Document:

ex10-1.htm

Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

 

This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is made by and between LiqTech International, Inc. a Nevada corporation (the “Company”), and the undersigned (“Subscriber”) as of the date this Subscription Agreement is accepted by the Company, as set forth on the Company’s signature page hereto. 

 

WHEREAS, subject to the terms and conditions set forth in this Agreement, and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), Rule 506 promulgated thereunder and/or Regulation S under the Securities Act, the Company desires to issue and sell to the Subscriber, and the Subscriber desires to purchase from the Company, that number of shares of the Company’s common stock, $0.001 par value per share (“Common Stock”) set forth on the signature page hereto, to persons who are not U.S. persons under Regulation S and persons who are “accredited investors” (as defined in Rule 501 of Regulation D under the Securities Act), in a private placement (the “Offering”); and

 

WHEREAS, the Subscriber understands that the Offering is being made without registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”), or any securities law of any state of the United States or of any other jurisdiction, and is being made only to “accredited investors” or non-U.S. persons. 

 

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:

 

1.             Subscription for Shares. 

 

(a)       Subscription for Shares. Subject to the terms and conditions hereinafter set forth, Subscriber hereby irrevocably subscribes for and agrees to purchase from the Company such amounts of Common Stock as is set forth on the signature page hereof (the “Shares”) at a price per Share and for an aggregate purchase price as set forth on the signature page hereof (the “Purchase Price”), and the Company agrees to sell such Shares to Subscriber for the Purchase Price, subject to the Company’s right, in its sole discretion, to reject this subscription, in whole or in part, at any time prior to the Closing (as defined below). Subscriber acknowledges that Subscriber is not entitled to cancel, terminate or revoke this Subscription Agreement. Subscriber further acknowledges that the Shares will be subject to restrictions on transfer as set forth in this Subscription Agreement. 

 

2.             Terms of Subscription.

 

(a)        Payment. Subscriber shall make payment for the Shares to an account designated by the Company in an amount equal to the Purchase Price by wire transfer of immediately available funds at or prior to the Closing.

 

(b)      Acceptance of Subscription and Issuance of Shares. It is understood and agreed that the Company shall have the sole right, at its complete discretion, to accept or reject this subscription, in whole or in part, for any reason and that the same shall be deemed to be accepted by the Company only when it is signed by a duly authorized officer of the Company and delivered to the undersigned at the Closing (as defined below). Notwithstanding anything in this Subscription Agreement to the contrary, the Company shall have no obligation to issue any of the Shares to any person who is a resident of a jurisdiction in which the issuance of Shares to such person would constitute a violation of the securities, “blue sky” or other similar laws.

 

 

 

 

(b)         Closing. The Offering may be consummated at such place (or by electronic transmission) as may be mutually agreed upon by the parties at a closing (the “Closing”) to occur on a date as may be determined by the Company, at a time as may be determined by the Company. Subsequent closings may occur at the discretion of the Company. 

 

(c)         Closing Deliverables. At the Closing: Subscriber shall deliver the Purchase Price; and the Company shall deliver a share certificate representing the Shares to Subscriber that bears an appropriate legend referring to the fact that the Shares are subject to transfer restrictions as set forth in the Securities Act.

 

3.             Representations and Warranties of Subscriber.

 

Subscriber represents and warrants to the Company that:

 

(a)        Reliance on Exemptions. Subscriber understands that the Shares are being offered and sold in reliance upon specific exemptions from registration provided in the Securities Act, and upon exemptions from registration under State securities laws, and acknowledges that the Offering has not been reviewed by the Securities and Exchange Commission or any state agency because it is intended to be a nonpublic offering exempt from the registration requirements of the Securities Act and State securities laws. Subscriber understands that the Company is relying upon, and intends that the Company rely upon, the truth and accuracy of, and Subscriber’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of Subscriber set forth herein in order to determine the availability of such exemptions and the eligibility of Subscriber to acquire the Shares. The Company may only make offers to sell the Shares to persons outside the United States in this Offering and, if applicable, at the time any buy order is originated, the buyer is outside the United States. The undersigned has not received an offer to purchase Shares inside the United States and will not originate a buy order inside the United States. 

 

(b)        Investment Purpose. The undersigned is either (i) an “accredited investor” if a U.S. investor, or (ii) not a U.S. person as defined under Rule 902 of Regulation S, and the Shares are being purchased for Subscriber’s own account, for investment purposes only and not for distribution or resale to others in contravention of the registration requirements of the Securities Act. Subscriber agrees that it will not sell or otherwise transfer the Shares unless they are registered under the Securities Act or unless an exemption from such registration is available under the Securities Act and permitted by the certificate of incorporation of the Company. Subscriber has no contract, undertaking, agreement, or arrangement with any person to sell, distribute, transfer, or pledge to such person or anyone else the Shares which Subscriber hereby subscribes to purchase, or any interest therein, and Subscriber has no present plans to enter into any such contract, undertaking, agreement, or arrangement. Subscriber agrees that the Company and its affiliates shall not be required to give effect to any purported transfer of such Shares except upon compliance with the foregoing restrictions. 

 

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(c)          Accredited Investor. Subscriber, if a U.S. investor, is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act, as amended to date, a summary of which is attached hereto as Exhibit B, and Subscriber is able to bear the economic risk of any investment in the Shares and in the Company. Subscriber shall complete and deliver to the Company prior to Closing an executed copy of the Accredited Investor Questionnaire attached hereto as Exhibit A.

 

(d)        Risk of Investment. Subscriber recognizes that the purchase of the Shares involves a high degree of risk in that: an investment in the Company is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Company and the Shares; transferability of the Shares is limited; and the Company may require substantial additional funds to operate its business and there can be no assurance that the Offering will be completed.

 

(e)           Use of Proceeds. Subscriber understands that the net proceeds of the Offering will be used for operations of the Company and general corporate purposes.

 

(f)            Prior Investment Experience. Subscriber understands the business in which the Company is engaged and has such knowledge and experience in business and financial matters that Subscriber is capable of evaluating the merits and risks of the investment in the Shares. Subscriber has prior investment experience, and Subscriber recognizes the highly speculative nature of this investment. 

 

(g)           Information and Non-Reliance. 

 

(i)     Subscriber acknowledges that Subscriber has carefully reviewed this Subscription Agreement, which Subscriber acknowledges has been provided to Subscriber. Subscriber has been given the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of this Offering and the Subscription Agreement and to obtain such additional information, to the extent the Company possesses such information or can acquire it without unreasonable effort or expense, necessary to verify the accuracy of same as Subscriber reasonably desires in order to evaluate the investment. Subscriber understands the Subscription Agreement, and Subscriber has had the opportunity to discuss any questions regarding the Subscription Agreement with Subscriber’s counsel or other advisor. Notwithstanding the foregoing, the only information upon which Subscriber has relied is that set forth in the Subscription Agreement and the results of independent investigation by Subscriber. Subscriber has received no representations or warranties from the Company, its employees, agents or attorneys in making this investment decision other than as set forth in the Subscription Agreement. Subscriber does not desire to receive any further information.

 

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(ii)     The Subscriber represents that it is not relying on (and will not at any time rely on) any communication (written or oral) of the Company, as investment advice or as a recommendation to purchase the Shares, it being understood that information and explanations related to the terms and conditions of the Shares and the Subscription Agreement shall not be considered investment advice or a recommendation to purchase the Shares.

 

(iii)     The Subscriber confirms that the Company has not (i) given any guarantee or representation as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) an of investment in the Shares or (ii) made any representation to the Subscriber regarding the legality of an investment in the Shares under applicable legal investment or similar laws or regulations. In deciding to purchase the Shares, the Subscriber is not relying on the advice or recommendations of the Company and the Subscriber has made its own independent decision that the investment in the Shares is suitable and appropriate for the Subscriber.

 

(h)         Tax Consequences. Subscriber acknowledges that the Offering may involve tax consequences and that the contents of the Subscription Agreement do not contain tax advice or information. Subscriber acknowledges that Subscriber must retain Subscriber’s own professional advisors to evaluate the tax and other consequences of an investment in the Shares. Subscriber intends to acquire the Shares without regard to tax consequences.

 

(i)         Transfer or Resale. The Subscriber is acquiring the Shares solely for the Subscriber’s own beneficial account, for investment purposes, and not with a view to, or for resale in connection with, any distribution of the Shares. Subscriber understands that the Shares have not been registered under the Securities Act or the securities laws of any state and, as a result thereof, are subject to substantial restrictions on transfer. Subscriber acknowledges that Subscriber may be precluded from selling or otherwise disposing of the Shares for an indefinite period of time. Subscriber understands and hereby acknowledges that the Company is under no obligation to register the Shares under the Securities Act. Subscriber consents that the Company may, if it desires, permit the transfer of the Shares out of Subscriber’s name only when Subscriber’s request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Securities Act or any applicable state “blue sky” laws.

 

(j)          No General Solicitation. Subscriber was not induced to invest in the Company or in the Shares by any form of general solicitation or general advertising including, but not limited to, the following: any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over the news or radio; any seminar or meeting whose attendees were invited by any general solicitation or advertising; and any solicitation within the United States.

 

(k)        Due Authorization; Enforcement. Subscriber has all requisite power and authority (and in the case of an individual, capacity) to purchase and hold the Shares, to execute, deliver and perform Subscriber’s obligations under this Subscription Agreement and when executed and delivered by Subscriber, this Subscription Agreement will constitute legal, valid and binding agreements of Subscriber enforceable against Subscriber in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally, and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

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(l)         Address. The residence address of Subscriber furnished by Subscriber on the signature page hereto is Subscriber’s principal residence if Subscriber is an individual or its principal business address if it is a corporation, partnership, trust or other entity.

 

(m)       Compliance with Laws. The Subscriber will comply with all applicable laws and regulations in effect in any jurisdiction in which the Subscriber purchases or sells Shares and obtain any consent, approval or permission required for such purchases or sales under the laws and regulations of any jurisdiction to which the Subscriber is subject or in which the Subscriber makes such purchases or sales, and the Company shall have no responsibility therefore.

 

(n)       Accuracy of Representations and Warranties. The information set forth herein concerning Subscriber is true and correct. The Subscriber understands that, unless the Subscriber notifies the Company in writing to the contrary at or before the Closing, each of the Subscriber’s representations and warranties contained in this Subscription Agreement will be deemed to have been reaffirmed and confirmed as of the Closing, taking into account all information received by the Subscriber.

 

(o)         Entity Representation. If Subscriber is a corporation, partnership, trust or other entity, such entity further represents and warrants that it was not formed for the purpose of investing in the Company.

 

4.            Representations and Warranties of the Company.

 

The Company represents and warrants to Subscriber that:

 

(a)          Organization. The Company is organized and validly existing in good standing under the laws of the state of Nevada. 

 

(b)        Due Authorization, Enforcement and Valid Issuance. The Company has all requisite power and authority to execute, deliver and perform its obligations under this Subscription Agreement, and when executed and delivered by the Company, this Subscription Agreement will constitute legal, valid and binding agreements of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally, and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The Shares have been duly authorized and, when issued and paid for in accordance with the terms of this Subscription Agreement, will be duly and validly issued, fully paid and nonassessable.

 

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(c)           Noncontravention. The execution and delivery of this Subscription Agreement and the consummation of the transactions contemplated hereby will not conflict with or constitute a violation of, or default under any material agreement to which the Company is a party or by which it or any of its properties are bound or the organizational documents of the Company.

 

5.            Conditions to Obligations of the Subscriber and the Company. 

 

The obligations of the Subscriber to purchase and pay for the Shares specified on the signature page hereof and of the Company to sell the Shares are subject to the satisfaction at or prior to the Closing of the following conditions precedent: 

 

(a)          Representations and Warranties. The representations and warranties of the Subscriber contained in Section 3 hereof and of the Company contained in Section 4 hereof shall be true and correct as of the Closing in all respects with the same effect as though such representations and warranties had been made as of the Closing.

 

6.             Legends. 

 

The certificates representing the Shares sold pursuant to this Subscription Agreement will be imprinted with legends in substantially the following form:

 

“THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). SUCH SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.”

 

and other legend language that may be determined by the Company and its counsel from time to time.

 

7.           United States Anti-Money Laundering Program. The Subscriber understands that the Company’s Board of Directors is required to comply with applicable anti-money laundering provisions under the United States PATRIOT Act of 2001, as amended (the “USA PATRIOT Act”). As a condition to acceptance of the Subscriber’s investment in the Company, the Subscriber makes the representations and agreements set forth on Annex A attached hereto, and agrees to provide to the Company true and correct copies of the applicable documentation pursuant to the requirements of Annex B, attached hereto. The Company reserves the right to request such additional information as is necessary to verify the identity of the Subscriber and the underlying beneficial owner of the Subscriber’s interest in the Company. In the event of delay or failure by the Subscriber to produce any information required for verification purposes, the Company may refuse to accept a subscription or may cause the withdrawal of the Subscriber from the Company.

