Document:

Exhibit
      10.4

    

    

    GENERAL
      SECURITY AGREEMENT

    New
      York

    

    Debtor
      (Name):
      Corning
      Natural Gas Corporation

    (Organizational
      Structure): Corporation

    (State
      Law organized under): New
      York

    (Organizational
      Identification Number, if any; note that this is NOT a request for the Taxpayer
      Identification Number):

    (Address
      of residence/chief executive office): 330
      West William Street, Corning, New York 14830

    

    Bank/Secured
      Party: Manufacturers and Traders Trust Company,
      a New
      York banking corporation with its banking offices at One M&T Plaza, Buffalo,
      New York 14203 Attention: Office of General Counsel.

    

    For
      good
      and valuable consideration, the receipt and sufficiency of which is
      acknowledged, and intending to be legally bound, Debtor agrees with Secured
      Party as follows: 

    

    1. Security
      Interests.

    

    1.1 Grant.
      As
      security for the prompt and complete payment and performance when due of all
      of
      the Obligations, Debtor does hereby grant to Secured Party a continuing security
      interest (“Security Interest”) in all personal property and fixtures of Debtor,
      wherever located, whether now existing or owned or hereafter arising or
      acquired, whether or not subject to the Uniform Commercial Code, as the same
      may
      be in effect in the State of New York, as amended from time to time (“UCC”), and
      whether or not affixed to any realty, including, without limitation, (i) all
      accounts, chattel paper, investment property, deposit accounts, documents,
      goods, equipment, farm products, general intangibles (including trademarks,
      service marks, trade names, patents, copyrights, licenses and franchises),
      instruments, contract
      rights,
      money,
      letter of credit rights, causes of action (including tort claims) and other
      personal property (including agreements and instruments not constituting chattel
      paper or a document, general intangible or instrument); (ii) all additions
      to,
      accessions to, substitutions for, replacements of and supporting obligations
      of
      the foregoing; (iii) all proceeds and products of the foregoing, including,
      without limitation, insurance proceeds; and (iv) all business records and
      information relating to any of the foregoing and any software or other programs
      for accessing and manipulating such information (collectively, the
“Collateral”). Debtor acknowledges and agrees that the foregoing collateral
      description is intended to cover all assets of Debtor.

    

    1.2 Obligations.
      The
      term “Obligations” means any and all indebtedness or other obligations of Debtor
      to Secured Party in any capacity, now existing or hereafter incurred, however
      created or evidenced, regardless of kind, class or form, whether direct,
      indirect, absolute or contingent (including obligations pursuant to any
      guaranty, endorsement, other assurance of payment or otherwise), whether joint
      or several, whether from time to time reduced and thereafter increased, or
      entirely extinguished and thereafter reincurred, together with all extensions,
      renewals and replacements thereof, and all interest, fees, charges, costs or
      expenses which accrue on or in connection with the foregoing, including, without
      limitation, any indebtedness or obligations (i) not yet outstanding but
      contracted for, or with regard to which any other commitment by Secured Party
      exists; (ii) arising prior to, during or after any pendency of any bankruptcy,
      insolvency, receivership or other similar proceeding, regardless of whether
      allowed or allowable in such proceeding; (iii) owed by Debtor to others and
      which Secured Party obtained, or may obtain, by assignment or otherwise; or
      (iv)
      payable under this Agreement.

    

    2. Covenants.
      Debtor
      covenants and agrees as follows:

    

    2.1 Perfection
      of Security Interest.
      Debtor
      shall execute and deliver to Secured Party such financing statements, control
      agreements or other documents, in form and content satisfactory to Secured
      Party, as Secured Party may from time to time request to perfect and continue
      the Security Interest. Upon the request of Secured Party, Debtor shall deliver
      to Secured Party any and all instruments, chattel paper, negotiable documents
      or
      other documents evidencing or constituting any part of the Collateral properly
      endorsed or assigned, in a manner satisfactory to Secured Party. Until such
      delivery, Debtor shall hold such portion of the Collateral in trust for Secured
      Party. Debtor shall pay all expenses for the preparation, filing, searches
      and
      related costs in connection with the grant and perfection of the Security
      Interest. Debtor authorizes (both prospectively and retroactively) Secured
      Party
      to file financing statements, and any continuations and amendments thereof,
      with
      respect to the Collateral without Debtor’s signature. A photocopy or other
      reproduction of any financing statement or this Agreement shall be sufficient
      as
      a financing statement for filing in any jurisdiction.

    

    2.2 Negative
      Pledge; Disposition of Collateral.
      Debtor
      shall not grant or allow the imposition of any lien, security interest or
      encumbrance on, or assignment of, the Collateral unless consented to in writing
      by Secured Party. Debtor shall not make or permit to be made any sale, transfer
      or other disposition of the Collateral; provided, however, prior to the
      occurrence of an Event of Default, Debtor may in the ordinary course of business
      consistent with its past practices and with prudent and standard practices
      used
      in the industry that is the same or similar to that in which Debtor is engaged:
      (i) dispose of any Collateral consisting of equipment that is obsolete or
      worn-out; (ii) sell or exchange any Collateral consisting of equipment in
      connection with the acquisition of other equipment that is at least as valuable
      as such equipment, that Debtor intends to use for substantially the same
      purposes as such equipment and that is not subject to any security interest
      or
      other lien or encumbrance; or
      (iii)
      collect Collateral consisting of accounts or assign such Collateral for purposes
      of collection.

    
      
        
        

      

      
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    2.3 Condition
      of Collateral; Impermissible Use.
      Debtor
      shall keep the Collateral consisting of goods in good condition and shall not
      commit or permit damage or destruction (other than ordinary wear and tear)
      to
      such Collateral. Debtor shall not permit any Collateral consisting of goods
      (i)
      to be used in such a manner that would violate any insurance policy or warranty
      covering the Collateral or that would violate any applicable law of any
      governmental authority (including any environmental law) now or hereafter in
      effect; (ii) to become fixtures on any real property on which Secured Party
      does
      not have a first priority mortgage lien (unless Secured Party has been provided
      with an acceptable landlord/mortgagee waiver) or become an accession to any
      goods not included in the Collateral; or (iii) to be placed in any warehouse
      that may issue a negotiable document with regard to such
      Collateral.

    

    2.4 Modification
      to Collateral.
      Debtor
      shall not, without Secured Party’s prior written consent, grant any extension
      on, compound, settle for less than the full amount of, release (in whole or
      in
      part), modify, cancel, or allow for any substitution, credit or adjustment
      on
      Collateral consisting of accounts, chattel paper, general intangibles,
      instruments, documents or investment property, except that in the absence of
      an
      Event of Default, Debtor may grant to account debtors, or other persons
      obligated with respect to the Collateral, extensions, credits, discounts,
      compromises or settlements in the ordinary course of business consistent with
      its past practices and consistent with prudent and standard practices used
      in
      the industries that are the same or similar to those in which Debtor is
      engaged.

    

    2.5 Titled
      Goods.
      Debtor
      shall cause all goods included in the Collateral to be properly titled and
      registered to the extent required by applicable law. Upon the request of Secured
      Party, Debtor shall cause the interest of Secured Party to be properly indicated
      on any certificate of title relating to such goods and deliver to Secured Party
      each such certificate, and any additional evidence of ownership, certificates
      of
      origin or other documents evidencing any interest in such goods.

    

    2.6 Insurance.
      Debtor
      shall, at its own expense and at all times, maintain effective insurance
      policies covering damage to persons and against fire, flood, theft and all
      other
      risks to which the Collateral may be subject, all in such amounts, with such
      deductibles and issued by such insurance company as shall be satisfactory to
      Secured Party. Such insurance policies shall have all endorsements that Secured
      Party may require and shall further (i) name Secured Party, exclusively, as
      the
      additional insured on the casualty insurance and the lender’s loss payee and/or
      mortgagee on the hazard insurance; (ii) provide that Secured Party shall receive
      a minimum of thirty (30) days prior written notice of any amendment or
      cancellation; and (iii) insure Secured Party notwithstanding any act or neglect
      of Debtor or other owner of the property described in such insurance. If Debtor
      fails to obtain the required insurance as provided herein, Secured Party may,
      but is not obligated, to obtain such insurance as Secured Party may deem
      appropriate, including, without limitation, if Secured Party so chooses, “single
      interest insurance” which will cover only Secured Party’s interest in the
      Collateral. Debtor shall pay or reimburse to Secured Party the cost of such
      insurance. Secured Party shall have the option, in its sole discretion, to
      hold
      insurance proceeds as part of the Collateral, apply any insurance proceeds
      toward the Obligations or allow the Debtor to apply the insurance proceeds
      towards repair or replacement of the item of Collateral in respect of which
      such
      proceeds were received. Upon the request of Secured Party, Debtor shall from
      time to time deliver to Secured Party such insurance policies, or other evidence
      of such policies satisfactory to Secured Party, and such other related
      information Secured Party may request.

    

    2.7 Collateral
      Information.
      Debtor
      shall provide all information, in form and substance satisfactory to Secured
      Party, that Secured Party shall from time to time request to (i) identify the
      nature, extent, value, age and location of any of the Collateral, or (ii)
      identify any account debtor or other party obligated with respect to any chattel
      paper, general intangible, instrument, investment property, document or deposit
      account included in the Collateral.

    

    2.8 Financial
      Information.
      Debtor
      shall furnish to Secured Party financial statements in such form (e.g.,
      audited, reviewed, compiled) and at such intervals as Secured Party shall
      request from time to time plus any additional financial information that Secured
      Party may request. All such financial statements shall be in conformity with
      generally accepted accounting principles consistently applied.

    

    2.9 Taxes;
      Licenses; Compliance with Laws.
      Before
      the end of any applicable grace period, Debtor shall pay each tax, assessment,
      fee and charge imposed by any governmental authority upon the Collateral, the
      ownership, disposition or use of any of the Collateral, this Agreement or any
      instrument evidencing any of the Obligations. Debtor shall maintain in full
      force and effect each license, franchise or other authorization needed for
      any
      ownership, disposition or use of the Collateral and the conduct of its business,
      operations or affairs. Debtor shall comply with all applicable law of any
      governmental authority (including any environmental law), now or hereafter
      in
      effect, applicable to the ownership, disposition or use of the Collateral or
      the
      conduct of its business, operations or affairs.

    

    2.10 Records;
      Legend.
      Debtor
      shall maintain accurate and complete books and records relating to the
      Collateral in conformity with generally accepted accounting principles
      consistently applied. At Secured Party’s request, Debtor will legend, in form
      and manner satisfactory to Secured Party, its books and records to indicate
      the
      Security Interest.

     

    
      
        
        

      

      
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    2.11 Additional
      Collateral.
      If at
      any time the liquidation value of any of the Collateral is unsatisfactory to
      Secured Party, then, on demand of Secured Party, Debtor shall immediately (i)
      furnish such additional collateral satisfactory to Secured Party to be held
      by
      Secured Party as if originally pledged hereunder and execute such additional
      security agreements, financing statements or other agreements as requested
      by
      Secured Party, or (ii) repay the Obligations to bring the outstanding amount
      of
      the Obligations to within a satisfactory relationship to the liquidation value
      of the Collateral.

    

    2.12 Notifications
      of Change.
      Immediately upon acquiring knowledge or reason to know of any of the following,
      Debtor shall notify Secured Party of the occurrence or existence of (i) any
      Event of Default; (ii) any event or condition that, after notice, lapse of
      time
      or after both notice and lapse of time, would constitute an Event of Default;
      (iii) any account or general intangible that arises out of a contract with
      any
      governmental authority (including the United States); (iv) any event or
      condition that has or (so far as can be foreseen) will or might have any
      material adverse effect on the Collateral (including a material loss,
      destruction or theft of, or of any damage to, the Collateral, material decline
      in value of the Collateral or a material default by an account debtor or other
      party’s performance of obligations with respect to the Collateral), on Debtor or
      its business, operations, affairs or condition (financial or
      otherwise).

    

    2.13 Lien
      Law.
      If any
      account or general intangible included in the Collateral represents money owing
      pursuant to any contract for the improvement of real property or for a public
      improvement for purposes of the Lien Law of the State of New York (the “Lien
      Law”), Debtor shall (i) give Secured Party notice of such fact; (ii) receive and
      hold any money advanced by Secured Party with respect to such account or general
      intangible as a trust fund to be first applied to the payment of trust claims
      as
      such term and/or concept is defined in the Lien Law (in Section 71 thereof,
      or
      otherwise); and (iii) until such trust claim is paid, not use or permit the
      use
      of any such money for any purpose other than the payment of such trust
      claims.

