Document:

EXHIBIT
10.25

THIS MORTGAGE IS AN
OPEN-END MORTGAGE AND SECURES FUTURE ADVANCES

(All notices to be
given to Mortgagee pursuant to

42 Pa. C.S.A. 8143 shall be given as set forth

in Paragraph 25 of this Mortgage.)

OPEN-END MORTGAGE
AND SECURITY AGREEMENT

THIS OPEN-END MORTGAGE
AND SECURITY AGREEMENT (this “Mortgage” made this 14th day of January, 2004, by
and between Spitz, Inc., a Delaware corporation, with an address of P.O. Box
198, Route 1, Chadds Ford, Pennsylvania 19317 (the Mortgagor), and FIRST KEYSTONE
BANK (Mortgagee), a federally chartered stock savings bank organized and existing
under the laws of the United States of America, at Mortgagee’s office located at
22 West State Street, Media, Pennsylvania, 19063.

WITNESSETH:

WHEREAS, this
Mortgage is an Open-End Mortgageas set forth in 42 Pa. C.S.A. 8143 and secures obligations
of Mortgagor and Transnational, Inc. (TN) to Mortgagee up to a maximum amount
of principal indebtedness outstanding at any time of Three Million Two Hundred Thousand
($3,200,000.00) Dollars together with, but not limited to, advances for the payment
of taxes and municipal assessments, maintenance charges, insurance premiums, costs
incurred for the protection of the Mortgaged Property (hereinafter defined) or
the lien of this Mortgage, expenses incurred by Mortgagee by reason of default
by Mortgagor under this Mortgage the Note (hereinafter defined), and all other
sums due hereunder or secured hereby, plus accrued and unpaid interest due
under the Note; and

WHEREAS, Mortgagor
and TN, as part of the foregoing obligations, has executed and delivered to
Mortgagee its Mortgage Note, dated even date herewith (the Note), evidencing Mortgagor’s
and TN’s indebtedness to Mortgagee in the principal amount of Three Million Two
Hundred Thousand ($3,200,000.00) Dollars in accordance with a certain Commitment
Letter from Mortgagee to Mortgagor and TN, dated December 19, 2003, (the Commitment
Letter), and a certain Loan Agreement (the Loan Agreement), dated even date herewith,
by and between Mortgagor, TN and Mortgagee, together with interest thereon
payable at the rate and times, in the manner, and according to the terms and
conditions specified in the Note which provides for interest rate adjustments
based on a formula therein set forth; and

WHEREAS, all of
the terms, conditions and provisions of the Note, the Commitment Letter and the
Loan Agreement are by reference incorporated herein as if fully set forth; and

WHEREAS, Mortgagor
has duly executed and delivered this Mortgage to secure all of Mortgagor’s and
TN’s obligations under the Note and the Loan Agreement.

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NOW, THEREFORE, in
consideration of the aforesaid indebtedness, and to secure the payment of all
sums due or to become due under the Note, under the Commitment Letter, under the
Loan Agreement, and under the terms of this Mortgage, and to secure the payment
of all sums advanced by Mortgagee to Mortgagor and TN, as well as to secure the
performance and observance of all of the terms, conditions and provisions of
the Note, the Commitment Letter, the Loan Agreement, this Mortgage, the
Assignment of Rents (hereinafter defined), the Environmental Indemnity Agreement
(hereinafter defined) and all other agreements and instruments given by or on behalf
of Mortgagor and TN to Mortgagee in connection with the Note, the Commitment Letter,
the Loan Agreement, or this Mortgage (collectively the Loan Documents), Mortgagor
has granted, bargained, conveyed, sold, aliened, enfeoffed, released, confirmed
and mortgaged, and by these presents does hereby grant, bargain, convey, sell, alien,
enfeoff, release, confirm and mortgage unto Mortgagee, its successors and assigns
all that certain parcel of real property known as Route 1, Chadds Ford Township,
Delaware County, Pennsylvania, being Folio No. 04-00-00034-02, and more
specifically described on the metes and bounds legal description, attached hereto,
made a part of hereof, and labeled Exhibit A (the Real Estate).

TOGETHER WITH all
of Mortgagor’s right, title and interest now owned or hereafter acquired in:

(i)  All buildings, structures and improvements of
every kind and description now or hereafter erected or placed on the Real
Estate.

(ii)  All tenements, hereditaments, appurtenances and
all the estates and rights of Mortgagor in and to the Real Estate or any part
thereof.

(iii)  All streets, roads, passages, ways, waters,
water courses, easements, and privileges of whatsoever kind or character, belonging
to, and adjoining, used in connection with or in any way appertaining to the
Real Estate.

(iv)  All reversions, remainders, easements, rents,
issues, income and profits arising or issuing from the Real Estate and/or the
buildings, structures and improvements now or hereafter erected or placed thereon,
or any portion thereof, including, but not limited to, the rents, issues, income
and profits arising or issuing from all insurance policies, sale agreements, licenses,
options, leases and subleases now or hereafter entered into covering any part
of the Real Estate and/or the buildings, structures and improvements now or hereafter
erected or placed thereon, or any portion thereof, all of which insurance policies,
sale agreements, licenses, options, leases, subleases, rents, issues, income
and profits are hereby assigned to Mortgagee by Mortgagor. Mortgagor will execute
and deliver to Mortgagee, on demand, such separate, specific assignments and instruments
as Mortgagee may require to implement, confirm, maintain and continue the assignment
hereunder. Mortgagor hereby appoints Mortgagee, its designees and nominees, as Mortgagor’s
agents and attorneys-in-fact to collect such rents, issues and profits.

(v)  All awards, damages, payments and other
compensation, and any and all claims therefor, and rights thereto, which may
result from taking or injury by virtue of the exercise of the power of eminent domain
of, or to, or any damage, injury or destruction in any manner caused to, the
Real Estate and/or the

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buildings, structures and
improvements now or hereafter erected or placed thereon, or any portion thereof,
all of which award, damages, payments, compensation, claims and rights are
hereby assigned to Mortgagee to the fullest extent that Mortgagor may do so
under law. Mortgagor hereby appoints Mortgagee, its designees and nominees, as Mortgagor’s
agents and attorneys-in-fact to collect any such awards, damages, payments and
compensation.

(vi)  All fixtures, fittings, furnishings, furniture,
trade fixtures, machinery, equipment, apparatus, building materials, appliances,
goods, supplies, tools, chattels, and all articles of tangible personal
property of whatever kind and nature, together with all replacements thereof, substitutions
therefor and additions and accessions thereto, and all proceeds and profits thereof
and therefrom, now or at anytime hereafter, affixed or attached to, installed upon,
included within, or used in any way in connection with the construction, use,
enjoyment, operation, maintenance or occupancy of the Real Estate and the
buildings, structures and improvements now or hereafter erected or placed thereon;
and all agreements, contract rights, chattel paper, negotiable instruments, general
intangibles, accounts, instruments, and documents (as those terms are defined
in the Pennsylvania Uniform Commercial Code). Any item referred to in this paragraph
(vi) shall hereinafter, for purposes of creating a security interest therein
under the Pennsylvania Uniform Commercial Code, sometimes be referred to as the
Personal Property.

The Real Estate, and
all of the right, title and interest of Mortgagor therein and thereto, and all
of the property rights, title and interest referred to in paragraphs (i)
through (vi) above shall hereinafter sometimes be referred to collectively as
the Mortgaged Property.

TO HAVE AND TO
HOLD the Mortgaged Property hereby granted and conveyed, or mentioned and
intended so to be, unto Mortgagee, its successors and assigns, to its and their
own use and benefit forever.

PROVIDED, HOWEVER,
that if Mortgagor pays to Mortgagee the principal interest to become due under
the Note at the time and in the manner stipulated therein, and pays all other
sums payable by Mortgagor and TN to Mortgagee as are secured hereby, and if Mortgagor
and TN perform and comply with all the agreements, conditions, covenants and
provisions contained in the Note, the Loan Agreement, this Mortgage and the
other Loan Documents, and if Mortgagor and TN pay all satisfaction costs, including
the recording costs for any Mortgage satisfaction and termination statements, then
this Mortgage and the estate, right, title and interest of Mortgagee in and to
the Mortgaged Property shall cease and become void. Until such time, Mortgagor covenants,
represents, promises, warrants and agrees to and with Mortgagee as follows:

1.  Mortgagor’s Title. Mortgagor warrants, covenants
and represents as follows:

1.1  Mortgagor has good and marketable and unencumbered
fee simple title to the Mortgaged Property subject only to the title exceptions
not removed from Title Insurance Commitment No. 03-1156 dated effective October
30, 2003, issued by Strong Abstract, Inc. agent for First American Title Insurance
Company, at the time of closing the loan evidenced by the Note; and

1.2  Mortgagor will forever warrant and defend the
title to the Mortgaged Property unto the Mortgagee, its successors and assigns,
against all persons and all claims of every kind and nature whatsoever.

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2.  Payment and Performance by Mortgagor.

2.1  Mortgagor and TN shall pay to Mortgagee all principal,
interest and other sums now or hereafter due and payable to Mortgagee under the
terms of the Note, this Mortgage, and all other Loan Documents, as and when the
same shall become due and payable by the terms thereof and hereof.

2.2  Mortgagor and TN shall perform and comply with
all terms, condition, provisions, covenants and agreements on the part of
Mortgagor and/or TN to be observed and performed under this Mortgage, the Note,
the Loan Agreement, and all other Loan Documents. All the terms, conditions and
provisions of the Loan Documents are by reference incorporated herein as if fully
set forth.

2.3  Mortgagor shall timely perform all of its obligations
and duties under any present or future lease, easement, license, permit, approval,
covenant or agreement relating to, affecting, created for the benefit of or used
in connection with the operation of all or any portion of the Mortgaged
Property.