 

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8.             Miscellaneous

 

(a)           Notice. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Subscription Agreement must be in writing and will be deemed to have been delivered: upon receipt, when delivered personally; upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or one (1) business day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

If to the Company:

 

 

LiqTech International, Inc.

Industriparken 22C, DK

2750 Ballerup, Denmark

Phone: +45 44986000

E-mail: ap@liqtech.com

Attention: Aldo Petersen, Chairman of the Board

 

	 	
			with a copy to:

				
			K&L Gates LLP

			

200 South Biscayne Boulevard

Suite 3900

Miami, FL 33131

Facsimile:     (305) 359-3306

E-mail: clayton.parker@klgates.com

Attention:     Clayton E. Parker, Esq.

 

If to Subscriber, to its residence address (or mailing address, if different) and facsimile number set forth at the end of this Subscription Agreement, or to such other address and/or facsimile number and/or to the attention of such other person as specified by written notice given to the Company five (5) calendar days prior to the effectiveness of such change.

 

(b)       Entire Agreement; Amendment. This Subscription Agreement, which includes the exhibits referred to herein, supersedes all other prior oral or written agreements between Subscriber, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and constitutes the entire understanding of the parties with respect to the matters covered herein. No provision of this Subscription Agreement may be amended or waived other than by an instrument in writing signed by the Company and Subscriber.

 

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(c)          Severability. If any provision of this Subscription Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Subscription Agreement in that jurisdiction or the validity or enforceability of any provision of this Subscription Agreement in any other jurisdiction.

 

(d)          Governing Law. This Subscription Agreement shall be governed by and construed in accordance with the laws of the state of Nevada, without giving effect to any choice of law or conflict of law provision or rule.

 

(e)          Successors and Assigns. This Subscription Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Subscriber shall not assign its rights hereunder without the prior written consent of the Company.

 

(f)           No Third Party Beneficiaries. This Subscription Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

(g)         Notification of Changes. The Subscriber hereby covenants and agrees to notify the Company upon the occurrence of any event prior to the closing of the purchase of the Shares pursuant to this Subscription Agreement which would cause any representation, warranty or covenant of the Subscriber contained in this Subscription Agreement to be false or incorrect. 

 

(h)         Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Subscription Agreement and the consummation of the transactions contemplated hereby.

 

(i)           Legal Representation. Subscriber acknowledges that: Subscriber has read this Subscription Agreement and the exhibits referred to herein; Subscriber understands that the Company has been represented in the preparation, negotiation and execution of the Subscription Agreement; and Subscriber understands the terms and conditions of the Subscription Agreement and is fully aware of their legal and binding effect.

 

(j)         Expenses. Each party will bear its own costs and expenses (including legal and accounting fees and expenses) incurred in connection with this Subscription Agreement and the transactions contemplated hereby.

 

(k)        Counterparts. This Subscription Agreement may be executed in counterparts, all of which shall be considered one and the same agreement. The exchange of signature pages by facsimile transmission, by electronic mail in “portable document format” (“.pdf”) form or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document shall constitute effective execution and delivery of this Agreement as to the parties.

 

[SIGNATURE PAGES FOLLOW]

 

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SUBSCRIBER SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

 

IN WITNESS WHEREOF, and intending to be legally bound hereby, Subscriber has caused this Subscription Agreement to be duly executed and, by executing this signature page, hereby executes, adopts and agrees to all terms, conditions, and representations contained in the foregoing Subscription Agreement and hereby subscribes for the Shares offered by the Company in the amount set forth below.

 

SUBSCRIBER:

 

 

	
			 

				
			 

				
			 

				
			 

			
	
			Signature

				
			 

				
			Social Security Number (if any)

				
			 

			
	
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	Print Name	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
			Signature of joint investor, if applicable

				
			 

				
			Social Security Number (if any)

				
			 

			
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Print name of joint investor, if applicable	 	 	 
	 	 	 	 
	Check one (if applicable) 	 	[ ] Tenants in Common	 
	 	 	 	 
	 	 	[ ] JTWROS	 
	 	 	 	 
	 	 	[ ] Tenants by Entirety	 
	 	 	 	 

 

	
			Date:                                                       , 2017

			
	 
	
			Shares (number of shares of Common Stock subscribed for):                                    

			
	 
	
			Purchase Price (number of Shares x $                     ): $                                          

			
	 

 

 

	
			Residence Address:

				 	
			Mailing Address, if different from Residence Address:

			
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

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COMPANY SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

 

– PLEASE DO NOT WRITE BELOW THIS LINE –

 

COMPANY USE ONLY

 

Accepted and Agreed:

 

LIQTECH INTERNATIONAL, INC.

 

By:                                                                                           

Name:                                       

Title:                                         

      

As of: ____________ ____, 2017

 

 

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Exhibit A

 

Confidential Accredited Investor Questionnaire

 

To:     LiqTech International, Inc.

 

LiqTech International, Inc., a Nevada corporation (the “Company”), is offering in a private placement (“Offering”) pursuant to an accompanying subscription agreement, including, without limitation, all exhibits and annexes made a part thereto (collectively, the “Subscription Agreement”) shares of its Common Stock, par value $0.001 per share (the “Shares”). The undersigned Subscriber is purchasing Shares pursuant to the Offering and acknowledges that all capitalized terms not otherwise defined herein have the meanings set forth in the Subscription Agreement.

 

I.     The Subscriber represents and warrants that he or it comes within one category marked below, and that for any category marked, he or it has truthfully set forth, where applicable, the factual basis or reason the Subscriber comes within that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL EXCEPT AS NECESSARY FOR THE COMPANY TO COMPLY WITH LAW AND/OR ANY RULES PROMULGATED BY ANY REGULATORY AGENCY. The undersigned shall furnish any additional information which the Company deems necessary in order to verify the answers set forth below.

 

	Category A               	 	The undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000.
	 	 	 
	 	 	Explanation. In calculating net worth you may include equity in personal property and real estate (other than the value, after deducting mortgage obligations, of Subscriber’s principal residence which may not be included in such net worth calculation), cash, short-term investments, stock and securities. Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.
	 	 	 
	Category B              	 	The undersigned is an individual (not a partnership, corporation, etc.) who had an individual income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year.
	 	 	 
	Category C             	 	The undersigned is a director or executive officer of the Company which is issuing and selling the Shares.
	 	 	 
	Category D             	 	The undersigned is a bank; a savings and loan association; insurance company; registered investment company; registered business development company; licensed small business investment company (“SBIC”); or employee benefit plan within the meaning of Title 1 of ERISA and (a) the investment decision is made by a plan fiduciary which is either a bank, savings and loan association, insurance company or registered investment advisor, or (b) the plan has total assets in excess of $5,000,000 or is a self directed plan with investment decisions made solely by persons that are accredited investors.

 

 

 

 

 

 

	 	 	 	                                  	 
	 	 	 	 	 
	 	 	 	(describe entity)	 
	 	 	 	 	 

 

	Category E          	 	The undersigned is a private business development company as defined in section 202(a)(22) of the Investment Advisors Act of 1940.

 

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	(describe entity)	 
	 	 	 	 	 

 

	Category F           	 	
			The undersigned is either a corporation, partnership, Massachusetts business trust, or non-profit organization within the meaning of Section 501(c)(3) of the Internal Revenue Code, in each case not formed for the specific purpose of acquiring the Shares and with total assets in excess of $5,000,000.

			

 

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	(describe entity)	 

 

	Category G            	 	The undersigned is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, where the purchase is directed by a “sophisticated person” as defined in Regulation 506(b)(2)(ii) under the Securities Act of 1933.
	 	 	 
	Category H            	 	The undersigned is an entity (other than a trust) all the equity owners of which are “accredited investors” within one or more of the above categories. If relying upon this Category alone, each equity owner must complete a separate copy of this Agreement.

 

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	(describe entity)	 

 

	Category I            	 	The undersigned is not within any of the categories above and is therefore not an accredited investor.
	 	 	 

 

For purposes hereof, “individual income” means adjusted gross income less any income attributable to a spouse or to property owned by a spouse, increased by the following amounts (but not including any amounts attributable to a spouse or to property owned by a spouse): (i) the amount of any interest income received which is tax-exempt under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) the amount of losses claimed as a limited partner in a limited partnership (as reported on Schedule E of Form 1040), (iii) any deduction claimed for depletion under Section 611 et seq. of the Code, and (iv) any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 12.02 of the Code.

 

The undersigned agrees that the undersigned will notify the Company at any time on or prior to the execution of the Subscription Agreement or this Questionnaire in the event that the representations and warranties in the Subscription Agreement or in this Questionnaire shall cease to be true, accurate and complete.

 

 

 

 

II.            Disqualification Events.

 

1.             Certain Criminal Convictions.

Have you been convicted, within the past ten (10) years (or five (5) years, in the case of the Company, its predecessors and affiliated issuers), of any felony or misdemeanor involving:

	 	
			☐

				
			in connection with the purchase or sale of any security;

			

	 	
			☐

				
			involving the making of any false filing with the SEC; or

			

	 	
			☐

				
			arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment advisor or paid solicitor of purchasers of securities?

			

☐ Yes. If yes, please explain:

 

_____________________________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

 

☐ No.

 

2.             Certain Court Injunctions and Restraining Orders.

Are you subject to any order, judgment or decree of any court of competent jurisdiction that was entered within the past five (5) years and currently restrains or enjoins you from engaging in any conduct or practice:

 

	 	
			☐

				
			in connection with the purchase or sale of any security;

			

	 	
			☐

				
			involving the making of any false filing with the SEC; or

			

	 	
			☐

				
			arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities?

			

 

☐ Yes. If yes, please explain:

 

_____________________________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

 

☐ No.

 

3.             Final Orders of Certain State and Federal Regulators.

Are you subject to a Final Order (as defined below) of state regulators of securities, insurance, banking, savings associations or credit unions; federal banking agencies; the Commodity Futures Trading Commission; or the National Credit Union Administration that:

 

☐     bars you from:

☐     associating with an entity regulated by any of the aforementioned regulators;

☐     engaging in the business of securities, insurance or banking; or

☐     engaging in savings association or credit union activities; or

 

	 	
			☐

				
			constitutes a Final Order based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct entered within the past ten (10) years?

			

 

☐ Yes. If yes, please explain:

 

_____________________________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

 

☐ No.

 

 

 

 

The term “Final Order” means a written directive or declaratory statement issued by a federal or state agency described in Rule 506(d)(1)(iii) under the Securities Act of 1933 under applicable statutory authority that provides for notice and an opportunity for a hearing, which constitutes a final disposition or action by that federal or state agency.

 

4.             SEC Disciplinary Orders.

Are you subject to any order of the Securities and Exchange Commission (“SEC”) that currently:

	 	
			☐

				
			suspends or revokes your registration as a broker, dealer, municipal securities dealer or investment adviser;

			

	 	
			☐

				
			places limitations on the activities, functions or operations of, or imposes civil money penalties on, such person; or

			

	 	
			☐

				
			bars you from being associated with any entity or from participating in the offering of any penny stock?1

			

 

☐ Yes. If yes, please explain: ______________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

 

☐ No.

_______________________________

1 A disqualification based on a suspension or limitation of activities expires when the suspension or limitation expires.

 

5.             SEC Cease-and-Desist Orders.

Are you subject to any order of the SEC that was entered within the past five (5) years and currently orders you to cease and desist from committing or causing a future violation of:

	 	
			☐

				
			any scienter-based (intent-based) anti-fraud provision of the federal securities laws (including, for example, but not limited to):

			

	 	
			☐

				
			Section 17(a)(1) of the Securities Act of 1933,

			

	 	
			☐

				
			Section 10(b) of the Exchange Act and Rule 10b-5, and

			

	 	
			☐

				
			Section 15 (c) (1) of the Securities Exchange Act); or

			

 

	 	
			☐

				
			Section 5 of the Securities Act, of 1933, which generally requires that securities be registered and prohibits the sale of unregistered securities.

			

 

☐ Yes. If yes, please explain: ______________________________________________________________________ 

_____________________________________________________________________________________________

_____________________________________________________________________________________________

 

☐ No.

 

 

 

 

6.             SRO Suspension/Expulsion.

Have you been suspended or expelled from membership in, or suspended or barred from association with a member of, a securities self-regulatory organization (“SRO”, such as a registered national securities exchange or a registered national or affiliated securities association, including FINRA) for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade?

 

☐ Yes. If yes, please explain: ______________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

 

☐ No.

 

7.             SEC Stop Orders.

Have you filed (as a registrant or issuer), or were you named as an underwriter in any registration statement or Regulation A offering statement filed with the SEC that, within the past five (5) years, was the subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is currently the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued?

 

☐ Yes. If yes, please explain: _________________________________________________________________________

________________________________________________________________________________________________

________________________________________________________________________________________________

________________________________________________________________________________________________

 

☐ No.

 

8.             USPS False Representations Order.

Are you subject to a United States Postal Service (“USPS”) false representation order entered within the past five (5) years, or are you currently subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the USPS to constitute a scheme or device for obtaining money or property through the mail by means of false representations?

