Document:

Exhibit

CONTINGENT VALUE RIGHTS AGREEMENT 
Dated as of
January 28, 2020
among 
Alexion Pharmaceuticals, Inc.
and 
Computershare Inc.
as Rights Agent 

B5092239.1

TABLE OF CONTENTS
Page
ARTICLE 1  DEFINITIONS    1
		
	Section 1.1
	Definitions    1

		
	Section 1.2
	Additional Definitions    5

		
	Section 1.3
	Other Definitional Provisions    6

ARTICLE 2  CONTINGENT VALUE RIGHTS    6
		
	Section 2.1
	CVRs    6

		
	Section 2.2
	Nontransferable    6

		
	Section 2.3
	No Certificate; Registration; Registration of Transfer; Change of Address    6

		
	Section 2.4
	Payment Procedures    8

		
	Section 2.5
	No Voting, Dividends or Interest; No Equity or Ownership Interest in Parent    10

		
	Section 2.6
	Enforcement of Rights of Holders    10

ARTICLE 3  THE RIGHTS AGENT    11
		
	Section 3.1
	Certain Duties and Responsibilities    11

		
	Section 3.2
	Certain Rights of the Rights Agent    11

		
	Section 3.3
	Resignation and Removal; Appointment of Successor    13

		
	Section 3.4
	Acceptance of Appointment by Successor    14

ARTICLE 4  COVENANTS    14
		
	Section 4.1
	List of Holders    14

		
	Section 4.2
	Payment of Milestone Payment    15

		
	Section 4.3
	Assignment Transactions    15

		
	Section 4.4
	Commercially Reasonable Efforts    15

		
	Section 4.5
	Tax Reporting    15

		
	Section 4.6
	No Conflict    16

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B5092239.1

		
	Section 4.7
	Compliance with Applicable Laws    16

ARTICLE 5  AMENDMENTS    16
		
	Section 5.1
	Amendments without Consent of Holders    16

		
	Section 5.2
	Amendments with Consent of Holders    17

		
	Section 5.3
	Execution of Amendments    17

		
	Section 5.4
	Effect of Amendments    17

ARTICLE 6  MISCELLANEOUS AND GENERAL    17
		
	Section 6.1
	Termination    17

		
	Section 6.2
	Notices to the Rights Agent and Parent    18

		
	Section 6.3
	Notice to Holders    19

		
	Section 6.4
	Counterparts    19

		
	Section 6.5
	Governing Law; Jurisdiction; WAIVER OF JURY TRIAL    19

		
	Section 6.6
	Other Remedies    20

		
	Section 6.7
	Entire Agreement    20

		
	Section 6.8
	Third-Party Beneficiaries; Action by Majority Holders    20

		
	Section 6.9
	Severability    20

		
	Section 6.10
	Assignment    21

		
	Section 6.11
	Benefits of Agreement    21

		
	Section 6.12
	Legal Holidays    21

		
	Section 6.13
	Interpretation; Construction    21

ii
B5092239.1

CONTINGENT VALUE RIGHTS AGREEMENT 
CONTINGENT VALUE RIGHTS AGREEMENT, dated as of January 28, 2020 (this “Agreement”), by and between Alexion Pharmaceuticals, Inc., a Delaware corporation (“Parent”), and Computershare Inc., as rights agent (the “Rights Agent”). 
WHEREAS, this Agreement is entered into pursuant to the Agreement and Plan of Merger, dated October 15, 2019 (the “Merger Agreement”), by and among Achillion Pharmaceuticals, Inc., a Delaware corporation (the “Company”), Parent and Beagle Merger Sub, Inc., a Delaware corporation wholly owned by Parent (“Merger Subsidiary”), pursuant to which Merger Subsidiary will merge with and into the Company (the “Merger”) with the Company surviving (the “Surviving Corporation”), on the terms and subject to the conditions set forth therein; 
WHEREAS, pursuant to and subject to the terms and conditions of the Merger Agreement, Parent has agreed to provide to the Holders of shares of common stock, par value $0.001 per share, of the Company (the “Shares”) and Holders of In the Money Options (as defined in the Merger Agreement) (the “Option Holders”) the right to receive the Regulatory Approval Milestone Payment and the Clinical Trial Milestone Payment (each, as defined below) during the Regulatory Approval Milestone Period and the Clinical Trial Milestone Period, respectively (each as defined below); 
WHEREAS, pursuant to this Agreement, the potential amount payable per CVR with respect to the Regulatory Approval Milestone Payment is $1.00 in cash, without interest; and
WHEREAS, pursuant to this Agreement, the potential amount payable per CVR with respect to the Clinical Trial Milestone Payment is $1.00 in cash, without interest.
NOW, THEREFORE, in consideration of the foregoing and the consummation of the transactions referred to above, Parent and the Rights Agent agree, for the equal and proportionate benefit of all Holders (as hereinafter defined), as follows: 

Article 1 
DEFINITIONS

Section 1.1    Definitions.  Capitalized terms used in this Agreement and not otherwise defined shall have the meanings assigned to them in the Merger Agreement. For purposes of this Agreement, the following terms shall have the following meanings: 
“Adaptive Trial” means a Clinical Trial that is designed to allow for a prospectively planned modification from a Phase II Clinical Trial to a Phase III Clinical Trial based on accumulating data from subjects in such Clinical Trial (as permitted by the FDA).
“Assignment Transaction” means any transaction (including a sale of assets, spin-off, split-off or licensing transaction), other than a Change in Control, pursuant to which (a) any rights of Parent or any of its Affiliates (including Intellectual Property rights) (i) necessary for the development or commercialization of any Product  or (ii) useful for the development or commercialization of any Product (other than, in the case of any useful but not necessary rights, to the extent that the applicable transaction would not reasonably be expected to result in a material delay in achievement of any of the Milestones) or (b) all or substantially all of the assets used or held for use in connection with any Product, in each case (in respect of the foregoing (a) and (b)) are, directly or indirectly, disposed of, sold, licensed, assigned, conveyed, or transferred to or acquired by any Person other than by Parent or any of Parent’s direct or indirect wholly-owned subsidiaries (such Person, the “Acquiror”). An “Assignment Transaction” shall not apply to (a) sales of a Product made by Parent or its Affiliates to distributors in the ordinary course, or ordinary course licensing arrangements between Parent and its Affiliates, on the one hand, and third party distributors, contract research organizations or contract manufacturers on the other hand, entered into in the ordinary course of business for purposes of developing, manufacturing, distributing and selling a Product, in each case, on Parent’s or its Affiliates’ behalf and (b) licenses granted by Parent or its Affiliates so long as Parent and its Affiliates retain any and all necessary rights and useful rights (other than, in the case of any useful but not necessary rights, to the extent that the applicable license would not reasonably be expected to result in a material delay in achievement of any of the Milestones) to develop and obtain approval by the FDA and any other applicable Regulatory Authority to market and sell the Products.  For purposes of this definition, any delay that reasonably would be expected to result in failure to achieve any of the Milestones hereunder shall be deemed to be a “material delay.”
“Board of Directors” means the board of directors of Parent or any other body performing similar functions, or any duly authorized committee of that board. 
“Board Resolution” means a copy of a resolution of the Board of Directors that has been certified in writing by the chairman of the Board of Directors, the chief executive officer, chief financial officer, executive vice president, company secretary or a deputy company secretary of Parent to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, which has been delivered to the Rights Agent. 
“Business Day” means any day other than a Saturday or Sunday or a day on which commercial banks are authorized or required by Law or executive order to be closed in New York City.  
“Change in Control” means (a) a merger or consolidation involving Parent in which Parent is not the surviving entity, (b) any transaction involving Parent in which Parent is the surviving entity but in which the stockholders of Parent immediately prior to such transaction own less than fifty percent (50%) of Parent’s voting power immediately after the transaction or (c) any sale of all or substantially all of Parent’s assets.
“Clinical Trial” means a clinical study of a pharmaceutical product conducted on human subjects.
“Clinical Trial Milestone” means, and will be deemed to occur upon, the earlier of (a) first dosing of the first patient with the Clinical Trial Product in the first Phase III Clinical Trial, (b) the Conversion Date for the first Converted Trial of the Clinical Trial Product (and, for clarity, the first dosing of the first patient in an Adaptive Trial prior to the Conversion Date shall not constitute dosing of a first patient in a Phase III Clinical Trial), and (c) the first submission of a new drug application to market and sell the Clinical Trial Product in the United States.
“Clinical Trial Milestone Payment” means $1.00 per CVR. 
“Clinical Trial Milestone Period” means the period commencing as of the date of this Agreement and ending 11:59 p.m., Eastern Time, on that date that is four (4) years after the date of this Agreement.
“Clinical Trial Product” means any pharmaceutical product, including all forms, presentations, doses and formulations, containing the Company’s compound, ACH-5228 or any salt, free-base, hydrate, solvate, polymorph, isomer, enantiomer, metabolite, prodrug or other derivative thereof, whether as the sole active ingredient or in combination with other active ingredients. 
“Commercially Reasonable Efforts” means, with respect to each Product, using such efforts and resources typically used by Parent for the development and commercialization of similar products at similar development stages taking into account, as applicable, such Product’s advantages and disadvantages, product profile, efficacy, safety, toxicity, tolerability, regulatory authority-approved labeling and pricing, the competitiveness of alternative products in the marketplace or under development, the current or future status as an orphan product, the patent coverage and proprietary position of such Product, the likelihood of development success or regulatory approval, the regulatory structure involved, the anticipated profitability of such Product, and other relevant scientific, technical and commercial factors typically considered in good faith by Parent in connection with such similar products.  For clarity, Commercially Reasonable Efforts does not mean that either of Parent or any of its Affiliates guarantee either of the Milestones will be achieved or that either of the Milestones will be achieved by a specific date, and the fact that a Milestone is not actually achieved is not, in and of itself, dispositive evidence that Parent or any of its Affiliates did not in fact utilize its Commercially Reasonable Efforts in attempting to achieve such Milestone.  For clarity, the application of Commercially Reasonable Efforts will not necessarily require Parent to disadvantage any particular currently available competing products or products currently under development by Parent or any of its Affiliates or which may in the future enter development by Parent or any of its Affiliates, the success of which may reduce the prospects of achieving the relevant Milestone. Any payments payable under this Agreement, including Milestone Payments, may not be taken into account in determining Commercially Reasonable Efforts.
“Conversion Date” means, with respect to a Converted Trial, the date when the first action specified in the protocol for the corresponding Adaptive Trial is taken following the decision to modify such Adaptive Trial to proceed as a Phase III Clinical Trial.
“Converted Trial” means an Adaptive Trial that is proceeding as a Phase III Clinical Trial following a prospectively planned modification from a Phase II Clinical Trial based on accumulating data from subjects in such Adaptive Trial. 
“CVRs” means the contingent value rights of Holders to receive cash payments in the amounts and subject to the terms and conditions set forth in this Agreement.
“Holder” means a Person in whose name a CVR is registered in the CVR Register at the applicable time. 
“Majority Holders” means, at the time of determination, Holders of at least the majority of the outstanding CVRs as set forth in the CVR Register.
“Milestone(s)” means the Clinical Trial Milestone and/or the Regulatory Approval Milestone, as applicable. 
“Milestone Payment(s)” means the Clinical Trial Milestone Payment and/or the Regulatory Approval Milestone Payment, as applicable.
“Milestone Payment Date” means the date that is selected by Parent not more than fifteen (15) Business Days following the date of the achievement of the applicable Milestone. 
“Milestone Period” means the Clinical Trial Milestone Period and/or the Regulatory Approval Milestone Period, as applicable.
“Officer’s Certificate” means a certificate signed by the chief executive officer, chief financial officer, or an executive vice president, in each case of Parent, in his or her capacity as such an officer, and delivered to the Rights Agent or any other person authorized to act on behalf of Parent. 
“Opinion of Counsel” means a written opinion of counsel, who may be counsel for Parent or its direct or indirect wholly-owned subsidiaries.  
“Party” shall mean each of the Rights Agent and Parent. 
“Permitted Transfer” means a transfer of CVRs (a) upon death of a Holder by will or intestacy; (b) by instrument to an inter vivos or testamentary trust in which the CVRs are to be passed to beneficiaries upon the death of the trustee, (c) pursuant to a court order; (d) by operation of Law (including by consolidation or merger) or without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; or (e) in the case of CVRs payable to a nominee, from a nominee to a beneficial owner (and, if applicable, through an intermediary) or from such nominee to another nominee for the same beneficial owner, in each case to the extent allowable by The Depository Trust Company (“DTC”). 
“Phase II Clinical Trial” means a Clinical Trial of the Clinical Trial Product within the scope of 21 C.F.R. § 312.21(b), as amended from time to time. 
“Phase III Clinical Trial” means a Clinical Trial of the Clinical Trial Product that is intended as a pivotal study to gather effectiveness data to support the submission of a marketing application within the scope of 21 C.F.R. § 312.21(c), as amended from time to time.
“Product(s)” means the Clinical Trial Product and/or the Regulatory Approval Product, as applicable.
“Program Transaction” means any Assignment Transaction pursuant to which a Third Party is (a) assigned, or exclusively licensed for any and all uses, all Intellectual Property necessary or useful for the development or commercialization of Regulatory Approval Products or Clinical Trial Products or (b) assigned all or substantially all of the assets used or held for use in connection with Regulatory Approval Products or Clinical Trial Products.
“Regulatory Approval Milestone” means, and will be deemed to occur upon, Parent’s or its Affiliates’ (or their respective successors or assigns) first receipt of approval by the FDA of a new drug application or other regulatory approval application which approval grants Parent or its Affiliates (or their respective successors or assigns) the right to market and sell the Regulatory Approval Product in the United States.
“Regulatory Approval Milestone Payment” means $1.00 per CVR. 
“Regulatory Approval Milestone Period” means the period commencing as of the date of this Agreement and ending 11:59 p.m., Eastern Time, on that date that is fifty-four (54) months after the date of this Agreement.
“Regulatory Approval Product” means any pharmaceutical product, including all forms, presentations, doses and formulations, containing the Company’s compound, ACH-4471 or any salt, free-base, hydrate, solvate, polymorph, isomer, enantiomer, metabolite, prodrug or other derivative thereof, whether as the sole active ingredient or in combination with other active ingredients.
“Rights Agent” means the Rights Agent named in the first paragraph of this Agreement, until a successor Rights Agent becomes such pursuant to the applicable provisions of this Agreement, and thereafter “Rights Agent” shall mean such successor Rights Agent. 

Section 1.2    Additional Definitions.  For purposes of this Agreement, each of the following terms shall have the meaning specified in the Section set forth opposite to such term: 
	
		
	Term
	Section

	Acquiror
	1.1

	Aggregate Clinical Trial Milestone Payment
	2.4(a)

	Aggregate Regulatory Approval Milestone Payment
	2.4(b)

	Aggregate Milestone Payments
	2.4(b)

	Agreement
	Preamble

	Assignee
	6.10

	Company
	Recitals

	CVR Register
	2.3(b)

	DTC
	1.1

	Equity Awards Schedule
	2.3(b)

	Merger
	Recitals

	Merger Agreement
	Recitals

	Merger Subsidiary
	Recitals

	Milestone Achievement Certificate
	2.4(a)

	Option Holders
	Recitals

	Parent
	Preamble

	Rights Agent
	Preamble

	Shares
	Recitals

	Surviving Corporation
	Recitals

Section 1.3    Other Definitional Provisions.  Unless the context expressly otherwise requires: 
(a)    the words “hereof,” “hereto,” “herein,” and “hereunder,” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; 
(b)    the terms defined in the singular have a comparable meaning when used in the plural, and vice versa; 
(c)    the terms “Dollars” and “$” mean United States Dollars; 
(d)    references herein to a specific Article, Section, or Annex shall refer, respectively, to Articles and Sections of, and Annexes to, this Agreement; 
(e)    wherever the word “include,” “includes,” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”; 
(f)    the term “or” will not be deemed to be exclusive; 
(g)    references herein to any gender include the other gender; and 
(h)    any Law defined or referred to herein will refer to such Law as amended and the rules and regulations promulgated thereunder.

ARTICLE 2     
CONTINGENT VALUE RIGHTS

Section 2.1    CVRs.  The CVRs represent the rights of Holders to receive contingent cash payments pursuant to this Agreement. The initial Holders shall be the (i) holders of Shares other than Dissenting Shares immediately prior to the Effective Time and (ii) holders of Company Stock Options immediately prior to the Effective Time whose Company Stock Options are converted into the right to receive the Cash Merger Consideration pursuant to Section 2.06 of the Merger Agreement. Nontransferable.  The CVRs may not be sold, assigned, transferred, pledged, encumbered or in any other manner transferred or disposed of, in whole or in part, other than through a Permitted Transfer. Any attempted sale, assignment, transfer, pledge, encumbrance or disposition of CVRs in whole or in part, that is not a Permitted Transfer, will be void ab initio and of no effect. 

Section 2.2    No Certificate; Registration; Registration of Transfer; Change of Address.
(a)    The CVRs shall not be evidenced by a certificate or other instrument. 
(b)    The Rights Agent shall keep a register (the “CVR Register”) for the purpose of registering CVRs and Permitted Transfers. The CVR Register will initially show one position for Cede & Co. representing all Shares held by DTC on behalf of street name holders held by such holders as of immediately prior to the Effective Time. The Rights Agent will have no responsibility whatsoever directly to the street name holders with respect to transfers of CVRs. With respect to any payments to be made under Section 2.4 below, the Rights Agent will accomplish the payment to any former street name holders of Shares by sending one lump sum payment to DTC. The Rights Agent will have no responsibilities whatsoever with regard to the distribution of payments by DTC to such street name holders. In the case of Option Holders, the CVRs shall be registered in the names and addresses of such Option Holder and in a denomination equal to the number of Shares subject to the outstanding number of Shares underlying the outstanding In the Money Options held by such Option Holder immediately prior to the Effective Time, and, in each case, as set forth in a schedule delivered by the Company to Parent (the “Equity Awards Schedule”). The Parent shall deliver the Equity Awards Schedule to the Rights Agent pursuant to Section 4.1 for registration by the Rights Agent of the Option Holders to the CVR Register. Except as otherwise provided herein, once registered on the CVR Register, such Option Holders shall be deemed “Holders” pursuant to this Agreement and entitled to all rights, and privileges and subject to all obligations under this Agreement. 
(c)    Subject to the restrictions on transferability set forth in Section 2.2, every request made to transfer a CVR must be in writing and accompanied by a written instrument of transfer and other requested documentation in form reasonably satisfactory to Parent and the Rights Agent pursuant to its customary policies and guidelines, duly executed by the Holder thereof, the Holder’s attorney duly authorized in writing, the Holder’s personal representative duly authorized in writing, or the Holder’s survivor (with written documentation evidencing such person’s status as the Holder’s survivor), and setting forth in reasonable detail the circumstances relating to the transfer. Upon receipt of such written notice by the Rights Agent, the Rights Agent shall, subject to its reasonable determination that the transfer instrument is in proper form, notify Parent that it has received such written notice.  Upon receipt of such notice from the Rights Agent, Parent shall determine whether the transfer otherwise complies with the other terms and conditions of this Agreement (including the provisions of Section 2.2), and if the Parent determines that it does so comply, Parent shall instruct the Rights Agent in writing to register the transfer of the CVRs in the CVR Register. Each of Parent and the Rights Agent may require payment, from any such Holder and any such transferee, of a sum sufficient to cover any stamp or other Tax or other charge of any nature whatsoever that is imposed by a Governmental Authority or Taxing Authority in connection with any such registration of transfer. Neither Parent nor the Rights Agent shall have any duty or obligation to take any action under any section of this Agreement that requires the payment by a Holder or a transferee of a CVR of applicable Taxes or charges unless and until each of Parent and the Rights Agent is satisfied that all such Taxes or charges have been paid by such Holder or such transferee. All duly transferred CVRs registered in the CVR Register shall be the valid obligations of Parent and shall entitle the transferee to the same benefits and rights under this Agreement as those held immediately prior to the transfer by the transferor. No transfer of a CVR shall be valid until registered in the CVR Register in accordance with this Agreement.
(d)    A Holder may make a written request to the Rights Agent to change such Holder’s address of record in the CVR Register. The written request must be duly executed by the Holder. Upon receipt of such written notice, the Rights Agent is hereby authorized to promptly record the change of address in the CVR Register. 

