Document:

f8k022708ex10c_cahr.htm

     

    

      

       

      SECURITY
AGREEMENT

       

       AGREEMENT, dated 28th day of
November 2007, between Vital Health Technologies, Inc. / Caribbean American
Health Resorts, Inc., a Minnesota Corporation. ("Debtor"), and Edward Rubin,
("Secured Party'').

       

      W
I T N E S S E T H

       

       WHEREAS, concurrently here with
Secured Party, in conjunction with an MSO Purchase Agreement of same date, has
promised and pledged to Debtor the sum of THREE MILLION DOLLARS ($3,00,000.00),
as evidenced by a Promissory Note of even date herewith (the "Note"):
and

       

       WHEREAS, in order to induce
Secured Party to accept such Note as part of the MSO Purchase Agreement, Debtor
has agreed to pledge to Secured Party certain property as security for the
loan;

       

       NOW THEREFORE, in consideration
of the above principal, and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

       

      1. Definitions.
The following terms as used in this Agreement shall have the meanings set forth
below:

       

      "Collateral".
shall mean all rights, titles and interests in the assets, personal, real or
intangible, of the business owned and operated by debtor and all property of the
same class or character acquired by Debtor subsequent: to the date hereof, and
all proceeds thereof, and all substitutions, replacements and accessions
thereto, including but not limited to un-issued shares of stock of the
Debtor.

       

      "Obligations".
shall mean all principal and interest due or to become due under the afore said
Note, and any other indebtedness or liability of Debtor to Secured Party, direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising.

       

      2. Creation
of the Security Interest. Debtor hereby grants to Secured Party a security
interest in all of the right, title and interest of Debtor in and to the
Collateral to secure the full and prompt payment and performance of all of the
Obligations.

       

      3.
Debtor's Obligations to Pay. Debtor shall pay and perform all of the Obligations
of Debtor to Secured Party as the same may become due according to their terms.
Debtor shall be liable for, and shall reimburse to Secured Party, all expenses,
including reasonable attorneys' fees, incurred or paid in connection with
establishing, perfecting, maintaining, protecting or enforcing any of Secured
Party's rights and remedies hereafter.

      

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      4.      
Protection of the Collateral. Debtor shall defend the title to the Collateral
against all claims and demands whatsoever. Debtor shall keep the Collateral free
and clear of all liens, charges, encumbrances, taxes and assessments, and shall
pay all taxes, assessments and fees relating to the Collateral. Upon request by
Secured Party. Debtor shall furnish further assurances of title, execute any
further instruments and do any other acts necessary to effectuate the purposes
and provisions of this Agreement. The risk of loss of the Collateral at all
times shall be borne by Debtor.

       

      5.      
Filing and Recording. Debtor, at its own cost and expense, shall execute and
deliver to Secured Party any financing statements, and shall procure for Secured
Party any other documents, necessary or appropriate to protect the security
interest granted to Secured Party hereunder against the rights and interests of
third parties, and shall cause the same to be duly recorded and filed in all
places necessary to perfect the security interest of Secured Party in the
Collateral. In the event that any recording or refiling thereof (or filing of
any statements of continuation or assignment of any financing statement) is
required to protect and preserve such security interest, Debtor, at its own
cost and expense,
shall cause the same to be rerecorded and/or refiled at the time and in the
manner requested by Secured Party. Debtor hereby authorizes Secured Party to
file or refile any financing statements or continuation statements with respect
to the security interest granted pursuant to this Agreement which at any time
may be required or appropriate, although the same may have been executed only by
Secured Party, and to execute such financing statement on behalf of Debtor.
Debtor hereby irrevocably designates Secured Party, its agents, representatives
and designees, as agent and attorney-in-fact for Debtor for the
aforesaid purposes.

       

      6.
Default. The occurrence of any one or more of the following events (hereinafter
referred to as "Events of Default") shall constitute a default hereunder,
whether such occurrence is voluntary or involuntary or comes about or is
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental authority:

       

      (a) If
Debtor shall fail to pay, perform or observe any covenant, agreement, term or
provision of this Agreement, the Note or any other agreement or arrangement now
or hereafter entered into between the parties hereto or with respect to any
Obligation of Debtor to Secured Party, or

       

      (b) If
any representation, warranty or other statement of fact herein or in any
writing, certificate, report or statement at any time furnished to Secured Party
pursuant to or in connection with this Agreement or the Note shall be false or
misleading in any material respect; or

       

      (c) If
Debtor shall: admit in writing its inability to pay its debts generally as they
become due; file a petition for relief under the bankruptcy laws or a petition
to take advantage of any insolvency act; make an assignment for the benefit of
creditors; commence a proceeding for the appointment of a receiver, trustee,
1iquidator or conservator of itself or the whole or any substantial part of its
property; file a petition or answer seeking

      

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

       

      reorganization
or arrangement or similar relief under  Federal Bankruptcy Laws
or any other applicable law or statute of the United States or any State or
foreign country; or if Debtor shall be adjudged a bankrupt or insolvent, or a
court of competent jurisdiction shall enter any order, judgment or decree
appointing a receiver, trustee, liquidator or conservator of Debtor or of the
whole or any substantial part of the property of Debtor or approves a petition
filed against Debtor seeking reorganization or similar relief under the Federal
Bankruptcy Laws or any other applicable law or statute of the United States
or any State or foreign country; or if, under the provisions of any other law
for the relief or aid of debtors, a court of competent jurisdiction shall
assume custody or control of Debtor or the whole or any substantial part of its
property; or if there is commenced against Debtor any proceeding for any of the
foregoing relief, or if Debtor by any act indicates its consent to, approval of,
or acquiescence in any such proceeding; or

       

      (d) If
any creditor of Debtor for any reason what so ever here after shall accelerate
payment in whole or in part of any outstanding obligation owed to it by Debtor
under any agreement or arrangement, or if any judgment against the Debtor or any
execution against any of its property for any
amount remains unpaid, unstayed or undismissed for a period in excess of thirty
days.

       

      7. Rights
and Remedies. Upon the occurrence of an Event of Default, the Obligations shall
immediately become due and payable in full without notice or demand. Secured
Party shall have all rights and remedies provided by the Uniform Commercial Code
in effect in the State of California on the date hereof. In addition to, or in
conjunction with, or substitution for such rights and remedies, Secured Party
may at any time arid from and after the occurrence of an Event of Default
hereunder:

       

      (a) with
or without notice to Debtor, foreclose the security interest created herein by
any available judicial procedure, or take possession of the Collateral, or any
portion thereof with or without judicial process, and enter any premises where
the Collateral may be located for the purpose of taking possession of or
removing the same, or rendering the same unusable, or disposing of the
Collateral on such premises, and Debtor agrees not to resist or interfere
therewith;

       

      (b)
require Debtor to prepare, assemble or collect the Collateral, at Debtor's own
expense, and make the same available to Secured Party at such place as Secured
Party may designate, whether at Debtor's premises or elsewhere;

       

      (c) sell,
lease or otherwise dispose of all or any part of the Collateral, whether in its
then condition or after further preparation, in Debtor's name or in its own
name, or in the name of such party as Secured Party may designate, either at
public or private sale (at which Secured Party shall have the right to
purchase), in lots or in bulk, for cash or for credit, with or without
representations or warranties, and upon such other terms as Secured Party, in
its sole discretion, may deem advisable; and ten days' written notice of such
public sale date or dates after which private sale may occur, or such lesser
period of time in the case of an emergency, shall constitute reasonable notice
hereunder:

       

      

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      (d)
execute and deliver documents of title, certificates of origin, or other
evidence of payment, shipment or storage of any Collateral or proceeds on behalf
of and in the name of Debtor;

       

      (e)
remedy any default by Debtor hereunder, with out waiving such default, and any
monies expended in so doing shall be chargeable with interest to Debtor arid
added to the Obligations secured hereby; and

       

      (f) apply
for an injunction to restrain a breach or threatened breach o f this Agreement
by Debtor.