2.4  This mortgage secures obligations of
Mortgagor and TN to Mortgagee which obligations shall include, but not be
limited to, expenses and attorneys fees incurred by Mortgagee by reason of
default by Mortgagor and/or TN hereunder, under the Note or under any of the other
Loan Documents, the payment of taxes, municipal assessments and insurance premiums
whether advanced prior to or after the entry of judgment in any action to
enforce this security instrument, together with all other sums due hereunder or
secured hereby, plus accrued and unpaid interest.

3.  Maintenance and Repair. Mortgagor shall keep
and maintain the Mortgaged Property and the sidewalks, curbs and drives
abutting and adjacent thereto, if any, in good and tenantable order, condition
and repair, and will make as and when necessary all repairs, renewals and replacements,
structural and not structural, exterior and interior, ordinary and extraordinary,
foreseen and unforseen. All such repairs, renewals and replacements made by
Mortgagor shall be at least equal in quality to the original portion of the
Mortgaged Property being repaired, renewed or replaced. Mortgagor shall abstain
from and shall not permit the commission of waste in or about the Mortgaged
Property.

4.  Removal, Demolition and Alteration. Mortgagor
shall not undertake or permit the removal or demolition of any building at any
time erected on or forming a part of the Mortgaged Property, nor shall Mortgagor,
without Mortgagee’s prior written consent, undertake or permit any alteration
in the design or structural character of any such building.

5.  Inspection by Mortgagee. Mortgagor will
permit Mortgagee and Mortgagee’s agents and representatives to enter the
Mortgaged Property and all parts thereof for the purposes of making site and
building investigations, performing soil, groundwater, structural and other tests,
and generally to inspect. and photograph the condition and state of repair of
the Mortgaged Property at any reasonable time upon one (1) business day prior
notice.

6.  Insurance. Mortgagor shall from and after the
date hereof and at all times while the indebtedness secured hereby is outstanding
maintain at Mortgagor’s sole expense, insurance in amounts, with deductibles
satisfactory to Mortgagee as more fully set forth in the Loan Agreement, including,
without

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limitation, all risk, fire,
hazard and extended coverage insurance with vandalism and malicious mischief endorsements
on all buildings, structures and improvements now existing or hereafter erected
on or forming a part of the Mortgaged Property, and all of the Personal Property,
to the extent of one hundred percent (100%) of the replacement value thereof pursuant
to full replacement value endorsements naming Mortgagee as mortgagee and additional
insured pursuant to a standard mortgagee loss payable clause, without co-insurance.
Mortgagor shall also insure against such other hazards as Mortgagee may require
from time to time and shall maintain rent insurance against loss of income arising
out of damage or destruction by fire or the perils of extended coverage insurance,
in an amount equal to one (1) year’s gross rental income to the owner of the Mortgaged
Premises, or business interruption insurance in an amount as required by
Mortgagee from time to time, but not to exceed Mortgagee’s reasonable estimate of
the annual cost of debt service on the Note, taxes, insurance and maintenance for
the Mortgaged Premises. All such insurance shall be in such amounts as is
necessary to comply with co-insurance requirements and otherwise as Mortgagee
shall require, and shall be written by stock or nonassessable mutual carriers
with a general policy holders rating of A or better and a financial rating of
VI or better in the most recent edition of Best’s Key Rating Guide, Property-Casualty,
published by Alfred M. Best Co., Inc. Mortgagor shall deliver to Mortgagee upon
demand, and in the absence of demand not less than twenty (20) days prior to
the expiration date of each such insurance policy, proof of the renewal and
continuance of all required insurance coverages, with premiums prepaid. As
additional security for the payment of the indebtedness secured by this
Mortgage, shall name Mortgagee as an additional insured or be endorsed with a
standard mortgagee clause, shall not be subject to contribution, shall be for a
term of at least one (1) year, and shall provide for cancellation or modification
only upon at least thirty (30) days prior written notice to Mortgagee.

6.1  If any of the insurance referred to herein, or
any part thereof, shall expire, or be canceled, or become void or voidable by
reason of the breach of any condition thereof, or if Mortgagee determines that
such coverage is unsatisfactory due to the failure or impairment of the capital
of any company in which the insurance may then be carried such that its AM Best
Rating falls below the standard set forth in this Mortgage, or if for any
reason whatever the insurance shall be or become unsatisfactory to Mortgagee, Mortgagor
shall place new insurance on the Mortgaged Property, satisfactory to Mortgagee.

6.2  If Mortgagee acquires title to the Mortgaged Property
either by virtue of a judicial sale thereof pursuant to proceedings under the
Note or upon this Mortgage or by virtue of a deed in lieu of foreclosure, or otherwise,
then, and in any such event, all of Mortgagor’s right, title and interest in
and to all insurance policies referred to herein, including unearned premiums thereon
and the proceeds thereof, shall vest in Mortgagee.

7.  Taxes, Assessments and Other Charges. If
requested by Mortgagee, in addition to the monthly installment of interest and/or
principal due to Mortgagee, Mortgagor shall pay to Mortgagee, on the payment
date of installments due under the Note, until the Note is fully paid, a sum
(the Escrow Payment) equal to one-twelfth (1/12) of the annual real estate
taxes, other municipal assessments and the estimated annual premiums for all insurance
required hereunder (the Escrow Charges), with an initial deposit to cover the
months which will have elapsed between the last date such taxes, charges and
premiums were due and payable and the first date on which an installment shall
be due hereunder. The Escrow Payments may be commingled with other funds of
Mortgagee

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and no interest thereon
shall be due of payable to Mortgagor. Mortgagee shall apply the Escrow Payments
to the payment of the Escrow Charges in such order or priority as Mortgagee shall
determine. If, at any time, the Escrow Payments theretofore paid to Mortgagee shall
be insufficient for the payment of the Escrow Charges, Mortgagor, within ten
(10) days after demand, shall pay the amount of the deficiency to Mortgagee.

Mortgagor shall
pay, prior to the accrual of any interest or penalties, without any deduction, defalcation
or abatement, and shall furnish to Mortgagee proper receipts for, within five
(5) days after their respective due dates, all ground rents, taxes, assessments,
water and sewer rents, licenses or permit fees, and all other charges or claims
which may be assessed, levied charged, imposed or filed at any time against Mortgagor,
the Mortgaged Property or any part thereof, or against the interest of
Mortgagee therein, by any governmental instrumentality or agency or other
lawful authority or by any deed restriction, private agreement or declaration,
recorded or otherwise, or which by any present or future law may have priority
over the indebtedness secured hereby either in lien or in distribution out of
the proceeds of any judicial sale. Mortgagor will pay, when due, all charges
for utilities, whether public or private, used or consumed upon, in or in
connection with the Mortgaged Property.

8.  Sale or Transfer of the Mortgaged Property.
Mortgagor shall not, without the prior written consent of Mortgagee: (i) sell,
transfer, convey or assign the Mortgaged Property, or any part thereof, or any
interest therein, including but not limited to, an equitable interest in the Mortgaged
Property, or any part thereof, to any party; or (ii) permit the sale, transfer,
conveyance or assignment of the Mortgaged Property or any part thereof or any interest
therein, either voluntarily or by operation of law.

9.  Internal Revenue Stamps. If at any time the
United States Government or any department or bureau thereof shall require Internal
Revenue stamps on the Note or other indebtedness secured hereby, Mortgagor
shall, upon demand made by Mortgage, pay for such stamps together with any
interest and penalties payable with respect thereto.

10.  Taxation of Note and Mortgage. If any law is
hereafter enacted: (i) deducting from the value of real estate, for purposes of
taxation, any lien or encumbrance thereon; (ii) revising or changing in any way
the laws and ordinances now in force for the taxation of mortgages or the debts
secured thereby, or the manner of collections of such taxes; (iii) imposing a
tax directly or indirectly on Mortgagee with respect to the Mortgaged Property,
the value of Mortgagor’s equity therein, the indebtedness evidenced by the Note
and/or secured by this Mortgage; (iv) requiring Mortgagee to pay, in whole or
in part, any tax, assessment, charge or lien required to be paid by Mortgagor pursuant
to the terms of this Mortgage; then, and in any such event, the entire unpaid
balance of the indebtedness secured by this Mortgage shall, at the option of
Mortgagee, without notice to Mortgagor, become immediately due and payable, unless,
to the extent permitted by such law or ordinance, Mortgagor is authorized to,
and does, pay or reimburse Mortgagee for the full amount of any such tax,
assessment, charge or lien.

11.  Protection of Mortgage Lien. Mortgagor will promptly
perform and observe, or cause to be performed and observed, all of the terms,
covenants and condition of all instruments of record affecting the Mortgaged Property,
or imposing any duty or obligation upon Mortgagor or any occupant or tenant of
the Mortgaged Property or any part thereof. Mortgagor shall do or cause to be
done all things necessary to preserve intact and unimpaired any and all
easements, appurtenances and other interests and rights in favor of or constituting
any portion of the Mortgaged Property.

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12.  Costs, Expenses and Counsel Fees. Mortgagor and/or
TN shall pay all expenses incurred by Mortgagee incident to the preparation, execution,
delivery and/or recording of the Note, this Mortgage and all of the other Loan
Documents. Mortgagor and/or TN shall, upon demand made by Mortgagee, promptly pay
to Mortgagee all expenses and costs, including reasonable attorneys’ fees,
incurred by Mortgagee to collect any of the indebtedness secured hereby or to
enforce the performance of the terms, conditions, provisions, agreements and covenants
contained herein, in the Note, the Loan Agreement, or in any other Loan Document,
whether or not suit is instituted, or incurred by Mortgagee in connection with
any action, proceeding, litigation or claim instituted or asserted by or
against Mortgagee or in which the Mortgagee becomes engaged, wherein it becomes
necessary, in the opinion of Mortgagee, to enforce, defend or uphold the lien
of this Mortgage or the validity or effectiveness of any assignment of any
claim, award, payment, insurance recovery or any other right or property conveyed,
encumbered or assigned by Mortgagor to Mortgagee hereunder, or the priority of
any of the same or otherwise. All such expenses, costs and attorneys’ fees, together
with interest thereon at the rate set forth in the Note in the event of a
default thereunder, shall be deemed to be part of the principal indebtedness
evidenced by the Note on a pro rata basis and secured by this Mortgage.