Section 2.3    Payment Procedures.
(a)    If the Clinical Trial Milestone occurs at any time prior to the expiration of the Clinical Trial Milestone Period, then, on or prior to the applicable Milestone Payment Date, Parent will deliver or cause to be delivered to the Rights Agent (i) a certificate (a “Milestone Achievement Certificate”) certifying the date of the satisfaction of the Clinical Trial Milestone, that the Holders are entitled to receive the Clinical Trial Milestone Payment and whether Parent is electing to pay the aggregate amount of Clinical Trial Milestone Payment payable to all Option Holders directly to the Surviving Company, and (ii) a wire transfer of Dollars in immediately available funds to an account designated by the Rights Agent, in the aggregate amount equal to the number of CVRs (as reflected in the CVR Register) then outstanding multiplied by the amount of the Clinical Trial Milestone Payment (the “Aggregate Clinical Trial Milestone Payment”), provided that Parent may instead, at its discretion, pay directly to the Surviving Corporation the aggregate amount of Clinical Trial Milestone Payment payable to all Option Holders.  After receipt of the Milestone Achievement Certificate and wire transfer described in the foregoing sentence, the Rights Agent will promptly (and in any event, within five (5) Business Days) pay (x) by one lump sum wire payment to DTC for any Holder who is a former street name holder of Shares, (y) by one lump sum wire payment to the Surviving Corporation for all Option Holders (unless Parent has elected to pay such amount itself to the Surviving Corporation as indicated in the Milestone Achievement Certificate), and (z) for all other Holders, by check mailed, first-class postage prepaid, to the address of each Holder set forth in the CVR Register or by other method of delivery as specified by the applicable Holder in writing and reasonably acceptable to the Rights Agent (such amount in (x), (y) and (z) together, an amount in Dollars equal to Aggregate Clinical Trial Milestone Payment). The Rights Agent shall hold the Aggregate Clinical Trial Milestone Payment pursuant to Section 2.4(g) until such payment is made in accordance with the foregoing sentence. Notwithstanding the foregoing, in no event shall Parent be required to pay the Clinical Trial Milestone Payment more than once, and Parent shall not be required to pay the Clinical Trial Milestone Payment if the Clinical Trial Milestone occurs after the expiration of the Clinical Trial Milestone Period.
(b)    If the Regulatory Approval Milestone occurs at any time prior to the expiration of the Regulatory Approval Milestone Period, then, on or prior to the applicable Milestone Payment Date, Parent will deliver or cause to be delivered to the Rights Agent (i) a Milestone Achievement Certificate certifying the date of the satisfaction of the Regulatory Approval Milestone, that the Holders are entitled to receive the Regulatory Approval Milestone Payment, and whether Parent is electing to pay the aggregate amount of Regulatory Approval Milestone Payment payable to all Option Holders directly to the Surviving Company, and (ii) a wire transfer of Dollars in immediately available funds to an account designated by the Rights Agent, in the aggregate amount equal to the number of CVRs (as reflected in the CVR Register) then outstanding multiplied by the amount of the Regulatory Approval Milestone Payment (the “Aggregate Regulatory Approval Milestone Payment”, together with the Aggregate Clinical Trial Milestone Payment, the “Aggregate Milestone Payments”), provided that Parent may instead, at its discretion, pay directly to the Surviving Corporation the aggregate amount of Regulatory Approval Milestone Payment payable to all Option Holders. After receipt of the Milestone Achievement Certificate and wire transfer described in the foregoing sentence, the Rights Agent will promptly (and in any event, within five (5) Business Days) pay (x) by one lump sum wire payment to DTC for any Holder who is a former street name holder of Shares, (y) by one lump sum wire payment to the Surviving Corporation for all Option Holders (unless Parent has paid such amount itself to the Surviving Corporation as indicated in the Milestone Achievement Certificate) and (z) for all other Holders, by check mailed, first-class postage prepaid, to the address of each Holder set forth in the CVR Register or by other method of delivery as specified by the applicable Holder in writing and reasonably acceptable to the Rights Agent (such amount in (x), (y) and (z) together, an amount in Dollars equal to Aggregate Regulatory Approval Milestone Payment). The Rights Agent shall hold the Aggregate Regulatory Approval Milestone Payment pursuant to Section 2.4(g) until such payment is made in accordance with the foregoing sentence. Notwithstanding the foregoing, in no event shall Parent be required to pay the Regulatory Approval Milestone Payment more than once and Parent shall not be required to pay the Regulatory Approval Milestone Payment if the Regulatory Approval Milestone occurs after the expiration of the Regulatory Approval Milestone Period.
(c)    Except in respect of the CVRs corresponding to In the Money Options (which CVRs shall be subject to the Tax withholding provisions set forth in Section 2.08 of the Merger Agreement and which withholdings shall be made by Parent or its Affiliate), each of Parent and the Rights Agent shall be entitled to deduct and withhold from either of the Milestone Payments, if payable, such amounts as may be required to be deducted and withheld with respect to the applicable Milestone Payment or CVR under the Code, and the rules and regulations thereunder, or any other applicable provision of state, local or foreign Law relating to Taxes, as may be reasonably determined by Parent and communicated to the Rights Agent in writing. Prior to making any such deduction or withholding, other than ordinary course payroll withholding and reporting, if applicable, Parent shall instruct the Rights Agent to solicit IRS Form W-9 or IRS Form W-8, or any other appropriate forms or information from each Holder in order to avoid or reduce such deduction and withholding, and the Milestone Payment may be reasonably delayed in order to gather such forms or information. Provided that the Parent has timely delivered all information and documents reasonably requested by the Rights Agent to effect any tax withholdings requested by the Parent from the Milestone Payments, the Rights Agent shall, not more than ten (10) Business Days following its receipt of the Milestone Payment, deliver any amounts withheld by it in respect of Taxes to the Parent for the purposes of remitting such amounts over to the relevant Governmental Authorities. To the extent such amounts are so deducted and withheld and timely remitted to the relevant Governmental Authorities, such amounts shall be treated for all purposes under this Agreement as having been paid to the person to whom such amounts would otherwise have been paid. As required by applicable Law, Parent or the Rights Agent (at the direction and expense of Parent), as applicable, shall deliver to the Person to whom such amounts would otherwise have been paid an original IRS Form 1099 or other reasonably acceptable evidence of such withholding. 
(d)    Any portion of any Milestone Payment that remains undistributed to the Holders twelve (12) months after the date of the applicable Milestone Achievement Certificate shall be delivered by the Rights Agent to Parent, upon demand, and any Holder shall thereafter look only to Parent for payment of such Milestone Payment, without interest, but such Holder shall have no greater rights against Parent than those accorded to general unsecured creditors of Parent under applicable Law. 
(e)    Neither Parent nor the Rights Agent shall be liable to any person in respect of any Milestone Payment delivered to a public official in compliance with any applicable state, federal or other abandoned property, escheat or similar Law. In addition to and not in limitation of any other indemnity obligation herein, Parent agrees to indemnify and hold harmless the Rights Agent with respect to any liability, penalty, cost or expense the Rights Agent may incur or be subject to in connection with transferring such property to Parent. The indemnification provided by this Section 2.4(e) shall survive the resignation, replacement or removal of the Rights Agent and the termination of this Agreement.
(f)    Except to the extent any portion of the Milestone Payment is required to be treated as imputed interest and except as otherwise required pursuant to applicable Law, the Parties hereto intend to treat the Milestone Payments payable with respect to Shares for all Tax purposes as consideration for the Shares, pursuant to the Merger Agreement. Parent shall, and shall cause the Surviving Corporation to, report imputed interest on the CVRs as required by applicable Law.
(g)    All funds received by the Rights Agent under this Agreement that are to be distributed or applied by the Rights Agent in the performance of services hereunder (the “Funds”) shall be held by the Rights Agent as agent for Parent and deposited in one or more bank accounts to be maintained by the Rights Agent in its name as agent for Parent. Until paid pursuant to the terms of this Agreement, the Rights Agent will hold the Funds through such accounts in: deposit accounts of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment grade by S&P (LT Local Issuer Credit Rating), Moody’s (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by Bloomberg Finance L.P.). The Rights Agent shall have no responsibility or liability for any diminution of the Funds that may result from any deposit made by the Rights Agent in accordance with this paragraph, including any losses resulting from a default by any bank, financial institution or other third party. The Rights Agent may from time to time receive interest, dividends or other earnings in connection with such deposits. The Rights Agent shall not be obligated to pay such interest, dividends or earnings to the Parent, any Holder or any other Person.

Section 2.4    No Voting, Dividends or Interest; No Equity or Ownership Interest in Parent.
(a)    The CVRs will not have any voting or dividend rights, and interest will not accrue on any amounts payable on the CVRs to any Holder. 
(b)    The CVRs will not represent any equity or ownership interest in Parent or in any constituent company to the Merger or any of their respective Affiliates. 

Section 2.5    Enforcement of Rights of Holders.  Any actions seeking the enforcement of the rights of Holders hereunder may only be brought by the Majority Holders. 

ARTICLE 3     
THE RIGHTS AGENT

Section 3.1    Certain Duties and Responsibilities.  The Rights Agent shall not have any liability for or in respect of any actions taken, suffered or omitted to be taken in connection with its acceptance and administration of this Agreement and the exercise and performance of its duties hereunder, except to the extent of its gross negligence, bad faith or willful or intentional misconduct (each as determined by a final non-appealable judgment of a court of competent jurisdiction). 

Section 3.2    Certain Rights of the Rights Agent.  The Parent hereby appoints the Rights Agent to act as rights agent for the Parent in accordance with the express terms and conditions hereof and the Rights Agent undertakes to perform such duties and only such duties as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Rights Agent. In addition: 
(a)    the Rights Agent may rely and shall be protected and held harmless by Parent in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties; 
(b)    whenever the Rights Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Rights Agent may rely upon an Officer’s Certificate, which certificate shall be full authorization and protection to the Rights Agent, and the Rights Agent shall, in the absence of bad faith on its part, incur no liability and be held harmless by Parent for or in respect of any action taken, suffered or omitted to be taken by it under the provisions of this Agreement in good faith reliance upon such certificate; 
(c)    the Rights Agent may engage and consult with counsel of its selection (who may be an employee of the Rights Agent) and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection to the Rights Agent, and the Rights Agent shall be held harmless by Parent in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(d)    the permissive rights of the Rights Agent to do things enumerated in this Agreement shall not be construed as a duty; 
(e)    the Rights Agent shall not be required to give any note or surety in respect of the execution of such powers; 
(f)    the Rights Agent shall not be liable for or by reason of, and shall be held harmless by Parent with respect to any of the statements of fact or recitals contained in this Agreement or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by Parent only; 
(g)    the Rights Agent shall have no liability and shall be held harmless by Parent in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution and delivery hereof by the Rights Agent and the enforceability of this Agreement against the Rights Agent assuming the due execution and delivery hereof by Parent), nor shall it be responsible for any breach by Parent of any covenant or condition contained in this Agreement; 
(h)    Parent agrees to indemnify the Rights Agent for, and hold the Rights Agent harmless against, any loss, liability, damage, judgment, fine, penalty, claim, demand, suit or expense (individually and collectively, “losses”) for any action taken, suffered or omitted to be taken by the Rights Agent or arising out of or in connection with the Rights Agent’s duties under this Agreement, including the reasonable and documented out-of-pocket costs and expenses of defending the Rights Agent against any such losses, unless such losses has been determined by a final non-appealable judgment of a court of competent jurisdiction to be a result of Rights Agent’s gross negligence, bad faith or willful or intentional misconduct; 
(i)    anything to the contrary notwithstanding, the aggregate liability of the Rights Agent arising in connection with this Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, the amounts paid hereunder by the Parent to the Rights Agent, as fees, but not including reimbursable expenses, during the twelve (12) months immediately preceding the event for which recovery from the Rights Agent is being sought;
(j)    the Rights Agent shall not be liable for special, punitive, indirect, consequential or incidental losses or damages of any kind whatsoever (including but not limited to lost profits) under any provision of this Agreement even if the Rights Agent has been advised of the possibility or likelihood of such damages; 
(k)    Parent agrees (i) to pay the fees and expenses of the Rights Agent in connection with this Agreement as set forth on Schedule 1 attached hereto, and (ii) to reimburse the Rights Agent for all Taxes and governmental charges, reasonable and documented out-of-pocket expenses and other charges of any kind and nature incurred by the Rights Agent in the execution of this Agreement (other than Taxes imposed on or measured by the Rights Agent’s net income and franchise or similar Taxes imposed on it (in lieu of net income Taxes)). The Rights Agent shall also be entitled to reimbursement from Parent for all reasonable and documented out-of-pocket expenses paid or incurred by it in connection with the administration by the Rights Agent of its duties hereunder;
(l)    no provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it;
(m)    the Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to receive notice thereof hereunder but did not, and the Rights Agent shall be fully protected and shall incur no liability for failing to take action in connection therewith, unless and until it has received such notice in writing; 
(n)    unless otherwise specifically prohibited by the terms of this Agreement, the Rights Agent and any shareholder, affiliate, director, officer or employee of the Rights Agent may buy, sell or deal in any securities of Parent or the Company or become pecuniarily interested in any transaction in which Parent or the Company may be interested, or contract with or lend money to Parent or the Company or otherwise act as fully and freely as though it were not the Rights Agent under this Agreement.  Nothing herein shall preclude the Rights Agent from acting in any other capacity for Parent, the Company or for any other Person;
(o)    the Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself (through its directors, officers and employees) or by or through its attorneys or agents, and the Rights Agent shall not be liable, answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents, absent gross negligence, bad faith or willful or intentional misconduct (each as determined by a final non-appealable judgment of a court of competent jurisdiction) in the selection and continued employment thereof;
(p)    the Rights Agent shall neither be responsible for, nor chargeable with, knowledge of, nor have any requirements to comply with, the terms and conditions of any other agreement, instrument or document, including, the Merger Agreement, nor shall the Rights  Agent be required to determine if any person or entity has complied with any such agreements, instruments or documents, nor shall any additional obligations of the Rights Agent be inferred from the terms of such agreements, instruments or documents even though reference thereto may be made in this Agreement; and
(q)    the Rights Agent shall be under no responsibility for the validity or sufficiency of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of the CVRs, nor shall it be responsible for any breach by Parent or any other Person of any covenant or condition contained in this Agreement or any CVR. The Rights Agent shall not have any duty or responsibility in the case of the receipt of any written demand from any Holder with respect to any action or default by the Parent or any other Person including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or to make any demand upon the Parent or any other Person.
The provisions of this Section 3.2 shall survive the termination of this Agreement, the resignation, replacement or removal of the Rights Agent, and the payment, termination and the expiration of the CVRs.

Section 3.3    Resignation and Removal; Appointment of Successor.
(a)    The Rights Agent may resign at any time by giving written notice thereof to Parent specifying a date when such resignation shall take effect, which notice shall be sent at least thirty (30) days prior to the date so specified, but in no event shall such resignation become effective until a successor Rights Agent has been appointed. Parent has the right to remove the Rights Agent at any time by a Board Resolution specifying a date when such removal shall take effect, but no such removal shall become effective until a successor Rights Agent has been appointed. Notice of such removal shall be given by Parent to the Rights Agent, which notice shall be sent at least thirty (30) days prior to the date so specified. 
(b)    If the Rights Agent provides notice of its intent to resign, is removed or becomes incapable of acting, Parent, by a Board Resolution, shall promptly, appoint a qualified successor Rights Agent. If Parent shall fail to make such appointment within thirty (30) days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent then the incumbent Rights Agent or any Holder may apply to any court of competent jurisdiction for the appointment of a new Rights Agent.  Any successor Rights Agent, unless otherwise consented to in writing by the Majority Holders, shall be a stock transfer agent of national reputation or the corporate trust department of a commercial bank. The successor Rights Agent so appointed shall, forthwith upon its acceptance of such appointment in accordance with Section 3.4, become the successor Rights Agent. 
(c)    Parent shall give notice of each resignation and each removal of a Rights Agent and each appointment of a successor Rights Agent by delivering a notice of such event through the facilities of DTC in accordance with DTC’s procedures or mailing it by first-class mail to the Holders as their names and addresses appear in the CVR Register. Each notice shall include the name and address of the successor Rights Agent. If Parent fails to send such notice within ten (10) Business Days after acceptance of appointment by a successor Rights Agent, the successor Rights Agent shall cause the notice to be mailed at the expense of Parent. Failure to give any notice provided for in this Section 3.3, however, and any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.
(d)    In connection with any resignation or removal, the Rights Agent will cooperate with Parent and any successor Rights Agent in connection with the transition of the duties and responsibilities of the Rights Agent to the successor Rights Agent, including transferring the CVR Register to the successor Rights Agent. 

Section 3.4    Acceptance of Appointment by Successor.  Every successor Rights Agent appointed hereunder shall execute, acknowledge and deliver to Parent and to the retiring Rights Agent an instrument accepting such appointment and a counterpart of this Agreement, and thereupon such successor Rights Agent, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Rights Agent. On request of Parent or the successor Rights Agent, the retiring Rights Agent shall execute and deliver an instrument transferring to the successor Rights Agent all the rights, powers and trusts of the retiring Rights Agent. 

ARTICLE 4     
COVENANTS

Section 4.1    List of Holders.  Parent shall furnish or cause to be furnished to the Rights Agent, promptly after the Effective Time and in no event later than ten (10) Business Days following the Effective Time, in such form as Parent receives from the Company’s transfer agent (or other agent performing similar services for the Company), the names and addresses of the Holders and, with respect to Option Holders, in such form as set forth in the Equity Awards Schedule. Until such list of Holders and Option Holders are furnished to the Rights Agent, the Rights Agent shall have no duties, responsibilities or obligations with respect to such Holders or Option Holders. 

Section 4.2    Payment of Milestone Payment.  If a Milestone has been achieved on or prior to the expiration of the applicable Milestone Period, Parent will duly deposit or cause to be deposited with the Rights Agent, on or prior to the Milestone Payment Date, the applicable Milestone Payment to be made to the Holders in accordance with the terms of this Agreement. Such amounts shall be considered paid on the Milestone Payment Date if on such date the Rights Agent has received (prior to 11 am Eastern Standard Time) in accordance with this Agreement Dollars in immediately available funds sufficient to pay all such amounts then due. 