       

      8.      
Cumulative Rights. All rights, remedies and powers granted to Secured Party
herein, or in any instrument or document related hereto, or provided or implied
by law or in equity shall be cumulative and may be exercised singly or
concurrently on any one or more occasions.

       

      9.      
Debtor's Representations And Warranties. Debtor hereby represents and warrants
to Secured Party that:

       

      (a)
Neither the execution nor the delivery of this Agreement, nor the consummation
of the transactions herein contemplated, nor compliance with the provisions
hereof, will violate any law or regulation, or any order or decree of any
domestic or foreign court of governmental authority, or will conflict with, or
result in the breach of, or constitute a default under, any indenture, mortgage,
deed or trust, agreement or other instrument to which Debtor is a party or by
which Debtor may be bound, or result in the creation or imposition of any lien,
claim or encumbrance upon any property of Debtor.

       

      (b)
Debtor has the power to execute, deliver and perform the provisions of this
Agreement and all instruments and documents delivered or to be delivered
pursuant hereto, and has taken or caused to be taken all necessary or
appropriate actions to authorize the execution, delivery and performance of this
Agreement iand all such instruments and documents.

       

      (c)
Debtor is the legal and equitable owner of the Collateral, free and clear of all
security interests, liens. claims and encumbrances of every kind and
nature.

       

      (d) No
default exists, and no event which with notice or the passage of time, or both,
would constitute a default under the Collateral by any party thereto, and there
are no offsets, claims or defenses against the obligations evidenced by the
Collateral, except as may be expressly set forth in Exhibit A annexed
hereto.

       

      10.
Notices. All notices, requests, demands or other communications provided for
herein shall be in writing and shall be deemed to have been properly given if
sent by registered or certified mail, return receipt requested, addressed to the
parties at their respective addresses, or at such other addresses as the parties
may designate in writing.

       

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      11.
Modification And Waiver. No modification or waiver of any provision of this
Agreement, and no consent by Secured Party to any breach thereof by Debtor shall
be effective unless such modification or waiver shall be in writing and signed
by Secured Party, and the same shall then be effective only for the period and
on the conditions and for the specific instances and purposes specified in such
writing. No course of dealing between Debtor and Secured Party in exercising any
rights or remedies hereunder shall operate as a waiver or preclude the exercise
of any rights or remedies hereunder.

       

      12.
Applicable Law. This Agreement shall be construed in accordance with and shall
be governed by the laws of the State of California.

       

      13.
Benefit. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, executors, administrators. successors
and assigns.

       

      IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first above written.

       

      Debtor

      CARIBBEAN
AMERICAN HEALTH RESORTS, INC.

      Hal
Martin, President

       

      By: /s/ Hal
Martin

       

       

      
        
 

        
          
            	
                    

                      Notary

                    

                  	
                    [SEAL]

                  	
                    EDWARD
      SIERRA

                  
	
                    

                      /s/ Edward Sierra

                    

                  	
                    COMM
      #1487219

                  
	 
      	
                    Notary
      Public California

                  
	 
      	
                    Los
      Angeles County

                  
	 
      	
                    My
      Comm. Expires May 29,
2008

                  

          

         

      

      5ex10_4.htm

    Exhibit
      10.4

    

    COMMERCIAL
      MORTGAGE, SECURITY AGREEMENT AND

    ASSIGNMENT
      OF LEASES AND RENTS

    

    This
      COMMERCIAL MORTGAGE. SECURITY AGREEMENT AND ASSIGNMENT OF LEASES AND RENTS
      (this
      "Mortgage") entered into at Chicopee, Massachusetts, as of April 15, 2005, between School
      Second Corporation,
a Massachusetts
corporation,
with
      an address of 191 Chestnut
      Street, Springfield, Massachusetts 01103 (the "Mortgagor") and CHICOPEE
      SAVINGS BANK, a Massachusetts Savings Bank with an address of 70 Center Street,
      Chicopee, Massachusetts 01014-0300 (the "Bank").

    

    The
      real
      property which is the subject matter of this Mortgage has the following
      address(es) 192-194 School Street, Chicopee, Massachusetts 01013 (the
      "Address(es)").

    1.
      MORTGAGE, OBLIGATIONS AND FUTURE ADVANCES

     

    1.1           
      Mortgage.  For
      valuable consideration paid and for other good and valuable consideration,
      the
      receipt and sufficiency of which are hereby acknowledged, the Mortgagor hereby
      irrevocably and unconditionally mortgages, grants, bargains, transfers, sells,
      conveys, sets over and assigns to the Bank and its successors and assigns
      forever, with MORTGAGE
      COVENANTS, all of Mortgagor's right, title and interest in and to the
"Property" described
      below, to secure the prompt payment and performance of the Obligations (as
      hereinafter defined), including without limitation, all amounts due and owing
      to
      the Bank and all obligations respecting that certain Construction Note, dated April
15,
      2005, by School Second Corporation
in
      favor of the Bank in the original principal amount of $185,000.00 (the "Note"; and
      collectively, along with all other agreements, documents, certificates and
      instruments delivered in connection therewith, the "Loan Documents"), and any
      substitutions, modifications, extensions or amendments to any of the Loan
      Documents.

    The
      amount of principal obligations outstanding and evidenced by the Loan Documents
      and secured by this Mortgage total $185,000.00 as of the date of
      this Mortgage but this Mortgage shall nevertheless secure payment and
      performance of all Obligations.

     

    1.2           
      Security Interest
      in
      Property.  As continuing security for the Obligations the
      Mortgagor hereby pledges, assigns and grants to the Bank, and its successors
      and
      assigns, a security interest in any of the Property (as hereinafter defined)
      constituting personal property or fixtures. This Mortgage is and shall be deemed
      to be a security agreement and financing statement pursuant to the terms of
      the
      Uniform Commercial Code of Massachusetts (the "Uniform Commercial Code") as
      to
      any and all personal property and fixtures and as to all such property the
      Bank
      shall have the rights and remedies of a secured party under the Uniform
      Commercial Code in addition to its rights hereunder. This Mortgage constitutes
      a
      financing statement filed as a fixture filing under Chapter 106. Section
      9-502(c) of the Massachusetts General Laws of the Uniform Commercial Code
      covering any Property which now is or later may become a fixture.

     

    1.3           
      Collateral Assignment
      of Leases and Rents.  The Mortgagor hereby irrevocably and
      unconditionally assigns to the Bank, and its successors and assigns, as
      collateral security for the Obligations all of the Mortgagors rights and
      benefits under any and all Leases (as hereinafter defined) and any and all
      rents
      and other amounts now or hereafter owing with respect to the Leases or the
      use
      or occupancy of the Property. This collateral assignment shall be absolute
      and
      effective immediately, but (he Mortgagor shall have a license, revocable by
      the
      Bank, to continue to collect rents owing under the Leases until an Event of
      Default (as hereinafter defined) occurs and the Bank exercises its rights and
      remedies to collect such rents as set forth herein.

