligated under the terms of any Lease to restore or repair theProperty or the annual income from Leases that will survive restoration providea forward-looking Debt Service Coverage Ratio (as defined in the AgreementConcerning Master Lease) of at least 1.05 upon completion of restoration, and Mortgagordemonstrates to Mortgagee’s reasonable satisfaction that it will be able toattain a forward-looking Debt Service Coverage Ration of at least 1.20 timesthe annual debt service from Leases within six months after completion ofrestoration, and (D) such restoration can be completed, in Mortgagee’sjudgment, at least ninety (90) days prior to the maturity date of the Note,then Mortgagee shall apply such proceeds as provided in clause (ii) of thepreceding sentence.  Mortgagee will haveno obligation to see to the proper application of any insurance proceeds paidover to Mortgagor, nor will any such proceeds received by Mortgagee bearinterest or be subject to any other charge for the benefit of Mortgagor.  Mortgagee may, prior to the application of insuranceproceeds, commingle them with Mortgagee’s own funds and otherwise act withregard to such proceeds as Mortgagee may determine in Mortgagee’s solediscretion.

 

(e)           Successor’sRights.  Any person who acquires title tothe Property or the Chattels upon foreclosure hereunder will succeed to all ofMortgagor’s rights under all policies of insurance maintained pursuant to thisSection.

 

**4.6****          Maintenance and Repairof Property and Chattels.**  Mortgagorwill at all times maintain the Property and the Chattels in good condition andrepair, will diligently prosecute the completion of any building or otherimprovement which is at any time in the process of construction on theProperty, and will promptly repair, restore, replace, or rebuild any part ofthe Property or the Chattels which may be affected by any casualty or anypublic or private taking or injury to the Property or the Chattels.  All costs and expenses arising out of theforegoing shall be paid by Mortgagor whether or not the proceeds of anyinsurance or eminent domain shall be sufficient therefor.  Mortgagor will comply with all statutes,ordinances, and

 

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othergovernmental or quasi-governmental requirements and private covenants relatingto the ownership, construction, use, or operation of the Property, includingbut not limited to any environmental or ecological requirements; provided, thatso long as Mortgagor is not otherwise in default hereunder, Mortgagor may, uponproviding Mortgagee with security reasonably satisfactory to Mortgagee, proceeddiligently and in good faith to contest the validity or applicability of anysuch statute, ordinance, or requirement. Mortgagee and any person authorized by Mortgagee may enter and inspectthe Property at all reasonable times, and may inspect the Chattels, whereverlocated, at all reasonable times.

 

**4.7****          Leases.**  Mortgagor shall timely pay and perform eachof its obligations under or in connection with the Leases, and shall otherwisepay such sums and take such action as shall be necessary or required in orderto maintain each of the Leases in full force and effect in accordance with itsterms.  Mortgagor shall immediatelyfurnish to Mortgagee copies of any notices given to Mortgagor by the lesseeunder any Lease, alleging the default by Mortgagor in the timely payment orperformance of its obligations under such Lease and any subsequentcommunication related thereto.  Mortgagoragrees that Mortgagee, in its sole discretion, may advance any sum or take anyaction which Mortgagee believes is necessary or required to maintain the Leasesin full force and effect, and all such sums advanced by Mortgagee, togetherwith all costs and expenses incurred by Mortgagee in connection with actiontaken by Mortgagee pursuant to this Section, shall be due and payable by Mortgagorto Mortgagee upon demand, shall bear interest until paid at the Default Rate(as defined in the Note), and shall be secured by this Mortgage.

 

**4.8****          Eminent Domain; PrivateDamage.**  If all or any part of theProperty is taken or damaged by eminent domain or any other public or privateaction, Mortgagor will notify Mortgagee promptly of the time and place of allmeetings, hearings, trials, and other proceedings relating to such action.  Mortgagee may participate in all negotiationsand appear and participate in all judicial or arbitration proceedingsconcerning any award or payment which may be due as a result of such taking ordamage, and may, in Mortgagee’s reasonable discretion following any Event ofDefault, compromise or settle, in the names of both Mortgagor and Mortgagee,any claim for any such award or payment. Any such award or payment in excess of $500,000.00 is to be paid toMortgagee and will be applied first to reimburse Mortgagee for all costs and expenses,including attorneys’ fees, incurred by Mortgagee in connection with theascertainment and collection of such award or payment.  The balance, if any, of such award or paymentmay, in Mortgagee’s sole discretion, either (a) be retained by Mortgageeand applied toward the Secured Obligations, or (b) be paid over, in wholeor in part and subject to such commercially reasonable construction relatedadvancement conditions as Mortgagee may impose, to Mortgagor for the purpose ofrestoring, repairing, or rebuilding any part of the Property affected by thetaking or damage.  Notwithstanding thepreceding sentence, if (i) no Default or Event of Default shall haveoccurred and be continuing hereunder, and (ii) the proceeds received byMortgagee (together with any other funds delivered by Mortgagor to Mortgageefor such purpose) shall be sufficient, in Mortgagee’s reasonable judgment, topay for any restoration necessitated by the taking or damage, and(iii) either Mortgagor is obligated under the terms of any Lease torestore or repair the Property or the annual income from Leases that willsurvive restoration provide a forward-looking Debt Service Coverage Ratio (asdefined in the Agreement Concerning Master Lease) of at least 1.05 uponcompletion of restoration, and Mortgagor demonstrates to Mortgagee’s reasonablesatisfaction that it will be able to attain a forward-looking Debt ServiceCoverage

 

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Ration of at least 1.20 times the annual debt servicefrom Leases within six months after completion of restoration, and(iv) such restoration can be completed, in Mortgagee’s judgment, at leastninety (90) days prior to the maturity date of the Note, and (v) theremaining Property shall constitute, in Mortgagee’s sole judgment, adequatesecurity for the Secured Obligations, then Mortgagee shall apply such proceedsas provided in clause (b) of the preceding sentence.  Mortgagor’s duty to pay the Note inaccordance with its terms and to perform the other Secured Obligations will notbe suspended by the pendency or discharged by the conclusion of any proceedingsfor the collection of any such award or payment, and any reduction in theSecured Obligations resulting from Mortgagee’s application of any such award orpayment will take effect only when Mortgagee receives such award orpayment.  If this Mortgage has beenforeclosed prior to Mortgagee’s receipt of such award or payment, Mortgagee maynonetheless retain such award or payment to the extent required to reimburseMortgagee for all costs and expenses, including attorneys’ fees, incurred inconnection therewith, and to discharge any deficiency remaining with respect tothe Secured Obligations.

 

**4.9****          Mechanics’ Liens.**  Mortgagor will keep the Property free andclear of all liens and claims of liens by contractors, subcontractors,mechanics, laborers, materialmen, and other such persons, and will cause anyrecorded statement of any such lien to be released of record within thirty (30)days after the recording thereof. Notwithstanding the preceding sentence, however, Mortgagor will not bedeemed to be in default under this Section if and so long as Mortgagor(a) contests in good faith the validity or amount of any asserted lien anddiligently prosecutes or defends an action appropriate to obtain a bindingdetermination of the disputed matter, (b) provides Mortgagee with suchsecurity as Mortgagee may require to protect Mortgagee against all loss,damage, and expense, including attorneys’ fees, which Mortgagee might incur ifthe asserted lien is determined to be valid.

 

**4.10****        Defense of Actions.**  Mortgagor will defend, at Mortgagor’sexpense, any action, proceeding or claim which affects any property encumberedhereby or any interest of Mortgagee in such property or in the SecuredObligations, and will indemnify and hold Mortgagee harmless from all loss,damage, cost, or expense, including attorneys’ fees, which Mortgagee may incurin connection therewith.

 

**4.11****        Expenses of Enforcement.**  Mortgagor will pay all actual out-of-pocketcosts and expenses, including attorneys’ fees, which Mortgagee may incur inconnection with any effort or action (whether or not litigation or foreclosureis involved) to enforce or defend Mortgagee’s rights and remedies under any ofthe Loan Documents, including but not limited to all attorneys’ fees, appraisalfees, consultants’ fees, and other expenses incurred by Mortgagee in securingtitle to or possession of, and realizing upon, any security for the SecuredObligations.  All such costs and expenses(together with interest thereon at the Default Rate from the date incurred)shall constitute part of the Secured Obligations, and may be included in thecomputation of the amount owed to Mortgagee for purposes of foreclosing orotherwise enforcing this Mortgage.