Section 4.3    Assignment Transactions. 
(a)    Parent shall not, and shall cause its Affiliates, including the Surviving Corporation, not to, consummate any Assignment Transaction unless: such Transaction is (A) a Program Transaction; (B) the Acquiror is a pharmaceutical or biotechnology company with (1) substantial experience in conducting clinical development of, and filing for and obtaining approval in accordance with all applicable Laws to place on the market and sell in the United States, pharmaceutical products for human use and (2) a development, regulatory and scientific infrastructure, that is at least reasonably comparable to that of Parent and its Affiliates; (C) the Acquiror expressly assumes in writing all of Parent’s and its Affiliates’ obligations under this Agreement with respect to the applicable Products by an assumption agreement, executed and delivered to the Rights Agent, in form attached as Annex A; and (D) Parent has delivered to the Rights Agent an Officer’s Certificate stating that such transaction complies with this Section 4.3(a) and all conditions precedent herein related to such transaction have been complied with.
(b)    Notwithstanding Section 4.3(a), Parent may, in its sole discretion and without the consent of any other party (including any Holder), consummate any Change in Control; provided that Parent or the Surviving Corporation, as applicable, will cause the Person acquiring Parent to expressly assume in writing Parent’s and the Surviving Corporation’s (as applicable) obligations, duties and covenants under this Agreement.  No later than five (5) Business Days prior to the consummation of any Change in Control, Parent will deliver to the Rights Agent an Officer’s Certificate, stating that such Change in Control complies with this Section 4.3(b) and that all conditions precedent herein relating to such transaction have been satisfied. 

Section 4.4    Commercially Reasonable Efforts.  During each Milestone Period, Parent (and its successors and assigns) shall, and shall cause its (and their) Affiliates to, use Commercially Reasonable Efforts to achieve the Milestones. Notwithstanding the foregoing, Parent shall have no obligation to develop the Clinical Trial Product in any indication other than paroxysmal nocturnal hemoglobinuria.

Section 4.5    Tax Reporting.  The Rights Agent shall comply with all applicable Laws, including as such Laws relate to Tax reporting and with withholding with respect to any Milestone Payments made pursuant to this Agreement, other than any payroll reporting requirements with respect to any Milestone Payments made under Section 2.4 of this Agreement.

Section 4.6    No Conflict.  Parent will not enter into any agreement with any Third Party that is, or otherwise take any actions or inactions, in conflict with this Agreement in any material respect or adversely affect the performance of its obligations under this Agreement.

Section 4.7    Compliance with Applicable Laws.  Parent agrees that its development and regulatory activities in connection with the Clinical Trial Product and Regulatory Approval Product will be carried out in compliance with all applicable Laws in all material respects.

ARTICLE 5     
AMENDMENTS

Section 5.1    Amendments without Consent of Holders.Without the consent of any Holders, Parent, when authorized by a Board Resolution, and the Rights Agent at any time and from time to time, may enter into one or more amendments hereto, for any of the following purposes: 
(i)    to evidence the succession of another Person as a successor Rights Agent and the assumption by any such successor of the covenants and obligations of the Rights Agent herein; 
(ii)    to add to the covenants of Parent such further covenants, restrictions, conditions or provisions as Parent shall consider to be reasonably necessary or desirable for the protection of the Holders; provided that, in each case, such provisions do not materially adversely affect the interests of the Holders; 
(iii)    to cure any ambiguity, to correct or supplement any provision herein that may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Agreement; provided that, in each case, such provisions do not materially adversely affect the interests of the Holders; 
(iv)    as may be necessary or appropriate to ensure that the CVRs are not subject to registration under the Securities Act, the Exchange Act or any applicable state securities or “blue sky” Laws; provided that, such amendments do not materially adversely affect the interests of the Holders; 
(v)    to reduce the number of CVRs, in the event any Holder agrees to renounce such Holder’s rights under this Agreement in accordance with Section 6.11; 
(vi)    subject to Section 4.3, to evidence the succession of another Person to Parent and the assumption by any such successor of the covenants of Parent contained herein; 
(vii)    to evidence the assignment of this Agreement by Parent as provided in Section 4.3; or 
(viii)    any other amendment to this Agreement that would provide any additional rights or benefits to the Holders or that does not materially adversely affect the legal rights under this Agreement of any such Holder. 
(b)    Promptly after the execution by Parent and the Rights Agent of any amendment pursuant to the provisions of this Section 5.1, Parent shall deliver to the Rights Agent pursuant to Section 6.2 and shall deliver (or cause the Rights Agent to deliver) a notice thereof through the facilities of DTC in accordance with DTC’s procedures or by first class mail to the Holders at their addresses as they appear on the CVR Register, setting forth such amendment. 

Section 5.2    Amendments with Consent of Holders.
(a)    Subject to Section 5.1 (which amendments pursuant to Section 5.1 may be made without the consent of the Holders), with the prior consent of the Majority Holders, whether evidenced in writing or taken at a meeting of the Holders, Parent, when authorized by a Board Resolution, and the Rights Agent may enter into one or more amendments hereto for the purpose of adding, eliminating or changing any provisions of this Agreement, even if such addition, elimination or change is materially adverse to the interest of the Holders. 
(b)    Promptly after the execution by Parent and the Rights Agent of any amendment pursuant to the provisions of this Section 5.2, Parent shall deliver (or cause the Rights Agent to deliver) a notice thereof through the facilities of DTC in accordance with DTC’s procedures or by first class mail to the Holders at their addresses as they appear on the CVR Register, setting forth such amendment. 

Section 5.3    Execution of Amendments.  In executing any amendment permitted by this Article 5, the Rights Agent shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement. Each amendment to this Agreement shall be evidenced by a writing signed by the Rights Agent and Parent. The Rights Agent may, but is not obligated to, enter into any such amendment that affects the Rights Agent’s own rights, powers, privileges, covenants or duties under this Agreement or otherwise, and the Rights Agent shall not be bound by amendments not executed by it. 

Section 5.4    Effect of Amendments.  Upon the execution of any amendment under this Article 5, this Agreement shall be modified in accordance therewith, such amendment shall form a part of this Agreement for all purposes and every Holder shall be bound thereby. 

ARTICLE 6     
MISCELLANEOUS AND GENERAL

Section 6.1    Termination.  Subject to the survival provisions contained in Section 2.4(e) and Section 3.2, this Agreement will be terminated and of no force or effect, the Parties will have no liability hereunder (other than with respect to monies due and owing by Parent to the Rights Agent) and no payments will be required to be made, upon the earlier to occur of (a) the payment by the Rights Agent to each Holder of both Milestone Payments required to be paid under the terms of this Agreement in accordance with Section 2.4(a) and 2.4(b), (b) the delivery of a written notice of termination duly executed by Parent and the Majority Holders and (c) the expiration of both Milestone Periods. For the avoidance of doubt, the termination of this Agreement will not affect or limit the right to receive the Milestone Payments under Section 2.4 to the extent earned prior to termination of this Agreement and the provisions applicable thereto will survive the expiration or termination of this Agreement. 

Section 6.2    Notices to the Rights Agent and Parent.  Any notices or other communications required or permitted under, or otherwise given in connection with, this Agreement shall be in writing and shall be deemed to have been duly given (a) when delivered or sent if delivered in person or sent by facsimile transmission (provided confirmation of facsimile transmission is obtained), (b) on the next Business Day if transmitted by national overnight courier, (c) on the date delivered if sent by email (provided confirmation of email receipt is obtained), or (d) two (2) Business Days after being sent by registered or certified mail, in each case as follows: 
If to Parent: 
Alexion Pharmaceuticals, Inc. 
121 Seaport Boulevard 
Boston, Massachusetts 02210 
Attention: General Counsel  
Email: ellen.chiniara@alexion.com
With a copy to: 
Foley Hoag LLP
Seaport Trade Center West
155 Seaport Boulevard
Boston, Massachusetts 02210
Attention: Mark A. Haddad
Email: mhaddad@foleyhoag.com

If to Rights Agent: 
Computershare Inc.
150 Royall Street
Canton, MA 02021
Attention: Corporate Actions

With a copy to: 
Computershare Inc.
150 Royall Street
Canton, MA 02021
Attention: General Counsel

or to such other persons or addresses as may be designated in writing by the Party to receive such notice as provided above. 

Section 6.3    Notice to Holders.  Where this Agreement provides for notice to Holders, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and transmitted through the facilities of DTC in accordance with DTC’s procedures or mailed, first-class postage prepaid, to each Holder affected by such event, at the Holder’s address as it appears in the CVR Register, not later than the latest date, and not earlier than the earliest date, if any, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. 

Section 6.4    Counterparts.  This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when each Party hereto shall have received a counterpart hereof signed by the other Party hereto.  Until and unless each Party has received a counterpart hereof signed by each other Party hereto, this Agreement shall have no effect and no Party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in PDF form, or by any other electronic means designed to preserve the original graphic and pictorial appearance of a document, will be deemed to have the same effect as physical delivery of the paper document bearing the original signatures. 

Section 6.5    Governing Law; Jurisdiction; WAIVER OF JURY TRIAL.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State that would cause the application of the laws of any other jurisdiction.  The Parties hereto agree that any Proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the Court of Chancery of the State of Delaware in and for New Castle County, Delaware and any state appellate court therefrom or, if (but only if) such court lacks subject matter jurisdiction, the United States District Court sitting in New Castle County, Delaware and any appellate court therefrom.  Each Party hereto hereby irrevocably submits to the exclusive jurisdiction of such court in respect of any legal action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, and hereby waives, and agrees not to assert, as a defense in any such action, suit or proceeding, any claim that it is not subject personally to the jurisdiction of such court, that the action, suit or proceeding is brought in an inconvenient forum, that the venue of the action, suit or proceeding is improper or that this Agreement or the transactions contemplated hereby may not be enforced in or by such courts. Each Party hereto agrees that notice or the service of process in any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby shall be properly served or delivered if delivered in the manner contemplated by Section 6.2 or in any other manner permitted by law.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 

Section 6.6    Other Remedies.  Except as otherwise provided herein, any and all remedies herein expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by Law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy. 

Section 6.7    Entire Agreement.  As between the Parent and the Rights Agent, this Agreement alone contains the entire understanding of the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof.  If and to the extent that any provision of this Agreement is inconsistent or conflicts with the Merger Agreement with respect to the Rights Agent or its rights, duties, obligations, protections and liabilities hereunder, this Agreement shall govern and be controlling.

Section 6.8    Third-Party Beneficiaries; Action by Majority Holders.  Parent and the Rights Agent hereby agree that the respective covenants and agreements set forth herein are intended to be for the benefit of, and shall be enforceable by, the Majority Holders, who are intended third-party beneficiaries hereof. Parent and the Rights Agent further agree that this Agreement and their respective covenants and agreements set forth herein are solely for the benefit of Parent, the Rights Agent, the Holders and their respective permitted successors and assigns hereunder in accordance with and subject to the terms of this Agreement, and nothing in this Agreement, express or implied, will confer upon any Person other than Parent, the Rights Agent, the Holders and their permitted successors and assigns hereunder any benefit or any legal or equitable right, remedy or claim hereunder. Except for the rights of the Rights Agent set forth herein, the Majority Holders will have the sole right, on behalf of all Holders, by virtue of or under any provision of this Agreement, to institute any action or proceeding at Law or in equity or in bankruptcy or otherwise upon or under or with respect to this Agreement, and no individual Holder or other group of Holders will be entitled to exercise such rights. The Parties hereby agree that irreparable damage would occur in the event that any provision of this Agreement were not performed in accordance with its specific terms or were otherwise breached, and that money damages or other legal remedies will not be an adequate remedy for any such damages. Accordingly, the Parties acknowledge and hereby agree that in the event of any breach by Parent or Assignee (as such term is defined below), on the one hand, or the Rights Agent, on the other hand, of any of their respective covenants or obligations set forth in this Agreement, Parent or Assignee, on the one hand, and the Rights Agent, on the other hand, shall be entitled to (and the other Party will not oppose) an injunction or injunctions to prevent or restrain breaches of this Agreement, by the other(s) (as applicable), and to specific enforcement of the terms and provisions of this Agreement. 

Section 6.9    Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party; provided, that if any such excluded provision, or the application thereof, shall materially and adversely affect the rights, immunities, liabilities, duties, responsibilities or obligations of the Rights Agent, the Rights Agent shall be entitled to resign immediately.  Upon such a determination, the Parties agree to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner, in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible. 

Section 6.10    Assignment.  This Agreement shall not be assignable provided, however, that (a) Parent may assign this Agreement to a Person (each such Person, an “Assignee”) (i) which is a direct or indirect wholly-owned subsidiary of Parent; provided that Parent remains jointly and severally liable, (ii) with the prior consent of the Majority Holders, whether evidenced in writing or taken at a meeting of the Holders, or (iii) in connection with a transaction involving an Assignment Transaction conducted in compliance with Section 4.3 and (b) the Rights Agent may assign this Agreement to a successor Rights Agent appointed in accordance with Section 3.3. 

Section 6.11    Benefits of Agreement.  Notwithstanding anything to the contrary contained herein, any Holder may at any time agree to renounce, in whole or in part, whether or not for consideration, such Holder’s rights under this Agreement by written notice to the Rights Agent and Parent, which notice, if given, shall be irrevocable. Parent may, in its sole discretion, at any time, offer consideration to Holders in exchange for their agreement to irrevocably renounce their rights hereunder. 

Section 6.12    Legal Holidays.  In the event that any Milestone Payment Date shall not be a Business Day, then (notwithstanding any provision of this Agreement to the contrary) payment need not be made on such date, but may be made, without the accrual of any additional interest thereon on account of such Milestone Payment Date not being a Business Day, on the next succeeding Business Day with the same force and effect as if made on such Milestone Payment Date. 

Section 6.13    Interpretation; Construction.
(a)    The table of contents and headings herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof. 
(b)    The Parties have participated jointly in negotiating and drafting this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement. 

[Signature Pages Follow.]

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the Parties hereto as of the date first written above. 
 
ALEXION PHARMACEUTICALS, INC.

By:    /s/ Aradhana Sarin                              
Name:    Aradhana Sarin
Title:    Executive Vice President, Chief     Financial Officer

B5092239.1

COMPUTERSHARE INC.

By:   /s/ Neda Sheridan                                  
Name:  Neda Sheridan
Title: Regional Manager

[Signature Page to Contingent Value Rights Agreement]
B5092239.1

Annex A
Form of Assignment and Assumption Agreement 
ASSIGNMENT AND ASSUMPTION AGREEMENT, made as of [ ] (this “Agreement”), between [Parent], a Delaware corporation (“Assignor”), and [●], a [ ] (“Assignee”). Unless otherwise defined herein, capitalized terms used in this Agreement shall have the meanings given to them in the CVR Agreement referred to below. 
W I T N E S S E T H: 
WHEREAS, Assignor and [●], as rights agent (the “Rights Agent”) are parties to a Contingent Value Rights Agreement dated as of [●], 2020 (the “CVR Agreement”); and 
WHEREAS, Assignor and Assignee desire to execute and deliver this Agreement evidencing the transfer to and assumption by Assignee of both (a) the due and punctual payment of any Milestone Payment and (b) the performance or observance of every covenant and agreement of the CVR Agreement to be performed or observed on the part of Assignor to be performed and observed and the assumption thereof of Assignee; 
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Assignor and Assignee hereby agree as follows: 
		
	1.
	Assignment and Assumption. Effective as of [●] (the “Assignment Date”), Assignor hereby assigns to Assignee, and Assignee hereby accepts the assignment of, assumes and becomes responsible for, (a) the due and punctual payment of any Milestone Payment and (b) the performance or observance of every covenant and agreement of the CVR Agreement to be performed or observed on the part of Assignor. 

		
	2.
	Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the respective parties hereto and their respective successors and assigns. 

		
	3.
	Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the Laws of Delaware, without giving effect to the principles of conflicts of Laws thereof. 

		
	4.
	Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. 

[Signature Page Follows]

B5092239.1

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first written above. 
 
[ASSIGNOR]

By:    
Name:
Title:

[ASSIGNEE]

By:    
Name:
Title:

B5092239.1grif_Current Folio_8K_State Farm _Ex 10.1

		
			Exhibit 10.1
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			OPEN-END MORTGAGE AND SECURITY AGREEMENT
		

		
			 
		

		
			THIS IS AN OPEN-END MORTGAGE AND SECURITY AGREEMENT.  IT SECURES FUTURE ADVANCES.  THE MAXIMUM PRINCIPAL AMOUNT SECURED BY THIS INSTRUMENT IS SUCH AMOUNT AS MAY BE DUE AND OWING ON THE NOTE DESCRIBED HEREIN, NOT TO EXCEED $15,000,000, PLUS ALL OTHER COSTS AND INDEBTEDNESS DESCRIBED IN 42 PaCSA §§8143 & 8144.
		

		
			 
		

		
			 
		

		
			THIS OPEN-END MORTGAGE AND SECURITY AGREEMENT (this “Mortgage”) is made and executed the 17th day of January, 2020, and an effective date as of the 23rd day of January, 2020, by RIVERBEND UPPER MACUNGIE PROPERTIES I LLC, a Pennsylvania limited liability company (“Mortgagor”), whose mailing address is c/o Griffin Industrial Realty, Inc., 204 West Newberry Road, Bloomfield, Connecticut  06002, to, in favor of and for the benefit of STATE FARM LIFE INSURANCE COMPANY, an Illinois corporation (“State Farm”), whose mailing address is One State Farm Plaza, Bloomington, Illinois 61710, and pertains to the real estate (the “Real Estate”) described on Exhibit A attached hereto and made a part hereof.
		

		
			 
		

			
	
			
				ARTICLE 1
			

RECITALS

		
			 
		

			
	
			
				 1.1
			Note.

		
			 
		

		
			Mortgagor and RIVERBEND CROSSINGS III HOLDINGS LLC (the “Nestle Borrower”), a Pennsylvania limited liability company, have executed and delivered to State Farm a Promissory Note (as the same may be amended, the “Note”) of even date herewith.  In the Note, Mortgagor promises to pay to the order of State Farm the principal sum of Fifteen Million and 00/100 Dollars ($15,000,000.00) (the “Loan”).  This Mortgage secures the Loan.  From the date hereof, the Loan shall be repaid with interest thereon, in monthly installments as set forth in the Note, and the entire unpaid principal balance and all accrued interest thereon shall be due and payable as set forth in the Note.  
		

		
			
		

		
			

		 

		

			 

		

		

			 

		

		

			

		

		

		
			 
		

			
	
			
				 1.2
			Indebtedness.

		
			 
		

		
			As used herein, the term “Indebtedness” means (a) the indebtedness evidenced by the Note, including principal, interest and prepayment fee, if any; and (b) all other sums which may at any time be due, owing or required to be paid under the Note, this Mortgage and the other Loan Documents (as defined in Section 1.3 hereof) including, without limitation, sums owing from or required to be paid by Mortgagor as a result of the breach or non-performance of any of the Obligations (as defined in Article Two hereof), regardless of whether Mortgagor is personally liable for any such payment. 
		

		
			 
		

			
	
			
				 1.3
			Loan Documents.

		
			 
		

		
			In addition to this Mortgage and the Note, there have been executed and delivered to and in favor of State Farm certain other loan documents (the Note, this Mortgage, the Mortgage and Security Agreement executed by Nestle Borrower to and in favor of State Farm of even date with the Note (the “Nestle Mortgage”, and collectively with this Mortgage, the “Mortgages”) and all other documents and instruments, whether now or hereafter existing, which secure or guarantee payment of the Note or are otherwise executed in connection with the Loan, as the same (including the Note and Mortgages) may hereafter be amended, modified, supplemented or replaced from time to time, are collectively referred to herein as the “Loan Documents”).  The Loan Documents include, without limitation, a guaranty (whether one or more, the “Guaranty”) executed by Griffin Industrial Realty, Inc. (whether one or more, the “Guarantor”) of even date herewith.
		