    

    1.4           
      Conditions to
      Grant.  To have and to hold the above granted Property unto and
      to the use and benefit of the Bank, and its successors and assigns, forever;
      provided, however, the conveyances, grants and assignments contained in this
      Mortgage are upon the express condition that, if Mortgagor shall pay and perform
      the Obligations in full, including, without limitation, all principal, interest
      and premium thereon and other charges, if applicable, in accordance with the
      terms and conditions in the Loan Documents and this Mortgage, shall pay and
      perform all other Obligations as set forth in this Mortgage and shall abide
      by
      and comply with each and every covenant and condition set forth herein and
      in
      the Loan Documents, the conveyances, grants and assignments contained in this
      Mortgage shall cease, terminate and be void.

     

    1.5           
      Property.  The
      term "Property," as used in this Mortgage, shall mean that certain parcel of
      land and the fixtures, structures and improvements and all personal property
      constituting fixtures, as that term is defined in the Uniform Commercial Code,
      now or hereafter thereon located at the Address(es), as more particularly
      described in Exhibit A attached hereto, together with: (i) all rights now or
      hereafter existing, belonging, pertaining or appurtenant thereto; (ii) the
      following categories of assets as defined in the Uniform Commercial Code: goods
      (including inventory, equipment and any accessions thereto), instruments
      (including promissory notes), documents, accounts (including
      health-care-insurance receivables), chattel paper (whether tangible or
      electronic), deposit accounts, letter-of-credit rights (whether or not the
      letter of credit is evidenced by a writing), commercial tort claims, securities
      and all other investment property, general intangibles (including payment
      intangibles and software), supporting obligations and any and all proceeds
      of
      any thereof, whether now owned or hereafter acquired, that are located on or
      used In connection with, or that arise in whole or in part out of the
      Mortgagor's use of or business conducted on or respecting, the Property and
      any
      substitutions, replacements, accessions and proceeds of any of the foregoing;
      (iii) all judgments, awards of damages and settlements hereafter made as a
      result or in lieu of any Taking, as hereinafter defined, (iv) all of the rights
      and benefits of the Mortgagor under any present or future leases and agreements
      relating to the Property, including, without limitation, rents, issues and
      profits, or the use or occupancy thereof together with any extensions and
      renewals thereof, specifically excluding all duties or obligations of the
      Mortgagor of any kind arising thereunder (the "Leases"); and (v) all contracts,
      permits and licenses respecting the use. operation or maintenance of the
      Property.

    
       

      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    1.6           
      Obligations.  The
      term "Obligation(s)," as used in this Mortgage, shall mean without limitation
      all loans, advances, indebtedness, notes, liabilities and amounts, liquidated
      or
      unliquidated, now or hereafter owing by the Mortgagor to the Bank at any time,
      of each and every kind, nature and description, whether arising under this
      Mortgage or otherwise, and whether secured or unsecured, direct or indirect
      (that is. whether the same are due directly by the Mortgagor to the Bank; or
      are
      due indirectly by the Mortgagor to the Bank as endorser, guarantor or other
      surety, or as obligor of obligations due third persons which have been endorsed
      or assigned to the Bank, or otherwise), absolute or contingent, due or to become
      due, now existing or hereafter contracted, including, without limitation,
      payment of all amounts outstanding when due pursuant to the terms of any of
      the
      Loan Documents. Said term shall also include all interest and other charges
      chargeable to the Mortgagor or due from the Mortgagor to the Bank from time
      to
      time and all costs and expenses referred to in this Mortgage, including without
      limitation the costs and expenses (including reasonable attorneys' fees) of
      enforcement of the Bank's rights hereunder or pursuant to any document or
      instrument executed in connection herewith.

     

    1.7           
      Cross-Collateral
      and
      Future Advances.  It is the express intention of the Mortgagor
      that this Mortgage secure payment and performance of all of the Obligations,
      whether now existing or hereinafter incurred by reason of future advances by
      the
      Bank or otherwise, and regardless of whether such Obligations are or were
      contemplated by the parties at the time of the granting of this Mortgage. Notice
      of the continuing grant of this Mortgage shall not be required to be stated
      on
      the face of any document evidencing any of the Obligations, nor shall such
      documents be required to otherwise specify that they are secured
      hereby.

     

    2. 
      REPRESENTATIONS, WARRANTIES,
      COVENANTS

     

    2.1           
      Representations
      and
      Warranties.  The Mortgagor represents and warrants
      that:

    

    
      	
               

            	
              (a)

            	
              This
                Mortgage has been duly executed and delivered by the Mortgagor and
                is the
                legal, valid and binding obligation of the Mortgagor enforceable
                in
                accordance with its terms, except as limited by bankruptcy, insolvency,
                reorganization, moratorium and other laws affecting the enforcement
                of
                creditors' rights generally; 

            

    

    

    
      	
               

            	
              (b)

            	
              The
                Mortgagor Is the sole legal owner of the Property, holding good and
                marketable fee simple title to the Property, subject to no liens,
                encumbrances, leases, security interests or rights of others, other
                than
                as set forth in detail in Exhibit B hereto (the "Permitted Encumbrances");
                

            

    

    

    
      	
               

            	
              (c)

            	
              The
                Mortgagor is the sole legal owner of the entire lessor’s interest in the
                Leases with full power and authority to encumber the Property in
                the
                manner set forth herein and the Mortgagor has not executed any other
                assignment of the Leases or any of the rights or rents arising thereunder;
                

            

    

    

    
      	
               

            	
              (d)

            	
              As
                of the date hereof, there are no Hazardous Substances (as hereinafter
                defined) in, on or under the Property, except as disclosed in writing
                to
                and acknowledged by the Bank; and 

            

    

    

    
      	
               

            	
              (e)

            	
              Each
                Obligation Is a commercial obligation and does not represent a loan
                used
                for personal, family or household purposes and is not a consumer
                transaction or otherwise subject to the provisions of the Federal
                Truth in
                Lending Act, Federal Reserve Board Regulation Z. Massachusetts General
                Laws, Chapter 140D, or other such consumer statutes or regulations
                and
                restrictions. 

            

    

    