 

**4.12****        Financial Reports.**  During the term of the Loan, Mortgagor shallsupply to Mortgagee (a) within thirty (30) days following the end of eachquarter, Mortgagor’s quarterly and annual operating statements for the Propertyas of the end of and for the preceding quarter and fiscal year, as applicable,in each case prepared against the budget for such year;

 

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(b) contemporaneouslywith Mortgagor’s delivery of each of such operating statements, a certifiedrent roll signed and dated by Mortgagor detailing the names of all tenantsunder the Leases, the portion of the improvements on the Property occupied byeach tenant, the rent and any other charges payable under each Lease, and theterm of each Lease; and (c) within one hundred five (105) days followingthe end of each year, an annual balance sheet and profit and loss statement ofMortgagor and the most recent 10K and 10Q filings of Guarantor.  The financial statements and reports forMortgagor described in (a) and (c) above shall be in such detail as Mortgageemay require, shall be prepared in accordance with generally accepted accountingprinciples consistently applied, and shall be certified as true and correct byMortgagor or the applicable Guarantor (or, if required by Mortgagee after anyDefault or Event of Default, by an independent certified public accountantacceptable to Mortgagee).  Mortgagorshall also furnish to Mortgagee within thirty (30) days of Mortgagee’s request,any other financial reports or statements of Mortgagor as Mortgagee mayrequest, provided, however, so long as Mortgagor’s sole asset is the Property,Mortgagor may provide the annual balance sheet and profit and loss statement ofthe Property in lieu of financial statements of Mortgagor.  Upon Mortgagee’s demand after any Default byMortgagor, Mortgagor shall supply to Mortgagee the items required in (a) and(b) above on a monthly basis; such items shall be supplied to Mortgagee on aquarterly basis upon Mortgagor’s cure of said default and Mortgagee’s writtenauthorization.  If Mortgagee securitizesthe Loan, Mortgagor shall supply to Mortgagee the items required in (a) and (b)above on a quarterly basis.

 

**4.13****        Priority of Leases.**  To the extent Mortgagor has the right, underthe terms of any Lease, to make such lease subordinate to the lien hereof,Mortgagor will, at Mortgagee’s request and Mortgagor’s expense, take suchaction as may be required to effect such subordination.  Conversely, Mortgagor will, at Mortgagee’srequest and Mortgagor’s expense, take such action as may be necessary tosubordinate the lien hereof to any future Lease designated by Mortgagee.

 

**4.14****        Inventories; Assembly ofChattels.**  Mortgagor will, from timeto time at the request of Mortgagee, supply Mortgagee with a current inventoryof the Chattels and the Intangible Personalty, in such detail as Mortgagee mayrequire.  Upon the occurrence of anyEvent of Default hereunder, Mortgagor will at Mortgagee’s request assemble theChattels and make them available to Mortgagee at any place designated byMortgagee which is reasonably convenient to both parties.

 

**4.15****        Compliance with Laws, Etc.**  Mortgagor shall comply in all materialrespects with all applicable laws, rules, regulations and orders, suchcompliance to include, without limitation, maintaining all Permits and payingbefore the same become delinquent all taxes, assessments and governmental chargesimposed upon Mortgagor or the Property.

 

**4.16****        Records and Books ofAccount.**  Mortgagor shall keepaccurate and complete records and books of account, in which complete entrieswill be made in accordance with generally accepted accounting principlesconsistently applied, reflecting all financial transactions relating to theProperty.

 

**4.17****        Inspection Rights.**  At any reasonable time, and from time totime, Mortgagor shall permit Mortgagee, or any agents or representativesthereof, to examine and

 

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makecopies of and abstracts from the records and books of account of, and visit andinspect the Property and to discuss with Mortgagor the affairs, finances andaccounts of Mortgagor.

 

**4.18****        Change of Mortgagor’sAddress or State of Organization.** Mortgagor shall promptly notify Mortgagee if changes are made inMortgagor’s address from that set forth in **Section 9.10**hereof, or if Mortgagor shall either change its “location” (as such term isused in **Section 5.8** hereof), its state oforganization or if Mortgagor shall organize in any state other than the Stateof Connecticut.

 

**4.19****        Further Assurances;Estoppel Certificates.**  Mortgagorwill execute and deliver to Mortgagee upon demand, and pay the costs ofpreparation and recording thereof, any further documents which Mortgagee mayrequest to confirm or perfect the liens and security interests created orintended to be created hereby, or to confirm or perfect any evidence of theSecured Obligations.  Mortgagor willalso, within ten (10) days after any request by Mortgagee, deliver to Mortgageea signed and acknowledged statement certifying to Mortgagee, or to any proposedtransferee of the Secured Obligations, (a) the balance of principal,interest, and other sums then outstanding under the Note, and (b) whetherMortgagor claims to have any offsets or defenses with respect to the SecuredObligations and, if so, the nature of such offsets or defenses.

 

**4.20****        Costs of Closing.**  Mortgagor shall on demand pay directly orreimburse Mortgagee for any costs or expenses pertaining to the closing of theLoan, including, but not limited to, reasonable fees of counsel for Mortgagee,costs and expenses for which invoices were not available at the closing of theLoan, or costs and expenses which are incurred by Mortgagee after suchclosing.  All such costs and expenses(together with interest thereon at the Default Rate from the date of demand ifsuch amounts are not paid within fifteen (15) days of the date of demand) shallconstitute a part of the Secured Obligations, and may be included in thecomputation of the amount owed to Mortgagee for purposes of foreclosing orotherwise enforcing this Mortgage.

 

**4.21****        Fund for ElectronicTransfer.**  All monthly payments ofprincipal and interest on the Note, and escrow deposits under this Mortgage,shall be made by Mortgagor by electronic funds transfer from a bank accountestablished and maintained by Mortgagor for such purpose.  Mortgagor shall establish and maintain suchan account until the Note is fully paid and shall direct the depository of suchaccount in writing to so transmit such payments on or before the respective duedates to the account of Mortgagee as shall be designated by Mortgagee inwriting.

 

**4.22****        Use.**  Mortgagor shall use the Property solely forthe operation of an industrial distribution center and any other use permittedby zoning and other law and for no other use or purpose.

 

**4.23****        Management.**  The Property shall be managed by Mortgagor orGuarantor.  Mortgagor shall not permitmanagement of the Property by any person or entity other than Mortgagor orGuarantor, without the prior written consent of Mortgagee.  If the Property is managed by Guarantor,Mortgagor shall not enter into any property management agreement which wouldnot be terminable on thirty (30) days’ notice to Guarantor.

 

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**ARTICLE 5MORTGAGOR’S NEGATIVE COVENANTS**

 

**5.1****          Waste and Alterations.**  Mortgagor will not commit or permit any wastewith respect to the Property or the Chattels. Mortgagor shall not cause or permit any part of the Property, includingbut not limited to any building, structure, parking lot, driveway, landscapescheme, timber, or other ground improvement, to be removed, demolished, ormaterially altered without the prior written consent of Mortgagee.

 

**5.2****          Zoning and PrivateCovenants.**  Mortgagor will notinitiate, join in, or consent to any change in any zoning ordinance orclassification, any change in the “zone lot” or “zone lots” (or similar zoningunit or units) presently comprising the Property, any transfer of developmentrights, any private restrictive covenant, or any other public or privaterestriction limiting or defining the uses which may be made of the Property orany part thereof, without the express written consent of Mortgagee.  If under applicable zoning provisions the useof all or any part of the Property is or becomes a nonconforming use, Mortgagorwill not cause such use to be discontinued or abandoned without the expresswritten consent of Mortgagee, and Mortgagor will use its best efforts toprevent the tenant under any Lease from discontinuing or abandoning such use.

 

**5.3****          Interference withLeases.**

 

(a)           Mortgagor will neitherdo, nor neglect to do, anything which may cause or permit the termination ofany Lease of all or any part of the Property, or permit the withholding orabatement of any rent payable under any such Lease.

