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HomeMy WebLinkAbout12-47464 , SILVERANG & DONOHOE, LLC By: Mark S. Haltzman, Esquire Edmund J. Campbell, Jr., Esquire mhaltzman(a)sanddlawyers.com ecampbell(a)sanddlawyers.com Attorney ID Nos: 38957/63587 595 E. Lancaster Avenue, Suite 203 St. Davids, PA 19087 (610) 263-0115 EXETER 40 EAST MAIN, L.P., AS ASSIGNEE OF CIBC, INC. 140 West Germantown Pike, Suite 150 Plymouth Meeting, PA 19462 PLAINTIFF, VS. HER INVESTORS, LP 1181 Sussex Road Teaneck, New Jersey 07666 DEFENDANT. Attorneys of Plaintiff,rn Exeter 40 East Main, L.P=,,r as Assignee of CIBC, Incr"?,.Z o NCO sr COURT OF COMMON.@E S CUMBERLAND COUN V ., . . „< cn DOCKET NO: OI - -? NOTICE TO DEFEND NOTICE You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint of for any other claim or relief requested by the plaintiff. You may lose money or property or other rights important to you. You should take this paper to your lawyer at once. If you do not have a lawyer or cannot afford one, go to or telephone the office set forth below to find out where you can get legal help. Cumberland County Bar Association Lawyer Referral and Information Service 32 South Bedford Street Carlisle, PA 17013 1-800-990-9108 717-249-3166 (00298272,1) AVISO "ri r- i t-d .utl Le ban demandado a usted en In corte. Si usted quiere defen erse de estas demandas expuestas en Ins paginas siguientes, ust d tiene veinte (20) dias de plazo al partir de In fecha de In dema An y la notificacion. Hace falta ascentar una comparencia escri a o en persona o con un abogado y entregar a In corte en forma es rite sus defensas o sus objeciones a Ins demandas en contra de su rsona. Sea avisado que si usted no se defiende, In corte tomara m didas y puede continuar In demanda en contra suya sin previo aviso o notificacion. Ademas, In corte puede decider a favor del de ndante y requiere que usted cumpla con todas [as provisiones de esta demanda. Usted puede perder dinero o sus propiedades u otros derechos importantes para usted. Lleve esta demanda a un abogado immediatamente. St no tiene a ogado si no tiene el dinero suficiente de pagar tal servicio. Maya en per ona o /lame por telefono a la oficina cuya direccion se encuentra escrit abajo para averiguar donde se puede conseguir asistencia legal. Cumberland County Bar Association Servicio De Referencia E Informacion Legal 32 South Bedford Street Carlisle, PA 17013 1-800-990-9108 717-249-3166 6tW4 3.75 ? a ?7yQ 12 97 ?cP 19 . 4 i SILVERANG & DONOHOE, LLC By: Mark S. Haltzman, Esquire Edmund J. Campbell, Jr., Esquire mhaltzman(&sanddlawyers.com ecamnbell(&,sanddlawyers.com Attorney ID Nos: 38957/63587 595 E. Lancaster Avenue, Suite 203 St. Davids, PA 19087 (610) 263-0115 EXETER 40 EAST MAIN, L.P., AS ASSIGNEE OF CHIC, INC. 140 West Germantown Pike, Suite 150 Plymouth Meeting, PA 19462 PLAINTIFF, VS. HER INVESTORS, LP 1181 Sussex Road Teaneck, New Jersey 07666 DEFENDANT. Attorneys for Plaintiff, Exeter 40 East Main, L.P., As Assignee of CHIC, Inc. COURT OF COMMON PLEAS CUMBERLAND COUNTY DOCKET NO: COMPLAINT IN MORTGAGE FORECLOSURE Plaintiff, Exeter 40 East Main, L.P. (hereinafter "Plaintiff"), by and through its Silverang & Donohoe, LLC, files this Complaint in Mortgage Foreclosure and, in support states as follows: PARTIES 1. Plaintiff, Exeter 40 East Main, L.P., is a Pennsylvania limited partnership offices at 140 West Germantown Pike, Suite 150, Plymouth Meeting, Pennsylvania 19462. 2. Defendant, HER Investors LP, is a Delaware limited partnership, with an of 1181 Sussex Road, Teaneck, New Jersey 07666. {00296985;61 1 JURISDICTION AND VENUE 3. Jurisdiction over the Defendant by the courts of the Commonwealth Pennsylvania is proper pursuant to the provisions of 42. Pa.C.S.A. § 5301 (a) (2) (iii) et seq. virtue of the fact that the Defendant regularly carries on a continuous and systematic part of general business within the Commonwealth of Pennsylvania. 4. Venue in Cumberland County is proper pursuant to Pa.R.C.P. 1006(a)(2) virtue of the fact that property involved is located within Philadelphia County. FACTUAL BACKGROUND 5. On or about April 12, 2007, in consideration of monies lent (the "Loan"), Defendant executed and delivered to CIBC, Inc. a promissory note in the original princi amount of $18,100,000.00 (the "Note"). A true and correct copy of the Note with is attached hereto as Exhibit "A" and incorporated by reference herein. 6. In order to secure the Note, also on or about April 12, 2007, the executed and delivered a Mortgage, Assignment of Leases and Rents, Security Instrument Fixtures Filing to CIBC, Inc. in the amount of $18,100,000.00, which mortgage pertains certain real property commonly known as 40 East Main Street, New Kingston, Cumber County, Pennsylvania (the "Property"), and which was recorded by the Recorder of Deeds Cumberland County in Mortgage Book 1991, Page 3385 et seq. (the "Mortgage"). A true correct copy of the Mortgage (with all amendments) is attached hereto as Exhibit "B" incorporated by reference herein. 7. On or about May 18, 2009, CIBC, Inc. assigned the Mortgage (the "Assi to Plaintiff. A true and correct copy of the Assignment is attached hereto as Exhibit "C" incorporated by reference herein. 2 (00296985;6) z 8. The Assignment is also reflected by a Note Allonge executed by CIBC, Inc. May 18, 2009, which was thereafter permanently affixed to the Note. See Exhibit "A." 9. By its terms, the Mortgage is for the purpose of securing the indebtedness by the Defendant to the Plaintiff as evidenced by the Note. 10. The Defendant is a "single purpose entity" whose sole purpose is to acquire, hold, maintain, mortgage, lease, operate and sell the Property which secures the Mortgage. 11. The Defendant owns no real property other than the Property which is subject the Mortgage. 12. The Defendant is responsible for the prompt payment to Plaintiff of the and interest due under the Note and as secured by the Mortgage. 13. Pursuant to the Note, the Maturity Date of the Loan was May 1, 2012. 14. The failure to pay principal and interest on the Note when due is an evem Default if not cured within fifteen (15) days. 15. Pursuant to the Note, the Loan accrues interest at the non-default rate of 5 (the "Note Rate"). 16. In the event of a default, the Note provides that interest shall accrue on outstanding principal balance of the Note at a rate per annum equal to four percent (4%) plus Note Rate (i.e., 9.94%) (the "Default Rate"). See, Note, Section 1.07. 17. Pursuant to Section 1.01 of the Note, the entire outstanding principal balance the Loan, together with all accrued but unpaid interest thereon and all other sums due under Loan, were payable in full on the Maturity Date. 18. The Note incorporates by reference the definition of the term "Event of Default" as set forth in the Mortgage (the Mortgage is referred to in the Note as the 3 {00296985;6} 1 a Instrument"). See, Note, Section 1.06. (The Mortgage, Note and all other documents in connection with the Loan are collectively referred to herein as the "Loan Documents.") 19. Accordingly, pursuant to the Loan Documents, the failure to pay all sums due owing within seven (7) days of the Maturity Date is an Event of Default. See, N 1.06; Mortgage, Section 2.1(a). 20. The Defendant failed to pay to the Plaintiff the principal amount $18,100,000.00 and interest in the amount of $89,595.00 within seven (7) days of the Date as required by the Loan Documents (the "Maturity Default") 21. The Loan Documents do not require the Plaintiff to provide the Defendant notice of a Maturity Default, nor do the Loan Documents require the Plaintiff to give Defendant an opportunity to cure the Maturity Default. 22. Notwithstanding the fact that the Plaintiff has no obligation to put the on notice of a Maturity Default or an opportunity to cure the Maturity Default, Plaintiff, its counsel, wrote to the Defendant on May 10, 2010, advising them of the Maturity Default demanded payment in full of all sums due and owing under the Note (the "Maturity Notice"). The Maturity Default Notice is attached hereto as Exhibit "D" and incorporated reference herein. 23. As of the date of the filing of this Complaint, the Maturity Default uncured. 24. Under the terms of the Mortgage, Plaintiff is entitled, inter alia, to pursue action for judicial foreclosure. See, Mortgage, Section 3.1(e). 25. Under the terms of the Mortgage and the Note, the Defendant is obligated to reasonable attorneys' fees and costs, including, without limitation, costs of collection 4 {00296985;6} a expenses incurred in the collection of this obligation and court costs. 1.08, Mortgage Section 3.1(e)(1). 26. As of July 15, 2012, Plaintiff has incurred legal fees of $10,611.97 in its efforts enforce the terms of the Mortgage. Plaintiff reserves the right to adjust its demand to additional legal fees that Plaintiff may incur. 27. The Defendant has defaulted and remains in default on its obligation pursuant the terms of the Note, Mortgage and Loan Documents, by virtue of, among other things, failed to pay in full all outstanding principal, accrued interest, reasonable attorneys' fees other charges due and owing under the Note as of the Maturity Date. 28. During the pendency of this action, Plaintiff may be obligated to pay assessments, water or sewer rents, insurance premiums, installments on prior mortgages costs of necessary repairs to preserve the security of its Mortgage, and any sums advanced the terms of the Note and Mortgage for such purposes, together with interest, each of which are to be added to the amount due on the Note secured by the Mortgage. 29. The Loan is a commercial loan and the Property is part of a commercial endeavor and investment to which the Pennsylvania Foreclosure Act 91 of 1983 and Act 6 1974 (each, as amended from time to time), and the notices required thereunder, do not apply. 30. As a result of the Defendant's default of the Note and the Loan Documents, the 5 {00296985;6} w following amounts are immediately due and payable as of May 31, 2012: Principal $18,100,000.00 Interest as of 4/30/2012 @ 5.94% $ 89,595.00 Interest from 5/1/2012 through 6/3/12 @ 9.94% $ 299,856.67 Attorneys' Fees $ 10,611.97 TOTAL': $18,500,063.64 31. Interest continues to accrue at the Default Rate from July 1, 2012 at a per rate of $4,997.61. WHEREFORE, Plaintiff demands Judgment in Mortgage Foreclosure against in the sum of $18,500,063.64 plus interest at the per diem rate of $4,997.61 using the Default Rate from and after June 30, 2012 (which interest shall continue to accrue until judgment lis paid), and attorneys' fees and other costs and expenses as authorized by the Note, Mortgage Loan Documents, and for the sale of the Property in satisfaction of said judgment, together such other and further relief as the Court may deem proper. squire Edmund J. Campbell, Jr., Esquire mhaltzman(a)sanddlawyers.com ecampbell(&sanddlawyers.com Attorney Identification Nos.: 38957/63587 595 E. Lancaster Avenue, Suite 203 St. Davids, PA 19087 (610) 263-0115 Attorneys for Plaintiff, Exeter 40 East Main, L.P., As Assignee of CIBC, Inc. Respectfully submitted, SILVERANG & DON HOE, LLC By: ?Mark S. a manE 1 Plus any and all attorneys' fees and other costs and expenses permitted under the Note, Mortgage and Loan Documents, plus interest at the per diem default rate of $4,997.61 to be charged from and after June 30, 2012, shall continue to accrue until judgment is paid. 6 {00296985;6} r SILVERANG & DONOHOE, LLC By: Mark S. Haltzman, Esquire Edmund J. Campbell, Jr., Esquire mhaltzman@sanddlawyers.com eampbell@sanddlawyers.com Attorney Identification Nos.: 38957/ 63587 595 E. Lancaster Avenue, Suite 203 St. Davids, PA 19087 (610) 263-0115 EXETER 40 EAST MAIN, L.P., As Assignee of CIBC, Inc. 140 West Germantown Pike Suite 150 Plymouth Meeting, PA 19462 Plaintiff, V. HER Investors, LP, 1181 Sussex Road Teaneck, New Jersey 07666 Defendant. Attorneys for Plaintiff, Exeter 40 East Main, L.P., as Assignee of CIBC, Inc. : COURT OF COMMON PLEAS : CUMBERLAND COUNTY : Docket No. 2012- VERIFICATION The undersigned, having read the attached Complaint in Mortgage Foreclosure, hereb verifies that the averments of fact contained therein are based on information which counse gathered in the course of this lawsuit. 'The language of the pleading is that of counsel and not c the signer. The undersigned verifies that the within document has been read by the signer an, that it is true and correctly to the best of signer's knowledge, information and belief. To th extent that the contents of the within document are that of counsel, the undersigned has relie upon counsel in taking this Verification. This Verification ism subject to the penalties of 1 .da Pa.C.S.A. § 4904, relating to unsworn falsification to a i J. Weber t00285746; I } {I`LL8LbZ00} «V,? 1191HXA NOTE ALLONGE ENDORSEMENT to that certain Promissory Note dated April 12, 2007, in stated principal amount $18,100,000, made by HER INVESTORS LP, a Delaware lim partnership in favor of CIBC, INC. Pay to the order of EXETER 40 EAST MAIN, L.P., a Pennsylvania limit partnership, without recourse, representation or warranty, express or implied, except as rr otherwise be expressly set forth in that certain Mortgage Loan Sale Agreement dated May 2009, by and between CIBC, INC. as Seller and EXETER 40 EAST MAIN, L.P., as Buyer. DATE: As of May L, 2009 CIBC, INC., a Delaware corporation B Name: L Title: lkaa U THIS NOTE ALLONGE SHOULD BE PERMANENTLY AFFIXED TO THE PROMISSORY NOTE DESCRIBED ABOVE 1a-1028952 Note Allonge - 40 East Loan # PROMISSORY NOTE Note Amount: $18,100,000.00 Date of Note: April 12, 2007 Note Rate: 5.94% Maturity Date: May 1, 2012 Property: 40 East Main Street New Kingstown, Pennsylvania FOR VALUE RECEIVED, the undersigned, HER INVESTORS LP, a Delaware limited partnership (`Borrower"), whose taxpayer identification number is 204250522 and whose address is 1181 Sussex Road, Teaneck, New Jersey 07666, promises to pay to the order of CIBC INC., a Delaware corporation ("Lender"), at the office of Lender at 300 Madison Avenue, 8's Floor, Attention: Real Estate Group, New York, New York 10017, or at such other place as Lender may designate to Borrower in writing from time to time, the Note Amount (as defined above), together with interest on so much thereof as is from time to time outstanding and unpaid, from the date of the advance of the principal evidenced hereby, at.the rate per annum equal to the Note Rate (as defined above), in lawful money of the United States of America, which shall at the time of payment be legal tender in payment of all debts and dues, public and private. ARTICLE I -- TERMS AND CONDITIONS 1.01 Payment of Principal and Interest. (a) Interest shall be computed hereunder based on a 360-day year and paid, in arrears on the related Payment Date (as defined below) for the actual number of days elapsed for any whole or partial month in which interest is being calculated. In computing the number of days during which interest accrues, the day on which funds are initially advanced shall be included (regardless of the time of day such advance is made), and the day on which funds are repaid shall be included unless repayment is credited prior to close of business. Payments in federal funds immediately available in the place designated for payment received by Lender prior to 2:00 p.m. local time on a business day in the State of Lender's principal office at said place of payment shall be credited prior to close of business, while other payments may, at the option of Lender, not be credited until immediately available to Lender in federal funds at the place designated for payment prior to 2:00 p.m. local time at said place of payment on a day on which Lender is open for business. (b) Payments on this Note, in accordance with Section 1.01(c) hereof, shall be due on the first day of each calendar month until payment in full of this Note (each such date, a "Payment Date") beginning on the first day of the second full calendar month following the date of this Note (or on the first day of the first full calendar month following the date hereof, in the event the advance of the principal amount evidenced by this Note is on the first day of a calendar month). On the Maturity Date (as defined above), the entire outstanding principal balance hereof, together with all accrued but unpaid interest thereon and all other sums due hereunder, shall be due and payable in full. So long as no Event of Default (as hereinafter defined) exists hereunder, each such monthly installment shall be applied first, to any amounts hereafter advanced by Lender hereunder or under any other Loan Document, second, to any late fees and other amounts payable to Lender, third, to the payment of accrued interest and last to reduction of principal. (c) On each Payment Date, Borrower shall pay interest only, at the Note Rate, based on the actual number of days in the previous calendar month. As used in this Note, the "Monthly Payment Amount" for any Payment Date shall mean the amount payable pursuant to this Section 1.01(c) on such Payment Date. (d) If the advance of the principal amount evidenced by this Note is made on a date other than the first day of a calendar month, then Borrower shall pay to Lender contemporaneously with the PROMISSORY NOTE - PAGE i NY:1098162.2B execution hereof interest at the Note Rate for a period from the date of such advance through and including the last day of such calendar month 1.02 Prepayment. (a) Restrictions on Prepayment Borrower may not voluntarily prepay this Note in whole or in part at any time prior to the expiration of the Lock-out Period, nor shall Lender be obligated to accept any such prepayment tendered by Borrower. "Lock-out Period" shall mean the period of time from the date hereof through and including April _, 2008 (the "Lock-Out Expiration Date"). During the period (the "Yield Maintenance Period") after the Lock-Out Expiration Date to, but not including, the date that is one (1) month prior to the Maturity Date, Borrower may prepay this Note in whole only upon payment of a "Prepayment Premium" in accordance with the provisions of Section 1.02(b) hereof. (b) Voluntary Prepayment During the Yield Maintenance Period. This Note may be prepaid in whole but not in part during the Yield Maintenance Period on the condition that: (i) written notice of such prepayment is received by Lender not more than sixty (60) days and not less than thirty (30) days prior to the date of such prepayment, (ii) such prepayment is either (x) received by Lender on a Payment Date, or (y) if not received on a Payment Date, accompanied by a payment of interest, calculated at the Note Rate, on the amount prepaid, based on the number of days from the date such prepayment is received through the next Payment Date, (iii) such prepayment is accompanied by all interest accrued hereunder through and including the date of such prepayment and all other sums due hereunder and/or under the other Loan Documents (as defined herein), and (iv) Lender is paid an amount (the "Prepayment Premium") equal to the greater of (A) one percent (1.0%) of the then-outstanding principal balance of this Note, and (B) the present value of a series of payments each equal to the Payment Differential (as hereinafter defined) and payable on each Payment Date over the remaining original term of this Note and, with respect to the principal balance of this Note due to be outstanding on such date, on the Maturity Date, discounted at the Reinvestment Yield (as hereinafter defined) for the number of months remaining as of the date of such prepayment to each such Payment Date and the Maturity Date, respectively. After the expiration of the Yield Maintenance Period, Borrower may repay this Note in whole only, provided, that (i) written notice of such prepayment is received by Lender not more than sixty (60) days and not less than thirty (30) days prior to the date of such prepayment, (ii) such prepayment is accompanied by all interest accrued hereunder and all other sums due hereunder and under the other Loan Documents (as hereinafter defined) and (iii) such prepayment (x) is received by Lender on a Payment Date, or (y) if not received on a Payment Date, is accompanied by a payment of interest, calculated at the Note Rate, on the amount prepaid, based on the number of days from the date such prepayment is received through the next Payment Date. (c) lnvoluntarv Prepayment Except as hereinafter provided in this subparagraph (c), in the event that any prepayment is accepted by Lender prior to the expiration of the Lock-out Period, or if a prepayment results from Lender's exercise of its remedies under the Loan Documents, Borrower shall pay Lender a Prepayment Premium in connection with such Prepayment. In the event that Lender elects to apply condemnation or insurance payments to prepayment of this Note in accordance with Section 1.07 of the Security Instrument (as defined in Section 1.04 hereof), (i) if an Event of Default shall have occurred and be continuing at the time of the related casualty or condemnation, in addition to applying such proceeds as provided in the Security Instrument, Borrower shall pay a Prepayment Premium to Lender; and (ii) if no Event of Default shall have occurred and be continuing at the time of the related casualty or condemnation, then no Prepayment Premium shall be due and payable in connection therewith. No prior written notice of prepayment by Borrower shall be required in connection with an application of insurance or condemnation proceeds. PROMISSORY NOTE - PAGE 2 NY:1098162.2B (d) Valid Tender. No tender of a prepayment of this Note with respect to which a Prepayment Premium is due shall be effective unless such prepayment is accompanied by such Prepayment Premium. No principal amount repaid may be re-borrowed. (e) Miscellaneous Provisions. In the event that any Prepayment Premium is due hereunder, Lender shall deliver to Borrower a statement setting forth the amount and determination of the Prepayment Premium, and, provided that Lender shall have in good faith applied the formula described above, Borrower shall not have the right to challenge the calculation or the method of calculation set forth in any such statement in the absence of manifest error, which calculation may be made by Lender on any day during the fifteen (15) day period preceding the date of such prepayment. Lender shall not be obligated or required to have actually reinvested the prepaid principal balance at the Reinvestment Yield or otherwise as a condition to charging or receiving the Prepayment Premium. In addition to the aforesaid Prepayment Premium, if, upon any such permitted or required prepayment (at any time prior to the Maturity Date), the aforesaid prior written notice has not been timely received by Lender, the Prepayment Premium shall be increased by, or if no Prepayment Premium is otherwise due, there shall be due a Prepayment Premium equal to, an amount equal to the lesser of (i) thirty (30) days' interest computed at the Note Rate on the outstanding principal balance of this Note so prepaid and (ii) interest computed at the Note Rate on the outstanding principal balance of this Note so prepaid that would have been payable for the period from, and including, the date of prepayment through the Maturity Date as though such prepayment had not occurred. (f) Certain Definitions. As used in this Note and in the Loan Documents "Payment Differential" shall mean an amount equal to (i) the Note Rate less the Reinvestment Yield, divided by (ii) twelve (12), and multiplied by (iii) the principal sum outstanding under this Note after application of the constant monthly payment due under this Note on the date of such prepayment, provided that the Payment Differential shall in no event be less than zero. "Reinvestment Yield" shall mean an amount equal to the lesser of (i) the yield on the U.S. Treasury issue (primary issue) with a maturity date closest to the Maturity Date, or (ii) the yield on the U.S. Treasury issue (primary issue) with a term equal to the remaining average life of the indebtedness evidenced by this Note, as determined by Lender, with each such yield being based on the bid price for such issue as published in the Wall Street Journal on the date that is fourteen (14) days prior to the date of such prepayment set forth in the notice of prepayment (or, if such bid price is not published on that date, the next preceding date on which such bid price is so published) and converted to a monthly compounded nominal yield. 1.03 Intentionally Omitted. 1.04 Securi . The indebtedness evidenced by this Note and the obligations created hereby are secured by, inter alia, that certain Mortgage, Assignment of Leases and Rents and Security Agreement (as amended, consolidated, modified, severed or spread from time to time, the "Security Instrument") from Borrower to Lender, dated on or about the date hereof, concerning the Property (as described above). The Security Instrument together with this Note and all other documents executed and/or delivered by or on behalf of Borrower, Borrower's property manager or any guarantor or substitute guarantor under the Indemnity or the Environmental Indemnity to or of which Lender is a party or beneficiary now or hereafter evidencing, securing, guarantying, modifying or otherwise relating to the indebtedness evidenced hereby, as amended or modified from time to time, are herein referred to collectively as the "Loan Documents". All of the terms and provisions of the Loan Documents are incorporated herein by reference. Some of the Loan Documents are to be filed for record on or about the date hereof in the appropriate public records. PROMISSORY NOTE - PAGE 3 NY:1098162.2B 1.05 Exculpation. Notwithstanding anything in the Loan Documents to the contrary, but subject to the qualifications hereinbelow set forth, Lender agrees that (i) enforcement of Borrower's liability hereunder shall be limited to the security for the indebtedness evidenced hereby and for the other obligations arising under the Loan Documents, the same being all properties (whether real or personal), rights, estates and interests now or at any time hereafter securing the payment of this Note and/or the other obligations of Borrower under the Loan Documents (collectively, the "Security Property"), and no attachment, execution or other writ of process shall be sought, issued or levied upon any assets, properties or funds of Borrower other than the Security Property except with respect to the liability described below in this section, and (ii) in the event of a foreclosure of such liens, security titles, estates, assignments, rights or security interests securing the payment of this Note and/or the other obligations of Borrower under the Loan Documents, no judgment for any deficiency upon the indebtedness evidenced hereby shall be sought or obtained by Lender against Borrower, except with respect to the liability described below in this section; provided, however, that, notwithstanding the foregoing provisions of this section, Borrower shall be fully liable, and subject to legal action, for all actual damages, actual losses (excluding punitive damages, lost profits, diminution in value and consequential damages), reasonable out of pocket costs and expenses incurred by Lender (including, without limitation, the reasonable fees and expenses of Lender's counsel) by reason of (a) proceeds paid under any insurance policies (or paid as a result of any other claim or cause of action against any person or entity) by reason of damage, loss or destruction to all or any portion of the Property, to the extent such proceeds have been paid to Borrower, to any of the Equity Holders (as defined in the Security Instrument), to any other person or entity under common control with any Equity Holder, or at Borrower's direction and not delivered to Lender, but which, under the terms of the Loan Documents, should have been delivered to Lender; (b) proceeds or awards resulting from the condemnation or other taking in lieu of condemnation of all or any portion of the Property, or any of them, to the full extent such proceeds or awards have been paid to Borrower, to any of the Equity Holders, to any other person or entity under common control with any Equity Holder, or at Borrower's direction and not previously delivered to Lender, but which, under the terms of the Loan Documents, should have been delivered to Lender; (c) all tenant security deposits or other refundable deposits actually paid to or held by Borrower, by any of the Entity Holders, by any other person or entity under common control with any Equity Holder, or otherwise paid at Borrower's direction in connection with leases of all or any portion of the Property which are not applied in accordance with the terms of the applicable lease or other agreement, to the full extent of such deposits; (d) rent and other payments received by Borrower, by any of the Equity Holders, by any other person or entity under common control with any Equity Holder, or otherwise paid at Borrower's direction from tenants under leases of all or any portion of the Property paid more than one month in advance, to the full extent of any such rents collected by Borrower and not remitted to Lender promptly upon the occurrence of an Event of Default; (e) rents, issues, profits and revenues of all or any portion of the Property actually received by Borrower, by any of the Equity Holders, by any other person or entity under common control with any Equity Holder, or otherwise paid at Borrower's direction or applicable to a period during the continuance of any Event of Default, which are not paid to Lender, to the full extent of the rents, issues, profits and revenues not so paid; (f) intentional physical waste committed on the Property, but only to the extent that funds were available to Borrower so as to avoid or protect against such waste and such funds were used by Borrower for purposes other than the avoidance of or protection against such waste; damage to the Property as a result of the intentional misconduct or gross negligence of, Borrower or any Indemnitor (as defined in the Security Instrument) or any holder of equity interests in Borrower or Indemnitor, or any PROMISSORY NOTE - PAGE 4 NY:1098162.2B r person acting on behalf of, or at the direction of, Borrower or Indemnitor, or any removal of the in violation of the terms of the Loan Documents; (g) failure to pay, or make deposits to the Impound Account (as defined in the Securit Instrument) pursuant to the requirements set forth in Section 1.6 of the Security Instrument on account o: any valid taxes, assessments, mechanic's liens, materialmen's liens or other liens which could create lien on any portion of the Property which would be superior to the lien or security title of the Securit Instrument or the other Loan Documents, but only to the extent that, at any time when such deposits wer due and payable, funds of Borrower were used for purposes other than payment of Reserves (as defined i the Security Instrument) or payments required under this Note or any other Loan Document; (h) failure by Borrower to pay, or make deposits to the Impound Account pursuant to th requirements set forth in Section 1.6 of the Security Instrument on account of, the premiums on insuranc policies required under the Loan Documents to be maintained by Borrower or with respect to th Property, but only to the extent that, at any time when such deposits were due and payable, funds c Borrower were used for purposes other than payment of Reserves or payments required under this Note c any other Loan Document; (i) fraud or material misrepresentation or failure to disclose a material fact by Borrowe or any Indemnitor, or any holder of equity interests in Borrower or Indemnitor, or any person acting o behalf of, or at the direction of, Borrower or Indemnitor; 0) (i) the filing by Borrower of a voluntary bankruptcy petition, or (ii) the filing again: Borrower of an involuntary bankruptcy petition by (a) any general partner, managing member or othe constituent entity of Borrower, (b) any indemnitor with respect to Borrower's obligations under the Loa Documents, or (c) any affiliate of any of them; and Furthermore, notwithstanding anything to the contrary in the Loan Documents, in the event th, (A) Borrower fails to obtain Lender's prior written consent to any subordinate financing or oth voluntary lien encumbering the Property, if such consent is required by the Loan Documents; (1 Borrower fails to obtain Lender's prior written consent to any assignment, transfer or conveyance of t1 Property or any interest therein, if such consent is required by Loan Documents; or (C) the first month debt service payment is not paid when due (together with all required reserves), then the Loan shall 1 fully recourse to Borrower. Nothing contained in this section shall (1) be deemed to be a release or impairment of the indebtedness evidenced by this Note or the other obligations of Borrower under the Loan Documents or the lien of the Loan Documents upon the Property, or (2) preclude Lender from foreclosing the Loan Documents in case of any Event of Default or from enforcing any of the other rights of Lender except as stated in this section, or (3) reduce, release, relieve, waive, limit or impair in any way whatsoever the Indemnity and Guaranty Agreement and/or the Hazardous Substances Indemnity Agreement each of even date executed and delivered in connection with the indebtedness evidenced by this Note or release, relieve, reduce, waive or impair in any way whatsoever, any obligation of any party to such Indemnity and Guaranty Agreement and Hazardous Substances. Indemnity Agreement or (4) waive any right that Lender may have under Section 506 (a), 506 (b), 1 I I I(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Loan or to require that all collateral shall continue to secure all of the indebtedness owing to Lender in accordance with the Loan Documents. Notwithstanding anything to the contrary contained herein, it is understood and agreed that "actual damages" or "actual losses" shall include, without limitation, any liabilities (both contractual and pursuant to any state or federal securities laws) imposed on Lender by reason of Lender having included any information provided by (or on behalf of ) Borrower or any Indemnitor (but excluding information provided by third parties other than Borrower, Indemnitor or their respective affiliates or agents, e.g. PROMISSORY NOTE - PAGE 5 NY:1098162.2B property condition reports, environmental reports, etc.) in any offering materials for any securitization the Loan. Notwithstanding anything to the contrary, except with respect to any guarantor or substitute guarantor with respect to the Indemnity Agreement and the Environmental Indemnity, neither any presen or future Constituent Member in Borrower nor any present or future shareholder, officer, director employee, trustee, beneficiary, advisor, partner, member, principal, participant or agent of or in Borrower or of or in any person or entity that is or becomes a Constituent Member in Borrower (collectively "Borrower's Members') shall have any personal liability, directly or indirectly, under or in connection with the Loan Documents, or any amendment or amendments to any of the foregoing made at any time o times hereafter and Borrower, on behalf of itself and its successors and assigns, hereby waives any and al. such personal liability. The term "Constituent Member", as used herein, shall mean, any direct member in Borrower and any person or entity that, directly or indirectly through one or more other partnerships, limited liability companies, corporations or other entities is a member in Borrower. Neither the negative capital account of any Constituent Member in Borrower or in any other Constituent Member in Borrower. nor any obligation of any Constituent Member in Borrower to restore a negative capital account or tc contribute or loan capital to Borrower or to any other Constituent Member in Borrower shall at any time be deemed to be the property or an asset of Borrower (or any such other Constituent Member) and neither Lender nor any of its successors or assigns shall have any right to collect,-enforce or proceed against with respect to any such negative capital account or obligation to restore, contribute or loan. 1.06 Event of Default. It is hereby expressly agreed that should any default occur in 1 payment of principal or interest as stipulated above and such payment is not made within seven (7) dE of the date such payment is due (provided that no grace period is provided for the payment of princil and interest due on the Maturity Date), or should an "Event of Default" (as defined in the Secur Instrument) occur, or should any other default occur under any of the Loan Documents which is not cur within any applicable grace or cure period, then an "Event of Default" shall exist hereunder, and so to as such Event of Default shall exist the indebtedness evidenced hereby, including all sums advanced accrued hereunder or under any other Loan Document, and all unpaid interest accrued thereon, shall, the option of Lender and without notice to Borrower, at once become due and payable and may collected forthwith, whether or not there has been a prior demand for payment and regardless of 1 stipulated date of maturity. 