    

    2.14 Protection
      of Collateral; Further Assurances.
      Debtor
      shall, at its own cost, faithfully preserve, defend and protect the Security
      Interest as a prior perfected security interest in the Collateral under the
      UCC
      and other applicable law, superior and prior to the rights of all third parties
      (other than those permitted pursuant to Section 3.1) and shall defend the
      Collateral against all setoffs, claims, counterclaims, demands and defenses.
      At
      the request of Secured Party, Debtor shall do, obtain, make, execute and deliver
      all such additional and further acts, things, deeds, assurances and instruments
      as Secured Party may deem necessary or advisable from time to time in order
      to
      attach, continue, preserve, perfect or protect the Security Interest and Secured
      Party’s rights hereunder including obtaining waivers (in form and content
      acceptable to Secured Party) from landlords, warehousemen and mortgagees. Debtor
      hereby irrevocably appoints Secured Party, its officers, employees and agents,
      or any of them, as attorneys-in-fact for Debtor with full power and authority
      in
      the place and stead of Debtor and in the name of Debtor or its own name from
      time to time in Secured Party’s discretion, to perform all acts which Secured
      Party deems appropriate to attach, continue, preserve or perfect and continue
      the Security Interest, including signing for Debtor (to the extent such
      signature may be required by applicable law) UCC-1 financing statements, UCC-3
      amendment or other instruments and documents to accomplish the purposes of this
      Agreement. This power of attorney, being coupled with an interest, is
      irrevocable and shall not be affected by the subsequent disability or
      incompetence of Debtor.

    

    3. Representations
      and Warranties.
      Debtor
      represents, warrants and agrees as follows:

    

    3.1 Title.
      Debtor
      holds good and marketable title to the Collateral free and clear from any
      security interest or other lien or encumbrance of any party, other than the
      Security Interest or such liens, security interests or other liens or
      encumbrances specifically permitted by Secured Party and set forth on Exhibit
      A
      hereto (“Permitted Liens”). Debtor has not made any prior sale, pledge,
      encumbrance, assignment or other disposition of any of the Collateral except
      for
      the Permitted Liens.

    

    3.2 Authority.
      If
      Debtor is a business entity, it is duly organized, validly existing and in
      good
      standing under the laws of the above-named state of organization. Debtor has
      the
      full power and authority to grant the Security Interest and to execute, deliver
      and perform its obligations in accordance with this Agreement. The execution
      and
      delivery of this Agreement will not (i) violate any applicable law of any
      governmental authority or any judgment or order of any court, other governmental
      authority or arbitrator; (ii) violate any agreement governing Debtor or to
      which
      Debtor is a party; or (iii) result in a security interest or other lien or
      encumbrance on any of Debtor’s assets, except in favor of Secured Party.
      Debtor’s certificate of incorporation, by-laws or other organizational documents
      do not prohibit any term or condition of this Agreement. Each authorization,
      approval or consent from, each registration and filing with, each declaration
      and notice to, and each other act by or relating to, any party required as
      a
      condition of Debtor’s execution, delivery or performance of this Agreement
      (including any shareholder or board of directors or similar approvals) has
      been
      duly obtained and is in full force and effect. Debtor has the power and
      authority to transact the business in which it is engaged and is duly licensed
      or qualified and in good standing in each jurisdiction in which the conduct
      of
      its business or ownership of property requires such licensing or such
      qualifications.

     

    
      
        
        

      

      
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    3.3 Judgments
      and Litigation.
      There
      is no pending or threatened claim, audit, investigation, action or other legal
      proceeding or judgment or order of any court, agency or other governmental
      authority or arbitrator which involves Debtor or the Collateral and which might
      have a material adverse effect upon the Collateral, the Debtor, its business,
      operations, affairs or condition (financial or otherwise), or threaten the
      validity of this Agreement or any related document or action. Debtor will
      immediately notify Secured Party upon acquiring knowledge of the
      foregoing.

    

    3.4 Enforceability
      of Collateral.
      Instruments, chattel paper, accounts or documents which constitute any part
      of
      the Collateral are genuine and enforceable in accordance with their terms,
      comply with the applicable law of any governmental authority concerning form,
      content, manner of preparation and execution, and all persons appearing to
      be
      obligated on such Collateral have authority and capacity to contract and are
      in
      fact obligated as they appear to be on such Collateral. There are no
      restrictions on any assignment or other transfer or grant of the Security
      Interest by Debtor. Each sum represented by Debtor from time to time as owing
      on
      accounts, instruments, deposit accounts, chattel paper and general intangibles
      constituting any part of the Collateral by account debtors and other parties
      with respect to such Collateral is the sum actually and unconditionally owing
      by
      account debtors and other parties with respect thereto at such time, except
      for
      applicable normal cash discounts. None of the Collateral is subject to any
      defense, set-off, claim or counterclaim of a material nature against Debtor
      except as to which Debtor has notified Secured Party in writing.

    

    3.5 Location
      of Chief Executive Office, Records, Collateral.
      The
      locations of the following are listed on page one of this Agreement or, if
      different or additional, on Exhibit A hereto: (i) Debtor’s residence, principal
      place of business and chief executive office; (ii) the office in which Debtor
      maintains its books or records relating to the Collateral; (iii) the facility
      (including any storage facility) at which now owned or subsequently acquired
      equipment and fixtures constituting any part of the Collateral shall be kept;
      and (iv) the real property on which any crop included in the Collateral is
      growing or is to be grown, or on which any timber constituting any part of
      the
      Collateral is or is to be standing. Debtor will not effect or permit any change
      in any of the foregoing locations (or remove or permit the removal of the
      records or Collateral therefrom, except for mobile equipment included in the
      Collateral which may be moved to another location for not more than thirty
      (30)
      days) without thirty (30) days prior written notice to Secured Party and all
      actions deemed necessary by Secured Party to maintain the Security Interest
      intended to be granted hereby at all times fully perfected and in full force
      and
      effect have been taken. All of the locations listed on page one or Exhibit
      A are
      owned by Debtor, of if not, by the party(ies) identified on Exhibit
      A.3.6 Structure;
      Name.
      Debtor’s organizational structure, state of registration and organizational
      identification number (if any) are stated accurately on page one of this
      Agreement, and its full legal name and any trade name used to identify it are
      stated accurately on page one of this Agreement, or if different or additional
      are listed on Exhibit A hereto. Debtor will not change its name, any trade
      names
      or its identity, its organizational structure, state of registration or
      organizational identification number without thirty (30) days prior written
      notice to Secured Party. All actions deemed necessary by Secured Party to
      maintain the Security Interest intended to be granted hereby at all times fully
      perfected and in full force and effect have been taken.

    

    4. Performance
      and Expenditures by Secured Party.
      If
      Debtor fails to perform or comply with any of the terms hereof, Secured Party,
      at its option, but without any obligation so to do, may perform or comply,
      or
      otherwise cause performance or compliance, with such terms including the payment
      or discharge of all taxes, fees, security interest or other liens, encumbrances
      or claims, at any time levied or placed on the Collateral. An election to make
      expenditures or to take action or perform an obligation of Debtor under this
      Agreement, after Debtor’s failure to perform, shall not affect Secured Party’s
      right to declare an Event of Default and to exercise its remedies. Nor shall
      the
      provisions of this Section relieve Debtor of any of its obligations hereunder
      with respect to the Collateral or impose any obligation on Secured Party to
      proceed in any particular manner with respect to the Collateral.

    

    5. Duty
      of Secured Party.
      Secured
      Party’s sole duty with respect to the custody, safekeeping and physical
      preservation of the Collateral in its possession shall be to deal with it in
      the
      same manner as Secured Party deals with similar property for its own account.
      Neither Secured Party nor its directors, officers, employees or agents shall
      be
      liable for failure to demand, collect or realize upon the Collateral or for
      any
      delay in doing so or shall be under any obligation to sell or otherwise dispose
      of the Collateral upon the request of Debtor or any other person or to take
      any
      other action whatsoever with regard to the Collateral. The powers conferred
      on
      Secured Party hereunder are solely to protect Secured Party’s interests in the
      Collateral and shall not impose any duty upon any Secured Party to exercise
      any
      such powers. Secured Party shall be accountable only for amounts that it
      actually receives as a result of the exercise of its powers under this
      Agreement, and neither it nor its officers, directors, employees or agents
      shall
      be responsible to Debtor for any act or failure to act hereunder, except for
      its
      own gross negligence or willful misconduct.

    

    
      
        
        

      

      
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    6. Certain
      Rights and Remedies.

    

    6.1 Inspection;
      Verification.
      Secured
      Party, and such persons as it may designate, shall have the right from time
      to
      time to (i) audit and inspect (a) the Collateral, (b) all books and records
      related thereto (and make extracts and copies from such records), and (c) the
      premises upon which any of the Collateral or books and records may be located;
      (ii) discuss Debtor’s business, operations, affairs or condition (financial or
      otherwise) with its officers, accountants; and (iii) verify the validity,
      amount, quality, quantity, value, condition and status of, or any other matter
      relating to the Collateral in any manner and through any medium Secured Party
      may consider appropriate (including contacting account debtors or third party
      possessing the Collateral for purpose of making such verification). Debtor
      shall
      furnish all assistance and information and perform any acts Secured Party may
      require regarding thereto. Debtor shall bear the cost and expense of any such
      inspection and verification.

    

    6.2 Notification
      of Security Interest.
      Secured
      Party may notify any or all account debtors and other person obligated with
      respect to the Collateral of the Security Interest therein. Upon the request
      of
      Secured Party, Debtor agrees to enter into such warehousing, lockbox or other
      custodial arrangement with respect to any of the Collateral that Secured Party
      shall deem necessary or desirable.

    

    6.3 Application
      of Proceeds.
      Secured
      Party may apply the proceeds from the sale, lease or other disposition or
      realization upon the Collateral to the Obligations in such order and manner
      and
      at such time as Secured Party shall, in its sole discretion, determine. Debtor
      shall remain liable for any deficiency if the proceeds of any sale, lease or
      other disposition or realization upon the Collateral are insufficient to pay
      the
      Obligations. Any proceeds received by Debtor from the Collateral after an Event
      of Default shall (i) be held by Debtor in trust for Secured Party in the same
      medium in which received; (ii) not be commingled with any assets of Debtor;
      and
      (iii) be delivered to Secured Party in the form received, properly indorsed
      to
      permit collection. After an Event of Default, Debtor shall promptly notify
      Secured Party of the return to or repossession by Debtor of goods constituting
      part of the Collateral, and Debtor shall hold the same in trust for Secured
      Party and shall dispose of the same as Secured Party directs.

    

    6.4 Income
      and Proceeds of Instruments and Investment Property.
      Until
      the occurrence of an Event of Default, Debtor reserves the right to request
      to
      receive all cash income or cash distribution (whether in cash or evidenced
      by
      check) payable on account of any instrument or investment property constituting
      part of the Collateral (collectively, “Cash Distribution”). Until actually paid,
      all rights in the foregoing shall remain subject to the Security Interest.
      Any
      other income, dividend, distribution, increase in or profits (including any
      stock issued as a result of any stock split or dividend, any capital
      distributions and the like) on account of any instrument or investment property
      constituting part of the Collateral and, upon the occurrence of an Event of
      Default, all Cash Distributions, shall be delivered to Secured Party immediately
      upon receipt, in the exact form received and without commingling with other
      property which may be received by, paid or delivered to Debtor or for Debtor’s
      account, whether as an addition to, in discharge of, in substitution of, or
      in
      exchange of the Collateral. Until delivery, such Collateral shall be held in
      trust for Secured Party.

    

    6.5 Registered
      Holder of the Collateral.
      Secured
      Party shall have the right to transfer to or register (with or without reference
      to this Agreement) in the name of Secured Party or its nominee any investment
      property, general intangible, instrument or deposit account constituting part
      of
      the Collateral so that Secured Party or such nominee shall appear as the sole
      owner of record thereof; provided, however, that so long as no Event of Default
      has occurred, Secured Party shall deliver to Debtor all notices, statements
      or
      other communications received by it or its nominee as such registered owner,
      and
      upon demand and receipt of payment of necessary expenses thereof, shall give
      to
      Debtor or its designee a proxy or proxies to vote and take all action with
      respect to such Collateral. After the occurrence of any Event of Default, Debtor
      waives all rights to be advised of or to receive any notices, statements or
      communications received by Secured Party or its nominee as such record owner,
      and agrees that no proxy or proxies given by Secured Party to Debtor or its
      designee as aforesaid shall thereafter be effective.

    

    
      
        
        

      

      
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    7. Default.