 

(b)           Without Mortgagee’sprior written consent, which may be granted or withheld in Mortgagee’sreasonable discretion, Mortgagor shall not enter into or modify any Lease ofall or any part of the Property.  Anysubmission by Mortgagor for Mortgagee’s approval of a Lease or modificationthereof shall be accompanied by a copy of such Lease or modification, a Leaseabstract, a then-current rent roll for the Property, year-to-date and prioryear operating statements for the Property, and a cover letter requestingMortgagee’s approval which contains a signature line on which Mortgagee mayevidence its approval of such Lease or modification.

 

(c)           Except with the priorwritten consent of Mortgagee, which may be granted or withheld in Mortgagee’ssole discretion, Mortgagor will not (i) collect rent from all or any partof the Property for more than one month in advance, (ii) assign the rentsfrom the Property or any part thereof, or (iii) consent to the cancellationor surrender of all or any part of any Lease, except that Mortgagor may in goodfaith terminate any Lease for nonpayment of rent or other material breach bythe tenant.

 

(d)           Notwithstanding theprovisions of **Section 5.3(b)** to thecontrary, Mortgagor shall have the right to enter into “Safe-Harbor Leases” (ashereinafter defined) without Mortgagee’s prior written consent.  A “Safe Harbor Lease” shall mean any proposedmarket Lease that meets the following criteria: (i) the rent payable undersuch proposed Lease is a rent that is no less than $6.00 per square foot on atriple-net basis, (ii) the rentable area to be

 

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demisedpursuant to such proposed Lease which, when combined with any other space inthe Property leased to affiliated entities of the tenant under such proposedSafe Harbor Lease, is less than 25,000 square feet, (iii) such Leaseshall be for a term of no less than three (3) years and no greater than ten(10) years, including any tenant extension option(s); provided, however, thatthe term, including any extension options, may extend to fifteen (15) years iflease years 11-15 have a rental rate not less than the greater of(A) the rental rate for year 10 and (B) market rental rate,(iv) the tenant improvement allocation or allowance shall not exceed$10.00 per rentable square foot, unless Guarantor guarantees the payment ofsuch allocation or allowance in excess of $10.00 per rentable square foot, and(v) such lease shall satisfy the additional leasing guidelines set forthin **Section 5.3(e)** below:

 

(e)           A Lease will qualify asa Safe-Harbor Lease when such Lease comes into effect, provided each of thefollowing conditions, in addition to the ones set forth above, are satisfied:(i) such Lease does not contain any options to purchase, or other rightsto acquire the Property, (ii) such Lease does not contain any materialrestrictions on Mortgagor’s rights to lease remaining portions of the Property;provided, however, that the granting of the right or option to lease additionalspace within the Property upon terms which would otherwise comply with theprovisions of this **Section 5.3**shall not be considered a material restriction, if such right or option must beexercised upon 15 days’ notice to the tenant, (iii) such Lease doesnot contain any extraordinary, uncustomary, and unduly burdensome Mortgagorobligations (including obligations which an unaffiliated Mortgagor would havedifficulty performing), (iv) such Lease is entered into on the standardform of Lease, without material modification thereto and provided it conformswith the leasing guidelines hereunder, (v) such Lease is entered into onarms-length terms, and (vi) within ten (10) days following the executionof such Lease, Mortgagor shall provide Mortgagee with a certified copy thereofand a certificate that such Lease complies in all respects with therequirements of a Safe Harbor Lease.

 

(f)            Mortgagee agrees thatfor any proposed Lease that does not qualify as a Safe Harbor Lease, for whichMortgagor is required to obtain Mortgagee’s consent thereto, Mortgagee willattempt to respond within ten (10) business days.  If Mortgagee has failed to respond to thewritten request for consent of a proposed Lease after ten (10) business daysafter its receipt thereof, together with any additional information thatMortgagee may reasonably require to evaluate such proposed lease, and Mortgagorhas provided a subsequent five (5) business days’ written notice to Mortgageerequesting consent, each notice marked with a legend in bold capital lettersstating: **MORTGAGEE SHALL BE DEEMED TO HAVE CONSENTED TO THEMATTER CONTAINED HEREIN IF IT FAILS TO RESPOND TO THIS REQUEST FOR CONSENTWITHIN [10/5 (as applicable)] BUSINESS DAYS AFTER THE DATE HEREOF**,then Mortgagee shall be deemed to have consented to the same.  Mortgagee agrees to consider a writtensummary of a proposed lease to a specific tenant in accordance with the termsdescribed in this **Section 5.3(f)**.  If Mortgagee approves a written summary (oris deemed to have given its approval), Mortgagee shall be deemed to haveapproved a lease to that tenant prepared in accordance with such writtensummary on the form previously approved by Mortgagee, without materialmodifications (except as disclosed in the written summary).

 

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**5.4****          Transfer or FurtherEncumbrance of Property.**

 

(a)           Without Mortgagee’sprior written consent, which consent may be granted or withheld in Mortgagee’ssole and absolute discretion, Mortgagor shall not, except as permitted in **Section 5.3**, (i) sell, assign, convey, transfer orotherwise dispose of any legal, beneficial or equitable interest in any of theProperty, (ii) permit or suffer any owner, directly or indirectly, of anybeneficial interest in the Property or Mortgagor to transfer such interest,whether by transfer of partnership, membership, stock or other beneficialinterest in any entity or otherwise, or (iii) mortgage, hypothecate orotherwise encumber or permit to be encumbered or grant or permit to be granteda security interest in all or any part of the Property or Mortgagor or anybeneficial or equitable interest in either the Property or Mortgagor.  The provisions of this Section shall notprohibit transfers of title or interest under any will or testament orapplicable law of descent.

 

(b)           Notwithstanding theprovisions of **Section 5.4(a)** to thecontrary, Mortgagor may transfer the Property or any beneficial interest inMortgagor provided that (i) the transferee of the Property (in the case ofa transfer of the Property) or the surviving entity (in the case of a transferof any beneficial interest in Mortgagor) is a wholly owned subsidiary ofGuarantor (and such other entity shall be a single purpose entity and shallexpressly assume the obligations of Borrower under the Loan Documents indocumentation satisfactory to Lender in form and content) and(ii) immediately before and immediately after giving effect to suchtransaction, no Event of Default, and no event which, after notice or lapse oftime or both, would become an Event of Default, shall have occurred and be continuing.  Mortgagor shall be responsible for allout–of–pocket expenses incurred by Mortgagee in connection with such transfer,including without limitation reasonable attorney’s fees.

 

(c)           Notwithstanding theprovisions of **Section 5.4(a)**, so long as(i) Mortgagor is a wholly owned subsidiary of Guarantor and Guarantorcontrols Mortgagor and (ii) Guarantor is an Independent Publicly TradedEntity, there shall be no restrictions on the sale or transfer of stock inGuarantor.  As used herein, the term “IndependentPublicly Traded Entity” means a corporation (1) whose stock is publiclytraded on the New York Stock Exchange, American Stock Exchange, NASDAQ marketor similar national or nationally recognized stock exchange or over the countermarket and (2) is not a subsidiary of another entity.  Notwithstanding the provisions of **Section 5.4(a)** and **(b)**, Guarantormay enter into any merger, consolidation or reorganization, provided that thesurviving entity following any such merger, consolidation or reorganization(A) is an Independent Publicly Traded Entity and (B) the net worth ofthe surviving entity (as determined by an independent certified publicaccounting firm) is equal to or greater than the greater of (I) the networth of Guarantor as of the date of the closing of the Loan and (II) thenet worth of Guarantor immediately prior to the consummation of such merger,consolidation or reorganization.

 

**5.5****          Further Encumbrance ofChattels.**  Mortgagor will neithercreate nor permit any lien, security interest or encumbrance against theChattels or Intangible Personalty or any part thereof or interest therein,other than the liens and security interests created by the Loan Documents,without the prior written consent of Mortgagee, which may be withheld for anyreason.