1.07 Late Charges and Default Interest Rate. In the event that any payment is not received by Lender on the date when due (subject to the applicable grace period but without additional notice or grace), with the exception of the payment due on the Maturity Date, then in addition to any default interest payments due hereunder, Borrower shall also pay to Lender a late charge in an amount equal to five percent (5.0%) of the amount of such overdue payment, provided, however, that no such late charge shall be due with respect to the outstanding principal balance of this Note outstanding as of the Maturity Date if not timely paid. So long as any Event of Default exists hereunder, regardless of whether or not there has been an acceleration of the indebtedness evidenced hereby, and at all times after maturity of the indebtedness evidenced hereby (whether by acceleration or otherwise), interest shall accrue on the outstanding principal balance of this Note at a rate per annum equal to four percent (4.0%) plus the Note Rate, or if such increased rate of interest may not be charged or collected under applicable law, then at the maximum rate of interest, if any, which may be charged or collected from Borrower under applicable law (the "Default Interest Rate"), and such default interest shall be immediately due and payable. Borrower acknowledges that it would be extremely difficult or impracticable to determine Lender's actual damages resulting from any late payment or Event of Default, and such late charges and default interest are reasonable estimates of those damages and do not constitute a penalty. Interest at the Default Rate shall continue to accrue on any judgment Lender may obtain against Borrower on this Note or the Security PROMISSORY NOTE - PAGE 6 NY: 1098162.2H Instrument until Lender acquires record title to the Property or the judgment, including interest and has been paid in full. 1.08 Cumulative Remedies. The remedies of Lender in this Note or in the Loan Documer or at law or in equity, shall be cumulative and concurrent, and may be pursued singly, successively together in Lender's discretion. In the event this Note, or any part hereof, is collected by or through attorney-at-law, Borrower agrees to pay all costs of collection including, but not limited to, reasonal attorneys' fees. ARTICLE II -- GENERAL CONDITIONS 2.01 No Waiver: Amendment No failure to accelerate the debt evidenced hereby by reason of default hereunder, acceptance of a partial or past due payment, or indulgences granted from time to time shall be construed (i) as a novation of this Note or as a reinstatement of the indebtedness evidenced hereby or as a waiver of such right of acceleration or of the right of Lender thereafter to insist upon strict compliance with the terms of this Note, or (ii) to prevent the exercise of such right of acceleration or any other right granted hereunder or by any applicable laws; and Borrower hereby expressly waives the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing. No extension of the time for the payment of this Note or any installment due hereunder, made by agreement with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the original liability of Borrower under this Note, either in whole or in part unless Lender agrees otherwise in writing. This Note may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought. 2.02 Waivers. Presentment for payment, demand, protest and notice of demand, protest and nonpayment and all other notices are hereby waived by Borrower, except notices expressly required under other provisions of the Loan Documents. Borrower hereby further waives and renounces, to the fullest extent permitted by law, all rights to the benefits of any moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension, redemption, appraisement, exemption and homestead now or hereafter provided by the Constitution and laws of the United States of America and of each state thereof, both as to itself and in and to all of its property, real and personal, against the enforcement and collection of the obligations evidenced by this Note or the other Loan Documents. 2.03 Limit of Validity. The provisions of this Note and of all agreements between Borrower and Lender, whether now existing or hereafter arising and whether written or oral, are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of demand or acceleration of the maturity of this Note or otherwise, shall the amount paid, or agreed to be paid ("Interest"), to Lender for the use, forbearance or detention of the money loaned under this Note exceed the maximum amount permissible under applicable law. If, from any circumstance whatsoever, performance or fulfillment of any provision hereof or of any agreement between Borrower and Lender shall, at the time performance or fulfillment of such provision shall be due, exceed the limit for Interest prescribed by law or otherwise transcend the limit of validity prescribed by applicable law, then ipso facto the obligation to be performed or fulfilled shall be reduced to such limit and if, from any circumstance whatsoever, Lender shall ever receive anything of value deemed Interest by applicable law in excess of the maximum lawful amount, an amount equal to any excessive Interest shall be applied to the reduction of the principal balance owing under this Note in the inverse order of its maturity (whether or not then due) or at the option of Lender be paid over to Borrower, and not to the payment of Interest. All Interest (including, but not limited to, any amounts or payments deemed to be Interest) paid or agreed to be paid to Lender shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal balance of this Note so that the Interest thereof for such full period will PROMISSORY NOTE - PAGE 7 NY:1099162.2B not exceed the maximum amount permitted by applicable law. This Section 2.03 will control all agreements between Borrower and Lender. 2.04 Use of Funds. Borrower hereby warrants, represents and covenants that the loan evidenced hereby is for business or commercial purposes only, and no advance of funds evidenced hereby shall be used by Borrower for personal, family, agricultural or household purposes. The foregoing shall not, however, prohibit Borrower from distributing surplus proceeds (after payment from time to time of all amounts that Borrower is required to pay pursuant to the Loan Documents) to the owners of equity interests in Borrower. 2.05 Unconditional Payment. Borrower is and shall be obligated to pay principal, interest and any and all other amounts which become payable hereunder or under the other Loan Documents absolutely and unconditionally and without any abatement, postponement, diminution or deduction and without any reduction for counterclaim or setoff. In the event that at any time any payment received by Lender hereunder shall be deemed by a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under any bankruptcy, insolvency or other debtor relief law, then the obligation to make such payment shall survive any cancellation or satisfaction of this Note or return thereof to Borrower and shall not be discharged or satisfied with any prior payment thereof or cancellation of this Note, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions hereof, and such payment shall be immediately due and payable upon demand. ARTICLE III - CERTAIN DEFINITION& CASH MANAGEMENT 3.01 Definitions. The following items, as used in this Note, shall have the following meaning which meaning shall be applicable equally to the singular and the plural of the items defined: (a) "Cash Management Agreement" shall mean that certain Cash Management Agreement of even date herewith executed by Borrower and Lender and, if applicable, any property manager retained by Borrower, in connection with this Note. 3.02 Deposit of Rents and Profits. Upon the commencement of any Sweep Period (as defined in the Cash Management Agreement) prior to the Maturity Date, Borrower shall thereafter cause the Rents and Profits (as defined in the Security Instrument) to be deposited in the applicable accounts required by the Cash Management Agreement and such sums shall be applied on the first day of each calendar month in the following listed order of priority: (a) First, payments to the Impound Account (as defined in the Security Instrument) in accordance with the terms and conditions of the Security Instrument; (b) Next, the payment of the Monthly Payment Amount; (c) Next, payments of any other amounts due under the Loan Documents not expressly set forth below in this Section 3.02; (d) Next, payments to the Replacement Reserve (as defined in the Security Instrument) in accordance with the terms and conditions of the Security Instrument; (e) Next, payments to the Leasing Reserve (as defined in the Security Instrument) in accordance with the terms and conditions of the Security Instrument and the Cash Management Agreement; and PROMISSORY NOTE - PAGE 8 NY:10981621B (f) Next, payments to the Arnold Sweep Reserve (as defined in the Security Instrument) i accordance with the terms and conditions of the Security Instrument and the Cash Managemel Agreement. Notwithstanding any provision of this Note to the contrary, following an Event of Default, Len( reserves the right to (x) take such enforcement actions as it deems appropriate under the Loan Documei or otherwise under law or in equity and (y) apply sums received to the amounts owed under the Lo Documents at such times and in such amounts, order and manner as Lender shall in its sole discreti elect from time to time. 3.03 Payment of Months Payment Amount. Nothing in this Article III shall limit, reduce otherwise affect Borrower's obligations to make payments of the Monthly Payment Amount and/4 payments to the Impound Account, the Leasing Reserve, or the Replacement Reserve due hereunder ar under the other Loan Documents, whether or not Rents and Profits are available to make such payments. ARTICLE IV - MISCELLANEOUS 4.01 Miscellaneous. This Note shall be interpreted, construed and enforced according to i laws of the State in which the Property is located. The terms and provisions hereof shall be binding uF and inure to the benefit of Borrower and Lender and their respective heirs, executors, le representatives, successors, successors-in-title and assigns, whether by voluntary action of the parties by operation of law. As used herein, the terms "Borrower" and "Lender" shall be deemed to include th respective heirs, executors, legal representatives, successors, successors-in-title and assigns, whether voluntary action of the parties or by operation of law. If Borrower consists of more than one person entity, each shall be jointly and severally liable to perform the obligations of Borrower under this Nc All personal pronouns used herein, whether used in the masculine, feminine or neuter gender, sh include all other genders; the singular shall include the plural and vice versa. Titles of articles a sections are for convenience only and in no way define, limit, amplify or describe the scope or intent any provisions hereof. Time is of the essence with respect to all provisions of this Note. This Note a the other Loan Documents contain the entire agreements between the parties hereto relating to the subj matter hereof and thereof and all prior agreements relative hereto and thereto which are not contain herein or therein are terminated. 4.02 Severance of Note. Lender shall have the unrestricted right at any time or from time to time to sell, dispose of, transfer, pledge, participate, syndicate or otherwise transfer the Loan, and/or securitize all or any portion of Lender's interest in the Loan at any time, or to cause this Note and the Security Instrument to be split into two or more notes, parts or interests, in whatever proportion Lender deems appropriate (i.e., an A/B or A/B/C structure), which may be in the form of pari passu interests, senior and junior interests, or other interests, and thereafter to sell, assign, participate, syndicate or securitize all or any part of either such severed or split note and mortgage. Borrower agrees to cooperate in all reasonable respects with Lender, at Lender's sole cost and expense, to facilitate any such action, the transfer. or disposition of the Loan, the rating of the Loan . or of a securitization in which the Loan is included. Borrower's cooperation obligation shall continue until the Loan has been repaid in full, and shall include, without limitation, the following as each may be reasonably required from time to time by Lender, Servicer, or any holder of the note evidencing Borrower's obligations pursuant to the Loan: (a) Consenting to non-material modifications to the Loan Documents or to Borrower's organizational documents, which modifications shall not increase Borrower's obligations nor diminish any of Borrower's rights or benefits in connection with the Loan; and (b) Executing any additional documents required by Lender to effectuate such severance, including, without limitation, a splitter and modification agreement, replacement notes, PROMISSORY NOTE - PAGE 9 NY:10981621B intercreditor agreements and replacement security deeds, mortgages or deeds of trust in the aggreg. amount of the principal amount of the indebtedness evidenced hereby, which may include, but not limited to, revising the interest rate for each note component, reallocating the principal balances of 1 severed notes and/or the components, increase or decrease the monthly debt service payments for ea component or eliminate the component structure and/or the multiple note structure of the Loan (includi the elimination of the related allocations of principal and interest payments), provided that the outstandi principal balance of all components immediately after the effective date of such modification equals 1 outstanding principal balance of this Note immediately prior to such modification and the weighs average of the interest rates for all components immediately after the effective date of such modificati equals the interest rate of this Note immediately prior to such modification. 4.03 Confession of Jud ent. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOW ANY ATTORNEY OR ATTORNEYS OR THE PROTHONOTARY OR CLERK OF) COURT OF RECORD IN THE COMMONWEALTH OF PENNSYLVANIA, ELSEWHERE, TO APPEAR FOR BORROWER IN ANY SUCH COURT IN APPROPRIATE ACTION THERE BROUGHT OR TO BE BROUGHT AGAI] BORROWER AT THE SUIT OF LENDER ON THIS NOTE, AND THEREIN CONFESS JUDGMENT AGAINST BORROWER FOR ALL SUMS DUE FR BORROWER TOGETHER WITH COSTS OF SUIT AND AN ATTORNEY'S FEE I COLLECTION EQUAL TO ONE PERCENT (1%) OF THE THEN OUTSTAND: PRINCIPAL BALANCE HEREOF; AND FOR SO DOING THIS NOTE OR A C( HEREOF VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. T WARRANT OF ATTORNEY SHALL BE EFFECTIVE ONLY AFTER AN EVENT DEFAULT, BUT SHALL NOT BE EXHAUSTED BY ANY EXERCISE THEREOF. BORROWER HEREBY RELEASES LENDER AND SAID ATTORNEY OR ATTORNEYS FROM ALL PROCEDURAL ERRORS, DEFECTS AND IMPERFECTIONS WHATSOEVER IN ENTERING JUDGMENT BY CONFESSION AS AFORESAID OR IN ISSUING ANY PROCESS OR INSTITUTING ANY PROCEEDINGS RELATING THERETO AND HEREBY WAIVES ALL BENEFIT THAT MIGHT ACCRUE TO BORROWER BY VIRTUE OF ANY PRESENT OR FUTURE LAWS EXEMPTING THE PREMISES, AND ANY OTHER COLLATERAL FOR THIS NOTE, OR ANY PART OF THE PROCEEDS ARISING FROM ANY SALE OF ANY SUCH PROPERTY, FROM ATTACHMENT, LEVY OR SALE UNDER EXECUTION, OR PROVIDING FOR ANY STAY OF EXECUTION, EXEMPTION FROM CIVIL PROCESS OR EXTENSION OF TIME AND AGREES THAT SUCH PROPERTY MAY BE SOLD TO SATISFY ANY JUDGMENT ENTERED ON THIS NOTE OR THE MORTGAGE, IN WHOLE OR IN PART AND IN ANY ORDER AS MAY BE DESIRED BY LENDER. BORROWER CONFIRMS TO LENDER THAT (I) BORROWER IS A BUSINESS ENTITY AND THAT ITS PRINCIPALS ARE KNOWLEDGEABLE IN BUSINESS MATTERS; (II) THE TERMS OF THIS NOTE, INCLUDING THE FOREGOING WARRANT OF ATTORNEY TO CONFESS JUDGMENT, HAVE BEEN NEGOTIATED AND AGREED UPON IN A COMMERCIAL CONTEXT; AND (III) IT HAS FULLY PROMISSORY NOTE - PAGE 10 NY:1098162.2B REVIEWED THE AFORESAID WARRANT OF ATTORNEY TO CONFF JUDGMENT WITH ITS OWN COUNSEL AND IS KNOWINGLY A: VOLUNTARILY WAIVING CERTAIN RIGHTS IT WOULD OTHERWISE POSSE INCLUDING BUT NOT LIMITED TO, THE RIGHT TO ANY NOTICE OR HEARING PRIOR TO THE ENTRY OF JUDGMENT BY LENDER PURSUANT' THE AFORESAID WARRANT OF ATTORNEY. 4.04 Time is of the Essence. Time is of the essence with respect to Borrower's under this Note. [NO FURTHER TEXT ON THIS PAGE] PROMISSORY NOTE - PAGE I 1 NY:10981621B IN WITNESS WHEREOF, Borrower has executed this Note under seal as of the date first above written. HER INVESTORS LP, a Delaware limited partnership By: HSAMBEN LP, a Delaware limited partnership, its general partner By: HERSAM LLC, a Delaware limited liability com&,its eneral p B y: muel Kirscheba Title: Ma4,T4r STATE OF NEW YORK COUNTY OF NEW YORK V?n°,TAi On;A I Z, 2007 before me, a Notary Public in and for the aforesaid County and State, personally appeared Samuel Kirschenbaum, known to me (or satisfactorily proven) to be the of HERSAM LLC, a Delaware limited liability company, the General Partner of HSAMBLIN LP, a Delaware limited partnership, in turn the General Partner of HER INVESTORS LP, a Delaware limited partnership, and acknowledged that he as such M p1,` , being duly authorized to do so, executed the foregoing instrument on behalf of HERSAM LC, a Delaware limited liability company, the General Partner of HSAMBEN LP, a Delaware limited partnership, in turn the General Partner of HER INVESTORS LP, a Delaware limited partnership, for the purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my official hand and seal. [SEAL] expires: JOHN P. GREELEY (Votary Public, State of New York No. 02GR8109096 Oualified in New York County Commission Expires June 7, 2006 PROM ISSOSRY NOTE- SIGNATURE PAGE NY:1099162.1 { I `LLEVZ00} «g„ JjIEIIHXA x y bd _1 r _.i F 200 PTA, IV 9 Pri 1 96 MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT, AND FIXTURE FILING HER INVESTORS LP, BORROWER IN FAVOR OF CIBC INC., LENDER DATEDAAS OF April I. 2007 *March 29, 2007, and effective Oc, eA Marck a9, accl .d JPec tve- as oP April i -A1 aOO7 Propertv Address 40 East Main New Kingstown, Pennsylvania County: Cumberland NY:1098157.2C P"1t 1991 PG338?: THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SEC AGREEMENT AND FIXTURE FILING (this "Mortgage") is madakas of the ([Ith day of April, 2007, by HER INVESTORS LP, a Delaware limited partnership, as mortgagor ("Borrower"), whose address is 1181 Sussex Road, Teaneck, New Jersey 07666, in favor of CIBC INC., a Delaware corporation as mortgagee ("Lender"), whose address is 300 Madison Avenue, 8`h Floor, Attention: Real Estate. Group, New York, New York 10017. *this 29th day of March, 2007 and effective WITNESSETH: THAT FOR THE PURPOSES OF SECURING: (1) A loan (the "Loan") by Lender to Borrower in the original principal amour of EIGHTEEN MILLION ONE HUNDRED THOUSAND AND N01100 DOLLARS ($18,100,000.00), together with interest thereon evidenced by that certain promissory note (such promissory note, toge er with any and all renewals, modifications, consolidations and extensions thereof, is hereinafter referre to as the "Note") of even date with this Mortgage, made by Borrower to the order of Lender in like amo t; (2) The full and prompt payment and performance of all of the provisions, agreements, covenants and obligations herein contained and contained in any other agreeme ts, documents or instruments now or hereafter evidencing, guarantying, securing or otherwise relating to the indebtedness evidenced by the Note, whether executed or delivered by Borrower or by any indemnito or guarantor with respect to any obligation of Borrower under the Loan Documents (each, hereinafter, an "Indemnitor"), as defined herein, or jointly and severally (the Note, this Mortgage, and such o er agreements, documents and instruments, together with any and all renewals, amendments, extensions d modifications thereof, are hereinafter collectively referred to as the "Loan Documents") excluding only the obligations pursuant to that certain Hazardous Substances Indemnity Agreement by Borrower d Indemnitor, jointly and severally, for the benefit of Lender (the "Hazardous Substances Indemnityd the payment of all other sums covenanted in the Loan Documents to be paid; (3) Any and all additional advances made by Lender to protect or preserve the Property (as defined herein) or the lien or security interest created hereby on the Property, or for Taxes and Other Charges (each as defined in Section 1.5) or Insurance Premiums (as defined in Section 1.6 as hereinafter provided or for performance of any of Borrower's obligations hereunder or under the o er Loan Documents or for any other purpose provided herein or in the other Loan Documents (whether or not the original Borrower named herein remains the owner of the Property at the time of such advanc s), and any and all costs and expenses incurred by Lender hereunder in performing the obligations required to be performed by Borrower or otherwise incurred by Lender pursuant to the terms of this Mortg ge, together with interest on each such advance, cost or expense (which interest shall accrue at the Default Interest Rate (as defined in the Note) from the date such amounts are advanced or paid by Lender until the date repaid by Borrower); and (4) Any and all other indebtedness now owing or which may hereafter be owing by Borrower to Lender in connection with the Loan, the Loan Documents and/or the Property, including, without limitation, all prepayment fees, however and whenever incurred or evidenced, whether express or implied, direct or indirect, absolute or contingent, or due or to become due, and all renewals, modifications, consolidations, replacements and extensions thereof; (All of the sums referred to in Paragraphs (1) through (4) above are herein sometimes referred to as "Obligations") MORTGAGE - PAGE I Error! Unknown document property name. IIK1991PG338 7 and for and in consideration of the sum of Ten and no/100 Dollars ($10.00), and other consideration, the receipt and sufficiency of which are hereby conclusively acknowledged, BORI HAS GRANTED, CONVEYED, BARGAINED, SOLD, ALIENED, ENFEOFFED, REL CONFIRMED, MORTGAGED AND WARRANTED AND HEREBY IRREVO MORTGAGES, GRANTS, BARGAINS, SELLS, CONVEYS, TRANSFERS, PLEDGES, A] ENFEOFFS, RELEASES, CONFIRMS, WARRANTS, SETS OVER AND ASSIGNS, AND C A SECURITY INTEREST, TO LENDER, ITS SUCCESSORS AND ASSIGNS, in all of Bc estate, right, title and interest in, to and under any and all of the following described property, now owned or hereafter acquired (collectively, the "Property"): A. All that certain real property referenced on the cover page of this Mortgage more particularly described on Exhibit A attached hereto and incorporated herein by this refer (collectively, the "Real Estate"), together with all of the easements, rights, privileges, franch tenements, hereditaments and appurtenances now or hereafter thereunto belonging or in any appertaining and all of the estate, right, title, interest, claim and demand whatsoever of Borrower the or thereto, either at law or in equity, in possession or in expectancy, now or hereafter acquired; B. All structures, buildings and improvements of every kind and description now or at any time hereafter located or placed on the Real Estate (the "Improvements"); C. All furniture, furnishings, fixtures, goods, equipment, inventory or perso al property owned by Borrower and now or hereafter located on, attached to or used in and about he Improvements, including, but not limited to, all machines, engines, boilers, dynamos, elevators, stok rs, tanks, cabinets, awnings, screens, shades, blinds, carpets, draperies, lawn mowers, and all applianc s, plumbing, heating, air conditioning, lighting, ventilating, refrigerating, disposal and incinera g equipment, and all fixtures and appurtenances thereto, and such other goods and chattels and perso al property owned by Borrower as are now or hereafter used or finished in operating the Improvements, or the activities conducted therein, and all building materials and equipment hereafter situated on or ab ut the Real Estate or Improvements, and all warranties and guaranties relating thereto, and all additi ms thereto and substitutions and replacements therefor (exclusive of any of the foregoing owned or leased by tenants of space in the Improvements) (hereinafter, all of the foregoing items described in this paragr ph C, collectively, the "Equipment"); D. All easements, rights-of-way, strips and gores of land, vaults, streets, 1 alleys, passages, sewer rights, air rights and other development rights now or hereafter located on the Estate or under or above the same or any part or parcel thereof, and all estates, rights, titles, inte tenements, hereditaments and appurtenances, reversions and remainders whatsoever, in any belonging, relating or appertaining to the Real Estate and/or Improvements or any part thereof, or v hereafter shall in any way belong, relate or be appurtenant thereto, whether now owned or her( acquired by Borrower, E. 1 All water, ditches, wells, reservoirs and drains and all water, ditch, well, rese oir and drainage rights which are appurtenant to, located on, under or above or used in connection with the Real Estate or the Improvements, or any part thereof, whether now existing or hereafter created or acquired; F. All minerals, crops, timber, trees, shrubs, flowers and landscaping features or hereafter located on, under or above the Real Estate; G. All cash funds, deposit accounts and other rights and evidence of rights to now or hereafter created or held by Lender pursuant to this Mortgage or any other of the MORTGAGE - PAGE 2 Error! Unknown document property name. I99lPM8 Documents, including, without limitation, all funds now or hereafter on deposit in the Impound, as defined in Section 1.6, and in the reserves required pursuant to Section 1.28 (all such funds, with the Impound Account, collectively, the "Reserves"); H. All leases, subleases, sub-subleases (including, without limitation, (a) that ce lease dated as of December 1, 2005 between Borrower, as successor in interest to The Hershey Comp y, a Delaware Corporation, as lessor, and Arnold Logistics, LLC, a Pennsylvania limited liability comp y ("Arnold"), as lessee (as the same may be modified and in effect from time to time, the "Primary Leas '), oil, gas and mineral leases and the Primary Lease), subleases, licenses, concessions and occup cy agreements of all or any part of the Real Estate or the Improvements now or hereafter entered into and any guaranty thereof (each, a "Lease" and collectively, the "Leases") and all rents, royalties, iss s, profits, revenue, income, claims, judgments, awards, settlements and other benefits (collectively, the "Rents and Profits") of the Real Estate or the Improvements, now or hereafter arising from the use or enjoyment of all or any portion thereof or from any present or future Lease or other agreement pertain g thereto or arising from any of the Contracts (as hereinafter defined) or any of the General Intangibles as hereinafter defined) and all cash or securities deposited to secure performance by the tenants, lessees, subtenants, sublessees or licensees, as applicable (each, a "Tenant" and collectively, the "Tenants"), of their obligations under any such Leases, whether said cash or securities are to be held until the expira on of the terms of said Leases or applied to one or more of the installments of rent coming due prior to he expiration of said terms, subject to, however, the provisions contained in Section 1.9 hereinbelow; I. All rights of the Borrower under contracts, agreements and documents now or hereafter entered into relating to the ownership or operation or management of the Real Estate or he Improvements or any portion of either of them (collectively, the "Contracts") including, without limitation, management agreements, franchise agreements, co-tenancy agreements, service contracts, maintenance contracts, equipment leases, personal property leases and any contracts or docume is relating to construction on any part of the Real Estate or the Improvements (including plans, drawings, surveys, tests, reports, bonds and governmental approvals) or to the management or operation of any art of the Real Estate or the Improvements and any and all warranties and guaranties relating to the al Estate or the Improvements or any fixtures, equipment or personal property owned by Borrower d located on and/or used in connection with the Property, together with all revenue, income and o er benefits thereof and all claims, judgments, awards and settlements arising thereunder; J. All present and future monetary deposits given to any