		
			 
		

		
			 
		

			
	
			
				ARTICLE 2
			

THE GRANT

		
			In order to secure (i) the payment of the Indebtedness; and (ii) the performance of any of the terms, provisions, covenants, agreements, representations, warranties, certifications and obligations contained herein or under the other Loan Documents (collectively, the “Obligations”), regardless of whether Mortgagor is personally liable for such performance and observance, and in consideration of the sum of Ten and No/100 Dollars ($10.00) in hand paid by State Farm to Mortgagor, the Recitals hereinabove stated in Article One and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Mortgagor hereby grants, bargains, sells, assigns, warrants, releases, aliens, transfers, conveys and mortgages to State Farm and its successors and assigns a present and continuing lien upon and security interest in and to all of the following rights, interests, claims and property (collectively, the “Secured Property”):
		

		
			 
		

			
	
			
				 (a)
			all the Real Estate described in Exhibit A attached hereto and by this reference incorporated herein and made a part hereof; 

		
			 
		

		
			

		 

		

			 

		

		

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				 (b)
			all buildings, structures and other improvements now or hereafter constructed, erected, installed, placed or situated upon the Real Estate (collectively, the “Improvements”);

		
			 
		

			
	
			
				 (c)
			all estate, claim, demand, right, title and interest of Mortgagor now owned or hereafter acquired, including, without limitation, any after acquired title, franchise, license, remainder or reversion, in and to (i) any land or vaults lying within the right of way of any street, avenue, way, passage, highway or alley, open or proposed, vacated or otherwise, adjoining the Real Estate; (ii) any and all alleys, sidewalks, streets, avenues, strips and gores of land adjacent, belonging or appertaining to the Real Estate and Improvements; (iii) all rights of ingress and egress to and from the Real Estate and all adjoining property; (iv) storm and sanitary sewer, water, gas, electric, railway, telephone and all other utility services relating to the Real Estate and Improvements; (v) all land use, zoning, developmental rights and approvals, air rights, water, water rights, water stock, gas, oil, minerals, coal and other substances of any kind or character underlying or relating to the Real Estate or any part thereof; and (vi) each and all of the tenements, hereditaments, easements, appurtenances, other rights, liberties, reservations, allowances and privileges relating to the Real Estate or the Improvements or in any way now or hereafter appertaining thereto, including homestead and any other claim at law or in equity (collectively, the “Appurtenances”);

		
			 
		

			
	
			
				 (d)
			all leasehold estates and the right, title and interest of Mortgagor in, to and under any and all leases, subleases, management agreements, arrangements, concessions or agreements, written or oral, relating to the use and occupancy of the Real Estate and Improvements or any portion thereof, now or hereafter existing or entered into, including any Major Leases and Minor Leases, each as defined in Section 3.18 (individually, a “Lease” and collectively, the “Leases”);

		
			 
		

			
	
			
				 (e)
			all rents, issues, profits, proceeds, income, revenues, royalties, advantages, avails, claims against guarantors, security and other deposits (whether in the form of cash, letters of credit or other forms), advance rentals and any and all other payments or benefits now or hereafter derived, directly or indirectly, from the Real Estate and Improvements, whether under the Leases or otherwise (collectively, the “Rents”); subject, however, to the right, power and authority (the “License”) granted Mortgagor in the Assignment of Rents and Leases executed by Mortgagor to and in favor of State Farm of even date herewith to collect and apply the Rents as provided therein;

		
			 
		

			
	
			
				 (f)
			all right, title and interest of Mortgagor in and to any and all contracts, written or oral, express or implied, now existing or hereafter entered into or arising, in any manner related to the improvement, use, operation, sale, conversion or other disposition of any interest in the Secured Property, including, without limitation, all options to purchase or lease the Real Estate or Improvements or any portion thereof or interest therein, or any other rights, interests or greater estates in the rights and properties comprising the Secured Property, now owned or hereafter acquired by Mortgagor (collectively, the “Contract Rights”);

		
			 
		

		
			

		 

		

			 

		

		

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				 (g)
			all general intangibles of Mortgagor, including, without limitation, goodwill, trademarks, trade names, option rights, permits, licenses, insurance policies and proceeds therefrom, rights of action and books and records relating to the Real Estate or Improvements (collectively, the “Intangible Personal Property”);

		
			 
		

			
	
			
				 (h)
			all right, title and interest of Mortgagor in and to all fixtures, equipment and tangible personal property of every kind, nature or description attached or affixed to or situated upon or within the Real Estate or Improvements, or both, provided the same are used, usable or intended to be used for or in connection with any present or future use, occupation, operation, maintenance, management or enjoyment of the Real Estate or Improvements (collectively, the “Tangible Personal Property”);

		
			 
		

			
	
			
				 (i)
			all proceeds of the conversion, voluntary or involuntary, of any of the Secured Property into cash or other liquidated claims or that are otherwise payable for injury to, or the taking or requisitioning of the Secured Property, including all insurance and condemnation proceeds as provided in this Mortgage (collectively, the “Proceeds”);

		
			 
		

			
	
			
				 (j)
			all Tax and Insurance Deposits (as defined in Section 3.3);

		
			 
		

			
	
			
				 (k)
			all of Mortgagor’s right, power or privilege to further hypothecate or encumber all or any portion of the property, rights and interests described in this Article Two as security for any debt or obligation, it being intended by this provision to divest Mortgagor of the right, power and privilege to hypothecate or encumber, or to grant a mortgage upon or security interest in any of the property hypothecated in or encumbered by this Mortgage, as security for the payment of any debt or performance of any obligation without State Farm’s prior written consent (collectively, the “Right to Encumber”); and

		
			 
		

			
	
			
				 (l)
			all other property, rights, interests, estates or claims of every name, kind, character or nature, both in law and in equity, which Mortgagor now has or may hereafter acquire in the Real Estate and Improvements and all other property, rights, interests, estates or claims of any name, kind, character or nature or properties now owned or hereafter acquired in the other properties, rights and interests comprising the Secured Property (collectively, the “Other Rights and Interests”).

		
			 
		

		
			Mortgagor agrees that without the necessity of any further act of Mortgagor or State Farm, the lien of and the security interest created in and by this Mortgage shall automatically extend to and include any and all renewals, replacements, substitutions, accessions, products or additions to and proceeds of the Secured Property.
		

		
			 
		

		
			TO HAVE AND TO HOLD the Secured Property hereby conveyed and intended so to be unto State Farm, its successors and assigns, forever, free from all rights and benefits under and by virtue of any homestead exemption laws or similar laws of the state or other jurisdiction in which the Secured Property is located (the “State”) (which rights and benefits are hereby expressly released and waived) for the uses and purposes herein set forth.
		

		
			

		 

		

			 

		

		

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			MORTGAGOR hereby covenants with and warrants to State Farm and with the purchaser at any foreclosure sale that at the execution and delivery hereof, Mortgagor owns the Secured Property and has a good and indefeasible estate therein in fee simple; that the Secured Property is free from all encumbrances whatsoever (and any claim of any other Person (as defined below) thereto) other than those encumbrances expressly permitted by State Farm in writing (or as set forth in the title Proforma loan policy delivered to State Farm in connection with closing the Loan) (the “Permitted Exceptions”); that Mortgagor has good and lawful right to sell, convey, mortgage and encumber the Secured Property; and that Mortgagor and its successors and assigns shall forever warrant and defend the title to the Secured Property against all claims and demands whatsoever.  As used herein, “Person” means any natural person, corporation, limited liability company, partnership, firm, association, government, governmental agency or any other entity, whether acting in an individual, fiduciary or other capacity.
		

		
			 
		

		
			PROVIDED, HOWEVER, that if and when Mortgagor has paid all of the Indebtedness and has strictly performed and observed all of the agreements, terms, conditions, provisions and warranties contained in this Mortgage and in all of the other Loan Documents, the estate, right, title and interest of State Farm in and to the Secured Property shall cease and shall be released and State Farm shall record a satisfaction of Mortgage at the cost of Mortgagor, but otherwise shall remain in full force and effect.  
		

		
			 
		

			
	
			
				ARTICLE 3
			

GENERAL AGREEMENTS

		
			 
		

		
			To protect the security of this Mortgage, Mortgagor further covenants and agrees as follows:
		

		
			 
		

			
	
			
				 3.1
			Recitals.

		
			 
		

		
			The recitals set forth above are true and correct and are material provisions of this Mortgage.
		

		
			 
		

			
	
			
				 3.2
			Payment of Indebtedness.

		
			 
		

		
			Mortgagor shall pay promptly the Indebtedness at the times and in the manner provided in the Loan Documents.  All such sums payable by Mortgagor shall be paid without demand, counterclaim, offset, deduction or defense.  Mortgagor hereby waives all rights now or hereafter conferred by statute or otherwise to any such demand, counterclaim, offset, deduction or defense.
		

		
			 
		

			
	
			
				 3.3
			Other Payments.

		
			 
		

			
	
			
				 (a)
			In addition to the monthly installment payments required by the Note, Mortgagor shall pay to State Farm (or its designee) the following sums on a monthly basis until the Indebtedness is fully paid (collectively, the “Tax and Insurance Deposits”):

		
			

		 

		

			 

		

		

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				 (i)
			a sum equal to one twelfth (1/12th) of the annual Taxes (as defined in Section 3.5) next due on the Secured Property, all as estimated by State Farm (the “Tax Deposits”); and

			
	
			
				 (ii)
			a sum equal to one twelfth (1/12th) of the annual premium or premiums next payable for the insurance herein required to be maintained on or with respect to the Secured Property (the “Insurance Deposits”).

			
	
			
				 (b)
			Should the total Tax and Insurance Deposits on hand not be sufficient to pay all of the Taxes and insurance premiums, together with all penalties and interest thereon, when the same become due and payable, Mortgagor shall pay to State Farm promptly on demand any amount necessary to make up the deficiency.  If the total of such Tax and Insurance Deposits exceeds the amount required to pay the Taxes and insurance premiums, such excess shall be credited on subsequent payments to be made for such items.

		
			 
		

			
	
			
				 (c)
			All such Tax and Insurance Deposits:

		
			 
		

			
	
			
				 (i)
			shall be held by State Farm or a depository designated by State Farm with no obligation to segregate such payments and without any obligation arising for the payment of any interest thereon;

		
			
		

			
	
			
				 (ii)
			shall be applied by State Farm for the purposes for which made (as herein provided) subject, however, to the security interest granted State Farm therein pursuant to Article Two; and

			
	
			
				 (iii)
			shall not be subject to the direction or control of Mortgagor.

			
	
			
				 (d)
			Provided that no Event of Default (as defined in Section 4.1) exists and there are sufficient funds in the Tax and Insurance Deposits, State Farm agrees to make the payment of the Taxes or insurance premiums with reasonable promptness following its receipt of appropriate tax and/or insurance bills therefor, or, alternatively, upon presentation by Mortgagor of receipted (i.e. paid) tax and/or insurance bills therefor, State Farm shall reimburse Mortgagor for such Taxes and insurance premium payments made by Mortgagor.

		
			 
		

			
	
			
				 (e)
			Upon the occurrence of an Event of Default, State Farm may, at its option, without being required to do so, apply any Tax and Insurance Deposits on hand to the payment of any of the Indebtedness, in such order and manner as State Farm may elect.  When the Indebtedness has been fully paid, any remaining Tax and Insurance Deposits shall be paid to Mortgagor.

		
			 
		

			
	
			
				 3.4
			Maintenance, Repair, Restoration, Prior Liens, Parking.

		
			 
		

		
			Mortgagor shall and hereby agrees to:
		

		
			 
		

		
			

		 

		

			 

		

		

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				 (a)
			promptly repair, restore, replace or rebuild any portion of the Improvements which may become damaged or destroyed, provided the proceeds of insurance are made available to Mortgagor pursuant to Section 3.10 hereof, with all replacements being at least equal in quality and condition as existed prior thereto, free from any security interest therein, encumbrances thereon or reservation of title thereto;

		
			 
		

			
	
			
				 (b)
			keep the Improvements in good condition and repair, without waste and free from mechanics’, materialmen’s or similar or other liens or claims of lien;

		
			 
		

			
	
			
				 (c)
			complete, within a reasonable time, any Improvements now or hereafter in the process of construction upon the Real Estate;

		
			 
		

			
	
			
				 (d)
			comply with all statutes, rules, regulations, orders, decrees and other requirements of any governmental body, whether federal, state or local, having jurisdiction over the Secured Property and the use thereof and observe and comply with any conditions and requirements necessary to preserve and extend any and all rights, licenses, permits (including without limitation zoning variances, special exceptions and nonconforming uses), privileges, franchises and concessions that are applicable to the Secured Property or its use and occupancy;

		
			 
		

			
	
			
				 (e)
			make no material alterations in or to the Improvements, except as required in subsection (d) hereof or otherwise with the prior written consent of State Farm (which consent shall not be unreasonably withheld or delayed provided such alterations or Improvements do not adversely impact the value of the Secured Property) and in conformity with all applicable laws; provided, however, without the consent of State Farm (i) upon written notice to State Farm, Mortgagor (or its tenants) may make such alterations required by or expressly permitted by tenant to be made without the consent of Landlord under the terms of any Major Lease  or Minor Lease provided that State Farm has previously reviewed and approved such Major Lease or Minor Lease (“Approved Lease Alterations”), provided, however, Mortgagor shall not be required to deliver written notice to State Farm if such Approved Lease Alterations will cost less than $100,000 and will not involve a building (as opposed to tenant space) being expanded or contracted; and (ii) without written notice to State Farm, Mortgagor (or its tenants) may make (x) structural alterations or structural repairs costing less than $100,000 in the aggregate in any one year and each year, or (y) non-structural alterations or non-structural repairs provided such alterations or repairs do not adversely impact the value of the Secured Property; 

		
			 
		

			
	
			
				 (f)
			not suffer nor permit any change in the general nature of the occupancy of the Improvements without the prior written consent of State Farm;

		
			 
		

			
	
			
				 (g)
			pay when due all operating costs of the Improvements;

		
			 
		

			
	
			
				 (h)
			not initiate nor consent in any zoning reclassification with respect to the Secured Property without the prior written consent of State Farm;

		
			 
		

		
			

		 

		

			 

		

		

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				 (i)
			provide, improve, grade, surface and thereafter maintain, clean, repair and adequately light all parking areas upon the Real Estate, such parking areas being of sufficient size to accommodate the greater of the amount of standard size vehicles required (i) by law, ordinance or regulation; or (ii) by the terms of any Leases, together with any sidewalks, aisles, streets, driveways and sidewalk cuts and sufficient paved areas for ingress, egress and rights of way to and from the adjacent thoroughfares necessary or desirable for the use thereof; and

		
			 
		

			
	
			
				 (j)
			forever warrant and defend its title to the Secured Property and the validity, enforceability and priority (which priority is subject to the Permitted Encumbrances) of the lien and security interests granted in and by this Mortgage and the other Loan Documents against the claims and demands of all Persons, subject to the Permitted Exceptions.

		
			 
		

			
	
			
				 3.5
			Property Taxes and Contest of Liens.

		
			 
		

		
			Notwithstanding the Tax and Insurance Deposits required by Section 3.3 hereof, Mortgagor shall be responsible for the payment before delinquency and before any penalty attaches, of all real estate and personal property taxes and assessments (general or special), water charges, sewer charges and any other charges, fees, taxes, claims, levies, charges, expenses, liens and assessments, ordinary or extraordinary, governmental or nongovernmental, statutory or otherwise, that may be levied, assessed or asserted against the Secured Property or any part thereof or interest therein (collectively, “Taxes”).  Notwithstanding anything contained herein to the contrary, Mortgagor may, in good faith and with reasonable diligence, contest the validity or amount of any Taxes as well as any mechanics’, materialmen’s or other liens or claims of lien upon the Secured Property (collectively, the “Contested Liens”), provided that:
		

		
			 
		

			
	
			
				 (a)
			such contest shall have the effect of preventing the collection of the Contested Liens and the sale or forfeiture of the Secured Property or any part thereof or interest therein to satisfy the same; and

		
			 
		

			
	
			
				 (b)
			Mortgagor shall first notify State Farm in writing of the intention of Mortgagor to contest the same before any Contested Liens have been increased by any interest, penalties or costs.

		
			 
		

			
	
			
				 3.6
			Tax and Lien Payments by State Farm.

		
			 
		

			
	
			
				 (a)
			Upon the failure of Mortgagor to pay the Tax Deposits as required in Section 3.3 or, in the event said payments are waived by State Farm, to pay the Taxes required to be paid in Section 3.5 above (unless Mortgagor is contesting the Taxes as provided in Section 3.5 above), State Farm is authorized, in its sole discretion, to make any payment of Taxes in accordance with any tax bill or statement from the appropriate public office without inquiry into the accuracy or validity of any Taxes, sales, forfeiture of title or claim relating thereto.

		
			 
		

			
	
			
				 (b)
			State Farm is also authorized, in the place and stead of Mortgagor, to make any payment relating to any apparent or threatened adverse title, lien, claim of lien, encumbrance, 

		 

		

			 

		

		

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	claim, charge or payment otherwise relating to any other purpose but not enumerated in this Section, whenever, in State Farm’s judgment and discretion, such payment seems necessary to protect the full security intended to be created by this Mortgage.

		
			 
		

			
	
			
				 (c)
			All such payments authorized by this Section 3.6 that are not promptly reimbursed by Mortgagor shall constitute additional Indebtedness and shall be immediately due and payable by Mortgagor to State Farm upon demand with interest at the Default Rate (as defined in the Note) from the date of such payment.

		
			 
		

			
	
			
				 3.7
			Insurance.

		
			 
		

			
	
			
				 (a)
			Mortgagor shall insure and keep insured the Secured Property and each and every part thereof against such perils and hazards as State Farm may from time to time require, and in any event including:

		
			 
		

			
	
			
				 (i)
			Property insurance insuring against all risks of loss to the Secured Property customarily covered by “Causes of Loss—Special Form” policies (also known as “all risk” insurance) in an amount at least equal to the full replacement cost of all Improvements, without deduction for physical depreciation and with (A) a standard mortgagee’s endorsement clause; (B) a maximum deductible of $25,000.00; and (C) either an agreed amount endorsement (to avoid the operation of any coinsurance provisions) or a waiver of any coinsurance provisions;

		
			 
		

			
	
			
				 (ii)
			Commercial general liability insurance on an occurrence basis to afford protection for bodily injury, death and property damage in an amount of not less than the greater of (A) One Million Dollars ($1,000,000); or (B) the highest amount of coverage required to be carried by the landlord under the terms of the Major Leases.  The policy shall name State Farm as an additional insured;

		
			 
		

			
	
			
				 (iii)
			Steam boiler, machinery and pressurized vessel insurance (if applicable to the Improvements);

		
			 
		

			
	
			
				 (iv)
			If the Secured Property is occupied by a tenant or tenants, rent loss insurance in an amount sufficient to cover loss of rents from the Secured Property for a minimum of twelve (12) months or, in the alternative, if the Secured Property is occupied by Mortgagor, business interruption insurance in an amount sufficient to cover loss of gross earnings from the Secured Property for a minimum of twelve (12) months;

		
			 
		

			
	
			
				 (v)
			If any building or other structure on the Secured Property is situated in an area now or hereafter designated by the Federal Emergency Management Agency as a “Special Flood Hazard Area” (Zone A or Zone V), evidence of flood insurance in an amount equal to the least of (A) the minimum amount required under the terms of the coverage to compensate 

		 

		

			 

		

		

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	for any damage or loss on a full replacement cost basis; (B) the unpaid principal balance of the Indebtedness; or (C) the maximum limit of coverage available for the Secured Property under the National Flood Insurance Program; provided, however, that, in the event the unpaid principal balance of the Indebtedness is less than 80% of the replacement cost under subsection (A), the flood insurance coverage shall be in an amount equal to the lesser of the amounts set forth in subsections (A) or (C).  The policy shall name State Farm as the first mortgagee under a standard mortgagee’s endorsement clause;

		
			 
		

			
	
			
				 (vi)
			Either affirmative coverage for acts of terrorism in its property and liability insurance or evidence that coverage for acts of terrorism is not excluded from its property and liability insurance; 

		
			 
		

			
	
			
				 (vii)
			Either affirmative coverage for windstorm and named storms in its property insurance or evidence that coverage for windstorm and named storms is not excluded from its property insurance; and

		
			 
		

			
	
			
				 (viii)
			Such other insurance coverages on the Secured Property as required by State Farm.