 

☐ Yes. If yes, please explain: _________________________________________________________________________

________________________________________________________________________________________________

________________________________________________________________________________________________

________________________________________________________________________________________________

 

☐ No.

 

 

 

 

III.       The undersigned is informed of the significance to the Company of the foregoing representations and answers contained in this Questionnaire contained herein and such answers have been provided under the assumption that the Company will rely on them.

 

IV.       In furnishing the above information, the undersigned acknowledges that the Company will be relying thereon in determining, among other things, whether there are reasonable grounds to believe that the undersigned qualifies as a Purchaser under Section 4(a)(2) and/or Regulation D of the Securities Act of 1933 and applicable state securities laws for the purposes of the proposed investment.

 

V.        The undersigned understands and agrees that the Company may request further information of the undersigned in verification or amplification of the undersigned’s knowledge of business affairs, the undersigned’s assets and the undersigned’s ability to bear the economic risk involved in an investment in the securities of the Company.

 

VI.     The undersigned represents to you that (a) the information contained herein is complete and accurate on the date hereof and may be relied upon by you, (b) the undersigned will notify you immediately of any change in any such information occurring prior to the acceptance of the subscription and will promptly send you written confirmation of such change. The undersigned hereby certifies that he, she or it has read and understands the Subscription Agreement related hereto and (c) the undersigned acknowledges that you may be required to publicly disclose the information provided in this Questionnaire and that he or it consents to such public disclosure.

 

VII.        INFORMATION VERIFICATION CONSENT.

 

BY SIGNING THIS QUESTIONNAIRE, SUBSCRIBER HEREBY GRANTS THE COMPANY PERMISSION TO REVIEW ALL PUBLICLY AVAILABLE INFORMATION REGARDING SUBSCRIBER, INCLUDING, BUT NOT LIMITED TO INFORMATION PROVIDED BY THE OFFICE OF FOREIGN ASSETS CONTROL (“OFAC”) FOR THE PURPOSE OF VERIFYING INFORMATION PROVIDED BY SUBSCRIBER HEREIN.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

INVESTOR QUESTIONNAIRE EXECUTION PAGE

 

 

	
			 

				
			 

				
			 

				
			 

			
	Signature 	 	Signature (if purchasing jointly)	 
	 	 	 	 
	 	 	 	 
	Name Typed or Printed	 	Name Typed or Printed	 
	 	 	 	 
	 	 	 	 
	Entity Name	 	Entity Name	 
	 	 	 	 
	 	 	 	 
	
			Address

				
			 

				
			Address

				
			 

			
	 	 	 	 
	 	 	 	 
	City, State and Zip Code	 	City, State and Zip Code	 
	 	 	 	 
	 	 	 	 

 

 

 

 

 

EXHIBIT B

 

Definition of Accredited Investor

 

“Accredited investor” means any person who comes within any of the following categories, or who the Company reasonably believes comes within any of the following categories, at the time of the sale of the Shares to that person:

 

	 	
			1.

				
			Any bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; any insurance company as defined in Section 2(13) of the Securities Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

			

 

	 	
			2.

				
			Any private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

			

 

	 	
			3.

				
			Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Shares offered, with total assets in excess of $5,000,000;

			

 

	 	
			4.

				
			Any director, executive officer, or general partner of the issuer of the Company, or any director or executive officer of the Company;

			

 

	 	
			5.

				
			Any natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000, provided that for purposes of this item 5, “net worth” means the excess of total assets at fair market value (including personal and real property, but excluding the value of a person’s primary home) over total liabilities (excluding any mortgage on the primary home in an amount of up to the home’s fair market value, but including any mortgage amount in excess of the home’s fair market value);

			

 

 

 

 

	 	
			6.

				
			Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year, provided that for purposes of this item 6, “income” means annual adjusted gross income, as reported for federal income tax purposes, plus the amount of any tax-exempt interest income received; the amount of losses claimed as a limited partner in a limited partnership; any deduction claimed for depletion; amounts contributed to an IRA or Keogh retirement plan; alimony paid; and any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 1202 of the Internal Revenue Code of 1986, as amended;

			

 

	 	
			7.

				
			Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii); and

			

 

	 	
			8.

				
			Any entity in which all of the equity owners are accredited investors.

			

 

 

 

 

Annex A

 

UNITED STATES ANTI-MONEY LAUNDERING

REPRESENTATIONS AND WARRANTIES

 

In connection with the acquisition of the Company’s Shares, the Subscriber hereby represents, warrants and covenants to the Company as follows:

 

1.     The Subscriber has reviewed the website of the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), and conducted such other investigation as Subscriber deems necessary or prudent, prior to making these representations and warranties. The Subscriber acknowledges that U.S. federal regulations and executive orders administered by OFAC prohibit, among other things, engaging in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals.

 

2.     All evidence of identity provided in connection with the Subscriber’s acquisition of Shares is genuine and all related information furnished is accurate. 

 

3.     The Subscriber understands and agrees that the investment of funds is prohibited by or restricted with respect to any persons or entities: (i) acting, directly or indirectly, on behalf of terrorists or terrorist organizations, including those persons, entities and organizations that are included on any of the OFAC lists; (ii) residing or having a place of business in a country or territory named on such lists or which is designated as a Non-Cooperative Jurisdiction by the Financial Action Task Force on Money Laundering (“FATF”), or whose subscription funds are transferred from or through such a jurisdiction; (iii) (A) that are a “Foreign Shell Bank” within the meaning of the USA PATRIOT Act or (B) that are a foreign bank other than a “Regulated Affiliate” that is barred, pursuant to its banking license, from conducting banking activities with the citizens of, or with the local currency of, the country that issued the license or (C) whose subscription funds are transferred from or through the entities listed in foregoing clauses (A) and (B); or (iv) residing in, or organized under the laws of, a jurisdiction designated by the Secretary of the Treasury under Sections 311 or 312 of the USA PATRIOT Act as warranting special measures due to money laundering concerns. Such persons or entities in (i) through (iv) are collectively referred to as “Restricted Persons.” Neither the Subscriber, nor any person or entity controlling, controlled by, or under common control with, the Subscriber, any investors in the Subscriber (if the Subscriber is a pooled investment vehicle) or any person or entity for whom the Subscriber is acting as agent, representative, intermediary, nominee or similar capacity (each such investor in the Subscriber and each such person for whom the Subscriber acts as agent, representative, intermediary, nominee or in a similar capacity, an “Underlying Beneficial Owner”) in connection with the acquisition of Shares is a Restricted Person.

 

4.     No funds tendered for the acquisition of Shares are directly or indirectly derived from activities that may contravene U.S. federal, state or non-U.S. laws and regulations, including anti-money laundering laws, rules and regulations, and no capital contribution in relation to Shares acquired by the Subscriber or, if applicable, any Underlying Beneficial Owner will be derived from any illegal or illegitimate activities.

 

5.     To the extent the Subscriber has any Underlying Beneficial Owners, the Subscriber: (i) has carried out thorough due diligence as to, and established the identities of, the Underlying Beneficial Owners and any related persons to the extent required by applicable law and regulations (“Related Persons”); (ii) holds the evidence of such identities and will maintain all such evidence for at least five years from the date of the completion of the liquidation of the Company; and (iii) will make such information available to the Company upon the Company’s request. 

 

6.     The Subscriber acknowledges and understands that the Company, in its sole discretion, may decline to accept any subscription for Shares by a person who is a “Covered Person” within the meaning of the Guidance on Enhanced Scrutiny for Transactions that May Involve the Proceeds of Foreign Official Corruption, issued by the U.S. Department of the Treasury, et al., January, 2001. Accordingly, the Subscriber agrees to inform the Company, prior to its acquisition of Shares, if the Subscriber or any person controlling, controlled by, or under common control with, the Subscriber, or for whom the Subscriber is acting as agent or nominee in connection with the acquisition of Shares, is a Covered Person.

 

 

 

 

7.     The Subscriber agrees to provide any information (including confidential information about the Subscriber and, if applicable, any Underlying Beneficial Owner or Related Person) to any person deemed necessary by the Company, in its sole and absolute discretion, to comply with its anti-money laundering responsibilities and policies and any laws, rules and regulations applicable to an investment held or proposed to be held by the Company.

 

8.      The Subscriber authorizes and permits the Company, using its own reasonable business judgment, to report information about the Subscriber, or any person controlling, controlled by, or under common control with the Subscriber, to appropriate authorities, and the Subscriber agrees not to hold them liable for any loss or injury that may occur as the result of providing such information.

 

9.      The Subscriber agrees that, in the event of a material change with respect to the information provided in connection with the purchase of the Shares, the Subscriber will provide the Company promptly with updated information affected by the material change.

 

10.   The Subscriber agrees that, notwithstanding any statement to the contrary in any agreement into which it has entered that relates to the Company, or any statement to the contrary in any private placement memorandum of the Company, if the Company determines that the Subscriber has appeared on a list of known or suspected terrorists or terrorist organizations compiled by any U.S. or non-U.S. governmental agency, or that any information provided by the Subscriber in connection with the acquisition of Shares is no longer true or accurate, the Company, without limiting any other rights available under any agreement between the Company and the Subscriber, shall be authorized to take any action it deems necessary or appropriate as a result thereof. The Company may be obligated to “freeze the account” of the Subscriber, either by prohibiting additional capital contributions, restricting any distributions and/or declining any requests to transfer the Subscriber’s Shares. In addition, in any such event, the Subscriber may forfeit its Shares, may be forced to withdraw from the Company or may otherwise be subject to the remedies required by law, and the Subscriber shall have no claim against the Company nor its officers, directors, employees, agents, control persons, affiliates and professional advisors and such parties shall be held harmless and indemnified by the Subscriber in accordance with the indemnification section of this Agreement for any form of damages as a result of any of the actions described in this paragraph. The Company may also be required to report such action and to disclose the Subscriber’s identity or provide other information with respect to the Subscriber to OFAC or other governmental entities.

 

11.     The Subscriber acknowledges and agrees that any distributions paid to it by the Company will be paid to, and any contributions made by it to the Company will be made from, an account in the Subscriber’s name unless the Company, in its sole discretion, agrees otherwise.

 

12.     The Subscriber understands, acknowledges and agrees that the acceptance of this Agreement, together with the appropriate remittance, will not breach any applicable money laundering or related rules or regulations (including, without limitation, any statutes, rules or regulations in effect under the laws of the U.S.A. pertaining to prohibitions on money laundering or to transacting business or dealing in property that may be blocked or may belong to Specially Designated Nationals, as such term is used by OFAC).

 

 

 

 

Annex B

 

ANTI-MONEY LAUNDERING DOCUMENTATION

 

The Subscriber has delivered, or is concurrently delivering herewith, the true, correct and applicable documentation noted below that is applicable to the Subscriber:

 

	 	
			(i)

				
			Individuals (each of the following):

			

 

	 	
			(A)

				
			Certified (notarized) copy of passport or other valid government identification document displaying the true name, signature, date of birth and photograph of the Subscriber (with certified English translation, if necessary); and

			

 

	 	
			(B)

				
			Copy of a recent bank statement or utility bill showing the Subscriber’s current home address.

			

 

	 	
			(ii)

				
			Corporate (each of the following):

			

 

	 	
			(A)

				
			Certificate of Incorporation (or equivalent) with evidence of any name changes;

			

 

	 	
			(B)

				
			Certificate of Good Standing; 

			

 

	 	
			(C)

				
			Director resolution authorizing the investment, if applicable;

			

 

	 	
			(D)

				
			Current list or register of Directors; 

			

 

	 	
			(E)

				
			Specimen signatures of persons authorized to bind the Subscriber with regard to its investments with name and office held printed underneath or Powers of Attorney or Letters of Authority (if applicable); 

			

 

	 	
			(F)

				
			Information on at least two Directors (see (i) above for individuals and (ii) for all other entities); 

			

 

	 	
			(G)

				
			Evidence of identity for authorized signatories and all beneficial owners of the Subscriber >25% OR comfort letter (see (i) above for individuals and (ii) for all other entities); and 

			

 

	 	
			(H)

				
			Signed copy of the Subscriber’s latest available financial statements.

			

 

	 	
			(iii)

				
			Limited Partnership (or Limited Liability Company) (each of the following):

			

 

	 	
			(A)

				
			Certificate of Limited Partnership (or equivalent) (evidencing registered address) with evidence of any name changes;

			

 

	 	
			(B)

				
			Certified copy of the limited partnership agreement (or equivalent);

			

 

	 	
			(C)

				
			Limited partnership mandate (or equivalent) for making the investment (if any); 

			

 

	 	
			(D)

				
			Specimen signatures of persons authorized to bind the Subscriber with regard to its investments with name and office held printed underneath or Powers of Attorney or Letters of Authority (if applicable); 

			

 

	 	
			(E)

				
			Information on the individual(s) that control the general partner (or managing member, if applicable) (see (i) above for individuals and (ii) for all other entities); 

			

 

	 	
			(F)

				
			Evidence of identity for authorized signatories and all beneficial owners of the Subscriber >25% OR comfort letter (see (i) above for individuals and (ii) for all other entities); and

			

 

 

 

 

	 	
			(G)

				
			Signed copy of the Subscriber’s latest available financial statements.