 

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**5.6****          Assessments AgainstProperty.**  Mortgagor will not,without the prior written approval of Mortgagee, which may be withheld for anyreason, consent to or allow the creation of any so-called special districts,special improvement districts, benefit assessment districts or similardistricts, or any other body or entity of any type, or allow to occur any otherevent, that would or might result in the imposition of any additional taxes,assessments or other monetary obligations or burdens on the Property, and thisprovision shall serve as RECORD NOTICE to any such district or districts or anygovernmental entity under whose authority such district or districts exist orare being formed that, should Mortgagor or any other person or entity includeall or any portion of the Property in such district or districts, whetherformed or in the process of formation, without first obtaining Mortgagee’sexpress written consent, the rights of Mortgagee in the Property pursuant tothis Mortgage or following any foreclosure of this Mortgage, and the rights ofany person or entity to whom Mortgagee might transfer the Property following aforeclosure of this Mortgage, shall be senior and superior to any taxes,charges, fees, assessments or other impositions of any kind or nature whatsoever,or liens (whether statutory, contractual or otherwise) levied or imposed, or tobe levied or imposed, upon the Property or any portion thereof as a result ofinclusion of the Property in such district or districts.

 

**5.7****          Transfer or Removal ofChattels.**  Mortgagor will not sell,transfer or remove from the Property all or any part of the Chattels with avalue in excess of $25,000.00, unless the items sold, transferred, or removedare simultaneously replaced with similar items of equal or greater value.

 

**5.8****          Change of Name,Organizational I.D. No. or Location.** Mortgagor will not change the name under which Mortgagor does business(or adopt or begin doing business under any other name or assumed or tradename), change its organizational identification number, or change its location,without first notifying Mortgagee of Mortgagor’s intention to do so anddelivering to Mortgagee such organizational documents of Mortgagor and executedmodifications or supplements to this Mortgage (and to any financing statementwhich may be filed in connection herewith) as Mortgagee may require.  For purposes of the foregoing, Mortgagor’s “location”shall mean (a) if Mortgagor is a registered organization, Mortgagor’sstate of registration, (b) if Mortgagor is an individual, the state ofMortgagor’s principal residence, or (c) if Mortgagor is neither aregistered organization nor an individual, the state in which Mortgagor’s placeof business (or, if Mortgagor has more than one place of business, theMortgagor’s chief executive office) is located.

 

**5.9****          Improper Use of Propertyor Chattels.**  Mortgagor will not usethe Property or the Chattels for any purpose or in any manner which violatesany applicable law, ordinance, or other governmental requirement, therequirements or conditions of any insurance policy, or any private covenant.

 

**5.10****        ERISA.**  Mortgagor shall not engage in any transactionwhich would cause the Note (or the exercise by Mortgagee of any of its rightsunder the Loan Documents) to be a non-exempt, prohibited transaction underERISA (including for this purpose the parallel provisions of Section 4975of the Internal Revenue Code of 1986, as amended), or otherwise result inMortgagee being deemed in violation of any applicable provisions of ERISA.  Mortgagor shall indemnify, protect, defend,and hold Mortgagee harmless from and against any and all losses, liabilities,damages, claims, judgments, costs, and expenses (including, without

 

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limitationattorneys’ fees and costs incurred in the investigation, defense, andsettlement of claims and in obtaining any individual ERISA exemption or stateadministrative exception that may be required, in Mortgagee’s sole and absolutediscretion) that Mortgagee may incur, directly or indirectly, as the result ofthe breach by Mortgagor of any warranty or representation set forth in **Section 3.3(x)** hereof or the breach by Mortgagor of anycovenant contained in this Section.  Thisindemnity shall survive any termination, satisfaction or foreclosure of thisMortgage and shall not be subject to the limitation on personal liabilitydescribed in the Note.

 

**5.11****        Use of Proceeds.**  Mortgagor will not use any funds advanced byMortgagee under the Loan Documents for household or agricultural purposes, topurchase margin stock, or for any purpose prohibited by law.

 

**ARTICLE 6EVENTS OF DEFAULT**

 

Each of the following events will constitute an eventof default (an “Event of Default”) under this Mortgage and under each of theother Loan Documents:

 

**6.1****          Failure to Pay Note.**  Mortgagor’s failure to make any payment whendue under the terms of the Note or any other Loan Document.

 

**6.2****          Due on Sale orEncumbrance.**  The occurrence of anyviolation of any covenant contained in **Section 5.4**,**5.5** or **5.7** hereof.

 

**6.3****          Other Obligations.**  The failure of Mortgagor to properly performany obligation contained herein or in any of the other Loan Documents (otherthan the obligation to make payments under the Note or the other LoanDocuments) and the continuance of such failure for a period of ten (10) daysfollowing written notice thereof from Mortgagee to Mortgagor; provided,however, that if such failure is not curable within such ten (10) day period,then, so long as Mortgagor commences to cure such failure within such ten (10)day period and is continually and diligently attempting to cure to completion,such failure shall not be an Event of Default unless such failure remainsuncured for thirty (30) days after such written notice to Mortgagor.

 

**6.4****          Levy Against Property.**  The levy against any of the Property, Chattelsor Intangible Personalty, of any execution, attachment, sequestration or otherwrit.

 

**6.5****          Liquidation.**  The liquidation, termination or dissolutionof Mortgagor or any Controlling Person.

 

**6.6****          Appointment of Receiver.**  The appointment of a trustee or receiver forthe assets, or any part thereof, of Mortgagor or any Controlling Person, or theappointment of a trustee or receiver for any real or personal property, or thelike, or any part thereof, representing the security for the Secured Obligations.

 

**6.7****          Assignments.**  The making by Mortgagor or any ControllingPerson of a transfer in fraud of creditors or an assignment for the benefit ofcreditors.

 

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**6.8****          Order for Relief.**  The entry in bankruptcy of an order forrelief for or against Mortgagor or any Controlling Person.

 

**6.9****          Bankruptcy.**  The filing of any petition (or answeradmitting the material allegations of any petition), or other pleading, seekingentry of an order for relief for or against Mortgagor or any Controlling Personas a debtor or bankrupt or seeking an adjustment of any of such parties’ debts,or any other relief under any state or federal bankruptcy, reorganization,debtor’s relief or insolvency laws now or hereafter existing, including,without limitation, a petition or answer seeking reorganization or admittingthe material allegations of a petition filed against any such party in anybankruptcy or reorganization proceeding, or the act of any of such parties ininstituting or voluntarily being or becoming a party to any other judicialproceedings intended to effect a discharge of the debts of any such parties, inwhole or in part, or a postponement of the maturity or the collection thereof,or a suspension of any of the rights or powers of a trustee or of any of therights or powers granted to Mortgagee herein, or in any other document executedin connection herewith.

 

**6.10****        Misrepresentation.**  If any representation or warranty made byMortgagor or any Controlling Person, or in any of the other Loan Documents orany other instrument or document modifying, renewing, extending, evidencing,securing or pertaining to the Note is false, misleading or erroneous in anymaterial respect.

 

**6.11****        Judgments.**  Unless a bond or other acceptable security isposted with Mortgagee (or, if applicable, a court of competent jurisdiction),the failure of Mortgagor or any Controlling Person to pay any monetary judgmentin excess of $50,000.00 before the expiration of thirty (30) days after suchjudgment becomes final and no longer appealable.

 

**6.12****        Admissions RegardingDebts.**  The admission of Mortgagor orany Controlling Person in writing of any such party’s inability to pay suchparty’s debts as they become due.

 

**6.13****        Assertion of Priority.**  The assertion of any claim of priority overthis Mortgage, by title, lien, or otherwise, unless Mortgagor within thirty(30) days after such assertion either causes the assertion to be withdrawn orprovides Mortgagee with such security as Mortgagee may require to protectMortgagee against all loss, damage, or expense, including attorneys’ fees,which Mortgagee may incur in the event such assertion is upheld; provided,however, that the written agreement in form and content acceptable to Mortgageefrom a title company acceptable to Mortgagee to defend Mortgagee against suchassertion and to insure against any such loss, damage or exchange shallconstitute adequate security.

 

**6.14****        Other Loan Documents.**  The occurrence of any default by Mortgagor,after the lapse of any applicable grace or cure period, or the occurrence of anyevent or circumstance defined as an Event of Default, under any of the LoanDocuments other than this Mortgage.

 

**6.15****        Other Liens.**  The occurrence of any default by Mortgagor,after the lapse of any applicable grace or cure period, or the occurrence of anyevent or circumstance defined as an Event of Default, under any otherconsensual lien encumbering the Property, or any part

 

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thereof or interest therein, or any document orinstrument evidencing obligations secured thereby.