    

    7.1 Events
      of Default.
      Any of
      the following events or conditions shall constitute an “Event of Default”: (i)
      failure by Debtor to pay when due (whether at the stated maturity, by
      acceleration, upon demand or otherwise) the Obligations, or any part thereof,
      or
      there occurs any event or condition which after notice, lapse of time or after
      both notice and lapse of time will permit acceleration of any Obligation; (ii)
      default by Debtor in the performance of any obligation, term or condition of
      this Agreement or any other agreement with Secured Party or any of its
      affiliates or subsidiaries (collectively, “Affiliates”); (iii) failure by Debtor
      to pay when due (whether at the stated maturity, by acceleration, upon demand
      or
      otherwise) any indebtedness or obligation owing to any third party or any
      Affiliate, the occurrence of any event which could result in acceleration of
      payment of any such indebtedness or obligation or the failure to perform any
      agreement with any third party or any affiliate; (iv) Debtor is dissolved,
      becomes insolvent, generally fails to pay or admits in writing its inability
      generally to pay its debts as they become due; (v) Debtor makes a general
      assignment, arrangement or composition agreement with or for the benefit of
      its
      creditors or makes, or sends notice of any intended, bulk sale; the sale,
      assignment, transfer or delivery of all or substantially all of the assets
      of
      Debtor to a third party; or the cessation by Debtor as a going business concern;
      (vi) Debtor files a petition in bankruptcy or institutes any action under
      federal or state law for the relief of debtors or seeks or consents to the
      appointment of an administrator, receiver, custodian or similar official for
      the
      wind up of its business (or has such a petition or action filed against it
      and
      such petition action or appointment is not dismissed or stayed within forty-five
      (45) days); (vii) the reorganization, merger, consolidation or dissolution
      of
      Debtor (or the making of any agreement therefor); (viii) the death or judicial
      declaration of incompetency of Debtor, if an individual; (ix) the entry of
      any
      judgment or order of any court, other governmental authority or arbitrator
      against Debtor; (x) falsity, omission or inaccuracy of facts submitted to
      Secured Party or any Affiliate (whether in a financial statement or otherwise);
      (xi) an adverse change in the Collateral, Debtor, its business, operations,
      affairs or condition (financial or otherwise) from the status shown on any
      financial statement or other document submitted to Secured Party, and which
      change Secured Party determines will have a material adverse affect on (a)
      Debtor, its business, operations or condition (financial or otherwise), or
      (b)
      the ability of Debtor to pay or perform the Obligations; (xii) any pension
      plan
      of Debtor fails to comply with applicable law or has vested unfunded liabilities
      that, in the opinion of Secured Party, might have a material adverse effect
      on
      Debtor’s ability to repay its debts; (xiii) any indication or evidence received
      by Secured Party that Debtor may have directly or indirectly been engaged in
      any
      type of activity which, in Secured Party’s discretion, might result in the
      forfeiture of any property of Debtor to any governmental authority; (xiv) the
      occurrence of any event described in Section 7.1(i) through and including
      7.1(xiii) with respect to any endorser, guarantor or any other party liable
      for,
      or whose assets or any interest therein secures, payment of any of the
      Obligations; or (xv) Secured Party in good faith deems itself insecure with
      respect to payment or performance of the Obligations.

    

    7.2 Rights
      and Remedies Upon Default.
      Upon
      the occurrence of any Event of Default, Secured Party without demand of
      performance or other demand, presentment, protest, advertisement or notice
      of
      any kind (except any notice required by law) to or upon Debtor or any other
      person (all and each of which demands, presentments, protests, advertisements
      and notices are hereby waived), may exercise all rights and remedies of a
      secured party under the UCC, under other applicable law, in equity or otherwise
      or available under in this Agreement including:

    

    7.2.1 Obligations
      Immediately Due; Termination of Lending.
      Secured
      Party may declare all or any part of any Obligations not payable on demand
      to be
      immediately due and payable without demand or notice of any kind. All or any
      part of any Obligations whether or not payable on demand, shall be immediately
      due and payable automatically upon the occurrence of an Event of Default in
      Section 7.1 (vi) above. The provisions hereof are not intended in any way to
      affect any rights of Secured Party with respect to any Obligations which may
      now
      or hereafter be payable on demand. Secured Party may terminate any obligation
      it
      may have to grant any additional loan, credit or other financial accommodation
      to Debtor.

    

    7.2.2 Access
      to Collateral.
      Secured
      Party, or its agents, may peaceably retake possession of the Collateral with
      or
      without notice or process of law, and for that purpose may enter upon any
      premises where the Collateral is located and remove the same. At Secured Party’s
      request, Debtor shall assemble the Collateral and deliver it to Secured Party
      or
      any place designated by Secured Party, at Debtor’s expense.

    

    7.2.3 Sell
      Collateral.
      Secured
      Party shall have the right to sell, lease or otherwise dispose of the Collateral
      in one or more parcels at public or private sale or sales upon such terms and
      conditions as it may deem advisable and at such prices as it may deem best,
      for
      cash or on credit or for future delivery without assumption of any credit risk.
      Each purchaser at any such sale shall hold the property sold absolutely, free
      from any claim or right on the part of Debtor. Debtor hereby waives (to the
      extent permitted by law) all rights of redemption, stay and appraisal which
      Debtor now has or may at any time in the future have under any applicable law
      now existing or hereafter enacted. Secured Party shall have the right to use
      Debtor’s premises and any materials or rights of Debtor (including any
      intellectual property rights) without charge for such sales or disposition
      of
      the Collateral or the completion of any work in progress for such times as
      Secured Party may see fit. Without in any way requiring notice to be given
      in
      the following time and manner, Debtor agrees that with respect to any notice
      by
      Secured Party of any sale, lease or other disposition or realization or other
      intended action hereunder or in connection herewith, whether required by the
      UCC
      or otherwise, such notice shall be deemed reasonable and proper if given at
      least five (5) days before such action in the manner described below in the
      Section entitled “Notices”.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    7.2.4 Collect
      Revenues.
      Secured
      Party may either directly or through a receiver (i) demand, collect and sue
      on
      any Collateral consisting of accounts or any other Collateral including
      notifying account debtors or any other persons obligated on the Collateral
      to
      make payment on the Collateral directly to Secured Party; (ii) file any claim
      or
      to take any other action or proceeding in any court of law or equity or
      otherwise deemed appropriate by Secured Party with respect to the Collateral
      or
      to enforce any other right in respect of the Collateral; (iii) take control,
      in
      any manner, of any payment or proceeds from the Collateral; (iv) prosecute
      or
      defend any suit, action or proceeding brought against Debtor with respect to
      the
      Collateral; (v) settle, compromise or adjust any and all claims arising under
      the Collateral or, to give such discharges or releases as Secured Party may
      deem
      appropriate; (vi) receive and collect all mail addressed to Debtor, direct
      the
      place of delivery thereof to any location designated by Secured Party; to open
      such mail; to remove all contents therefrom; to retain all contents thereof
      constituting or relating to the Collateral; (vii) execute, sign or endorse
      any
      and all claims, endorsements, assignments, checks or other instruments with
      respect to the Collateral; or (viii) generally, use, sell, transfer, pledge
      and
      make any agreement with respect to or otherwise deal with any of the Collateral;
      and Debtor hereby irrevocably appoints Secured Party, its officers, employees
      and agents, or any of them, as attorneys-in-fact for Debtor with full power
      and
      authority in the place and stead of Debtor and in the name of Debtor or in
      its
      own name from time to time in Secured Party’s discretion, to take any and all
      appropriate action Secured Party deems necessary or desirable to accomplish
      any
      of the foregoing or otherwise to protect, preserve, collect or realize upon
      the
      Collateral or to accomplish the purposes of this Agreement. Debtor revokes
      each
      power of attorney (including any proxy) heretofore granted by Debtor with regard
      to the Collateral. This power of attorney, being coupled with an interest,
      is
      irrevocable and shall not be affected by the subsequent disability or
      incompetence of Debtor.

    

    7.2.5 Setoff.
      Secured
      Party may place an administrative hold on and set off against the Obligations
      any property held in a deposit or other account with Secured Party or any of
      its
      Affiliates or otherwise owing by Secured Party or any of its Affiliates in
      any
      capacity to Debtor. Such set-off shall be deemed to have been exercised
      immediately at the time Secured Party or such Affiliate elects to do
      so.

    

    8. Expenses.
      Debtor
      shall pay to Secured Party on demand all costs and expenses (including all
      reasonable fees and disbursements of all counsel retained for advice, suit,
      appeal or other proceedings or purpose and of any experts or agents it may
      retain), which Secured Party may incur in connection with (i) the administration
      of this Agreement, including any administrative fees Secured Party may impose
      for the preparation of discharges, releases or assignments to third-parties;
      (ii) the custody or preservation of, or the sale, lease or other disposition
      or
      realization on the Collateral; (iii) the enforcement and collection of any
      Obligations or any guaranty thereof; (iv) the exercise, performance ,enforcement
      or protection of any of the rights of Secured Party hereunder; or (v) the
      failure of Debtor to perform or observe any provisions hereof. After such demand
      for payment of any cost, expense or fee under this Section or elsewhere under
      this Agreement, Debtor shall pay interest at the highest default rate specified
      in any instrument evidencing any of the Obligations from the date payment is
      demanded by Secured Party to the date reimbursed by Debtor. All such costs,
      expenses or fees under this Agreement shall be added to the
      Obligations.

    

    9. Indemnification.
      Debtor
      shall indemnify Secured Party and its Affiliates and each officer, employee,
      accountant, attorney and other agent thereof (each such person being an
“Indemnified Party”) on demand, without any limitation as to amount, against
      each liability, cost and expense (including all reasonable fees and
      disbursements of all counsel retained for advice, suit, appeal or other
      proceedings or purpose, and of any expert or agents an Indemnified Party may
      retain) heretofore or hereafter imposed on, incurred by or asserted against
      any
      Indemnified Party (including any claim involving any allegation of any violation
      of applicable law of any governmental authority (including any environmental
      law
      or criminal law)), however asserted and whether now existing or hereafter
      arising, arising out of any ownership, disposition or use of any of the
      Collateral; provided, however, the foregoing indemnity shall not apply to
      liability, cost or expense solely attributable to an Indemnified Party’s gross
      negligence or willful misconduct. This indemnity agreement shall survive the
      termination of this Agreement. Any amounts payable under this or any other
      section of this Agreement shall be additional Obligations secured
      hereby.

    

    10. Miscellaneous.

    

    10.1 Notices.
      Any
      demand or notice hereunder or under any applicable law pertaining hereto shall
      be in writing and duly given if delivered to Debtor (at its address on Secured
      Party’s records) or to Secured Party (at the address on page one and separately
      to Secured Party’s officer responsible for Debtor’s relationship with Secured
      Party). Such notice or demand shall be deemed sufficiently given for all
      purposes when delivered (i) by personal delivery and shall be deemed effective
      when delivered, or (ii) by mail or courier and shall be deemed effective three
      (3) business days after deposit in an official depository maintained by the
      United States Post Office for the collection of mail or one (1) business day
      after delivery to a nationally recognized overnight courier service (e.g.,
      Federal Express). Notice by e-mail is not valid notice under this or any other
      agreement between Debtor and Secured Party.

    

    10.2 Governing
      Law; Jurisdiction.
      This
      Agreement has been delivered to and accepted by Secured Party and will be deemed
      to be made in the State of New York. Except as otherwise provided under federal
      law, this Agreement will be interpreted in accordance with the laws of the
      State
      of New York excluding its conflict of laws rules. DEBTOR
      HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR
      FEDERAL COURT IN THE STATE OF NEW YORK IN A COUNTY OR JUDICIAL DISTRICT WHERE
      SECURED PARTY MAINTAINS A BRANCH AND CONSENTS THAT SECURED PARTY MAY EFFECT
      ANY
      SERVICE OF PROCESS IN THE MANNER AND AT DEBTOR’S ADDRESS SET FORTH ABOVE FOR
      PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED IN THIS AGREEMENT
      WILL PREVENT SECURED PARTY FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR
      JUDGMENT OR EXERCISING ANY RIGHTS AGAINST DEBTOR INDIVIDUALLY, AGAINST ANY
      SECURITY OR AGAINST ANY PROPERTY OF DEBTOR WITHIN ANY OTHER COUNTY, STATE OR
      OTHER FOREIGN OR DOMESTIC JURISDICTION.
      Debtor
      acknowledges and agrees that the venue provided above is the most convenient
      forum for both Secured Party and Debtor. Debtor waives any objection to venue
      and any objection based on a more convenient forum in any action instituted
      under this Agreement. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    10.3 Security
      Interest Absolute.
      All
      rights of Secured Party hereunder, the Security Interest and all obligations
      of
      Debtor hereunder shall be absolute and unconditional irrespective of (i) any
      filing by or against Debtor of any petition in bankruptcy or any action under
      federal or state law for the relief of debtors or the seeking or consenting
      to
      of the appointment of an administrator, receiver, custodian or similar officer
      for the wind up of its business; (ii) any lack of validity or enforceability
      of
      any agreement with respect to any of the Obligations, (iii) any change in the
      time, manner or place of payment of, or in any other term of, all or any of
      the
      Obligations, or any other amendment or waiver of or any consent to any departure
      from any agreement or instrument with respect to the Obligations, (iv)any
      exchange, release or non-perfection of any lien or any release or amendment
      or
      waiver of or consent under or departure from any guarantee, securing or
      guaranteeing all or any of the Obligations, or (v) any other circumstance that
      might otherwise constitute a defense available to, or a discharge of, Debtor
      in
      respect of the Obligations or this Agreement. If, after receipt of any payment
      of all or any part of the Obligations, Secured Party is for any reason compelled
      to surrender such payment to any person or entity, because such payment is
      determined to be void or voidable as a preference, impermissible setoff, or
      a
      diversion of trust funds, or for any other reason, such payment shall be
      reinstated as part of the Obligations and this Agreement shall continue in
      full
      force notwithstanding any contrary action which may have been taken by Secured
      Party in reliance upon such payment, and any such contrary action so taken
      shall
      be without prejudice to Secured Party’s rights under this Agreement and shall be
      deemed to have been conditioned upon such payment having become final and
      irrevocable.