public or private with respect to utility services furnished to any part of the Real Estate or the Improvements; K All present and future funds, (excluding, however, cash once it is distribute to Borrower's members), accounts (provided, however, that Lender shall not exercise any rights with resp ct to Borrower's bank account into which net proceeds of the Property are deposited after payment of amounts then due under the Loan Documents and operating expenses of the Property, unless Borrower fails to apply Property revenues as required under the Loan Documents), instruments, acco is receivable; documents, causes of action, claims, general intangibles (including- without limitati n, trademarks, trade names, servicemarks and symbols now or hereafter used in connection with any part of the Real Estate or the Improvements, all names by which the Real Estate or the Improvements may be operated or known, all rights to carry on business under such names, and all rights, interest and privileges which Borrower has or may have as developer or declarant under any covenants, restrictions or declarations now or hereafter relating to the Real Estate or the Improvements) and all notes or cha el paper now or hereafter arising from or by virtue of any transactions related to the Real Estate or e Improvements (collectively, the "General Intangibles"); MORTGAGE - PAGE 3 Error! Unknown document property name. 8K199, 1PG. 338 7 T L. All water taps, sewer taps, certificates of occupancy, permits, licens s, franchises, certificates, consents, approvals and other rights and privileges now or hereafter obtained in connection with the Real Estate or the Improvements and all present and future warranties and guaran es relating to the Improvements or to any equipment, fixtures, furniture, furnishings, personal property or components of any of the foregoing now or hereafter located or installed on the Real Estate or e Improvements; M. All building materials, supplies and equipment now or hereafter placed on Real Estate or in the Improvements and all architectural renderings, models, drawings, pl specifications, studies and data now or hereafter relating to the Real Estate or the Improvements; N. Any insurance policies or binders now or hereafter relating to the including any unearned premiums thereon; 0. All proceeds, products, substitutions and accessions (including claims and demands therefor) of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims, including, without limitation, proceeds of-insurance and condemnation awards and proceeds of refunds of any Taxes or Other Charges with respect to any period from and after the to hereof until the Loan is indefeasibly paid or defeased in full; and P. All other or greater rights and interests of every nature in the Real Estate or e Improvements and in the possession or use thereof and income therefrom, whether now owned or hereafter acquired by Borrower.. TO HAVE AND TO HOLD the above granted and described Property unto Lender, successors and assigns forever, for the purposes and uses herein set forth. ARTICLE I COVENANTS OF BORROWER For the purpose of further securing the Obligations and for the protection of the of this Mortgage, for so long as the Obligations or any part thereof remains unpaid, Borrower ci and agrees as follows: 1.1 Warranties of Borrower. Borrower, for itself and its successors and assigns, hereby represent and warrant as of the date hereof to and with Lender, its successors and assigns, that: (a) Organization and Existence. Borrower is duly organized and validly existing a limited partnership in good standing under the laws of Delaware is qualified to do business in the state of Pennsylvania and in all other jurisdictions in which Borrower is transacting business. (b) Authorization. Borrower has the power and authority to execute, deliver a perform the obligations imposed on it under the Loan Documents and to consummate the transactic contemplated by the Loan Documents. Borrower has taken all necessary actions for the authorization the borrowing on account of the Loan and for the execution and delivery of the Loan Documents, withi limitation, that those partners or members of Borrower whose approval is required by the terms Borrower's organizational documents have duly approved the transactions contemplated by the Lc Documents and have authorized execution and delivery thereof by the respective signatories. To the b of Borrower's knowledge, no other consent by any local, state or federal agency is required in connect with the execution and delivery of the Loan Documents. MORTGAGE - PAGE 4 Error! Unknown document property name. of of Ou1991PG338 31 r (c) Valid Execution and Delivery. All of the Loan Documents requiring execution by Borrower have been duly and validly executed and delivered by Borrower. (d) Enforceability. All of the Loan Documents constitute valid, legal and binding obligations of Borrower and are fully enforceable against Borrower in accordance with their terms, subject only to bankruptcy laws and general principles of equity. (e) No Defenses. The Note, this Mortgage and the other Loan Documents are of subject to any right of rescission, set-off, counterclaim or defense, nor would the operation of any of he terms of the Note, this Mortgage or any of the other Loan Documents, or the exercise of any ri ht thereunder, render this Mortgage unenforceable, in whole or in part, or subject to any right of rescissi n, set-off, counterclaim or defense, including the defense of usury. (f) Defense of Usury. Borrower knows of no facts that would support a claim of usury to defeat or avoid its obligation to repay the principal of, interest on, and other sums or amounts ue and payable under, the Loan Documents. (g) No Conflict/Violation of Law. The execution, delivery and performance of he Loan Documents by the Borrower will not cause or constitute a default under or conflict with he organizational documents of Borrower, any Indemnitor or any Constituent Entity (as defined in Section 1.27) of either of them. The execution, delivery and performance of the obligations imposed on Borrower under the Loan Documents will not cause Borrower or any Indemnitor or any Constituent Entity of either of them to be in default, including after due notice or lapse of time or both, under he provisions of any agreement, judgment or order to which Borrower or any Indemnitor or any Constituent Entity of either of them is a party or by which Borrower or any Indemnitor or any Constituent Entity of either of them is bound. (h) Compliance with Applicable Laws and Regulations. All of the Improvements and the use of the Property by the Borrower comply (and shall continue to comply) in all material respe is with all applicable statutes, rules, regulations and private covenants now relating to the owners 'p, construction, use or operation of the Property, including all applicable health, fire and building codes, and all applicable statutes, rules and regulations pertaining to requirements for equal opportunity, ti- discrimination, fair housing, environmental protection, zoning and land use (collectively, "Applica le Laws"). To the best knowledge of Borrower, there is no evidence of any illegal activities relating to controlled substances on the Property. To the best knowledge of Borrower, all material certificatio , permits, licenses and approvals, including, without limitation, certificates of completion and occup cy permits required for the legal use, occupancy and operation of the Property for the use currently be g made thereof have been obtained and are in full force and effect. To the best knowledge of Borrower, all of the Improvements comply with all material requirements of any applicable zoning and subdivis on laws and ordinances. (i) Consents Obtained. All consents, approvals, authorizations, orders or fi with any court or governmental agency or body, if any, required for the execution, delivery performance of the Loan Documents by Borrower have been obtained or made. 0) No Litigation. There are no pending actions, suits or proceedings, arbitrations or governmental investigations against Borrower, or to the best knowledge of Borrower, the Property, any Indemnitor or any Constituent Entity of Borrower or any Indemnitor, whether pursuant to the an Documents or otherwise, an adverse outcome of which would materially affect the Borrower's performance under the Note, the Mortgage or the other Loan Documents. MORTGAGE - PAGE 5 Error! Unknown document property name. K1991PG3389 T (k) Title. (i) The Borrower has good and marketable fee simple title to the Prop subject only to those matters expressly listed as exceptions to title or subordinate matters in the insurance policy accepted by Lender in connection with this Mortgage (the "Title Insurance Polic excepting therefrom all preprinted and/or standard exceptions (the "Permitted Exceptions"). ' possession of the Property by Borrower has been peaceful and undisturbed and title thereto has not b disputed or questioned to the best of Borrower's knowledge. Further, Borrower has full power and laN authority to grant, bargain, sell, convey, assign, transfer and mortgage its interest in the Property in manner and form hereby done or intended. Borrower will preserve its interest in and title to the Prop and will forever warrant and defend the same to Lender against any and all claims whatsoever and forever warrant and defend the validity and priority of the lien and security interest created herein aga the claims of all persons and parties whomsoever, subject, in each case, to the Permitted Exceptions. foregoing warranty of title shall survive the foreclosure of this Mortgage and shall inure to the benefi and be enforceable by Lender in the event Lender acquires title to the Property pursuant to foreclosure. (1) Permitted Exceptions. The Permitted Exceptions do not and will not materia y and adversely affect (1) the ability of the Borrower to pay in full the principal and interest on the Note in a timely manner or (2) the use of the Property for the use currently being made thereof, the operation of the Property as currently being operated or the value of the Property. (m) First Lien. Upon the execution by the Borrower and the recording of Mortgage, and upon the execution and filing of UCC-1 financing statements or amendments thereto, Lender will have a valid first lien on the Property and a valid security interest in all personal prop, encumbered hereby, subject to no liens, charges or encumbrances other than the Permitted Exceptions. (n) ERISA. The Borrower has made and shall continue to make all req i ed contributions to all employee benefit plans and multi-employer plans, if any, and the Borrower has no knowledge of any material liability which has been incurred by the Borrower which remains unsatis ed for any taxes or penalties with respect to any employee benefit plan or any multi-employer plan. Each such plan has been administered in compliance with its terms and the applicable provisions of he Employee Retirement Income Security Act of 1974, as amended ("ERISA") and any other applicable federal or state law and shall continue to be qualified and tax-exempt to the greatest extent permi ed thereunder. Other than with respect to any such plans, Borrower is not an entity subject to regulation or restriction under ERISA, and no assets of Borrower are "plan assets" (as defined in ERISA). (o) Contingent Liabilities. Neither Borrower nor, to the best knowledge of Borrower, any Indemnitor has any known material contingent liabilities, except for contingent liabilities of any Indemnitor explicitly set forth on the financial statements of such Indemnitor that were delivered to Lender in connection with the Loan. (p) No Other Obligations . The Borrower has no material financial obligation in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which Borrower is a party or by which the Borrower or the Property is otherwise bound, other 1 (i) obligations incurred in the ordinary course of the operation of the Property that do not vic Section 1.27, and (ii) the Obligations. (q) Fraudulent Convevance. The Borrower (1) has not entered into the Loan or any Loan Document with the actual intent to hinder, delay, or defraud any creditor and (2) received reasonably equivalent value in exchange for its obligations under the Loan Documents. Giving effec to the Loans contemplated by the Loan Documents, the fair saleable value of the Borrower's assets exceed and will, immediately following the execution and delivery of the Loan Documents, exceed he MORTGAGE - PAGE 6 Error! Unknown document property name. Bar` 1 9 91 PG' 3 3 9` 41" Borrower's total liabilities, including, without limitation, subordinated, unliquidated, disputed contingent liabilities. The fair saleable value of the Borrower's assets is and will, immediately followi the execution and delivery of the Loan Documents, be greater than the Borrower's probable liabiliti including the maximum amount of its contingent liabilities or its debts as such debts become absolute a matured. The Borrower's assets do not and, immediately following the execution and delivery of 1 Loan Documents will not, constitute unreasonably small capital to carry out its business as conducted as proposed to be conducted. The Borrower does not intend to, and does not believe that it will, in( debts and liabilities (including, without limitation, contingent liabilities and other commitments) beyc its ability to pay such debts as they mature (taking into account the timing and amounts to be payable or in respect of obligations of the Borrower). (r) Investment Company Act. Neither Borrower nor any Indemnitor is (1) "investment company" or a company "controlled" by an "investment company," within the meaning the Investment Company Act of 1940, as amended; (2) a "holding company" or a "subsidiary compar of a "holding company" or an "affiliate" of either a "holding company" or a "subsidiary company" wit] the meaning of the Public Utility Holding Company Act of 1935, as amended; or (3) subject to any ot] federal or state law or regulation which purports to restrict or regulate its ability to borrow money. (s) Access/Utilities. Except as otherwise shown on the Survey (as herein er defined), to the best knowledge of Borrower, the Property has adequate rights of access to public w ys and is served by adequate water, sewer, sanitary sewer and storm drain facilities. Except as otherw se shown on the Survey, to the best knowledge of Borrower, all public utilities necessary to the continued use and enjoyment of the Property as presently used and enjoyed are located in the public right-of- y abutting the Property, or enter the Property via permanent easements not subject to termination exc pt with the consent of Borrower, and all such utilities are connected so as to serve the Property without passing over other property. Except as otherwise shown on the Survey, to the best knowledge of Borrower, all roads, and access to such roads, necessary for the full utilization of the Property for its current purpose have been completed and dedicated to public use and accepted by all governmental authorities or are the subject of access easements for the benefit of the Property without any er condition or cost to Borrower or Tenant. (t) Taxes Paid. Borrower has filed all federal, state, county and municipal I ax returns required to have been filed by Borrower, and has paid all taxes which have become due purs t to such returns or to any notice of assessment received by Borrower. Borrower has no knowledge of a:iy basis for additional assessment with respect to such Taxes and Other Charges. Further, to Borrowe 's best knowledge, the Property is free from delinquent Taxes and Other Charges. (u) Single Tax Lot. The Real Estate consists of a single lot or multiple tax lots; no portion of said tax lot(s) covers property other than the Real Estate or a portion of the Real Estate and no portion of the Real Estate lies in any other tax lot. (v) Special Assessments. Except as disclosed in the Title Insurance Policy, there e no pending or, to the knowledge of the Borrower, proposed special or other assessments for public improvements or otherwise affecting the Property, nor, to the knowledge of the Borrower, are there any contemplated improvements to the Property that may result in such special or other assessments. (w) Flood Zone. Except as shown on the Survey, the Property is not located ' a flood hazard area as defined by the Federal Insurance Administration. (x) Seismic Exvosure. The Real Estate is not located in Zone 3 or Zone 4 of the "Seismic Zone Map of the U.S." MORTGAGE - PAGE 7 Error! Unknown document property name. BK 1991 PG3391, Cy) Misstatements of Fact. To the best knowledge of Borrower, no certificatic representation or statement of fact made in the Loan Documents contains any untrue statement of material fact or omits to state any material fact necessary to make statements contained herein or there not misleading. There is no fact presently known to the Borrower, any Indemnitor or any Constitu( Entity of Borrower or any Indemnitor which has not been disclosed which materially adversely affects, in the judgment of a reasonable person would materially adversely affect, the business, operations condition (financial or otherwise) of Borrower. Further, and in clarification of the foregoing, to the b knowledge of Borrower, all reports, certificates, affidavits, representations, statements and other d furnished by or on behalf of Borrower, Indemnitor and each Constituent Entity of each of them to Lend or their respective agents, in connection with the Loan are true and correct in all material respects and not omit to state any material fact or circumstance necessary to make the statements contained therein i misleading. (z) Condition of Improvements. The Property has not been damaged by fire, wat r, wind or other cause of loss since the earlier to occur of the initial visit to or inspection of the Property by Lender or its agents in connection with the Loan. To the best knowledge of Borrower, except as shown in the property condition report obtained by Lender in connection with the Loan (the "Engineering Repo '), the Improvements are structurally sound, and will be kept in good repair and free of defects in materi is and workmanship and have been constructed and installed in substantial compliance with the plans d specifications relating thereto. To the best knowledge of Borrower, except as shown in the Engine g Report, all major building systems located within the Improvements, including, without limitation, he heating and air conditioning systems and the electrical and plumbing systems, are in good working or er and condition. (aa) No Insolvency or Judgment. Neither Borrower, nor to the best of Borrow 's knowledge, any Indemnitor, nor any Constituent Entity of Borrower or any Indemnitor, (a) has been o is currently the subject of or a party to any completed or pending bankruptcy, reorganization or insolvency proceeding; or (b) is currently the subject of any judgment unsatisfied of record or docketed in any court of the state in which the Property is located or in any other court located in the United States. The proposed Loan will not render the Borrower or any general partner or member of Borrower insolvent. used in this Mortgage, the term "insolvent" means that the sum total of all of an entity's liabili'es (whether secured or unsecured, contingent or fixed, or liquidated or unliquidated) is in excess of the value of all such entity's non-exempt assets, i.e., all of the assets of the entity that are available to satisfy claims of creditors. (bb) No Condemnation. No part of any property subject to the Mortgage has been taken in condemnation or other like proceeding to an extent which would impair the value of the Prope , the Mortgage or the Loan or the usefulness of such property for the purposes contemplated by the loan application relating to the Loan (the "Loan Application"), nor, to the best knowledge of Borrower, is y proceeding pending, threatened or known to be contemplated for the partial or total condemnation or taking of the Property. (cc) No Labor or Materialmen Claims. To the best knowledge of Borrower, all parties furnishing labor and materials to Borrower (or any predecessor-in-title) or the Property have been paid in full and, except for such liens or claims expressly disclosed in, and insured against by the Title Insurance Policy, there are no mechanics', laborers' or materialmen's liens or claims outstanding for work, labor or materials affecting the Property, whether prior to, equal with or subordinate to the lie of the Mortgage. MORTGAGE - PAGE 8 Error'. Unknown document property name. ou-I.991"3392. (dd) No Purchase Options. No person, party, firm, corporation or other entity has option, right of first offer, or right of first refusal, to purchase the Property, any portion thereof or interest therein. (ee) Leases. The Property is not subject to any leases, subleases, licens s, concessions or other agreements related to the leasing or renting of the Property or any portion thereof, except for the Primary Lease. No person has any possessory interest in the Property or right to occupy he same, except pursuant to the Leases. Borrower hereby represents that: (i) Borrower has delivere a schedule (the "Rent Roll") of all Leases affecting the Property, which accurately and completely sets fa. -th in all material respects for each Lease, the following: the name of the Tenant, the Lease expiration da:e, extension and renewal provisions, cancellation and termination provisions, the base rent payable and e security deposit held thereunder, which Rent Roll is true, convect and complete as of the date hereof; a:ld (ii) the Borrower is the owner and holder of the landlord's interest under the Leases, and there are no p or assignments of all or any portion of the Leases or any portion of the Rents and Profits which are presen y outstanding and have priority over the assignment of leases and rents contained herein in Section .9 given by Borrower to Lender, and (iii) each Lease constitutes the legal, valid and binding obligation of Borrower and, to the best of Borrower's knowledge and belief, is enforceable against the Tenant thereunder; and (iv) no default exists, or with the passing of time or the giving of notice or both would exist, under any Lease which would, in the aggregate, have a material adverse effect on Borrower or e Property; and (v) except as disclosed in writing in an estoppel certificate by such Tenant that has been delivered to and accepted by Lender in connection with the Loan, no Tenant has any offset or defense to the payment of rent under its Lease; and (vi) except as disclosed in writing in an estoppel certificate by such Tenant that has been delivered to and accepted by Lender in connection with the Loan, no Ten=t has, as of the date hereof, paid rent under its Lease more than one (1) month in advance, and the re is under such Lease has not been waived, released, or otherwise discharged or compromised; and (vii) all work to be performed by Borrower under each Lease has been substantially performed, all contributions to be made by Borrower to the Tenant thereunder have been made and all other conditions preceden to each Tenant's obligations thereunder have been satisfied; and (viii) each Tenant that has been delivere to and accepted by Lender in connection with the Loan, each Tenant under a Lease has entered ' to occupancy of the demised premises; and (ix) Borrower has delivered to Lender true, correct and complete copies of all Leases described in the Rent Roll; and (x) to the best of Borrower's knowledge and be ef, each Tenant is free from bankruptcy, reorganization or arrangement proceedings or a general assignment for the benefit of creditors; and (xi) except as specifically described in the Title Insurance Policy, no Lease provides any party with the right to obtain a lien or encumbrance upon the Property superior to e lien of this Mortgage. (ff) Intentionally Omitted (gg) Boundary Lines. Except as shown on the Survey, all of the Improvements w were included in determining the appraised value of the Property lie wholly within the boundaries building restriction lines of the Property, and except as specifically described in the Title Insur Policy, no improvements on adjoining properties encroach upon the Property and no easements or < encumbrances upon the Real Estate encroach upon any of the Improvements, in each case so as to a'. the value or marketability of the Property. (hh) Survey. To the best knowledge of Borrower, the survey of the Property c to Lender in connection with this Mortgage (the "Survey") has been performed by a duly surveyor or registered professional engineer in the jurisdiction in which the Real Estate is located. (ii) Forfeiture. There has not been, to the best knowledge of Borrower, and never be committed by Borrower and Borrower shall use all commercially reasonable efforts to e MORTGAGE - PAGE 9 Error: Unknown document property name. B.K199.1PG3391, that there shall never be committed by any agent of Borrower any act or omission affording the fede al government or any state or local government the right of forfeiture as against the Property or any p thereof or any monies paid in performance of Borrower's obligations under any of the Loan Documents 6j) No Broker. No financial advisors, brokers, underwriters, placement agents, agents or finders have been dealt with by the Borrower in connection with the Loan, except for any bro er whose full commission is being paid out of the proceeds of the Loan and is set forth in the written instructions from Borrower to Lender regarding disbursement of the proceeds of the Loan. (kk) Conviction of Criminal Acts. Each of Borrower, and, to the best knowle ge of Borrower, any Indemnitor, and any Constituent Entity of Borrower or any Indemnitor, has never been convicted of a felony and, to the best knowledge of Borrower, is not currently the subject of any pen g or threatened criminal investigation or proceeding involving a felony. Borrower has disclosed to Len er in writing any civil action (whether or not such action resulted in a judgment) and regulatory or enforcement proceeding to which Borrower, or to the best knowledge of Borrower, any Indemnitor w a defendant or respondent in which it was alleged that Borrower or such Indemnitor engaged in fra d, deception or misrepresentation, or with respect to which Borrower or any Indemnitor was ordered or agreed not to engage in the banking or securities industry. (ll) Security Agreements. There are no security agreements or financing statements affecting or encumbering any of the Property other than the security agreements and financing statements created in favor of Lender or that shall be terminated simultaneously herewith. (mm) Homestead. The Property forms no part of any property owned, used or claimed by Borrower as a residence or business homestead and is not exempt from forced sale under the law of the State in which the Real Estate is located. Borrower hereby disclaims and renounces each and every claim to all or any portion of the Property as a homestead. (nn) Compliance with Anti-Terrorism Embargo and Anti-Money Laundering La:6L& (i) None of Borrower, Managing Member, or to Borrower's knowledge, Indemnitor, or any Person who, owns any direct equity interest in or controls Borrower or Managing Member currently is identified on the OFAC List or otherwise qualifies as a Prohibited Person, and Borrower will implement procedures, approved by Managing Member, to ensure that no Person who now or hereafter owns any direct eq 'ty interest in Borrower or Managing Member is a Prohibited Person or controlled by a Prohibited Person, and (ii) none of Borrower, Managing Member, or to Borrower's knowledge, Indemnitor are in violation of any applicable laws relating to anti-money laundering or anti-terrorism, including, without limitation, any applicable laws related to transacting business with Prohibited Persons or the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obs ct Terrorism Act of 2001, U.S. Public Law 107-56, and the related regulations issued thereunder, including temporary regulations, all as amended from time to time. For purposes hereof. (1) the term "Managing Member" shall mean, if Borrower is a partnership, each general partner of Borrower and, if Borrowers a limited liability company, each manager or managing member of Borrower and in each case if applicable, each general partner or managing member of such general partner or managing member. In the event that Borrower or any Managing Member is a single member limited liability company, the term. "Managing Member" shall include such single member; (2) the term "Person" shall mean any individ ial, corporation, limited liability company, partnership, joint venture, estate, trust, unincorporated associa on, any federal, state, county or municipal government or any bureau, department or agency thereof and y fiduciary acting in such capacity on behalf of any of the foregoing; (3) the term "Prohibited Person" shall mean any Person identified on the OFAC List or any other Person with whom a U.S. Person may of conduct business or transactions by prohibition of Federal law or Executive Order of the President of the United States or America; (4) the term "OFAC List" shall mean the list of specially designated natio als MORTGAGE - PAGE 10 Error! Unknown document property name. [W,;1-99 ! gG3394:. and blocked persons subject to financial sanctions that is maintained by the U.S. Treasury E Office of Foreign Assets Control and accessible through the internet www.treas. gov/ofac/tl l sdn.pdf. (oo) Primary Lease. Borrower represents and warrants to Lender that (i) Borrower is the landlord under the Primary Lease, and (ii) to the best of Borrower's knowledge, no default, event or condition which, with the passing of time or the giving of notice or both, would constitute a default exists under the Primary Lease. 1.2 Defense of Title. If, while this Mortgage is in force, the title to the Property or the interest of Lender therein shall be the subject, directly or indirectly, of any action at law or in equi , or be attached directly or indirectly, or endangered, clouded or adversely affected in any manner (o er than by the Permitted Exceptions), Borrower, at Borrower's expense, shall take all necessary and pro er steps for the defense of said title or interest, including the employment of counsel reasonably approved y Lender (it being agreed that Lender shall not unreasonably withhold its consent to counsel appoin ed pursuant to the Title Insurance Policy for such purposes), the prosecution or defense of litigation, and he compromise or discharge of claims made against said title or interest. Notwithstanding the foregoing, in the event that Lender reasonably determines that Borrower is not adequately performing its obligations under this Section, Lender may, without limiting or waiving any other rights or remedies of Lender hereunder, take such steps with respect thereto as Lender shall deem necessary or proper; any and all o it- of-pocket costs and expenses incurred by Lender in connection therewith, together with interest thereon at the Default Interest Rate, shall be immediately paid by Borrower on demand. 1.3 Performance of Obligations. Borrower shall pay when due the principal of d the interest on and other amounts evidenced by the Note. Borrower shall also pay and perform all of e Obligations as and when due. Further, Borrower shall promptly and strictly perform and comply in all material respects with all covenants, conditions, obligations and prohibitions required of Borrower in connection with any other document or instrument affecting title to the Property, or any part thereof, regardless of whether such document or instrument is superior or subordinate to this Mortgage, excep as expressly prohibited by the Loan Documents. 