    2.2           
      Recording: Further
      Assurances.  The Mortgagor covenants that it shall, at its sole
      cost and expense and upon the request of the Bank, cause this Mortgage, and
      each
      amendment, modification or supplement hereto, to be recorded and filed in such
      manner and in such places, and shall at all times comply with all such statutes
      and regulations as may be required by law in order to establish, preserve and
      protect the Interest of the Bank in the Property and the rights of the Bank
      under this Mortgage. Mortgagor will from time to time execute and deliver to
      the
      Bank, and take or cause to be taken, all such other further action as the Bank
      may request in order to effect and confirm or vest more securely in the Bank
      all
      rights contemplated by this Mortgage or to vest more fully in, or assure to
      the
      Bank the security interest in, the Property or to comply with applicable statute
      or law. To the extent permitted by applicable law, Mortgagor authorizes the
      Bank
      to file financing statements, continuation statements or amendments without
      Mortgagor's signature appearing thereon, and any such financing statements,
      continuation statements or amendments may be signed or authenticated by the
      Bank
      on behalf of Mortgagor, if necessary, and may be filed at any time In any
      jurisdiction. The Bank may at any time and from time to time file financing
      statements, continuation statements and amendments thereto that describe the
      Property as "all assets of Mortgagor" or words of similar effect and which
      contain any other information required by Article 9 of the Uniform Commercial
      Code for the sufficiency or filing office acceptance of any financing statement,
      continuation statement or amendment, including whether Mortgagor is an
      organization, the type of organization and any organization identification
      number issued to Mortgagor; Mortgagor also authorizes the Bank to file financing
      statements describing any agricultural liens or other statutory liens held
      by
      the Bank. Mortgagor agrees to furnish any such information to the Bank promptly
      upon request, fn addition, Mortgagor shall at any time and from time to time,
      take such steps as the Bank may reasonably request for the Bank (i) to obtain
      an
      acknowledgement, in form and substance satisfactory to the Bank, of any bailee
      having possession of any of the Property that the bailee holds such Property
      for
      the Bank, (ii) to obtain "control" of any investment property, deposit accounts,
      letter-of-credit rights or electronic chattel paper (as such terms are defined
      in Article 9 of the Uniform Commercial Code relating to what constitutes
      "control" for such items of Property), with any agreements establishing control
      to be in form and substance satisfactory to the Bank, and (iii) otherwise to
      insure the continued perfection and priority of the Bank's security interest
      in
      any of the Property and the preservation of its rights therein. Mortgagor hereby
      constitutes the Bank its attorney-in-fact to execute and file all filings
      required or so requested for the foregoing purposes, all acts of such attorney
      being hereby ratified and confirmed; and such power, being coupled with an
      interest, shall be irrevocable until this Mortgage terminates in accordance
      with
      its terms, all Obligations are paid in full and the Property is
      released.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2.3           
      Restrictions on
      the
      Mortgagor.  The Mortgagor covenants that it will not, nor will
      it permit any other person lo, directly or indirectly, without the prior written
      approval of the Bank in each instance:

    

    
      	
               

            	
              (a)

            	
              Sell,
                convey, assign, transfer, mortgage, pledge, hypothecate, lease or
                dispose
                of all or any part of any legal or beneficial interest in the Mortgagor
                or
                the Property or any part thereof or permit any of the foregoing,
                except as
                expressly permitted by the terms of this Mortgage;
                

            

    

    

    
      	
               

            	
              (b)

            	
              Permit
                the use. generation, treatment, storage, release or disposition of
                any oil
                or other material or substance constituting hazardous waste or hazardous
                materials or substances under any applicable Federal or state law,
                regulation or rule ("Hazardous Substances"); or

            

    

    

    
      	
               

            	
              (c)

            	
              Permit
                lo be created or suffer to exist any mortgage, lien, security interest,
                attachment or other encumbrance or charge on the Property or any
                part
                thereof or interest therein (except for the Permitted Encumbrances),
                including, without limitation, (i) any lien arising under any Federal,
                state or local statute, rule, regulation or law pertaining to the
                release
                or cleanup of Hazardous Substances and (ii) any mechanics' or
                materialmen's lien. The Mortgagor further agrees to give the Bank
                prompt
                written notice of the imposition, or notice, of any lien referred
                to in
                this Section and to take any action necessary to secure the prompt
                discharge or release of the same. The Mortgagor agrees to defend
                its title
                to the Property and the Bank's interest therein against the claims
                of all
                persons and, unless the Bank requests otherwise, to appear in and
                diligently contest. all he Mortgagor's sole cost and expense, any
                action
                or proceeding that purports to affect the Mortgagor's title to the
                Property or the priority or validity of this Mortgage or the Bank's
                interest hereunder. 

            

    

    

    2.4           
      Operation of
      Property.  The Mortgagor covenants and agrees as
      follows:

    

    
      	
               

            	
              (a)

            	
              The
                Mortgagor will not permit the Property to be used for any unlawful
                or
                improper purpose, will at all times comply with all Federal, state
                and
                local laws, ordinances and regulations, and the provisions of any
                Lease,
                easement or other agreement affecting all or any part of the Property,
                and
                will obtain and maintain all governmental or other approvals relating
                to
                the Mortgagor, the Property or the use thereof, including without
                limitation, any applicable zoning or building codes or regulations
                and any
                laws or regulations relating to the handling, storage, release or
                cleanup
                of Hazardous Substances, and will give prompt written notice to the
                Bank
                of (i) any violation of any such law. ordinance or regulation by
                the
                Mortgagor or relating to the Property, (ii) receipt of notice from
                any
                Federal, state or local authority alleging any such violation and
                (iii)
                the presence or release on the Property of any Hazardous Substances;
                

            

    

    

    
      	
               

            	
              (b)

            	
              The
                Mortgagor will at all times keep the Property insured for such losses
                or
                damage, in such amounts and by such companies as may be required
                by law or
                which the Bank may require, provided that, in any case, the Mortgagor
                shall maintain: (i) physical hazard insurance on an "all risks" basis
                in
                an amount not less than 100% of the full replacement cost of the
                Property;
                (ii) flood insurance if and as required by applicable Federal law
                and as
                otherwise required by the Bank; (iii) comprehensive commercial general
                liability insurance; (iv) rent loss and business interruption insurance;
                and (v) such other insurance as the Bank may require from time to
                time,
                including builder's risk insurance in the case of construction loans.
                All
                policies regarding such insurance shall be issued by companies licensed
                to
                do business in the state where the policy is issued and also in the
                slate
                where the Property is located, be otherwise acceptable to the Bank,
                provide deductible amounts acceptable to the Bank, name the Bank
                as
                mortgagee, loss payee and additional insured, and provide that no
                cancellation or material modification of such policies shall occur
                without
                at least thirty (30) days' prior written notice to the Bank. Such
                policies
                shall Include (i) a mortgage endorsement determined by the Bank in
                good
                faith to be equivalent to the "standard" mortgage endorsement so
                that the
                insurance, as to the interest of the Bank, shall not be invalidated
                by any
                act or neglect of the Mortgagor or the owner of the Property, any
                foreclosure or other proceedings or notice of sale relating to the
                Property, any change in the title to or ownership of the Property,
                or the
                occupation or use of the Property for purposes more hazardous than
                are
                permitted at the date of inception of such insurance policies; (ii)
                a
                replacement cost endorsement; (iii) an agreed amount endorsement;
                (iv) a
                contingent liability from operation endorsement; and (v) such other
                endorsements as the Bank may request. The Mortgagor will furnish
                to the
                Bank upon request such original policies, certificates of insurance
                or
                other evidence of the foregoing as are acceptable to the Bank. The
                terms
                of all insurance policies shall be such that no coinsurance provisions
                apply, or if a policy does contain a coinsurance provision, the Mortgagor
                s hall insure t he Property in an amount sufficient to prevent the
                application of the coinsurance provisions;

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (c)

            	
              Mortgagor
                will not enter into or modify the Leases without the prior written
                consent
                of the Bank, execute any assignment of the Leases except in favor
                of the
                Bank, or accept any rentals under any Lease for more than one month
                in
                advance and will at all times perform and fulfill every term and
                condition
                of the Leases; 

            

    

    

    
      	
               

            	
              (d)

            	
              Mortgagor
                will at all times (i) maintain complete and accurate records and
                books
                regarding the Property in accordance with generally accepted accounting
                principles and (ii) permit the Bank and the Bank's agents, employees
                and
                representatives, at such reasonable times as the Bank may request,
                to
                enter and inspect the Property and such books and records; and
                

            

    

    

    
      	
               

            	
              (e)

            	
              Mortgagor
                will at all times keep the Property in good and first-rate repair
                and
                condition (damage from casualty not excepted) and will not commit
                or
                permit any strip, waste, impairment, deterioration or alteration
                of the
                Property or any part thereof. 