    

    10.4 Remedies
      Cumulative; Preservation of Rights.
      The
      rights and remedies herein are cumulative, may be exercised singly or
      concurrently and are not exclusive of any other rights or remedies which Secured
      Party may have under other agreements now or hereafter in effect between Debtor
      and Secured Party, at law (including under the UCC) or in equity. No failure
      or
      delay of Secured Party in exercising any power or right hereunder shall operate
      as a waiver thereof, nor shall any single or partial exercise of any such right
      or power, or any abandonment or discontinuance of steps to enforce such a right
      or power, preclude any other or further exercise thereof or the exercise of
      any
      other right or power. Debtor expressly disclaims any reliance on any course
      of
      dealing or usage of trade or oral representation of Secured Party including
      representations to make loans to Debtor. No notice to or demand on Debtor in
      any
      case shall entitle Debtor to any other or further notice or demand in similar
      or
      other circumstances. 

    

    10.5 Joint
      and Several; Successors and Assigns.
      If
      there is more than one Debtor, each of them shall be jointly and severally
      liable for all amounts, which become due, and the performance of all obligations
      under this Agreement and the term “Debtor” shall include each as well as all of
      them. This Agreement shall be binding upon Debtor and upon its heirs and legal
      representatives, its successors and assignees, and shall inure to the benefit
      of, and be enforceable by, Secured Party, its successors and assignees and
      each
      direct or indirect assignee or other transferee of any of the Obligations;
      provided, however, that this Agreement may not be assigned by Debtor without
      the
      prior written consent of Secured Party.

    

    10.6 Waivers;
      Changes in Writing.
      No
      course of dealing or other conduct, no oral agreement or representation made
      by
      Secured Party or usage of trade shall operate as a waiver of any right or remedy
      of Secured Party. No waiver of any provision of this Agreement or consent to
      any
      departure by Debtor therefrom shall in any event be effective unless made
      specifically in writing by Secured Party and then such waiver or consent shall
      be effective only in the specific instance and for the purpose for which given.
      No modification to any provision of this Agreement shall be effective unless
      made in writing in an agreement signed by Debtor and Secured Party.

    

    10.7 Interpretation.
      Unless
      the context otherwise clearly requires, references to plural includes the
      singular and references to the singular include the plural; the word “or” has
      the inclusive meaning represented by the phrase “and/or”; the word “including”,
“includes” and “include” shall be deemed to be followed by the words “without
      limitation”; and captions or section headings are solely for convenience and not
      part of the substance of this Agreement. Any representation, warranty, covenant
      or agreement herein shall survive execution and delivery of this Agreement
      and
      shall be deemed continuous. Each provision of this Agreement shall be
      interpreted as consistent with existing law and shall be deemed amended to
      the
      extent necessary to comply with any conflicting law. If any provision
      nevertheless is held invalid, the other provisions shall remain in effect.
      Debtor agrees that in any legal proceeding, a photocopy of this Agreement kept
      in Secured Party’s course of business may be admitted into evidence as an
      original. Terms not otherwise defined in this Agreement shall have the meanings
      attributed to such terms in the UCC.

    

    10.8 Waiver
      of Jury Trial.
      DEBTOR
      AND SECURED PARTY HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY
      RIGHT TO TRIAL BY JURY DEBTOR AND SECURED PARTY MAY HAVE IN ANY ACTION OR
      PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS AGREEMENT OR ANY
      TRANSACTIONS RELATED HERETO. DEBTOR REPRESENTS AND WARRANTS THAT NO
      REPRESENTATIVE OR AGENT OF SECURED PARTY HAS REPRESENTED, EXPRESSLY OR
      OTHERWISE, THAT SECURED PARTY WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO
      ENFORCE THIS JURY TRIAL WAIVER. DEBTOR ACKNOWLEDGES THAT SECURED PARTY HAS
      BEEN
      INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE PROVISIONS
      OF
      THIS SECTION.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

      
        	
                Dated:
                  May 7, 2008

              	
                CORNING
                  NATURAL GAS CORPORATION

              
	 	 
	 	
                By:
                  /s/ Michael I. German

              
	 	
                Name:
                  Michael I German

              
	 	
                Title:  
                  President

              

      

    

    

    ACKNOWLEDGMENT

    

    STATE
      OF
      NEW YORK     )

        :
      SS.

    COUNTY
      OF
      BROOME      )

    

    On
      the
      ______ day of May, in the year 2008, before me, the undersigned, a Notary Public
      in and for said State, personally appeared MICHAEL
      I. GERMAN,
      personally known to me or proved to me on the basis of satisfactory evidence
      to
      be the individual(s) whose name(s) is (are) subscribed to the within instrument
      and acknowledged to me that he/she/they executed the same in his/her/their
      capacity(ies), and that by his/her/their signature(s) on the instrument, the
      individual(s), or the person upon behalf of which the individual(s) acted,
      executed the instrument.

    

    Notary
      Public

    

    ________________________________________________________________________________________________________________________________________

    
       

      
        

      

    

    FOR
      SECURED PARTY USE ONLY:

    Authorization
      confirmed: 

    If
      Debtor’s Obligations arise under a guaranty in favor of Secured Party, list the
      name whose indebtedness is being guaranteed under such
      guaranty:

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    

    1. Permitted
      Liens (§3.1)

     

    2. Residence,
      principal place of business or chief executive office (§3.5(i))

     

    3. Location
      of Books and Records (§3.5(ii))

     

    4. Location
      of Equipment, Fixtures, Crops or Timber (§3.5(iii) and §3.5(iv))

     

    5. Locations
      Not Owned by Debtor and Name of Record Owner (§3.5)

     

    6. Trade
      Name, “Doing Business As” Name or Assumed Name (§3.6)Exhibit
      10.5

    

    

    

    MORTGAGE

     

    Date:
      May 7,
      2008

    

    Mortgagor (Name):
      Corning
      Natural Gas Corporation

    (Organizational
      Structure): Corporation

    

    (State
      Law organized under): New
      York

    (Organizational
      Identification Number, if any; note that this is NOT a request for the Taxpayer
      Identification Number):

    (Address
      of residence/chief executive office): 330
      West William Street, Corning, New York 14830

    

    Mortgagee: MANUFACTURERS
      AND TRADERS TRUST COMPANY,
      a New
      York banking corporation having offices at One M&T Plaza, Buffalo, New York
      14203, Attn: Office of General Counsel.

    

    WITNESSETH,
      to secure (a) the payment of an indebtedness in the principal sum of
Three
      Million and 00/100 Dollars ($3,000,000.00),
      lawful
      money of the United States, together with interest thereon and other charges
      with respect thereto, to be paid according to a certain bond, note or other
      obligation dated on or about May 7, 2008, made and delivered by Mortgagor to
      Mortgagee (the “Note”) and (b) if the Note is guaranteed by Mortgagor, to the
      extent of such principal sum and such interest and other charges, such guaranty
      (the “Guaranty”), Mortgagor hereby mortgages to Mortgagee, as continuing and
      collateral security for the payment of any and all indebtedness, liabilities
      and
      obligations of Mortgagor (or Debtor) to Mortgagee, now existing or which may
      hereafter arise pursuant to or in connection with (as further described below)
      the Note, the Guaranty, this Mortgage or any amendments, renewals, extensions,
      modifications or substitutions of the Note, the Guaranty or this Mortgage
      (collectively, the “Indebtedness”), the premises described on the attached
      Schedule A.

    

    TOGETHER
      with all buildings, structures and other improvements now or hereafter erected,
      constructed or situated upon said premises, and all fixtures and equipment
      and
      other personal property now or hereafter affixed to, or used in connection
      with,
      said premises and any and all replacements thereof and additions thereto, all
      of
      which shall be deemed to be and remain and form a part of said premises and
      are
      covered by the lien of this Mortgage (said premises, buildings, structures,
      other improvements, fixtures and equipment and other personal property being
      collectively referred to as the “Premises”),

    

    TOGETHER
      with all strips and gores of land adjoining or abutting the
      Premises,

    

    TOGETHER
      with all right, title and interest of Mortgagor in and to all streets, alleys,
      highways, waterways and public places open or proposed in front of, running
      through or adjoining the Premises, and all easements and rights of way, public
      and private, now or hereafter used in connection with the Premises
      including all easements, rights of way, licenses for ingress and egress,
      pipelines, connections and transfer stations in which the Mortgagor now has,
      ever had, or subsequently acquires any interest in and which are used by the
      Mortgagor in connection with its operation, including, but not limited to,
      those
      easements and rights of way set forth in Schedule B,

    

    TOGETHER
      with all tenements, hereditaments and appurtenances and all the estate and
      rights of Mortgagor in and to the Premises,

    

    TOGETHER
      with all awards heretofore or hereafter made by any federal, state, county,
      municipal or other governmental authority, or by whomsoever made in any
      condemnation or eminent domain proceedings whatsoever, to the present or
      subsequent owners of the Premises or any portion thereof, for the acquisition
      for public purposes of the Premises or any portion thereof or any interest
      therein or any use thereof, or for consequential damages on account thereof,
      including any award for any change of grade of streets affecting the Premises
      or
      any portion thereof and any award for any damage to the Premises or any portion
      thereof or any interest therein or any use thereof.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    MORTGAGOR
      COVENANTS WITH MORTGAGEE SO LONG AS THIS MORTGAGE IS IN EFFECT AS
      FOLLOWS:

    

    1. INDEBTEDNESS.
      The
      Indebtedness shall be paid as provided in the Note or Guaranty, as the case
      may
      be, and as provided herein. Additionally, Mortgagor acknowledges and agrees
      that
      any amounts now or hereafter due and owing from Mortgagor (or Debtor) to
      Mortgagee arising from or in connection with any interest rate swap agreement,
      now existing or hereafter entered into between Mortgagor (or Debtor) and
      Mortgagee, and any costs incurred by Mortgagee in connection therewith,
      including, without limitation, any interest, expenses, fees, penalties or other
      charges associated with any obligations undertaken by Mortgagee to hedge or
      offset Mortgagee’s obligations pursuant to such swap agreement, or the
      termination of any such obligations, shall be (i) deemed additional interest
      and/or a related expense (to be determined in the sole discretion of Mortgagee)
      due in connection with the principal amount of the Indebtedness secured by
      this
      Mortgage, (ii) included (in the manner described above) as part of the
      Indebtedness secured by this Mortgage, and secured by this Mortgage to the
      full
      extent thereof, and (iii) included in any judgment in any proceeding instituted
      by Mortgagee or its agents against Mortgagor for foreclosure of this Mortgage
      or
      otherwise.

    

    2. INSURANCE.
      Mortgagor shall keep the Premises insured against each risk to which the
      Premises may from time to time be subject (including fire, vandalism and other
      risks covered by all risk insurance; if requested by Mortgagee, earthquake;
      if
      the Premises or any portion thereof are located in an area identified as an
      area
      having special flood hazards and in which flood insurance has been made
      available, flood; and loss of rents by reason of such risks) for the benefit
      of
      Mortgagee. Such insurance shall be provided in such amounts, for such periods,
      in such form, with such special endorsements, on such terms and by such
      companies and against such risks as shall be satisfactory to Mortgagee. Without
      limiting the generality of the preceding two sentences, each policy pursuant
      to
      which such insurance is provided shall contain a mortgagee clause, in form
      and
      substance satisfactory to Mortgagee, (a) naming Mortgagee as mortgagee and
      (b)
      providing that (i) all moneys payable pursuant to such insurance shall be
      payable to Mortgagee, (ii) such insurance shall not be affected by any act
      or
      neglect of Mortgagor or Mortgagee, any occupancy, operation or use of the
      Premises or any portion thereof for purposes more hazardous than permitted
      by
      the terms of such policy, any foreclosure or other proceeding or notice of
      sale
      relating to the Premises or any portion thereof or any change in the title
      to or
      ownership of the Premises or any portion thereof and (iii) such policy and
      such
      mortgagee clause may not be canceled or amended except upon thirty (30) days’
prior written notice to Mortgagee. Mortgagor hereby assigns and shall deliver
      each policy pursuant to which any such insurance is provided to Mortgagee.
      The
      acceptance by Mortgagee of such policies from Mortgagor shall not be deemed
      or
      construed as an approval by Mortgagee of the form, sufficiency or amount of
      such
      insurance. Mortgagee does not in any way represent that such insurance, whether
      in scope or coverage or limits of coverage, is adequate or sufficient to protect
      the business or interest of Mortgagor. In the event of the foreclosure of this
      Mortgage, or a transfer of title to the Premises in extinguishment of the
      Indebtedness, all right, title and interest of Mortgagor in and to any such
      policies then in force shall pass to the purchaser or grantee of the Premises.
      All the provisions of this Section 2 and any other provisions of this Mortgage
      pertaining to insurance which may be required under this Mortgage shall be
      construed with Section 254, Subdivision 4 of the New York Real Property Law,
      but, said Section 254 to the contrary notwithstanding, Mortgagor consents that
      Mortgagee may, without qualification or limitation by virtue of said Section
      254, retain and apply the proceeds of any such insurance in satisfaction or
      reduction of the Indebtedness, whether or not then due and payable, or it may
      pay the same, wholly or in part, to any Mortgagor for the repair or replacement
      of the Premises or for any other purpose satisfactory to Mortgagee, without
      affecting the lien of this Mortgage for the full amount of the Indebtedness
      before the making of such payment.