1.4 Insurance. Borrower shall at Borrower's expense, maintain in force and effect on the Property at all times while this Mortgage continues in effect the following insurance in a m er satisfactory to Lender: (a) Insurance against loss or damage to the Property by fire, windstorm, tornado d hail and against loss and damage by such other, further and additional risks as may be now or hereafter embraced by an "all-risk" or "special" form of insurance policy. The amount of such insurance shall be not less than one hundred percent (100%) of the full replacement (insurable) cost of the Improvements, furniture, furnishings, fixtures, equipment and other items (whether personalty or fixtures) included in the Property and owned by Borrower from time to time, without reduction for depreciation The determination of the replacement cost amount shall be adjusted annually to comply with the requirements of the insurer issuing such coverage or, at Lender's election, by reference to such indices, appraisa or information as Lender determines in its reasonable discretion. Full replacement cost, as used herein, means, with respect to the Improvements, the cost of replacing the Improvements without regar to deduction for depreciation, exclusive of the cost of excavations, foundations and footings below the lowest basement floor, and means, with respect to such furniture, furnishings, fixtures, equipment d other items, the cost of replacing the same, in each case, with inflation guard coverage to reflect the a ect of inflation, or annual valuation. Each policy or policies shall contain a replacement cost endorse ent and either an agreed amount endorsement (to avoid the operation of any co-insurance provisions) or a MORTGAGE - PAGE 11 Error! Unknown document property name. v 199 1 PG3395 D, un. waiver of any co-insurance provisions, all subject to Lender's approval. Except as otherwise approved by Lender, the deductible with respect to such insurance shall not exceed $10,000 per claim. (b) Comprehensive Commercial General Liability Insurance for personal inji bodily injury, death and property damage liability in amounts not less than $1,000,000.00 per occurre: and $2,000,000.00 in the aggregate, together with umbrella coverage in amounts not less 0 $5,000,000.00. During any construction on the Property, Borrower's general contractor for si construction shall also provide the insurance required in this Subsection (b). Lender hereby retains right to periodically review, but no more than once a year, the amount of said liability insurance be maintained by Borrower and to require an increase in the amount of said liability insurance should Len deem an increase to be reasonably prudent under then existing circumstances provided that the ame required shall be no greater than what is available at commercially reasonable rates for similar proper by asset class, location and size in the area where the Property is located. No deductible shall permitted. (c) General boiler and machinery insurance coverage is required if steam boiler or other pressure-fired vessels are in operation at the Property. Minimum liability amount per accident must equal the lesser of the replacement (insurable) value of the Improvements housing such boiler or pressure- fired machinery or $2,000,000.00. Except as otherwise approved by Lender, the deductible with respect to such insurance shall not exceed $10,000.00 per claim. (d) If the Property or any part thereof is identified by the Secretary of Housing d Urban Development as being situated in an area now or subsequently designated as having special flood hazards (including, without limitation, those areas designated as Zone A or Zone V), flood insurance ' an amount equal to the lesser of: (i) the minimum amount required, under the terms of coverage, to compensate for any damage or loss on a replacement basis or (ii) such other amount as is approved by Lender. Except as otherwise approved by Lender, the deductible with respect to such insurance shall of exceed $25,000.00 per occurrence. (e) During the period of any construction on the Property or renovation or alters "on of the Improvements, a so-called "Builder's All-Risk Completed Value" or "Course of Construction" insurance policy in non-reporting form for any Improvements under construction, renovation or alteration in an amount approved by Lender and Worker's Compensation Insurance covering all persons engage in such construction, renovation or alteration. The deductible for such insurance, if any, shall be satisfactory to Lender. (f) Loss of rents or loss of business income insurance in amounts sufficien to compensate Borrower for all Rents and Profits following a casualty until completion of Restoration (as defined in Section 1.7 below) together with an additional period of not less than twelve (12) months thereafter. The amount of coverage shall be adjusted annually to reflect the then-current Rents and Pr fits or income payable during such period. The deductible for such insurance, if any, shall be satisfactory to Lender. (g) Any other insurance coverage (or higher coverages) conning to the benefit o or required by, Lender in connection with the making of the Loan and as set forth on the insurance certificates or policies delivered to and accepted by Lender in connection with the closing of the Loan. (h) Such other insurance on the Property or on any replacements or substitut thereof or additions thereto as may from time to time reasonably be required by Lender against o insurable hazards or casualties which at the time are commonly insured against in the case of prop similarly situated including, without limitation, Sinkhole, Mine Subsidence, Terrorism, Earthquake MORTGAGE - PAGE 12 Error! Unknown document property name. Itm 991PG3396 Environmental insurance, due regard being given to the height and type of buildings, their location, use and occupancy. All such insurance shall (i) be with insurers authorized to do business in the state wi which the Property is located and who have and maintain a rating of at least "AA" from Standard & Po ors (or, alternatively, if the insurers maintain re-insurance with re-insurers maintaining such rating, Lender will not unreasonably withhold its consent to satisfying such required rating by means of a "cut-through" endorsement allowing recourse directly against a reinsurer maintaining such rating), (ii) contain he complete address of the Property (or a complete legal description), (iii) be for terms of at least one year, and (iv) to the extent not already explicitly provided herein, be subject to the reasonable approval of Lender as to insurance companies, amounts, content, forms of policies, method by which premiums are paid and expiration dates. . Borrower shall as of the date hereof deliver to Lender evidence that said insurance policies have been paid current as of the date hereof and original certificates of insurance signed by an authorized agent of the applicable insurance companies evidencing such insurance satisfactory to Len r. Upon Lender's request no more than once a year, Borrower shall deliver to Lender copies of such insurance policies. Borrower shall renew all such insurance and deliver to Lender certificates evidencing such renewals at least fifteen (15) days before any such insurance shall expire. Lender shall, in accordance with the terms and conditions of Section 1.6 pay Insurance Premiums when due. With ut limiting the required endorsements to the insurance policies, Borrower further agrees that all such poli es shall include a standard, non-contributory, mortgagee clause naming: CIBC Inc., its successors and/or assigns, as their interests may appear Attn: Real Estate Finance Group 300 Madison Avenue, 8th Floor New York, New York 10017 (x) as an additional insured under all liability insurance policies, (y) as the first mortgagee on all prope insurance policies and (z) as the loss payee on all loss of rents or loss of business income insurai policies. Borrower further agrees that all such insurance policies: (1) shall provide for at least thirty days' prior written notice to Lender prior to any cancellation or termination thereof and prior to modification thereof which affects the interest of Lender; (2) shall contain an endorsement or agreem by the insurer that any loss shall be payable to Lender in accordance with the terms of such pol notwithstanding any act or negligence of Borrower which might otherwise result in forfeiture of s1 insurance; (3) shall waive all rights of subrogation against Lender, (4) in the event that the Real Estate the Improvements constitutes a legal non-conforming use under applicable building, zoning or land laws or ordinances, shall include an ordinance or law coverage endorsement which will contain Cover A: "Loss Due to Operation of Law" (with a minimum liability limit equal to Replacement Cost VA Agreed Value Endorsement), Coverage B: "Demolition Cost" and Coverage C: "Increased Cost Construction" coverages; and (5) may be in the form of a blanket policy provided that, in the event 1 any such coverage.is provided in the form of a blanket policy, Borrower hereby acknowledges and agr that failure to pay any portion of the premium therefor which is not allocable to the Property or by other action not relating to the Property which would otherwise permit the issuer thereof to cancel coverage thereof, would require the Property to be insured by a separate, single-property policy. blanket policy must properly identify and fully protect the Property as if a separate policy were issued 100% of Replacement Cost at the time of loss and otherwise meet all of Lender's applicable insura requirements set forth in this Section 1.4. The delivery to Lender of the insurance policies or certificates of insurance as provided above shall constitute an assignment of all proceeds payable un such insurance policies relating to the Property by Borrower to Lender as finther security for Obligations. In the event of foreclosure of this Mortgage, or other transfer of title to the PropeM MORTGAGE - PAGE 13 Error'. Unknown document property name. 0) or of in ?!{1991PG3397: extinguishment in whole or in part of the Obligations, all right, title and interest of Borrower in and to unearned insurance premiums and proceeds payable under such policies then in force concerning e Property shall thereupon vest in the purchaser at such foreclosure, or in Lender or other transferee in e event of such other transfer of title whether or not the damage to the Property occurred prior to s h transfer of title. Approval of any insurance by Lender shall not be a representation of the solvency of y insurer or the sufficiency of any amount of insurance. In the event Borrower fails to provide, main n, keep in force or deliver and furnish to Lender the policies of insurance required by this Mortgage or evidence of their renewal as required herein, Lender may, but shall not be obligated to, procures h insurance and Borrower shall pay all amounts advanced by Lender therefor, together with interest there m at the Default Interest Rate from and after the date advanced by Lender until actually repaid by Borrow r, promptly upon demand by Lender. Lender shall not be responsible for nor incur any liability for e insolvency of the insurer or other failure of the insurer to perform, even though Lender has caused e insurance to be placed with the insurer after failure of Borrower to furnish such insurance. Borrower sh not obtain insurance for the Property in addition to that required by Lender without the prior wrin consent of Lender, which consent will not be unreasonably withheld provided that (i) Lender is a n d insured on such insurance, (ii) Lender receives complete copies of all policies evidencing such insuran e, and (iii) such insurance complies with all of the applicable requirements set forth herein. To the ext nt that at any time Lender agrees to accept insurance from an insurer that is rated less than the forego' g, Lender may terminate its waiver and reassert the aforesaid minimum rating requirements upon y renewal of any insurance coverage, or at any time if the rating of any insurer is reduced or Lender determines that any other material adverse event has occurred with respect to the financial condition of such insurer. 1.5 Payment of Taxes. Except to the extent funds are held in the Impound Acco t therefor pursuant to Section 1.6 of this Mortgage when the same become due and payable, Borrower sb all (a) pay or cause to be paid all taxes, assessments, water rents, sewer rents, governmental impositions d other charges, including, without limitation, vault charges and license fees for the use of vaults, chu es and similar areas adjoining the Real Estate, now or hereafter levied or assessed or imposed against, or which are or may become a lien upon, the Property ("Taxes"), and all ground rents, maintenance charges and similar charges, now or hereafter levied or assessed or imposed against the Property or any part thereof (the "Other Charges"), and (b) furnish Lender with receipts (or if receipts are not immediately available, with copies of canceled checks evidencing payment with receipts to follow promptly after they become available) showing payment of such Taxes and Other Charges at least fifteen (15) days prior to the applicable delinquency date therefor. Notwithstanding the foregoing, Borrower may in good faith, by appropriate proceedings and upon notice to Lender, contest the validity, applicability or amount of any asserted Taxes or Other Charges so long as (x) such contest is diligently pursued, (y) Lender determin s, in its subjective opinion, that such contest suspends the obligation to pay the Taxes or Other Charges and that nonpayment of such Taxes or Other Charges will not result in the sale, loss, forfeiture or diminution of the Property or any part thereof or any interest of Lender therein, and (z) prior to the earlier of e commencement of such contest or the delinquency date of the asserted Taxes or Other Charges, Borrower deposits in the Impound Account an amount determined by Lender to be adequate to cover the payment of such Taxes or Other Charges and a reasonable additional sum to cover possible interest, costs d penalties; provide however, that Borrower shall promptly cause to be paid any amount adjudged b a court of competent jurisdiction to be due, with all interest, costs and penalties thereon, promptly a er such judgment becomes final (which payment may be made from the Impound Account, to the ext nt funds are available for such payment); and provide further. that in any event each such contest shall be concluded, the Taxes or Other Charges, as the case may be, together with any applicable interest, co is and penalties, shall be paid prior to the date any writ or order is issued under which the Property may be sold, lost or forfeited. MORTGAGE - PAGE 14 Error! Unknown document property name. - 19 9 1 PG 3.39 .. aV UIN 1.6 Tax and Insurance Impound Account. Borrower shall establish and mainta with Lender at all times while this Mortgage continues in effect an impound account (the "Impo d Account") for payment of Taxes and Other Charges and for the premiums on the insurance required to be maintained with respect to Borrower and the Property ("Insurance Premiums") and as additional securi for the Obligations. In addition to the initial deposit to the Impound Account required simultaneous .y with the execution hereof, commencing on the first Payment Date (as defined in the Note) and contin ' g thereafter on each Payment Date until the Note and all other Obligations are fully paid and performed, Borrower shall pay to Lender, for deposit to the Impound Account, an amount equal to one-twelfth (1/12) of the amount of the annual Taxes and Other Charges that will next become due and payable on e Property, plus one-twelfth (1/12) of the amount of the annual Insurance Premiums that will next beco e due and payable, each as estimated and determined by Lender. So long as no Event of Default (as defin d in Section 2.1 hereunder) has occurred and is continuing, all sums in the Impound Account shall be held by Lender in the Impound Account to pay said Taxes and Other Charges, in periodic installments, d Insurance Premiums in one annual installment, in each case, following the due date thereof but before e same become delinquent. Borrower shall be responsible for ensuring the receipt by Lender, at least (30) days prior to the respective due date for payment thereof, of all bills, invoices and statements for; dI Taxes and Other Charges, and all Insurance Premiums, and so long as no Event of Default has occurr d and is continuing, Lender shall pay the governmental authority or other party entitled thereto directly to the extent funds are available for such purpose in the Impound Account. In making any payment from e Impound Account, Lender shall be entitled to rely on any bill, statement or estimate procured from e appropriate public office or insurance company or agent without any inquiry into the accuracy of su h bill, statement or estimate and without any inquiry into the accuracy, validity, enforceability or contestability of any tax, assessment, valuation, sale, forfeiture, tax lien or title or claim thereof. Tie Impound Account shall not, unless otherwise explicitly required by applicable law, be or be deemed to e escrow or trust funds, but, at Lender's option and in Lender's discretion, may either be held in a sep to account or be commingled by Lender with the general funds of Lender. No interest on the funds contained in the Impound Account shall be paid by Lender to Borrower. The Impound Account is solely for the protection of Lender and entails no responsibility on Lender's part beyond the payment of Taxes and Other Charges, and of Insurance Premiums, following receipt of bills, invoices or statements there or in accordance with the terms hereof and beyond the allowing of due credit for the sums actually receiv d. Upon assignment of this Mortgage by Lender, any funds in the Impound Account shall be turned over to the assignee and any responsibility of Lender, as assignor, with respect thereto shall terminate. If the to l funds in the Impound Account are reasonably determined by Lender to be in excess of the amount of payments required by Lender for the purposes of the Impound Account, such excess may be credited y Lender on the subsequent payment to be made hereunder or, if such excess is greater than the amo is due from Borrower to Lender in the month following such determination (and if no Event of Default is then continuing and no event has occurred, and no state of facts exists, which in either case would, th the giving of notice and/or the passage of time, constitute an Event of Default (any such event or state of facts, a "Default") is then continuing), refunded to Borrower. If at any time Lender determines that, with the making of all monthly deposits to the Impound Account when due, the Impound Account nonetheless would not contain sufficient funds to pay the next due periodic installments of all Taxes and Other Charges at least 30 days prior to the delinquency date thereof, or to pay the next due annual Insurance Premiums at least 30 days prior to the due date thereof, Borrower shall, within ten (10) days after receipt of written notice thereof, deposit with Lender the full amount of any such deficiency. If the Borrower shall fail to deposit with Lender the full amount of such deficiency as provided above, Lender shall have the option, but not the obligation, to make such deposit and all amounts so deposited by Lender, together with interest thereon at the Default Interest Rate from the date incurred by Lender until actually paid y Borrower, shall be immediately paid by Borrower on demand. At any time during the continuance of an Event of Default, Lender may, but shall not be obligated to, apply at any time the balance then rem ' g in the Impound Account against the Obligations in whatever order Lender shall subjectively dete ' e. No such application of the Impound Account shall be deemed to cure any Default or Event of Defa t MORTGAGE - PAGE 15 Error! Unknown document property name. QV 991PG339 . hereunder, and any such application shall not limit Borrower's obligation to deposit any deficiency which Lender gives notice. Upon full payment of the Obligations in accordance with its terms or at s1 earlier time as Lender may elect, the balance of the Impound Account then in Lender's possession sl be paid over to Borrower and no other party shall have any right or claim thereto. 1.7 Condemnation and Casualty. (a) Borrower shall give Lender prompt written notice of the occurrence of a casualty affecting, or the institution of any proceedings for eminent domain or for the condemnation the Property or any portion thereof. All insurance proceeds on the Property and all causes of actii claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part the Property or for any damage or injury to it for any loss or diminution in value of the Property, hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedu relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender hereby authorized, in its own name or in Borrower's name, to adjust any loss covered by insurance or condemnation claim or cause of action, and to settle or compromise any claim or cause of action connection therewith, and Borrower shall from time to time deliver to Lender any instruments requires permit such participation; provide however, that so long as no Event of Default is continuing, Borrower shall have the right to directly receive proceeds with respect to any loss which is not in exc of five percent (5%) of the then outstanding principal balance of the Note and (b) Borrower shall have right to adjust any loss covered by insurance or any condemnation claim or cause of action, and to se or compromise any claim or cause of action in connection therewith, subject to Lender's prior writ approval not to be unreasonably withheld. Lender may, at Lender's option, (y) if request by Borrower consented to be Lender, hold the balance of any of such proceeds to be used to reimburse Borrower for cost of restoring and repairing the Property to the equivalent of its original condition or to a condit approved by Lender (the "Restoration"), or (z) except as otherwise provided below, apply the balance such proceeds to the payment of the Obligations without prepayment penalty, whether or not then due. the extent Lender, pursuant to Borrower's request and in accordance with the terms herent determine: apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lends then-current policies relating to the, as applicable, restoration of casualty damage on similar properde: restoration or rebuilding of properties that have been the subject of a partial condemnation. Notwithstand the foregoing, Lender shall not exercise its option to apply insurance proceeds or condemnation prose to the payment of the Obligations if all of the following conditions are met: (1) no Default or Even Default has occurred and is continuing; (2) in the case of casualty, less than fifty percent (50%) of Improvements has been damaged, or in the case of a taking, less than twenty-five percent (25%) of improvements has been taken; (3) Lender determines, in its reasonable discretion, that there will sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly u] Lender's determination that such a shortfall exists); (4) Lender determines, in its discretion, that the re income from the Property after completion of the Restoration will be sufficient to meet all operating ci and other expenses, deposits to the Impound Account, deposits to reserves and loan repaytt obligations relating to the Property and that the debt service coverage ratio for the Property a Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value a Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its reason discretion, that (A) the Restoration will be completed before the earlier of (i) six (6) months before Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent insurance or business interruption insurance referenced in Section 1.4(f) above (together with amounts deposited by Borrower with Lender for such purpose) will cover all payments due under Loan during the completion of the Restoration; (6) upon Lender's request, Borrower provides Let evidence of the availability during and after the Restoration of the insurance required to be maintains MORTGAGE - PAGE 16 Error! Unknown document property name. of is in to of To to is or hg ;ds of he he be Eby BK 199 1 QG00. Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Primary Lease is in full force and effect, the Tenant under the Primary Leased es not have the right to terminate the Primary Lease due to such casualty or taking (as the case may be), or the Tenant under the Primary Lease affirms in writing that it has waived any right to terminate the Primary Lease as a result of such casualty or taking (as the case may be). (b) Unless Lender otherwise agrees in writing, any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments refe ed to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender's application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and a ct and Borrower shall not be excused in the payment thereof. Partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects or Lender directs Borrower to effect a Restoration, Borrower shall promptly and diligently, at Borrower's sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all reasonable out-of-pod cet costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided he Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deli, er from time to time such further instruments as may be requested by Lender to confirm the forego g assignment to Lender of any award, damage, insurance proceeds payment or other compensation. Len er is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower during the continuance of an Event of Default (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to se le for, collect and receive any such awards, damages, insurance proceeds payments or other compensa on from the parties or authorities making the same, to appear in and prosecute any proceedings therefor d to give receipts and acquittances therefor, provided, however, that Lender shall exercise the forego g rights subject to the terms of the preceding paragraph. 1.8 Mechanics' Liens. Borrower shall pay when due all claims and demands of mechanics, materialmen, laborers and others for any work performed or materials delivered for the R -,al Estate or Improvements; provide however, that, Borrower shall have the right to contest in good faith any such claim or demand, so long as it does so diligently, by appropriate proceedings and without prejudice to Lender, and provided that neither the Property nor any interest therein would be in y danger of sale, loss or forfeiture as a result of such proceeding or contest. In the event Borrowers all contest any such claim or demand, Borrower shall promptly notify Lender of such contest and thereafter shall, upon Lender's request, promptly provide a bond, cash deposit or other security reasonably satisfactory to Lender to protect Lender's interest and security should the contest be unsuccessful. If Borrower shall fail to promptly discharge or provide security against any such claim or demand as aforesaid, Lender may do so and any and all expenses incurred by Lender, together with interest they on at the Default Interest Rate from the date incurred by Lender until actually paid by Borrower, shall be immediately paid by Borrower on demand. MORTGAGE - PAGE 17 Error! Unknown document property name. 1W 199IN 401 uft 1.9 Assignment of Leases and Rents and Profits. As additional and collate 1 security for the payment of the Obligations and cumulative of any and all rights and remedies herein provided for, Borrower hereby absolutely and presently assigns to Lender all existing and future Leases, and all existing and future Rents and Profits. Borrower hereby grants to Lender the sole, exclusive d immediate right, without taking possession of the Property, to demand, collect (by suit or otherwis ), receive and give valid and sufficient receipts for any and all of said Rents and Profits, for which pure se Borrower does hereby irrevocably make, constitute and appoint Lender its attorney-in-fact with 11 power to appoint substitutes or a trustee to accomplish such purpose (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed to be coupled with an inter st, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof). Lender shall be without liability for any loss that may arise from a failure or inability to collect Rents and Profits, proceeds or other payments to the extent such failure or inability is not attributable to the gross negligence or wiflftd misconduct of Lender. However, so long as an Event of Default is not continuing under this Mortga e, Borrower shall have a license to collect and receive the Rents and Profits when due and prepayme is thereof for not more than one month prior to due date thereof (except in respect of security deposi ). During the continuance of an Event of Default, Borrower's license shall automatically terminate without notice to Borrower and Lender may thereafter, without taking possession of the Property, collect he Rents and Profits itself or by an agent or receiver. From and after the termination of such lice e, Borrower shall be the agent of Lender in collection of the Rents and Profits and all of the Rents nd Profits so collected by Borrower shall be held in trust by Borrower for the sole and exclusive benefit of Lender and Borrower shall, within one (1) business day after receipt of any Rents and Profits, pay he same to Lender to be applied by Lender as hereinafter set forth. Borrower hereby irrevocably agrees at any Tenant paying Rents and Profits as directed by Lender shall be deemed to have paid such amour in satisfaction of its obligation under such Tenant's Lease, and each Tenant may rely on such agreement by Borrower. Neither the demand for or collection of Rents and Profits by Lender, nor the exercise of Lender's rights as assignee of the Leases, shall constitute any assumption by Lender of any obligations under any Lease or other agreement relating thereto. Lender is obligated to account only for such R nts and Profits as are actually collected or received by Lender. Borrower irrevocably agrees and consents that the respective payors of the Rents and Profits shall, upon demand and notice from Lender of an E ent of Default hereunder, pay said Rents and Profits to Lender without liability to determine the ac al existence of any Event of Default claimed by Lender (Lender agreeing not to deliver such a notice ess an Event of Default has occurred and is continuing). Borrower hereby waives any right, claim or dem d which Borrower may now or hereafter have against any such payor by reason of such payment of Rents and Profits to Lender, and any such payment shall discharge such payor's obligation to make s ch payment to Borrower. After and during the continuance of an Event of Default, all Rents and Pr fits collected or received by Lender shall be applied against all expenses of collection, including, without limitation, attorneys' fees, against costs of operation and management of the Property and against the Obligations, in whatever order or priority as to any of the items so mentioned as Lender directs in its sole subjective discretion and without regard to the adequacy of its security. Neither the exercise by Lend of any rights under this Section nor the application of any Rents and Profits to the Obligations shall cur or be deemed a waiver of any Default or Event of Default hereunder. The assignment of Leases an of Rents and Profits hereinabove granted shall continue in full force and effect during any period of foreclosure or redemption with respect to the Property. 