13.  Security Interest in the Personal Property. Mortgagor
and Mortgagee hereby acknowledge that this Mortgage constitutes a security
agreement under the Pennsylvania Uniform Commercial Code, and Mortgagor hereby
grants to Mortgagee a security interest in every item of the Personal Property and
the proceeds thereof and profits therefrom, replacements and substitutions therefor
and additions and accessions thereto. Mortgagor shall, upon demand made by Mortgagee,
execute, deliver and file any financing statements, continuation statements and
other instruments as Mortgagee may from time to time require in order to
perfect, confirm and maintain such perfected security interest under the Pennsylvania
Uniform Commercial Code. Mortgagor hereby irrevocably appoints Mortgagee, its designees
and nominees, as Mortgagor’s agents and attorneys-in-fact to execute, deliver
and file, on Mortgagor’s behalf and in its name, any such financing statements,
continuation statements, and other instruments as Mortgagee, in its sole
discretion, deems necessary.

13.1  Mortgagor hereby warrants and represents to Mortgagee
that Mortgagor is and will be the owner of every item of the Personal Property,
free from any leases, conditional sales, chattel mortgages, security interests,
liens or encumbrances other than the security interest hereby created. Mortgagor
further hereby represents and warrants to Mortgagee that, unless Mortgagee gives
its prior written consent to the contrary, every item of the Personal Property
has been, and shall be created thereon except the security interest hereby
created.

14.  Rents, Profits and Leases. Mortgagor hereby
assigns and transfers unto Mortgagee, its successors and assigns: (i) all
rights, title, interest and privileges which Mortgagor has or may have as
lessor in any lease now existing or hereafter made and affecting the Mortgaged Property
or any part thereof, together with any extensions or renewals of such leases (collectively,
the Leases and individually, a Lease); and (ii) all rents, income, and profits
due or to become due under the Leases, or any of them, or arising or accruing
from or relating to the Mortgaged Property, or any portion thereof, or the use thereof,
and Mortgagor hereby confers upon Mortgagee, immediately upon Mortgagor’s default
in any respect under this Mortgage, the Note or any other Loan Document, the
right to enter upon and take possession of the Mortgaged Property, or any portion
thereof, and the right, with or without taking possession of the Mortgaged Property,
to collect and receive all rents, income and profits accruing from the Leases
and from the Mortgaged Property.

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14.1  Mortgagor hereby warrants, certifies,
covenants and represents to Mortgagee as follows:

14.1.1  That Mortgagor has or will have title to and
full right to assign the Leases and the rents, income and profits due and to
become due arising from and due pursuant to the Leases and from the Mortgaged Property.

14.1.2  That Mortgagor will not, without the prior
written consent of Mortgagee in each instance, enter into any Lease for all or
any portion of the Mortgaged Property for a term of more than three (3) years
or alter or modify any Lease, consent to any subletting of any Lease, or subordinate
any Lease to any mortgage or other encumbrance other than this Mortgage. Each
and every Lease shall be for fair market rental and on other than commercially reasonable
terms between unrelated parties at arms length dealing. All such leases shall
be subject and subordinate in lien and payment to the Mortgage and any extension,
renewal, modification or replacement thereof

14.1.3  That Mortgagor has not executed, and will not
execute, any prior or other assignment of any of its rights under any of the Leases
or its rights to the rent, income and profits therefrom or from the Mortgaged
Property.

14.1.4  That as of the date of this Mortgage, there
are no Leases respecting all of any portion of the Mortgaged Property.

14.2  Mortgagor has executed, acknowledged and
delivered to Mortgagee a specific separate Assignment of Rents, Profits and
Leases with respect to the Mortgaged Property dated even date herewith (the
Assignment of Rents). In the event of any conflict between the terms of this
Mortgage, including without limitation this paragraph 14, and the terms of any separate
Assignment of Rents, the terms of the Assignment of Rents shall control.

15.  Destruction of the Mortgaged Property. In the
event of any loss, damage or destruction to or of the Mortgaged Property, or
any part thereof, Mortgagor shall give immediate written notice thereof to
Mortgagee, and Mortgagee may make proof of loss thereof if proof of loss is not
made promptly by Mortgagor; provided, however, that any adjustment of a proof
of loss shall require the prior written consent of Mortgagee which shall not be
unreasonably whithheld, conditioned or delayed. Each insurance company concerned
is hereby authorized and directed to make payment under its insurance policies
directly to Mortgagee. Mortgagee may, with the consent of Mortgagor, on behalf
of Mortgagor, adjust and compromise any claims under any insurance policies.
Mortgagor hereby irrevocably constitutes and appoints Mortgagee, its designees
and nominees after an Event of Default, as Mortgagor’s agents and attorneys-in-fact
to adjust and compromise claims and to collect and receive proceeds and to
endorse drafts therefor. Any proceeds paid to or collected by Mortgagee in
connection with collecting such proceeds, shall be applied, in such order and amounts
as Mortgagee, in Mortgagee’s sole discretion, may elect, in reduction of the outstanding
principal balance of the Note, accrued and unpaid interest, or any other sum
due under and/or secured by the Note or this Mortgage, whether or not then due.
Mortgagee shall deliver written notice to Mortgagor of the amount so applied
and of the then outstanding balance of the indebtedness secured by this
Mortgage if the insurance proceeds are insufficient to pay the entire amount
hereof. In the event a balance remains outstanding on the Note and Mortgagee
receives proceeds of rent insurance or business interruption insurance beyond
those required to be

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applied for the current
monthly installment due under the Note, Mortgagee may retain such additional
proceeds in escrow, for the account of Mortgagor, and so apply such proceeds on
a monthly basis, provided that any such proceeds not needed to be applied to
keep the Mortgagor current and not in default hereunder during the reasonably
estimated period of time when the rents from the Mortgaged Premises will be inadequate
to provide Mortgagor with sufficient funds with which to pay Mortgagee the
amounts falling due each month shall be paid over to Mortgagor to met the other
expenses of the Mortgaged Premises.

15.1  Repair and Restoration. Notwithstanding the provision
of paragraph 15, and provided that (i) no event of default has occurred hereunder
or under the Note or other Loan Documents, (ii) Mortgagee is satisfied that the
there are sufficient proceeds to complete the restoration of the improvements constructed
on the Mortgaged Premises to the same value and character as existed prior to
such damage, and (iii) the insurers do not deny liability as to the insureds, Mortgagee
shall apply the insurance proceeds for the repair and restoration of the Mortgaged
Property in accordance in accordance with the following conditions:

15.1.1  Prior to commencement of repair and restoration,
the contracts, contractors, and plans and specifications thereof shall be approved
by Mortgagee which approval shall not be unreasonably withheld, conditioned or
delayed, and Mortgagee shall be provided with mechanics’ lien waivers.

15.1.2  At the time of any disbursement of the
proceeds, Mortgagor shall not be in default under the Note, or this Mortgage, no
mechanics’ or materialmen’s liens shall have been filed and remain undischarged
and/or not bonded against and a satisfactory bring down of title insurance
shall be delivered to Mortgagee.

15.1.3  Disbursement shall be made from time to time
in an amount not exceeding the cost of the work completed since the last disbursement,
upon receipt of satisfactory evidence of the stage of completion and or performance
of the work in a good and workmanlike manner in accordance with the contracts and
the plans and specifications.

15.1.4  Mortgagee shall retain ten percent (10%) of
the proceeds until the repair and restoration is fully completed.

15.1.5  The proceeds shall not bear interest and may
be commingled with Mortgagee’s other funds.

15.1.6  Mortgagee may impose such other conditions as are
customarily imposed by construction lenders.

15.1.7  Prior to commencement of and at any time
during repair and restoration, if the estimated cost thereof as determined by
Mortgagee exceeds the amount of the proceeds, Mortgagor shall, immediately upon
demand by Mortgagee, pay the amount of such excess to Mortgagee to be

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added to the proceeds held by Mortgagee. Any sum so added by Mortgagor which
remains upon completion of repair and restoration shall be refunded to
Mortgagor. If any sum remains after the completion and any refund to Mortgagor aforesaid,
such sum remaining shall, at Mortgagee’s option, be applied on account of the
outstanding balance of the Note.

16.  Environmental Matters. Mortgagee shall, if it
has reason to believe a problem exists, have the right to conduct or have conducted
by its agents or contractors such environmental inspections, audits and testing
as Mortgagee shall deem necessary or advisable at any reasonable time upon at
least one (1) business day prior notice, at the sole cost and expense of
Mortgagor and/or TN. Mortgagor and each lessee of any property encumbered by
the lien of the Loan Documents, shall cooperate or, in the case of any such
lessee shall be caused to cooperate, with such inspection efforts; such
cooperation shall include, without limitation, supplying such information concerning
the operations conducted and hazardous substances or hazardous waste located on
any of such properties. In the event that Mortgagor shall fail to comply with
any applicable state or federal environmental law, then Mortgagee may, in
addition to any of its other remedies hereunder and the other Loan Documents, cause
each such property to be brought into compliance and all expenses incurred by
Mortgagee added to the sum secured by the Loan Documents and evidenced by the
Note, and shall bear interest from the date of demand at the interest rate then
in effect thereunder, plus five (5%) percent. Further, in the event Mortgagee, in
order to protect the priority of this Mortgage, or to preserve the value of the
Mortgaged Property, or in any situation in which Mortgagee is required, by
court order or otherwise, to pay any costs, fees, expenses, settlements, damages,
fines (civil or criminal) or penalties, including but not limited to, clean-up
costs, attorney’s fees and court costs, because of a past, present or future violation
of the Environmental Laws (as defined in that certain Environmental Indemnity
Agreement made by Mortgagor and Guarantor and delivered to Mortgagee even date herewith)
on, in, under from or about the Mortgaged Property, all such sums shall be
added to the amount secured hereby, shall be secured hereby (if this Mortgage
is at that time in existence), shall be payable on demand by Mortgagor and/or
TN and shall bear interest from the date of demand at the interest rate then in
effect thereunder, plus five (5%) percent. The terms of this paragraph shall
survive the payment in full of all other sums secured hereby and the satisfaction
of record of this Mortgage. Mortgagor and TN have executed and delivered to Mortgagee
that certain Environmental Indemnity Agreement dated even date herewith (the Environmental
Indemnity Agreement) setting forth certain representations, warranties, covenants
and obligations of Mortgagor and TN respecting environmental matters at the
Mortgaged Property. In the event of any conflict between this Mortgage and the
Environmental Indemnity Agreement. the terms of the Environmental Indemnity
Agreement shall control. The terms of the Environmental Indemnity Agreement are
incorporated herein by reference.