		
			 
		

			
	
			
				 (b)
			Insurance policies required by this Section 3.7 shall:

		
			 
		

			
	
			
				 (i)
			be in amounts and form and issued by companies satisfactory to State Farm and shall comply with all provisions of this Mortgage;

		
			 
		

			
	
			
				 (ii)
			contain endorsements naming State Farm as first mortgagee under a standard mortgagee clause under the required property, steam boiler and rent loss insurance policies and as an additional insured for the commercial general liability insurance policy;

		
			 
		

			
	
			
				 (iii)
			contain endorsements providing for not less than ten (10) days’ prior written notice to State Farm prior to any cancellation, non-renewal or termination for non-payment of a premium and not less than thirty (30) days’ prior written notice of cancellation for any other reason;

		
			 
		

			
	
			
				 (iv)
			permit State Farm to pay any premium within fifteen (15) days after its receipt of notice stating that such premium has not been paid when due; 

		
			 
		

		
			

		 

		

			 

		

		

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				 (v)
			require that settlement of any claim under any of the referenced policies shall require State Farm’s prior written approval; and

		
			 
		

			
	
			
				 (vi)
			contain exclusions to coverage acceptable to State Farm.

		
			 
		

			
	
			
				 (c)
			The policy or policies of such insurance or certificates of insurance evidencing the required coverage shall be delivered to State Farm.

		
			 
		

			
	
			
				 (d)
			Mortgagor shall not purchase separate insurance policies concurrent in form or contributing in the event of loss with those policies required to be maintained under this Section 3.7.

		
			 
		

			
	
			
				 3.8
			Insurance Premium Payment by State Farm, Use of Proceeds.

		
			 
		

			
	
			
				 (a)
			In the event Mortgagor fails to make the Insurance Deposits as required by Section 3.3, or if such Insurance Deposits have been waived, upon State Farm’s receipt of written notice (i) of an unpaid insurance premium; (ii) of a termination or cancellation of any required insurance policy; or (iii) that a required insurance policy is not to be renewed and Mortgagor fails to provide replacement coverage at least fifteen (15) days prior to the termination of existing coverage, State Farm may, at its option, procure and substitute another policy of insurance in the amount required pursuant to the foregoing terms of this Mortgage with such companies as State Farm may select, the cost of which shall be paid by Mortgagor upon demand should the amount available from the Insurance Deposits be insufficient to pay the premium therefor.  All sums paid by State Farm in procuring said insurance that are not promptly reimbursed by Mortgagor shall be additional Indebtedness and shall be immediately due and payable without notice, with interest thereon at the Default Rate from the date of such payment.

		
			 
		

			
	
			
				 (b)
			In the event of any damage to or destruction of the Improvements or any part thereof, Mortgagor shall promptly notify State Farm and take such action necessary to preserve the undamaged portion of the Improvements.  If at the time of such damage and destruction, 

		
			 
		

			
	
			
				 (i)
			no Event of Default is in existence and no event shall have occurred as of such date which, with the passage of time, the giving of notice or both, would constitute an Event of Default; 

		
			 
		

			
	
			
				 (ii)
			the damage is such that it can be reasonably repaired within the time provided in the Leases so as to preclude a material reduction in the rental income from the Secured Property (after application of any rental insurance proceeds), or Mortgagor obtains written commitments in form and substance reasonably satisfactory to State Farm from tenants to lease space, upon completion of repairs, in the Secured Property at aggregate rentals equal to or exceeding the debt service of the Loan and the general operating expenses of the Secured Property; 

		
			

		 

		

			 

		

		

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				 (iii)
			the Proceeds are less than the outstanding Indebtedness under the Loan; 

			
	
			
				 (iv)
			the casualty insurer has not denied liability for payment of Proceeds as a result of any act, neglect, use or occupancy of the Secured Property by Mortgagor or any tenant of the Secured Property; 

			
	
			
				 (v)
			the Real Estate and/or Improvements can be restored to the condition at least equal to the condition in which they existed at the closing of the Loan (with any post-closing improvements included in such Restoration (as defined in this Section 3.8)); and

			
	
			
				 (vi)
			if required by State Farm, a satisfactory report addressed to State Farm from an environmental engineer or other qualified professional satisfactory to State Farm certifies that no adverse environmental impact to the Secured Property has resulted from the casualty; 

		
			then, any Proceeds paid to State Farm in connection with such damage or destruction, after deducting therefrom any expenses, including without limitation reasonable attorneys’ fees, incurred by State Farm in protecting the undamaged portion of the Improvements and in the collection of the Proceeds (the “Collection Expenses”), shall be applied by State Farm to the cost of restoring, repairing, replacing or rebuilding (herein generally called “Restoration”) the Real Estate and/or Improvements or any part thereof as set forth in Section 3.10. 
		

		
			 
		

		
			Otherwise, in State Farm’s sole discretion, all Proceeds, less Collection Expenses, shall be applied:  (A) to the installments of the Indebtedness in the inverse order of their maturity; or (B) to the cost of Restoration as set forth in Section 3.10 hereof.  
		

		
			 
		

			
	
			
				 (c)
			If State Farm applies the Proceeds to the installments of the Indebtedness in the inverse order of their maturity, and provided no Event of Default is in existence and no event shall have occurred as of such date which, with the passage of time, the giving of notice or both, would constitute an Event of Default, no premium or fee shall be payable in connection with any prepayment of the Indebtedness from the Proceeds. In addition, if the Proceeds are applied to the Indebtedness pursuant to the preceding sentence, and provided no Event of Default is in existence and no event shall have occurred as of the date of prepayment of the remaining Indebtedness in full which, with the passage of time, the giving of notice or both, would constitute an Event of Default, Mortgagor may, at its option, pay the remaining Indebtedness in full (but not in part) without a premium or fee at any time within one hundred eighty (180) days after the date of such application. 

		
			 
		

			
	
			
				 3.9
			Condemnation.

		
			 
		

			
	
			
				 (a)
			Mortgagor shall give State Farm prompt notice of any proceedings, instituted or threatened, seeking condemnation or taking by eminent domain or any like process (a “Taking”) of all or any part of the Real Estate or Improvements including any easement thereon or appurtenance thereto (including severance of, consequential damage to or change in grade of 

		 

		

			 

		

		

			-  12  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

	streets) and shall deliver to State Farm copies of any and all papers served in connection with any such proceeding.

		
			 
		

			
	
			
				 (b)
			Mortgagor hereby assigns, transfers and sets over unto State Farm the entire Proceeds of any and all awards resulting from any Taking.  State Farm is hereby authorized to collect and receive from the condemnation authorities the entire Proceeds and is further authorized to give appropriate receipts and acquittances therefor.

		
			 
		

			
	
			
				 (c)
			In the event of any such Taking, any and all such Proceeds shall be applied, after deducting therefrom any Collection Expenses, in State Farm’s sole discretion but subject to the further terms of this Section 3.9, to: (i) the installments of the Indebtedness in the inverse order of their maturity; or (ii) the cost of Restoration pursuant to Section 3.10 hereof. 

		
			 
		

			
	
			
				 (d)
			If (i) the Proceeds of any Taking exceed the greater of (A) $500,000; or (B) 5% of the then value of the Secured Property (as determined by an M.A.I. Appraisal obtained by State Farm at the cost and expense of Mortgagor) but are less than the outstanding Indebtedness under the Loan as of the date of such Taking and are received at least two years prior to the Maturity Date; (ii) the requirements stated in Sections 3.8(b)(i), (ii) and (v) above are satisfied; and (iii) in State Farm’s reasonable judgment, the remainder of the Secured Property can be operated (A) as an economically viable project at substantially the same level of operations which existed immediately prior to the Taking; and (B) at the functional equivalent of its condition (considering, without limitation, the effect of the Taking on the remaining leasable area, parking and access) prior to the Taking (the “Viability Requirements”); then, such Proceeds, after deducting therefrom the Collection Expenses, shall be applied to the cost of Restoration pursuant to Section 3.10 hereof.

		
			 
		

			
	
			
				 (e)
			If (i) the Proceeds of any Taking do not exceed the greater of (A) $500,000; or (B) 5% of the then value of the Secured Property (as determined by an M.A.I. Appraisal obtained by State Farm at the cost and expense of Mortgagor); (ii) no Event of Default is in existence on the date of such Taking and no event shall have occurred as of such date which, with the passage of time, the giving of notice or both, would constitute an Event of Default; and (iii) the Viability Requirements are met; then, such Proceeds, after deducting therefrom the Collection Expenses, shall be applied to the cost of Restoration pursuant to Section 3.10 hereof.

		
			 
		

			
	
			
				 (f)
			If State Farm applies the Proceeds to the installments of the Indebtedness in the inverse order of maturity, and provided no Event of Default is in existence and no event shall have occurred as of such date which, with the passage of time, the giving of notice or both, would constitute an Event of Default, no premium or fee shall be payable in connection with any prepayment of the Indebtedness from the Proceeds.  In addition, if the Proceeds are applied to the Indebtedness because State Farm has determined that the Viability Requirements have not been satisfied, and provided no Event of Default is in existence and no event shall have occurred as of the date of prepayment of the remaining Indebtedness in full which, with the passage of time, the giving of notice or both, would constitute an Event of Default, Mortgagor may, at its option, pay 

		 

		

			 

		

		

			-  13  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

	the remaining Indebtedness in full (but not in part) without a premium or fee at any time within one hundred eighty (180) days after the date of such application.

		
			 
		

			
	
			
				 (g)
			Notwithstanding anything contained herein to the contrary, in the event that the Taking is, in State Farm’s determination, of such a nature that the Real Estate and the Improvements will not require Restoration, all Proceeds, after deducting therefrom the Collection Expenses, shall be applied in State Farm’s sole discretion to installments of Indebtedness in the inverse order of their maturity, and provided no Event of Default is in existence and no event shall have occurred as of such date which, with the passage of time, the giving of notice or both, would constitute an Event of Default, no premium or fee shall be payable in connection with any prepayment of the Indebtedness from the Proceeds.  

		
			 
		

			
	
			
				 3.10
			Restoration Using Proceeds.

		
			 
		

			
	
			
				 (a)
			In the event State Farm elects (or is required hereby) to make any Proceeds available for Restoration, Mortgagor shall complete, in form and with supporting documentation reasonably required by State Farm, an estimate of the cost to repair or to restore the Real Estate and Improvements to the condition at least equal to the condition in which they existed prior to such damage, destruction or Taking, free from any security interest in, lien or encumbrance on, or reservation of title to, such Real Estate and Improvements. 

		
			 
		

			
	
			
				 (b)
			The Proceeds and, if applicable, other amounts payable by Mortgagor to State Farm necessary to complete Restoration shall be held by State Farm or if State Farm so desires, a disbursing agent selected by State Farm.  Said Proceeds may be invested using Mortgagor’s taxpayer identification number in an interest bearing account mutually acceptable to Mortgagor and State Farm.  The costs and expenses of administering disbursements shall be paid by Mortgagor.  In the event the amount of the Proceeds are insufficient to cover the cost of Restoration, Mortgagor shall pay to State Farm upon demand the cost of Restoration in excess of the Proceeds, such excess to be held by State Farm with the Proceeds.

		
			 
		

			
	
			
				 (c)
			Subject to State Farm’s right to limit the number of disbursements, the Proceeds shall be disbursed from time to time upon State Farm’s receipt of architect’s certificates, waivers or subordinations of lien, contractor’s sworn statements and such other evidence as State Farm or any disbursing agent may reasonably require to verify the cost and fact of the completion of the work included in said disbursement.  Under no circumstances shall any portion of the Proceeds be released until State Farm has been reasonably assured that the Proceeds remaining after the requested disbursement will be sufficient to complete Restoration.  No payment of Proceeds made prior to the final completion of Restoration shall exceed ninety percent (90%) of the value of the work performed from time to time.  Any Proceeds remaining after Restoration shall be applied against the installments of Indebtedness in the inverse order of their maturity without any prepayment premium or fee (provided an Event of Default shall not then exist).  

		
			 
		

			
	
			
				 3.11
			Restrictions on Transfer.

		
			 
		

		
			

		 

		

			 

		

		

			-  14  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

			
	
			
				 (a)
			Without the prior written consent of State Farm:

		
			 
		

			
	
			
				 (i)
			Mortgagor shall not create, effect, contract for, commit or consent to, nor shall Mortgagor suffer or permit, any sale, conveyance, transfer, assignment, collateral assignment, lien, pledge, mortgage, security interest or other hypothecation, encumbrance or alienation (or any agreement to do any of the foregoing) (the foregoing, excluding Leases entered into in accordance with the terms of the Loan Documents, being herein collectively, called a “Transfer”) of the Secured Property, or any interest therein or title thereto (excepting, however, the sale or other disposition of Collateral (as defined in Section 6.1) no longer useful in connection with the operation of the Secured Property (“Obsolete Collateral”); provided, however, that prior to the sale or other disposition of Obsolete Collateral, such Obsolete Collateral shall have been replaced by Collateral of at least equal value and utility which is subject to the first and prior lien of this Mortgage, and further provided that nothing herein shall affect Mortgagor’s rights with respect to Contested Liens; 

			
	
			
				 (ii)
			Mortgagor shall not fail to pay when the same shall become due all lawful claims and demands of mechanics, materialmen, laborers and others which, if unpaid, might result in or permit the creation of a lien on the Real Estate or Improvements or on the Rents arising therefrom except as permitted under Section 3.5 hereof; 

			
	
			
				 (iii)
			if Mortgagor is a land trustee (“Trustee Mortgagor”), any beneficiary of Mortgagor shall not Transfer such beneficiary’s beneficial interest in Mortgagor, it being specifically agreed that such beneficiary may not obtain mezzanine financing secured by beneficiary’s beneficial interest or otherwise; 

			
	
			
				 (iv)
			if Mortgagor or any beneficiary of a Trustee Mortgagor is a corporation or limited liability company, any shareholder of such corporation or member of such limited liability company shall not Transfer any such shareholder’s shares of such corporation or member’s membership interest in such limited liability company (provided, however, that if such corporation is a corporation whose stock is publicly traded on a national securities exchange or on the “Over The Counter” market, this subsection (iv) shall be inapplicable), it being specifically agreed that any such shareholder or member may not obtain mezzanine financing secured by such shareholder’s shares or member’s membership interest or otherwise; 

		
			 
		

			
	
			
				 (v)
			if Mortgagor or any beneficiary of a Trustee Mortgagor is a partnership or joint venture, any general partner of such partnership or joint venturer of such joint venture shall not Transfer any such general partner’s interest in such partnership or joint venturer’s interest in such joint venture, it being specifically agreed that any such general partner or joint venturer may not obtain mezzanine financing secured by such partner’s partnership interest or joint venturer’s joint venture interest or otherwise; or

		
			 
		

			
	
			
				 (vi)
			there shall not be any change in control (by way of Transfers of stock ownership, membership interests, partnership interests or otherwise) in any corporation, limited 

		 

		

			 

		

		

			-  15  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

	liability company or partnership constituting or included within Mortgagor which directly or indirectly controls any corporation, limited liability company or partnership constituting or included within Mortgagor that results in a change in the identity of the Person(s) in control of such entity.

		
			 
		

			
	
			
				 (b)
			The foregoing provisions of this Section 3.11 shall not apply (i) to liens securing the Indebtedness; or (ii) to the lien of current Taxes not yet delinquent.  The provisions of this Section 3.11 shall be operative with respect to, and shall be binding upon, any Person who, in accordance with the terms hereof or otherwise, shall acquire any part of or interest in or encumbrance upon the Secured Property, or such beneficial interest (whether stock, membership interest, partnership or joint venture interest or other beneficial interest) in Mortgagor or any beneficiary of a Trustee Mortgagor.  Any waiver by State Farm of the provisions of this Section 3.11 must be in writing and shall not be deemed to be a waiver of the right of State Farm in the future to insist upon strict compliance with the provisions of this Section 3.11.

		
			 
		

			
	
			
				 (c)
			Upon the Transfer, without the prior written consent of State Farm, of (i) all or any part of the Secured Property; or (ii) any beneficial interest in Mortgagor if such Transfer is prohibited by Section 3.11 above, State Farm may, at its option, declare all of the sums secured by this Mortgage to be immediately due and payable. 

		
			 
		

			
	
			
				 (d)
			Notwithstanding anything contained herein to the contrary, prior written consent shall not be required for any Transfer of an interest in Mortgagor by any partner, member shareholder or beneficiary, as applicable, of Mortgagor where such Transfer: (i) results from death; (ii) is a Transfer made among the present partners, members, shareholders or beneficiaries, as applicable; or (iii) is made to immediate family members (spouses and children) or family trusts solely for the benefit of such family members for estate planning purposes.  Any such Transfer shall be subject to the following conditions:

		
			 
		

			
	
			
				 (i)
			Except for death, thirty (30) days prior written notice of such proposed Transfer shall be delivered to State Farm, together with (A) a description of the proposed sale or Transfer, including a description of the nature and amount(s) of beneficial ownership interests proposed to be sold or transferred and a description of who owns the remainder not being transferred; (B) documentation related to the proposed transferee as required by State Farm in its sole and absolute discretion including, without limitation, organizational documents, certificates of existence and final ownership allocations; (C) copies of the Transfer documents pursuant to which the proposed Transfer is to be effected; and (D) any additional information reasonably requested by State Farm regarding the proposed Transfer and/or transferee; 

		
			 
		

			
	
			
				 (ii)
			Any such proposed sale or Transfer shall not be permitted to any Person who or which on the date of the proposed Transfer is in a bankruptcy, insolvency, reorganization or any other similar court or administrative proceeding;

		
			

		 

		

			 

		

		

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				 (iii)
			No Event of Default shall be in existence under any of the Loan Documents on the date of such proposed sale or Transfer and no event shall have occurred or be in existence as of such date which, with the passage of time, the giving of notice or both, would constitute an Event of Default under any of the Loan Documents;

			
	
			
				 (iv)
			Any such sale or Transfer, if and when consummated, shall not release any Person from any liability or obligation to which it is otherwise liable or obligated, if any, under the terms of the Loan Documents;

			
	
			
				 (v)
			Mortgagor shall pay all of State Farm’s expenses relating to the review and/or preparation of any documentation related to the proposed Transfer, including, without limitation, the fees and expenses of State Farm’s outside counsel; and 

			
	
			
				 (vi)
			After any such Transfer, Griffin Industrial Realty, Inc. must continue to maintain at least a one hundred percent (100%) direct or indirect ownership and  controlling interest in Mortgagor.  