1.10 Leases. (a) Entering Into Leases. Borrower will not enter into, modify, amend, copse t to cancellation of or terminate any Lease, whether now existing or hereafter entered into, without the rior written consent of Lender, which consent may be granted or withheld in Lender's sole discretion. MORTGAGE - PAGE 18 Error! Unknown document property name. nu 1991 pG3402. (b) Covenants Regarding Leases. Borrower (i) shall observe and perform all t obligations imposed upon the lessor under each Lease in all material respects, and shall not do or perr to be done anything to materially impair the value of any Lease as security for the Obligations; (ii) up request (which request is hereby deemed given with respect to any "Major Lease", as defined beloi shall promptly send copies to Lender of all notices of default which Borrower shall send or recei thereunder; (iii) shall enforce all of the material terms, covenants and conditions contained in each LeE upon the part of the Tenant thereunder to be observed or performed, (iv) shall not collect any of the Re: more than one (1) month in advance (it being acknowledged that security deposits shall not be deerr Rents collected in advance); (v) shall not execute any other assignment of the lessor's interest in any the Leases or the Rents and Profits (other than to Lender as security for the Obligations); and (vi) st not consent to any assignment of or subletting under any Lease not in accordance with the terms of st Lease, in each case without the prior written consent of Lender. After Lender's request therefor (wh request shall not be made more than twice in any calendar year absent an Event of Default), BorroN shall request and use commercially reasonable efforts to deliver to Lender within 30 days of Lende request an estoppel certificate from each Tenant. (c) Amendments to Leases. Borrower shall not, without the prior written consent of Lender which consent may be granted or withheld in Lenders sole discretion, amend, modify or waive he provisions of any Lease, or terminate, reduce rents under, accept a surrender of space under, or sho en the term of, any Lease (including any guaranty, letter of credit or other credit support with respect there o) (the foregoing, collectively, a "Lease Modification"). (d) Security Deposits. All security deposits of tenants, whether held in cash o in any other form, shall be held in compliance with applicable law. All such security deposits shall not be commingled with any other funds of Borrower or any other person and, if cash, shall be deposited by Borrower at such commercial or savings bank or banks, or otherwise held in compliance with applica le law, as may be reasonably satisfactory to Lender. Any bond or other instrument which Borrowe is permitted to hold in lieu of cash security deposits under any applicable legal requirements shall be maintained in full force and effect in the full amount of such deposits unless replaced by cash deposits as hereinabove described; shall be in the form required under the applicable Lease; shall, if permit d pursuant to any applicable legal requirements, name Lender as payee or mortgagee thereunder or, at Lender's option, be assigned or fully assignable to Lender; and shall, in all respects, comply with y applicable legal requirements. Borrower shall, upon request, provide Lender with evidence reason ly satisfactory to Lender of Borrower's compliance with the foregoing. Upon an Event of Default under his Mortgage, Borrower shall, immediately upon Lender's request (if permitted by applicable law), deliver to Lender the security deposits (and any interest previously earned thereon and not disbursed to the person(s) lawfully entitled to receive same) with respect to all or any portion of the Property, to be held by Lender subject to the terms of the Leases. (e) Tenant Financial Information. Borrower shall use best efforts to cause a ch Lease entered into on or after the date hereof to require the Tenant under such Lease to delive to Borrower periodic operating statements with respect to (i) such Tenant's operations at the Property, and (ii) the operations of such Tenant and, if applicable, any parent or affiliated entity of such Tenant w 'ch operates, or has subsidiaries that operate, comparable businesses (collectively, "Tenant Finan ial Information"). Borrower shall, from time to time promptly upon request of Lender, request Ter ant Financial Information from the Tenant and promptly upon receipt thereof, deliver such Tenant Finan ial information to Lender, provided, however, that (1) prior to a Secondary Market Transaction consisting of a securitization, Lender shall not require Borrower to request Tenant Financial Information more an three (3) times, and (2) following a Secondary Market Transaction consisting of a securitization, provi led no Event of Default is continuing, Lender shall not request such information without reasonable cause (which reasonable cause shall include, without limitation, the occurrence of any default by a Tenant or if MORTGAGE - PAGE 19 Error! Unknown document property name. ov1991P63'193 such Tenant ceases to conduct its business in the premises demised by such Major Income Notwithstanding any provision herein to the contrary, Borrower's failure to obtain and furnish Financial Information to Lender shall not constitute an Even of Default. 1.11 Alienation and Further Encumbrances. (a) Borrower acknowledges that Lender has relied upon the principals of Borrower and their experience in owning and operating properties similar to the Property in connection with the closing of the loan evidenced by the Note. Accordingly, notwithstanding anything to the con contained in Section 5.6 hereof, neither the Property, nor any part thereof or interest therein shall be sold, conveyed, disposed of, alienated, hypothecated, leased (except to Tenants under Leases which are not violation of Section 1.10 hereof), assigned, pledged, mortgaged, further encumbered or otherwise transferred, nor shall Borrower be divested of its title to the Property or any interest therein, in aily manner or way, whether voluntarily or involuntarily (any of the foregoing, a "Transfer"), except expressly set forth in this Section 1. 11, in each case without the prior written consent of Lender being st obtained, which consent may be withheld in Lender's sole discretion. For the purposes of this Section 1.11, a "Transfer" shall also include (i) transfers of direct or indirect ownership interests in Borrower,- and the creation of new or additional ownership interests in Borrower, or in any Constituent Entity of Borrower, in each case except as set forth in Section 1.11(c) below, (ii) an installment sales agreement with respect to the Property or any portion thereof, (iii) a Lease of all or substantially all of the Property other than for actual occupancy by a space tenant thereunder, (iv) any sale or assignment of any f Borrower's right, title and interest in, to and under any Leases or Rents and Profits, other than to Lend r, (v) if Borrower or any Constituent Entity of Borrower is a partnership or joint venture, the additin, change, removal or resignation of any general partner, or the transfer or pledge of any interest (whether as a general partner or limited partner) of any general partner in such partnership, and (vi) if Borrower or any Constituent Entity of Borrower is a limited liability company, the addition, change, removal or resignation of any manager or managing member, or the transfer or pledge of any interest (whether a managing member or otherwise) of such manager or managing member in such limited liability comp y, or the transfer of control (as defined in Section 1.27) of such manager or managing member. Len er acknowledges that the foregoing prohibition shall not apply to Borrower's right to prepay the Loan as et forth in the Note. of (b) Notwithstanding the foregoing provisions of this Section, Lender sh2ntirety unreasonably withhold, condition or delay its consent to one or more sales of the Property in its or one or more transfers of the entire ownership interest in Borrower (hereinafter, "Sale") to a sin e- purpose entity with organizational documents containing provisions substantially similar to those set fo in Section 1.27 and otherwise reasonably acceptable to Lender (hereinafter, "Buyer") provided that such Sale occurs after the earlier to occur of a Secondary Market Transaction (as defined herein) and the to that is one (1) year from the date hereof, and each of the following terms and conditions are satisfie in connection with such Sale: (1) No Event of Default is then continuing; (2) Borrower gives Lender written notice of the terms of such prospect ve Sale not less than thirty (30) days before the date on which such Sale is scheduled to close (it being acknowledged that any such notice by Borrower may be revoked by Borrower on or prior to the date of the Sale set forth in such notice, provided, however, that Borrower shall be responsible for paying e reasonable out-of-pocket expenses incurred by Lender), accompanied by all information concerning he proposed Buyer as Lender would reasonably require in evaluating an initial extension of credit t a borrower and a non-refundable application fee in the amount of $2,500.00. Lender shall have the righ to approve or disapprove the proposed Buyer in its reasonable discretion (it being acknowledged that Len er MORTGAGE - PAGE 20 Error! Unknown document property name. ev 1991 M3404 T may, as a condition to approving any proposed Buyer, require confirmation in writing from each of 1 Rating Agencies (as defined herein) that such Sale will not result in a qualification, downgrade withdrawal of any rating in effect immediately prior to such Sale for any securities issued in connecti with a Secondary Market Transaction), and such approval, if given, may be given subject to st reasonable conditions as Lender may reasonably deem appropriate; and such approval shall not unreasonably withheld in the event the proposed Buyer and its principal owners and persons or entit responsible for the operation of the business and affairs of the proposed Buyer are of substantially simi or greater financial strength and creditworthiness (determined, for example, on the identity, prior crimi record, status on OFAC list, prior litigation history, prior bankruptcy history of such persons or entiti as Borrower and its principal owners and persons or entities responsible for the operation of Borrowe business and affairs; (3) Borrower pays Lender, concurrently with the closing of such Sale, a refundable assumption fee in an amount equal to all out-of-pocket costs and expenses, including, wi limitation, attorneys' fees, incurred by Lender in connection with the Sale plus an amount equal to quarter of one percent (0.25%) of the then outstanding principal balance of the Note; (4) Buyer assumes and agrees to pay the Obligations (subject to provisions of Section 5.26 hereof) and, prior to or concurrently with the closing of such Sale, the B executes, without any cost or expense to Lender, such documents and agreements as Lender reasonably require to evidence and effectuate said assumption and delivers such legal opin excluding, however, a nonconsolidation opinion, as Lender may reasonably require; (5) Borrower and the Buyer execute and cause to be filed in such pub records as Lender deems appropriate, without any cost or expense to Lender, new financing statements financing statement amendments and any additional documents reasonably requested by Lender, (6) Borrower causes to be delivered to Lender, without any cost or expe to Lender, such endorsements to Lender's title insurance policy, hazard insurance endorsements certificates and other similar materials as Lender may deem reasonably necessary at the time of the & all in form and substance reasonably satisfactory to Lender, including, without limitation, an endorsem or endorsements to Lender's title insurance policy insuring the lien of this Mortgage, extending effective date of such policy to the date of execution and delivery (or, if later, of recording) of assumption agreement referenced above in subparagraph (4) of this Section, with no additional excepti added to such policy other than those permitted by this Mortgage or approved by Lender which apprc shall not be unreasonably withheld, and insuring that fee simple title to the Property is vested in Buyer; (7) Borrower executes and delivers to Lender, without any cost or expense to Lender, a release of Lender, its officers, directors, employees and agents, from all known claims and liability relating to the transactions evidenced by the Loan Documents through and including the date of the closing of the Sale, which agreement shall be in form and substance reasonably satisfactory to Lender and shall be binding upon the Buyer, (8) Subject to the provisions of Section 5.26 hereof, such Sale is of construed so as to relieve Borrower of any personal liability under the Note or any of the other Loan Documents for any acts or events occurring or obligations arising prior to or simultaneously with he closing of such Sale and Borrower executes, without any cost or expense to Lender, such documents d agreements as Lender shall reasonably require to evidence and effectuate the ratification of said perso al liability. Borrower shall be released from and relieved of any personal liability under the Note or an of the other Loan Documents for any acts or events occurring or obligations arising after the closing of s ch MORTGAGE - PAGE 21 Error! Unimown document property name. By 1991 °G3405. Sale which are not caused by or arising out of any acts or events occurring or obligations arising prior tp or simultaneously with the closing of such Sale and Lender will, if requested by Borrower, execute reasonable confirmation of the foregoing in favor of Borrower concurrently with the closing of the sale f the Property; and (9) Such Sale is not construed so as to relieve any Indemnitor of i obligations under any Loan Document for any acts or events occurring or obligations arising prior to or simultaneously with the closing of such Sale, provided an entity or Person approved by Lender in i reasonable discretion (a "Successor Indemnitor") assumes the obligations of such Indemnitor d executes such documents as may be reasonably required by Lender to evidence such assumption simultaneously with the closing of such Sale. Each Indemnitor shall be released from and relieved of y of its obligations under any indemnity or guaranty executed in connection with the Loan for any acts or events occurring or obligations arising after the closing of such Sale which are not caused by or aris' g out of any acts or events occurring or obligations arising prior to or simultaneously with the closing of such Sale and Lender will, if requested by Borrower or an Indemnitor, execute a reasonable confirmation of the foregoing in favor of each Indemnitor concurrently with the closing of the Sale of the Property; (10) Buyer has furnished to Lender all appropriate papers evidencing e Buyer's capacity and good standing, and the authority of the signers to execute the assumption of e Loan Documents and the Obligations, which papers shall include certified copies of all documents relating to the organization and formation of the Buyer and of the Constituent Entities of the Buyer, all of which shall be satisfactory to Lender and which, inter alia, shall satisfy the requirements of Section 131 hereof; (11) Buyer shall assume the obligations of Borrower under any managem nt agreements pertaining to the Property, or shall cause the new manager and management agreement to satisfy in all material respects the requirements of Section 1.24 hereof; (12) Buyer shall furnish an opinion of counsel reasonably satisfactory to Lender that the assumption of the Loan Documents and Obligations by Buyer and, to the extent applicable, Successor Indemnitor, was validly authorized, and duly executed and delivered, and constitutes the legal, valid and binding obligations of Buyer and Successor Indemnitor, enforceable against each of them in accordance with their respective terms, and with respect to such other matters as Lender may reasonably require. (c) The following direct or indirect transfers of interests in Borrower, or any Constituent Entity of Borrower, shall be permitted without the prior written consent of Lender: (1) If Borrower (or any Constituent Entity of Borrower) is a corporation, any direct or indirect transfer of stock in such corporation, or the issuance of new stock in such corporation, which does not result in a change of control (as defined under Rule 405 under the Securities Act of 1933, as amended) of such corporation; (2) If Borrower (or any Constituent Entity of Borrower) is a limited partnership, any direct or indirect transfer of limited partnership interests in such limited partnership or the issuance of new limited partnership interests which results in the dilution of the existing limited partners, so that after giving effect to such transfer or issuance, (x) not more than 49% of the eq 'ty interests in such partnership have been transferred or issued from and after the date hereof and (y) the persons responsible for the management of the Borrower and the Property remain unchanged; MORTGAGE - PAGE 22 Error! Unknown document property name. o 1991PG3436 urt I (3) If Borrower (or any Constituent Entity of Borrower) is a limited liabili company, any direct or indirect transfer of membership interests in Borrower, or the issuance of ne membership interests which results in the dilution of the existing members, so that after giving effect such transfer or issuance, (x) not more than 49% of the equity interests in such limited liability comps have been transferred or issued from and after the date hereof and (y) the persons responsible for t management of the Borrower and the Property remain unchanged; and (4) Any of the following transfers: (A) any transfer of direct or indin beneficial ownership interests in Borrower; provided that after the consummation of the transf Borrower is controlled by a Kirschenbaum Entity (as such terms are hereinafter defined); (B) a involuntary transfer caused by the death of a holder of ownership interests in Borrower, or in any gene partner or member of Borrower, in each case so long as (x) Borrower is reconstituted, if require following any such death (y) either (i) those persons responsible for the management of the Borrower a the Property remain unchanged as a result of such death or estate planning or (ii) the person(s) to beco: responsible for management of the Borrower and the Property are approved by Lender. (d) Borrower shall give Lender (i) prior written notice of any event set forth clauses (1), (2), (3) and (4)(A), and (ii) prompt written notice after any event giving rise to a transfer forth in clauses 4(B) above, in each case together with copies of all documents, instruments agreements effecting such transfer, all of which shall be certified by Borrower to be true, correct , complete. (e) As used in this Section 1.11 of this Mortgage, the following capitalized tel shall have the following meanings: "Kirschenbaum Entity" means a corporation, partnership, limited company or other entity that is directly or indirectly controlled by Kirschenbaum. "Control" means the power to direct or cause the direction of the management or policies of a Person or entity, whether through the ability to exercise voting power, by contract or otherwise. "Controlled by," "controlling" and "under common control with" shall have the respective correlative meaning thereto. "Person" means any individual, sole proprietorship, corporation, gen partnership, limited partnership, limited liability company or partnership, j venture, association, joint stock company, bank, trust, estate unincorpor organization, any federal, state, county or municipal government (or any age or political subdivision thereof) endowment fund or any other form of entity. (f) Intentionally Omitted (g) Notwithstanding (and without limiting) the foregoing provisions of this Sec 1.11 no transfer of any direct or indirect ownership interests in Borrower may be made such that transferee owns, in the aggregate with the ownership interest in Borrower of Transferee's Affiliates, n than a forty nine percent (49%) interest in Borrower unless such transfer is conditioned upon the deli of a nonconsolidation opinion acceptable to Lender and any applicable Rating Agency. 1.12 Use of Rents and Profits. Except to the extent provided to the contrary in Loan Documents, all Rents and Profits generated by or derived from the Property shall first be utili solely for current expenses directly attributable to the ownership and operation of the Property, includ MORTGAGE - PAGE 23 Error! Unlrnown document property name. g111V 1991PG3407 without limitation, current expenses relating to Borrower's liabilities and obligations with respect to is Mortgage and the other Loan Documents, and none of the Rents and Profits generated by or derived from Property shall be diverted by Borrower, distributed to the equity owners of Borrower or utilized r any other purposes, in each case unless all expenses attributable to the ownership and operation of e Property then due and payable have been fully paid and satisfied. Without limiting the foregoing, Borrower shall pay when due all utility charges (e.g., for gas, electricity, water and sewer services d similaz charges) which are incurred by Borrower or its agents, and all other assessments or charges o fa similar nature, or assessments payable pursuant to any restrictive covenants, whether public or priv e, affecting the Real Estate and/or the Improvements or any portion thereof, whether or not s h assessments or charges are or may become liens thereon. 1.13 Access Privileges and Inspections. Lender and the agents, representatives d employees of Lender shall, subject to the rights of tenants, have full and free access to the Real Estate d the Improvements and any other location where books and records concerning the Property are kept at ffl reasonable times and on reasonable prior notice for the purposes of inspecting the Property and of examining, copying and making extracts from the books and records of Borrower relating to the Proper . Borrower shall reasonably cooperate with all such agents, representatives and employees of Lender. 1.14 Waste, Alteration of Improvements. Borrower shall not commit, suffer or pe it any waste on the Property nor take any actions that would invalidate any insurance carried on he Property. Borrower shall maintain the Property in good condition and repair. No part of he Improvements may be removed, demolished or materially altered, in each case, without the prior writ en consent of Lender, not to be unreasonably withheld, except (i) as required pursuant to Applicable Law or to cause the Property not to be in violation of any Lease approved or deemed approved pursuant to Section 1.10 hereof, (ii) intentionally omitted, and (iii) other alterations which do not impair the value of the Property, not to exceed $100,000 in any given year and Lender's consent shall not be unreasonably withheld with respect to any other proposed alterations. Except as otherwise provided in this Sec on 1.14, without the prior consent of Lender in each case, not to be unreasonably withheld, Borrowers all not commence construction of any improvements on the Real Estate other than improvements required or the maintenance or repair of the Property. 1.15 Zoning. Without the prior written consent of Lender in each case, which cons nt shall not be unreasonably withheld, Borrower shall not seek, make, suffer, consent to or acquiesce in y change in the zoning or conditions of use of the Real Estate or the Improvements. If, under applic le zoning provisions, the use of all or any part of the Real Estate or the Improvements is or become, a nonconforming use, Borrower shall not cause or permit such use to be discontinued or abandoned with ut the prior written consent of Lender. Without Lender's prior written consent, which consent shall no be unreasonably withheld, Borrower shall not file or subject any part of the Real Estate or the Improvem nts to any declaration of condominium or co-operative or convert any part of the Real Estate or the Improvements to a condominium, co-operative or other form of multiple ownership and governance. 1.16 Financial Statements Books and Records and Informational R o Borrower shall keep accurate books and records of account of the Property and its own financial aff s sufficient to permit the preparation of financial statements therefrom in accordance with gene lly accepted accounting principles or such other accounting basis reasonably acceptable to Lender. Le der and its duly authorized representatives shall have the right to examine, copy and audit Borrower's rec rds and books of account at all reasonable times and upon reasonable advance notice. So long as ibis Mortgage continues in effect, Borrower shall provide to Lender, in addition to any other finan ial statements required hereunder or under any of the other Loan Documents, the following finan ial statements and information, all of which must be certified to Lender as being true and correct by Borrower or the person or entity to which they pertain, as applicable, be prepared in accordance with MORTGAGE - PAGE 24 Error! Unknown document property name. R 1991¢G3408 generally accepted accounting principles consistently applied and be in form and substance acceptable to Lender, or such other accounting basis reasonably acceptable to Lender: (a) copies of all tax returns filed by Borrower, within thirty (30) days after the of filing; (b) monthly operating statements for the Property (including a current Rent R ll containing the information set forth in Paragraph 1.1(ee) above), within twenty (20) days after the end of each month during the first twelve (12) months of the term of the Loan or until the occurrence of a Secondary Market Transaction and (ii) during any period when Borrower is required to make payments of net cash flow to any Reserve; (c) quarterly operating statements for the Property, within thirty (30) days after end of each calendar year; (d) certified annual financial statements for Borrower (setting forth Borrow balance sheet and operating statements for the Property), and each Indemnitor in connection with Loan, within ninety (90) days after the end of each calendar year, (e) a current Rent Roll, containing the information set forth in Paragraph 1.1( above, dated as of January 1 of each calendar year and certified by Borrower as being true, correct complete, which shall be delivered to Lender on or before January 15 of each year; and (f) such other information with respect to the Property, Borrower, the principals in Borrower, and each Indemnitor which may reasonably be requested from time to time by Lender, withhL a reasonable time after the applicable request. If any of the aforementioned materials are not furnished to Lender within the applicable time periods, a d such failure continues for ten (10) days after written notice thereof from Lender, in addition to any o er rights and remedies of Lender contained herein, Lender shall have the right, but not the obligation, to obtain the same by means of a review by an independent certified public accountant selected by Lend r, in which event Borrower agrees to pay, or to reimburse Lender for, any expense of such review and further agrees to provide all necessary information to said accountant and to otherwise cooperate in e making of such review. 1.17 Further Documentation. Borrower shall, on the reasonable request of Lender a at the expense of Borrower, promptly: (a) correct any defect, error or omission which may be discovej in the contents of this Mortgage or in the contents of any of the other Loan Documents; (b) execs acknowledge, deliver and record or file such further instruments (including, without limitation, furtl mortgages, deeds of trust, security deeds, security agreements, financing statements, continuati statements and assignments of rents or leases) and promptly do such further acts as may be reasonal necessary, desirable or proper to carry out more effectively the purposes of this Mortgage and the of Loan Documents and to subject to the liens and security interests hereof and thereof any prope intended by the terms hereof and thereof to be covered hereby and thereby, including specifically, 1 without limitation, any renewals, additions, substitutions, replacements or appurtenances to the Propel (c) execute, acknowledge, deliver, procure and record or file any document or instrument (includ specifically any financing statement) deemed necessary by Lender to protect, continue or perfect the li or the security interests hereunder against the rights or interests of third persons; and (d) furnish Lender, upon Lender's request, not more than once annually so long as no Event of Default has occurs a duly acknowledged written statement and estoppel certificate addressed to such party or parties directed by Lender and in form and substance supplied by Lender, setting forth all amounts due under MORTGAGE - PAGE 25 Error! Unknown document property name. to as BK 199.1 PG3409 Note, stating whether any Default or Event of Default exists, stating whether any offsets or defenses ex against the Obligations, affirming that the Loan Documents are the legal, valid and binding obligations Borrower, and containing such other matters as Lender may reasonably require. 1.18 Payment of Costs• Reimbursement to Lender. Borrower shall pay all out-or- pocket costs and expenses of every character incurred by or on behalf of Lender in connection with the closing of the Loan or otherwise attributable or chargeable to Borrower as the owner of the Prope , including, without limitation, appraisal fees, recording fees, documentary, stamp, mortgage or intangib e taxes, brokerage fees and commissions, title policy premiums and title search fees, public records sear (h fees, escrow fees and attorneys' fees. Borrower shall pay to Lender any and all reasonable out-of-pock-.t costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) in connection with any matter for which the consent or approval of Lender is required (or which is required to be delivered to Lender for review and/or approval) pursuant to the Loan Documents. If Borrower defaults any such payment, which default is not cured within any applicable grace or cure period, Lender may p y the same and Borrower shall reimburse Lender on demand for all such costs and expenses incurred r paid by Lender, together with such interest thereon at the Default Interest Rate from and after the date of Lender's making such payment until reimbursement thereof by Borrower. Further, Borrower shk1l promptly notify Lender in writing of any litigation or written threat of litigation affecting the Property, or any other demand or claim which, if enforced, could impair or threaten to impair Lender's securJ ty hereunder. Without limiting or waiving any other rights and remedies of Lender hereunder, if any action or proceeding of any kind (including, but not limited to, any bankruptcy, insolvency, arrangeme t, reorganization or other debtor relief proceeding) is commenced which might affect Lender's interest in the Property or Lender's right to enforce its security, or during the continuance of any other Event of Default, then Lender may, at its option, with or without notice to Borrower, make any appearanc s, disburse any sums and take any actions as may be necessary or desirable to protect or enforce the sec ty of this Mortgage or to remedy such Event of Default (without, however, waiving any Default); provided, however, that absent an Event of Default, Lender shall not have the right to appear in tenant litigation or other property litigation not challenging or threatening the validity or priority of Lender's lien. Borrower agrees to pay on demand all expenses of Lender incurred with respect to the foregoing (including, but of limited to, reasonable fees and disbursements of counsel), and if not paid within three (3) business ys from Lender's written demand therefore, interest thereon at the Default Interest Rate from and after e date on which Lender incurs such expenses until reimbursement thereof by Borrower. The necessity or any such actions and of the amounts to be paid shall be determined by Lender in its discretion. Lende is hereby empowered during and Event of Default to enter and to authorize others to enter upon the Property or any part thereof for the purpose of performing or observing any such defaulted term, covenant or condition without thereby becoming liable to Borrower or any person in possession holding under Borrower other than with respect to the gross negligence or willful misconduct of such party. Borrower hereby acknowledges and agrees that the remedies set forth in this Section 1.18 shall be exercisable by Lender, and any and all payments made or costs or expenses incurred by Lender in connection therewith shall be secured hereby and shall be, without demand, immediately repaid by Borrower with interest thereon at the Default Interest Rate, notwithstanding the fact that such remedies were exercised ands ch payments made and costs incurred by Lender after the filing by Borrower of a voluntary case or the fi ' g against Borrower of an involuntary case pursuant to or within the meaning of the Bankruptcy Reform ct of 1978, as amended, Title 11 U.S.C., or after any similar action pursuant to any other debtor relief aw (whether statutory, common law, case law or otherwise) of any jurisdiction whatsoever, now or here ter, in effect, which may be or become applicable to Borrower, Lender, any Indemnitor, the Obligation; or any of the Loan Documents. Borrower hereby indemnifies and holds Lender harmless from and ag t all actual losses, reasonable out-of-pocket costs and reasonable out-of-pocket expenses with respe to any Default hereof, any liens (i.e., judgments, mechanics' and materialmen's liens, or otherwise), ch ges and encumbrances filed against the Property, and from any third party claims and demands fora 1 damages or injury, including claims for property damage, personal injury or wrongful death, arising o t of MORTGAGE - PAGE 26 Error! Unknown document property name. BX1991PG3410. or in connection with any accident or fire or other casualty on the Real Estate or the Improvements or a nuisance made or suffered thereon, including, in any case, reasonable attorneys' fees, costs and expens as aforesaid, whether at pretrial, trial or appellate level, and such indemnity shall survive payment in f of the Obligations; provided that the foregoing indemnity shall (a) not extend to Hazardous Substanc introduced to the Property after (i) payment in full of the Obligations, (ii) the date that Lender or its age nominee or a third party acquires title to the Property by foreclosure, deed in lieu of foreclosure otherwise or (iii) the closing, subject to the terms and conditions of Section 1.11 hereof of a Sale provid that the successor Buyer of the Property and a Successor Indemnitor assume all of the liabilities a obligations arising hereunder on and after the date of the closing of such Sale, (b) exclude puniti damages, diminution in value, lost revenues and other consequential damages, (c) notwithstanding 1 foregoing which are attributable to the gross negligence or willful misconduct of Lender or its agents, a (d) exclude any other claims accruing after Lender or its successor or designee takes title to the Propel This Section shall not be construed to require Lender to incur any expenses, make any appearances take any actions. 