			

 

	 	
			(iv)

				
			Trust (each of the following):

			

 

	 	
			(A)

				
			Certified copy of Trust Deed/Agreement (including trust name, nature of trust, trustees, authorizations, date of trust and principal address); 

			

 

	 	
			(B)

				
			Information about the trustee(s) and settlor(s) (or beneficial owner(s), if different than the settlor(s)) (see (i) above for individuals and (ii) for all other entities); and

			

 

	 	
			(C)

				
			Signed copy of the Subscriber’s latest available financial statements.

			

 

	 	
			(v)

				
			Private Pension Plans or Not For Profit (including Foundations and Charities) (each of the following):

			

 

	 	
			(A)

				
			Certified copy of the entity’s formation documents;

			

 

	 	
			(B)

				
			An explanation of the nature of the entity’s purpose and operations; 

			

 

	 	
			(C)

				
			Evidence of identity for authorized signatories, anyone who gives instructions on behalf of the entity and all beneficial owners of the Subscriber >25% OR comfort letter (see (i) above for individuals and (ii) for all other entities); and

			

 

	 	
			(D)

				
			Confirmation of not for profit designation from the applicable government authority.

			

 

	 	
			(vi)

				
			Financial Institutions (additional requirements):

			

 

In addition to the applicable requirements above, banks, brokers and other financial institutions must deliver a representation letter in the form determined by the Company indicating that they have established and implemented anti-money laundering procedures reasonably designed to achieve compliance with the USA PATRIOT Act.

 

The Subscriber acknowledges that the Company and its affiliates may require further identification of the Subscriber or source of funds before the subscription can be processed, and the Company and its officers, directors, employees, agents, control persons, affiliates and professional advisors shall be held harmless and indemnified in accordance with the indemnification provisions of the Agreement as a result of a failure to process the subscription if such information as has been required by the Company has not been provided by the Subscriber. The Subscriber agrees to provide any information deemed necessary by the Company in its sole and absolute discretion to comply with its anti-money laundering policies and obligations.Exhibit
10.1

 

Record
and Return to:

Eugene
R. Boffa, Esq.

Schumann
Hanlon LLC

Harborside
Plaza 10, Suite 1201

3
Second Street

Jersey
City, NJ 07311

 

MORTGAGE
AND SECURITY AGREEMENT

 

THIS
MORTGAGE AND SECURITY AGREEMENT (“Mortgage”) is made this 12 day of May, 2017, by Hemispherx Biopharma, Inc.,
(“Mortgagor”), whose address is One Penn Center, 1617 JFK Boulevard St. 500, Philadelphia, PA 19103, in favor
of SW PARTNERS LLC, a Florida limited liability company (“Mortgagee”), whose address is at 2700 North Military
Trail, Suite 225, Boca Raton, FL 33431.

 

W
I T N E S S E T H:

 

In
consideration of the indebtedness hereinafter referred to, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Mortgagor does hereby mortgage, grant, bargain, sell, assign and convey unto Mortgagee, with
the power of sale and right of entry and possession, all of Mortgagor’s estate, right, title and interest in, to and under,
and grants to Mortgagee a security interest in, all of the following described property (“Mortgaged Property”)
now owned or held or hereafter acquired by Mortgagor:

 

(i)       All
of the land described in Exhibit “A” annexed hereto and incorporated herein by this reference (“Land”),
including all of the rights, privileges and appurtenances thereunto belonging, and all of the estate, right, title and interest
of Mortgagor therein or thereto, either in law or in equity, now or hereafter acquired, and in and to all streets, roads and public
places, opened or proposed, in front of or adjoining the said Land, and all easements and rights-of-way, public or private, now
or hereafter used in connection with the Land (collectively, the “Realty”);

 

(ii)       All
buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Land. All fixtures, machinery,
appliances, equipment, furniture, inventory and personal property of every nature whatsoever now or hereafter owned by Mortgagor
and located in or on, or attached to, or used or intended to be used in connection with or with the operation of, the Realty,
buildings, structures or other improvements, or in connection with any construction being conducted or which may be conducted
thereon, and owned by Mortgagor, including all extensions, additions, improvements, betterments, renewals, substitutions, and
replacements to any of the foregoing and all of the right, title and interest of Mortgagor in and to any such personal property
or fixtures together with the benefit of any deposits or payments now or hereafter made on such personal property or fixtures
by Mortgagor or on its behalf (“Improvements”);

 

    	 

    	 

    

 

(iii)       If
applicable, all leases and other agreements, including, without limitation, insurance contracts pertaining to the ownership, occupancy,
use, possession or enjoyment of all or any part of the Mortgaged Property, now or hereafter entered into, and any modification,
renewal or extension thereof, and all guaranties of the lessees’, tenants’ or occupants’ obligations thereunder,
including, without limitation, deposits of cash or securities (collectively, the “Leases”), and all of the
rents, royalties, issues, profits, revenue, income, unearned insurance premiums and other benefits hereafter accruing under any
Lease or otherwise arising from the ownership, occupancy, use, possession or enjoyment of all or any part of the Mortgaged Property
(collectively, the “Rents and Profits”);

 

(iv)       All
proceeds and products of every kind and description of the conversion, voluntary or involuntary, of any of the foregoing into
cash, noncash or liquidated claims, including, without limitation, proceeds of insurance and condemnation awards;

 

(v)       All
of Mortgagor’s rights further to encumber said Mortgaged Property for debt.

 

TO
HAVE AND TO HOLD the Mortgaged Property unto Mortgagee, its successors and assigns, forever, for the purpose of securing unto
Mortgagee:

 

(a)       The
payment of the maximum principal sum of FOUR MILLION AND NO/100 DOLLARS ($4,000,000.00) and interest thereon, as provided in that
certain Promissory Note made by Mortgagor to Mortgagee of even date herewith, and any modification, renewal or extension thereof
(“Note”); and the payment of the principal sum, with interest thereon, of any future advances made to Mortgagor
by Mortgagee pursuant to the provisions of Paragraph 28 hereof;

 

(b)       The
performance and observance of, and compliance with, each and every obligation, covenant, warranty, agreement, term, provision
and condition contained in the Note and this Mortgage and in all other Loan Documents (as hereinafter defined); and

 

(c)       The
payment of all other sums incurred or advanced by Mortgagee or otherwise becoming due and payable under the provisions of the
Note, this Mortgage or any Loan Document, and interest thereon; and

 

(d)       the
payment or performance, as the case may be, of all obligations of Mortgagor pursuant to any interest rate hedge or exchange agreement
(including, but not necessarily limited to, any ISDA Master Agreement and any other swap agreements as defined in 11 U.S.C. §101)
heretofore or hereafter executed by Mortgagor and Mortgagee, together with any related schedules and confirmations; and

 

(e)       the
repayment of all reimbursement obligations due or that may become due under or in connection with any present or future letters
of credit issued by Mortgagee for the account of Mortgagor.

 

    	 

    	 

    

 

THIS
IS A FIRST MORTGAGE GIVEN TO SECURE ANY PRESENT AND FUTURE OBLIGATIONS OF MORTGAGOR.

 

Mortgagor
further covenants and agrees with Mortgagee as follows:

 

2.       Wherever
used in this Mortgage, unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein,
the word “Mortgagor” shall mean Mortgagor and/or any subsequent owner or owners of the Mortgaged Property;
the word “Mortgagee” shall mean Mortgagee or any subsequent holder or holders of this Mortgage; the word “Note”
shall mean the note described in paragraph (a) above of even date herewith secured by this Mortgage, and any additional notes
hereafter to be issued and secured by this Mortgage pursuant to the future advance provisions hereof and any renewal or modification
of any of the foregoing”; the word “Obligor” shall include Mortgagor, any guarantor of indebtedness secured
hereby and any other person directly or indirectly liable to Mortgagee for any indebtedness secured hereby; the word “person”
shall mean an individual, corporation, partnership, limited liability company, unincorporated association, joint stock corporation
and/or joint venture; the word “Loan Documents” shall mean the Note, this Mortgage, and all other documents
executed and/or delivered by Mortgagor, any Obligor or any other person to Mortgagee having reference to or arising in connection
with the Note or this Mortgage; and pronouns of any gender shall include the other gender, and either the singular or plural shall
include the other. If Mortgagor consists of more than one person, the obligations and liabilities of each such person hereunder
shall be joint and several. “Will” and “shall” are used interchangeably in this Mortgage; both denote
an obligation.

 

3.       Mortgagor
covenants and warrants that Mortgagor is seized of an indefeasible estate in fee simple in the Mortgaged Property, has good and
absolute title to all existing personal property hereby mortgaged or made subject to the security interest hereby created and
has good right, full power and lawful authority to convey, mortgage and encumber the same as provided herein: that the Mortgaged
Property is and shall be kept free and clear of all liens, security interests, charges and encumbrances whatsoever, except for
the lien for property taxes not yet due and payable and those encumbrances, if any, described in a schedule of exceptions to coverage
in any title policy insuring Mortgagee’s interest in the Mortgaged Property. Mortgagor fully warrants the title to the Mortgaged
Property and every part thereof, and will forever defend the same against the claims of all persons whomsoever.

 

4.       Mortgagor
shall perform, observe and comply with all provisions hereof, of the Note and of all Loan Documents, and will promptly pay to
Mortgagee the principal with interest thereon and all other sums required to be paid by Mortgagor under the Note and pursuant
to the provisions of this Mortgage and of all Loan Documents when payment shall become due, all without deduction or credit for
taxes or other similar charges paid or payable by Mortgagor.

 

    	 

    	 

    

 

5.       Mortgagor
shall pay promptly, when and as due, and shall promptly deliver to Mortgagee within fifteen (15) days of when due, receipts for
the payment of, all taxes including but not limited to assessments, rates, dues, charges, fees, levies, fines, impositions, liens
for unpaid withholding taxes, liabilities, obligations and encumbrances of every kind whatsoever now or hereafter imposed, levied
or assessed upon or against the Mortgaged Property or any part thereof, or upon or against this Mortgage or the indebtedness or
other sums secured hereby, or upon or against the interest of Mortgagee in the Mortgaged Property, as well as all income taxes,
assessments and other governmental charges levied and imposed by the United States of America or any state, county, municipality,
or other taxing authority upon or against Mortgagor or in respect of the Mortgaged Property or any part thereof, and any charge
which, if unpaid, would become a lien or charge upon the Mortgaged Property prior to or equal to the lien of this Mortgage before
they become delinquent and before any interest attaches or any penalty is incurred. Mortgagor shall pay all property taxes on
or before November 30 of each year for the property taxes that come due during that year (so that Mortgagor shall be entitled
to the maximum discount available).

 

6.       For
purposes of this Mortgage, the following terms
have the following meanings:

 

“Full
Replacement Cost” means (1) with respect to the Improvements, the cost of replacing the Improvements without regard to deduction
for depreciation, and (2) with respect to Personal Property the cost of replacing such Personal Property.

 

“Rental
Income” means
the sum of (1) the
total of the then
ascertainable Rents payable under the Leases,
and (2) the total ascertainable amount of all other amounts
to be received by Borrower from third
parties which are the legal obligations
of Tenants.

 

Borrower
represents and warrants that Borrower has not received notice from any insurance company or bonding company of any defects or
inadequacies in any or all of the Property which could (1) adversely affect the insurability of any or all of the Property, (2)
cause the imposition of increased premiums or charges or (3) cause the termination of any insurance policy or bond.

 

Borrower
will maintain at all times
the following
types of
insurance upon or
related
to the Property (collectively,
“Insurance Policies”):

 

(1)
Casualty
Insurance.
“All risk”
coverage insurance
against
loss
or da
mage
to the
Property
from all risk perils,
including acts
of terrorism (foreign
or domestic),
fire,
lightning,
wind,
hail ,
flood,
earthquake,
subsidence,
vandalism,
riot or
civil commotion, malicious
mischief burglary
and theft.
The amount of such insurance
shall
not be less than
one hundred
percent (100%)
of the
Full Replacement Cost
of the Improvements,
Fixtures,
and
Personal Property
owned by
Borrower from
time to time. The
determination of the amount of the
Full Replacement
Cost
shall
be adjusted annually to
comply with the
requirements of the
insurer providing
such
coverage or, at Lender’s
election,
by reference to such
indexes, appraisals
or information as
Lender determines in
its discretion.
Absent such
annual adjustment, each policy
shall contain inflation
guard coverage insuring
that the policy limit will be
increased over time
to reflect the
effect of inflation.
Each policy
or policies
shall contain a replacement
cost endorsement and either an
agreed amount
endorsement (to avoid the operation
of any co-insurance
provisions) or a waiver
of any co-insurance provisions.
Co-insurance is not permitted and,
in all events, the
amount of such insurance shall
be sufficient to prevent Lender
from becoming a
co-insurer within the terms of the
applicable policies
and under applicable
Law. The maximum deductible
under such insurance
will not exceed the
Casualty Insurance Deductible.