			
	
			
				 (e)
			As used in Section 3.11(d) above and if Mortgagor is comprised of more than one entity, a “Transfer of an interest in Mortgagor” shall also include a Transfer of undivided interests in the Secured Property to other entities comprising Mortgagor, subject to the same qualifications and limitations, and satisfaction of the same requirements, set forth in Section 3.11(d) with respect to Transfers of beneficial interests in entities.

		
			 
		

			
	
			
				 3.12
			State Farm’s Dealings with Transferee.

		
			 
		

		
			In the event State Farm gives its written consent to a sale or Transfer of all or any part of the Secured Property, whether by operation of law, voluntarily or otherwise, State Farm shall be authorized and empowered to deal with the Person to whom the Secured Property or any part thereof shall have been transferred with regard to the Secured Property, the Indebtedness and any of the terms or conditions of this Mortgage as fully and to the same extent as it might with the original Mortgagor, without in any way releasing or discharging the original Mortgagor from any of its covenants under this Mortgage and without waiving State Farm’s right of acceleration of the maturity of the Indebtedness as provided in this Mortgage or the Note.
		

		
			 
		

			
	
			
				 3.13
			Change in Tax Laws.

		
			 
		

		
			In the event of any change in, or change in the interpretation of, any applicable law regarding (a) the taxation of mortgages, deeds of trust or other security instruments or the debts secured thereby; or (b) the manner in which such taxes are collected, which change adversely affects State Farm, this Mortgage or any other Loan Document or the Indebtedness, Mortgagor shall promptly pay any such tax and otherwise compensate State Farm to the extent of such detriment; provided, however, that if Mortgagor fails to make such payment or if any such law prohibits Mortgagor from making such payment or would penalize State Farm in the event of such payment, State Farm may elect, by notice in writing given to Mortgagor, to declare all of the 

		 

		

			 

		

		

			-  17  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

Indebtedness secured hereby to be and become due and payable, without any prepayment premium or fee, within sixty (60) days from the giving of such notice.
		

		
			 
		

			
	
			
				 3.14
			Inspection of Secured Property.

		
			 
		

		
			Subject to the rights of tenants under the Leases pursuant to the Leases, Mortgagor hereby grants to State Farm, its agents, employees, consultants and contractors the right to enter upon the Secured Property upon reasonable prior notice (except in the case of emergencies) for the purpose of making any and all inspections, reports, tests, inquiries and reviews as State Farm (in its sole and absolute discretion) deems necessary to assess the then current condition of the Secured Property or for the purpose of performing any other acts which State Farm is authorized to perform under this Mortgage or under the Environmental Indemnification Agreement executed by Mortgagor and Guarantor (if applicable) in connection with the Loan (the “Environmental Indemnification Agreement”).  Mortgagor will cooperate with State Farm to facilitate each such entry and the accomplishment of such purposes.
		

		
			 
		

			
	
			
				 3.15
			Operating and Financial Statements.

		
			 
		

		
			Within forty-five (45) days after the end of each six-month period in each fiscal year of
		

		
			 Mortgagor during the term of the Loan (whether such fiscal year is a calendar year or otherwise), Mortgagor shall deliver, or cause to be delivered, to State Farm: (a) semi-annual operating statements showing all elements of income and expense of the Secured Property dated as of the last day of such period; and  (b) a current rent roll, showing all items set forth in the rent roll delivered to State Farm in connection with the closing of the Loan, as well as gross sales of each tenant, if any, paying percentage rental. Within one hundred twenty (120) days after the end of each fiscal year of Mortgagor and any Guarantor, Mortgagor shall deliver or cause to be delivered annual financial statements (consisting only of a balance sheet and an income and expense statement) for Mortgagor, any Guarantor and any tenant under a Lease approved by State Farm that provides that such tenant may self-insure on any insurance otherwise required to be obtained by Mortgagor under this Mortgage. Mortgagor shall promptly deliver to State Farm (y) any financial statements received by Mortgagor from any tenant under a Major Lease after receipt thereof, and (z) such other information (financial or otherwise) concerning the Secured Property, Mortgagor, Guarantor or its or their constituent entities that State Farm may reasonably request after such request therefor.  All such statements and information shall be prepared in accordance with generally accepted accounting principles consistently applied, shall otherwise be satisfactory to State Farm and shall be certified by an authorized Person, member, partner or officer of Mortgagor or Guarantor, as applicable, approved by State Farm.  State Farm and its representatives shall have the right, at all reasonable times and upon reasonable notice, to examine and make copies of Mortgagor’s plans, books, records, income tax returns and all supporting data concerning Mortgagor or the Secured Property. Mortgagor will assist State Farm and its representatives in conducting any such examination.
		

		
			 
		

			
	
			
				 3.16
			Declaration of Subordination.

		
			 
		

		
			

		 

		

			 

		

		

			-  18  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

		
			At the option of State Farm, this Mortgage shall become subject and subordinate, in whole or in part (but not with respect to priority of entitlement to insurance proceeds or any Award) to any and all Leases of all or any part of the Secured Property upon the execution by State Farm and recording thereof, at any time hereafter and in the appropriate official records of the county wherein the Real Estate is situated, of a unilateral declaration to that effect. 
		

		
			 
		

			
	
			
				 3.17
			Usury.

		
			 
		

		
			State Farm intends that Mortgagor shall not be required to pay, and State Farm shall not be entitled to receive or collect, interest in excess of the maximum legal rate permitted under applicable usury laws.  In the event State Farm or any court determines that any charge, fee or interest paid or agreed to be paid in connection with the Loan may, under applicable usury laws, cause the interest rate on the Loan to exceed the maximum rate permitted by law, such charges, fees or interest shall be reduced to the maximum rate permitted by law and any amounts actually paid in excess of such maximum rate permitted by law shall, at State Farm’s option, be applied by State Farm to reduce the outstanding principal balance of the Loan or repaid by State Farm directly to Mortgagor.
		

		
			 
		

			
	
			
				 3.18
			Lease Obligations.

		
			 
		

			
	
			
				 (a)
			As further security for the payment of the Indebtedness, Mortgagor has, pursuant to this Mortgage and by separate Assignment of Rents and Leases of even date herewith, sold, transferred and assigned to State Farm, its successors and assigns, all of Mortgagor’s right, title and interest, as landlord, in, to and under the Leases.

		
			 
		

			
	
			
				 (b)
			The following definitions shall be applicable to all Leases of the Secured Property now or hereafter existing:

		
			 
		

			
	
			
				 (i)
			“Major Leases”:  the Master Lease (as defined below) and the Leases that demise 60,000 square feet or more and have a lease term of at least five (5) years  (with no termination options during such term), together with all extensions, renewals, amendments, modifications, replacements and substitutions therefor; provided, however, a replacement or substitution for a Major Lease shall in turn be deemed a “Major Lease” only if such replacement or substitution demises 60,000 square feet or more and has a lease term of at least five (5) years.  As of the date hereof, the following Leases constitute Major Leases:

			
					
						 

					
						 

					
					
						 

					
					
						 

				
	
					
						Name of Tenant

					
					
						Original Date of Lease

					
					
						Total Square Footage

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Kenco Logistic Services, LLC

					
					
						August 30, 2019

					
					
						63,547 square feet

				
	
					
						 

					
					
						 

					
					
						 

				

		
			 
		

			
	
			
				 (ii)
			 “Master Lease”: that certain Master Lease dated as of the date of this Mortgage between Mortgagor, as landlord, and Guarantor, as tenant. 

		
			

		 

		

			 

		

		

			-  19  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

			
	
			
				 (iii)
			“Minor Leases”:  Leases that are not Major Leases; provided, however, if any Minor Lease, after modification, meets the definition of a Major Lease, such Minor Lease shall thereupon become a Major Lease.

		
			 
		

			
	
			
				 (c)
			State Farm shall have the right to impose a reasonable Servicing Fee (as defined in Section 7.15 hereof) in connection with the review of any documentation submitted for State Farm’s approval hereunder.  Mortgagor shall also be responsible for the payment of all fees and expenses reasonably charged by State Farm’s outside counsel in the event State Farm, in its sole discretion, shall determine that the assistance of outside counsel is necessary or appropriate. 

		
			 
		

			
	
			
				 (d)
			Mortgagor covenants and agrees to keep, observe and perform and to require all tenants of the Secured Property to keep, observe and perform all the covenants, agreements and provisions of any present or future Leases of the Secured Property on their respective parts to be kept, observed and performed.  If Mortgagor shall neglect or refuse to so perform or fail to require such tenants to so perform, State Farm may, at its option, itself perform and comply or require performance or compliance by such tenants with any such Lease covenants, agreements and provisions.  Any sums expended by State Farm in performance of or compliance with such Leases or in enforcing performance of or compliance with such Leases by the tenants, including costs and expenses and reasonable attorneys’ fees, shall be paid to State Farm by Mortgagor upon demand with interest thereon at the Default Rate from the date of such payments and, in the absence of such payment, all such sums shall be deemed to be and become part of the Indebtedness secured by this Mortgage.

		
			 
		

			
	
			
				 (e)
			Mortgagor expressly covenants and agrees that if Mortgagor, as landlord under the Major Leases: 

		
			 
		

			
	
			
				 (i)
			fails to perform and fulfill any material term, covenant, condition or provision in any Major Lease on its part to be performed or fulfilled, at the times and in the manner provided in such Major Lease;  

		
			 
		

			
	
			
				 (ii)
			does or permits to be done anything to impair the value of any Major Lease as security for the Indebtedness, including, without limitation, voluntary surrender or termination; 

		
			 
		

			
	
			
				 (iii)
			fails to enforce all of the material terms, covenants and conditions required to be performed by a tenant under any Major Lease; 

		
			 
		

			
	
			
				 (iv)
			fails to pursue its remedies under any Major Lease (short of voluntary surrender or termination) following a material breach or default by the tenant thereunder; or

		
			

		 

		

			 

		

		

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				 (v)
			without State Farm’s prior written consent, permits or approves an assignment by any tenant under any Major Lease or a subletting of all or any part of the Secured Property demised in any Major Lease (other than in accordance with the terms of the applicable Major Lease previously approved by State Farm); 

		
			 
		

		
			then, upon the occurrence of any such actions or inactions referenced in (i) through (v) above, at the option of State Farm, and with written notice to Mortgagor, an Event of Default shall be deemed to have occurred hereunder and at the option of State Farm, all unpaid Indebtedness secured by this Mortgage shall, notwithstanding anything in the Note, this Mortgage or the other Loan Documents to the contrary, become due and payable as in the case of other Events of Default. 
		

		
			 
		

			
	
			
				 3.19
			Environmental Compliance.

		
			 
		

		
			Mortgagor hereby agrees to comply and cause all tenants of the Secured Property to comply with any and all federal, state or local laws, rules and regulations relating to environmental protection including, but not limited to, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended by the Superfund Amendments and Reauthorization Act of 1986 and such other legislation, rules and regulations as are in or may hereafter come into effect and apply to Mortgagor, State Farm, the Loan or the Secured Property or any occupants thereof, whether as lessees, tenants, licensees or otherwise.  Mortgagor shall defend, indemnify and save and hold State Farm harmless from and against any and all claims, costs or expenses relating to such environmental protection provisions notwithstanding any exculpatory or limitation of liability provisions contained in this Mortgage and the other Loan Documents.
		

		
			 
		

			
	
			
				 3.20
			Further Assurances.

		
			 
		

			
	
			
				 (a)
			Mortgagor shall do all acts necessary to keep valid and effective the liens and security interests created by this Mortgage and the security intended to be afforded by the Loan Documents and to carry into effect their objectives.

		
			 
		

			
	
			
				 (b)
			Without limiting the generality of the foregoing, Mortgagor shall, upon request from State Farm, promptly and, insofar as not contrary to applicable law, at Mortgagor’s expense, execute, record, rerecord, file and refile in such offices, at such times and as often as may be necessary, this Mortgage, additional mortgages, security agreements and every other instrument in addition to or supplemental hereto, including applicable financing statements, continuation statements, affidavits or certificates as may be necessary to create, perfect, maintain, continue, extend and/or preserve the liens, encumbrances and security interests intended to be granted and created in and by the Loan Documents and the rights and remedies of State Farm and Mortgagor thereunder.  Upon request of State Farm, Mortgagor shall promptly supply evidence of fulfillment of the foregoing acts and further assurances.

		
			

		 

		

			 

		

		

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				 3.21
			Change of Name, Identity or Structure.

		
			 
		

		
			Except as may be expressly set forth in this Mortgage, without giving State Farm at least thirty (30) days prior written notice, Mortgagor shall not change: (a) its jurisdiction of organization; (b) the location of its place of business (or chief executive office if more than one place of business); or (c) its name or identity (including its trade name or names).  In addition, if Mortgagor is an entity, Mortgagor shall not change its structure or legal status without first obtaining the prior written consent of State Farm.
		

		
			
		

		
			

		 

		

			 

		

		

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				 3.22
			Substitute Guarantor.

		
			 
		

		
			Within one hundred eighty (180) days after the death of any individual Guarantor, or within ninety (90) days after the dissolution or cessation of business of an entity Guarantor (such entity Guarantor being herein called a “dissolved Guarantor”), Mortgagor shall propose in writing to State Farm the name of a Person to act as a successor guarantor (the “Successor Guarantor”) and to assume all of the obligations and liabilities of the deceased or dissolved Guarantor under the Loan Documents, including, without limitation, the obligations and liabilities in Section 7.13 below that are personal obligations and liabilities of Guarantor and Mortgagor.  The proposed Successor Guarantor’s identity, composition, financial condition and creditworthiness, experience, character and business reputation shall be reasonably acceptable to State Farm.  If the proposed Successor Guarantor is acceptable to State Farm, the Successor Guarantor shall promptly, and in no event more than two hundred seventy (270) days following the death of an individual Guarantor or one hundred eighty (180) days following the dissolution or cessation of business of an entity Guarantor, as applicable, execute all documents and instruments reasonably requested by State Farm to assume all of the obligations and liabilities of the deceased or dissolved Guarantor under the Loan Documents (the “Guaranty Documents”).  Mortgagor shall pay all costs and expenses incurred by State Farm relating to the approval of the proposed Successor Guarantor and the preparation and review of the Guaranty Documents, including, without limitation, the fees and expenses of State Farm’s outside counsel.  The provisions of this Section 3.22 shall also apply in the event of the death of any individual Successor Guarantor or the dissolution or cessation of business of any entity Successor Guarantor.
		

		
			 
		

			
	
			
				 3.23
			Management of Secured Property.

		
			 
		

		
			The Secured Property shall be managed in a first-class manner by either:  (a) Mortgagor or an entity affiliated with Mortgagor and approved by State Farm; or (b) a professional property management company approved by State Farm.  The management of the Secured Property by a Mortgagor-affiliated entity or a professional property management company (in either case, a “Manager”) shall be pursuant to a written agreement approved by State Farm (the “Management Agreement”).  In no event shall any Manager be removed or replaced or the terms of any Management Agreement modified or amended without the prior written consent of State Farm, which consent shall not be unreasonably withheld, conditioned or delayed.  Following an Event of Default, State Farm shall have the right to terminate the Management Agreement or to direct Mortgagor to retain a new Manager approved by State Farm. Approvals required by State Farm under this Section 3.23 shall not be unreasonably withheld, conditioned or delayed.
		

		
			 
		

			
	
			
				ARTICLE 4
			

EVENTS OF DEFAULT

		
			 
		

			
	
			
				 4.1
			Defaults.

		
			 
		

		
			

		 

		

			 

		

		

			-  23  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

		
			It shall constitute an event of default (“Event of Default”) of and under this Mortgage and, at the option of State Farm, under the other Loan Documents, if any of the following events shall occur:
		

		
			 
		

			
	
			
				 (a)
			Mortgagor shall fail to pay on the dates or within the times required any of the Indebtedness, including the payment of principal and/or interest under the Note;

		
			 
		

			
	
			
				 (b)
			Mortgagor shall fail to timely observe, perform or discharge any of the non-monetary Obligations, other than a non monetary obligation described in any other clause in this Article Four, and any such failure shall remain uncured for thirty (30) days or such lesser period as may be otherwise specified in the applicable Loan Document (the “Grace Period”) after notice to Mortgagor of the occurrence of such failure; provided, however, that State Farm shall extend any applicable Grace Period up to ninety (90) days if State Farm determines in good faith that: (i) such default cannot reasonably be cured within such Grace Period but can be cured within ninety (90) days; (ii) no lien or security interest created by the Loan Documents shall be impaired prior to the anticipated completion of such cure; and (iii) State Farm’s immediate exercise of any remedies provided in this Mortgage or by law is not necessary for the protection or preservation of the Secured Property or State Farm’s security interest therein or lien thereon, and Mortgagor shall immediately commence and diligently pursue the cure of such default;

		
			 
		

			
	
			
				 (c)
			Mortgagor, as landlord or sublandlord, as the case may be, shall assign or otherwise encumber the Rents or any interest therein without first obtaining the written consent of State Farm;

		
			 
		

			
	
			
				 (d)
			Mortgagor shall, after the expiration of all applicable grace or cure periods, default or be in default under any agreement, other than the Loan Documents, which (i) is secured by a lien on the Secured Property that is junior and subordinate to this Mortgage (regardless of whether such lien was obtained with the prior written consent of State Farm); (ii) is secured by a lien on the respective interests of the constituent entities in Mortgagor (regardless of whether such lien was obtained with the prior written consent of State Farm); or (iii) would, as a result of such default, subject the Secured Property to any mechanics’, materialmen’s or other lien or claim of lien, other than a lien that constitutes a Contested Lien pursuant to Section 3.5 above;

		
			 
		

			
	
			
				 (e)
			Should any representation or warranty made by Mortgagor in, under or pursuant to any of the Loan Documents be false or misleading in any material respect as of the date on which such representation or warranty was made or deemed remade;

		
			 
		

			
	
			
				 (f)
			Should any of the Loan Documents cease to be in full force and effect or be declared null and void, or cease to constitute valid and subsisting liens and/or valid and perfected security interests in, to or upon the Secured Property;

		
			 
		

			
	
			
				 (g)
			Should any violation of Section 3.11 hereof occur or should any other event occur which, under the terms of the Loan Documents, would permit State Farm to accelerate the maturity of the Indebtedness;

		
			

		 

		

			 

		

		

			-  24  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

		
			 
		

			
	
			
				 (h)
			Should Mortgagor fail at any time to satisfy the requirements of Section 3.7 and such failure shall continue for fifteen (15) days after written notice thereof;

		
			 
		

			
	
			
				 (i)
			Should any Liable Party (as defined in Section 7.13 hereof) (A) generally not pay its debts as they become due; (B) admit in writing its inability to pay its debts; or (C) make a general assignment for the benefit of creditors;

		
			 
		

			
	
			
				 (j)
			Should any Liable Party commence any case, proceeding or other action seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it and its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking to have an order for relief entered against it as debtor, or seeking appointment of a receiver for it or for all or any substantial part of its property (collectively, a “Proceeding”);

		
			 
		

			
	
			
				 (k)
			Should any Liable Party take an action to authorize any of the actions set forth above in subsections (i) or (j) of this Section 4.1; 

		
			 
		

			
	
			
				 (l)
			Should any Proceeding be commenced against any Liable Party, and such Proceeding result in the entry of an order for relief against it which is not fully stayed within thirty  (30) business days after the entry thereof or remain undismissed for a period of ninety (90) days; 

		
			 
		

			
	
			
				 (m)
			Should (i) a final judgment, other than a final judgment in connection with any condemnation, including any judgment or other final determination of any contest permitted by Section 3.5 of this Mortgage, be entered against Mortgagor that (A) adversely affects the value, use or operation of the Secured Property; or (B) adversely affects, or reasonably may tend to adversely affect, the validity, enforceability or priority of the liens or security interests created in and by this Mortgage, or the other Loan Documents, or both; or (ii) execution or other final process issue on any judgment with respect to the Secured Property, and Mortgagor shall fail to discharge the same, or provide for its discharge in accordance with its terms, or procure a stay of execution thereon in any event within thirty (30) days from entry, or should Mortgagor not within such period, or such longer period during which execution on such judgment shall have been stayed, appeal therefrom or from the order, decree or process upon or pursuant to which such judgment shall have been entered and cause its execution to be stayed during such appeal, or if on appeal, such order, decree or process shall be affirmed and Mortgagor shall not discharge such judgment or provide for its discharge in accordance with its terms within thirty (30) days after the entry of such order or decree of affirmation, or if any stay of execution on appeal is released or otherwise discharged; 

		
			 
		

			
	
			
				 (n)
			Should a Successor Guarantor fail to execute and deliver to State Farm all Guaranty Documents reasonably requested by State Farm necessary to assume all of the obligations and liabilities of the deceased or dissolved Guarantor under the Loan Documents within two hundred seventy (270) days following the death of an individual Guarantor or one hundred eighty (180) days following the dissolution or cessation of business of an entity Guarantor, as applicable; or

		
			

		 

		

			 

		

		

			-  25  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

		
			 
		

			
	
			
				 (o)
			An Event of Default shall occur under the Nestle Mortgage.