            

    

    

    2.5           
      Payments.  The
      Mortgagor covenants to pay when due: all Federal, state, municipal or other
      taxes, betterment and improvement assessments and other governmental levies,
      water rates, sewer charges, insurance premiums and other charges on the
      Property, this Mortgage or any Obligation secured hereby that could, if unpaid,
      result in a lien on the Property or on any interest therein. If and when
      requested by the Bank, the Mortgagor shall deposit from time to time with the
      Bank sums determined by the Bank to be sufficient to pay when due the amounts
      referred to in this Section. The Mortgagor shall have the right to contest
      any
      notice, lien, encumbrance, claim, tax, charge, betterment assessment or premium
      filed or asserted against or relating to the Property, provided that it contests
      the same diligently and in good faith and by proper proceedings and, at the
      Bank's request, provides the Bank with adequate cash security, in the Bank's
      reasonable judgment, against the enforcement thereof. The Mortgagor shall
      furnish to the Bank the receipted real estate tax bills or other evidence of
      payment of real estate taxes for the Property within thirty (30) days prior
      to
      the date from which interest or penalty would accrue for nonpayment thereof.
      The
      Mortgagor shall also furnish to the Bank evidence of all other payments referred
      to above within fifteen (15) days after written request therefor by the
      Bank.

     

    2.6           
      Notices; Notice
      of
      Default.  The Mortgagor will deliver to the Bank, promptly upon
      receipt of the same, copies of all notices or other documents it receives that
      affect the Property or its use, or claim that the Mortgagor is in default in
      the
      performance or observance of any of the terms hereof or that the Mortgagor
      or
      any tenant is in default of any terms of the Leases. The Mortgagor further
      agrees to deliver to the Bank written notice promptly upon the occurrence of
      any
      Event of Default hereunder or event that with the giving of notice or lapse
      of
      time, or both, would constitute an Event of Default hereunder.

     

    2.7           
      Takings.  In
      case of any condemnation or expropriation for public use of, or any damage
      by
      reason of the action of any public or governmental entity or authority to,
      all
      or any part of the Property (a "Taking"), or the commencement of any proceedings
      or negotiations that might result in a Taking, the Mortgagor shall promptly
      give
      written notice to the Bank, describing the nature and extent thereof. The Bank
      may, at its option, appear in any proceeding for a Taking or any negotiations
      relating to a Taking and the Mortgagor shall promptly give to the Bank copies
      of
      all notices, pleadings, determinations and other papers relating thereto. The
      Mortgagor shall in good faith and with due diligence and by proper proceedings
      file and prosecute its claims for any award or payment on account of any Taking.
      The Mortgagor shall not settle any such claim without the Bank's prior written
      consent. The Mortgagor shall hold any amounts received with respect to such
      awards or claims, by settlement, judicial decree or otherwise, in trust for
      the
      Bank and promptly pay the same to the Bank. The Mortgagor authorizes any award
      or settlement due in connection with a Taking to be paid directly to the Bank
      in
      amounts not exceeding the Obligations. The Bank may apply such amounts to the
      Obligations in such order as the Bank may determine.

     

    2.8           
      Insurance
      Proceeds.  The proceeds of any insurance resulting from any
      loss with respect to the Property shall be paid to the Bank and. at the option
      of the Bank, be applied to the Obligations in such order as the Bank may
      determine; provided, however, that if the Bank shall require repair of the
      Property, the Bank may release all or any portion of such proceeds to the
      Mortgagor for such purpose. Any insurance proceeds paid to the Mortgagor shall
      be held in trust for the Bank and promptly paid to it.

    

    3. 
CERTAIN
      RIGHTS OF THE
      BANK

     

    3.1         
      Legal
      Proceedings.  The Bank shall have the right, but not the duty,
      to intervene or otherwise participate in any legal or equitable proceeding
      that,
      in the Bank's reasonable judgment, might affect the Property or any of the
      rights created or secured by this Mortgage. The Bank shall have such right
      whether or not there shall have occurred an Event of Default
      hereunder.

     

    3.2         
      Appraisals/Assessments.  The
      Bank shall have the right, at the Mortgagor's sole cost and expense, to obtain
      appraisals, environmental site assessments or other inspections of the portions
      of the Property that are real estate at such times as the Bank deems necessary
      or as may be required by applicable law, or its prevailing credit or
      underwriting policies.

     

    3.3         
      Financial
      Statements.  The Bank shall have the right, at the Mortgagor's
      sole cost and expense, to require delivery of financial statements in form
      and
      substance acceptable to the Bank from the Mortgagor or any guarantor of any
      of
      the Obligations and the Mortgagor hereby agrees to deliver such financial
      statements and/or cause any such guarantor lo so deliver any such financial
      statement when required by the Bank.

     

    3.4         
      Tax
      Return.  The Mortgagor shall deliver to the Bank on or before
      May 1 of each year or such other date approved by the Bank, the Mortgagor's
      filed Federal and any applicable state tax returns for the prior
      year.

     

    3.5         
      Leases and Rent
      Roll.  The Mortgagor shall deliver to the Bank during each
      calendar year and at such other times as the Bank shall request a rent roll
      for
      the Property, in form acceptable to the Bank, listing all tenants and occupants
      and describing all of the Leases.

    
       

      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    4.
 
      DEFAULTS AND REMEDIES

     

    4.1           
      Events of
      Default.  Event of Default shall mean the occurrence of any one
      or more of the following events:

    

    
      	
               

            	
              (a)

            	
              default
                of any liability, obligation or undertaking of the Mortgagor or any
                guarantor of the Obligations to the Bank, hereunder or otherwise,
                including failure to pay in full and when due any installment of
                principal
                or interest or default of the Mortgagor or any guarantor of the
                Obligations under any other Loan Document;

            

    

    

    
      	
               

            	
              (b)

            	
              failure
                by the Mortgagor to perform, observe or comply with any of the covenants,
                agreements, terms or conditions set forth in this Mortgage;
                

            

    

    

    
      	
               

            	
              (c)

            	
              the
                (i) occurrence of any material loss, theft, damage or destruction
                of. or
                (ii) issuance or making of any levy, seizure, attachment, execution
                or
                similar process on a material portion of the Property;
                

            

    

    

    
      	
               

            	
              (d)

            	
              failure
                of the Mortgagor or any guarantor of the Obligations to maintain
                aggregate
                collateral security value satisfactory to the Bank;
                

            

    

    

    
      	
               

            	
              (e)

            	
              default
                of any material liability, obligation or undertaking of the Mortgagor
                or
                any guarantor of the Obligations to any other party;
                

            

    

    

    
      	
               

            	
              (f)

            	
              if
                any statement, representation or warranty heretofore, now or hereafter
                made by the Mortgagor or any guarantor of the Obligations in connection
                with this Mortgage or in any supporting financial statement of the
                Mortgagor or any guarantor of the Obligations shall be determined
                by the
                Bank to have been false in any material respect when made;
                

            

    

    

    
      	
               

            	
              (g)

            	
              if
                the Mortgagor or any guarantor of the Obligations is a corporation,
                trust,
                partnership or limited liability company, the liquidation, termination
                or
                dissolution of any such organization, or the merger or consolidation
                of
                such organization into another entity, or its ceasing to carry on
                actively
                its present business or the appointment of a receiver for its property;
                