1.19 Securitv Interest and Security Agreement. This Mortgage is also a sec agreement under the Uniform Commercial Code for any of the Property which, under applicable law, may be subject to a security interest under the Uniform Commercial Code, whether acquired now or in e future, including, without limitation, the Reserves, all products, and cash (excluding, however, cash once it is distributed to Borrower's members) and non-cash proceeds thereof (collectively, "UCC Collateral'). Borrower hereby grants to Lender a security interest in the UCC Collateral. Borrower shall execute d deliver to Lender, upon Lender's request, financing statements, continuation statements and amendments, in such form as Lender may require, to perfect or continue the perfection of this security interest. Borrower shall pay all costs of preparing and filing such statements, and all costs and expenses of y record searches for financing statements that Lender may require. Without the prior written consent of Lender, Borrower shall not create or permit to exist any other lien or security interest in any of the U C Collateral. The name and address of Borrower (as Debtor under any applicable Uniform Commercial Code) and Lender (as Secured Party under any applicable Uniform Commercial Code) are as set forth on Page 1 of this Mortgage. 1.20 Easements and Rights-of-Way. Borrower shall not grant any easement or ri t- of-way with respect to all or any portion of the Real Estate or the Improvements without the prior written consent of Lender, not to be unreasonably withheld. The purchaser at any foreclosure sale hereunder may, at its discretion, disaffirm any easement or right-of-way granted in violation of any of the provisions of this Mortgage and may take immediate possession of the Property free from, and despite the terms of, such grant of easement or right-of-way. If Lender consents to the grant of an easement or right-of-way, Lender agrees to grant such consent provided that Lender is paid a standard review fee together with all other reasonable out-of-pocket expenses, including, without limitation, attorneys' fees, incurred by Lender in the review of Borrower's request and in the preparation of documents effecting the subordination, if consented to be Lender in its reasonable discretion. Borrower shall at all times co ly with all easement agreements, reciprocal easement agreements, declarations, restrictive covenants and y other similar types of agreements now or hereafter affecting the Property, and Borrower shall not amend, modify or terminate any such easement agreements, reciprocal easement agreements, declarations, restrictive covenants or any other similar types of agreements without Lender's prior written consent not to be unreasonably withheld. Notwithstanding the foregoing, so long as no DEfault shall have occ ed and be continuing Lender shall not unreasonably withhold, condition, or delay its consent to an access easement on and over the Real Estate (the "Proposed Access Easement"), for the benefit of that part of real property lying to the South of the Real Estate, and having a tax parcel I.D. number of T.P.M. 38 08- 0569-016, provided that Borrower at it's sole cost and expense (including but not limited to Len er's reasonable attorney fees) complies with the following conditions: (i) the grant of the Proposed Ac ess Easement will in no way interfere with the use of the Property as a warehouse and distribution facility, (ii) MORTGAGE - PAGE 27 Error: Unimown document property name. RX1991PG3`?11 the form and substance of the Proposed Access Easement is approved by Lender in Lender's reasonable discretion, (iii) Borrower has provided Lender with an original certified updated survey plotting th. Proposed Access Easement, (iv) Arnold has consented in writing to the Proposed Access Easement, and Borrower has provided Lender with a copy of same, and (v) if Borrower desires to cause this Mortga to be subordinated to the Proposed Access Easement, Borrower shall provide Lender with (x) any and all documentation required by Lender or its attorneys evidencing such subordination, and (y) if available, endorsement to Lender's title insurance policy providing that use and maintenance of the Proposed Acce s Easement shall not interfere with the Property's intended use. Promptly after recordation, Borrower shad provide Lender with a certified copy of the filed Proposed Access Easement, and any agreed up subordination instrument. 1.21 Compliance with Laws. Borrower shall at all times comply with all Applicab e Laws, even if such compliance shall require structural changes to the Property; provided, however, it where such compliance is the responsibility of a non-Affiliate tenant of Borrower, Borrower's so .e obligation shall be to use all commercially reasonable efforts to enforce the obligations of such ten it under its lease. Borrower may, upon providing Lender with security satisfactory to Lender, proceed diligently and in good faith to contest the validity or applicability of any Applicable Law so long as e Property shall not be subject to any lien, charge, fine or other liability, and shall not be in danger of be' g forfeited, lost or closed, during or as a result of such contest. Borrower shall not alter the Property in y manner that would materially increase Borrower's responsibilities for compliance with Applicable La s without the prior approval of Lender which approval shall not be unreasonably withheld. Borrower sh 1 not use or occupy, or allow the use or occupancy of, the Property in any manner which violates any Le e or any Applicable Law or which constitutes a public or private nuisance or which makes void, voidable r cancelable, or increases the premium of, any insurance then in force with respect thereto. Borrower shall, from time to time, upon Lender's request, provide Lender with evidence reasonably satisfactory to Lender that the Property complies with all Applicable Laws. 1.22 Additional Taxes. In the event of the enactment after this date of any law of e state where the Property is located or of any other governmental entity which, by virtue of deducting frm the value of the Property for the purpose of taxation the Obligations or any lien or security interest on e Property imposes upon Lender any Taxes or Other Charges that Lender is not subject to on the to hereof, or imposing upon Lender the payment of the whole or any part of the Taxes or Other Charges herein required to be paid by Borrower, or changing in any way the laws relating to the taxation of mortgages or security agreements or debts secured by mortgages or security agreements or the interest of the Lender or secured party in the property covered thereby, or the manner of collection of such Taxes or Other Charges, so as to adversely affect this Mortgage or the Obligations or Lender, then, and in any s ch event, Borrower, upon demand by Lender, shall pay such Taxes or Other Charges, or reimburse Lender therefor, provide however, that if in the opinion of counsel for Lender (a) it might be unlawful to require Borrower to make such payment, or (b) the making of such payment would result in e imposition of interest beyond the maximum amount permitted by law, then and in either such event provided that the Loan cannot be restructured to make it lawful for Borrower to make such payment o to avoid a violation of usury laws, Lender may elect, by notice in writing given to Borrower, to declare all of the Obligations to be and become due and payable in full one hundred eighty (180) days from the gi g of such notice and no prepayment premium shall be due with respect to such payment. 1.23 Borrower's Waivers. To the full extent permitted by law, Borrower shall no at any time insist upon, plead, claim or take the benefit or advantage of any law now or hereafter in force providing for any appraisement, valuation, stay, moratorium or extension, or any law now or hereafter in force providing for the reinstatement of the Obligations prior to any sale of the Property to be made pursuant to any provisions contained herein or prior to the entering of any decree, judgment or order of any court of competent jurisdiction, or any right under any statute to redeem all or any part of the MORTGAGE - PAGE 28 Error! Unknown document property name. BC{ 1991 PG-3412 Property so sold. Borrower, for Borrower and Borrower's successors and assigns, and for any and a persons ever claiming any interest in the Property, to the full extent permitted by law, hereby knowingly, intentionally and voluntarily with and upon the advice of competent counsel: (a) waives, release , relinquishes and forever forgoes all rights of valuation, appraisement, stay of execution, reinstatement and notice of election or intention to mature or declare due the Obligations (except such notices as e specifically provided for herein); (b) waives, releases, relinquishes and forever forgoes all right to a marshalling of the assets of Borrower, including the Property, to a sale in the inverse order of alienation, or to direct the order in which any of the Property shall be sold in the event of foreclosure of the liens d security interests hereby created and agrees that any court having jurisdiction to foreclose such liens d security interests may order the Property sold as an entirety; and (c) waives, releases, relinquishes d forever forgoes all rights and periods of redemption provided under applicable law. To the full exte t permitted by law, Borrower shall not have or assert any right under any statute or rule of law pertaining o the exemption of homestead or other exemption under any federal, state or local law now or hereafter effect, the administration of estates of decedents or other matters whatever to defeat, reduce or affect e right of Lender under the terms of this Mortgage to a sale of the Property, for the collection of e Obligations without any prior or different resort for collection, or the right of Lender under the terms f this Mortgage to the payment of the Obligations out of the proceeds of sale of the Property in preferen e to every other claimant whatever. Further, Borrower hereby knowingly, intentionally and voluntari y, with and upon the advice of competent counsel, waives, releases, relinquishes and forever forgoes ill present and future statutes of limitations as a defense to any action to enforce the provisions of s Mortgage or to collect any of the Obligations the fullest extent permitted by law. Borrower covenants d agrees that upon the commencement of a voluntary or involuntary bankruptcy proceeding by or ag ' t Borrower, Borrower shall not seek a supplemental stay or otherwise shall not seek pursuant to 11 U.SC. §105 or any other provision of the Bankruptcy Reform Act of 1978, as amended, or any other deb or relief law (whether statutory, common law, case law, or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may be or become applicable, to stay, interdict, condition, reduce or inhibit he ability of Lender to enforce any rights of Lender against any Indemnitor of the secured obligations or y other party liable with respect thereto by virtue of any indemnity, guaranty or otherwise. 1.24 Management. (a) The management of the Property shall be by either (1) Borrower or an en ity affiliated with Borrower approved by Lender for so long as Borrower or said affiliated entity is mana g the Property in a first class manner, such approval not to be unreasonably withheld (it be g acknowledged that as of the date hereof, Lender has approved SK Realty Management, LLP, as mans er of the Property); or (2) a professional property management company reasonably approved by Lender, and in either case pursuant to a written agreement reasonably approved by Lender. In no event shall y manager be removed, replaced or retained, or any management agreement entered into, modified or amended, in each case without the prior written consent of Lender, provided Lender's consent shall of unreasonably be withheld and shall be deemed given if Lender does not timely notify Borrower o its disapproval in accordance with the procedures set forth below; provided, further, Lender's consent s all not be unreasonably withheld to a replacement manager in connection with a Sale pursuant to sec 'on 1.11(b) if such replacement manager is an affiliate of a proposed Buyer having financial strength, cr dit and management experience similar to or greater than that of the manager it is replacing. After an E ent of Default hereunder or a default under any management contract then in effect, which default is not cured within any applicable grace or cure period, Lender shall have the right to terminate, or to direct Borrower to terminate, such management contract upon thirty (30) days' notice and to retain, or to direct Borrower to retain, a new management agent. reasonably approved by Lender. It shall be a condition of Lender's consent to any management agreement, whether with an affiliate of Borrower or a professional property management company, that such manager enter into an agreement with Lender whereby the manager acknowledges and agrees to the aforesaid rights of Lender, and as to such other matte as MORTGAGE - PAGE 29 Error! Unknown document property name. RK 1 `991 PG3413 me t Lender may require. With respect to any proposed modification or amendment of the manage agreement then in effect, Borrower's request for approval shall be made to Lender in writing. As part of such request, Borrower shall furnish to Lender (and any loan servicer specified from time to time y Lender): (1) a copy of the proposed amendment or modification and (2) a summary of the material ternis of the proposed amendment or modification. Borrower's request shall reference this Mortgage, shall include a copy of the cover page and this Section 1.24 of this Mortgage and shall specifically state boldface, capital print as follows: YOUR FAILURE TO ADVISE OF YOUR APPROVAL O DISAPPROVAL WITH THE SPECIFIC REASONS FOR ANY DISAPPROVAL, WITHIN 0 DAYS OF THE DATE HEREOF, SHALL BE DEEMED AN APPROVAL OF THE ENCLOSE) SUBMISSION PURSUANT TO SECTION 1.24 OF THE REFERENCED MORTGAGE. With 10 days of Borrower's submission to Lender in accordance with the foregoing, Lender shall advi e Borrower of its approval or disapproval and, in the event of a disapproval, of the specific reasons therefor. In the event that Lender fails to notify Borrower of its approval or disapproval in accordance with e foregoing sentence, Lender's approval shall be deemed to have been given. (b) Without limiting the restrictions set forth in Section 1.24(a) pertaining to e management agreement for the Property, Borrower may not terminate any other Contract that is mate al to the operation of the Property, or enter into any amendment thereto that makes the terms there of materially less favorable to Borrower, in each case without the prior written consent of Lender, whi h shall not unreasonably be withheld, provided, however, Borrower can replace the goods or services provided on terms not materially more disadvantageous to Borrower than the contract being replaced, then the prior written consent of Lender shall not be required to terminate such Contract. Borrower shall perform its obligations under each Contract and each of the General Intangibles, except where Borrower's failure to do so would not have a material adverse effect on Borrower or the Property. Borrower represents that to its best knowledge, its interest under each Contract, and each General Intangible, is of subject to any claim, setoff, lien, deduction or encumbrance of any nature which, in the aggregate, is material, other than that created by this Mortgage. At any time during the continuance of an Event of Default, Lender may (but shall not be obligated to) take such action as Lender may determine to be reasonably necessary to protect the rights of Borrower under any or all of the Contracts and/or e General Intangibles. Should Lender, or Lender's designee, acquire the Property (whether pursuant to exercise of Lender's remedies hereunder or by transfer in lieu thereof), Lender may elect to ass e Borrower's interests under any or all of the Contracts or General Intangibles as Lender shall dete e, and Borrower shall cause to be terminated, without obligation to Lender or the successor owner of e Property, such other Contracts and/or General Intangibles as Lender may direct. 1.25 Hazardous Waste and Other Substances. (a) Borrower hereby represents and warrants to and covenants and agrees Lender as follows: (1) To the best of Borrower's knowledge and information, except as expressly set forth in the environmental report prepared for Lender in connection with the Loan (the "Environmental Report"), the Property is not in violation of any present or future local, state or federal law, rule or regulation pertaining to environmental regulation, contamination or clean-up (collectively, "Environmental Laws"), including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq. and 40 CFR § 302.1 et seq.), e Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.), the Federal Water Pollu on Control Act (33 U.S.C. § 1251 et seq.) and 40 CFR § 116.1 et seq.), and the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), and those relating to Lead Based Paint (as hereinafter defined), all as same have been or may be amended, relating to or affecting the Property, whether or of caused by or within the control of any of Borrower or any Indemnitor; MORTGAGE - PAGE 30 Error! Unknown document property name. BK 1991 PG3414 (2) To the best of Borrower's knowledge and information, except as expressly set forth in the Environmental Report, no hazardous, toxic or harmful substances, waste;, materials, pollutants or contaminants (including, without limitation, asbestos, polychlorinated biphenyl 3, petroleum products, flammable explosives, radioactive materials, paint containing more than 0.5% lead by dry weight ("Lead Based Paint'), infectious substances or raw materials which include hazardo constituents) or any other substances or materials which are included under or regulated by Environmental Laws, or any molds, spores or fungus or other harmful microbial matter (collectively, "Hazardous Substances"), are located on or have been handled, generated, stored, processed or disposed of on or released or discharged from the Property (including underground contamination) except for those substances used or handled by Borrower or Tenants in the ordinary course of their respective business -,s or the maintenance, upkeep and/or repair of the Property and in compliance with all Environmental Law ; (3) To the best of Borrower's knowledge and information, except expressly set forth in the Environmental Report, the Property is not subject to any private or governmen 1 lien or judicial or administrative notice or action relating to Hazardous Substances; (4) To the best of Borrower's knowledge and information, except as expressly set forth in the Environmental Report, there are no existing or closed underground storage tanks or other underground storage receptacles for Hazardous Substances on the Property; (5) Borrower has received no written notice of, and to the best of Borrower's knowledge and information, there exists no investigation, action, proceeding or claim by any agency, authority or unit of government or by any third party which, if adversely determined, would result in any liability, penalty, sanction or judgment under any Environmental Laws with respect to any condition, e or operation of the Property; and (6) Borrower has received no notice that, and to the best of Borrower' knowledge and information, there has been no claim by any party that, any use, operation or condition of the Property has caused any nuisance or any other liability or adverse condition on any other property or does Borrower know of any basis for such a claim. (b) Borrower shall keep or cause the Property to be kept free from Hazardous Substances (except those substances used or handled by Borrower and Tenants, in the ordinary course of their respective businesses or the maintenance, upkeep and/or repair of the Property and, in each case in compliance with all Environmental Laws) and in material compliance with all Environmental Laws, shall not install or use any underground storage tanks, shall expressly prohibit the use, generation, handling, storage, production, processing and disposal of Hazardous Substances on the Property by all Tenants (except in the ordinary course of their respective business or the maintenance, upkeep and/or repair of the Property and, in each case, in compliance with all Environmental Laws), and, without limiting the generality of the foregoing, during the term of this Mortgage, shall not install in the improvements or permit to be installed in the improvements asbestos containing materials ("ACMs") or any substance containing ACMs (it being acknowledged that no default shall occur under the Loan in the event that a Tenant violates the foregoing provisions as long as Borrower promptly takes commercially reasonable actions in connection therewith). Borrower shall, if required under applicable Environmental Laws, maintain all applicable Material Safety Data Sheets with respect to the Property, and make same avail ble to Lender or Lender's consultants upon reasonable notice. Borrower acknowledges its responsibilito be aware of all material Environmental Laws affecting the Property during the term of the Loan. Borrower acknowledges and agrees that Lender has no duty to provide Borrower with any information regarding the Environmental Laws or any interpretation thereof. MORTGAGE - PAGE 31 Error! Unknown document property name. BK1991PG3415 (c) Borrower shall promptly notify Lender should Borrower become aware of ( Hazardous Substances, or other potential environmental problem or liability, with respect to the Proper that in each case constitutes an imminent threat of a violation or a violation of Environmental Laws, (: any lien, action or notice affecting the Property or Borrower resulting from any violation or allegi violation of Environmental Laws, (iii) the institution of any investigation, inquiry or proceedu concerning Borrower or the Property pursuant to the violation of any Environmental Law, or (iv) t discovery of any occurrence, condition or state of facts which would render any representation warranty contained in this Mortgage incorrect in any material respect if made at the time of su discovery, but only to the extent that same would constitute a violation of Environmental Law. Borrow shall, promptly and when and as required by Environmental Law and regardless of the source of t contamination except if caused by Lender or its agents, at its own expense, take all actions as shall necessary or advisable for the clean-up of Hazardous Substances on any and all portions of the Propei or if required by Environmental Law, other affected property, in violation of Environmental Lav including, without limitation, all investigative, monitoring, removal, containment and remedial actions accordance with all applicable Environmental Laws (and in all events in a manner reasonably satisfact( to Lender), and shall further pay or cause to be paid, at no expense to Lender, all clean-up, administrati and enforcement costs of applicable governmental agencies which may be levied against Borrower or i Property; in the event Borrower fails to take such actions within five (5) Business Days of written not from Lender or such applicable governmental agencies, (1) Lender may cause the Property or od affected property to be freed from any Hazardous Substances or otherwise brought into conformance w Environmental Laws and any out-of-pocket cost incurred by Lender in connection therewith shall included in Costs and shall be paid by Borrower in accordance with the terms of this Section 1.25(c); (2) in furtherance of the foregoing, Borrower hereby grants to Lender access to the Property and irrevocable license to remove any items deemed by Lender to be Hazardous Substances and to do things Lender shall reasonably deem necessary to bring the Property into conformance w Environmental Laws. Upon the request of Lender, at any time and from time to time during continuance of an Event of Default under this Mortgage or the other Loan Documents or at such of time as Lender has reasonable grounds to believe that Hazardous Substances are or have been releas stored or disposed of on or around the Property in a manner that would constitute a violation Environmental Laws, Borrower (or another Borrower if Borrower fails so to do) shall provide, Borrower's sole expense, an inspection or audit of the Property prepared by a hydrogeologist environmental engineer or other appropriate consultant reasonably approved by Lender indicating presence or absence of Hazardous Substances on the Property or an inspection or audit of improvements located on the Property prepared by an engineering or consulting firm reasonably appro by Lender indicating the presence or absence of friable asbestos or substances containing asbestos on Property. If Borrower fails to provide such inspection or audit within thirty (30) days after such requ Lender may order the same, and Borrower hereby grants to Lender access to the Property and irrevocable license to undertake such inspection or audit. The cost of such inspection or audit shall included in Costs and shall be paid by Borrower in accordance with the terms of this Section 1.2: hereof. of at or an be (c) (d) Borrower hereby assumes liability for, and hereby agrees to pay, protect, de nd (at trial and appellate levels) and with attorneys, consultants and experts reasonably acceptable to Len er, and save Lender harmless from and against, and hereby indemnify Lender from and against any an all present or future liens, actual damages, actual losses, liabilities, obligations, settlement payments, penalties, assessments, citations, directives, claims, litigation, demands, defenses, judgments, s 'ts, proceedings, costs, disbursements and expenses of any kind or of any nature whatsoever (including, without limitation, reasonable attorneys', consultants' and experts' fees and disbursements actually incurred in investigating, defending, settling or prosecuting any claim, litigation or proceeding, but excluding punitive damages and further excluding damages arising from diminution of the value o the Property, lost revenues and other consequential damages) (collectively "Costs") which may at any time be MORTGAGE - PAGE 32 Error! Unknown document property name. RX1991PG3416 imposed upon, incurred by or asserted or awarded against Lender or the Property, and arising from or o of: (i) the violation of any present or future Environmental Laws, including, without limitation, U Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601 seq. and 40 CFR § 302.1 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S., § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.) and 40 CFR § 116.1 seq.), and the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), and those relating Lead Based Paint, all as same have been or may be amended, relating to or affecting the Proper whether or not caused by or within the control of any of the Borrowers; (ii) the actual or alleged presenc release or threat of release of any Hazardous Substances, now or hereafter on, in, under or affecting all any portion of the Property or any surrounding areas (as a result of migration from the Propeq regardless of whether or not caused by or within the control of Borrower; (iii) the failure by Borrower comply fully with the terms and conditions of this Section 1.25; or (iv) the enforcement of this Secti 1.25, including, without limitation, the cost of assessment, containment and/or removal of any and Hazardous Substances from all or any portion of the Property or any surrounding areas (as a result migration from the Property) in accordance with the terms hereof or Environmental Laws, the cost of a actions contemplated by the terms hereof taken in response to the presence, release or threat of release any Hazardous Substances on, in, under or affecting any portion of the Property or any surrounding are to prevent or minimize such release or threat of release so that it does not migrate or otherwise cause threaten danger to present or future public health, safety, welfare or the environment, and costs pursu to the terms hereof incurred to comply with the Environmental Laws in connection with all or any port of the Property or any surrounding areas. "Costs" as used in this Section 1.25 shall not include diminution in the value of the security afforded by the Property, lost revenues, other consequen damages, or any future reduction of the sales price of the Property by reason of any matter set forth in 1 Section 1.25. (e) Upon Lender's request, at any time after the occurrence of an Event of Defa t hereunder or at such other time as Lender has reasonable grounds to believe that Hazardous Substances are or have been released, stored or disposed of on or around the Property or that the Property may be in violation of the Environmental Laws, Borrower shall provide, at Borrower's sole cost and expense, an inspection or audit of the Property prepared by a hydrogeologist or environmental engineer or o er appropriate consultant approved by Lender indicating the presence or absence of Hazardous Substances on the Property or an inspection or audit of the Improvements prepared by an engineering or consul g firm approved by Lender indicating the presence or absence of friable asbestos or substances contain g asbestos on the Property. If Borrower fails to provide such inspection or audit within thirty (30) days after such request, Lender may order the same, and Borrower hereby grants to Lender and its employ es and agents access to the Property and a license to undertake such inspection or audit. The cost of s itch inspection or audit, together with interest thereon at the Default Interest Rate from the date incurred by Lender until actually paid by Borrower, shall be immediately due and payable to Lender by Borrower on demand. (f) The obligations of Borrower under this Mortgage (including, without limitat this Section 1.25) with respect to Hazardous Substances shall not in any way limit the obligations of party under the Hazardous Substances Indemnity. (g) Borrower covenants and agrees that it will continue to comply with the Operations & Maintenance Plan for Asbestos-Containing Materials, prepared by EBI Consulting, dated February 16, 2006 (the "ACM O&M Plan"), with respect to "ACM's", and keep such ACM O&M Pl in effect until the Obligations is repaid in full. In furtherance of the foregoing, Borrower shall inspect and maintain all ACM's on a regular basis and ensure that all ACM's shall be maintained in a condition at prevents exposure of tenants or invitees to ACM's at all times. Without limiting the generality o the preceding sentence, Lender may reasonably require (i) periodic notices or reports to Lender in f I rm, MORTGAGE - PAGE 33 Error! Unknown document property name. RK1991PG3417 substance and at such intervals as Lender may specify, (ii) an amendment to the ACM O&M Plan o address changing circumstances, laws or other matters, (iii) at Borrower's sole expense, supplemen 1 examination of the Property by consultants specified by Lender, and (iv) variation of the ACM O& Plan in response to the reports provided by any such consultants. (h) Borrower represents and warrants that it has delivered an original fully executed Declaration of Restrictive Covenant containing certain restrictions on the use of ground water ( e "Restrictive Covenant"), to the title company issuing Lenders title insurance policy, and shall cause flie title company to record the Restrictive Covenant prior to the recordation of this Mortgage. Borrower ()r Indemnitor if Borrower fails to do so) covenants and agrees that it shall comply in all material respects with the restrictions contained in the Restrictive Covenant. Borrower shall provide Lender with a certified copy of the recorded Restrictive Covenant whenever same becomes available. (i) Borrower (or Indemnitor if Borrower fails to do so) covenants and agrees that it shall permit any duly authorized party access to any and all monitoring wells located on the Property or the purpose of periodic sampling of ground water in order to determine contamination levels arising from the 1997 release of fuel oil at the bulk fuel distribution terminal formerly located on the adjacent propeity lying to the Southwest of the Property. 