 

    	 

    	 

    

 

(2)
Comprehensive
General
Liability Insurance.
Commercial general
liability
insurance
for personal
injury,
bodily injury,
death and property
damage liability
in amounts not
less than
$1,000,000
per occurrence,
$2,000,000
aggregate (exclusive
of umbrella
coverage). Lender may
require Borrower to increase the amount
of such
liability insurance
maintained by Borrower should
Lender deem an
increase to be
reasonably prudent under then
existing
circumstances. Such policy
must include
coverage for premises
and operations, products
and completed
operations, independent
contractors, blanket
contractual liability,
hired,
owned and non-owned
automobile liability,
and innkeeper’s
legal
liability. No
deductible is permitted under
such
liability insurance.

 

(3)
Flood Insurance. If
the
Land or
any part thereof is identified
by the Secretary of Housing
and Urban
Development
and/or
the Federal
Emergency Management
Agency as being
situated
in an
area now or subsequently
designated as
having
special
flood
hazards
(including those areas
designated as
Zone A or
Zone V), flood insurance
in an
amount equal
to
the lesser
of (1)
one hundred percent (100%)
of the Full Replacement Cost
of the Improvements,
or (2) the maximum
amount
of
available
flood
insurance. The maximum
deductible under such insurance
will not
exceed $20,000.00.

 

(4)
Builder’s All-Risk Completed
Value Insurance. During the period of any construction on the Property or renovation or alteration of the improvements, Builder’s
All-Risk insurance in an amount approved by Lender and with an agreed amount endorsement waiving co-insurance provisions. 

 

All
insurance required by this Mortgage shall be underwritten by companies approved by Lender and each policy shall (1) in the case
of a liability policy, name Lender as additional insured, and (2) name Lender as mortgagee and loss payee.

 

Borrower
shall deliver to Lender an original of each insurance policy required to be maintained, or a certificate of such insurance reasonably
acceptable to Lender, together with a copy of the declaration page for each such policy. Not later than fifteen (15) days prior
to the expiration of each policy of Required Insurance, Borrower shall deliver a renewed policy or policies, or certificates of
insurance, or duplicate original or originals thereof and, if requested by Lender, accompanied by evidence of payment satisfactory
to Lender with standard non-contributory mortgage clauses in favor of and acceptable to Lender. Upon request of Lender, Borrower
shall use its best efforts to cause its insurance underwriter or broker to certify to Lender in writing that all the requirements
of this Mortgage governing insurance have been satisfied.

 

    	 

    	 

    

 

Without
limiting the foregoing, within sixty (60) days after the close of each fiscal year of Borrower, Borrower shall furnish to Lender
a statement in form and substance satisfactory to Lender setting forth the amounts of Required Insurance, the risks covered by
such insurance and of the insurance company or companies providing such insurance, which statement shall be accompanied by copies
of all certificates of insurance evidencing the required coverages and endorsements.

 

Each
Required Insurance policy shall (1) in the case of a liability policy, name Lender and its successors and assigns as additional
insured , (2) in the case of a casualty policy, name Lender and its successors and assigns as mortgagee and loss payee, (3) be
for a term of not less than one (I) year, (4) include a standard mortgagee clause providing that the interest of Lender shall
be insured regardless of any breach or violation by Borrower or any Tenant of any warranties, declarations or conditions in such
policy, (5) if any such Required Insurance policy is subject to cancellation, termination or being endorsed to effect a change
in coverage for any reason whatsoever, the insurer under such policy shall promptly notify Lender in writing and such cancellation,
termination or change shall not be effective as to Lender until thirty (30) days after receipt by Lender of such notice (unless
such cancellation is for non-payment, in which case such insurer shall be obligated to provide Lender with not less than ten (I
0) days written notice), (6) shall include an effective waiver of all subrogation rights against any loss payee, additional insured
or named insured, (7) in the case of property damage insurance policies such policies automatically reinstate after a Casualty,
(8) provide that no loss payee or additional insured is responsible for any insurance premiums on or assessments pursuant to any
such policy, (9) permit Lender to pay the premiums and continue such policy upon failure of Borrower to pay such premium, and
(I 0) to the extent available at commercially reasonable rates, a waiver of subrogation endorsement as to Lender. Lender may,
but shall not be obligated to, make premium payments to prevent such cancellation. In addition, each Required Insurance policy
shall be subject to the approval of Lender as to insurance company, amounts, content, form of policy, method by which premiums
are paid and expiration date.

 

Borrower
shall (1) pay when due all insurance premiums for all Required Insurance, (2) comply with and conform to (a) all provisions of
each such Required Insurance policy, and (b) all requirements of the insurers applicable to Borrower or to the Property or to
the use, manner of use, occupancy, possession, operation, maintenance, alterations or repair of any of the Property, (3) not use
or permit the use of the Property in any manner which permits any insurer to cancel or void any Required Insurance policy.

 

Borrower
shall give Lender prompt notice of, and copies of documents delivered or received by Borrower in connection with, each of the
following: (l) any claims made against Borrower for any personal injury, bodily injury or property damage incurred on or about
the Property, (2) any Casualty, and (3) any cancellation or non-renewal of any Required Insurance policy.

 

    	 

    	 

    

 

Not
less than fifteen (15) days prior to the expiration, termination or cancellation of any insurance policy required to be maintained
under this Agreement, Borrower shall renew such policy or obtain a replacement policy or policies (or a binding commitment for
such replacement policy or policies), which shall be effective not later than the date of the expiration, termination or cancellation
of the previous policy, and shall deliver to Lender a certificate in respect of such policy or policies or a copy of the binding
commitment for such policy or policies and confirming that such policy complies with all requirements of this Mortgage.

 

If
at any time Lender is not in receipt of written evidence that all Required Insurance is in full force and effect, Lender has the
right but not the obligation, without notice to Borrower, to obtain such insurance coverage as Lender in its sole discretion deems
appropriate. Borrower agrees that all premiums incurred by Lender in connection with obtaining and maintaining such insurance
shall be paid by Borrower to Lender upon demand and until paid shall bear interest at the Default Rate. At Lender’s option,
said premiums may be paid by Lender from the Escrow Fund.

 

7.       At
the option of Mortgagee, Mortgagor shall deposit with Mortgagee monthly at the time that payment is due under the Note, in addition
to making any required payments of principal and interest, until the Note is fully paid, an amount equal to one-twelfth (1/12th)
of the yearly real property taxes, assessments and other similar charges against the Mortgaged Property or any part thereof as
estimated by Mortgagee to be sufficient to enable Mortgagee to pay the same at least thirty (30) days before they become delinquent.
Such deposits shall not be, nor be deemed to be, trust funds, but may be commingled with the general funds of Mortgagee, and no
interest shall be payable in respect thereof. Upon demand by Mortgagee, Mortgagor shall deliver to Mortgagee such additional monies
as are required to make up any deficiencies in the amounts necessary to enable Mortgagee to pay such taxes, assessments and similar
charges. In the event of a default under any of the terms, covenants and conditions in the Note, this Mortgage or any other Loan
Document to be kept, performed or observed by Mortgagor, Mortgagee may apply to the reduction of the sums secured hereby, in such
manner as Mortgagee shall determine, any amount under this Paragraph 6 remaining to Mortgagor’s credit. The amount of existing
credit hereunder at the time of any transfer of the title to the Mortgaged Property, shall, without any specific assignment thereof,
inure to the benefit of the successor owner of the Mortgaged Property. Upon payment in full of the secured indebtedness, the amount
of any unused credit shall be paid over to the owner of record as of the date of such full payment.

 

8.       Notwithstanding
any taking by eminent domain, alteration of the grade of any street or other injury to or decrease in value of the Mortgaged Property
by any public or quasi-public authority or corporation, Mortgagor shall continue to make the regular payments of principal and/or
interest as required by the Note and any other evidence of indebtedness secured hereby until the loan secured hereby is paid in
full. Such award or payment shall first be applied toward Mortgagee’s expenses and attorneys fees in obtaining the award,
and then Mortgagee may, at the option of Mortgagee in Mortgagee’s sole discretion, either retain and apply the remaining
amounts toward payment of any moneys secured by this Mortgage, or after the payment of Mortgagee’s expenses and attorneys
fees in obtaining the award, pay over wholly or in part any remaining award to Mortgagor for the purpose of altering, restoring
or rebuilding any part of the Mortgaged Property, which may have been altered, damaged or destroyed as a result of any such taking,
alteration of grade, or other injury to the Mortgaged Property, or for any other purpose or object satisfactory to Mortgagee.
Nothing herein contained shall waive the right of Mortgagee to demand payment in full of all obligations hereby secured pursuant
to Paragraph 19 hereof upon the occurrence of such taking.

 

    	 

    	 

    

 

9.       Mortgagor
shall preserve and maintain the Mortgaged Property in good condition and repair. Mortgagor shall not erect any building, structure
or other improvement and shall not remove, demolish, materially alter or change the use of any building, structure or other improvement
presently or hereafter on the Land without the prior written consent of Mortgagee, (such consent not to be unreasonably withheld,
conditioned or delayed). Mortgagor shall not permit, commit or suffer any waste, impairment or deterioration of the Mortgaged
Property or of any part thereof, and will not take any action which will increase the risk of fire or other hazard to the Mortgaged
Property or to any part thereof. No material fixtures, personal property or other part of the Mortgaged Property shall be removed,
demolished or altered, without the prior written consent of Mortgagee, other than items which may become worn out, undesirable
or obsolete provided that they are replaced with similar items of at least equal value which shall, without further action, become
subject to the lien of this Mortgage. Mortgagor will promptly repair, restore, replace or rebuild any part of the Mortgaged Property
now or hereafter subject to the lien of this Mortgage which may be damaged or destroyed by any casualty whatsoever or which may
be affected by any proceeding of the character referred to in Paragraph 7. Mortgagee may enter upon and inspect the Mortgaged
Property at any reasonable time during the life of this Mortgage.

 

10.Mortgagor
will promptly comply with all present and future laws, ordinances, rules and regulations of any governmental authority affecting
the Mortgaged Property or any part thereof or its use and occupancy, including, without limitation, all applicable zoning requirements.

 

11.       Subject
to the terms and conditions of this Mortgage, Mortgagor shall not sell, convey, mortgage, transfer, lease or further encumber
any legal or equitable interest in all or any part of the Mortgaged Property, without the prior written consent of Mortgagee,
which can be withheld by Mortgagee in its sole discretion, and any such sale, conveyance, mortgage, transfer, lease or encumbrances
made without Mortgagee’s prior written consent shall, in addition to being an Event of Default, be voidable at Mortgagee’s
option. For purposes of this Paragraph, sale or transfer of any direct or indirect interest of Mortgagor or a change in the beneficial
ownership of Mortgagor, or a change in the management of Mortgagor, shall be considered a conveyance of the Mortgaged Property.
If any person should obtain any interest in all or any part of the Mortgaged Property pursuant to the execution or enforcement
of any lien, security interest or other right, whether superior, equal or subordinate to this Mortgage or the lien hereof, such
event shall be deemed to be a transfer by Mortgagor.

 

    	 

    	 

    

 

Notwithstanding
anything to the contrary contained herein, Mortgagor covenants and agrees at Mortgagor’s sole cost and expense not to: (a)
engage in any line of business or other activity other than (1) acquiring, owning, developing, operating, leasing, managing and
disposing (subject to the terms hereof) of the Mortgaged Property, (2) executing, delivering and performing the Loan Documents,
and (3) any and all lawful activities incidental, necessary and appropriate thereto; (b) acquire or own any assets other than
(1) the Mortgaged Property, and (2) such incidental personal property as may be necessary for the operation of the Mortgaged Property
or the conduct of its business as contemplated herein; (c) merge into or consolidate with any person, or dissolve, terminate,
liquidate in whole or in part, or change its legal structure; (d) transfer or otherwise dispose of all or substantially all of
its assets, or engage in any transfer of assets outside the ordinary course of its business; (e) form, acquire, hold or own any
subsidiary, or make any investment in any person; (f) commingle its assets with the assets of any other person; (g) incur any
debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (1) the loan evidenced by
the Note, and/or (2) trade and operational indebtedness incurred in the ordinary course of business with trade creditors, provided
such indebtedness is (A) unsecured, (B) not evidenced by a note, (C) on commercially reasonable terms and conditions, and
(D) due not more than sixty (60) days past the date incurred and paid on or prior to such date; (h) fail to maintain its records,
books of account, bank accounts, financial statements, accounting records and other entity documents separate and apart from those
of any other person or have its assets listed on the financial statement of any other entity; (i) enter into any contract or agreement
with any affiliate except upon terms and conditions that are intrinsically fair, commercially reasonable and substantially similar
to those that would be available on an arm’s-length basis with unaffiliated third parties; (j) maintain its assets in such
a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other
person; (k) assume or guaranty or otherwise become obligated for the debts of any other person, hold itself out to be responsible
for the debts of any other person, or otherwise pledge its assets for the benefit of any other person (other than to Mortgagee
to secure the loan evidenced by the Note) or hold out its credit as being available to satisfy the obligations of any other person;
(l) make any loans or advances to any person; (m) fail either to hold itself out to the public as a legal entity separate and
distinct from any other person (including identifying itself as a division or part of any other person), or to conduct its business
solely in its own name (including the failure to use separate stationery, invoices and checks bearing its own name) or fail to
correct any known misunderstanding regarding its separate identity; (n) fail to maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of its contemplated business operations (including
the failure to remain solvent or pay its own expenses and liabilities (including salaries of its own employees) only from its
own funds); (o) without the unanimous written consent of all of its partners/managers/members/shareholders: (1) file or consent
to the filing of any petition, either voluntary or involuntary, to take advantage of any creditors rights laws, (2) seek or consent
to the appointment of a receiver, liquidator or any similar official, (3) take any action that might cause such entity to become
insolvent, (4) make an assignment for the benefit of creditors, (5) otherwise seek relief under any laws relating to the relief
from debts of the protection of debtors generally, or (6) take any action in furtherance of any of the foregoing; or (p) fail
to fairly and reasonably allocate expenses that are shared with an affiliate (including for shared office space and for services
performed by an employee of an affiliate) among the persons sharing such expenses.