            

    

    

    
      	
               

            	
              (h)

            	
              the
                death of the Mortgagor or any guarantor of the Obligations and, if
                the
                Mortgagor or any guarantor of the Obligations is a partnership or
                limited
                liability company, the death of any partner or member;
                

            

    

    

    
      	
               

            	
              (i)

            	
              the
                institution by or against the Mortgagor or any guarantor of the
                Obligations of any proceedings under the Bankruptcy Code 11 USC §101 et seq. or any
                other
                law in which the Mortgagor or any guarantor of the Obligations is
                alleged
                to be insolvent or unable to pay its debts as they mature, or the
                making
                by the Mortgagor or any guarantor of the Obligations of an assignment
                for
                the benefit of creditors or the granting by the Mortgagor or any
                guarantor
                of the Obligations of a trust mortgage for the benefit of creditors;
                

            

    

    

    
      	
               

            	
              (j)

            	
              the
                service upon the Bank of a writ in which the Bank is named as trustee
                of
                the Mortgagor or any guarantor of the Obligations;
                

            

    

    

    
      	
               

            	
              (k)

            	
              a
                judgment or judgments for the payment of money shall be rendered
                against
                the Mortgagor or any guarantor of the Obligations, and any such judgment
                shall remain unsatisfied and in effect for any period of thirty (30)
                consecutive days without a stay of execution;

            

    

    

    
      	
               

            	
              (l)

            	
              any
                levy, lien (including mechanics lien), seizure, attachment, execution
                or
                similar process shall be issued or levied on any of the property of the
                Mortgagor or any guarantor of the Obligations;

            

    

    

    (m)           
      the termination of any guaranty of the Obligations; or

    

    
      	
               

            	
              (n)

            	
              the
                occurrence of such a change in the condition or affairs (financial
                or
                otherwise) of the Mortgagor or any guarantor of the Obligations,
                or the
                occurrence of any other event or circumstance, such that the Bank,
                in its
                sole discretion, deems that it is insecure or that the prospects
                for
                timely or full payment or performance of any obligation of the Mortgagor
                or any guarantor of the Obligations to the Bank has been or may be
                impaired. 

            

    

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    4.2
Remedies.  On
      the occurrence of any Event of Default the Bank may, at any time thereafter,
      at
      its option and, to the extent permitted by applicable law, without notice,
      exercise any or all of the following remedies:

    

    
      	
               

            	
              (a)

            	
              Declare
                the Obligations due and payable, and the Obligations shall thereupon
                become immediately due and payable, without presentment, protest,
                demand
                or notice of any kind, all of which are hereby expressly waived by
                the
                Mortgagor except for Obligations due and payable on demand, which
                shall be
                due and payable on demand whether or not an event of default has
                occurred
                hereunder; 

            

    

    
      	
               

            	
              (b)

            	
              Enter,
                take possession of, manage and operate the Property (including all
                personal property and all records and documents pertaining thereto)
                and
                any part thereof and exclude the Mortgagor therefrom, take all actions
                it
                deems necessary or proper to preserve the Property and operate the
                Property as a mortgagee in possession with all the powers as could
                be
                exercised by a receiver or as otherwise provided herein or by applicable
                law; provided, however, the entry by the Bank upon the Property for
                any
                reason shall not cause the Bank to be a mortgagee in possession,
                except
                upon the express written declaration of the Bank;
                

            

    

    
      	
               

            	
              (c)

            	
              With
                or without taking possession, receive and collect all rents, income,
                issues and profits ("Rents") from the Property (including all real
                estate
                and personal property and whether past due or thereafter accruing),
                including as may arise under the Leases, and the Mortgagor appoints
                the
                Bank as its true and lawful attorney with the power for the Bank
                in its
                own name and capacity to demand and collect Rents and take any action
                that
                the Mortgagor is authorized to take under the Leases. The Bank shall
                (after payment of all costs and expenses incurred) apply any Rents
                received by it to the Obligations in such order as the Bank determines,
                or
                in accordance with any applicable statute, and the Mortgagor agrees
                that
                exercise of such rights and disposition of such funds shall not be
                deemed
                to cure any default or constitute a waiver of any foreclosure once
                commenced nor preclude the later commencement of foreclosure for
                breach
                thereof. The Bank shall be liable to account only for such Rents
                actually
                received by the Bank. Lessees under the Leases are hereby authorized
                and
                directed, following notice from the Bank, to pay all amounts due
                the
                Mortgagor under the Leases to the Bank, whereupon such lessees shall
                be
                relieved of any and all duty and obligation to the Mortgagor with
                respect
                to such payments so made; 

            

    

    

    
      	
               

            	
              (d)

            	
              Sell
                the Property or any part thereof or interest therein pursuant to
                exercise
                of its STATUTORY POWER OF SALE or otherwise at public auction on
                terms and
                conditions as the Bank may determine, or otherwise foreclose this
                Mortgage
                in any manner permitted by law. and upon such sale the Mortgagor
                shall
                execute and deliver such instruments as the Bank may request in order
                to
                convey and transfer all of the Mortgagor's interest in the Property,
                and
                the same shall operate to divest all rights, title and interest of
                the
                Mortgagor in and to the Property. In the event this Mortgage shall
                include
                more than one parcel of property or subdivision (each hereinafter
                called a
                "portion"), the Bank shall, in its sole and exclusive discretion,
                be
                empowered to foreclose upon any such portion without impairing its
                right
                to foreclose subsequently upon any other portion or the entirety
                of the
                Property from time to time thereafter. I n addition, the Bank may
                in its
                discretion subordinate this Mortgage to one or more Leases for the
                sole
                purpose of preserving any such Lease in the event of a foreclosure;
                

            

    

    
      	
               

            	
              (e)

            	
              Cause
                one or more environmental assessments to be taken, arrange for the
                cleanup
                of any Hazardous Substances or otherwise cure the Mortgagor's failure
                to
                comply with any statute, regulation or ordinance relating to the
                presence
                or cleanup of Hazardous Substances, and the Mortgagor shall provide
                the
                Bank or its agents with access to the Property for such purposes;
                provided
                that the exercise of any of such remedies shall not be deemed to
                have
                relieved the Mortgagor from any responsibility therefor or given
                the Bank
                "control" over the Property or cause the Bank to be considered to
                be a
                mortgagee in possession, "owner" or "operator" of the Property for
                purposes of any applicable law, rule or regulation pertaining to
                Hazardous
                Substances; and 

            

    

    
      	
               

            	
              (f)

            	
              Take
                such other actions or proceedings as the Bank deems necessary or
                advisable
                to protect its interest in the Property and ensure payment and performance
                of the Obligations, including, without limitation, appointment of
                a
                receiver (and the Mortgagor hereby waives any right to object to
                such
                appointment) and exercise of any of the Bank's remedies provided
                herein or
                in any other document evidencing, securing or relating to any of
                the
                Obligations or available to a secured party under the Uniform Commercial
                Code or under other applicable law.

            

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    This
      Mortgage is upon the STATUTORY CONDITION, for any breach of which the Bank
      shall
      have the STATUTORY POWER OF SALE.

    In
      addition, the Bank shall have all other remedies provided by applicable law,
      including, without limitation, the right to pursue a judicial sale of the
      Property or any portion thereof by deed, assignment or otherwise.