 

**6.16****        Other Indebtedness.**  The occurrence of any default by Mortgagor,after the lapse of any applicable grace or cure period, or the occurrence ofany event or circumstance defined as an Event of Default, under any otherindebtedness incurred or owing by Mortgagor, or any document or instrumentevidencing any obligation to pay such indebtedness.

 

**ARTICLE 7MORTGAGEE’S REMEDIES**

 

Immediately upon or any time after the occurrence ofany Event of Default hereunder, Mortgagee may exercise any remedy available atlaw or in equity, including but not limited to those listed below and thoselisted in the other Loan Documents, in such sequence or combination asMortgagee may determine in Mortgagee’s sole discretion:

 

**7.1****          Performance of DefaultedObligations.**  Mortgagee may make anypayment or perform any other obligation under the Loan Documents whichMortgagor has failed to make or perform, and Mortgagor hereby irrevocablyappoints Mortgagee as the true and lawful attorney-in-fact for Mortgagor tomake any such payment and perform any such obligation in the name ofMortgagor.  All payments made andexpenses (including attorneys’ fees) incurred by Mortgagee in this connection,together with interest thereon at the Default Rate from the date paid orincurred until repaid, will be part of the Secured Obligations and will beimmediately due and payable by Mortgagor to Mortgagee.  In lieu of advancing Mortgagee’s own fundsfor such purposes, Mortgagee may use any funds of Mortgagor which may be inMortgagee’s possession, including but not limited to insurance or condemnationproceeds and amounts deposited for taxes, insurance premiums, or otherpurposes.

 

**7.2****          Specific Performance andInjunctive Relief.**  Notwithstandingthe availability of legal remedies, Mortgagee will be entitled to obtainspecific performance, mandatory or prohibitory injunctive relief, or otherequitable relief requiring Mortgagor to cure or refrain from repeating anyDefault.

 

**7.3****          Acceleration of SecuredObligations.**  Mortgagee may, withoutnotice or demand, declare all of the Secured Obligations immediately due andpayable in full.

 

**7.4****          Suit for MonetaryRelief.**  Subject to the non-recourseprovisions of the Note, with or without accelerating the maturity of theSecured Obligations, Mortgagee may sue from time to time for any payment dueunder any of the Loan Documents, or for money damages resulting from Mortgagor’sdefault under any of the Loan Documents.

 

**7.5****          Possession of Property.**  To the extent permitted by law, Mortgagee mayenter and take possession of the Property without seeking or obtaining theappointment of a receiver, may employ a managing agent for the Property, andmay lease or rent all or any part of the Property, either in Mortgagee’s nameor in the name of Mortgagor, and may collect the rents, issues, and profits ofthe Property.  Any revenues collected byMortgagee under this Section will be applied first toward payment of allexpenses (including attorneys’ fees) incurred by Mortgagee, together withinterest thereon at the Default Rate from the date incurred until repaid,

 

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andthe balance, if any, will be applied against the Secured Obligations in suchorder and manner as Mortgagee may elect in its sole discretion.

 

**7.6****          Enforcement of SecurityInterests.**  Mortgagee may exerciseall rights of a secured party under the Code with respect to the Chattels andthe Intangible Personalty, including but not limited to taking possession of,holding, and selling the Chattels and enforcing or otherwise realizing upon anyaccounts and general intangibles.  Anyrequirement for reasonable notice of the time and place of any public sale, orof the time after which any private sale or other disposition is to be made,will be satisfied by Mortgagee’s giving of such notice to Mortgagor at leastfive (5) days prior to the time of any public sale or the time after which anyprivate sale or other intended disposition is to be made.

 

**7.7****          Foreclosure AgainstProperty.**

 

(a)           Mortgagee may bring anaction in any court of competent jurisdiction to foreclose this Mortgage.

 

(b)           All fees, costs andexpenses of any kind incurred by Mortgagee in connection with foreclosure ofthis Mortgage, including, without limitation, the costs of any appraisals ofthe Property obtained by Mortgagee, the cost of any title reports or abstracts,all costs of any receivership for the Property advanced by Mortgagee, and allattorneys’ and consultants’ fees and expenses incurred by Mortgagee, shallconstitute a part of the Secured Obligations and may be included as part of theamount owing from Mortgagor to Mortgagee at any foreclosure sale.

 

(c)           The proceeds of anysale under this Section shall be applied first to the fees and expenses ofthe officer conducting the sale, and then to the reduction or discharge of theSecured Obligations in such order and manner as Mortgagee may elect in its solediscretion; any surplus remaining shall be paid over to Mortgagor or to suchother person or persons as may be lawfully entitled to such surplus.

 

(d)           Nothing in this Section dealingwith foreclosure procedures or specifying particular actions to be taken byMortgagee shall be deemed to contradict or add to the requirements andprocedures now or hereafter specified by the laws of the State, and any suchinconsistency shall be resolved in favor of the State’s law applicable at thetime of foreclosure.

 

**7.8****          Appointment of Receiver.**  To the extent permitted by law, Mortgageeshall be entitled, as a matter of absolute right and without regard to thevalue of any security for the Secured Obligations or the solvency of any personliable therefor, and with or without taking possession of the Property, to theappointment of a receiver for the Property upon ex-parte application to anycourt of competent jurisdiction. Mortgagor waives any right to any hearing or notice of hearing prior to theappointment of a receiver.  Such receiverand its agents shall be empowered to (a) take possession of the Propertyand any businesses conducted by Mortgagor or any other person thereon and anybusiness assets used in connection therewith, (b) exclude Mortgagor andMortgagor’s agents, servants, and employees from the Property, (c) collectthe rents, issues, profits, and income therefrom, (d) complete anyconstruction which may be in

 

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progress,(e) do such maintenance and make such repairs and alterations as thereceiver deems necessary, (f) use all stores of materials, supplies, andmaintenance equipment on the Property and replace such items at the expense ofthe receivership estate, (g) pay all taxes and assessments against theProperty and the Chattels, all premiums for insurance thereon, all utility andother operating expenses, and all sums due under any prior or subsequentencumbrance, and (h) generally do anything which Mortgagor could legallydo if Mortgagor were in possession of the Property.  All expenses incurred by the receiver or itsagents shall constitute a part of the Secured Obligations.  Any revenues collected by the receiver shallbe applied first to the expenses of the receivership, including attorneys’ feesincurred by the receiver and by Mortgagee, together with interest thereon atthe Default Rate from the date incurred until repaid, and the balance shall beapplied toward the Secured Obligations in such order or manner as Mortgagee mayin its sole discretion elect or in such other manner as the court maydirect.  Unless sooner terminated withthe express consent of Mortgagee, any such receivership will continue until theSecured Obligations have been discharged in full, or until title to the Propertyhas passed after foreclosure sale and all applicable periods of redemption haveexpired.

 

**7.9****          Right to Make Repairs,Improvements.**  Should any part of theProperty come into the possession of Mortgagee, whether before or after anEvent of Default, Mortgagee may use, operate, and/or make repairs, alterations,additions and improvements to the Property for the purpose of preserving it orits value.  Mortgagor covenants topromptly reimburse and pay to Mortgagee, at the place where the Note ispayable, or at such other place as may be designated by Mortgagee in writing,the amount of all reasonable expenses (including the cost of any insurance,taxes, or other charges) incurred by Mortgagee in connection with its custody,preservation, use or operation of the Property, together with interest thereonfrom the date incurred by Mortgagee at the Default Rate, and all such expenses,costs, taxes, interest, and other charges shall be a part of the SecuredObligations.  It is agreed, however, thatthe risk of accidental loss or damage to the Property is undertaken byMortgagor and Mortgagee shall have no liability whatsoever for decline in valueof the Property, for failure to obtain or maintain insurance, or for failure todetermine whether any insurance ever in force is adequate as to amount or as tothe risks insured.

 

**7.10****        Surrender of Insurance.**  Mortgagee may surrender the insurancepolicies maintained pursuant to the terms hereof, or any part thereof, andreceive and apply the unearned premiums as a credit on the Secured Obligationsand, in connection therewith, Mortgagor hereby appoints Mortgagee (or anyofficer of Mortgagee), as the true and lawful agent and attorney-in-fact forMortgagor (with full powers of substitution), which power of attorney shall bedeemed to be a power coupled with an interest and therefore irrevocable, tocollect such premiums.