 

12.Mortgagor
shall notify Mortgagee in writing promptly of the occurrence of any of the following: (a) fire or other casualty (including flooding)
causing damage to the Mortgaged Property; (b) receipt of notice from any governmental authority relating to the structure, use
or occupancy of the Mortgaged Property; (c) receipt of any notice of alleged default from the holder of any lien or security interest
in the Mortgaged Property; or (d) commencement of any litigation affecting the Mortgaged Property.

 

    	 

    	 

    

 

13.       Mortgagor
shall pay or reimburse Mortgagee for all costs, charges and expenses, including reasonable attorney’s fees and disbursements
and costs, incurred or paid by Mortgagee in any threatened, pending or completed action, proceeding or dispute in which Mortgagee
is or might be made a party or appears as a party plaintiff or party defendant and which affects or might affect the Note, this
Mortgage or any other instrument securing the Note, or the Mortgaged Property or any part thereof, or the interests of Mortgagor
or Mortgagee therein, including, but not limited to, the foreclosure of this Mortgage, condemnation involving all or part of the
Mortgaged Property or any action to protect the security hereof, including all appellate proceedings in connection with or arising
out of any of the foregoing. All costs, charges and expenses so incurred or paid by Mortgagee shall become due and payable immediately,
whether or not there be notice, demand, attempt to collect or suit pending. The amounts so incurred or paid by Mortgagee, together
with interest thereon at the Default Rate from the date incurred until paid by Mortgagor, shall be added to the indebtedness and
secured by the lien of this Mortgage.

 

14.       If
Mortgagor defaults in the payment of any tax, assessment, encumbrance or other imposition, in its obligation to furnish insurance
hereunder or in the performance or observance of any other covenant, condition or term in this Mortgage or in any Loan Document,
Mortgagee may at its option perform or observe the same, and all payments made (whether such payments are regular or accelerated
payments) and costs and expense incurred or paid by Mortgagee in connection therewith shall become due and payable immediately,
whether or not there be notice or demand. The amounts so incurred or paid by Mortgagee, together with interest thereon at the
Default Rate from the date incurred until paid by Mortgagor, shall be added to the indebtedness and secured by the lien of this
Mortgage. Nothing contained herein shall be construed as requiring Mortgagee to advance or expend monies for any purposes mentioned
in this Paragraph, or for any other purpose. Mortgagee is hereby empowered to enter and to authorize others to enter upon the
Mortgaged Property or any part thereof for the purpose of performing or observing any such defaulted covenant, condition or terms,
without thereby becoming liable to Mortgagor or any person in possession holding under Mortgagor.

 

15.       Mortgagor
shall keep and maintain at all times complete, true and accurate books of account and records reflecting the results of the operation
of the Mortgaged Property. Mortgagor shall furnish to Mortgagee such financial statements and other financial information as reasonably
required by Mortgagee.

 

    	 

    	 

    

 

16.       As
additional security for the obligations of Mortgagor under the Note, Mortgagor hereby transfers and assigns to Mortgagee all of
Mortgagor’s right, title and interest, but not its liability, in, under, and to all construction, architectural and design
contracts existing with respect to the Mortgaged Property, as well as any and all building permits, plats, site plans, surveys,
architectural plans and specifications, shop drawings, governmental approvals, licenses, concurrency certificates, permits, agreements
with any utility companies (together with any deposits, impact fees, reservation fees, allocation fees, prepaid fees and charges
paid thereon), and all other consents, approvals and rights which it may now or hereafter own with respect to or in connection
with the Mortgaged Property (collectively, the “Plans”), and agrees that all of the same are covered by the
security agreement provisions of this Mortgage. Mortgagor agrees to deliver to Mortgagee from time to time upon Mortgagee’s
request such consents to the foregoing assignment from parties contracting with Mortgagor as Mortgagee may require. Neither this
assignment nor any action by Mortgagee shall constitute an assumption by Mortgagee of any obligation under any contract or with
respect to the Plans, Mortgagor hereby agrees to perform all of its obligations under any contract, and Mortgagor shall continue
to be liable for all obligations of Mortgagor with respect thereto. Mortgagee shall have the right at any time (but shall have
no obligation) to take in its name or in the name of Mortgagor such action as Mortgagee may determine to be necessary to cure
any default under any contract or with respect to the Plans or to protect the rights of Mortgagor or Mortgagee with respect thereto.
Mortgagor irrevocably constitutes and appoints Mortgagee as Mortgagor’s attorney in fact, which power of attorney is coupled
with an interest and irrevocable, to enforce in Mortgagor’s name or in Mortgagee’s name all rights of Mortgagor under
any contract or with respect to the Plans. Mortgagee shall incur no liability if any action so taken by it or on its behalf shall
prove to be inadequate or invalid. Mortgagor indemnifies and holds Mortgagee harmless against and from any loss, cost, liability
or expense (including, but not limited to, consultants’ fees and expenses and attorneys’ fees and expenses) incurred
in connection with Mortgagor’s failure to perform such contracts or any action taken by Mortgagee. Mortgagee may use the
Plans for any purpose relating to the Mortgaged Property. Mortgagor represents and warrants to Mortgagee that the copy of any
contract furnished or to be furnished to Mortgagee is and shall be a true and complete copy thereof, that the copies of the Plans
delivered to Mortgagee are and shall be true and complete copies of the Plans, that there have been no modifications thereof which
are not fully set forth in the copies delivered, and that Mortgagor’s interest therein is not subject to any claim, setoff,
or encumbrance.

 

17.       In
addition to the lien on and security interest in the Realty and Improvements created hereby, this Mortgage shall, to the extent
applicable, constitute a security agreement with respect to all personal property secured hereby; and Mortgagor hereby agrees
to execute and deliver on demand and hereby irrevocably authorizes and appoints Mortgagee the attorney-in-fact of Mortgagor, jointly
or severally, to execute in the name of Mortgagor, deliver and, if appropriate, to file with the appropriate filing officer or
office such security agreements, financing statements, amendments to financing statements and comparable instruments as Mortgagee
may require in order to impose, perfect or more effectively evidence the lien or security interest hereby created. In addition
to any other rights and remedies provided herein or by law, Mortgagee shall be entitled to pursue any and all remedies of a secured
party under the Uniform Commercial Code and other applicable statutes of the place or places where the Mortgaged Property is located,
it being hereby agreed that ten (10) days’ notice as to the time and place of any sale shall be reasonable. No inference
shall be drawn from the inclusion of any of the Mortgaged property in a Financing Statement filed with the New Jersey Secretary
of State or Treasury that such property is considered by Mortgagee to be personalty as opposed to realty, Mortgagor agrees that
in the event of uncertainty as to whether any portion of the Mortgaged Property is personalty or Realty, the presumption shall
be that such item is Realty.

 

    	 

    	 

    

 

18.       At
any time and from time to time, upon Mortgagee’s request, Mortgagor shall make, execute and deliver or cause to be made,
executed and delivered to Mortgagee and, where appropriate, shall cause to be recorded or filed and from time to time thereafter
to be re-recorded or refiled at such time and in such offices and places as shall be deemed desirable by Mortgagee, any and all
such further mortgages, instruments or further assurance, certificates and other documents as Mortgagee may consider necessary
or desirable in order to effectuate, complete, enlarge or perfect, or to continue and preserve the obligations of Mortgagor under
the Note and this Mortgage, and the lien of this Mortgage as a first and prior lien upon all of the Mortgaged Property, whether
now owned or hereafter acquired by Mortgagor. Upon any failure by Mortgagor to do so, Mortgagee may make, execute, record, file,
re-record or refile any and all such mortgages, instruments, certificates and documents for and in the name of Mortgagor, and
Mortgagor hereby irrevocably appoints Mortgagee the agent and attorney-in-fact of Mortgagor to do so.

 

19.       Intentionally
Omitted.

 

20.       Mortgagee
shall have the unconditional right, at its option, to require payment in full of all indebtedness secured hereby and to declare
all such indebtedness immediately due and payable: (a) after default in the payment when due of any installment of principal and/or
of interest under the Note beyond any applicable grace or cure period thereunder; or (b) after default in the payment of any tax,
water rate or assessment for ten (10) days after the same becomes due; or (c) after default for ten (10) days after notice and
demand either in assigning and delivering the Insurance Policies hereinbefore described or referred to or in reimbursing Mortgagee
for premiums paid to obtain such insurance as herein provided; or (d) after default for ten (10) days after request in furnishing
a statement of the amount due on the Mortgage and whether any offsets or defenses exist to the payment of all indebtedness secured
hereby; or (e) after default for ten (10) days after notice and demand in the payment of any installment of any assessment for
local improvements which may now or hereafter affect the Mortgaged Property and may be or become payable in installments; or (f)
after default for ten (10) days after notice and demand in the repayment of any sum advanced by Mortgagee to protect the security
hereof; or (g) upon the actual or threatened waste, removal or demolition of, or material alteration to or enlargement of, any
building or other Improvement on the Mortgaged Property or upon the commencement of unpermitted construction of any new buildings(s)
on any part of the Mortgaged Property; or (h) upon default in keeping in force the insurance required by Paragraph 5 above; or
(i) upon the entry by any court of last resort of a decision that an undertaking by Mortgagor as herein provided to pay taxes,
assessments, levies, liabilities, obligations and encumbrances is legally inoperative or cannot be enforced; or (j) after default
for ten (10) days after notice and demand in the removal of any Federal tax lien on any of the Mortgaged Property; or (k) after
default for ten (10) days after notice and demand in the observance or performance of any other covenant(s) or agreement(s) of
Mortgagor hereunder, unless such default is not curable in which event there shall be no grace period, or after default of Mortgagor
or any Obligor under any of the Loan Documents beyond any applicable grace or cure period thereunder; or (l) upon the election
by Mortgagee to accelerate the maturity of said principal sum pursuant to the provisions of any other instrument which may be
held by Mortgagee as additional security for the Note; or (m) upon the dissolution of Mortgagor; or (n) after failure to comply
within ten (10) days with a requirement or order or notice of violation of a law or ordinance issued by any political subdivision
or governmental department claiming jurisdiction over any of the Mortgaged Property or any operation conducted on any of the Mortgaged
Property, or in the case of noncompliance which cannot be cured or complied with within said period, then upon the failure of
Mortgagor to commence to comply with said orders or notices within said period or thereafter diligently pursue such cure to completion;
or (o) immediately upon the filing in any court of competent jurisdiction by the United States of America, or any instrumentality
thereof, of any lis pendens against any of the Mortgaged Property or any notice of intention to acquire under the power of eminent
domain any of the Mortgaged Property, or any part thereof, or upon notice from the State of New Jersey, or any political subdivision
of the State of New Jersey, or any redevelopment agency of a notice of taking of the Mortgaged Property or any part thereof; or
(p) upon the issuance of any order by the State of New Jersey, or any political subdivision, any administrative board or, thereof
or any department thereof, declaring unlawful or suspending the current operation of any part of the Mortgaged Property; or (q)
upon the filing by or against Mortgagor or any Obligor of any petition or application for relief, extension, moratorium or reorganization
under any bankruptcy, insolvency or debtor’s relief law or law whereunder Mortgagor or any Obligor is making an assignment
for the benefit of creditors, or entering into any arrangement with creditors or becomes a party to any receivership proceeding,
which is not dismissed within sixty (60) days of filing in the case of matters filed against Mortgagor or any Obligor; or (r)
if Mortgagor shall grant any lien or mortgage on the Mortgaged Property or any part thereof junior to this Mortgage; or (s) except
as permitted in this Mortgage, upon the transfer, lease, sale, pledge, hypothecation, or further encumbrance of the Mortgaged
Property or any portion thereof or of the rents and profits therefrom; or (t) upon the commencement of any suit against any part
of the Mortgaged Property upon any other claim or lien (whether superior or inferior to the lien of this Mortgage) which is not
dismissed within ten (10) days of filing; or (u) if there be any mortgage superior to this Mortgage, then upon the failure to
pay when due any sums secured by or owing under said superior mortgage or the failure to abide by any other terms or provisions
of said superior mortgage, or the modification of, or acceptance of any future or additional advance under, any such superior
mortgage; or (v) upon determination by Mortgagee that any representation, warranty, or covenant made by Mortgagor or any Obligor
or any other person in this Mortgage or in any other instrument or document executed in connection with this Mortgage, or in any
certificate, agreement, affidavit or statement contemplated by, or made or delivered pursuant to, or in connection with, any such
documents, is untrue or materially misleading; or (w) if Mortgagor, shall fail to pay when due any indebtedness for borrowed money
owed by Mortgagor, or any interest or premium thereon, whether such indebtedness shall become due by scheduled maturity, required
payment, acceleration, demand or otherwise; or (x) if Mortgagor or any Obligor shall fail to abide by any term, covenant, or agreement
under any agreement or instrument evidencing, securing or relating to any indebtedness for borrowed money owing by Mortgagor or
such Obligor, if the effect of such failure is to accelerate, or permit the holder or holders to accelerate, the maturity of such
indebtedness, whether or not such failure be waived by the holder or holders of such indebtedness; or (y) a material adverse change
occurs in Mortgagor or any Obligor’s financial condition. The occurrence of any of the foregoing events is hereinafter referred
to as an “Event of Default”. No consent or waiver express or implied by Mortgagee to or of any default by Mortgagor
hereunder shall be construed as a consent or waiver to or of any further default of the same or any other term, covenant, condition
or provision hereof, or of or under any of the obligations secured hereby; and no consent or waiver shall be deemed or construed
to exist by reason of any curative action initiated by Mortgagor or any other course of conduct or in any other manner whatsoever
except by a writing duly executed by Mortgagee and then only to the single occasion to which such writing is addressed. In order
to accelerate the maturity of the indebtedness secured hereby because of the failure to pay any tax, assessment, premium, charge,
liability, obligation or encumbrance upon the Mortgaged Property as herein provided, it shall not be necessary or required that
Mortgagee first pay the same.