    The
      Mortgagor agrees and acknowledges that the acceptance by the Bank of any
      payments from either the Mortgagor or any guarantor after the occurrence of
      any
      Event of Default, the exercise by the Bank of any remedy set forth herein or
      the
      commencement, discontinuance or abandonment of foreclosure proceedings against
      the Property shall not waive the Bank's subsequent or concurrent right to
      foreclose or operate as a bar or estoppel to the exercise of any other rights
      or
      remedies of the Bank. The Mortgagor agrees and acknowledges that the Bank,
      by
      making payments or incurring costs described herein, shall be subrogated to
      any
      right of the Mortgagor to seek reimbursement from any third parties, including,
      without limitation, any predecessor in interest to the Mortgagor's title or
      other party who may be responsible under any law, regulation or ordinance
      relating to the presence or cleanup of Hazardous Substances.

     

    4.3           
      Advances.  If
      the Mortgagor fails to pay or perform any of its obligations respecting the
      Property, the Bank may in its sole discretion do so without waiving or releasing
      Mortgagor from any such obligation. Any such payments may include, but are
      not
      limited to, payments for taxes, assessments and other governmental levies,
      water
      rates, insurance premiums, maintenance, repairs or improvements constituting
      part of the Property. Any amounts paid by the Bank hereunder shall be, until
      paid, part of the Obligations and secured by this Mortgage, and shall be due
      and
      payable to the Bank, on demand,  together with interest thereon to the
      extent permitted by applicable law, at the highest rate permitted under the
      Note.

    

    4.4           
      Cumulative Rights
      and
      Remedies.  All of the foregoing rights, remedies and options
      (including without limitation the right to enter and take possession of the
      Property, the right to manage and operate the same, and the right to collect
      Rents, in each case whether by a receiver or otherwise) are cumulative and
      in
      addition to any rights the Bank might otherwise have, whether at law or by
      agreement, and may be exercised separately or concurrently and none of which
      shall be exclusive of any other. The Mortgagor further agrees that the Bank
      may
      exercise any or all of its rights or remedies set forth herein without having
      to
      pay the Mortgagor any sums for use or occupancy of the Property.

     

    4.5           
      Mortgagor's Waiver
      of
      Certain Rights.  To the extent permitted by applicable law, the
      Mortgagor hereby waives the benefit of all present and future laws (i) providing
      for any appraisal before sale of all or any portion of the Property or (ii)
      in
      any way extending the time for the enforcement of the collection of the
      Obligations or creating or extending a period of redemption from any sale made
      hereunder.

     

    5.
 
      MISCELLANEOUS

     

    5.1           
      Costs and
      Expenses.  To the extent permitted by applicable law, the
      Mortgagor shall pay to the Bank, on demand, all reasonable expenses (including
      attorneys' fees and expenses and reasonable consulting, accounting, appraisal,
      brokerage and similar professional fees and charges) incurred by the Bank in
      connection with the Bank's interpretation, exercise, preservation or enforcement
      of any of its rights, remedies and options set forth in this Mortgage and in
      connection with any litigation, proceeding or dispute whether arising hereunder
      or otherwise relating to the Obligations, together with interest thereon to
      the
      extent permitted by applicable law, until paid in full by the Mortgagor at
      the
      highest rate set forth in the Note. Any amounts owed by the Mortgagor hereunder
      shall be, until paid, part of the Obligations and secured by this Mortgage,
      and
      the Bank shall be entitled, to the extent permitted by law. to receive and
      retain such amounts in any action for a deficiency against or redemption by
      the
      Mortgagor, or any accounting for the proceeds of a foreclosure sale or of
      insurance proceeds.

     

    5.2           
      Indemnification
      Regarding Leases.  The Mortgagor hereby agrees to defend, and
      does hereby indemnify and hold the Bank and each of its directors, officers,
      employees, agents and attorneys (each an "Indemnitee") harmless from all losses,
      damages, claims, costs or expenses (including attorneys' fees and expenses)
      resulting from the assignment of the Leases and from all demands that may be
      asserted against such Indemnitees arising from any undertakings on the part
      of
      the Bank to perform any obligations under the Leases. It is understood that
      the
      assignment of the Leases shall not operate to place responsibility for the
      control or management of the Property upon the Bank or any Indemnitee or make
      them liable for performance of any of the obligations of the Mortgagor under
      Leases, respecting any condition of the Property or any other agreement or
      arrangement, written or oral, or applicable law.

    
       

      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    5.3           
      Indemnification
      Regarding Hazardous Substances.  The Mortgagor hereby agrees to
      defend, and does hereby indemnify and hold harmless each Indemnitee from and
      against any and all losses, damages, claims, costs or expenses, including,
      without limitation, litigation costs and attorneys' fees and expenses and fees
      or expenses of any environmental engineering or cleanup firm incurred by such
      Indemnitee and arising out of or in connection with the Property or resulting
      from the application of any current or future law, regulation or ordinance
      relating to the presence or cleanup of Hazardous Substances on or affecting
      the
      Property. The Mortgagor agrees its obligations hereunder shall be continuous
      and
      shall survive termination or discharge of this Mortgage and/or the repayment
      of
      all debts to the Bank including repayment of all Obligations.

     

    5.4           
      Indemnitee's
      Expenses.  If any Indemnitee is made a party defendant to any
      litigation or any claim is threatened or brought against such Indemnitee
      concerning this Mortgage or the Property or any part thereof or therein or
      concerning the construction, maintenance, operation or the occupancy or use
      thereof by the Mortgagor or other person or entity, then the Mortgagor shall
      indemnify, defend and hold each Indemnitee harmless from and against all
      liability by reason of said litigation or claims, including attorneys' fees
      and
      expenses incurred by such Indemnitee in connection with any such litigation
      or
      claim, whether or not any such litigation or claim is prosecuted to judgment.
      The within indemnification shall survive payment of the Obligations, and/or
      any
      termination, release or discharge executed by the Bank in favor of the
      Mortgagor.

    

    5.5           
      Waivers.  The
      Mortgagor waives notice of nonpayment, demand, presentment, protest or notice
      of
      protest o f t he Obligations and all other notices, consents to any renewals
      or
      extensions of time of payment thereof, and generally waives any and all
      suretyship defenses and defenses in the nature thereof. No delay or omission
      of
      the Bank in exercising or enforcing any of its rights, powers, privileges,
      remedies, immunities or discretion (all of which are hereinafter collectively
      referred to as "the Bank's rights and remedies") hereunder shall constitute
      a
      waiver thereof; and no waiver by the Bank of any default of the Mortgagor
      hereunder or of any demand shall operate as a waiver of any other default
      hereunder or of any other demand. No term or provision hereof shall be waived,
      altered or modified except with the prior written consent of the Bank, which
      consent makes explicit reference to this Mortgage. Except as provided in
      the preceding sentence, no other agreement or transaction, of whatsoever nature,
      entered into between the Bank and the Mortgagor at any time (whether before,
      during or after the effective date or term of this Mortgage) shall be construed
      as a waiver, modification or limitation of any of the Bank's rights and remedies
      under this Mortgage (nor shall anything in this Mortgage be construed as a
      waiver, modification or limitation of any of the Bank's rights and remedies
      under any such other agreement or transaction) but all the Bank's rights and
      remedies not only under the provisions of this Mortgage but also under any
      such
      other agreement or transaction shall be cumulative and not alternative or
      exclusive, and may be exercised by the Bank at such time or times and in such
      order of preference as the Bank in its sole discretion may
      determine.