    

    3. ALTERATIONS,
      DEMOLITION OR REMOVAL.
      No
      building, structure, other improvement, fixture or equipment or other personal
      property constituting any portion of the Premises shall be removed, demolished
      or substantially altered without the prior written consent of
      Mortgagee.

    

    4. WASTE
      AND CHANGE IN USE.
      No
      Mortgagor shall commit any waste on the Premises or make any change in the
      use
      of the Premises which may in any way increase any ordinary fire, environmental
      or other risk arising out of construction or operation.

    
      
        
        

      

      
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    5. MAINTENANCE
      AND REPAIRS.
      Mortgagor shall keep and maintain all buildings, structures, other improvements,
      fixtures and equipment and other personal property constituting any portion
      of
      the Premises and the sidewalks and curbs abutting the Premises in good order
      and
      rentable and tenantable condition and state of repair. In the event that the
      Premises or any portion thereof shall be damaged or destroyed by fire or any
      other casualty, or in the event of the condemnation or taking of any portion
      of
      the Premises as a result of any exercise of the power of eminent domain,
      Mortgagor shall promptly restore, replace, rebuild or alter the same as nearly
      as possible to the condition immediately prior to such fire, other casualty,
      condemnation or taking without regard to the adequacy of any proceeds of any
      insurance or award received. Mortgagor shall give prompt written notice to
      Mortgagee of any such damage or destruction or of the commencement of any
      condemnation or eminent domain proceeding affecting the Premises or any portion
      thereof.

    

    6. EXISTENCE
      AND AUTHORITY.
      Mortgagor represents and warrants, and continues to represent and warrant as
      long as this Mortgage is in effect, as follows: (a) If Mortgagor is not a
      natural person (e.g.,
      corporation, partnership, limited liability company, etc.), it is duly
      organized, validly existing and in good standing under the laws of the
      above-named state of organization and will do all things necessary to preserve
      and keep in full force and effect the existence, franchises, rights and
      privileges of Mortgagor as the type of business entity it was as of the date
      of
      this Mortgage, under the laws of the state of its organization; (b) Mortgagor
      has the full power and authority to grant the mortgage lien hereunder and to
      execute, deliver and perform its obligations in accordance with this Mortgage;
      (c) the execution and delivery of this Mortgage will not (i) violate any
      applicable law of any governmental authority or any judgment or order of any
      court, other governmental authority or arbitrator; (ii) violate any agreement
      to
      which Mortgagor is a party; or (iii) result in a lien or encumbrance on any
      of
      its assets (other than the mortgage lien hereunder); (d) Mortgagor’s certificate
      of incorporation, by-laws, partnership agreement, articles of organization
      or
      other organizational or governing documents (“Governing Documents”) do not
      prohibit any term or condition of this Mortgage; (d) each authorization,
      approval or consent from, each registration and filing with, each declaration
      and notice to, and each other act by or relating to, any party required as
      a
      condition of Mortgagor’s execution, delivery or performance of this Mortgage
      (including any shareholder or board of directors or similar approvals) has
      been
      duly obtained and is in full force and effect and no other action is required
      under its Governing Documents or otherwise; and (e) Mortgagor has the power
      and
      authority to transact the business in which it is engaged and is duly licensed
      or qualified and in good standing in each jurisdiction in which the conduct
      of
      its business or ownership of property requires such licensing or such
      qualifications.

    

    7. TAXES
      AND ASSESSMENTS.
      Unless
      paid from an escrow established pursuant to Section 8 of this Mortgage,
      Mortgagor shall pay all taxes, general and special assessments and other
      governmental impositions with respect to the Premises before the end of any
      applicable grace period. Upon request by Mortgagee, Mortgagor shall promptly
      deliver to Mortgagee receipted bills showing payment of all such taxes,
      assessments and impositions within the applicable grace period.

    

    8. ESCROW
      FOR TAXES, ASSESSMENTS AND INSURANCE.
      Upon
      request by Mortgagee, Mortgagor shall pay (a) monthly to Mortgagee on or before
      the first day of each and every calendar month, until the Indebtedness is fully
      paid, a sum equal to one-twelfth (1/12th)
      of the
      yearly taxes, general and special assessments, other governmental impositions
      and other liens and charges with respect to the Premises to be imposed for
      the
      ensuing year, as estimated by Mortgagee in good faith, and annual premiums
      for
      insurance on the Premises and (b) an initial payment such that, when such
      monthly payments are added thereto, the total of such payments will be
      sufficient to pay such taxes, assessments, impositions and other liens and
      charges and such insurance premiums on or before the date when they become
      due.
      Absent manifest error, Mortgagee’s calculation as to the amount to be paid into
      Escrow shall be deemed conclusive. So long as no Event of Default (as
      hereinafter defined) shall have occurred or exists, Mortgagee shall hold such
      payments in trust in an account maintained with Mortgagee without obligation
      to
      pay interest thereon, except such interest as may be mandatory by any applicable
      statute, regulation or other law, to pay, to the extent funds are available,
      such taxes, assessments, impositions and other liens and charges and such
      insurance premiums within a reasonable time after they become due; provided,
      however, that upon the occurrence or existence of any Event of Default,
      Mortgagee may apply the balance of any such payments held to the Indebtedness.
      If the total of such payments made by any Mortgagor shall exceed the amount
      of
      such payments made by Mortgagee, such excess shall be held or credited by
      Mortgagee for the benefit of Mortgagor. If the total of such payments made
      by
      any Mortgagor shall be less than the amount of such taxes, assessments,
      impositions and other liens and charges and such insurance premiums, then
      Mortgagor shall pay to Mortgagee any amount necessary to make up the deficiency
      on or before the date when any such amount shall be due.

    
      
        
        

      

      
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    9. LEASES.
      Pursuant to Section 291-f of the New York Real Property Law, Mortgagor shall
      not
      (a) amend, cancel, abridge, terminate, or otherwise modify any lease of the
      Premises or of any portion thereof or (b) accept any prepayment of installments
      of rent to become due thereunder for more than one month in advance, without
      the
      prior written consent of Mortgagee. No Mortgagor shall make any new lease in
      place of or any lease renewal or extension of any lease of the Premises or
      any
      portion thereof (other than those that Mortgagor as landlord may be required
      to
      grant by the terms of an existing lease) without the prior written consent
      of
      Mortgagee. Upon request by Mortgagee, Mortgagor shall promptly furnish to
      Mortgagee a written statement containing the names and mailing addresses of
      all
      lessees of the Premises or of any portion thereof, the terms of their respective
      leases, the space occupied and the rentals payable thereunder and copies of
      their respective leases and shall cooperate in effecting delivery of notice
      of
      this covenant to each affected lessee.

    

    10. ASSIGNMENT
      OF LEASES AND RENTS.
      Mortgagor hereby assigns to Mortgagee all existing and future leases of the
      Premises or any portion thereof (including any amendments, renewals, extensions
      or modifications thereof) and the rents, issues and profits of the Premises
      including accounts receivable for use of the Premises for hotel or lodging
      services (“Accounts”), as further security for the payment of the Indebtedness,
      and Mortgagor grants to Mortgagee the right to enter upon and to take possession
      of the Premises for the purpose of collecting the same and to let the Premises
      or any portion thereof, and after payment of each cost and expense (including
      each fee and disbursement of counsel to Mortgagee) incurred by Mortgagee in
      such
      entry and collection, to apply the remainder of the same to the Indebtedness,
      without affecting its right to maintain any action theretofore instituted,
      or to
      bring any action thereafter, to enforce the payment of the Indebtedness. In
      the
      event Mortgagee exercises such rights, it shall not thereby be deemed a
      mortgagee in possession, and it shall not in any way be made liable for any
      act
      or omission. No Mortgagor shall assign such leases, rents, issues or profits
      or
      any interest therein or grant any similar rights to any other person without
      Mortgagee’s prior written consent. Mortgagee hereby waives the right to enter
      upon and to take possession of the Premises for the purpose of collecting said
      rents, issues and profits, and Mortgagor shall be entitled to collect the same,
      until the occurrence or existence of any Event of Default, but such right of
      Mortgagor may be revoked by Mortgagee upon the occurrence or existence of any
      Event of Default. Upon the occurrence or existence of any Event of Default,
      Mortgagor shall pay monthly in advance to Mortgagee, or to any receiver
      appointed to collect said rents, issues and profits, a fair and reasonable
      monthly rental value for the use and occupation of the Premises, and upon
      default in any such payment shall vacate and surrender the possession of the
      Premises to Mortgagee or to such receiver, and in default thereof may be evicted
      by summary proceedings pursuant to Article 7 of the New York Real Property
      Actions and Proceedings Law. The rights and remedies under this section and
      any
      separately recorded assignment of rents and/or leases in favor of Mortgagee
      shall be cumulative. In the event of any irreconcilable inconsistencies between
      such agreements and this section, the separately recorded assignment of rents
      and/or leases shall control.

    

    11. SECURITY
      AGREEMENT.
      This
      Mortgage constitutes a security agreement under the New York Uniform Commercial
      Code in effect in the State of New York, as amended from time to time (the
      “UCC”), and Mortgagor hereby grants to Mortgagee, to secure the Indebtedness, a
      continuing security interest in all personal property of Mortgagor used in
      connection with any portion of, or otherwise constituting a portion of, the
      Premises, including, without limitation, fixtures, goods that are or are to
      become fixtures, as-extracted items and timber to be cut, as such terms and
      categories may be defined or described in the UCC, as applicable, whether now
      existing or owned or hereafter arising or acquired, and in all proceeds,
      products, rents, issues, profits and accounts arising therefrom. Mortgagee
      shall
      have the right to file in any public office, without the signature of Mortgagor,
      any financing statement relating to such items of collateral. Mortgagee shall
      have each applicable right and remedy of a secured party under the UCC and
      each
      applicable right and remedy pursuant to any other law or pursuant to this
      Mortgage.

    
      
        
        

      

      
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    12. NO
      TRANSFER.
      Mortgagor shall not, without Mortgagee’s prior written consent, sell, convey or
      transfer the Premises or any portion thereof or any interest therein or contract
      to do so. If any Mortgagor, Debtor or any endorser or guarantor of the
      Indebtedness (a “Guarantor”) is a corporation, or if any other person liable
      with respect to the Indebtedness or any portion thereof other than Mortgagor
      or
      any general partner of Mortgagor, Debtor or any Guarantor, is a corporation,
      any
      direct or indirect change in the beneficial ownership or number of issued and
      outstanding shares of any class of stock of such Mortgagor, Debtor, Guarantor
      or
      general partner, whether by operation of law or otherwise, after which the
      percentage of such shares beneficially owned by any person or group of persons
      having beneficial ownership of any such shares has changed by at least ten
      percent (10%) more or less than it was on the date of this Mortgage shall be
      deemed a sale, conveyance or transfer of the Premises within the meaning of
      this
      Section 12. If any Mortgagor, Debtor or Guarantor is a partnership, including
      a
      limited liability partnership, any change in the partnership interests of the
      general partners of such Mortgagor, Debtor or Guarantor or in the composition
      of
      the general partners of such Mortgagor, Debtor or Guarantor, whether by
      operation of law or otherwise, shall be deemed a sale, conveyance or transfer
      of
      the Premises within the meaning of this Section 12. If any Mortgagor, Debtor
      or
      Guarantor is a limited liability company, any change in the direct or indirect
      membership interest of any member or class of members of such Mortgagor, Debtor
      or Guarantor, whether by operation of law or otherwise, after which the
      percentage of such membership interest owned by any such member or class has
      changed by at least ten percent (10%) more or less than it was on the date
      of
      this Mortgage shall be deemed a sale, conveyance or transfer of the Premises
      within the meaning of this Section 12.