1.26 Indemnification; Subrogation. (a) Borrower shall indemnify, defend and hold Lender harmless against: (i) any all claims for brokerage, leasing, finders or similar fees which may be made relating to the Property or Obligations (other than a party which dealt exclusively with Lender and was not disclosed to Borrow and (ii) any and all liability, obligations, actual losses, actual damages (excluding lost profit, diminu in value and other consequential damages), penalties, claims, actions, suits, reasonable out-of-poc costs and expenses (including Lender's reasonable attorneys' fees, together with reasonable appel counsel fees, if any) of whatever kind or nature which may be asserted against, imposed on or incurrec Lender in connection with the Obligations, this Mortgage, the Property, or any part thereof, or exercise by Lender of any rights or remedies granted to it under this Mortgage; provided, however, nothing herein shall be construed to obligate Borrower to indemnify, defend and hold harmless Lei from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, c and expenses enacted against, imposed on or incurred by Lender by reason of Lender's wi misconduct or gross negligence or with respect to Hazardous Substances introduced to the Property Lender or its successor or designee takes title to the Property. (b) If Lender is made a party defendant to any litigation or any claim is threatene or brought against Lender by a third party concerning the Obligations, this Mortgage, the Property, or y part thereof, or any interest therein, or the construction, maintenance, operation or occupancy or use thereof, then Borrower shall indemnify, defend and hold Lender harmless from and against all liability by reason of said litigation or claims, including reasonable attorneys' fees (together with reasonable appellate counsel fees, if any) and expenses incurred by Lender in any such litigation or claim, whether or not any such litigation or claim is prosecuted to judgment but other than to the extent attributable to the oss negligence or willful misconduct of Lender or its agents. If Lender commences an action against Borrower to enforce any of the terms hereof or to prosecute any breach by Borrower of any of the terms hereof or of any of the other Loan Documents, or to recover any sum secured hereby, Borrower shall ay to Lender its reasonable attorneys' fees (together with reasonable appellate counsel fees, if any) and expenses , unless there is a final adjudication in favor of Borrower in such action as to the material cl therein. If Borrower commences an action against Lender for any reason, Borrower shall pay to Le dei its reasonable attorneys' fees (together with reasonable appellate counsel fees, if any) and expe es, unless there is a final adjudication in favor of Borrower in such action as to the material claims the ein MORTGAGE - PAGE 34 Error! Unknown document property name. Rwt99IPG34 8 The right to such attorneys' fees (together with reasonable appellate counsel fees, if any) and expens shall be deemed to have accrued on the commencement of any such action, and shall be enforceat whether or not such action is prosecuted to judgment. If Borrower breaches any term of this Mortgal Lender may engage the services of an attorney or attorneys to protect its rights hereunder, and in the evc of such engagement following any breach by Borrower, Borrower shall pay Lender reasonable attorne fees (together with reasonable appellate counsel fees, if any) and expenses incurred by Lender, whether not an action is actually commenced against Borrower by reason of such breach. All references "attorneys" in this Subsection and elsewhere in this Mortgage shall include without limitation a attorney or law firm engaged by Lender, and all references to "fees and expenses" in this Subsection a elsewhere in this Mortgage shall include without limitation any fees of such attorney or law firm. (c) A waiver of subrogation shall be obtained by Borrower from its insurance c er and, consequently, Borrower waives any and all right to claim or recover against Lender, its officers, employees, agents and representatives, for loss of or damage to Borrower, the Property, Borrower's property or the property of others under Borrower's control from any cause insured against or require to be insured against by the provisions of this Mortgage. 1.27 Single-Puraose Entity Covenants. Borrower hereby represents, warrants d covenants, as of the date hereof and until such time as the Obligations are paid in full, that without, in each case, the prior written consent of Lender (which may be withheld or conditioned by Lender in its sole and absolute discretion for any reason or for no reason): (a) The sole purpose of Borrower has been, is and will be, to acquire, own, h ld, maintain, mortgage, lease, operate and sell the Property, together with such other activities as may be necessary or advisable in connection with the ownership and management of the Property. Borrower as not engaged, and does not and shall not engage, in any business, and it has and shall have no purpose, unrelated to the Property. Borrower has not owned, does not own and shall not acquire, any real property or own assets other than those related to the Property and/or otherwise in furtherance of the limited purposes of Borrower. (b) Neither Borrower, nor any general partner, manager or managing member (a "Controlling Entity") of Borrower, as applicable, shall have the authority to perform any act in respect of Borrower in violation of any (a) applicable laws or regulations or (b) any agreement between Borrower and Lender (including, without limitation, the Loan Documents). (c) Borrower shall not: (1) make any loans to the holder (directly or indirectly) of any eq 'ty interests in Borrower (collectively, the "Equity Holders"), any Affiliate (as defined below) of Borrow or of any Equity Holders; (2) except as expressly permitted under the Loan Documents. or othe ise consented to by the Lender in writing, sell, encumber (except with respect to the Lender) or othe ise transfer or dispose of all or substantially all of the properties of Borrower (a sale or disposition will be deemed to be "all or substantially all of the properties of Borrower" if the sale or disposition include the Property or if the total value of the properties sold or disposed of in such transaction and during the twelve months preceding such transaction is sixty six and two thirds percent (66-2/3%) or more in v lue of Borrower's total assets as of the end of the most recently completed fiscal year of Borrower); (3) to the fullest extent permitted by law, dissolve, wind-up, or Borrower, MORTGAGE - PAGE 35 Error! Unknown document property name. RX 1991 PS3419 (4) merge, consolidate or acquire all or substantially all of the assets of Affiliate of same or other person or entity; (5) change the nature of the business conducted by Borrower; or (6) except as permitted by the Lender in writing, amend, modify r otherwise change single purpose entity related provisions in the the Organizational Documents (is defined below) of Borrower (which approval, after a Secondary Market Transaction with respect to e Loan, may be conditioned upon Lender's receipt of confirmation from each of the applicable Rat g Agencies that such amendment, modification or change would not result in the qualification, withdra al or downgrade of any securities rating). (d) Borrower shall not, and no Equity Holder or other person or entity on behalf of Borrower shall, without the prior written affirmative vote of one hundred percent (1001/6) of the membe s, partners or stockholders of Borrower: (1) institute proceedings to be adjudicated bankrupt or insolvent; (2) consent to the institution of bankruptcy or insolvency proceedings against it; (3) file a petition seeking, or consenting to, reorganization or relief under any applicable federal or state law relating to bankruptcy; (4) consent to the appointment of a receiver, liquidator, assignee, trustee, custodi , sequestrator (or other similar official) of Borrower or a substantial part of its property; (5) make y assignment for the benefit of creditors; (6) admit in writing its inability to pay its debts generally as they become due or declare or effect a moratorium on its debts; or (7) take any action in furtherance of y such action ((1) through (7) above, with respect to any individual or entity, collectively, a "Bankruptcy Action"). (e) Borrower shall have no indebtedness or incur any liability other than 1) unsecured debts and liabilities for trade payables and accrued expenses incurred in the ordinary course of its business of operating the Property, provided, however, that such unsecured indebtedness or liabilit es (y) are in amounts that are normal and reasonable under the circumstances, but in no event to exceed t-wo percent (2%) of the original principal amount of the Loan and (z) are not evidenced by a note and are paid when due, but in no event for more than sixty (60) days from the date that such indebtedness or liabilities are incurred (subject to the Borrower's right to dispute any amount that Borrower reasonably asserts is of owed), (2) tax and insurance expenses with respect to the Property and (3) the Obligations. o assu by the Property. indebtedness other than the Loan shall be secured (senior, subordinated or 2an (f) The following provisions shall apply only when Borrower is a limited liability company or a partnership. A Bankruptcy Action by or against any partner or member of Borrower, as applicable, shall not cause such partner or member of Borrower, as applicable, to cease to be a partner or member of Borrower and upon the occurrence of a Bankruptcy Action, Borrower shall continue without dissolution. Additionally, to the fullest extent permitted by law, if any partner or member of Borrower as applicable, ceases to be a partner or member of Borrower, as applicable, such event shall not to to Borrower and Borrower shall continue without dissolution. (g) Borrower shall at all times observe the applicable legal requirements for the recognition of Borrower as a legal entity separate from any Equity Holders or Affiliates of Borrower o of any Equity Holder, including, without limitation, as follows: (1) Borrower shall either (a) maintain its principal executive office telephone and facsimile numbers separate from that of any Affiliate of Borrower or of any Equity H and shall conspicuously identify such office and numbers as its own, or (b) shall allocate by w agreement fairly and reasonably any rent, overhead and expenses for shared office space. Additioi MORTGAGE - PAGE 36 Error! Unknown document property name. RuIggIFG3420 r Borrower shall use its own separate stationery, invoices and checks which reflects its name, addre?s, telephone number and facsimile number. (2) Borrower shall maintain correct and complete financial statemen , accounts, books and records and other entity documents separate from those of any Affiliate of BOrro er or of any Equity Holder or any other person or entity. Borrower shall prepare unaudited quarterly d annual financial statements, and Borrower's financial statements shall substantially comply with genera y accepted accounting principles, or such other accounting basis reasonably acceptable to Lender. (3) Borrower shall maintain its own separate bank accounts, payroll and correct, complete and separate books of account. (4) Borrower shall file or cause to be filed its own separate tax return to e extent such returns are required by applicable law. (5) Borrower shall hold itself out to the public (including any of is Affiliates' creditors) under Borrower's own name and as a separate and distinct entity and not as a department, division or otherwise of any Affiliate of Borrower or of any Equity Holder. (6) Borrower shall observe all customary formalities regarding the existen e of Borrower, including maintaining current and accurate minute books separate from those of any Affiliate of Borrower or of any Equity Holder. (7) Borrower shall hold title to its assets in its own name and act solely in is own name and through its own duly authorized officers and agents. (8) Investments shall be made in the name of Borrower directly by Borrower or on its behalf by brokers engaged and paid by Borrower. (9) Except as required by Lender, Borrower shall not guarantee, pledge r assume or hold itself out or permit itself to be held out as having guaranteed, pledged or assumed any liabilities or obligations of any Equity Holder or any Affiliate of Borrower, nor shall it make any to except as permitted in the Loan Documents. (10) Borrower is and will be solvent. (11) Assets of Borrower shall be separately identified, maintained aj segregated. Borrower's assets shall at all times be held by or on behalf of Borrower and if held on beh, of Borrower by another entity, shall at all times be kept identifiable (in accordance with customa usages) as assets owned by Borrower. This restriction requires, among other things, that (i) funds Borrower shall be deposited or invested in Borrower's name, (ii) funds of Borrower shall not 1 commingled with the funds of any Affiliate of Borrower or of any Equity Holder, (iii) Borrower sh maintain all accounts in its own name and, if required by applicable law, with its own tax identificatii number, separate from those of any Affiliate of Borrower or of any Equity Holder, and (iv) funds Borrower shall be used only for the business of Borrower (including distributions in accordance wi Borrower's operating agreement). (12) Borrower shall maintain its assets in such a manner that it is not costly difficult to segregate, ascertain or identify its individual assets from those of any Affiliate of Borrower of any Equity Holder. MORTGAGE - PAGE 37 Error! Unknown document property name. nuinoiDr,2!,).1~ (13) Borrower shall pay or cause to be paid its own liabilities and expenses any kind, including but not limited to salaries of its employees, only out of its own separate funds a assets. (14) Borrower shall at all times be adequately capitalized to engage in transactions contemplated at its formation. (15) Borrower shall not do any act which would make it impossible to on the ordinary business of Borrower. (16) All data and records (including computer records) used by Borrower any Affiliate of Borrower in the collection and administration of any loan shall reflect Borrow( ownership interest therein. (17) No funds of Borrower shall be invested in securities issued by, nor sha Borrower acquire the indebtedness or obligation of, an Affiliate of Borrower or of an Equity Holder. (18) Borrower shall maintain an arm's length relationship with each of i Affiliates and may enter into contracts or transact business with its Affiliates only on commercial reasonable terms that are no less favorable to Borrower than is obtainable in the market from a person entity that is not an Affiliate of Borrower or of any Equity Holder. Subject to the terms and conditions s forth in the Manager's Subordination Agreement dated the date hereof between SK Realty Manageme ("Property Manager") and Lender, Lender hereby consents to the Management Agreement dated the da hereof between Property Manager and Borrower (the "Management Agreement"). (19) Borrower shall correct any misunderstanding that is known by regarding its name or separate identity. (h) Any indemnification obligation of Borrower to the holder of any equity inter, in Borrower shall (1) be fully subordinated to the Loan and (2) not constitute a claim against Borrower its assets until such time as the Loan has been indefeasibly paid in accordance with its terms a otherwise has been fully discharged (or has been defeased in accordance with the Note). (i) The following shall only apply if and when Borrower is a limited partners p. Each general partner of Borrower may not be an individual. Each general partner of Borrower shall at ill times have as its sole purpose to act as the general partner of Borrower, and shall be engaged in no o er business or have any other purpose. Additionally, any additional or substitute general partner of Borro ei shall have organizational documents that (1) include covenants substantially similar to the forego' g provisions of this Section 1.27, inclusive of all single purpose/bankruptcy remote provisions, and (2) e acceptable to the Lender. 0) Borrower shall cause the Organizational Documents of Borrower to include, at all times, requirements substantially similar to the foregoing, in a manner satisfactory to Lender. At any time when Borrower is a limited partnership, the Organizational Documents of the general partner shall include provisions substantially similar to those set forth in Section 1.27(i) above. (k) As used in this Mortgage: (1) "Affiliate" means any person or entity which directly or indire( through one or more intermediaries controls, is controlled by or is under common control with a specif person or entity. For purposes of the definition of "Affiliate", the terms "control", "controlled", MORTGAGE - PAGE 38 Error! Unknown document property name. or nvinntDr1!.1) ^l J _ "controlling" with respect to a specified person or entity shall include, without limitation, (i) the ownership, control or power to vote ten percent (10%) or more of (x) the outstanding shares of any class of voting securities or (y) beneficial interests, of any such person or entity, as the case may be, directly or indirectly, or acting through one or more persons or entities, (ii) the control in any manner over the general partner(s) or the election of more than one director or trustee (or persons exercising similar functions) of such person or entity, or (iii) the power to exercise, directly or indirectly, control overt the management or policies of such person or entity. (2) "Constituent Entity" means any person or entity which directly or indirectly through one or more intermediaries controls a specified person or entity. (3) For purposes of the definition of "Constituent Entity" or "Affiliate", the terms "control", "controlled", or "controlling" with respect to a specified person or entity shall mean the power to exercise, directly or indirectly, control over the management or policies of such person or entity, whether through the ability to exercise voting power, by contract or otherwise. (4) "Organizational Documents" shall mean, with respect to any entity, the documents customarily used to form an entity and provide for its governance, as the same may be amended from time to time, including, without limitation, (a) with respect to a corporation, the articles of incorporation or certificate of incorporation or charter, and the by-laws; (b) with respect to a limited liability company, the articles of organization and the operating agreement; (c) with respect to a limited partnership, the certificate of limited partnership and the limited partnership agreement; and (d) with respect to a general partnership, the agreement of partnership. 1.28 Reserve Accounts and Disbursement Requests. At Lender's option, as additional security for the indebtedness secured hereby, Borrower shall establish and maintain the reserve accounts required by this Section 1.28, subject to the security interest therein as more fully set forth in Section 1.19 hereof. (a) Repair and Remediation Reserve. Prior to the execution of this Mortgage, Lender has caused the Property to be inspected by Lender's engineering consultant. Such inspection w is solely for the benefit of Lender, and Lender makes no representation or warranty as to the accuracy r completeness of the inspection. Attached hereto as Exhibit B is a list of items (the "Deferred Maintenance") identified (in the Property Condition Report prepared by Lender's engineering consultant) as requiring immediate repair. Simultaneously herewith, Borrower shall deposit with Lender the sum f $224,475.00 (the "Repair and Remediation Reserve"), to be held as security for Borrower's performan e of the Deferred Maintenance. Within ninety (90) days of the date hereof, as such time period may be extended by Lender in its sole discretion, Borrower shall complete the Deferred Maintenance in a go d and workmanlike manner, in accordance with all applicable codes and regulations, and each case ' a manner satisfactory to Lender and as necessary to bring the Property into compliance with all applicable laws, ordinances, rules and regulations. So long as no Default shall exist and be continuing, Lender sh , to the extent funds are available for such purpose in the Repair and Remediation Reserve, disburse to Borrower the amount paid or incurred by Borrower in performing the Deferred Maintenance as required above upon satisfaction of the requirements set forth in Section 1.29 of this Mortgage. If Borrower f Is timely to perform the Deferred Maintenance as required above, Borrower hereby grants to Lender irrevocable power-of-attorney, coupled with an interest, to perform the Deferred Maintenance as requir d above and to apply the amounts on deposit in the Repair and Remediation Reserve to the costs associat d therewith, all as Lender may determine in its sole and absolute discretion but without obligation to do o. Upon the completion of the Deferred Maintenance as required above, or at such earlier time as Len &r may elect in its sole discretion, the balance remaining in the Repair and Remediation Reserve shall e paid over to Borrower. MORTGAGE - PAGE 39 Error! Unknown document property name. BK1991PG3423 (b) Arnold Sweep Reserve. Upon the occurrence of the Arnold Sweep Event Da (as defined in the Cash Management Agreement), then on each Payment Date (as defined in the Note) thereafter, beginning with the next occurring Payment Date, Borrower shall deposit all Excess Cash Flo (as defined below) into an account (the "Arnold Sweep Reserve") held by Lender (it being specifically agreed and understood that Borrower shall be required to continue to make such deposits of Excess Cash Flow into the Arnold Sweep Reserve until a Arnold Sweep Period Termination Event (as defined in e Cash Management Agreement)) has occurred. The Arnold Sweep Reserve and the funds deposit d therein shall be held by Lender as additional security for the Obligations and disbursed to Borrower n accordance with the provisions of this Section 1.28(b). Borrower's failure to deposit all Excess C h Flow into the Arnold Sweep Reserve shall constitute an Event of Default. If any time during the term f the Loan after the occurrence of a Arnold Sweep Event a Arnold Sweep Period Termination Event (its defined in the Cash Management Agreement) occurs, then provided no Event of Default exists, Ell amounts in the Arnold Sweep Reserve will be released to Borrower and Borrower will no longer be obligated to make deposits into the Arnold Sweep Reserve. For purposes of this Section 1.28(d), the to "Excess Cash Flow" shall mean all cash flow generated by the Property after deducting Borrower's payment of the Monthly Payment Amount (as defined in the Note), any required debt service under permitted mezzanine financing, and the deposits into the Impound Account and any other reserves required to be made by Borrower pursuant to the terms of this Mortgage. (c) Replacement Reserve. Borrower agrees that it will perform all repairs d replacements necessary to maintain the Property in good working order, in accordance with its conditi n as of the date hereof. Simultaneously herewith, and on each Payment Date until the Note is paid in ll, Borrower shall pay to Lender the sum of $3,533.33 to be held in a reserve fund (the "Replacement Reserve") subject to this Mortgage, for payment of certain repairs and replacements at the Prope which, under generally accepted accounting principles, are categorized as capital expenses and not as operating expenses (the "Repairs'), provided, however, that Borrower shall not be required tom ke deposits to the Replacement Reserve in any month to the extent that, after deducting therefrom y pending requests for disbursements from the Replacement Reserve, such deposit would increase he balance in the Replacement Reserve above $84,800.00. Borrower shall perform all Repairs in a good d workmanlike manner, in accordance with all applicable codes and regulations, and each case in a m er satisfactory to Lender and as necessary to maintain the Property in good condition and in compliance with all applicable laws, ordinances, rules and regulations. So long as no Default shall exist and be contin ' g, Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Borrower the amount paid or incurred by Borrower in performing the Repairs as required above upon satisfaction of the requirements set forth in Section 1.29 of this Mortgage. Lender may, at Borrow is expense, make or cause to be made an inspection of the Property to determine the need, as determined by Lender in its reasonable judgment, for further Repairs of the Property. In the event that such inspect on reveals that further Repairs are required, Lender shall provide Borrower with a written description of e required Repairs, and Borrower shall complete such Repairs to Lender's reasonable satisfaction wit ninety (90) days after Lender's notice, or such later date as may be approved by Lender in its discretio (d) Leasing Reserve. Borrower agrees that, upon the execution of any Lease approved or deemed approved in accordance with Section 1.10 of this Mortgage, Borrower shall timely perform all build-out, construction, tenant improvement work and other work required to be performe by Borrower under such Lease (the foregoing, "Tenant Improvements") and timely pay as and when due y and all commissions to brokers in connection with such Lease ("Leasing Commissions"). Simultaneously herewith, and on each Payment Date until the Note is paid in full, Borrower shall pay to Lender the um of $4,166.67 to be held in a reserve fund (the "Leasing Reserve") subject to this Mortgage, for payment of the costs of Leasing Commissions and Tenant Improvements (collectively, "Leasing Costs"), provi led, however, that Borrower shall not be required to make deposits to the Leasing Reserve in any month to the extent that, after deducting therefrom any pending requests for disbursements from the Leasing Reserve, MORTGAGE - PAGE 40 Error! Unknown document property name. au i qq i Pr,2424 such deposit would increase the balance in the Leasing Reserve above $200,000.00. Borrower sh perform all Tenant Improvements in a good and workmanlike manner, in accordance with all applical codes and regulations, and each case in a manner satisfactory to Lender and as necessary to maintain t Property in good condition and in compliance with all applicable laws, ordinances, rules and regulatioi So long as no Default shall exist and be continuing, Lender shall, to the extent funds are available such purpose in the Leasing Reserve, disburse to Borrower the amount paid or incurred by Borrower Leasing Costs upon satisfaction of the requirements set forth in Section 1.29 of this Mortgage. (e) Intentionally Omitted. 1.29 Disbursements from the Property Reserve Accounts. So long as no Event Default shall have occurred and be continuing under this Mortgage, all sums in each of, the Leasi Reserve, and the Replacement Reserve (the foregoing, collectively, the "Progerty Reserve Account shall be held by Lender in the respective Property Reserve Account as set forth above for the purposes forth in Section 1.28. So long as no Default has occurred and is continuing, Lender shall disburse Borrower, from the appropriate Property Reserve Account for the purposes set forth in Section 1.28, amount equal to the actual expenses incurred to date by Borrower, less any prior disbursements Borrower from any of the Property Reserve Account for such expenditure, but only to the extent that si expense is one for which, pursuant to Section 1.28, the proceeds of a Property Reserve Account may disbursed. Disbursements shall be made to Borrower within ten (10) days following Lender's receipt each of the following: (a) a written request from Borrower for such disbursement, accompanied certification by Borrower, in the form therefor then utilized by Lender or Lender's servicing agent; (b) copies of invoices, receipts or other evidence satisfactory to Lender payment of the costs and expenses for which Borrower is requesting such disbursement; (c) for disbursement requests in connection with a single project, or group of rela ed projects, for which Borrower is seeking reimbursement of $10,000 or more, affidavits, lien waivers or other evidence reasonably satisfactory to Lender showing that all materialmen, laborers, contractors, suppliers and other parties who have or might claim statutory or common law liens, or who have famished labor, materials or supplies to or in connection with the Property, have been paid all amounts due; (d) for disbursement requests in connection with a single project, or group of projects, for which Borrower is seeking reimbursement of $20,000 or more, excluding, however, I Commissions, a certification from an inspecting architect or other third party acceptable to 1 verifying that the any work for which Borrower is requesting a disbursement has been properly cot and that the cost of such work bears a reasonable relationship to the costs incurred therefor; (e) a copy of the certificate of occupancy for the Improvements if, as a result of any work undertaken by Borrower, it was necessary to receive an amendment to the existing certificate: of occupancy (or similar instrument) issued with respect to the Improvements, or to obtain a new certificate of occupancy for the Improvements, or a certification of Borrower that no such amended or new certificate of occupancy is required; and (f) payment of an administrative fee of $150.00 per request. Lender shall not be required to make an advance from each Property Reserve Account more i than once in any thirty (30) day period. In making any disbursement from a Property Reserve MORTGAGE - PAGE 41 Error! Unknown document property name. Qu 1 QQ I PCILL9 Lender shall be entitled to rely on the disbursement request from Borrower without any inquiry into t accuracy, validity or contestability of any amount set forth therein. All costs and expenses required to incurred in connection with the review and approval of each request for a disbursement from a Propel Reserve Account shall be paid by Borrower not later than concurrently with such disbursement. T Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrc or trust funds. Lender may, at its discretion, hold the Reserves either in a separate account commingled by Lender with any other funds in the possession or control of Lender. The Reserves solely for the protection of Lender, and entail no responsibility on Lender's part beyond maki disbursements upon strict satisfaction of the requirements of Section 1.28 and this Section 1.29 a beyond the allowing of due credit for the sums actually received. To the extent that any funds in any the Reserves are invested in any investment suitable for the investment of escrows and resen established under mortgage loans included in a Secondary Market Transaction in which some or all of i securities issued thereby are rated "AAA" (or the equivalent rating) by one or more Rating Agencies, the standards therefor are established from time to time (or if Lender reasonably determines that no st standards exist, such investments as are otherwise acceptable to Lender, in the exercise of prudent lend standards), Borrower shall bear the risk of loss of such investments. In the event that the amounts deposit in any Property Reserve Account are insufficient to reimburse Borrower for amounts otherw properly requested, Lender shall not be obligated or authorized to transfer funds from other Reserves, Borrower shall pay the amount of such deficiency. Upon assignment of this Mortgage by Lender, funds in the Reserves shall be turned over to the assignee, and any responsibility of the assignor w respect thereto shall terminate. 1.30 Interest-Bearing Reserves. Lender shall cause funds in the Repair d Remediation Reserve, Replacement Reserve, Arnold Sweep Reserve and Leasing Reserve (referred to in this Section 1.30 as the "Interest-Bearing Reserve") to be deposited into an interest bearing account of he type customarily maintained by Lender or its servicing agent for the investment of similar reserves, which account may not yield the highest interest rate then available. Interest payable on such amounts shall be computed based on the daily outstanding balance in the Interest-Bearing Reserve. Such interest shall be calculated on a simple, non-compounded interest basis based solely on contributions made to the Interest- Bearing Reserve by Borrower. All interest earned on amounts contributed to the Interest-Bearing Rese e shall be retained by Lender and added to the balance in such Interest-Bearing Reserve and shall be disbursed for payment of the items for which other funds in such Interest-Bearing Reserve are to be disbursed. Borrower acknowledges that all Reserves other than the Interest-Bearing Reserves shall of accrue or bear interest for the benefit of Borrower, and no interest shall be payable thereon by Lender. 