17.  Eminent Domain. In the event that the
Mortgaged Property, or any part thereof, shall be taken in condemnation proceedings
or by the exercise of any right of eminent domain or bona fide sale in lieu thereof
(hereinafter collectively referred to as condemnation proceedings), Mortgagor
and Mortgagee shall have the right to participate in any such condemnation
proceedings and the award that may be made in any such condemnation proceedings
or the proceeds thereof or the agreed upon compensation for damages sustained
shall be applied by Mortgagee, in such order and amounts as Mortgagee, in its
sole discretion, may elect, in reduction of the outstanding principal balance
of the Note, all accrued and unpaid interest, or any other sum due under and/or
secured by the Note or this Mortgage, whether or not then due. In the event the
whole of the

 10
 

Mortgaged Property is taken
and the amount of the awards, proceeds or compensation received by Mortgagee is
insufficient to pay the then unpaid principal balance of the Note, together with
all accrued and unpaid interest thereon, and all other sums then due to Mortgagee
from Mortgagor and TN, Mortgagor and/or TN shall, within ten (10) days after
the application of the award, proceeds or compensation as aforesaid, pay such
deficiency to Mortgagee. In the event less than the whole of the Mortgaged Property
is taken, and the amount of the awards, proceeds or compensation received by Mortgagee
is insufficient to reduce the outstanding balance of the Note to an amount
equal to or less than eighty-five (85%) percent of the appraised value of the
Mortgaged Property after the taking determined by an appraisal of the Mortgaged
Property by a qualified appraiser approved by Mortgagee, then Mortgagor and/or
TN shall, within ten (10) days after the application of the award, proceeds or compensation
as aforesaid, pay to Mortgagee the amount necessary to reduce the outstanding balance
of the Note to an amount equal to eighty-five (85%) percent of the appraised
value of the Mortgaged Property after the taking. The cost of such appraisal
shall be the responsibility of Mortgagor.

17.1  Repair and Restoration. Notwithstanding the provisions
of paragraph 17, in the event of a partial taking, and provided that (i) no event
of default has occurred hereunder or under the Note or other Loan Documents, and
(ii) Mortgagee is satisfied that the there are sufficient proceeds to complete
the restoration of the improvements constructed on the Mortgaged Premises to
the same value and character as existed prior to such taking, Mortgagee shall
apply the condemnation proceeds for the repair and restoration of the Mortgaged
Property in accordance with the following conditions:

17.1.1  Prior to commencement of repair and restoration,
the contracts, contractors, and plans and specifications thereof shall be approved
by Mortgagee, which approval shall not be unreasonably withheld, conditioned or
delayed, and Mortgagee shall be provided with mechanics’ lien waiver.

17.1.2  At the time of any disbursement of the
proceeds, Mortgagor shall not be in default under the Note, or the Mortgage, no
mechanics’ or materialmen’s liens shall have been filed and remain undischarged
and or properly bonded against and a satisfactory bring down of title insurance
shall be delivered to Mortgagee.

17.1.3  Disbursement shall be made from time to time
in an amount not exceeding the cost of the work completed since the last disbursement,
upon receipt of satisfactory evidence of the stage of completion and of performance
of the work in a good and workmanlike manner in accordance with the contracts and
the plans and specifications.

17.1.4  Mortgagee shall retain ten percent (10%) of
the proceeds until the repair and restoration is fully completed.

17.1.5  The proceeds shall not bear interest and may
be commingled with Mortgagee’s other funds.

17.1.6  Mortgagee may impose such other conditions as are
customarily imposed by construction lenders.

17.1.7  Prior to commencement of and at any time
during repair and restoration, if the estimated cost thereof as determined by
Mortgagee exceeds the amount of the proceeds, Mortgagor shall, immediately upon
demand by Mortgagee, pay the amount of such excess to Mortgagee to be

 11
 

added to the proceeds held by Mortgagee. Any sum so
added by Mortgagor which remains upon completion of repair and restoration shall
be refunded to Mortgagor. If any sum remains after the completion and any refund
to Mortgagor aforesaid, such sum remaining shall, at Mortgagee’s option, be
applied on account of the outstanding balance of the Note.

18.  Events of Default. The occurrence of any one
or more of the following shall constitute an Event of Default hereunder:

18.1  The occurrence of an event of default under
the Note, the Loan Agreement, the Assignment of Rents, the Environmental Indemnity
Agreement or any other Loan Document.

18.2  The failure of Mortgagor to perform or comply
with any other of the terms, conditions, provisions, agreements, covenants and
conditions contained herein.

18.3  The filing
of any non consensual lien or encumbrance, mechanic’s or materialmen’s lien or
municipal claim against all or any portion of the Mortgaged Property which is
not discharged within twenty (20) days unless it is being contested by Mortgagor
in good faith and due diligence in appropriate proceedings with the approval of
Mortgagee, a bond or escrow having been posted with Mortgagee for the full
amount of such contested lien.

18.4  The
existence of any security interest, pledge, consensual lien, or other
consensual encumbrance in favor of any party other than Mortgagee in the
Mortgaged Property.

18.5  If Mortgagor
shall at any time deliver or cause to be delivered to Mortgagee a notice
pursuant to 42 Pa. C.S.A. 8143 electing to limit the indebtedness secured by
this Mortgage.

In the event of
any conflict between the terms of this Mortgage, including without limitation this
paragraph 18, and the terms of the Note, the terms of the Note shall control.

19.  Remedies. Upon the happening of any Event of
Default, the entire unpaid balance of principal, and all accrued and unpaid
interest under the Note and all other sums due under or secured by this Mortgage
shall, at the option of Mortgagee, become immediately due and payable, without notice
or demand. Mortgagee may forthwith, and without delay:

19.1  Institute an action of mortgage foreclosure
against the Mortgaged Property, or any portion thereof, or take such other
action at law or in equity for the enforcement of this Mortgage and realization
on the mortgage security or any other security herein or elsewhere provided for,
and proceed therein to final judgment and execution thereon for the entire accelerated
indebtedness as aforesaid, together with all costs of suit and attorney’s fees,
together with interest at the default rate set forth in the Note on any
judgement obtained by mortgagee from and after the date of any Sheriff’s Sale
of the Mortgaged Property until actual payment is made by the Sheriff of the
full amount due to Mortgagee. The obligations of the Mortgagor and/or TN and
the rights and remedies of the Mortgagee hereunder shall survive the entry of
judgment hereunder or under the obligation this Mortgage secures; it being the intention
of parties hereto that such rights, remedies and obligations shall not merge
into or be extinguished by any such judgment but shall continue until all sums
secured hereby have been paid in full.

 12
 

19.1.1  The Mortgaged Property, or any portion thereof,
may be sold pursuant to any Writ of Execution issued on a judgment obtained by virtue
of the Note or this Mortgage or pursuant to any other judicial proceedings, whether
or not under this Mortgage, in one parcel as an entirety, or in such parcels, manner
and order as Mortgagee, in its sole discretion, may elect.

19.2  Enter and take possession of the Mortgaged Property
and manage and operate the same, let or re-let the Mortgaged Property or any
part thereof, cancel, modify, and grant indulgences with respect to the Leases,
evict tenants, bring or defend any suits in Mortgagee’s name or in Mortgagor’s name
in connection with possession of the Mortgaged Property, make repairs, alterations
and improvements as Mortgagee deems appropriate, and perform such other acts in
connection with the management and operation of the Mortgaged Property as Mortgagee,
in its sole discretion, deems appropriate, and demand, sue for, collect and
receive all or any rents, income and profits accruing from the Mortgaged
Property and from the Leases shall be applied by Mortgagee, in such order and
amounts as Mortgagee shall elect, to the costs of operation and maintenance of
the Mortgaged Property, the expenses (including attorney’s fees) incident to
taking and retaining possession of the Mortgaged Property and collecting the
rents, issues and profits therefrom and from any Lease, any other expenses as
Mortgagee shall determine and monies necessary to satisfy all indebtedness due
under and/or secured by the Note and this Mortgage.

19.2.1  THE FOLLOWING SECTION SETS FORTH WARRANTS OF
ATTORNEY FOR ANY ATTORNEY TO CONFESS JUDGMENTS AGAINST MORTGAGOR. IN GRANTING
THESE WARRANTS OF ATTORNEY TO CONFESS JUDGMENTS AGAINST MORTGAGOR, MORTGAGOR HEREBY
KNOWINGLY, INTENTIONALLY, VOLUNTARILY, AND UNCONDITIONALLY WAIVES ANY AND ALL
RIGHTS MORTGAGOR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER
THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE COMMONWEALTH OF PENNSYLVANIA AND
THE UNITED STATES OF AMERICA.