     

    5.6           
      Waiver of
      Homestead.  To the maximum extent permitted under applicable
      law, the Mortgagor hereby waives and terminates any homestead rights and/or
      exemptions respecting the Property under the provisions of any applicable
      homestead laws, including without limitation. Chapter 188, Section 1, of the
      General Laws of Massachusetts.

     

    5.7           
      Severability.  If
      any provision of this Mortgage or portion of such provision or the application
      thereof to any person or circumstance shall to any extent be held Invalid or
      unenforceable, the remainder of this Mortgage (or the remainder of such
      provision) and the application thereof to other persons or circumstances shall
      not be affected thereby.

     

    5.8           
      Complete
      Agreement.  This Mortgage and the other Loan Documents
      constitute the entire agreement and understanding between and among the parties
      hereto relating to the subject matter hereof, and supersedes all prior
      proposals, negotiations, agreements and understandings among the parties hereto
      with respect to such subject matter.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    5.9           
      Binding Effect of
      Agreement.  This Mortgage shall run with the land and be
      binding upon and  inure to the benefit of the respective heirs, executors,
      administrators, legal representatives, successors and assigns of the parties
      hereto, and shall remain in full force and effect (and the Bank shall be
      entitled to rely thereon) until all Obligations are fully and indefeasibly
      paid.
      The Bank may transfer and assign this Mortgage and deliver any collateral to
      t
      he assignee, who shall thereupon have all of the rights of the Bank; and the
      Bank shall then be relieved and discharged of any responsibility or liability
      with respect to this Mortgage and such collateral. Except as expressly provided
      herein or in the other Loan Documents, nothing, expressed or implied, is
      intended to confer upon any party, other than the parties hereto, any rights,
      remedies, obligations or liabilities under or by reason of this Mortgage or
      the
      other Loan Documents.

     

    5.10           
      Notices.  Any
      notices under or pursuant to this Mortgage shall be deemed duly received and
      effective if delivered in hand to any officer of agent of the Mortgagor or
      the
      Bank, or if mailed by registered or certified mail, return receipt requested,
      addressed to the Mortgagor or the Bank at the address set forth in this Mortgage
      or as any party may from time to time designate by written notice to the other
      party.

     

    5.11           
      Governing
      Law.  This Mortgage shall be governed by Massachusetts law
      without giving effect to the conflicts of laws principles thereof.

     

    5.12           
      Reproductions.  This
      Mortgage and all documents which have been or may be hereinafter furnished
      by
      the Mortgagor to the Bank may be reproduced by the Bank by any photographic,
      photostatic, microfilm, xerographic or similar process, and any such
      reproduction shall be admissible in evidence as the original itself in any
      judicial or administrative proceeding (whether or not the original is in
      existence and whether or not such reproduction was made in the regular course
      of
      business).

     

    5.13           
      Jurisdiction and
      Venue.  The Mortgagor irrevocably submits to the nonexclusive
      jurisdiction of any Federal or state court sitting in Massachusetts, over any
      suit, action or proceeding arising out of or relating to this Mortgage. The
      Mortgagor irrevocably waives, to the fullest extent it may effectively do so
      under applicable law, any objection it may now or hereafter have to the laying
      of the venue of any such suit, action or proceeding brought in any such court
      and any claim that the same has been brought in an inconvenient forum. The
      Mortgagor hereby consents to process being served in any such suit, action
      or
      proceeding (i) by the mailing of a copy thereof by registered or certified
      mail,
      postage prepaid, return receipt requested, to the Mortgagor's address set forth
      herein or such other address as has been provided in writing to the Bank and
      (ii) in any other manner permitted by law, and agrees that such service shall
      in
      every respect be deemed effective service upon the Mortgagor.

     

    5.14           
      JURY
      WAIVER. THE MORTGAGOR
      AND THE BANK EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, AND AFTER
      AN
      OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL, (A) WAIVE ANY AND ALL RIGHTS TO
      A
      TRIAL BY JURY IN ANY ACTION ORPROCEEDING IN CONNECTION
      WITH THIS
      MORTGAGE, THE OBLIGATIONS, ALL MATTERS CONTEMPLATED HEREBY AND DOCUMENTS
      EXECUTED IN CONNECTION HEREWITH AND (B) AGREE NOT TO CONSOLIDATE ANY SUCH ACTION
      WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CAN NOT BE, OR HAS NOT BEEN WAIVED.
      THE MORTGAGOR CERTIFIES THAT NEITHERTHE BANK NOR ANY OF
      ITS
      REPRESENTATIVES, AGENTS OR COUNSEL HAS REPRESENTED,EXPRESSLY OR OTHERWISE,
      THAT THE BANK
      WOULD NOT IN THE EVENT OF ANY SUCHPROCEEDING SEEK TO
      ENFORCE THIS
      WAIVER OF RIGHT TO TRIAL BY JURY.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    EXECUTED
      under seal as of the date first above written.

    Witness:                                                                           
      Mortgagor:

      

    School
      Second Corporation

    

    

    /s/
      Duane C.
      Bennett

                                                                                      
      Duane
      C.
      Bennett, President and Treasurer

    

    

    STATE
      OF
      NORTH CAROLINA

    Mecklenburg,
      SS.                                                                                                                     
April 15,
      2005

    On
      this 15 day of April
,
      2005, before
      me, the
      undersigned notary public, personally appeared Duane C. Bennett, President
      of School
      Second Corporation, proved to me through satisfactory evidence of
      identification, which were drivers license, to
      be the person whose name is signed on the preceding or attached document, and
      acknowledged to me that School
      Second Corporation and Duanne C. Bennett
signed it
      voluntarily for its stated purpose, in such capacity.

    /s/
      Lisa
      R. Johnson,
NOTARY PUBLIC

    MY
      COMMISSION EXPIRES: 11-14-2009

    Lisa
      R.
      Johnson                                                                 

    TYPE
      OR
      PRINT NAME

    

    192-194
      School Street

    Chicopee,
      MA  01013

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

    

    The
      land
      with the buildings thereon situated in Chicopee, Hampden County, Massachusetts,
      bounded and described as follows:

    

    Beginning
      at an iron rod on the southwesterly side of School Street, at the southeasterly
      corner of land formerly of Ignacy Statkin, now supposed to belong to one Hosman,
      and thence running.

    

    
      	
              SOUTHEASTERLY

            	
              on
                said School fifty-six (56) feet to land formerly of A.L. Page, now
                supposed to belong to one Maguder; thence running
                

            

    

    

    
      	
              WESTERLY

            	
              along
                last named land seventy-five (75) feet to land now or formerly of
                one
                Farrell; thence running at right angles with last named line along
                land
                now or formerly of said Farrell about eleven and one-half (11 1⁄2) feet to
                land formerly of one Meyer now supposed to belong to one Pirog; thence
                running 

            

    

    

    
      	
              NORTHERLY

            	
              along
                last named land about twenty-four and one-half (24 1⁄2) feet to an iron rod
                in the ground at land of said Hosman; and thence running along last
                named
                land North 56 East about ninety-two and one-half (92 1⁄2) feet to School
                Street, to the point of beginning. 

            

    

    

    Being
      the
      same premises conveyed to the mortgagor herein by deed of Duane C. Bennett
      dated
      September 4, 2003 and recorded with the Hampden County Registry of Deeds in
      Book
      13842, page 405.

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