 

    	 

    	 

    

 

21.       Upon
the occurrence of an Event of Default, Mortgagee may, in its sole and absolute discretion, either with or without entry or taking
possession as hereinabove provided or otherwise, proceed by suit or suits at law or in equity or by any other appropriate proceeding
or remedy: (a) to enforce payment of the Note or the performance of any term hereof or any other right; (b) to foreclose this
Mortgage and to sell, as an entirety or in separate parcels, the Mortgaged Property, under the judgment or decree of a court or
courts of competent jurisdiction; and (c) to pursue any other remedy available to it under law or in the other Loan Documents.
Mortgagee shall take action either by such proceedings or by the exercise of its powers with respect to entry or taking possession,
or both, as Mortgagee may determine. If any of the proceeds of the loan evidenced by the Note have not been disbursed, upon the
occurrence of an Event of Default, Mortgagee shall have the absolute right to refuse to disburse any such proceeds.

 

22.       If
an Event of Default shall have occurred, Mortgagee, to the extent permitted by law and without regard to the value or occupancy
of the security, shall be entitled as a matter of right if it so elects in its sole and absolute discretion to the appointment
of a receiver to enter upon and take possession of the Mortgaged Property and to collect all rents, revenues, issues, income,
products and profits thereof and apply the same as the court may direct. The receiver shall have all rights and powers permitted
under the laws of the state where the Land is located and such other powers as the court making such appointment shall confer,
including the right to sell the Mortgaged Property. The expenses, including receiver’s fees, attorneys’ fees, costs
and agent’s compensation incurred pursuant to the powers herein contained shall be secured by this Mortgage. The right to
enter and take possession of and to manage and operate the Mortgaged Property, and to collect the rents, issues and profits thereof,
whether by a receiver or otherwise, shall be cumulative to any other right or remedy hereunder or afforded by law, and may be
exercised concurrently therewith or independently thereof. Mortgagee shall be liable to account only for such rents, issues and
profits actually received by Mortgagee whether received pursuant to this Paragraph or any other provision hereof. Notwithstanding
the appointment of any receiver or other custodian, Mortgagee shall be entitled as pledgee to the possession and control of any
cash deposits or instruments at the time held by, or payable or deliverable under the terms of this Mortgage to Mortgagee.

 

23.       Mortgagee
shall have the power and authority to institute and maintain any suits and proceedings as Mortgagee may deem advisable (a) to
prevent any impairment of the Mortgaged Property by any acts which may be unlawful or to prevent any violation of this Mortgage;
(b) to preserve or protect its interest in the Mortgaged Property; and (c) to restrain the enforcement of or compliance with any
legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement
of or compliance with such enactment, rule or order might impair the security hereunder or be prejudicial to Mortgagee’s
interest.

 

    	 

    	 

    

 

24.       No
delay or omission of Mortgagee or of any holder of the Note to exercise any right, power or remedy accruing upon any Event of
Default shall exhaust or impair any such right, power or remedy or shall be construed to waive any such Event of Default or to
constitute acquiescence therein. Every right, power and remedy given to Mortgagee may be exercised from time to time as often
as may be deemed expedient by Mortgagee.

 

25.       If
Mortgagee: (a) grants forbearance or an extension of time for the payment of any sums secured hereby; (b) takes other or additional
security for the payment thereof; (c) waives or does not exercise any right granted in the Note, this Mortgage or any other Loan
Document; (d) releases any part of the Mortgaged Property from the lien of this Mortgage or any other instrument securing the
Note; (e) consents to the filing of any map, plat or replat of the Land; or (f) consents to the granting of any easement on the
Land, no such act or omission shall release, discharge, modify, change or affect the original liability under the Note, this Mortgage
or otherwise of Mortgagor, or any subsequent purchaser of the Mortgaged Property or any part thereof or any mortgagor, co-signer,
endorser, or surety. No such act or omission shall preclude Mortgagee from exercising any right, power or privilege herein granted
or intended to be granted in case of any Event of Default then existing or of any subsequent Event of Default nor, except as otherwise
expressly provided in an instrument or instruments executed by Mortgagee shall the lien of this Mortgage be altered thereby. In
the event of the sale or transfer by operation of law or otherwise of all or any part of the Mortgaged Property, Mortgagee, without
notice to any person, firm or corporation, is hereby authorized and empowered to deal with any such vendee or transferee with
reference to the Mortgaged Property or the indebtedness secured hereby, or with reference to any of the terms or conditions hereof,
as fully and to the same extent as it might deal with the original parties hereto and without in any way releasing or discharging
any of the liabilities or undertakings hereunder.

 

26.       If
Mortgagee shall have proceeded to enforce any right or remedy under this Mortgage by foreclosure, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any reasons, or shall have been determined adversely to Mortgagee, then,
at the option of Mortgagee, Mortgagor and Mortgagee shall be restored to their former positions and rights hereunder, and all
rights, powers and remedies of Mortgagee shall continue as if no such proceeding had occurred or had been taken.

 

27.       No
right, power or remedy conferred upon or reserved to Mortgagee by the Note, this Mortgage or any other Loan Document is exclusive
of any other right, power or remedy, but each and every such right, power and remedy shall be cumulative and concurrent and shall
be in addition to any other right, power and remedy given hereunder or under the Note or any other Loan Document, or now or hereafter
existing at law, in equity or by statute.

 

28.       This
Mortgage is also given to secure advances, whether such advances are obligatory or are to be made at the option of Mortgagee,
or otherwise, made to Mortgagor, as are made within twenty (20) years from the date hereof, to the same extent as if such future
advances were made on the date of the execution of this Mortgage. The total amount of indebtedness that may be so secured may
decrease or increase from time to time, but the total unpaid balance so secured at one time shall not exceed FourMillion Dollars
($4,000,000), plus interest thereon, and any disbursements made for the payment of taxes, levies or insurance on the Mortgaged
Property, with interest on such disbursements at the Default Rate. Advances may be made pursuant to this provision to an Obligor
without the consent of Mortgagor being obtained prior thereto. Mortgagor hereby agrees that the Mortgaged Property shall secure
any and all such advances.

 

    	 

    	 

    

 

29.       If
as part of the inducement to Mortgagee to make the loan evidenced by the Note, Mortgagor has caused certain other persons, firms
or corporations to enter into certain guaranty agreements with Mortgagee guaranteeing the obligations of Mortgagor, Mortgagor
covenants and agrees that such persons, firms or corporations shall fully perform, comply with and abide by such agreements. It
is further understood and agreed by Mortgagor that such representations and agreements by such other persons, firms and corporations
shall constitute for the purpose of its obligations hereunder, covenants on behalf of Mortgagor.

 

30.       In
the event of a conflict between the terms hereof and the Note or any other Loan Document, the terms of the document which shall
either enlarge the interest of Mortgagee in the Mortgaged Property, grant to Mortgagee greater financial security in the Mortgaged
Property and/or assure payment of the Note and all sums secured hereby in full shall control.

 

31.       Whenever
one of the parties hereto is named or referred to herein, the heirs, successors and assigns of such party shall be included and
all covenants and agreements contained in this Mortgage, by or on behalf of Mortgagor or Mortgagee, shall bind and inure to the
benefit of their respective heirs, successors and assigns, whether so expressed or not.

 

32.       All
notices, demands, requests and other communications made hereunder shall be in writing and shall be properly given and deemed
delivered on the date of delivery if sent by personal delivery or nationally recognized overnight courier and on the third business
day following mailing if sent by certified or registered mail, postage prepaid, return receipt requested, to the address of such
party on the first page of this Mortgage. Either party may change the address to which any such notice, report, demand or other
instrument is to be delivered or mailed by furnishing written notice in accordance herewith of such change to the other party,
but no such notice of change shall be effective unless and until received by such other party.

 

33.       In
the event that any of the covenants, agreements, terms or provisions contained in the Note, this Mortgage or any other Loan Document
shall be invalid, illegal or unenforceable in any respect, the validity of the remaining covenants, agreements, terms or provisions
contained herein and in the Note and any other Loan Document shall be in no way affected, prejudiced or disturbed thereby.

 

34.       Neither
this Mortgage nor any term hereof may be changed, waived, discharged or terminated orally, or by any action or inaction, but only
by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.
Any agreement hereafter made by Mortgagor and Mortgagee relating to this Mortgage shall be superior to the rights of the holder
of any intervening lien or encumbrance.

 

35.       “Default
Rate” shall have the meaning defined in the Note.

 

    	 

    	 

    

 

36.       In
addition to the obligations described above (as evidenced by the Note or otherwise), this Mortgage is given to secure any and
all obligations from Mortgagor to Mortgagee arising by virtue of any security agreement, promissory note, guaranty or other agreement
between Mortgagor and Mortgagee and for all obligations of Mortgagor to Mortgagee, contingent or absolute, direct or indirect,
regardless of however or whenever created.

 

37.       Mortgagee
is hereby subrogated to the lien and to the rights of the owner and holder thereof of each and every mortgage, lien or other encumbrance
on the Mortgaged Property, or any portion thereof, which is paid or satisfied, in whole or in part, out of the proceeds of the
loan secured hereby, and the respective liens of said mortgage, liens or other encumbrances shall be preserved and shall pass
to and be held by Mortgagee as security for the indebtedness secured hereby to the same extent as if they had been duly assigned
by separate instrument of assignment and notwithstanding the fact that the same shall be canceled and satisfied of record.

 

38.       That
acceptance by Mortgagee of any payment which is less than full payment of all amounts due and payable at the time of such payment,
even if made by one other than the Obligor, shall not constitute a waiver of Mortgagee’s right to exercise its option to
declare the whole of the principal sum then remaining unpaid, together with all accrued interest thereon, immediately due and
payable without notice or to exercise any other rights of Mortgagee except and as to the extent otherwise provided by law or this
Mortgage.

 

39.       Mortgagor
consents to any and all renewals and extensions in the time of payment of the secured indebtedness, and agrees further that, at
any time and from time to time without notice to any person, the terms of payment provided for in the Note may be modified or
the security described in this Mortgage (or any other collateral which may be held by Mortgagee) may be released (in whole or
in part) or increased, changed or exchanged by agreement between Mortgagee and any owner of the Mortgaged Property affected by
this Mortgage without in anyway affecting the liability of any party to the Note, or any person liable or to become liable with
respect to the secured indebtedness. Mortgagor agrees that no sale of the Mortgaged Property, no forbearance on the part of Mortgagee
and no extensions, whether oral or in writing, of the time for the payment of the whole or any part of the obligations hereby
secured (or secured by any other collateral which may be held by Mortgagee), or any other indulgence given by Mortgagee, whether
with or without consideration, shall operate to relieve or, in any manner, affect the original liability of Mortgagor or the priority
of this Mortgage or to limit, prejudice or impair any right of Mortgagee, notice of any such extension, indulgence and forbearance
being hereby waived by Mortgagor (and by any endorsers, or other persons liable or who may become liable for payment of all or
any portion of the indebtedness secured hereby) and all those claiming by, through and under Mortgagor. It is expressly agreed
that any release or releases may be made by Mortgagee without the consent or approval of any other person or persons whomsoever.