FOR THE PURPOSE OF
OBTAINING POSSESSION OF THE MORTGAGED PROPERTY UPON THE OCCURRENCE OF AN EVENT OF
DEFAULT, MORTGAGOR HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY COURT OF
RECORD OF THE COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE, AS ATTORNEY FOR
MORTGAGOR AND ALL PERSONS CLAIMING UNDER OR THROUGH MORTGAGOR, TO, BY COMPLAINT
OR OTHERWISE, APPEAR FOR AND ENTER AND CONFESS JUDGMENT IN FAVOR OF MORTGAGEE AND
AGAINST MORTGAGOR, AND AGAINST ALL PERSONS CLAIMING UNDER OR THROUGH MORTGAGOR,
FOR RECOVERY BY MORTGAGEE OF POSSESSION OF THE MORTGAGED PROPERTY, FOR WHICH
THIS MORTGAGE, OR A COPY HEREOF VERIFIED BY AFFIDAVIT, SHALL BE A SUFFICIENT
WARRANT; WHEREUPON, IF MORTGAGEE SO DESIRES, A WRIT OF POSSESSION MAY
IMMEDIATELY ISSUE FOR POSSESSION OF THE MORTGAGED PROPERTY, WITHOUT ANY WRIT OR
PROCEEDING WHATSOEVER AND WITHOUT ANY STAY OF EXECUTION. IF FOR ANY REASON
AFTER SUCH ACTION HAS BEEN COMMENCED IT SHALL BE DISCONTINUED, OR POSSESSION OF
THE MORTGAGED PROPERTY SHALL REMAIN IN OR BE RESTORED TO MORTGAGOR, MORTGAGEE SHALL
HAVE THE RIGHT IN CONNECTION WITH THE SAME DEFAULT OR ANY SUBSEQUENT DEFAULT TO
BRING ONE OR MORE FURTHER ACTIONS OR ENTER

 13
 

AND CONFESS JUDGMENT ONE OR MORE TIMES AS HEREIN PROVIDED
TO RECOVER POSSESSION OF THE MORTGAGED PROPERTY. MORTGAGEE 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
IN ANY PROCEEDINGS TO FORECLOSE THIS MORTGAGE OR ON THE NOTE, OR AFTER A
SHERIFF’S SALE OF THE MORTGAGED PROPERTY IN WHICH MORTGAGEE IS THE SUCCESSFUL
BIDDER.

MORTGAGOR ACKNOWLEDGES THAT
MORTGAGOR HAS HAD THE ASSISTANCE OF LEGAL COUNSEL IN THE REVIEW AND EXECUTION
OF THIS MORTGAGE AND FURTHER ACKNOWLEDGES THAT THE MEANING AND EFFECT OF THE
FOREGOING PROVISIONS CONCERNING CONFESSION OF JUDGMENT HAVE BEEN FULLY EXPLAINED
TO MORTGAGOR BY SUCH COUNSEL, AND AS EVIDENCE OF SUCH FACT THE MORTGAGOR SIGN(S)
HIS/HER/THEIR/ITS INITIALS BELOW.

	
  

  	
  /s/ PLD

  	
   

  	
  /s/ JAS

  
	
   

  	
  (Initials of Mortgagor)

  	
   

  	
  (Initials of
  Mortgagor)

  

 

19.3  Have a receiver appointed to enter into possession
of the Mortgaged Property and to collect the rents, issues, profits and income therefrom
and to apply such rents, issues, profits and income as provided for in subparagraph
19.2.1 hereof or as the court may otherwise direct. Mortgagee shall be entitled
to the appointment of a receiver without the necessity of proving either the inadequacy
of the security for the indebtedness secured hereby or the insolvency of
Mortgagor or any other person who may be legally or equitably liable to pay
money secured hereby and the Mortgagor and each such other person shall be
deemed to have waived such proof and to have consented to the appointment of
such receiver. Should the Mortgagee or any receiver collect rents, issues, profits
or income from the Mortgaged Property, monies so collected shall not be substituted
for the payment of the indebtedness secured hereby, nor can they be used to
cure the default, without the prior written consent of Mortgagee. Any receiver shall
be liable to account only for the rents, issues, profits and income actually
received by such receiver.

19.4  Exercise all of the remedies of a secured party
under the Pennsylvania Uniform Commercial Code, including, but not limited to,
the right and power to sell, or otherwise dispose of, the Personal Property or any
part thereof, and for that purpose Mortgagee shall take immediate and exclusive
possession of the Personal Property or any part thereof as Mortgagee elects
and, with or without judicial process, enter upon any portion of the Mortgaged Property
on which the Personal Property, or any part thereof, may be situated and remove
the same without being guilty of trespass and without liability for damages
thereby occasioned.

19.5  Exercise any other right or remedy otherwise available
to Mortgagee and resort to any other security held by Mortgagee for the payment
of the indebtedness secured hereby in such order and manner as Mortgagee, in
its sole discretion, may elect.

20.  Remedies Cumulative. The rights and remedies
of Mortgagee provided for in this Mortgage, in the Note, in the Loan Agreement,
and in any other Loan

 14
 

Document, shall be
cumulative and concurrent and shall not be exclusive of any right or remedy provided
by law, in equity or otherwise. Said rights and remedies may, at the sole and
exclusive discretion of Mortgagee, be pursued singly, successively or together,
and may be exercised as often as occasion therefor shall arise.

21.  Mortgagor’s Waivers. Mortgagor and TN hereby
waive and release: (i) all errors, defects and imperfections (except as to
notice required hereunder or in the Loan Documents), in any proceeding instituted
by Mortgagee under this Mortgage, the Note, the Loan Agreement, or any other
Loan Document; (ii) all notices of default or of Mortgagee’s exercise, or
election to exercise, any right or remedy referred to in paragraph 19 hereof;
and (iii) the benefit of any laws now or hereafter enacted extending the time
for payment of any sum due under or secured hereby or affording any right to a
stay of any execution to be issued on any judgment obtained under the Note, the
Loan Agreement, this Mortgage or any other Loan Document, or exempting any
property from levy and sale upon any such execution.

22.  No Waiver. No failure or delay by Mortgagee in
insisting upon the strict performance by Mortgagor and/or TN of any of the terms,
covenants, conditions, agreements and provisions contained herein, in the Note,
the Loan Agreement, or in any other Loan Document shall constitute or operate
as an estoppel or a waiver of any such terms, covenants, conditions, agreements
and provisions, nor shall any such failure or delay preclude Mortgagee from thereafter
insisting upon such strict performance by Mortgagor and/or TN. Neither
Mortgagor, TN nor any guarantor or surety or other person obligated for the payment
of the indebtedness secured hereby shall be relieved of such obligation by
reason of the failure of Mortgagee or TN to comply with any request of Mortgagor
or of any such guarantor, surety or other person to take action to foreclose
this Mortgage or to otherwise enforce any of the provisions of this Mortgage or
any of the obligations secured by this Mortgage, or by reason of the release,
regardless of consideration, of the whole or any part of the security held for
the indebtedness secured by this Mortgage, or by reason of any agreement or stipulation
between any subsequent owner or owners or the Mortgaged Property and Mortgagee extending
the time of payment or modifying the terms of the Note or this Mortgage without
first having obtained the consent of Mortgagor, TN, or any such guarantor, surety
or other person, and Mortgagor and each such guarantor, surety and other person
shall continue to be liable to make payments according to the terms of any such
extension or modification agreement, unless expressly released and discharged
in writing by Mortgagee. Mortgagee may release, regardless of consideration, the
obligation of any party at any time liable for any of the indebtedness secured
by this Mortgage without, as to any other person so obligated or the remainder of
such security, in any way affecting such other person’s obligation or impairing
or affecting the lien of this Mortgage or the priority of the lien of this
Mortgage.

23.  Mortgagee’s Right to Remedy Defaults. If,
after the expiration of all applicable notice and cure periods, Mortgagor fails
to pay when due any sum required to be paid by Mortgagor or fails to perform
any obligation of Mortgagor hereunder, Mortgagee, at its option, shall have the
right, but not the obligation, to pay any such sum or to take any action which Mortgagee
deems necessary or advisable to protect the security of this Mortgage or the
Mortgaged Property, all without prejudice to any of Mortgagee’s rights or remedies
available hereunder or under the Note, the Loan Agreement, or under any other Loan
Document, at law, or in equity. The amount of all payments so made by Mortgagee,
together with all costs so incurred by Mortgagee, shall immediately be due and
payable from Mortgagor and/or TN to Mortgagee, together with interest

 15
 

at the rate set forth in
the Note in the event of a default thereunder, from the date such payment was
made of cost incurred by Mortgagee until the date of repayment by Mortgagor and/or
TN. All such amounts, together with interest as aforesaid, shall be add to and evidenced
by the Note and secured by this Mortgage.

24.  Further Assurances. Mortgagor will execute
and deliver such further instruments and documents, and perform such further acts
as may be requested by Mortgagee from time to time to confirm the provisions
of, or to carry out more effectively the purposes of this Mortgage, the Note,
the Loan Agreement, or any other Loan Documents. Mortgagor hereby authorizes Mortgagee
to execute and deliver such further instruments and documents and to perform
such further acts at any time and from time to time, on behalf of Mortgagor. Mortgagor
hereby irrevocably appoints Mortgagee, its designees and nominees, as Mortgagor’s
agents and attorneys-in-fact, to execute, from time to time, on behalf of Mortgagor,
one or more such instruments and documents.

25.  Notices and Other Communications. All notices
and other communications hereunder shall be given in the manner specified in
the Loan Agreement. All notices to be given to Mortgagee pursuant to 42 Pa.
C.S.A. 8143 shall be given to Mortgagee by certified mail to Mortgagee’s
address set forth below.

26.  Captions. The heading and captions herein are
inserted for convenience of reference only and shall not control or affect the
meaning or construction of any of the provisions of this Mortgage.