		
			
		

		
			

		 

		

			 

		

		

			-  26  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

			
	
			
				ARTICLE 5
			

REMEDIES

		
			 
		

			
	
			
				 5.1
			Remedies.

		
			 
		

			
	
			
				 (a)
			Upon the occurrence of an Event of Default, State Farm, at its option, may at any time thereafter declare the entire Indebtedness to be immediately due and payable and the same shall thereupon become immediately due and payable, without any further presentment, demand, protest or notice of any kind being required and State Farm, at its option and in its sole discretion, shall also be entitled to do any of the following:

		
			 
		

			
	
			
				 (i)
			(A) to the extent permitted by applicable law, in person, by agent or by a receiver, without regard to the adequacy of security, the solvency of Mortgagor or the condition of the Secured Property, without obligation to do so and without notice to or demand upon Mortgagor, enter upon and take possession of the Secured Property or any part thereof in its own name or in the name of a trustee and do any acts which State Farm deems necessary to preserve the value or marketability of the Secured Property; (B) sue for or otherwise collect the Rents and apply the same, less costs and expenses of operation and collection, including reasonable attorneys’ fees, against the Indebtedness, all in such order as State Farm may determine; (C) appear in and defend any action or proceeding purporting to affect, in any manner whatsoever, the Indebtedness, the security hereof or the rights or powers of State Farm; (D) pay, purchase or compromise any encumbrance, charge or lien that in the judgment of State Farm is prior or superior hereto; and (E) in exercising any such powers, pay necessary expenses, employ counsel and pay reasonable attorneys’ fees;

		
			 
		

			
	
			
				 (ii)
			to the extent permitted by applicable law, as a matter of strict right and without notice to Mortgagor or anyone claiming under Mortgagor, and without regard to: (A) the solvency of Mortgagor; (B) whether there has been or may be any impairment of or diminution in the value of the Secured Property; or (C) whether the amount of the Indebtedness exceeds the then value of the Secured Property, apply ex parte to any court having jurisdiction to appoint a receiver to enter upon and take possession of the Secured Property and Mortgagor hereby waives notice of any application therefor, provided, if required by law, a hearing to confirm such appointment with notice to Mortgagor is set within the time required by law (any such receiver shall have all the powers and duties of receivers in similar cases and all the powers and duties of State Farm in case of entry as provided herein, and shall continue as such and exercise all such powers until the date of confirmation of sale, unless such receivership is sooner terminated);

			
	
			
				 (iii)
			commence an action to foreclose this Mortgage in the manner provided in this Mortgage or by law; and

			
	
			
				 (iv)
			with respect to any Collateral, proceed as to both the real and personal property in accordance with State Farm’s rights and remedies in respect of the Real Estate and Improvements, or proceed to sell said Collateral separately and without regard to the Real 

		 

		

			 

		

		

			-  27  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

	Estate and Improvements in accordance with State Farm’s rights and remedies with respect to the Collateral.

			
	
			
				 (b)
			In (i) any action to foreclose the lien of this Mortgage or enforce any other remedy of State Farm under any of the Loan Documents; or (ii) any other proceeding whatsoever in connection with any of the Loan Documents or the Secured Property in which State Farm is named as a party, there shall be allowed and included, as additional indebtedness in the judgment or decree for sale resulting therefrom, all expenses paid or incurred in connection with such proceeding by or on behalf of State Farm including, without limitation, attorneys’ and paralegals’ fees, appraisers’ fees, outlays for documentary and expert evidence, stenographers’ charges, publication costs, land and environmental survey costs, and costs (which may be estimated as to items to be expended after entry of such judgment or decree) of procuring all abstracts of title, title certificates, title searches and examinations, title insurance policies, Torrens certificates and any similar data and assurances with respect to the title to the Secured Property as State Farm may deem reasonably necessary either to prosecute or defend in such proceeding or to evidence to bidders at any sale pursuant to such decree the true condition of the title to or value of the Secured Property.  All expenses and fees of the foregoing nature and such expenses and fees as may be incurred in the protection of the Secured Property and the maintenance of the lien of this Mortgage thereon in any litigation affecting the Loan Documents or the Secured Property, including probate and bankruptcy proceedings, or in preparation for the commencement or defense of any proceeding or threatened suit or proceeding in connection therewith, shall upon demand of State Farm be immediately due and payable by Mortgagor with interest thereon at the Default Rate from the date of prepayment of such expenses and fees and shall become a part of the Indebtedness secured by this Mortgage.

		
			 
		

			
	
			
				 (c)
			Unless otherwise provided herein, if Mortgagor shall at any time fail to perform or comply with any of the terms, covenants and conditions required on Mortgagor’s part to be performed and complied with under any of the Loan Documents or any other agreement that, under the terms of this Mortgage, Mortgagor is required to perform, State Farm may, at its option and in its sole discretion: 

		
			 
		

			
	
			
				 (i)
			make any payments hereunder or thereunder payable by Mortgagor; and/or

		
			 
		

			
	
			
				 (ii)
			after the expiration of any applicable grace period and subject to Mortgagor’s right to contest certain Obligations specifically granted in this Mortgage, perform any such other acts thereunder on part of Mortgagor to be performed and enter upon the Secured Property for such purpose.

		
			 
		

			
	
			
				 (d)
			To the extent permitted by applicable law, in any foreclosure sale of the Secured Property, the Secured Property, including the Real Estate and Improvements, may be sold in one parcel (i.e. as a single entity) or in two or more parcels and, otherwise, in such manner or order as State Farm, in its sole discretion, may elect or as the court having jurisdiction over such foreclosure sale may otherwise order or direct.

		
			 
		

		
			

		 

		

			 

		

		

			-  28  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

			
	
			
				 (e)
			The proceeds of any foreclosure sale of the Secured Property shall be distributed and applied in accordance with the applicable law of the Commonwealth of Pennsylvania or as otherwise directed by order of the court in which this Mortgage is foreclosed.

		
			 
		

			
	
			
				 (f)
			All remedies of State Farm provided for herein are cumulative and shall be in addition to any and all other rights and remedies provided in the other Loan Documents or by law, including any right of offset.  The exercise of any right or remedy by State Farm hereunder shall not in any way constitute a cure or waiver of any default or Event of Default hereunder or under the Loan Documents, invalidate any act done pursuant to any notice of default or prejudice State Farm in the exercise of any of its rights hereunder or under the Loan Documents.

		
			 
		

			
	
			
				 (g)
			To the extent permitted by law, Mortgagor hereby waives its right of redemption in the event of foreclosure.

		
			 
		

			
	
			
				 (h)
			Notwithstanding anything herein to the contrary, in the event of (i) a Transfer of all or any portion of the Secured Property by Mortgagor or a Transfer of fifty percent (50%) or more of the interests in the entity (or entities) comprising Mortgagor, each without the prior written consent of State Farm or in violation of Section 3.11 hereof; and/or (ii) the occurrence of any of the bankruptcy-related Events of Default under Sections 4.1(i)(C), 4.1(j), 4.1(k) (solely with respect to authorizing the action set forth in Section 4.1(i)(C)) or 4.1(l) of this Mortgage, in addition to the remedies specified in this Article Five, Mortgagor and Guarantor shall immediately and automatically be and become personally liable for the payment of the Indebtedness.

		
			 
		

			
	
			
				ARTICLE 6
			

SECURITY AGREEMENT AND FIXTURE FILING

		
			 
		

			
	
			
				 6.1
			Security Agreement.

		
			 
		

		
			Mortgagor hereby assigns and grants to State Farm a first priority present security interest in and to the Rents, Contract Rights, Intangible Personal Property, Tangible Personal Property, Proceeds, Right to Encumber and Other Rights and Interests described in Article Two and in and to any other part or component of the Secured Property which may not be deemed real property or which may not constitute a “fixture” (within the meaning of the Code as defined in this Section 6.1), and all replacements, substitutions and additions of, for and to the same and the proceeds thereof (collectively, the “Collateral”) in order to secure payment of the Indebtedness and performance by Mortgagor of the other Obligations.  This Mortgage shall constitute a Security Agreement within the meaning of the Uniform Commercial Code (the “Code”) of the State in which the Real Estate is located.
		

		
			 
		

			
	
			
				 6.2
			Fixture Filing.

		
			 
		

		
			This Mortgage, upon recording or registration in the real estate records of the proper office, shall constitute a “fixture filing” within the meaning of the Code with respect to any and all fixtures 

		 

		

			 

		

		

			-  29  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

included within the foregoing description and definition of the Secured Property and any Collateral that may now be or hereafter become “fixtures” within the meaning of the Code.
		

		
			 
		

			
	
			
				 6.3
			Remedies.

		
			 
		

		
			If any Event of Default occurs under this Mortgage, State Farm, in addition to its other rights and remedies provided under this Mortgage, shall have all the rights and remedies available to a secured party under the Code as well as all other rights and remedies available at law or in equity.  Mortgagor upon request by State Farm will assemble the Collateral and make it available to State Farm at a place State Farm designates to allow State Farm to take possession or dispose of the Collateral.  Mortgagor agrees that ten (10) days prior written notice of the time and place of the sale of the Collateral, sent to Mortgagor in the manner provided for the mailing of notices herein, is reasonable notice to Mortgagor.  The sale of the Collateral may be conducted by an employee or agent of State Farm and any Person, including both Mortgagor and State Farm, shall be eligible to purchase any part or all of the Collateral at the sale.  The reasonable expenses of retaking, holding, preparing for sale, selling and the like incurred by State Farm shall include, without limitation, attorneys’ and paralegals’ fees and legal expenses incurred by State Farm, and shall be paid by Mortgagor.  
		

		
			 
		

			
	
			
				 6.4
			Waivers.

		
			 
		

		
			Mortgagor waives any right to require State Farm to (a) proceed against any Person; (b) proceed against or exhaust any Collateral; or (c) pursue any other remedy in its power.  Mortgagor further waives any defense arising by reason of any power and any defense arising by reason of any disability or other defense of Mortgagor or any other Person, or by reason of the cessation from any cause whatsoever of the liability of Mortgagor or any other Person.  Until the Indebtedness shall have been paid in full, Mortgagor shall not have any right to subrogation and Mortgagor waives any right to enforce any remedy which Mortgagor now has or may hereafter have against State Farm or against any other Person and waives any benefit of and any right to participate in any Collateral or security whatsoever now or hereafter held by State Farm for or with respect to the Indebtedness and/or the Obligations.
		

		
			 
		

			
	
			
				 6.5
			Authorization.

		
			 
		

		
			Mortgagor hereby authorizes State Farm at any time and from time to time during the life of the Loan to file in any filing office in any Code jurisdiction any financing statements, amendments or addendums thereto and continuation statements (the “UCC Documents”) in order to perfect or continue the perfection of any security interest granted under this Mortgage or any of the other Loan Documents.  Mortgagor agrees to provide any information needed to complete such UCC Documents to State Farm promptly upon request.
		

		
			 
		

		
			Mortgagor shall pay to State Farm, within five (5) business days of written demand, any and all costs and expenses incurred by State Farm in connection with the preparation, processing and filing of any such UCC Documents, including reasonable attorneys’ fees and all 

		 

		

			 

		

		

			-  30  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

disbursements.  Such costs and expenses shall bear interest at the Default Rate from the date paid by State Farm until the date repaid by Mortgagor and such costs and expenses, together with such interest, shall be part of the Indebtedness and shall be secured by this Mortgage.
		

		
			 
		

			
	
			
				 6.6
			Preservation of Mortgagor’s Existence.

		
			 
		

		
			Mortgagor shall do all things necessary to preserve and keep in full force and effect its existence, franchises, rights and privileges under the laws of the state of its formation and of the State.
		

		
			 
		

			
	
			
				 6.7
			Notice of Change of Location of Collateral.

		
			 
		

		
			Without giving at least thirty (30) days’ prior written notice to State Farm, Mortgagor shall not add to or change any location at which any of the Collateral is stored, held or located.  
		

		
			 
		

			
	
			
				ARTICLE 7
			

MISCELLANEOUS

		
			 
		

			
	
			
				 7.1
			Notices, Consents, and Approvals.

		
			 
		

		
			Any notice, consent or approval that State Farm or Mortgagor may desire or be required to give to the other shall be in writing and shall be mailed or delivered to the intended recipient thereof at its address set forth below or at such other address as such intended recipient may from time to time by notice in writing designate to the sender pursuant hereto.  Any such notice, consent or approval shall be deemed effective if given (a) by nationally recognized overnight courier for next day delivery three (3) business days after delivery to such courier; (b) by United States mail (registered or certified), three (3) business days after such communication is deposited in the mails; or (c) in person, when written acknowledgment of receipt thereof is given.  Except as otherwise specifically required herein, notice of the exercise of any right or option granted to State Farm by this Mortgage is not required to be given.
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						(a)

					
					
						If to State Farm:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						State Farm Life Insurance Company

				
	
					
						 

					
					
						 

					
					
						One State Farm Plaza

				
	
					
						 

					
					
						 

					
					
						Bloomington, Illinois 61710

				
	
					
						 

					
					
						 

					
					
						Attn: Corporate Law-Investments , A-3

				
	
					
						 

					
					
						 

					
					
						Loan No. 14773

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						and

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						McCarter & English, LLP

				
	
					
						 

					
					
						 

					
					
						Four Gateway Center

				
	
					
						 

					
					
						 

					
					
						100 Mulberry Street

				

		
			 
		

		

		 

		

			 

		

		

			-  31  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

	
					
						

					
						 

					
					
						 

					
					
						Newark, New Jersey 07102

				
	
					
						 

					
					
						 

					
					
						Attn: Jeffrey A. Petit, Esq.

				

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						(b)

					
					
						If to Mortgagor:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Riverbend Upper Macungie Properties I LLC

				
	
					
						 

					
					
						 

					
					
						c/o Griffin Industrial Realty, Inc.

				
	
					
						 

					
					
						 

					
					
						204 West Newberry Road

				
	
					
						 

					
					
						 

					
					
						Bloomfield, CT  06002

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						and

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Griffin Industrial Realty, Inc.

				
	
					
						 

					
					
						 

					
					
						204 West Newberry Road

				
	
					
						 

					
					
						 

					
					
						Bloomfield, CT  06002

				
	
					
						 

					
					
						 

					
					
						Attn:  Anthony J. Galici

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						and

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Griffin Industrial Realty, Inc.

				
	
					
						 

					
					
						 

					
					
						641 Lexington Avenue

				
	
					
						 

					
					
						 

					
					
						26th Floor

				
	
					
						 

					
					
						 

					
					
						New York, New York  10022

				
	
					
						 

					
					
						 

					
					
						Attn:  Michael S. Gamzon

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						and

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Saul Ewing Arnstein & Lehr LLP

				
	
					
						 

					
					
						 

					
					
						Centre Square West

				
	
					
						 

					
					
						 

					
					
						1500 Market Street, 38th Floor

				
	
					
						 

					
					
						 

					
					
						Philadelphia,  PA 19102-2186 

				
	
					
						 

					
					
						 

					
					
						Attn: Martin J. Doyle, Esq. 

				

		
			 
		

		
			Either party’s failure to give a copy of any notice to the intended recipient’s counsel shall not invalidate any notice given to the intended recipient hereunder.
		

		
			 
		

			
	
			
				 7.2
			Time of Essence. 

		
			 
		

		
			It is specifically agreed that time is of the essence for all of the terms and provisions contained in this Mortgage.
		

		
			 
		

			
	
			
				 7.3
			Covenants of Mortgage Run with Title to the Real Estate. 

		
			 
		

		
			The Obligations set forth in this Mortgage are intended as, shall be deemed and are hereby declared to be covenants running with the title to the land which constitutes the Real Estate and 

		 

		

			 

		

		

			-  32  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

any and all portions(s) thereof, and such Obligations shall be binding upon and enforceable by the owner and holder of this Mortgage personally against Mortgagor and any successor in title to Mortgagor who or which shall acquire and/or hold title to the Real Estate while the same is subject to and encumbered by this Mortgage.  Every Person that shall have, claim, own, hold, accept or otherwise acquire title to the Real Estate, whether or not such title is reflected in the Public Records of the State and County in which the Real Estate is located, shall be conclusively presumed and deemed to have consented and agreed to personally perform each and every covenant and obligation of Mortgagor contained in this Mortgage, to the same extent as the original Mortgagor, whether or not any reference to this Mortgage is contained in the document or instrument pursuant to which such Person shall have acquired title to the Real Estate and whether or not such Person shall have expressly agreed in writing to assume or perform the Obligations of Mortgagor contained in this Mortgage.
		

		
			 
		

			
	
			
				 7.4
			Governing Law.

		
			 
		

		
			This Mortgage shall be governed by and construed in accordance with the laws of the State.  To the extent that this Mortgage may operate as a security agreement under the Code, State Farm shall have all rights and remedies conferred therein for the benefit of a Secured Party.
		

		
			 
		

			
	
			
				 7.5
			Severability.

		
			 
		

		
			If any provision of this Mortgage, or any paragraph, sentence, clause, phrase or word, or the application thereof, in any circumstance, is held invalid, the validity of the remainder of this Mortgage shall be construed as if such invalid part were never included herein.
		

		
			 
		

		
			 
		

			
	
			
				 7.6
			Headings. 

		
			 
		

		
			The headings of articles, sections, paragraphs and subparagraphs in this Mortgage are for convenience of reference only and shall not be construed in any way to limit or define the content, scope or intent of the provisions hereof.
		

		
			 
		

			
	
			
				 7.7
			Grammar.

		
			 
		

		
			As used in this Mortgage, the singular shall include the plural, and masculine, feminine and neuter pronouns shall be fully interchangeable, where the context so requires.
		

		
			 
		

			
	
			
				 7.8
			Deed in Trust.

		
			 
		

		
			If title to the Secured Property or any part thereof is now or hereafter becomes vested in a trustee, any prohibition or restriction contained herein against the creation of any lien on the Secured Property shall be construed as a similar prohibition or restriction against the creation of any lien on or security interest in the beneficial interest of such trust.
		