 

**7.11****        *Prima Facie*Evidence.**  Mortgagor agrees that, in any assignments,deeds, bills of sale, notices of sale, or postings, given by Mortgagee, any andall statements of fact or other recitals therein made as to the identity ofMortgagee, or as to the occurrence or existence of any Event of Default, or asto the acceleration of the maturity of the Secured Obligations, or as to therequest to sell, posting of notice of sale, notice of sale, time, place, termsand manner of sale and receipt, distribution and application of the moneyrealized therefrom, and without being limited by the foregoing, as to any otheract or thing having been duly done by Mortgagee, shall be taken by all courtsof law and equity as *prima facie*evidence that such statements or recitals

 

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statefacts and are without further question to be so accepted, and Mortgagor doeshereby ratify and confirm any and all acts that Mortgagee may lawfully do byvirtue hereof.

 

**ARTICLE 8ASSIGNMENT OF LEASES AND RENTS**

 

**8.1****          Assignment of Leases andRents.**  Mortgagor herebyunconditionally and absolutely grants, transfers and assigns unto Mortgagee allrents, royalties, issues, profits and income (“Rents”) now or hereafter due orpayable to Mortgagor for the occupancy or use of the Property, and all Leases(other than subleases), whether written or oral, with all security therefor,including all guaranties thereof, now or hereafter affecting the Property;reserving unto Mortgagor, however, a license to collect and retain such Rentsprior to the occurrence of any Event of Default.  Such license shall be revocable by Mortgageewithout notice to Mortgagor at any time after the occurrence of an Event ofDefault.  Mortgagor represents thatMortgagor’s interest in the Rents and the Leases have not been heretofore sold,assigned, transferred or set over by any instrument now in force and will notat any time during the life of this assignment be sold, assigned, transferredor set over by Mortgagor or by any person or persons whomsoever; and Mortgagorhas good right to sell, assign, transfer and set over the same and to grant toand confer upon Mortgagee the rights, interest, powers and authorities hereingranted and conferred.  Failure ofMortgagee at any time or from time to time to enforce the assignment of Rentsand Leases under this Section shall not in any manner prevent itssubsequent enforcement, and Mortgagee is not obligated to collect anythinghereunder, but is accountable only for sums actually collected.

 

**8.2****          Further Assignments.**  Mortgagor shall give Mortgagee at any timeupon demand any further or additional forms of assignment or transfer of suchRents, Leases and security as may be reasonably requested by Mortgagee, andshall deliver to Mortgagee executed copies of all such Leases and security.

 

**8.3****          Application of Rents.**  Mortgagee shall be entitled to deduct andretain a just and reasonable compensation from monies received hereunder forits services or that of its agents in collecting such monies.  Any monies received by Mortgagee hereundermay be applied when received from time to time in payment of any taxes,assessments or other liens affecting the Property regardless of thedelinquency, such application to be in such order as Mortgagee maydetermine.  The acceptance of thisMortgage by Mortgagee or the exercise of any rights by it hereunder shall notbe, or be construed to be, an affirmation by it of any Lease nor an assumptionof any liability under any Lease.

 

**8.4****          Collection of Rents.**  Upon or at any time after an Event of Defaultshall have occurred and be continuing, Mortgagee may declare all sums securedhereby immediately due and payable, and may, at its option, without notice, andwhether or not the Secured Obligations shall have been declared due andpayable, either in person or by agent, with or without bringing any action orproceeding, or by a receiver to be appointed by a court, (a) enter upon,take possession of, manage and operate the Property, or any part thereof (includingwithout limitation making necessary repairs, alterations and improvements tothe Property); (b) make, cancel, enforce or modify Leases; (c) obtainand evict tenants; (d) fix or modify Rents; (e) do any acts whichMortgagee deems reasonably proper to protect the security thereof; and

 

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(f) eitherwith or without taking possession of the Property, in its own name sue for orotherwise collect and receive such Rents, including those past due andunpaid.  In connection with theforegoing, Mortgagee shall be entitled and empowered to employ attorneys, andmanagement, rental and other agents in and about the Property and to effect thematters which Mortgagee is empowered to do, and in the event Mortgagee shallitself effect such matters, Mortgagee shall be entitled to charge and receivereasonable management, rental and other fees therefor as may be customary inthe area in which the Property is located; and the reasonable fees, charges,costs and expenses of Mortgagee or such persons shall be additional Secured Obligations.  Mortgagee may apply all funds collected asaforesaid, less costs and expenses of operation and collection, includingreasonable attorneys’ and agents’ fees, charges, costs and expenses, asaforesaid, upon any Secured Obligations, and in such order as Mortgagee maydetermine.  The entering upon and takingpossession of the Property, the collection of such Rents and the applicationthereof as aforesaid shall not cure or waive any default or waive, modify or affectnotice of default under the Note or this Mortgage or invalidate any act donepursuant to such notice.

 

**8.5****          Authority of Mortgagee.**  Any tenants or occupants of any part of theProperty are hereby authorized to recognize the claims of Mortgagee hereunderwithout investigating the reason for any action taken by Mortgagee, or thevalidity or the amount of secured obligations owing to Mortgagee, or theexistence of any default in the Note or this Mortgage, or under or by reason ofthis assignment of Rents and Leases, or the application to be made by Mortgageeof any amounts to be paid to Mortgagee. The sole signature of Mortgagee shall be sufficient for the exercise ofany rights under this assignment and the sole receipt of Mortgagee for any sumsreceived shall be a full discharge and release therefor to any such tenant oroccupant of the Property.  Checks for allor any part of the rentals collected under this assignment of Rents and Leasesshall be drawn to the exclusive order of Mortgagee.

 

**8.6****          Indemnification ofMortgagee.**  Nothing herein containedshall be deemed to obligate Mortgagee to perform or discharge any obligation,duty or liability of any lessor under any Lease of the Property, and Mortgagorshall and does hereby indemnify and hold Mortgagee harmless from any and allliability, loss or damage which Mortgagee may or might incur under any Lease orby reason of the assignment; and any and all such liability, loss or damageincurred by Mortgagee, together with the costs and expenses, includingreasonable attorneys’ fees, incurred by Mortgagee in defense of any claims ordemands therefor (whether successful or not), shall be additional SecuredObligations, and Mortgagor shall reimburse Mortgagee therefor on demand.

 

**ARTICLE 9MISCELLANEOUS PROVISIONS**

 

**9.1****          Time of the Essence.**  Time is of the essence with respect to all ofMortgagor’s obligations under the Loan Documents.

 

**9.2****          Joint and SeveralObligations.**  If Mortgagor is morethan one person or entity, then (a) all persons or entities comprisingMortgagor are jointly and severally liable for all of the Secured Obligations;(b) all representations, warranties, and covenants made by Mortgagor shallbe deemed representations, warranties, and covenants of each of the persons orentities comprising Mortgagor; (c) any breach, Default or Event of Defaultby any of the persons or

 

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entitiescomprising Mortgagor hereunder shall be deemed to be a breach, Default, orEvent of Default of Mortgagor; (d) any reference herein contained to theknowledge or awareness of Mortgagor shall mean the knowledge or awareness ofany of the persons or entities comprising Mortgagor; and (e) any eventcreating personal liability of any of the persons or entities comprisingMortgagor shall create personal liability for all such persons or entities.

 

**9.3****          Waiver of Homestead andOther Exemptions.**  To the extentpermitted by law, Mortgagor hereby waives all rights to any homestead or otherexemption to which Mortgagor would otherwise be entitled under any present orfuture constitutional, statutory, or other provision of applicable state orfederal law.  Mortgagor hereby waives anyright it may have to require Mortgagee to marshal all or any portion of thesecurity for the Secured Obligations.

 

**9.4****          Non-Recourse; Exceptionsto Non-Recourse.**  Except as expresslyset forth in the Note, the recourse of Mortgagee with respect to theobligations evidenced by the Note and the other Loan Documents shall be solelyto the Property, Chattels and Intangible Personalty, and any other collateralgiven as security for the Note.

 

**9.5****          Rights and RemediesCumulative.**  Mortgagee’s rights andremedies under each of the Loan Documents are cumulative of the rights andremedies available to Mortgagee under each of the other Loan Documents andthose otherwise available to Mortgagee at law or in equity.  No act of Mortgagee shall be construed as anelection to proceed under any particular provision of any Loan Document to theexclusion of any other provision in the same or any other Loan Document, or asan election of remedies to the exclusion of any other remedy which may then orthereafter be available to Mortgagee.