27.  Binding Effect. This Mortgage shall bind
Mortgagor and its successors and assigns and shall inure to the benefit of
Mortgagee and Mortgagor and their respective successors and assigns.

28.  No Amendment. This Mortgage shall not be
modified or amended except in writing signed by the party against whom the enforcement
of such amendment or modification is sought.

29.  Severability. If any term, covenant or condition
of this Mortgage or the application thereof to any party or circumstance shall,
to any extent, be invalid, or unenforceable, the remainder of this Mortgage, or
the application of such term, covenant or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable shall not be
affected thereby and each term, covenant or condition of this Mortgage shall be
valid and be enforced to the fullest extent permitted by law.

30.  Governing Law. This Mortgage shall be construed
and enforced in accordance with the laws of the Commonwealth of Pennsylvania.

31.  Waiver of Jury Trial. MORTGAGOR AND MORTGAGEE HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH, THE NOTE, THIS MORTGAGE, AND OTHER LOAN DOCUMENTS, ANY
OTHER TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
MORTGAGEE OR THE MORTGAGOR IN CONNECTION HEREWITH OR THEREWITH. THIS PROVISION
IS A MATERIAL

 16

INDUCEMENT FOR THE
MORTGAGEE TO MAKE THE LOAN EVIDENCED BY THE NOTE AND SECURED BY, INTER ALIA,
THIS MORTGAGE.

IN
WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly executed the day
and year first above written.

	
  

  	
  MORTGAGOR:

  
	
   

  	
   

  
	
   

  	
  SPITZ, INC.

  
	
   

  	
   

  
	
  /s/ Donn L. Guthrie

  	
   

  	
   

  
	
   

  	
  WITNESS AS TO BOTH

  
	
  WITNESS AS TO BOTH

  	
   

  
	
   

  	
  BY:

  	
   /s/ Jonathan Shaw 

  	
  (SEAL)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ATTEST:

  	
   /s/ Paul
  Dailey 

  	
  (SEAL)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Corporate Seal]

  
							

 

In
consideration of Mortgagee’s advance of the proceeds of the Note and the covenants
and obligations of TN as set forth herein, and intending to be legally bound
hereby, TN has caused this Mortgage to be duly executed.

	
  

  	
  TRANSNATIONAL INDUSTRIES, INC.

  
	
  /s/ Donn L. Guthrie

  	
   

  	
   

  
	
  WITNESS AS TO BOTH

  	
   

  
	
   

  	
  BY:

  	
   /s/ Jonathan Shaw 

  	
  (SEAL)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ATTEST:

  	
   /s/ Paul
  Dailey 

  	
  (SEAL)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Corporate Seal]

  
							

 

I
hereby certify that the address of the above-named Mortgagee is 22 West State
Street, Media, Delaware County, Pennsylvania, 19063.

	
  

  	
  /s/ Donn L.
  Guthrie

  
	
   

  	
  Donn L. Guthrie,
  Esquire

  

 

 17
 

COMMONWEALTH OF PENNSYLVANIA :

:SS

COUNTY OF CHESTER :

On
this, the 14th day of January, 2004, before me, the undersigned officer, appeared
Jonathan A. Shaw and Paul L. Dailey, who acknowledged themselves to be the
President and Executive President of, Spitz, Inc., a Delaware corporation, and
Transnational Industries, Inc., a Delaware corporation, and that they as such, being
authorized to do so, executed the foregoing instrument and acknowledged that he
executed the same for the purpose therein contained.

IN
WITNESS WHEREOF, I hereunto set my hand and official seal.

	
  

  	
  /s/ Maria
  Pantano Bucci

  
	
   

  	
  NOTARY PUBLIC

  
	
  My Commission Expires: 

  	
  (Notary Seal)

  
	
  Maria Pantano Bucci, Notary Public

  	
   

  
	
  Marple Twp., Delaware County

  	
   

  
	
  My commission expires June 16, 2007

  	
   

  

 

RECORDING INFORMATION:

 18
 

ALL THAT CERTAIN lot or
parcel of land with buildings and improvements thereon erected, Situate in the
Township of Chadds Ford, County of Delaware, State of Pennsylvania, bounded and
described according to a Final Subdivision Plan for Chadds From Plaza, made by Brandywine
Valley Engineers, Aston, PA, dated 1/19/1998 and last revised 10/2/2002 as
follows, to wit:

BEGINNING at a point of
curve on the Southwesterly side of Brandywine Drive (60 feet wide), being a
corner of Proposed Lot #2 (as shown on said plan); thence from said point of beginning
extending along said drive the three following courses and distances: (1) on a
line curving to the left having a radius of 425.00 feet an arc distance of
74.78 feet to a point; thence (2) South 48 degrees 55 minutes 22 seconds East
467.61 feet to a point of curve; thence (3) on a line curving to the right
having a radius of 250.00 feet an arc distance of 101.40 feet to a point, being
a corner of lands now or late of Thomas Hannum; thence leaving said drive extending
along lands of Hannum the two following courses and distances: (1) South 64
degrees 18 minutes 55 seconds West 229.98 feet to a point; thence (2) South 25
degrees 41 minutes 05 seconds East 261.49 feet to a point on the title line in
the bed of Baltimore Pike, being a corner of lands of Hannum; thence extending
along said title line the three following courses and distances: (1) South 66
degrees 53 minutes 00 seconds West 33.53 feet to a point; thence (2) South 60
degrees 12 minutes 00 seconds West 210.00 feet to a point; thence (3) South 57
degrees 55 minutes 00 seconds West 371.81 feet to a point, being a corner of
other lands of Brandy Partners; thence leaving said pike extending along said
lands the three following courses and distances: (1) North 20 degrees 56
minutes 06 seconds West 317.68 feet to a point; thence (2) North 52 degrees 44
minutes 03 seconds West 339.59 feet to a point; thence (3) North 25 degrees 49
minutes 00 seconds West 295.00 feet to a point; thence still along said lands
and along Lot #2 North 64 degrees 11 minutes 00 seconds East 743.13 feet to the
first mentioned point and place of beginning.

BEING Lot #3 on the
above-mentioned Plan.

BEING Folio
#04-00-00034-02.

BEING THE SAME PREMISES
which Brandy Partners, a Pennsylvania limited partnership, by Indenture bearing
date the 14th day of January, 2004, duly executed, acknowledged and delivered,
and intended to be forthwith recorded, granted and conveyed unto Spitz, Inc., a
Delaware corporation, in fee.

EXHIBIT “A”

 19EXHIBIT
10.26

MORTGAGE NOTE

	
  $3,200,000.00

  	
  January 14, 2004

  

 

FOR VALUE
RECEIVED, and without defalcation or setoff, Transnational Industries, Inc., a
Delaware corporation, and Spitz, Inc., a Delaware corporation (individually,
collectively, jointly and severally referred to as the “Maker”), with an
address of P.O. Box 198, Route 1, Chadds Ford, Pennsylvania 19317 promises to
pay to the order of FIRST KEYSTONE BANK (“Payee”), a federally chartered stock
savings bank organized and existing under the laws of the United States of
America, at Payee’s office located at 22 West State Street, Media,
Pennsylvania, 19063, the principal amount of Three Million Two Hundred Thousand
($3,200,000.00) Dollars, advanced pursuant to the terms, conditions, and
provisions of a certain Loan Agreement dated even date herewith, by and between
Maker and Payee (the “Loan Agreement”), together with interest on the
outstanding principal balance of this Mortgage Note (the Note) from the date
hereof at the rate of five and three quarter (5.750%) percent per annum,
provided, however, effective January 14, 2006, and on that same day every
thirty sixth (36th) month thereafter the rate of interest will adjust to a
fixed per annum rate equal to the greater of (i) five and three quarter
(5.750%) percent, or (ii) three hundred (300) basis points (3.00%) over the
Three (3) Year Constant Maturity Treasury Rate, the said fixed rate to be set
five (5) days prior to the effective date of the rate change; provided,
however, that should the fifth day fall on a Saturday, Sunday or a bank
holiday, the said fixed rate shall be set on the last day prior to such the
fifth day for which a Three (3) Year Constant Maturity Treasury Rate is
available. The rate of interest from time to time charged on the outstanding
balance of this Note is hereinafter referred to as the Rate.

1.  Payment.  The principal amount of this Note shall be
payable, together with interest thereon, in lawful money of the United States,
in the following manner:

(a)  On January
1, 2004, a payment of interest only scheduled to accrue on the principal
balance outstanding from the date hereof to January 31, 2004.

(b)  Commencing
on the first day of March, 2004 and on the first day of each and every month
thereafter, Maker shall pay to Payee the principal, together with interest
accruing hereunder at the Rate, in arrears, in amortized, consecutive, and
successive monthly installments sufficient to repay the principal balance of
this Note, together with interest accruing thereon at the Rate, in full over a
twenty (20) year amortization period (the “Amortization Period”), provided,
however, interest on this Note shall be calculated on the basis of a three
hundred sixty (360) day year, and charged for the actual number of days elapsed.
Provided, however, Payee shall recalculate the amount of the monthly principal
and interest installment due on this Note on the first day of the first month
following the effective date of any change in the Rate. The recalculated
monthly installment shall be equal to the monthly installment sufficient to
repay the principal balance Maker is expected to owe as of the effective date
of any change in the Rate, together with interest accruing thereon at the Rate,
in full over the remaining portion of the original Amortization Period.

 1
 

(c)  Notwithstanding
the foregoing, and unless sooner paid, the entire outstanding principal amount
of this Note, together with all interest accrued and not theretofore paid, and
all other sums payable hereunder, shall be due and payable in full on January
13, 2024 (the “Maturity Date”).