		
			 
		

		
			

		 

		

			 

		

		

			-  33  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

			
	
			
				 7.9
			Successors and Assigns.

		
			 
		

		
			 This Mortgage and all provisions hereof shall be binding upon and enforceable against Mortgagor, its successors, assigns and all other Persons claiming under or through Mortgagor and the word “Mortgagor” when used herein shall include all such Persons and any others liable for the payment of the Indebtedness or any part thereof, whether or not they have executed the Note or this Mortgage.  The words “State Farm” when used herein shall include State Farm’s successors and assigns, including all other holders, from time to time, of the Note.
		

		
			 
		

			
	
			
				 7.10
			No Oral Change.

		
			 
		

		
			This Mortgage may only be modified, amended or changed by an instrument in writing signed by Mortgagor and State Farm and may only be released, discharged or satisfied of record by an instrument in writing signed by State Farm.  No waiver of any term, covenant, condition or provision of this Mortgage shall be effective unless given in writing by State Farm, and if so given by State Farm shall only be effective in the specific instance in which given.
		

		
			 
		

			
	
			
				 7.11
			Entire Agreement.

		
			 
		

		
			This Mortgage and the other Loan Documents supersede, in all respects, all prior written or oral agreements between Mortgagor and State Farm relating to the Loan, this Mortgage and the other Loan Documents (including, without limitation, the Loan Application submitted by Mortgagor to State Farm in connection with the Loan) and there are no agreements, understandings, warranties or representations between the parties except as set forth in this Mortgage and the other Loan Documents.
		

		
			 
		

			
	
			
				 7.12
			Construction.

		
			 
		

		
			Mortgagor acknowledges that Mortgagor and Mortgagor’s counsel have reviewed this Mortgage and the other Loan Documents and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be employed in the construction or interpretation of this Mortgage or the other Loan Documents or any amendments or schedules to any of the foregoing.
		

		
			 
		

			
	
			
				 7.13
			Limitation of Liability.

		
			 
		

		
			In consideration of the security provided by Mortgagor to State Farm for repayment of the Indebtedness, including, without limitation, the liens on and security interests in the Secured Property granted pursuant to this Mortgage and the assignment of the Rents and Leases made pursuant to the Assignment of Rents and Leases, upon the occurrence of an Event of Default under this Mortgage or under any of the other Loan Documents, State Farm agrees that it shall not, except as otherwise set forth in this Section, seek to enforce, nor shall State Farm be entitled to enforce, any deficiency or monetary judgment against Mortgagor, Guarantor, any shareholder or other affiliate or subsidiary of Guarantor, or Mortgagor, any partner of Mortgagor, any member of 

		 

		

			 

		

		

			-  34  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

Mortgagor, any shareholder of Mortgagor or any beneficiary of Mortgagor (individually, an “Exculpated Party”, and collectively, the “Exculpated Parties”), personally, and shall not levy or execute judgment upon any property of the Exculpated Parties, other than the Secured Property; it being expressly agreed, acknowledged and understood, however, that the foregoing limitation of the liability of an Exculpated Party shall not apply to the extent that such Exculpated Party is, pursuant to the further terms hereof, liable for any Losses (as defined in this Section 7.13); and nothing contained herein shall in any manner or way release, affect or impair:
		

		
			 
		

			
	
			
				 (a)
			The existence of the Indebtedness and Obligations created in and evidenced by the Loan Documents;

		
			 
		

			
	
			
				 (b)
			The enforceability of the liens, security interests and assignments created in and granted by the Loan Documents against the Secured Property;

		
			 
		

			
	
			
				 (c)
			The enforceability of the Environmental Indemnification Agreement, Master Lease and any Guaranty given to State Farm; 

		
			 
		

			
	
			
				 (d)
			The right of State Farm to recover from Mortgagor and Guarantor all Indebtedness, including principal, interest and other amounts outstanding under the Loan Documents, following (i) a Transfer of all or any portion of the Secured Property or a Transfer of fifty percent (50%) or more of the interests in the entity (or entities) comprising Mortgagor, each without the prior written consent of State Farm or in violation of Section 3.11 of this Mortgage; and/or (ii) the occurrence of any of the bankruptcy-related Events of Default under Sections 4.1(i)(C), 4.1(j), 4.1(k) (solely with respect to authorizing the action set forth in Section 4.1(i)(C)) or 4.1(l) of this Mortgage; or

		
			 
		

			
	
			
				 (e)
			The right of State Farm to recover from Mortgagor and any Guarantor (Mortgagor and Guarantor are sometimes hereafter individually called a “Liable Party” and collectively called the “Liable Parties”), who shall be jointly and severally liable for all Losses incurred by State Farm arising from the following:

		
			 
		

			
	
			
				 (i)
			The failure to apply any Rents received by any of the Exculpated Parties or Liable Parties at any time after an Event of Default (all such Rents received during such period being herein called “Recoverable Rents”) to (A) the payment of any amount due under the Loan Documents, including, without limitation, the Indebtedness; (B) the payment of all operating expenses of the Secured Property; or (C) the performance of any Obligations required under the Loan Documents; provided, however, the Liable Parties shall not be liable to State Farm under this subsection (i) for any Recoverable Rents in excess of the Recoverable Rents applied to the payment of the amounts and the performance of the obligations set forth in (A), (B) and (C) above; 

		
			 
		

			
	
			
				 (ii)
			The misapplication or misappropriation of any tenant security deposits, advance or prepaid Rents, cancellation or termination fees or other similar sums paid to or held by Mortgagor, any affiliate of Mortgagor or any other Person (other than State Farm) in 

		 

		

			 

		

		

			-  35  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

	connection with the operation of the Secured Property in violation of the Loan Documents or any Leases affecting the Secured Property;

			
	
			
				 (iii)
			The willful or wanton act or omission on the part of any of the Exculpated Parties or Liable Parties resulting in damage to or destruction of all or any portion of the Secured Property, including, without limitation, waste or any act of arson or malicious destruction by any of the Exculpated Parties or Liable Parties;

			
	
			
				 (iv)
			The failure to maintain insurance as required by the Loan Documents or any Leases affecting the Secured Property or the failure to timely pay insurance premiums, real estate taxes, regular or special assessments or utility charges affecting the Secured Property;

			
	
			
				 (v)
			The failure of the Exculpated Parties or Liable Parties to deliver to State Farm any Proceeds received by any of them relating to the Secured Property, or to use such Proceeds for Restoration of the Secured Property in accordance with the terms of the Loan Documents; 

			
	
			
				 (vi)
			Any fraud or willful misrepresentation of a material fact by any of the Exculpated Parties or Liable Parties in any document executed or presented to State Farm in connection with the Loan; or

			
	
			
				 (vii)
			The failure on the part of any of the Exculpated Parties or Liable Parties to comply with the provisions of the Environmental Indemnification Agreement.  Notwithstanding anything contained herein to the contrary, the indemnification obligations under this subsection (vii) shall not apply to any costs incurred by or imposed upon State Farm which arise solely as a consequence of a condition coming into existence on the Secured Property subsequent to the time of both State Farm taking title to the Secured Property by foreclosure or deed in lieu of foreclosure and State Farm taking physical possession of the Secured Property, unless such costs are incurred in connection with an event or events related to a condition existing at the Secured Property prior to or at the time of transfer of title and physical possession of the Secured Property to State Farm; provided, however, Mortgagor shall bear the burden of proof that such event or events: (A) occurred subsequent to the transfer of title and physical possession to State Farm; and (B) did not occur as a result of any action of any of the Exculpated Parties or Liable Parties.  

		
			As used herein, “Losses” means any and all claims, suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations, debts, damages, costs, fines, penalties, charges, fees, expenses (including, without limitation, reasonable legal fees and expenses and other costs of defense and internal administrative fees assessed by State Farm), judgments, awards or amounts paid in settlement of whatever kind or nature. 
		

		
			 
		

			
	
			
				 7.14
			Waiver of Trial by Jury.

		
			 
		

		
			

		 

		

			 

		

		

			-  36  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

		
			Mortgagor hereby waives, to the fullest extent permitted by applicable law, the right to trial by jury in any action, proceeding or counterclaim filed by any party, whether in contract, tort or otherwise, relating directly or indirectly to this Mortgage or any acts or omissions of Mortgagor in connection therewith or contemplated thereby.
		

		
			 
		

			
	
			
				 7.15
			Servicing Fees and Expenses.  

		
			 
		

		
			Mortgagor acknowledges and agrees that State Farm shall impose certain reasonable administrative processing fees (the “Servicing Fees”) in connection with (a) the extension, renewal, modification, amendment and termination of the Loan Documents; (b) the release or substitution of collateral therefor; (c) the consideration of any consents, waivers and approvals with respect to the Secured Property or Mortgagor; (d) the review of any Lease or proposed Lease or the preparation or review of any tenant estoppel certificate or any subordination, nondisturbance and attornment agreement; or (e) any other services provided by State Farm or any of its agents to or on behalf of Mortgagor in connection with the Secured Property, the Loan Documents or the Indebtedness secured thereby (the occurrence of any of the foregoing shall hereafter be referred to as a “Servicing Action”).  Mortgagor hereby acknowledges and agrees to pay, immediately, upon demand, all such Servicing Fees (as the same may be increased or decreased from time to time), and any additional fees of a similar type or nature that may be imposed by State Farm from time to time in connection with a Servicing Action.  Mortgagor shall also be responsible for the payment of all fees and expenses of State Farm’s outside counsel in the event that State Farm, in its sole discretion, shall determine that the assistance of an outside attorney is necessary or appropriate to accomplish the Servicing Action. 
		

		
			 
		

			
	
			
				 7.16
			Subrogation.

		
			 
		

		
			To the extent the proceeds of the Indebtedness are used to pay any outstanding lien, charge or encumbrance affecting the Secured Property (including, without limiting the generality of the foregoing, any prior lien), State Farm shall be subrogated to all rights, interests and liens owned or held by any owner or holder of such outstanding liens, charges and encumbrances, irrespective of whether such liens, charges or encumbrances are released of record; provided, however, the terms and provisions hereof shall govern the rights and remedies of State Farm and, to the extent permitted by law without impairing any of State Farm’s rights of subrogation, shall supersede the terms, provisions, rights and remedies under the lien or liens to which State Farm is subrogated hereunder.
		

		
			 
		

			
	
			
				 7.17
			Modifications and Extensions.

		
			 
		

		
			Mortgagor and State Farm may agree to (a) extend the time for payment of all or any part of the Indebtedness; (b) reduce, rearrange or otherwise modify the terms of payment thereof; (c) accept a renewal note or notes therefor; and (d) otherwise deal with the Secured Property or the Loan Documents, all without notice to or the consent of any junior lienholder or any other Person having an interest in the Secured Property and/or Collateral subordinate to the lien of this Mortgage and without the consent of Mortgagor if Mortgagor has then parted with title to the Secured 

		 

		

			 

		

		

			-  37  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

Property and/or Collateral.  No such extension, reduction, modification, renewal or dealing shall affect the priority of this Mortgage or release any liability of Mortgagor or any other Person or impair the security hereof in any manner whatsoever.
		

		
			 
		

			
	
			
				 7.18
			Future Advances.

		
			Pursuant to 42 Pa. C.S.A. §8144, this Mortgage secures the unpaid balance of advances made, with respect to the Secured Property, for the payment of taxes, assessments, maintenance charges, insurance premiums or costs incurred by State Farm for the protection of the Secured Property or the lien of this Mortgage, and expenses incurred by State Farm by reason of an Event of Default, and the priority of the lien of such advances shall relate back to the date of recording of this Mortgage.
		

			
	
			
				 7.19
			Confession of Judgment.

		
			FOR THE PURPOSE OF OBTAINING POSSESSION OF THE SECURED PROPERTY UPON THE OCCURRENCE OF AN EVENT OF DEFAULT HEREUNDER, MORTGAGOR HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD IN THE COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE, AS ATTORNEY FOR MORTGAGOR AND ALL PERSONS CLAIMING UNDER OR THROUGH MORTGAGOR TO SIGN AN AGREEMENT FOR ENTERING IN ANY COMPETENT COURT AN ACTION IN EJECTMENT FOR POSSESSION OF THE SECURED PROPERTY AND TO APPEAR FOR AND CONFESS JUDGMENT AGAINST MORTGAGOR AND AGAINST ALL PERSONS CLAIMING UNDER OR THROUGH MORTGAGOR, IN FAVOR OF STATE FARM, FOR RECOVERY BY STATE FARM OF POSSESSION THEREOF, FOR WHICH THIS MORTGAGE, OR A COPY THEREOF VERIFIED BY AFFIDAVIT, SHALL BE A SUFFICIENT WARRANT; AND THEREUPON A WRIT OF POSSESSION MAY IMMEDIATELY ISSUE FOR POSSESSION OF THE SECURED PROPERTY, WITHOUT ANY PRIOR WRIT OR PROCEEDING WHATSOEVER AND WITHOUT ANY STAY OF EXECUTION.  IF FOR ANY REASON AFTER SUCH ACTION HAS BEEN COMMENCED IT SHOULD BE DISCONTINUED, OR POSSESSION OF THE SECURED PROPERTY SHALL REMAIN IN OR BE RESTORED TO MORTGAGOR, STATE FARM SHALL HAVE THE RIGHT FOR THE SAME EVENT OF DEFAULT OR ANY SUBSEQUENT EVENT OF DEFAULT TO BRING ONE OR MORE FURTHER ACTIONS AS ABOVE PROVIDED TO RECOVER POSSESSION OF THE SECURED PROPERTY.  STATE FARM MAY BRING AN ACTION IN EJECTMENT AND CONFESS JUDGMENT THEREIN BEFORE OR AFTER THE INSTITUTION OF PROCEEDINGS TO FORECLOSE THIS MORTGAGE OR TO ENFORCE THE NOTE, OR AFTER ENTRY OF JUDGMENT THEREIN OR ON THE NOTE, OR AFTER A SHERIFF’S SALE OF THE SECURED PROPERTY IN WHICH STATE FARM IS THE SUCCESSFUL BIDDER; THE AUTHORIZATION TO PURSUE SUCH PROCEEDINGS FOR OBTAINING POSSESSION AND CONFESS JUDGMENT THEREIN IS AN ESSENTIAL PART OF THE REMEDIES FOR ENFORCEMENT OF THIS MORTGAGE AND THE NOTE, AND SHALL SURVIVE ANY EXECUTION SALE TO STATE FARM.
		

		
			

		 

		

			 

		

		

			-  38  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

		
			MORTGAGOR CONFIRMS TO STATE FARM THAT (I) MORTGAGOR IS A BUSINESS ENTITY AND THAT ITS PRINCIPALS ARE KNOWLEDGEABLE IN BUSINESS MATTERS; (II) THE TERMS OF THIS MORTGAGE, INCLUDING THE FOREGOING WARRANT OF ATTORNEY TO CONFESS JUDGMENT, HAVE BEEN NEGOTIATED AND AGREED UPON IN A COMMERCIAL CONTEXT; AND (III) IT HAS FULLY REVIEWED THE AFORESAID WARRANT OF ATTORNEY TO CONFESS JUDGMENT WITH ITS OWN COUNSEL AND IS KNOWINGLY AND VOLUNTARILY WAIVING CERTAIN RIGHTS IT WOULD OTHERWISE POSSESS, INCLUDING BUT NOT LIMITED TO, THE RIGHT TO ANY NOTICE OR A HEARING PRIOR TO THE ENTRY OF JUDGMENT BY STATE FARM PURSUANT TO THE AFORESAID WARRANT OF ATTORNEY.
		

		
			

		 

		

			 

		

		

			-  39  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

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

			
					
						RIVERBEND UPPER MACUNGIE PROPERTIES I LLC

				
	
					
						By: Riverbend Lehigh Valley Holdings IV

				
	
					
						LLC, its sole member

				
	
					
						By: Griffin Industrial, LLC, its sole member

				
	
					
						 

				
	
					
						By: /s/Anthony Galici

				
	
					
						Name: Anthony Galici

				
	
					
						Title: Vice President

				

		
			 
		

		
			 
		

		
			The address of the within-named mortgagee is One State Farm Plaza, Bloomington, IL  61710.
		

			
					
						 

					
					
						/s/Jeffrey Petit

				
	
					
						 

					
					
						Agent for Mortgagee

				

		
			 
		

			
					
						STATE OF CONNECTICUT

					
					
						)

					
					
						 

				
	
					
						 

					
					
						)

					
					
						SS: _______________

				
	
					
						COUNTY OF HARTFORD

					
					
						)

					
					
						 

				

		
			 
		

		
			 
		

		
			On this 17th day of January, 2020 before me, Nichole Parlapiano, the undersigned officer, personally appeared Anthony J. Galici, who acknowledged himself to be the Vice President of Griffin Industrial, LLC, a Connecticut limited liability company, which is the Sole Member of Riverbend Lehigh Valley Holdings IV LLC, a Delaware limited liability company, which is the Sole Member of RIVERBEND UPPER MACUNGIE PROPERTIES I LLC, a Pennsylvania limited liability company, and that he, as such Officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained as his free act and deed as such Officer and the free act and deed of such limited liability companies.
		

		
			 
		

		
			
		

			
					
						 

					
					
						In witness whereof I hereunto set my hand.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						/s/Nichole Parlapiano

				
	
					
						 

					
					
						Nichole Parlapiano

				
	
					
						 

					
					
						Commissioner of the Superior Court

				
	
					
						 

					
					
						Notary Public

				
	
					
						 

					
					
						My Commission Expires: April 30, 2020

				

		
			 
		

		
			 

		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			 

		

		

			-  40  -

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

		
			EXHIBIT A
		

		
			 
		

		
			Legal Description of Real Estate
		

		
			 
		

		
			 
		

		
			ALL THAT CERTAIN lot, parcel, tract of land lying and being in the Township of Upper Macungie, County of Lehigh and Commonwealth of Pennsylvania, known as Lot 5, shown on a Preliminary/Final Minor Subdivision Plan of Lot 5, Section 2B of Iron Run recorded in Minor Subdivision Plan Volume 11, page 333, bounded and described as follows, to wit:
		

		
			 
		

		
			BEGINNING at an iron pin along the right-of-way line of Ambassador Drive also being a corner of land n/f Brandywine Industrial Partnership LP; being the POINT OF BEGINNING; thence along land n/f Brandywine Industrial Partnership LP; North 28° 53' 48" West, a distance of 611.69 feet to an iron pin along Hilltop Acres residential subdivision; thence along Hilltop Acres, North 59° 28' 17" East, a distance of 969.31 feet to an iron pin being a corner of land n/f Upper Macungie Township; thence along land n/f Upper Macungie Township, and also along land n/f Jeric Investment Partnership LP, South 28° 53' 48" East, a distance of 639.29 feet to a concrete monument along the right-of-way of Ambassador Drive; thence along the right-of-way of Ambassador Drive, South 61° 06' 12" West, a distance of 968.92 feet to an iron pin, being the POINT OF BEGINNING.
		

		
			 
		

		
			CONTAINING 606,045 square feet or 13.9129 acres, more or less.
		

		
			 
		

		
			TOGETHER WITH AND SUBJECT TO that certain Easement Agreement between Atlantic American Land Development, Inc. and Brandywine Industrial Partnership, L.P. dated June 16, 1999 and recorded in Misc. Volume 961, Page 548; as amended by that Amendment of Easement Agreement dated June 20, 2017, effective July 28, 2017 and recorded August 2, 2017 to Instrument Number 2017022082.
		

		
			 
		

		
			 
		

		
			Tax ID / Parcel No.  546607997641-1
		

		
			 
		

		
			 
		

		 

		

			 

		

		

			-  2  -

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