    

    13. NO
      SECONDARY FINANCING OR OTHER LIENS.
      Mortgagor shall not, without Mortgagee’s prior written consent, mortgage,
      pledge, assign, grant a security interest in or cause any other lien or
      encumbrance to be made or permit any other lien or encumbrance to exist upon
      the
      Premises or any portion thereof except for (a) taxes and assessments not yet
      delinquent and (b) any mortgage, pledge, security interest, assignment or other
      lien or encumbrance to Mortgagee or any affiliate of Mortgagee (an
“Affiliate”).

    

    14. COMPLIANCE
      WITH LAWS.
      Mortgagor represents and warrants to Mortgagee, and continues to represent
      and
      warrant as long as this Mortgage is in effect, as follows: (a) the buildings,
      structures and other improvements now constituting any portion of the Premises
      are in full compliance with all applicable statutes, regulations and other
      laws
      (including all applicable zoning, building, fire and health codes and ordinances
      and the Americans With Disabilities Act of 1990) and all applicable deed
      restrictions, if any, and is not and shall not be used for any illegal purpose;
      (b) such compliance is based solely upon Mortgagor’s ownership of the Premises
      and not upon title to or interest in any other property. Mortgagor shall comply
      with or cause compliance with all statutes, regulations and other laws
      (including all applicable zoning, building, fire and health codes and ordinances
      and the Americans With Disabilities Acts of 1990), all other requirements of
      all
      governmental authorities whatsoever having jurisdiction over or with respect
      to
      the Premises or any portion thereof or the use or occupation thereof and with
      all applicable deed restrictions, if any; provided, however, that Mortgagor
      may
      postpone such compliance if and so long as the validity or legality of any
      such
      requirement or restriction shall be contested by such Mortgagor, with diligence
      and in good faith, by appropriate legal proceedings and Mortgagee is satisfied
      that such non-compliance will not impair or adversely affect the value of its
      security.

    

    15. WARRANTY
      OF TITLE; TITLE INSURANCE.
      Mortgagor represents and warrants to Mortgagee, and continues to represent
      and
      warrant as long as this Mortgage is in effect, that Mortgagor holds good and
      marketable title in fee simple absolute to the Premises. Upon request by
      Mortgagee, Mortgagor shall furnish to Mortgagee at Mortgagor’s own cost and
      expense a title insurance policy in the then amount of the Indebtedness, (a)
      naming Mortgagee as mortgagee, (b) covering the lien on the Premises granted
      pursuant to this Mortgage, (c) containing no exception not approved by
      Mortgagee, (d) issued by a title insurance company qualified to do business
      in
      the State of New York and satisfactory to Mortgagee and (e) otherwise in form
      and substance satisfactory to Mortgagee.

    

    16. CERTAIN
      RIGHTS AND OBLIGATIONS.

    

    (a) Mortgagee
      may take such action as Mortgagee deems appropriate to protect the Premises
      or
      the status or priority of the lien of this Mortgage, including: entry upon
      the
      Premises to protect the Premises from deterioration or damage, or to cause
      the
      Premises to be put in compliance with any governmental, insurance rating or
      contract requirements; payment of amounts due on liens having priority over
      this
      Mortgage; payment of any tax or charge for purposes of assuring the priority
      or
      enforceability of this Mortgage; obtaining insurance on the Premises (including
      flood insurance); or commencement or defense of any legal action or proceeding
      to assess or protect the validity or priority of the lien of this Mortgage.
      On
      demand, Mortgagor shall reimburse Mortgagee for all expenses in taking any
      such
      action, with interest, and the amount thereof shall be secured by this Mortgage
      and shall, to the extent permitted by law, be in addition to the maximum amount
      of the Indebtedness evidenced by the Note.

    
      
        
        

      

      
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    (b) Mortgagor
      authorizes Mortgagee, without notice, demand or any reservation of rights and
      without affecting this Mortgage, from time to time: (i) to accept from any
      person or entity and hold additional collateral for the payment of the
      Indebtedness or any part thereof, and to exchange, enforce or refrain from
      enforcing, or release such collateral or any part thereof; (ii) to accept and
      hold any endorsement or guaranty of payment of the Indebtedness or any part
      thereof, and to release or substitute any such obligation of any such Guarantor
      or any person or entity who has given any collateral as security for the payment
      of the Indebtedness or any part thereof, or any other person or entity in any
      way obligated to pay the Indebtedness or any part thereof, and to enforce or
      refrain from enforcing, or compromise or modify, the terms of any obligation
      of
      any such Guarantor, person or entity; (iii) upon the occurrence of an Event
      of
      Default, to direct the order or manner of the disposition of any and all
      collateral and the enforcement of any and all endorsements and guaranties
      relating to the Indebtedness or any part thereof as Mortgagee, in its sole
      discretion, may determine; and (iv) upon the occurrence of an Event of Default
      to determine the manner, amount and time of application of payments and credits,
      if any, to be made on all or any part of any component or components of the
      Indebtedness (whether principal, interest, costs and expenses, or otherwise)
      including if the amount of the Indebtedness secured by this Mortgage is less
      than the total amount of the obligations under the Note or the Guaranty, to
      make
      any such application to such obligations, if any, in excess of the amount of
      the
      Indebtedness secured by this Mortgage.

    

    (c) Notwithstanding
      the occurrence of an Event of Default, this Mortgage shall remain valid, binding
      and enforceable: (i) without deduction by reason of any setoff, defense or
      counterclaim of Mortgagor, Guarantor or Debtor, (ii) without requiring protest
      or notice of nonpayment or notice of default to Mortgagor, to Guarantor, to
      Debtor, or to any other person; (iii) without demand for payment or proof of
      such demand; (iv) without requiring Mortgagee to resort first to Mortgagor
      or to
      any other guaranty or any collateral which Mortgagee may hold; (v) without
      requiring notice of acceptance hereof or assent hereto by Mortgagee; and (vi)
      without requiring notice that any indebtedness has been incurred or of the
      reliance by Mortgagee upon this Mortgage; all of which Mortgagor hereby
      waives.

    

    (d) The
      enforceability of this Mortgage shall not be affected by: (i) any failure to
      perfect or continue the perfection of any security interest in or other lien
      on
      any other collateral securing payment of the Indebtedness; (ii) the invalidity,
      unenforceability, or loss or change in priority of any such security interest
      or
      other lien; (iii) any failure to protect, preserve or insure any such
      collateral; (iv) any defense arising by reason of the cessation from any cause
      whatsoever of liability of Debtor or any Guarantor; (v) any compromise of any
      obligation of Mortgagor, Debtor or any Guarantor; (vi) the invalidity or
      unenforceability of any of the Indebtedness; or (vii) any renewal, extension,
      acceleration, or other change in the time for payment of, or the terms of the
      interest on the Indebtedness or any part thereof; all of which Mortgagor hereby
      waives.

    

    (e) If
      Mortgagee shall receive from or on behalf of Mortgagor any sum less than the
      full amount then due and payable, Mortgagee may, but shall not be obligated
      to,
      accept the same and, if it elects to accept any such payment, it may without
      waiving any Event of Default: (i) apply such payment on account of the
      Indebtedness or any amount payable hereunder, or (ii) hold same or any part
      thereof, without liability for interest, in a special account and from time
      to
      time apply same or any part thereof as specified in subsection (i) of this
      subsection.

    

    17. LIEN
      LAW COVENANT.
      Mortgagor shall receive the advances secured by this Mortgage and shall hold
      the
      right to receive such advances as a trust fund in accordance with the provisions
      of Section 13 of the New York Lien Law.

    

    18. APPLICATION
      OF AND INTEREST ON CONDEMNATION AWARD.
      Mortgagor consents that Mortgagee may retain and apply the proceeds of any
      award
      by a condemning authority in satisfaction or reduction of the Indebtedness,
      whether or not then due and payable, or it may pay the same, wholly or in part,
      to Mortgagor for the restoration or alteration of the Premises or for any other
      purpose satisfactory to Mortgagee, without affecting the lien of this Mortgage
      for the full amount of the Indebtedness before the making of such payment.
      In
      the event of the condemnation or taking by eminent domain of the Premises or
      any
      portion thereof, Mortgagee shall not be limited to the interest paid on the
      award by the condemning authority, but shall be entitled to receive out of
      the
      award interest on the Indebtedness in accordance with its terms.

    

    19. APPOINTMENT
      OF RECEIVER.
      In
      addition to any other remedy, upon the occurrence of any Event of Default,
      Mortgagee, in any action to foreclose this Mortgage, shall be entitled, without
      notice or demand and without regard to the adequacy of any security for the
      Indebtedness or the solvency or insolvency of any person liable for the payment
      thereof, to the appointment of a receiver of the rents, issues and profits
      of
      the Premises.

    
      
        
        

      

      
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    20. SALE
      IN ONE OR MORE PARCELS.
      In case
      of a foreclosure sale, the Premises may be sold in one or more parcels, any
      provision of any statute, regulation or other law to the contrary
      notwithstanding.

    

    21. ESTOPPEL
      STATEMENT.
      Upon
      request by Mortgagee, Mortgagor shall furnish to Mortgagee within five (5)
      days
      if such request is made in person or within ten (10) days if such request is
      otherwise made a written statement duly acknowledged of the amount of the
      Indebtedness and whether any offsets or defenses exist against the
      Indebtedness.

    

    22. RIGHT
      TO INSPECT AND EXAMINE.
      Upon
      request by Mortgagee, Mortgagor shall immediately permit Mortgagee and each
      officer, employee, accountant, attorney and other agent of Mortgagee to enter
      and inspect the Premises and to examine, audit, copy and extract each record
      of
      any Mortgagor relating to the Premises or any portion thereof.

    

    23. FINANCIAL
      STATEMENTS.
      Mortgagor shall provide, shall cause each Guarantor and Debtor to provide,
      and
      shall use its best efforts to cause each lessee of the Premises or any material
      portion thereof (a “Material Lessee”) to provide, to Mortgagee, in form
      satisfactory to Mortgagee, promptly upon request by Mortgagee, all information
      relating to such Mortgagor, Guarantor, Debtor or Material Lessee or to such
      Mortgagor’s, Guarantor’s, Debtor’s or Material Lessee’s business, operations,
      assets, affairs or condition (financial or otherwise) or to the Premises or
      any
      portion thereof that is so requested. Without limiting the generality of the
      preceding sentence, Mortgagor shall so provide (a) if such Mortgagor is a
      natural person, at least once during each period of twelve (12) consecutive
      months, a personal financial statement of such Mortgagor for a year ending
      not
      more than sixty (60) days earlier, in reasonable detail and certified by such
      Mortgagor to be complete and accurate and (b) if such Mortgagor is not an
      individual, (i) promptly copies of all annual reports, proxy statements and
      similar information distributed to shareholders, partners or other owners and
      of
      all filings with the Securities and Exchange Commission and the Pension Benefit
      Guaranty Corporation, (ii) within sixty (60) days after the end of each of
      its
      first three fiscal quarters, accountant
      prepared consolidating
      and consolidated statements of income and cash flows for the quarter, for the
      corresponding quarter in the previous fiscal year and for the period from the
      end of the previous fiscal year, with a consolidating and consolidated balance
      sheet as of the quarter end, (iii) within one
      hundred twenty (120)
      days
      after the end of each fiscal year, consolidating and consolidated statements
      of
      such Mortgagor’s income and cash flows and its consolidating and consolidated
      balance sheet as of the end of such fiscal year, setting forth comparative
      figures for the preceding fiscal year and to be x
      audited o
      reviewed o
      compiled
      (check
      appropriate box. If no box is selected, all financial statements shall be
      audited) by an independent certified public accountant acceptable to Mortgagee,
      all such statements to be certified by such Mortgagor’s chief financial officer
      or partner to be correct and in accordance with such Mortgagor’s records and to
      present fairly the results of such Mortgagor’s operations and cash flows and its
      financial position at year end in conformity with generally accepted accounting
      principles, and (iv) with each statement of income, a certificate executed
      by
      such Mortgagor’s chief executive and chief financial officers or managing
      partners or members (A) stating that the signers of the certificate have
      reviewed this Mortgage and the operations and condition (financial or other)
      of
      such Mortgagor and any subsidiaries during the relevant period and (B) stating
      that no Event of Default occurred during the period, or if an Event of Default
      did occur, describing its nature, the date(s) of its occurrence or period of
      existence and what action Mortgagor has taken with respect thereto.

    

    24. AUTHORIZATION
      AND POWER OF ATTORNEY.
      Mortgagee is irrevocably and unconditionally authorized to take, and Mortgagor
      irrevocably and unconditionally appoints Mortgagee as the attorney-in-fact
      of
      such Mortgagor, with full power of substitution and of revocation, to take,
      in
      the name of such Mortgagor or otherwise at the sole option of Mortgagee, each
      action relating to the Premises or any portion thereof that, subject to this
      Mortgage, such Mortgagor could take in the same manner, to the same extent
      and
      with the same effect as if such Mortgagor were to take such action; provided,
      however, that Mortgagee shall not have the right, pursuant to such authorization
      or as such attorney-in-fact, to sell or otherwise dispose of the Premises or
      any
      portion thereof. Such power of attorney is coupled with an interest in favor
      of
      Mortgagee, and shall not be terminated or otherwise affected by the death,
      disability or incompetence of any Mortgagor.