 

**9.6****          No Implied Waivers.**  Mortgagee shall not be deemed to have waivedany provision of any Loan Document unless such waiver is in writing and issigned by Mortgagee.  Without limitingthe generality of the preceding sentence, neither Mortgagee’s acceptance of anypayment with knowledge of a Default by Mortgagor, nor any failure by Mortgageeto exercise any remedy following a Default by Mortgagor shall be deemed awaiver of such Default, and no waiver by Mortgagee of any particular Default onthe part of Mortgagor shall be deemed a waiver of any other Default or of anysimilar Default in the future.

 

**9.7****          No Third-Party Rights.**  No person shall be a third-party beneficiaryof any provision of any of the Loan Documents. All provisions of the Loan Documents favoring Mortgagee are intendedsolely for the benefit of Mortgagee, and no third party shall be entitled toassume or expect that Mortgagee will not waive or consent to modification of anysuch provision in Mortgagee’s sole discretion.

 

**9.8****          Preservation ofLiability and Priority.**  Withoutaffecting the liability of Mortgagor or of any other person (except a personexpressly released in writing) for payment and performance of all of the SecuredObligations, and without affecting the rights of Mortgagee with respect to anysecurity not expressly released in writing, and without impairing in any waythe priority of this Mortgage over the interests of any person acquired orfirst evidenced by recording subsequent to the recording hereof, Mortgagee may,either before or after the maturity of the Note, and without notice orconsent:  (a) release any personliable for payment or

 

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performanceof all or any part of the Secured Obligations; (b) make any agreementaltering the terms of payment or performance of all or any of the SecuredObligations; (c) exercise or refrain from exercising, or waive, any rightor remedy which Mortgagee may have under any of the Loan Documents;(d) accept additional security of any kind for any of the SecuredObligations; or (e) release or otherwise deal with any real or personalproperty securing the Secured Obligations. Any person acquiring or recording evidence of any interest of any naturein the Property, the Chattels, or the Intangible Personalty shall be deemed, byacquiring such interest or recording any evidence thereof, to have agreed andconsented to any or all such actions by Mortgagee.

 

**9.9****          Subrogation ofMortgagee.**  Mortgagee shall besubrogated to the lien of any previous encumbrance discharged with fundsadvanced by Mortgagee under the Loan Documents, regardless of whether suchprevious encumbrance has been released of record.

 

**9.10****        Notices.**  Any notice required or permitted to be givenby Mortgagor or Mortgagee under this Mortgage shall be in writing and will bedeemed given (a) upon personal delivery, (b) on the first businessday after receipted delivery to a courier service which guaranteesnext-business-day delivery, or (c) on the third business day aftermailing, by registered or certified United States mail, postage prepaid, in anycase to the appropriate party at its address set forth below:

 

If toMortgagor:

 

TradeportDevelopment II, LLC

204West Newberry Road

Bloomfield,Connecticut 06002-1308

Attention:Anthony Galici

 

with acopy to:

 

MurthaCullina, LLP

CityplaceOne, 185 Asylum Street

Hartford,Connecticut 06103

Attention:Thomas Daniells, Esq.

 

If toMortgagee:

 

FirstSunAmerica Life Insurance Company

c/oAIG Global Investment Corp.

1SunAmerica Center, 38th Floor

CenturyCity

LosAngeles, California 90067-6022

Attention:  Director-Mortgage Lending and Real Estate

 

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with acopy to:

 

Otten,Johnson, Robinson, Neff & Ragonetti, P.C.

950Seventeenth Street, Suite 1600

Denver,Colorado 80202

Attention:  Aaron J. Hill, Esq.

 

Either party may change such party’s address fornotices or copies of notices by giving notice to the other party in accordancewith this Section.

 

**9.11****        Defeasance.**  Upon payment and performance in full of allof the Secured Obligations, Mortgagee will execute and deliver to Mortgagorsuch documents as may be required to release this Mortgage of record.

 

**9.12****        Illegality.**  If any provision of this Mortgage is held tobe illegal, invalid, or unenforceable under present or future laws effectiveduring the term of this Mortgage, the legality, validity, and enforceability ofthe remaining provisions of this Mortgage shall not be affected thereby, and inlieu of each such illegal, invalid or unenforceable provision there shall be addedautomatically as a part of this Mortgage a provision as similar in terms tosuch illegal, invalid, or unenforceable provision as may be possible and belegal, valid, and enforceable.  If therights and liens created by this Mortgage shall be invalid or unenforceable asto any part of the Secured Obligations, then the unsecured portion of theSecured Obligations shall be completely paid prior to the payment of theremaining and secured portion of the Secured Obligations, and all payments madeon the Secured Obligations shall be considered to have been paid on and appliedfirst to the complete payment of the unsecured portion of the SecuredObligations.

 

**9.13****        Usury Savings Clause.**  It is expressly stipulated and agreed to bethe intent of Mortgagee and Mortgagor at all times to comply with theapplicable law governing the highest lawful interest rate.  If the applicable law is ever judiciallyinterpreted so as to render usurious any amount called for under the Note orunder any of the other Loan Documents, or contracted for, charged, taken,reserved or received with respect to the Loan, or if acceleration of thematurity of the Note, any prepayment by Mortgagor, or any other circumstancewhatsoever, results in Mortgagor having paid any interest in excess of thatpermitted by applicable law, then it is the express intent of Mortgagor andMortgagee that all excess amounts theretofore collected by Mortgagee becredited on the principal balance of the Note (or, at Mortgagee’s option, paidover to Mortgagor), and the provisions of the Note and other Loan Documentsimmediately be deemed reformed and the amounts thereafter collectible hereunderand thereunder reduced, without the necessity of the execution of any newdocument, so as to comply with the applicable law, but so as to permit therecovery of the fullest amount otherwise called for hereunder andthereunder.  The right to acceleratematurity of the Note does not include the right to accelerate any interestwhich has not otherwise accrued on the date of such acceleration, and Mortgageedoes not intend to collect any unearned interest in the event ofacceleration.  All sums paid or agreed tobe paid to Mortgagee for the use, forbearance or detention of the SecuredObligations

 

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evidencedhereby or by the Note shall, to the extent permitted by applicable law, beamortized, prorated, allocated and spread throughout the full term of suchSecured Obligations until payment in full so that the rate or amount ofinterest on account of such Secured Obligations does not exceed the maximumrate or amount of interest permitted under applicable law.  The term “applicable law” as used hereinshall mean any federal or state law applicable to the Loan.

 

**9.14****        Obligations Binding UponMortgagor’s Successors.**  ThisMortgage is binding upon Mortgagor and Mortgagor’s successors and assigns, andshall inure to the benefit of Mortgagee, and its successors and assigns, andthe provisions hereof shall likewise be covenants running with the land.  The duties, covenants, conditions, obligations,and warranties of Mortgagor in this Mortgage shall be joint and severalobligations of Mortgagor and Mortgagor’s successors and assigns.

 

**9.15****        Construction.**  All pronouns and any variations of pronounsherein shall be deemed to refer to the masculine, feminine, or neuter, singularor plural, as the identity of the parties may require.  Whenever the terms herein are singular, thesame shall be deemed to mean the plural, as the identity of the parties or thecontext requires.

 

**9.16****        Attorneys’ Fees.**  Any reference in this Mortgage to attorneys’or counsel’s fees paid or incurred by Mortgagee shall be deemed to includeparalegals’ fees and legal assistants’ fees. Moreover, wherever provision is made herein for payment of attorneys’ orcounsel’s fees or expenses incurred by Mortgagee, such provision shall includebut not be limited to, such fees or expenses incurred in any and all judicial,bankruptcy, reorganization, administrative, or other proceedings, includingappellate proceedings, whether such fees or expenses arise before proceedingsare commenced, during such proceedings or after entry of a final judgment.