2.  Security.  The payment of this Note, and the performance
by Maker of all of its obligations under the commitment letter dated December
19, 2003 (the “Commitment Letter”), and the Loan Agreement are secured by,
among other things:

(a)  a certain
Open-End Mortgage and Security Agreement, dated even date herewith (the
Mortgage), secured upon certain real property premises currently occupied by
Spitz, Inc., located at Route 1, Chadds Ford Township, Delaware County,
Pennsylvania, being Folio No. 04-00-00034-02, and more specifically described
on the metes and bounds legal description, attached to the Mortgage and labeled
Exhibit A, and all improvements now or hereafter placed or made thereon and
thereto (the Mortgage Premises), and creating a security interest under the
Pennsylvania Uniform Commercial Code in all fixtures, equipment and other
tangible personal property, including, but not limited to, all machinery,
appliances, furnishings, tools and building materials now or hereafter acquired
by Maker and installed or to be installed upon, or used or to be used in
connection with, the Mortgaged Premises;

(b)  those
certain UCC-1 Financing Statements, dated even date herewith, identifying Maker
as Debtorand Payee as the Secured Party, securing Payee’s interest in and to
all fixtures, equipment and other tangible personal property, including, but
not limited to, all machinery, appliances, furnishings, tools and building
materials now or hereafter acquired by Maker and installed or to be installed
upon, or used or to be used in connection with the Mortgaged Premises;

(c)  an
Assignment of Rents, Profits and Leases, dated even date herewith, pursuant to
which Spitz, Inc. has collaterally assigned to Payee all of its right, title
and interest in and to all rents, profits and income arising from the Mortgaged
Premises and from all leases now or hereafter in effect pertaining to all or
any portion of the Mortgaged Premises, and;

(d)  a
Collateral Assignment of Agreements Affecting Real Estate, dated even date
herewith, pursuant to which Maker has collaterally assigned to Payee all of
Maker’s right, title and interest in and to all approvals, permits, contracts
and warranties, now or hereafter in effect, pertaining to all or any portion of
the Mortgaged Premises.

All of the
agreements, conditions, covenants and provisions contained in the Commitment
Letter, the Loan Agreement, and the documents listed in clauses (a) through (d)
above (hereinafter referred to collectively as the “Loan Documents) are hereby
made a part of this Note to the same extent and with the same force and effect
as if they were fully set forth herein. Maker covenants and agrees to keep and
perform, or cause to be kept and performed, all such agreements, conditions,
covenants and provisions, strictly in accordance with their terms.

3.  Late Charge.  Maker is obligated to make payments of
interest or principal or both on the above specified due dates in accordance
with the terms of this Note

 2
 

without defalcation or
setoff and without notice or demand, and the failure to receive any notice or
demand from Payee shall not be a defense to, or excuse for, the failure to make
such payments on the due dates. If any installment of interest or principal or
both, or any other payment required hereunder or under any of the Loan
Documents is not paid within fifteen (15) days after the due date of such
installment, or payment, a late charge equal to the greater of: (a) five
percent (5.00%) of such overdue amount; or (b) seventy-five ($75.00) Dollars
will be due and payable to Payee to cover the additional expense incident to
such delinquency. This shall not be construed to obligate Payee to accept any
overdue installment (i.e., any payment remaining unpaid for a period of five
(5) days after written notice of failure to pay the same when due) nor to limit
Payee’s rights and remedies for Maker’s default, as hereinafter set forth.

4.  Default. Maker shall be in default hereunder
upon the occurrence of any of the following events (an “Event of Default): (i)
any installment of interest or principal and interest, or any other sum
required hereunder, or any other payment required under any of the Loan
Documents, remains unpaid for the period of five (5) days after written notice
of failure to pay the same when due in accordance with the provisions hereof or
under any of the Loan Documents; (ii) after the expiration of any applicable
notice and cure periods, if any, the default by Maker under any of the Loan
Documents; (iii) the institution by or against Maker of any bankruptcy,
insolvency, reorganization, arrangement, debt adjustment, receivership,
liquidation or dissolution proceeding which, if instituted against any such
party, is consented to by such party or remains not dismissed or stayed for
sixty (60) days; (iv) the adjudication of Maker as a bankrupt or the
appointment of a trustee or receiver for all or any part of Maker’s property;
(v) the making by Maker of an assignment for the benefit of creditors; (vi) the
admission by Maker of an inability to pay his/her/its or their debts as they
become due; (vii) after the expiration of any applicable notice and cure
periods, if any, the default by Maker or any affiliate, owner or subsidiary
thereof, in making any payment for money owed or borrowed by Maker or any
affiliate, owner or subsidiary thereof including, without limitation, the
occurrence of an event of default under that certain Line Of Credit Agreement
dated June 12, 1997 between Payee and Maker, amended by that certain
Modification Agreement dated July 7, 2000, and further amended by that certain
Second Modification Agreement dated July 18, 2002, respecting a Two Million
($2,000,000.00) Dollar commercial revolving line of credit; (viii) the untruth,
in any respect regarded by Payee as material, of any warranty, representation,
certification, financial statement or other information made or furnished by
Maker in connection with the loan made by Payee to Maker pursuant to the
Commitment Letter and the Loan Agreement; or (ix) the sale or transfer of any
right, title, or interest, legal or equitable, in the Mortgaged Premises or any
part or parcel thereof or a change of the majority of the members of the board
of directors of Maker during any twelve (12) month period.

5.  Remedies. Upon the occurrence of any Event of
Default, the entire unpaid balance of principal (including any additional loans
or advances and all other sums paid by Payee to or on behalf of Maker or added
to the principal hereof pursuant to the terms of this Note or any of the Loan
Documents), with all accrued interest thereon, together with an attorney’s
commission for collection of the greater of Five Thousand ($5,000.00) Dollars
or five (5%) percent of the total indebtedness, and all other sums due and
owing hereunder or under the Loan Documents, shall, at the option of Payee,
become immediately due and payable without presentment, demand or further
action of any kind, and one or more executions may forthwith issue on any
judgment or judgments obtained by virtue of any provision of this Note or
otherwise obtained and any security given to

 3
 

secure the obligation
evidenced by this Note may thereupon forthwith be enforced, and Payee may also
recover all costs of suit and other expenses of collection involving, but not
limited to, reasonable attorney’s fees, the costs of title searches, the costs
of eviction of any tenants and re-appraisals.

The rights and
remedies provided herein or in the Loan Documents shall be cumulative and
concurrent and shall not be exclusive of any right or remedy provided by law,
in equity or otherwise. Said rights and remedies may, at the sole discretion of
Payee, be pursued singly, successively or together as often as occasion
therefor shall arise, against Maker and/or the Mortgaged Premises or any other
security for this Note, as applicable. No failure on the part of Payee to
exercise any of such rights or remedies shall be deemed a waiver of any such
rights or remedies or of any Event of Default hereunder.

Upon the occurrence
of an Event of Default, Payee shall have the right, but not the duty, to cure
such default, in part or in its entirety, and all amounts expended or debts
incurred by Payee, including reasonable attorneys’ fees, shall be deemed to be
advances to Maker, shall be added to the principal due under this Note, shall
be secured by the security for this Note, and shall be payable by Maker to
Payee upon demand with interest at the Default Rate (hereinafter defined).

6.  Default Rate.  Upon the occurrence of an Event of Default,
interest shall continue to accrue thereafter at the default rate of the Rate
plus five (5%) percent per annum (the Default Rate) until this Note, and all
sums due hereunder, are paid in full, including the period following the entry
of any judgment. Interest after the occurrence of an Event of Default at the
Default Rate shall be calculated on the basis of a three hundred sixty (360)
day year, but charged for the actual number of days elapsed.

7.  WARRANT OF ATTORNEY.  THE FOLLOWING SECTION SETS FORTH WARRANTS OF
ATTORNEY FOR ANY ATTORNEY TO CONFESS JUDGMENTS AGAINST MAKER. IN GRANTING THESE
WARRANTS OF ATTORNEY TO CONFESS JUDGMENTS AGAINST MAKER, MAKER HEREBY
KNOWINGLY, INTENTIONALLY, VOLUNTARILY, AND UNCONDITIONALLY WAIVE(S) ANY AND ALL
RIGHTS MAKER MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE
RESPECTIVE CONSTITUTIONS AND LAWS OF THE COMMONWEALTH OF PENNSYLVANIA AND THE
UNITED STATES OF AMERICA.

UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT, MAKER, WITHOUT FURTHER CONSENT OR NOTICE,
DOES HEREBY IRREVOCABLY AND UNCONDITIONALLY AUTHORIZE AND EMPOWER ANY ATTORNEY
OF THE PROTHONOTARY OF ANY COURT OF RECORD OF THE COMMONWEALTH OF PENNSYLVANIA
OR ELSEWHERE TO APPEAR FOR MAKER IN ANY SUCH COURT, AND WITH OR WITHOUT A
COMPLAINT OR DECLARATION FILED, IN AN APPROPRIATE ACTION BROUGHT AGAINST MAKER
ON THIS NOTE, TO ENTER AND CONFESS JUDGMENT AGAINST MAKER IN FAVOR OF PAYEE OR
ITS SUCCESSORS AND ASSIGNS, FOR ALL OR ANY PORTION OF THE ENTIRE AMOUNT DUE TO
PAYEE UPON SUCH EVENT OF DEFAULT AS PROVIDED HEREIN, TOGETHER WITH COSTS OF
SUIT AND ATTORNEYS’ COMMISSION IN AN AMOUNT EQUAL TO FIVE (5%) PERCENT

 4
 

OF THE PRINCIPAL AMOUNT
OUTSTANDING UNDER THIS NOTE, BUT IN NO EVENT LESS THAN FIVE THOUSAND
($5,000.00) DOLLARS; AND FOR SO DOING THIS NOTE OR A COPY HEREOF VERIFIED BY
AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. THE AUTHORITY HEREIN GRANTED TO
APPEAR, ENTER AND CONFESS JUDGMENT SHALL NOT BE EXHAUSTED BY ANY ONE OR MORE
EXERCISE THEREOF OR BY ANY DEFECTIVE EXERCISE THEREOF, BUT SHALL CONTINUE AND BE
EXERCISABLE FROM TIME TO TIME UNTIL THE FULL PAYMENT OF ALL AMOUNTS DUE FROM
MAKER TO PAYEE HEREUNDER AND UNDER THE LOAN DOCUMENTS IS MADE. THE FOREGOING
RIGHT AND REMEDY IS IN ADDITION TO AND NOT IN LIEU OF ANY OTHER RIGHT OR REMEDY
AVAILABLE TO PAYEE UNDER THIS NOTE OR OTHERWISE.