    

    25. FURTHER
      ASSURANCES.
      Promptly
      upon request by Mortgagee, Mortgagor shall execute and deliver each writing,
      and
      take each other action, that Mortgagee shall deem necessary or desirable at
      the
      sole option of Mortgagee (a) to perfect or accomplish any lien or security
      interest granted, or assignment made, pursuant to this Mortgage; (b) otherwise
      to accomplish any purpose of this Mortgage; (c) in connection with any
      transaction contemplated by this Mortgage; or (d) in connection with the
      Premises or any portion thereof.

    
      
        
        

      

      
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    26. ENVIRONMENTAL
      REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION.
      Mortgagor represents and warrants, and continues to represent and warrant as
      long as this Mortgage is in effect, to Mortgagee that (a) Mortgagor and the
      Premises are in compliance with each statute, regulation or other law and each
      judgment, order or award of any court, agency or other governmental authority
      or
      of any arbitrator (individually an “Environmental Requirement”) relating to the
      protection of any water, water vapor, land surface or subsurface, air, fish,
      wildlife, biota or other natural resources or governing the use, storage,
      treatment, generation, transportation, processing, handling, production or
      disposal of any chemical, natural or synthetic substance, waste, pollutant
      or
      contaminant (collectively “Regulated Materials”), (b) Mortgagor has not been
      charged with, or has received any notice that such Mortgagor is under
      investigation for, the failure to comply with any Environmental Requirement,
      nor
      has Mortgagor received any notice that Mortgagor has or may have any liability
      or responsibility under any Environmental Requirement with respect to the
      Premises or otherwise, (c) the Premises have never been used for (i) the
      storage, treatment, generation, transportation, processing, handling, production
      or disposal of Regulated Materials, except as permitted by law, (ii) a landfill
      or other waste disposal site or (iii) military purposes, (d) no underground
      storage tanks are located on the Premises, (e) the environmental media at the
      Premises do not contain Regulated Materials beyond any legally permitted level,
      (f) there has never been any release, threatened release, migration or
      uncontrolled presence of any Regulated Materials on, at or from the Premises
      or,
      to the knowledge of Mortgagor, within the immediate vicinity of the Premises
      and
      (g) Mortgagor has not received any notice of any such release, threatened
      release, migration or uncontrolled presence. Mortgagor shall not cause or permit
      the Premises to be used in any way that would result in any of the
      representations and warranties contained in the preceding sentence to be false
      or misleading at any future time. To the extent any such representation or
      warranty at any time is or becomes false or misleading, Mortgagor shall promptly
      notify Mortgagee thereof. If at any time Mortgagor obtains any evidence or
      information which suggests that potential environmental problems may exist
      on,
      at or about the Premises, Mortgagee may request Mortgagor, at Mortgagor’s own
      cost and expense, to conduct and complete investigations, studies, sampling
      and
      testing with respect to the Premises requested by Mortgagee. Mortgagor shall
      promptly furnish to Mortgagee copies of all such investigations, studies,
      samplings and tests. Mortgagor shall (a) conduct and complete all such
      investigations, studies, samplings and testing, and all remedial, removal and
      other actions necessary with respect to the Premises, in accordance with all
      applicable Environmental Requirements and promptly furnish to Mortgagee copies
      of all documents generated in connection therewith and (b) defend, reimburse,
      indemnify and hold harmless Mortgagee, its employees, agents, officers and
      directors, from and against any claims, demands, penalties, fines, liabilities,
      settlements, damages, costs or expenses of whatever kind or nature, known or
      unknown, contingent or otherwise, arising out of, or in any way related to,
      the
      violation of, or other liability or responsibility under, any Environmental
      Requirements, or the release, threatened release, migration or uncontrolled
      presence of any Regulated Materials on, at or from the Premises including
      attorney and consultant fees, investigation and laboratory fees, court costs
      and
      litigation expenses. In the event this Mortgage is foreclosed, or Mortgagor
      tenders a deed in lieu of foreclosure which Mortgagee agrees to accept,
      Mortgagor shall be responsible to deliver the Premises to Mortgagee free of
      any
      and all Regulated Materials other than any that are (a) normally used in
      Mortgagor’s business and (b) located and maintained thereon in compliance with
      all applicable Environmental Requirements and in a condition that conforms
      with
      all applicable Environmental Requirements. The provisions of this Section 26
      shall be in addition to any and all other obligations and liabilities Mortgagor
      may have to Mortgagee at common law or any other agreement with Mortgagee,
      and
      shall survive the transactions contemplated in this Mortgage and the termination
      of this Mortgage.

    

    27. EVENTS
      OF DEFAULT.

    

    (a) Any
      of
      the following events or conditions shall constitute an “Event of Default”: (i)
      failure by Mortgagor to pay when due (whether at the stated maturity, by
      acceleration, upon demand or otherwise) the Indebtedness, or any part thereof,
      or there occurs any event or condition which after notice, lapse of time or
      after both notice and lapse of time will permit acceleration of the
      Indebtedness; (ii) default by Mortgagor in the performance of any obligation,
      term or condition of this Mortgage or any other agreement with Mortgagee or
      any
      of its Affiliates; (iii) failure by Mortgagor to pay when due (whether at the
      stated maturity, by acceleration, upon demand or otherwise) any indebtedness
      or
      obligation owing to any third party or any Affiliate, the occurrence of any
      event which could result in acceleration of payment of any such indebtedness
      or
      obligation or the failure to perform any agreement with any third party or
      any
      Affiliate; (iv) Mortgagor is dissolved, becomes insolvent, generally fails
      to
      pay or admits in writing its inability generally to pay its debts as they become
      due; (v) failure to pay, withhold or collect any tax as required by law; (vi)
      Mortgagor makes a general assignment, arrangement or composition agreement
      with
      or for the benefit of its creditors or makes, or sends notice of any intended,
      bulk sale; the sale, assignment, transfer or delivery of all or substantially
      all of the assets of Mortgagor to a third party; or the cessation by Mortgagor
      as a going business concern; (vii) Mortgagor files a petition in bankruptcy
      or
      institutes any action under federal or state law for the relief of debtors
      or
      seeks or consents to the appointment of an administrator, receiver, custodian
      or
      similar official for the wind up of its business (or has such a petition or
      action filed against it and such petition action or appointment is not dismissed
      or stayed within forty-five (45) days); (viii) the reorganization, merger,
      consolidation or dissolution of Mortgagor (or the making of any agreement
      therefor); (ix) the death or judicial declaration of incompetency of Mortgagor,
      if a natural person; (x) the entry of any judgment or order of any court, other
      governmental authority or arbitrator against Mortgagor; (xi) falsity, omission
      or inaccuracy of facts submitted to Mortgagee or any Affiliate (whether in
      a
      financial statement or otherwise); (xii) an adverse change in the Premises,
      Mortgagor, its business, operations, affairs or condition (financial or
      otherwise) from the status shown on any financial statement or other document
      submitted to Mortgagee, and which change Mortgagee determines will have a
      material adverse affect on (a) Mortgagor, the Premises, its business, operations
      or condition (financial or otherwise), or (b) the ability of Mortgagor to pay
      the Indebtedness or perform its obligations hereunder or the Note; (xiii) there
      occurs any change in the management or ownership of Mortgagor which is, in
      the
      opinion of Mortgagee, materially adverse to its interest and which remains
      uncorrected for thirty (30) days after Mortgagee notifies Mortgagor of its
      opinion; (xiv) any pension plan of Mortgagor fails to comply with applicable
      law
      or has vested unfunded liabilities that, in the opinion of Mortgagee, might
      have
      a material adverse effect on Mortgagor’s ability to repay its debts; (xv) any
      indication or evidence received by Mortgagee that Mortgagor may have directly
      or
      indirectly been engaged in any type of activity which, in Mortgagee’s
      discretion, might result in the forfeiture of the Premises to any governmental
      authority; (xvi) the occurrence of any event described in Section 27.1(i)
      through and including 27.1(xv) with respect to any Guarantor or Debtor (if
      Mortgagor and Debtor are not the same); or (xvii) Mortgagee in good faith
      believes that the prospect of payment of all or any part of the Indebtedness
      or
      performance of Mortgagor’s or Debtor’s obligations under this Mortgage or any
      other agreement now or hereafter in effect between Mortgagor, Debtor or
      Guarantor and Mortgagee or its Affiliates is impaired.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    (b) Mortgagee,
      at its sole election, may declare all or any part of any Indebtedness not
      payable on demand to be immediately due and payable without demand or notice
      of
      any kind upon the happening of any Event of Default. All or any part of any
      Indebtedness not payable on demand shall be automatically and immediately due
      and payable, without demand or notice of any kind, upon the commencement of
      Mortgagor’s or Debtor’s bankruptcy if voluntary and upon the lapse of forty-five
      (45) days without dismissal if involuntary, unless an order for relief is
      entered sooner. The provisions of this paragraph are not intended in any way
      to
      affect any rights of Mortgagee with respect to any Indebtedness which may now
      or
      hereafter be payable on demand.

    

    (c) Upon
      the
      happening of an Event of Default, whether or not foreclosure proceedings have
      been instituted, Mortgagor shall, upon demand, surrender possession of the
      Premises to Mortgagee. If Mortgagor remains in possession of the Premises after
      the happening of an Event of Default and demand by Mortgagee, the possession
      shall be as tenant of Mortgagee and Mortgagor agrees to pay in advance upon
      demand to Mortgagee a reasonable monthly rental for the Premises or portion
      so
      occupied. Mortgagee may dispossess, by summary proceedings or otherwise, any
      tenant of Mortgagor defaulting in the payment of rent. If a receiver is
      appointed, this covenant shall inure to the benefit of such receiver.
      Notwithstanding any provision of law to the contrary, Mortgagee may, at its
      option, foreclose this Mortgage subject to the rights of tenants of the Premises
      which are subordinate to the lien of this Mortgage.

    

    (d) If
      the
      Indebtedness, as evidenced by a single note or other written instrument shall
      exceed the amount secured by this Mortgage, or as evidenced by a combination
      of
      same that singularly or in part collectively may be less than said secured
      amount but combined exceed said secured amount, Mortgagee, in any foreclosure
      hereof, shall have the right to sue and collect the excess in the same action
      as
      commenced for the foreclosure hereof, and recover a money judgment for said
      excess with all the rights attendant thereto, including the issuance of an
      execution to the Sheriff for collection thereof, and Mortgagor hereby waives
      any
      defense based upon a claim that in doing so, Mortgagee is splitting its cause
      of
      action if it seeks to foreclose this Mortgage for part of the indebtedness
      and
      recover at law for another part.

    
      
        
        

      

      
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    (e) Upon
      the
      happening of an Event of Default, Mortgagee may pursue, take or refrain from
      pursuing any remedy for collection of the Indebtedness, including foreclosure
      of
      this Mortgage.

    

    (f) Mortgagee
      may, either with or without entry or taking possession of the Premises as
      provided in this Mortgage or otherwise, personally or by its agents or
      attorneys, and without prejudice to the right to bring an action of foreclosure
      of this Mortgage: (A) sell the Premises or any part thereof pursuant to any
      procedures provided by applicable law including the procedures set forth in
      Article 14 of the New York Real Property Actions and Proceedings Law (and any
      amendments or substitute statutes in regard thereto) allowing non-judicial
      foreclosure of Mortgage by sale, and all estate, right, title, interest, claim
      and demand therein, and right of redemption thereof, at one or more sales as
      an
      entity or in parcels, and at such time and place upon such terms and after
      such
      notice thereof as may be required or permitted by applicable law or (B) take
      such steps to protect and enforce its rights whether by action, suit or
      proceeding in equity or at law for the specific performance of any covenant,
      condition or agreement in the Note or in this Mortgage, or in aid of the
      execution of any power granted in this Mortgage, or for any foreclosure under
      this Mortgage, or for the enforcement of any other appropriate legal or
      equitable remedy or otherwise as Mortgagee may elect. Any reference in this
      Mortgage to an action or right of Mortgagee in regard to or in connection with
      a
“foreclosure proceeding” shall be deemed to include a sale and/or proceeding
      under this subsection, including a non-judicial foreclosure of mortgage by
      sale.