 

**9.17****        Waiver and Agreement.**  MORTGAGOR HEREBY EXPRESSLY WAIVES ANY RIGHTIT MAY HAVE UNDER APPLICABLE LAW TO PREPAY THE NOTE, IN WHOLE OR IN PART,WITHOUT PREPAYMENT CHARGE, UPON ACCELERATION OF THE MATURITY DATE OF THE NOTE,AND AGREES THAT, IF FOR ANY REASON A PREPAYMENT OF ALL OR ANY PART OF THE NOTEIS MADE, WHETHER VOLUNTARILY OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATEOF THE NOTE BY MORTGAGEE ON ACCOUNT OF THE OCCURRENCE OF ANY EVENT OF DEFAULTARISING FOR ANY REASON, INCLUDING, WITHOUT LIMITATION, AS A RESULT OF ANYPROHIBITED OR RESTRICTED TRANSFER, FURTHER ENCUMBRANCE OR DISPOSITION OF THEPROPERTY OR ANY PART THEREOF SECURING THE NOTE, THEN MORTGAGOR SHALL BEOBLIGATED TO PAY, CONCURRENTLY WITH SUCH PREPAYMENT, THE PREPAYMENT PREMIUMPROVIDED FOR IN THE NOTE (OR, IN THE EVENT OF ACCELERATION WHEN THE NOTE ISCLOSED TO PREPAYMENT, AS PROVIDED IN THE DEFINITION OF “SECURED OBLIGATIONS”SET FORTH IN **ARTICLE 1** HEREOF).  MORTGAGOR HEREBY DECLARES THAT MORTGAGEE’SAGREEMENT TO MAKE THE LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH INTHE NOTE CONSTITUTES ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BYMORTGAGOR, FOR THIS WAIVER AND AGREEMENT.

 

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**9.18****        Waiver of Jury Trial.**  MORTGAGEE AND MORTGAGOR KNOWINGLY,IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO ATRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ONTHIS MORTGAGE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS MORTGAGE ORANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO ANY LOANDOCUMENT.  THIS PROVISION IS A MATERIALINDUCEMENT FOR MORTGAGEE AND MORTGAGOR TO ENTER INTO THE LOAN.

 

**9.19****        Governing Laws.**  The substantive laws of the State shallgovern the validity, construction, enforcement and interpretation of thisMortgage.

 

**9.20****        Inconsistency.**  In the event of any inconsistency between theterms of the Loan Documents and the terms of that certain First Mortgage LoanApplication between Mortgagor and Mortgagee, as amended (the “Application”),the terms of the Loan Documents shall govern and control in all respects.

 

**9.21****        Prejudgment Remedy.**  MORTGAGOR AND EACH ENDORSER, GUARANTOR ANDSURETY OF THE NOTE, AND EACH OTHER PERSON LIABLE OR WHO SHALL BECOME LIABLE FORALL OR ANY PART OF THE INDEBTEDNESS EVIDENCED BY THE NOTE, HEREBY ACKNOWLEDGETHAT THE TRANSACTION OF WHICH THE NOTE AND THIS MORTGAGE IS A PART IS ACOMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED UNDER CONNECTICUT GENERALSTATUTES SECTIONS 52–278a TO 52–278n, INCLUSIVE, OR BY OTHER APPLICABLELAW, HEREBY WAIVE THEIR RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENTREMEDY WHICH MORTGAGEE OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

 

**9.22****        Anti-Terrorism.**

 

(a)           None of Mortgagor,Guarantor or any of their respective constituents or affiliates is in violationof any laws relating to terrorism or money laundering, including withoutlimitation, Executive Order No. 13224 on Terrorist Financing, effective September 24,2001, and relating to Blocking Property and Prohibiting Transactions WithPersons Who Commit, Threaten to Commit, or Support Terrorism, (as the same hasbeen, or may hereafter be, renewed, extended, amended or replaced, the “ExecutiveOrder”) and the Bank Secrecy Act (31 U.S.C. § 5311 *et seq*.),as amended by the Uniting and Strengthening America by Providing AppropriateTools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56,as the same has been, or may hereafter be, renewed, extended, amended orreplaced, the “Patriot Act”).  As usedherein, “Anti-Terrorism Laws” shall mean any laws relating to terrorism ormoney laundering, including the Executive Order, the Patriot Act, the lawscomprising or implementing the Bank Secrecy Act, and the laws administered bythe United States Treasury Department’s Office of Foreign Asset Control (as anyof the foregoing laws may from time to time be renewed, extended, amended, orreplaced).

 

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(b)           None of Mortgagor,Guarantor, their respective affiliates, or to Mortgagor’s knowledge, any personhaving a beneficial interest in Mortgagor or Guarantor, any person for whomMortgagor or Guarantor is acting as agent or nominee, any of their respectivebrokers or other agents acting in any capacity in connection with the Loan or,to Mortgagor’s knowledge as of the date hereof, Mortgagor’s predecessor ininterest to the Property is a “Prohibited Person,” which is defined as follows:

 

(i)      a person or entity that islisted in the Annex to, or is otherwise subject to the provisions of, theExecutive Order;

 

(ii)     a person or entity owned orcontrolled by, or acting for or on behalf of, any person or entity that islisted in the Annex to, or is otherwise subject to the provisions of, theExecutive Order;

 

(iii)    a person or entity with whomMortgagee or any bank or other institutional lender is prohibited from dealingor otherwise engaging in any Anti-Terrorism Law;

 

(iv)    a person or entity whocommits, threatens or conspires to commit or supports “terrorism” as defined inthe Executive Order;

 

(v)     a person or entity that isnamed as a “specially designated national” or “blocked person” on the mostcurrent list published by the U.S. Treasury Department Office of Foreign AssetsControl at its official Website, http://www.treas.gov/ofac/t11sdn.pdf or at anyreplacement Website or other replacement official publication of such list; and

 

(vi)    a person or entity who isaffiliated with a person or entity listed above.

 

(c)           None of Mortgagor,Guarantor, any of their respective affiliates, to Mortgagor’s knowledge, any oftheir respective brokers or other agents acting in any capacity in connectionwith the Loan or, to Mortgagor’s knowledge as of the date hereof, the seller ofthe Property (if any portion of the Property is being acquired with proceeds ofthe Loan), does or shall (i) conduct any business or engage in anytransaction or dealing with any Prohibited Person, including making orreceiving any contribution of funds, goods or services to or for the benefit ofany Prohibited Person or leasing any portion of the Property to any ProhibitedPerson, (ii) deal in, or otherwise engage in any transaction relating to,any property or interests in property blocked pursuant to the Executive Order,or (iii) engage in or conspire to engage in any transaction that evades oravoids, or has the purpose of evading or avoiding, or attempts to violate, anyof the prohibitions set forth in any Anti-Terrorism Law.

 

(d)           Mortgagor shallpromptly deliver to Mortgagee any certification or other evidence reasonablyrequested from time to time by Mortgagee confirming Mortgagor’s compliance withthis Section.  The representations,warranties and covenants set forth in this Section shall be deemedrepeated and reaffirmed by Mortgagor as of each date that Mortgagor makes apayment to Mortgagee under the Note, this Mortgage and the other Loan Documentsor receives any payment from Mortgagee. Mortgagor shall promptly notify Mortgagee in writing

 

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shouldMortgagor become aware of any change in the information set forth in theserepresentations, warranties and covenants.

 

NOW THEREFORE, if Mortgagor shall pay or cause to bepaid the Secured Obligations and if Mortgagor shall keep, perform and observeall of the covenants, agreements, conditions and provisions of this Mortgageand the other Loan Documents, then this Mortgage shall be null and void and ofno further force and effect and shall be released by Mortgagee after writtenrequest by, and at the expense of, Mortgagor; otherwise to remain in full forceand effect.

 

**[Balance of Page Intentionally Left Blank]**

 

IN WITNESS WHEREOF, Mortgagor has executed anddelivered this Mortgage as of the date first mentioned above.

 
|     | TRADEPORT  DEVELOPMENT II, LLC, a  Connecticut limited liability company      |
|----------|-------------------------------------------------------------------------------|
|     |                                                                          |
|     | By: River Bend  Associates, Inc., a Connecticut  corporation, its Sole Member |
|     |                                                                          |
| Witness: | /s/ Thomas Daniells                                                           |   | By: | /s/ Anthony Galici |   |
|     |                                                                          |   |
|     | Name:                                                                         | Anthony Galici |   |
|     |                                                                          |   |
| Witness: | /s/ Sara Taylor                                                               |   | Title: | Vice President |   |
|          |                                                                               |  |  |  |  |  |  |  |  |  |  |

 

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