MAKER ACKNOWLEDGES
HAVING HAD THE ASSISTANCE OF LEGAL COUNSEL OR THE OPPORTUNITY TO RETAIN LEGAL
COUNSEL IN THE REVIEW AND EXECUTION OF THIS NOTE FOR THE PURPOSE OF EXPLAINING
THE MEANING AND EFFECT OF THE FOREGOING PROVISIONS CONCERNING CONFESSION OF
JUDGMENT, AND FURTHER ACKNOWLEDGES THAT THE MEANING AND EFFECT OF THE FOREGOING
PROVISIONS CONCERNING CONFESSION OF JUDGMENT HAVE BEEN EITHER FULLY EXPLAINED
TO MAKER BY SUCH COUNSEL OR FULLY UNDERSTOOD BY MAKER WITHOUT RELIANCE ON PAYEE
IF MAKER HAS ELECTED NOT TO BE REPRESENTED BY LEGAL COUNSEL AND AS EVIDENCE OF
SUCH FACT SIGNS HIS/HER/THEIR/ITS INITIALS.

	
  

  	
  /s/ PLD

  	
   

  	
  /s/ JAS

  	
   

  
	
   

  	
  (Initials of
  Maker)

  	
   

  	
  (Initials of
  Maker)

  	
   

  

 

Maker hereby
waives the benefit of any laws now or hereafter enacted providing for any stay
of execution, marshaling of assets, exemption from civil process, redemption,
extension of time for payment, or valuation or appraisement of all or any part
of the Mortgaged Premises or any other security for this Note, exempting all or
any part of the Mortgaged Premises, any other security for this Note or any
other property of Maker from attachment, levy or sale upon any such execution
or conflicting with any provision of this Note or any of the Loan Documents.
Maker waives and releases Payee and said attorney or attorneys from all errors,
defects and imperfections whatsoever in confessing any such judgment or in any
proceedings relating thereto or instituted by Payee hereunder or under any of
the Loan Documents. Maker hereby agrees that any property that may be levied
upon pursuant to a judgment obtained under this Note may be sold upon any
execution thereon in whole or in part, and in any manner and order that Payee,
in its sole discretion may elect.

8.  Prepayment.  Upon giving Payee at least thirty (30) days
prior written notice, Maker may prepay all or any portion of the outstanding
principal balance of this Note by paying, in addition to (i) the prepaid
principal amount, (ii) all accrued and unpaid interest to the date of
prepayment, and (iii) all other amounts due under this Note, a prepayment
premium (“Prepayment Premium) equal to the greater of:

 5
 

(a)             the
product obtained multiplying (1) the difference between the then Rate and the
yield rate of that U.S. Treasury Note the due date of which is closest to
(either before, after or on) the end of the current three (3) year fixed rate
period of this Note (the Period End Date) (however, if the period between the
Period End Date and the due date exceeds six(6) months, the average of the
yield rates of the two U.S. Treasury Notes with due dates next preceding and
following the Period End Date shall be used to compute such difference; and if
there are two or more U.S. Treasury Notes with the same due dates, that one
with a whole yield rate closest to the Rate shall be used to compute such
difference) as reported in the Wall Street Journal or similar publication on
the fifth (5th) business day preceding the prepayment date, and (2) the number
of whole and fractional years remaining between the prepayment date and the
Period End Date, and (3) the prepaid principal amount; or

(b)            one
(1%) percent of the prepaid principal amount.

Prepayment shall
mean any event whereby the indebtedness evidenced by this Note is paid in
advance of the payment schedule or fully satisfied prior to the Maturity Date
in any manner, whether voluntary or involuntary, including without limitation
any payment after default, any payment after the Maturity Date is accelerated,
or any payment under court order or bankruptcy proceeding. Payee shall not be
required to accept ay prepayment if it does not include payment of the required
Prepayment Premium. Notwithstanding anything herein to the contrary, Maker may
during each calendar year, upon giving Payee thirty (30) days prior written
notice, prepay, in the aggregate, an amount equal to or less than ten (10%)
percent of the outstanding principal balance of the indebtedness evidenced by
this Note determined as of January 1 of each calendar year without liability
for the payment of any Prepayment Premium.

Notwithstanding
the foregoing, no Prepayment Premium will be due and payable (i) in the event
of the receipt and retention by the Payee of proceeds from any casualty loss or
condemnation (ii) during the last 120 days of any three (3) year term of this
Note or (iii) as a result of the sale of all or a portion of the Mortgaged
Premises to an unaffiliated third party in an arms length transaction.

All prepayments
shall first be applied to the Prepayment Premium, then on account of interest
accrued hereunder and other sums due hereunder other than principal, with the
balance applied to principal. No partial prepayment shall postpone or interrupt
payments of interest or the payment of the remaining principal balance, all of
which shall continue to be due and payable at the times and in the manner set
forth above.

9.  Waiver.  The Maker and all other endorsers, sureties
and guarantors hereby jointly and severally waive presentment and demand for
payment, notice of demand, notice of default (except as required in this Note),
notice of dishonor, protest and notice of protest of this Note, and all other
notices in connection with the delivery, acceptance, performance, default or
enforcement of the payment of this Note, and also waive notice of the exercise
of any options on the part of Payee hereunder.

The granting, with
or without notice, of any extension or extensions of time for payment of any
sum or sums due hereunder, or under any of the Loan

 6
 

Documents, or for the
performance of any covenant, provision, condition or agreement contained herein
or therein, or the granting of any other indulgence, or the taking or releasing
or subordinating of any security for the indebtedness evidenced hereby, or any
other modification or amendment of this Note or any of the Loan Documents, will
in no way release or discharge the liability of Maker, whether or not granted
or done with the knowledge or consent of Maker.

Payee shall not be
deemed, by any act of omission or commission, to have waived any of its rights
or remedies hereunder, under any of the Loan Documents, at law or in equity,
unless such waiver is in writing and signed by Payee, and then only to the
extent specifically set forth in the writing. A waiver as to one event shall
not be construed as continuing or as a bar to or waiver of any right or remedy
as to a subsequent event.

10.  Joint and Several Liability.  The obligations and liabilities hereunder of
the persons or entities referred to as “Maker” shall be joint and several.

11.  Notice.  Regular monthly payment invoices and notice of
any change in the monthly installment of principal and interest due under this
Note shall be sent by regular mail, postage prepaid, to the address of Maker
set forth above. All other notices and other communications required or given
under this Note shall be given in the manner and to the addresses set forth in
the Loan Agreement

12.  Miscellaneous.  Notwithstanding any other provision contained
herein, if, at any time, the Rate or the Default Rate shall be deemed by any
competent court of law, governmental agency or tribunal to exceed the maximum
rate of interest permitted by any applicable laws, then, for such time as the
Rate or the Default Rate would be deemed excessive, its application shall be
suspended and there shall be charged instead the maximum rate of interest
permitted under such laws. Any amounts theretofore received by Payee hereunder
in excess of the maximum rate of interest so permitted shall be applied by Payee
in reduction of the outstanding principal balance of this Note, or if this Note
shall have theretofore been paid in full, the amount of such excess shall
promptly be returned by Payee to Maker.

In the event any
portion of this Note shall be declared by any court of competent jurisdiction
to be invalid or unenforceable, such portion shall be deemed severable from
this Note, and the remaining parts hereof shall remain in full force and
effect, as fully as though such invalid or unenforceable portion was never part
of this Note.

The obligations of
Maker hereunder shall be binding on the successors and assigns of Maker, and
the benefits of this Note shall inure to Payee, its successors and assigns and
to any holder of this Note.

Each and every
person or entity signing this Note as an endorser binds himself, herself or
itself as principal not as surety, and agrees to be bound by and comply with
all of the terms, conditions and provisions of this Note.

 7
 

Nothing herein
contained or contained in any of the Loan Documents shall be construed to
create a partnership or joint venture between Payee and Maker, or to render
Payee in any way responsible for the debts or losses of Maker.

This Note, and all
issues arising hereunder, shall be governed by and construed according to the
laws of the Commonwealth of Pennsylvania.

MAKER AND PAYEE
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS NOTE, THE MORTGAGE, ANY OTHER DOCUMENT OR
INSTRUMENT RELATING HERETO OR THERETO, ANY OTHER TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE PAYEE OR THE MAKER IN CONNECTION
HEREWITH OR THEREWITH. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PAYEE TO
MAKE THE LOAN EVIDENCED BY THIS NOTE.

[THIS SPACE
INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.]

 8
 

IN WITNESS
WHEREOF, Maker has caused this Note to be duly executed and sealed this 14th
day of January, 2004.

	
  WITNESSES:

  	
   

  	
  MAKER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SPITZ, INC.

  
	
  /s/ Maria Pantano Bucci

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Donn L. Guthrie

  	
   

  	
   

  	
   

  	
   

  
	
  WITNESS AS TO
  ALL

  	
   

  	
   

  	
   

  
	
   

  	
  BY:

  	
   

  	
   /s/ Jonathan Shaw 

  	
  (SEAL)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ATTEST:

  	
   

  	
   /s/ Paul Dailey 

  	
  (SEAL)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TRANSNATIONAL INDUSTRIES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BY:

  	
   

  	
   /s/ Jonathan Shaw 

  	
  (SEAL)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ATTEST:

  	
   

  	
   /s/ Paul Dailey 

  	
  (SEAL)

  
							

 

 9

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