 

    	 

    	 

    

 

40.       If
Mortgagor shall, with the duly issued prior written consent of Mortgagee, grant any lien or mortgage on the Mortgaged Property
junior to this Mortgage, such junior lien or mortgage shall be subject to, in addition to all tenancies now or hereafter affecting
the Mortgaged Property, all such renewals and extensions, modifications, releases, increases, increases in interest rate, future
advances, changes or exchanges to the Note and this Mortgage as Mortgagor and Mortgagee may agree upon or as may be provided herein,
without joinder or consent of such junior lien or mortgage holder, and without any obligation on Mortgagee’s part to give
notice of any kind thereto. Notwithstanding the foregoing, Mortgagor will not suffer or permit any act or omission whereby any
of the Mortgaged Property shall become subject to any attachment, judgment, lien, charge or other encumbrances whatsoever or whereby
any of the security represented by this Mortgage shall be impaired or threatened. Mortgagor will not directly or indirectly do
anything or take any action which might prejudice any of the rights, titles or interests of Mortgagee in or to any of the Mortgaged
Property and/or impose or create any direct or indirect obligation or liability on the part of Mortgagee with respect to any of
the Mortgaged Property. If any such attachment, judgment, lien, charge or other encumbrance is filed against the Mortgaged Property,
or any portion thereof. Mortgagor shall cause the same to be immediately discharged or otherwise bonded or transferred to other
security.

 

41.       Mortgagee
does not intend to violate any applicable usury laws. Accordingly, all agreements between Mortgagor and Mortgagee are expressly
limited so that in no contingency or event whatsoever, whether by reason of advancement of the proceeds hereof, acceleration of
maturity of the unpaid principal balance hereof, or otherwise, shall the amount paid or agreed to be paid to Mortgagee for the
use, forbearance or detention of the money to be advanced hereunder (including all interest on the Note, the loan fees payable
in connection herewith, and the aggregate of all other amounts taken, reserved or charged pursuant to the Note, this Mortgage,
or any Loan Document, which, under applicable laws is or may be deemed to be interest) exceed the maximum rate allowed by applicable
law. If, from any circumstances whatsoever, fulfillment of any obligation hereof or of the Note or any Loan Document, at the time
performance of such obligation shall be due, shall cause the effective rate of interest upon the sums evidenced by the Note or
hereby to exceed the maximum rate of interest allowed by applicable law then, the obligation to be fulfilled shall be reduced
automatically to the extent necessary to prevent that effective rate of interest from exceeding the maximum rate allowable under
applicable law and to the extent that Mortgagee shall receive any sum which would constitute excessive interest, such sum shall
be applied to the reduction of the unpaid principal balance due hereunder and not to the payment of interest or, if such excessive
interest exceeds the unpaid balance of principal the excess shall be refunded to Mortgagor. This provision shall control every
other provision of all agreements between Mortgagor and Mortgagee. Nothing herein shall be deemed to limit any rights, powers
or privileges which Mortgagee may have by reason of its being a national or state banking association pursuant to any law of the
United States of America or the State of New Jersey, or any rule, regulation or order of any department or agency thereof and
nothing herein shall be deemed to make unlawful any transaction or conduct by Mortgagee which is lawful pursuant to, or which
is permitted by, any of the foregoing.

 

    	 

    	 

    

 

42.Mortgagor
represents, warrants and covenants that Mortgagor has not used Hazardous Materials (as hereinafter defined), on, from, or affecting
the Mortgaged Property in any manner which violates federal, state, or local laws, ordinances, rules regulations or policies governing
the use, storage, treatment, transportation, manufacture, refinement, handling, production or disposal of Hazardous Materials,
and to Mortgagee’s kn0wledge no prior owner of the Mortgaged Property or any tenant, subtenant prior tenant or prior subtenant
has used Hazardous Materials on, from, or affecting the Mortgaged Property, in any manner which violates federal, state or local
laws, ordinances, rules, regulations or policies governing the use, storage, treatment, transportation, manufacture, refinement,
handling, production or disposal of Hazardous Materials. Mortgagor shall keep or cause the Mortgaged Property to be kept free
of Hazardous Materials. Without limiting the foregoing, Mortgagor shall not cause or permit the Mortgaged Property to be used
to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce or process Hazardous Materials,
except in compliance with all applicable federal, state and local laws and regulations, nor shall Mortgagor cause or permit, as
a result of any intentional or unintentional act or omission on the part of Mortgagor or any tenant or subtenant, a release of
Hazardous Materials onto the Mortgaged Property or onto any other property. Mortgagor shall comply with and ensure compliance
by all tenants and subtenants with all applicable federal, state and local laws, ordinances, rules and regulations, whenever and
by whomever triggered, and shall obtain and comply with any and all approvals, registrations or permits required thereunder. Mortgagor
shall (a) conduct and complete all investigations, studies, sampling, and testing and all remedial, removal, and other actions
necessary to clean up and remove all Hazardous Materials, on, from, or affecting the Mortgaged Property (i) in accordance with
all applicable federal, state, and local laws, ordinances, rules, regulations, and policies, (ii) to the satisfaction of Mortgagee,
and (iii) in accordance with the orders and directions of all federal, state and local governmental authorities and (b) defend,
indemnify, and hold harmless Mortgagee and its employees, agents, officers and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs, or expenses of whatever kind or nature, known or unknown, contingent
or otherwise, arising out of, or in any way related to (i) the presence, disposal, release, or threatened release of any Hazardous
Materials which are on, from, or affecting the soil, water, vegetation, buildings, personal property, persons, animals, or otherwise;
(ii) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to such Hazardous
Materials; (iii) any lawsuit brought or threatened, settlement reached, or government order relating to such Hazardous Materials;
and/or (iv) any violation of laws, orders, regulations, requirements, or demands of governmental authorities, or any policies
or requirements of Mortgagee, which are based upon or in any way related to such Hazardous Materials, including without limitation,
attorneys and consultant fees, investigation and laboratory fees, court costs, and litigation expenses. In the event this Mortgage
is foreclosed, or Mortgagor tenders a deed in lieu of foreclosure, Mortgagor shall deliver the Mortgaged Property to Mortgagee
free of any and all Hazardous Materials so that the condition of the Mortgaged Property shall conform with all applicable federal,
state and local laws, ordinances, rules or regulations affecting the Mortgaged Property. For purposes of this Paragraph, “Hazardous
Materials” includes without limitation, any flammable explosives, radioactive materials, hazardous materials, hazardous
wastes, hazardous or toxic substances or related materials defined in the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.), the Hazardous Materials Transportation Act, as amended
(42 U.S.C. Sections 1801, et seq.), the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. Sections 2901, et
seq.), and in the regulations adopted and publications promulgated pursuant thereto, or any other federal, state or local environmental
laws, ordinances, rules, or regulations. The provisions of this Paragraph shall be in addition to any and all obligations and
liabilities Mortgagor may have to Mortgagee at common law, and shall survive the transactions contemplated herein. Mortgagee in
its sole discretion, in the event of any Event of Default under this Mortgage, may inspect the Mortgaged Property or retain others
to inspect the Mortgaged Property and conduct whatever tests Mortgagee deems necessary to insure Mortgagor is in compliance with
the warranties, covenants and representations contained in this Paragraph. In the event Mortgagee ascertains, with or without
an inspection of the Mortgaged Property, that there are any violations of any warranties or covenants contained in this Paragraph
or that any of Mortgagor’s representations contained herein are inaccurate, then Mortgagee may foreclose this Mortgage,
although Mortgagee shall be under no obligation to do so, or Mortgagee may pursue any other remedies provided under the Loan Documents
which Mortgagee is entitled to pursue as a result of a violation of the warranties and covenants of this Paragraph or as a result
of any inaccurate or false representations contained in this Paragraph.

 

    	 

    	 

    

 

43.       Mortgagee
shall have the right, at any time and from time to time, to order an appraisal of the Mortgaged Property at the expense of Mortgagor.
Such an appraisal (the “Appraisal”) shall be rendered by an appraiser selected by Mortgagee and shall comply
with the appraisal standards set forth in Section 34.44(a) of Subpart C of Part 34 of Title 12 of the Code of Federal Regulations.
The Appraisal will be addressed to Mortgagee and will constitute Mortgagee’s property. If the Appraisal is approved by Mortgagee’s
in-house review appraiser, Mortgagee will provide Mortgagor with a copy of such Appraisal upon written request by Mortgagor. Mortgagor
hereby agrees to grant Mortgagee’s appraiser prompt access to the premises to be appraised and to cooperate with the appraiser
in the preparation of the Appraisal.

 

44.       Mortgagor
shall, within five (5) days after written demand by Mortgagee, execute in such form as shall be required by Mortgagee, an estoppel
certificate duly acknowledged setting forth the amount of principal and interest unpaid hereunder and the general status of this
Mortgage. Failure of Mortgagor to make and deliver the estoppel certificate within the required time shall constitute an Event
of Default hereunder.

 

45.       Omitted

 

46.       Except
for equipment leased by Mortgagor from unrelated third parties upon Mortgagee’s prior approval (not to be unreasonably withheld,
conditioned or delayed), the lien of this Mortgage will automatically attach, without further act, to all after acquired property
of any nature whatsoever attached to, located in, on, or used in the operation of the Mortgaged Property or any part thereof,
owned by Mortgagor or in which Mortgagor has an interest, and Mortgagor covenants and warrants that it will have good and absolute
title to all of the aforesaid after acquired property it acquires, free of any lien or encumbrance.

 

47.       The
organizational documents of Mortgagor (including, without limitation, Operating Agreement, Partnership Agreement, Articles, Bylaws,
and Shareholder’s Agreement, as applicable) shall not be changed, modified, canceled or altered in any manner without the
prior written consent of Mortgagee (not to be unreasonably withheld, conditioned or delayed), and such organizational documents
shall at all times be maintained in full force and effect and in good standing.

 

    	 

    	 

    

 

48.       Mortgagor
and Mortgagee acknowledge and agree that in no event shall Mortgagee be deemed to be a partner or joint venturer with Mortgagor.
Without limitation of the foregoing, Mortgagee shall not be deemed to be such a partner or joint venturer on account of its becoming
a mortgagee in possession or exercising any rights pursuant to this Mortgage or pursuant to any other instrument or document evidencing
or securing any of the indebtedness secured hereunder, or otherwise.

 

49.       Upon
payment in full of all sums due under the Note and this Mortgage, Mortgagee shall, upon the request of, and at the cost of, Mortgagor,
execute a proper satisfaction of this Mortgage; provided, however, Mortgagee may, in its sole and absolute discretion, regardless
of consideration, cause the release of any part of the Mortgaged Property from the lien of this Mortgage without in any manner
affecting or impairing the lien or priority of this Mortgage as to the remainder of that Mortgaged Property.

 

50.       Mortgagor
represents and warrants that neither Mortgagor, nor any of its members or affiliates, is a prohibited person and Mortgagor and
all of its members and affiliates are in full compliance with all applicable orders, rules, regulations and recommendations of
The Office of Foreign Assets Control of the U.S. Department of the Treasury.

 

51.       If
Mortgagor is more than one person, then all obligations of Mortgagor hereunder shall be joint and several.

 

52.MORTGAGEE
(BY ITS ACCEPTANCE HEREOF) AND MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS MORTGAGE, AND ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR MORTGAGEE EXTENDING CREDIT TO MORTGAGOR.

 

[SIGNATURES
APPEAR ON FOLLOWING PAGE]

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, Mortgagor has caused this Mortgage to be executed under seal as of the date first written above.

 

	 	MORTGAGOR:
	 	 
	 	Hemispherx
    Biopharma, Inc.
	 	 	 
	 	By:	/s/
    Thomas Equels
	 	 	Thomas
    Equels, Chief Executive Officer 

 

	STATE
    OF NEW JERSEY	)	 
	 	)ss.:	 
	 	 	 
	COUNTY
    OF	)	 

 

BE
IT REMEMBERED that on this 12th day of May, 2017 before me, the subscriber, personally appeared Thomas Equels, who, being by me
duly sworn on his oath, deposed and made proof to my satisfaction that he is the Chief Executive Officer of Hemispherx Biopharma,
Inc., named in the attached Mortgage and Security Agreement, and he acknowledged that he signed and delivered the Mortgage and
Security Agreement as the duly authorized by the board of directors pursuant to its bylaws.

 

________________________________

 

    	 

    	 

    

 

EXHIBIT
A

 

LEGAL
DESCRIPTION

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