    

    28. EXPENSES.
      Mortgagor shall pay to Mortgagee on demand all costs and expenses (including
      attorneys’ fees and disbursements whether for internal or outside counsel)
      incurred by Mortgagee in connection with the Indebtedness or the Mortgage
      including costs of collection, of preserving or exercising any right or remedy
      of Mortgagee under this Mortgage or any related security agreement or guaranty,
      of workout or bankruptcy proceedings by or against Mortgagor, of defending
      against any claim asserted as a direct or indirect result of the Indebtedness
      or
      of performing any obligation of any Mortgagor pursuant to this Mortgage or
      otherwise (including payment of any amount any Mortgagor is obligated to pay
      pursuant to this Mortgage and performance of any obligation of Mortgagor
      pursuant to this Mortgage). Mortgagor agrees to defend and indemnify Mortgagee
      from any and all third party claims arising from Mortgagor’s duties as owner
      and/or occupant of the Premises, and further agrees to pay, upon demand, any
      expense that Mortgagee may incur (including attorneys’ fees and disbursements
      whether for internal or outside counsel) due to Mortgagor’s failure to provide
      appropriate defense and indemnification to Mortgagee in a timely manner.
      Mortgagee reserves the right to have Mortgagor pay, upon demand, administrative
      fee(s) in regard to any administrative action Mortgagee is required or requested
      to take including the preparation of discharges, releases or assignments to
      third parties. Costs and expenses shall accrue interest at the default rate
      set
      forth in the Note from the date of demand until payment is actually received
      by
      Mortgagee. Each such cost and expense and any interest thereon shall constitute
      part of the Indebtedness and be secured by this Mortgage and may be added to
      the
      judgment in any suit brought by Mortgagee or its agents against any Mortgagor
      on
      this Mortgage.

    

    29. NOTICES.
      Any
      demand or notice hereunder or under any applicable law pertaining hereto
      (including Article 14 of New York Real Property Actions and Proceedings Law)
      shall be in writing and duly given if delivered to Mortgagor (at its address
      on
      Mortgagee’s records) or to Mortgagee (at the address on page one and separately
      to Mortgagee officer responsible for Mortgagor’s relationship with Mortgagee).
      Such notice or demand shall be deemed sufficiently given for all purposes when
      delivered (i) by personal service and shall be deemed effective when delivered,
      or (ii) by mail or courier and shall be deemed effective three (3) business
      days
      after deposit in an official depository maintained by the United States Post
      Office for the collection of mail or one (1) business day after delivery to
      a
      nationally recognized overnight courier service (e.g.,
      Federal
      Express). Notice by e-mail is not valid notice under this or any other agreement
      between Mortgagor and Mortgagee.

    

    30. LITIGATION.
      Mortgagor shall promptly notify Mortgagee in writing of any litigation,
      proceeding, or counterclaim against, or of any investigation of, Mortgagor
      (or
      the threat thereof) if: (i) the outcome of such litigation, proceeding,
      counterclaim, or investigation may materially and adversely affect the finances
      or operations of Mortgagor or title to, or the value of, any assets secured
      by
      the Mortgage or (ii) such litigation, proceeding, counterclaim, or investigation
      questions the validity of the Mortgage, the Note or any document executed in
      connection therewith including any guaranties or any action taken, or to be
      taken, pursuant to any such documents. Mortgagor shall furnish to Mortgagee
      such
      information regarding any such litigation, proceeding, counterclaim, or
      investigation as Mortgagee shall request.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    31. NOTICE
      OF NON-COMPLIANCE.
      Mortgagor shall notify Mortgagee in writing of any failure by Mortgagor to
      comply with any provision of the Note, the Mortgage or any document executed
      in
      connection therewith immediately upon learning of such non-compliance, or if
      any
      representation, warranty or covenant contained in any such document is no longer
      true. Mortgagor shall also immediately notify Mortgagee in writing if there
      is
      any material adverse change in any of the information or financial statements
      supplied to Mortgagee to induce Mortgagee to extend credit to Mortgagor or
      if
      such information or financial statement is required under this Mortgage or
      any
      other document executed in connection therewith.

    

    32. COVENANTS
      SHALL RUN WITH THE LAND.
      The
      covenants contained in this Mortgage shall run with the land and bind Mortgagor,
      each heir, legal representative, successor and assign of Mortgagor and each
      subsequent owner, encumbrancer, tenant and subtenant of the Premises or any
      portion thereof, and shall inure to the benefit of, and be enforceable by,
      Mortgagee and each successor and assign of Mortgagee.

    

    33. NONWAIVER
      BY MORTGAGEE.
      All
      rights and remedies of Mortgagee under this Mortgage and its other agreements
      with Mortgagor are cumulative, and no right or remedy shall be exclusive of
      any
      other right or remedy. No single, partial or delayed exercise by Mortgagee
      or
      its agents of any right or remedy shall preclude full and timely exercise by
      Mortgagee or its agents at any time of any right or remedy of Mortgagee without
      notice or demand, at Mortgagee’s sole option. No course of dealing or other
      conduct, no oral agreement or representation made by Mortgagee or its agents
      or
      usage of trade shall operate as a waiver of any right or remedy of Mortgagee.
      No
      waiver of any right or remedy of Mortgagee hereunder shall be effective unless
      made specifically in writing by Mortgagee. No notice or demand on Mortgagor,
      Debtor or Guarantor in any case shall entitle Mortgagor, Debtor or Guarantor
      to
      any other or further notice in similar or other circumstances.

    

    34. RIGHT
      OF SETOFF.
      If an
      Event of Default occurs, Mortgagee and Affiliates shall also have the right
      to
      setoff against the indebtedness any property held in a deposit or other account
      or otherwise owing by Mortgagee or Affiliates including, in any capacity to
      any
      Mortgagor, Debtor or Guarantor in any capacity whether or not the Indebtedness
      or the obligation to pay such moneys owed by Mortgagee is then due, and
      Mortgagee shall be deemed to have exercised such right of setoff immediately
      at
      the time of such election.

    

    35. TERM;
      SURVIVAL.
      The term
      of this Mortgage and Mortgagor’s obligations hereunder shall continue until the
      Indebtedness has been fully paid to Mortgagee’s satisfaction. Mortgagor’s
      obligation to pay the costs and expenses hereunder shall survive the term of
      this Mortgage and the entry of any judgment of foreclosure. Mortgagor’s
      representations, warranties, covenants and agreements shall survive during
      the
      term of this Mortgage and shall be presumed to have been relied upon by
      Mortgagee. If after receipt of any payment of all or any part of the
      Indebtedness, Mortgagee is for any reason compelled to surrender such payment
      to
      any person or entity because such payment is determined to be void or voidable
      as a preference, impermissible set-off, or a diversion of trust funds, or for
      any other reason, this Mortgage shall continue in full force notwithstanding
      any
      contrary action which may have been taken by Mortgagee in reliance upon such
      payment, and any such contrary action so taken shall be without prejudice to
      Mortgagee’s rights under this Mortgage and shall be deemed to have been
      conditioned upon such payment having become final and irrevocable.

    

    36. MISCELLANEOUS.
      This
      Mortgage is absolute and unconditional. This Mortgage and all documents,
      including the Note, any Guaranty and any other document required to be executed
      by Mortgagor, Debtor or Guarantor in connection with the transaction
      contemplated hereby constitute the entire agreement and understanding between
      the parties hereto with respect to such transaction and supersedes all prior
      negotiations, courses of dealing, understandings, and agreements between such
      parties with respect to such transactions. This Mortgage is a binding obligation
      enforceable against Mortgagor and its heirs and legal representatives and its
      successors and assigns and shall inure to the benefit of Mortgagee and its
      successors and assigns. Any reference herein to “Mortgagee” shall be deemed to
      include and apply to every subsequent holder of this Mortgage and any reference
      herein to “Mortgagor”, “Debtor” or “Guarantor” shall include; (i) any successor
      individual or individuals, association, partnership, limited liability company
      or corporation to which all or substantially all of the business or assets
      of
      Debtor, Mortgagor or Guarantor, as the case may be, shall have been transferred;
      (ii) in the case of a partnership Debtor, Mortgagor or Guarantor (as the case
      may be) any new partnership which shall have been created by reason of the
      admission of any new partner or partners therein, or by reason of the
      dissolution of the existing partnership by voluntary agreement or the death,
      resignation or other withdrawal of any partner; and (iii) in the case of a
      corporate or limited liability company, Debtor, Mortgagor or Guarantor (as
      the
      case may be) any other entity into or with which Debtor, Mortgagor or Guarantor
      (as the case may be) shall have been merged, consolidated, reorganized, or
      absorbed. It is the intent of Mortgagor and Mortgagee that the provisions of
      this Mortgage, other than those included in the New York statutory form of
      mortgage, shall be construed as affording to Mortgagee rights additional to,
      and
      not exclusive of, the rights conferred under the provisions contained in such
      statutory form. Unless the context otherwise clearly requires, references to
      plural includes the singular and references to the singular include the plural;
      the word “or” has the inclusive meaning represented by the phrase “and/or”; the
      word “including”, “includes” and “include” shall be deemed to be followed by the
      words “without limitation”; and captions or section headings are solely for
      convenience and not part of the substance of this Mortgage. Any representation,
      warranty, covenant or agreement herein shall survive execution and delivery
      of
      this Mortgage and shall be deemed continuous. Each provision of this Mortgage
      shall be interpreted as consistent with existing law and shall be deemed amended
      to the extent necessary to comply with any conflicting law. If any provision
      nevertheless is held invalid, the other provisions shall remain in effect.
      Mortgagor agrees that in any legal proceeding, a photocopy of this Mortgage
      kept
      in Mortgagee’s course of business may be admitted into evidence as an
      original.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    37. JOINT
      AND SEVERAL.
      If there
      is more than one Mortgagor, each of them shall be jointly and severally liable
      for all amounts and obligations which become due or should be performed under
      this Mortgage and the term “Mortgagor” shall include each as well as all of
      them.

    

    38. GOVERNING
      LAW; JURISDICTION.
      This
      Mortgage has been delivered to and accepted by Mortgagee and will be deemed
      to
      be made in the State of New York. This Mortgage will be interpreted in
      accordance with the laws of the State of New York excluding its conflict of
      laws
      rules. MORTGAGOR
      HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR
      FEDERAL COURT IN NEW YORK STATE IN A COUNTY OR JUDICIAL DISTRICT WHERE MORTGAGEE
      MAINTAINS A BRANCH AND CONSENTS THAT MORTGAGEE MAY EFFECT ANY SERVICE OF PROCESS
      IN THE MANNER AND AT MORTGAGOR’S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR
      DEMAND; PROVIDED THAT NOTHING CONTAINED IN THIS MORTGAGE WILL PREVENT MORTGAGEE
      FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY
      RIGHTS AGAINST MORTGAGOR INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY
      PROPERTY OF MORTGAGOR WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR
      DOMESTIC JURISDICTION.
      Mortgagor acknowledges and agrees that the venue provided above is the most
      convenient forum for both Mortgagee and Mortgagor. Mortgagor waives any
      objection to venue and any objection based on a more convenient forum in any
      action instituted under this Mortgage.

    

    39. WAIVER
      OF JURY TRIAL. MORTGAGOR AND MORTGAGEE HEREBY KNOWINGLY, VOLUNTARILY, AND
      INTENTIONALLY EACH WAIVE ANY RIGHT TO TRIAL BY JURY THEY MAY HAVE IN ANY ACTION
      OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS MORTGAGE OR THE
      TRANSACTIONS RELATED THERETO. MORTGAGOR REPRESENTS AND WARRANTS THAT NO
      REPRESENTATIVE OR AGENT OF MORTGAGEE HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
      THAT MORTGAGEE WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS RIGHT
      TO JURY TRIAL WAIVER. MORTGAGOR ACKNOWLEDGES THAT MORTGAGEE HAS BEEN INDUCED
      TO
      ACCEPT THIS MORTGAGE BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS
      SECTION.

    

    IN
      WITNESS WHEREOF, this Mortgage has been duly executed by Mortgagor the day
      and
      year first above written.

    

    
      	
              CORNING
                NATURAL GAS CORPORATION

            
	 	 
	
              By:

            	
              /s/
                Michael I. German

            
	
              Name:
                

            	
              Michael
                I. German

            
	
              Title:

            	
              President

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    ACKNOWLEDGMENT

    

    STATE
      OF
      NEW YORK  
      )

    :
      SS.

    COUNTY
      OF
      BROOME  )

    

    On
      the
      ____ day of May, in the year 2008, before me, the undersigned, a Notary Public
      in and for said State, personally appeared MICHAEL
      I. GERMAN,
      personally known to me or proved to me on the basis of satisfactory evidence
      to
      be the individual(s) whose name(s) is (are) subscribed to the within instrument
      and acknowledged to me that he/she/they executed the same in his/her/their
      capacity(ies), and that by his/her/their signature(s) on the instrument, the
      individual(s), or the person upon behalf of which the individual(s) acted,
      executed the instrument.

    

    
      	
              ___________________________________________

            
	
              Notary Public

            

    

    

    RECORD
      & RETURN TO:

    Mark
      S. Gorgos, Esq.

    Coughlin
      & Gerhart, LLP

    P.O.
      Box 2039

     

    Binghamton,
      NY 13902-2039

     

    
      
        
        

      

      
        13

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