1.31 Bankruptcy-Remote Entities. As a material inducement to Lender to make e Loan, and recognizing that Lender will suffer immeasurable damage should Borrower fail to perform as required under this Section, Borrower hereby agrees as follows: (a) At any time when Borrower is a corporation, Borrower shall have a director,; is "Independent" (as defined below). At any time when Borrower is a limited liability company, un Borrower satisfies the requirement in the following sentence, the sole managing member of Borro, shall be a corporation that has a director who is Independent. At any time when Borrower is a lim: liability company organized under the laws of the State of Delaware, in lieu of satisfying the requiren of the foregoing sentence, Borrower may have as a manager or member a person who is "Independe Borrower may not be a general partnership unless Lender approves the Organizational Documents of t Borrower and at least two (2) partners of Borrower, and such approval may be conditioned upon Lend determination in its sole discretion that both Borrower and at least two (2) partners of Borrower "bankruptcy-remote entities" in accordance with then-current standards therefor utilized by applic, Rating Agencies. MORTGAGE - PAGE 42 Error! Unknown document property name. Qvl! aQ 1 PCg119f (b) Borrower may not undertake, or request Lender's approval for, any of the even described in Paragraphs (c) and (d) of Section 1.27 without first receiving the affirmative consent of tl Fiduciary Representative (as defined below) of Borrower or, if applicable, without the Controlling End (as defined below) receiving the affirmative consent of the Fiduciary Representative prior to tl Controlling Entity giving its consent to Borrower's action. In the event of the death, incapacit resignation or removal of a Fiduciary Representative, Borrower or the Controlling Entity, as the case m2 be, shall promptly appoint a replacement Fiduciary Representative, and no action requiring the consent the Fiduciary Representative shall be taken until a replacement Fiduciary Representative has be appointed. In addition, no Fiduciary Representative may be removed unless his or her success satisfying the definition hereunder has been appointed (c) "Independent" means a natural person who has not been, and during tl continuation of his or her services as manager or director ("Fiduciary Representative") of Borrower or Borrower's general partner, manager or managing member (a "Controlling Entity"), (i) except in tl capacity as the Fiduciary Representative of Borrower or Borrower's Controlling Entity, is not 1 employee, officer, director, shareholder, partner, manager, member, counsel, advisor, accountant or age of Borrower, any Constituent Entity of Borrower, or any Affiliate of Borrower or of any Constitue Entity of Borrower; (ii) is not a present or former customer or supplier of Borrower, any Constitue Entity of Borrower or any Affiliate of Borrower or of any Constituent Entity of Borrower, or other persl or entity who derives or is entitled to derive any of its profits or revenues or any payments (other than as fee paid to such person as compensation for such person to serve as Fiduciary Representative) from aj Borrower, any Constituent Entity of Borrower, or any Affiliate of Borrower or of any Constituent Enti of Borrower; (iii) is not (and is not affiliated with an entity that is) a present or former accounta advisor, attorney, consultant or counsel to Borrower, any Constituent Entity of Borrower, or any Affili2 of Borrower or of any Constituent Entity of Borrower; (iv) is not a spouse, parent, child, grandchild sibling of, or otherwise related to (by blood or by law), any of (i), (ii) or (iii) above; and (v) is r affiliated with a person or entity of which Borrower, any Constituent Entity of Borrower, or any Affilia of Borrower or of any Constituent Entity of Borrower is a present or former customer or supplio provided, however, that an entity that provides a Fiduciary Representative as a service for a fee is n prohibited under this paragraph from providing one or more Fiduciary Representatives to Borrower, aj Constituent Entity of Borrower, or any Affiliate of Borrower or of any Constituent Entity of Borrower. (d) The Organizational Documents of Borrower, of any general partner, manag and/or managing member or Borrower, and of such other Constituent Entities of Borrower and/or t foregoing as Lender may reasonably determine, shall incorporate requirements substantially similar to t foregoing in a manner satisfactory to Lender. ARTICLE H EVENTS OF DEFAULT 2.1 Events of Default. The occurrence of any of the following shall be an "Event Default" hereunder: (a) Borrower fails to punctually perform any covenant, agreement, obligation, tea or condition of the Note, this Mortgage or any other Loan Document which requires payment of & money to Lender, and (1) in the case of any Monthly Payment Amount due under the Note or a payment to any Reserve required under this Mortgage, such failure continues beyond the applicable gra period set forth in the Note with respect to the Monthly Payment Amount, (2) in the case of any od amount due from Borrower to Lender, such failure continues for the applicable period set forth in su MORTGAGE - PAGE 43 Error! Unknown document property name. 0ll t QQ 1 PCIN77 Loan Document or, if no period is set forth, for seven (7) days after such payment becomes due or, if d*e on demand, is demanded. (b) Borrower (i) allows any lapse to occur of the insurance as required by Section 14 hereof (except to the extent that such lapse is due solely to a failure by Lender to pay the insurance premiums after so requested by Borrower and sufficient funds are available therefor at such time in flie Impound Account) or (ii) fails to cause the payment of Taxes and Other Charges as required by Section 1.5 hereof or (iii) fails to comply with Section 1.31 or 1.32 hereof. (c) Borrower fails to perform any other covenant, agreement, obligation, term or condition set forth herein other than those otherwise described in this Section 2.1 and, to the extent su h failure or default is susceptible of being cured, the continuance of such failure or default for thirty (30) days after written notice thereof from Lender to Borrower; provided, however, that if such default is susceptible of cure but such cure cannot be accomplished with reasonable diligence within said period of time, and if Borrower commences to cure such default promptly after receipt of notice thereof from Lender, and thereafter prosecutes the curing of such default with reasonable diligence, such period of time shall be extended for such period of time as may be necessary to cure such default with reasonable diligence, but not to exceed an additional one hundred eighty (180) days. (d) Any representation or warranty made herein, in or in connection with the Loan Application or any commitment relating to the Loan, or in any of the other Loan Documents to Lender, by Borrower, by any Indemnitor or by any Constituent Entity of Borrower or any Indemnitor, is determined by Lender to have been false or misleading in any material respect at the time made. (e) A Transfer occurs, except as expressly permitted by Section 1.11 hereof. (f) A default occurs under any of the other Loan Documents which has not cured within any applicable grace or cure period therein provided. (g) Borrower, any Indemnitor, or the Tenant, or the manager, managing member or general partner of Borrower under the Primary Lease or any guarantor thereunder, becomes insolvent, or shall make a transfer in fraud of creditors, or shall make an assignment for the benefit of creditors, s all file a petition in bankruptcy, shall voluntarily be adjudicated insolvent or bankrupt or shall admit in writing the inability to pay debts as they mature, shall petition or apply to any tribunal for or shall cons nt to or shall not contest the appointment of a receiver, trustee, custodian or similar officer for Borrower, y Indemnitor, the manager, managing member or general partner of Borrower, or for a substantial part of the assets of or the Tenant under the Primary Lease or any guarantor thereunder Borrower, any such Indemnitor, the manager, managing member or general partner of Borrower or the Tenant under the Primary Lease or any guarantor thereunder, or shall commence any case, proceeding or other action un er any bankruptcy, reorganization, arrangement, readjustment or debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect. (h) A petition is filed or any case, proceeding or other action is commenced ag t Borrower, against any Indemnitor, against the manager, managing member or general partner of Borrower or any Indemnitor, or against the tenant under the Primary Lease or any guarantor thereunder seeking to have an order for relief entered against it as debtor or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts or other relief under any law relating to bankruptcy, insolvency, arrangement, reorganization, receivership or other debtor relief under any la or statute of any jurisdiction whether now or hereafter in effect or a court of competent jurisdiction enters an order for relief against Borrower, against any Indemnitor, against the manager, managing member or general partner of Borrower or any Indemnitor or against the tenant under the Primary Lease or y MORTGAGE - PAGE 44 Error! Unknown document property name. AVIgq{P0# 28 guarantor thereunder, as debtor, or an order, judgment or decree is entered appointing, with or without consent of Borrower, of any Indemnitor, of the manager, managing member or general partner Borrower or any Indemnitor, a receiver, trustee, custodian or similar officer for Borrower, for any si Indemnitor, for the manager, managing member or general partner of Borrower, for the tenant under Primary Lease or any guarantor thereunder, or for any substantial part of any of the properties Borrower, any such Indemnitor, the manager, managing member or general partner of Borrower or tenant under the Primary Lease or any guarantor thereunder, and if any such event shall occur, s, petition, case, proceeding, action, order, judgment or decree shall not be dismissed within ninety days after being commenced. (i) The Property or any material part thereof shall be taken on execution or process of law (other than by eminent domain) in any action against Borrower. 0) Borrower abandons all or any portion (other than a de minimis portion) of Property. (k) The holder of any lien or security interest on the Property (without implying t e consent of Lender to the existence or creation of any such lien or security interest), whether superior or subordinate to this Mortgage or any of the other Loan Documents, declares a default and such default is not cured within any applicable grace or cure period set forth in the applicable document or such holder institutes foreclosure or other proceedings for the enforcement of its remedies thereunder. (1) The Property, or any part thereof, is subjected to actual physical waste, or to removal, demolition or material alteration in violation of the provisions of this Mortgage so that the value of the Property is materially diminished thereby, and Lender determines that it is not adequately protec ed from any loss, damage or risk associated therewith. (m) Any dissolution, termination, partial or complete liquidation, merger or consolidation of Borrower, any Indemnitor or the manager, managing member or general partner of Borrower or any Indemnitor, without the prior written consent of Lender, in violation of any of the L an Documents. (n) If any Lease, sublease or sub-sublease shall be terminated, modified or amended without the prior written consent of Lender, in violation of any of the Loan Documents. ARTICLE III REMEDIES 3.1 Remedies Available. During the continuance of an Event of Default under is Mortgage, then the Property shall be subject to sale and this Mortgage shall be subject to foreclosure all as provided by law, and Lender may, at its option and by or through a trustee, nominee, assignee or otherwise, to the fullest extent permitted by law, exercise any or all of the following rights, remedies d recourses, either successively or concurrently: (a) Acceleration. Accelerate the maturity date of the Note and declare any or of the Obligations to be immediately due and payable without any presentment, demand, protest, notice, or action of any kind whatever (each of which is hereby expressly waived by Borrower), whereupon the same shall become immediately due and payable. Upon any such acceleration, payment of such accelerated amount shall constitute a prepayment of the principal balance of the Note and any applicable prepayment fee provided for in the Note shall then be immediately due and payable. MORTGAGE - PAGE 45 Error'. Unknown document property name. RVI-991PG3429" (b) Entry on the Property. Either in person or by agent, with or without bringing y action or proceeding, or by a receiver appointed by a court and without regard to the adequacy of its security, enter upon and take possession of the Property, or any part thereof, without force or with such force as is permitted by law and without notice or process or with such notice or process as is required by law unless such notice and process is waivable, in which case Borrower hereby waives such notice and process, and do any and all acts and perform any and all work which may be desirable or necessary in Lender's judgment to complete any unfinished construction on the Real. Estate, to preserve the vale, marketability or rentability of the Property, to increase the income therefrom, to manage and operate he Property or to protect the security hereof and all sums expended by Lender therefor, together with inter st thereon at the Default Interest Rate, shall be immediately due and payable to Lender by Borrower on demand. (c) Collect Rents and Profits. With or without taking possession of the Property, or otherwise collect the Rents and Profits, including those past due and unpaid. (d) Appointment of Receiver. Subject to Section 5.31 hereof, at any time prior to or after, initiating the exercise of any power of sale, instituting any judicial foreclosure or instituting any other foreclosure of the liens and security interests provided for herein or any other legal proceedings hereunder, make application to a court of competent jurisdiction for appointment of a receiver for all or any part of the Property, as a matter of strict right and without notice to Borrower and without regar to the adequacy of the Property for the repayment of the Obligations or the solvency of Borrower or y person or persons liable for the payment of the Obligations, and Borrower hereby irrevocably consent to such appointment, waives any and all notices of and defenses to such appointment and agrees no to oppose any application therefor by Lender, but nothing herein is to be construed to deprive Lender of y other right, remedy or privilege Lender may now have under the law to have a receiver appointed, provided, however, that, the appointment of such receiver, trustee or other appointee by virtue of any court order, statute or regulation shall not impair or in any manner prejudice the rights of Lender to receive payment of the Rents and Profits pursuant to other terms and provisions hereof. Any such receiver shall have all of the usual powers and duties of receivers in similar cases, including, with ut limitation, the full power to hold, develop, rent, lease, manage, maintain, operate and otherwise use or permit the use of the Property upon such terms and conditions as said receiver may deem to be prunt and reasonable under the circumstances as more fully set forth in Section 3.3 below. Such receivers p shall, at the option of Lender, continue until full payment of all of the Obligations or until title to the Property shall have passed by foreclosure sale under this Mortgage or deed in lieu of foreclosure. (e) Foreclosure. Immediately commence an action to foreclose this Mortgage o to specifically enforce its provisions or any of the Obligations pursuant to the statutes in such case made d provided and sell the Property or cause the Property to be sold in accordance with the requirements d procedures provided by said statutes in a single parcel or in several parcels at the option of Lender. (1) In the event foreclosure proceedings are filed by Lender, all expenses incident to such proceeding, including, but not limited to, attorneys' fees and costs, shall be paid by Borrower and secured by this Mortgage and by all of the other Loan Documents securing all or any art of the indebtedness evidenced by the Note. The Obligations and all other obligations secured by ihis Mortgage, including, without limitation, interest at the Default Interest Rate (as defined in the Note), y prepayment charge, fee or premium required to be paid under the Note in order to prepay principal (to e extent permitted by applicable law), attorneys' fees and any other amounts due and unpaid to Lender under the Loan Documents, may be bid by Lender in the event of a foreclosure sale hereunder. In the event of a judicial sale pursuant to a foreclosure decree, it is understood and agreed that Lender o its assigns may become the purchaser of the Property or any part thereof. MORTGAGE - PAGE 46 Error! Unknown document property name. nutnnl?rO!.#'Jn`= (2) Lender may, by following the procedures and satisfying the requirer prescribed by applicable law, foreclose on only a portion of the Property and, in such event, foreclosure shall not affect the lien of this Mortgage on the remaining portion of the Property foreclo! (f) Rights under the Uniform Commercial Code. Exercise any or all of the remedies of a secured party under the Uniform Commercial Code against the UCC Collateral, either separately or together, and in any order, without in any way affecting the availability of Lender's other remedies. Furthermore, to the extent permitted by law, in conjunction within, addition to or in substitution for the rights and remedies available to Lender pursuant to any applicable Uniform Commercial Code: in e event of a foreclosure sale with respect to the portions of the Property which are not UCC Collateral, the Property (including the UCC Collateral) may, at the option of Lender, be sold as a whole or in parts, as determined by Lender in its sole discretion; and (2) it shall not be necessary that (x) Lender take possession of the UCC Collateral, or any part thereof, prior to the time that any sale pursuant to e provisions of this Section is conducted, or (y) the UCC Collateral, or any part thereof, be present at e location of such sale; and (3) Lender may appoint or delegate any one or more persons as agent to perform any act or acts necessary or incident to any sale held by Lender, including the sending of noti es and the conduct of the sale, but in the name and on behalf of Lender. (g) Confession of Judgment. FOR THE PURPOSE OF OBTAINING POSSESSI N OF THE PROPERTY UPON THE OCCURRENCE OF AN EVENT OF DEFAULT HEREUNI R, BORROWER HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY COURT F RECORD IN THE COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE, AS ATTORNEY FOR BORROWER AND ALL PERSONS CLAIMING UNDER OR THROUGH BORROWER O SIGN AN AGREEMENT FOR ENTERING IN ANY COMPETENT COURT AN ACTION EJECTMENT FOR POSSESSION OF THE PROPERTY AND TO APPEAR FOR AND CONFESS JUDGMENT AGAINST BORROWER AND AGAINST ALL PERSONS CLAIMING UNDER R THROUGH BORROWER, IN FAVOR OF LENDER, FOR RECOVERY BY LENDER F POSSESSION THEREOF, FOR WHICH THIS MORTGAGE, OR A COPY THEREOF VERIFIED Y AFFIDAVIT, SHALL BE A SUFFICIENT WARRANT; AND THEREUPON A WRIT F POSSESSION MAY IMMEDIATELY ISSUE FOR POSSESSION OF THE PROPERTY, WITHO ANY PRIOR WRIT OR PROCEEDING WHATSOEVER AND WITHOUT ANY STAY F EXECUTION. IF FOR ANY REASON AFTER SUCH ACTION HAS BEEN COMMENCED IT SHOULD BE DISCONTINUED, OR POSSESSION OF THE PROPERTY SHALL REMAIN IN OR BE RESTORED TO BORROWER, LENDER SHALL HAVE THE RIGHT FOR THE SAME EVENT F DEFAULT OR ANY SUBSEQUENT EVENT OF DEFAULT TO BRING ONE OR MORE FURT R ACTIONS AS ABOVE PROVIDED TO RECOVER POSSESSION OF THE PROPERTY. LENDER MAY BRING AN ACTION IN EJECTMENT AND CONFESS JUDGMENT THEREIN BEFORE R AFTER THE INSTITUTION OF PROCEEDINGS TO FORECLOSE THIS MORTGAGE OR O ENFORCE THE NOTE, OR AFTER ENTRY OF JUDGMENT THEREIN OR ON THE NOTE, R AFTER A SHERIFF'S SALE OF THE PROPERTY IN WHICH LENDER IS THE SUCCESSFUL BIDDER; THE AUTHORIZATION TO PURSUE SUCH PROCEEDINGS FOR OBT G POSSESSION AND CONFESS JUDGMENT THEREIN IS AN ESSENTIAL PART OF T REMEDIES FOR ENFORCEMENT OF THIS MORTGAGE AND THE NOTE, AND S L SURVIVE ANY EXECUTION SALE TO LENDER. BORROWER CONFIRMS TO LENDER THAT (I) BORROWER IS A BUSINESS ENT AND THAT ITS PRINCIPALS ARE KNOWLEDGEABLE IN BUSINESS MATTERS; (II) Z TERMS OF THIS MORTGAGE, INCLUDING THE FOREGOING WARRANT OF ATTORNEY CONFESS JUDGMENT, HAVE BEEN NEGOTIATED AND AGREED UPON IN A COMMBRC] CONTEXT; AND (III) IT HAS FULLY REVIEWED THE AFORESAID WARRANT OF ATTORT\ TO CONFESS JUDGMENT WITH ITS OWN COUNSEL AND IS KNOWINGLY A MORTGAGE - PAGE 47 Error! Unknown document property name. AM I q q I pr, I [I '? VOLUNTARILY WAIVING CERTAIN RIGHTS IT WOULD OTHERWISE POSSESS, INCLUI BUT NOT LIMITED TO, THE RIGHT TO ANY NOTICE OR A HEARING PRIOR TO THE EN OF JUDGMENT BY LENDER PURSUANT TO THE AFORESAID WARRANT OF ATTORNEY (h) Other. Exercise any other right or remedy available hereunder, under any of other Loan Documents or at law or in equity. 3.2 Application of Proceeds. To the fullest extent permitted by law, the proceeds any sale under this Mortgage shall be applied to the extent funds are so available to the following items such order as Lender in its discretion may determine: (a) To payment of the costs, expenses and fees of taking possession of the Properly, and of holding, operating, maintaining, using, leasing, repairing, improving, marketing and selling e same and of otherwise enforcing Lender's right and remedies hereunder and under the other Lo Documents, including, but not limited to receivers' fees, court costs, attorneys', accountants', appraisers', managers' and other professional fees, title charges and transfer taxes. (b) To payment of all sums expended by Lender under the terms of any of the Documents and not yet repaid, together with interest on such sums at the Default Interest Rate. (c) To payment of the Obligations and all other obligations secured by s Mortgage, including, without limitation, interest at the Default Interest Rate and, to the extent permitted by applicable law, any prepayment fee, charge or premium required to be paid under the Note in order to prepay principal, in any order that Lender chooses in its sole discretion. The remainder, if any, of such funds shall be disbursed to Borrower or to the person or persons legally entitled thereto. 3.3 Ri ht and Authority of Receiver or Lender m the Lvent of llletault• rower or Attorney. During the continuance of an Event of Default hereunder, and entry upon the Property purl t to Section 3.1(b) hereof or appointment of a receiver pursuant to Section 3.1(d) hereof, and under s ch terms and conditions as may be prudent and reasonable under the circumstances in Lender's or he receiver's sole discretion, all at Borrower's expense, Lender or said receiver, or such other persons or entities as they shall hire, direct or engage, as the case may be, may do or permit one or more of he following, successively or concurrently: (a) enter upon and take possession and control of any and all of the Property, to the extent permitted by law; (b) take and maintain possession of all documents, books, records, papers and accounts relating to the Property; (c) exclude Borrower and its agents, servants d employees wholly from the Property; (d) manage and operate the Property; (e) preserve and maintain he Property; (f) make repairs and alterations to the Property; (g) complete any construction or repair of he Improvements, with such changes, additions or modifications of the plans and specifications or intended disposition and use of the Improvements as Lender may in its sole discretion deem appropriate or desirable to place the Property-in such condition as will, in Lender's sole discretion, make it or any art thereof readily marketable or rentable; (h) conduct a marketing or leasing program with respect to he Property, or employ a marketing or leasing agent or agents to do so, directed to the leasing or sale of the Property under such terms and conditions as Lender may in its sole discretion deem appropriate or desirable; (i) employ such contractors, subcontractors, materialmen, architects, engineers, consul ts, managers, brokers, marketing agents, or other employees, agents, independent contractors or professionals, as Lender may in its sole discretion deem appropriate or desirable to implement d effectuate the rights and powers herein granted; 0) execute and deliver, in the name of Lender as alto y- in-fact and agent of Borrower or in its own name as Lender, such documents and instruments as are necessary or appropriate to consummate authorized transactions; (k) enter into such Leases, whethe of MORTGAGE - PAGE 48 Error! Unknown document property name. RNIggIPi; 4q? I real or personal property, under such terms and conditions as Lender may in its sole discretion dee appropriate or desirable; (1) collect and receive the Rents and Profits from the Property; (m) eject Tenar or repossess personal property, as provided by law, for breaches of the conditions of their Leases; (n) si for unpaid Rents and Profits, payments, income or proceeds in the name of Borrower or Lender, ( maintain actions in forcible entry and detainer, ejectment for possession and actions in distress for rei (p) compromise or give acquittance for Rents and Profits, payments, income or proceeds that may becor due; (q) delegate or assign any and all rights and powers given to Lender by this Mortgage; and (r) do a acts which Lender in its sole discretion deems appropriate or desirable to protect the security hereof a use such measures, legal or equitable, as Lender may in its sole discretion deem appropriate or desirat to implement and effectuate the provisions of this Mortgage. This Mortgage shall constitute a direction and full authority to any Tenant, lessee, or other third party who has heretofore dealt or contracted or m hereafter deal or contract with Borrower or Lender, at the request of Lender, to pay all amounts owi under any Lease, contract or other agreement to Lender without proof of the Event of Default relied up( Any such Tenant, lessee or third party is hereby irrevocably authorized to rely upon and comply with (a shall be fully protected by Borrower in so doing) any request, notice or demand by Lender for t payment to Lender of any Rents and Profits or other sums which may be or thereafter become due unc its Lease, contract or other agreement, or for the performance of any undertakings under any such Lea contract or other agreement, and shall have no right or duty to inquire whether any Event of Default unc this Mortgage, or any default under any of the other Loan Documents, has actually occurred or is tb existing (but Lender agrees not to give the foregoing instructions prior to an Event of Default). Borrov hereby constitutes and appoints Lender, its assignees, successors, transferees and nominees, Borrower's true and lawful attorney-in-fact and agent from and after an Event of Default, with full pov of substitution in the Property, in Borrower's name, place and stead, to do or permit any one or more the foregoing described rights, remedies, powers and authorities, successively or concurrently, and s power of attorney shall be deemed a power coupled with an interest and irrevocable so long as a Obligations is outstanding. Any money advanced by Lender in connection with any action taken uni this Section 3.3, together with interest thereon at the Default Interest Rate from the date of making sl advancement by Lender until actually paid by Borrower, shall be a demand obligation owing by Borrow to Lender. as of 3.4 Occupancy After Foreclosure. In the event there is a foreclosure sale hereon er and at the time of such sale, Borrower or Borrower's representatives, successors or assigns, or any o er persons claiming any interest in the Property by, through or under Borrower (except tenants of space in the Improvements subject to Leases entered into prior to the date hereof), are occupying or using he Property, or any part thereof, then, to the extent not prohibited by applicable law, each and all shall, at he option of Lender or the purchaser at such sale, as the case may be, immediately become the tenant of he purchaser at such sale, which tenancy shall be a tenancy from day-to-day, terminable at the will of either landlord or tenant, at a reasonable rental per day based upon the value of the Property occupied or us d, such rental to be due daily to the purchaser. Further, to the extent permitted by applicable law, in e event the tenant fails to surrender possession of the Property upon the termination of such tenancy, e purchaser shall be entitled to institute and maintain an action for unlawful detainer of the Property in e appropriate court of the county in which the Real Estate is located. 3.5 Notice to Account Debtors. Lender may, at any time during the continuance of an Event of Default hereunder, notify the account debtors and obligors of any accounts, chattel paper, negotiable instruments or other evidences of indebtedness, to Borrower included in the Property to ay Lender directly. Borrower shall at any time or from time to time upon the request of Lender provide to Lender a current list of all such account debtors and obligors and their addresses. 3.6 Cumulative Remedies. All remedies contained in this Mortgage are curm and Lender shall also have all other remedies provided at law and in equity or in any other MORTGAGE - PAGE 49 Error! Unknown document property name. BK1991PG3433: Documents. Such remedies may be pursued separately, successively or concurrently at the sole subjec direction of Lender and may be exercised in any order and as often as occasion therefor shall arise. act of Lender shall be construed as an election to proceed under any particular provisions of Mortgage to the exclusion of any other provision of this Mortgage or as an election of remedies to exclusion of any other remedy which may then or thereafter be available to Lender. No delay or fai by Lender to exercise any right or remedy under this Mortgage shall be construed to be a waiver of right or remedy or of any Event of Default hereunder. Lender may exercise any one or more of its ri, and remedies at its option without regard to the adequacy of its security. 3.7 Payment of Expenses. Borrower shall pay on demand all of Lender's expens s incurred in any efforts to enforce any terms of this Mortgage, whether or not any lawsuit is filed d whether or not foreclosure is commenced but not completed, including, but not limited to, legal fees d disbursements, foreclosure costs and title charges, together with interest thereon from and after the to incurred by Lender until actually paid by Borrower at the Default Interest Rate. Furthermore, Borro er shall, and does hereby, indemnify Lender for, and hold Lender harmless from, any and all losses, cos , expenses, claims, actions, demands liabilities, loss or damage which may or might be incurred by Lender under this Mortgage or by the exercise of rights or remedies hereunder, and from any and all claims and demands whatsoever which may be asserted against Lender by reason of any alleged obligations or undertakings on Lender's part with respect to the Property except as expressly set forth in the Lo Documents, other than those finally determined to have resulted solely from the gross negligence or willful misconduct of Lender; provided that the foregoing shall not apply to Hazardous Substances introduced to the Property after Lender or its successor or designee takes title thereto. Borrower's obligation pursuant to the previous sentence shall include, without limitation, payment to or reimbursement of) any compensation payable by the holder of the Loan to any servicing agent under a Secondary Market Transaction pursuant to the Securitization Documents (as defined herein) ifs h payment becomes due solely by reason of the existence and continuance of any Event of Default. Shot d Lender incur any such liability, the amount thereof, including, without limitation, costs, expenses d attorneys' fees, together with interest thereon at the Default Interest Rate from the date incurred y Lender until actually paid by Borrower, shall be immediately due and payable to Lender from Borro er on demand. ARTICLE IV [INTENTIONALLY OMITTED] ARTICLE V MISCELLANEOUS TERMS AND CONDITIONS 5.1 Time of Essence. Time is of the essence with respect to all provisions of Loan Documents. 5.2 Release of Mortgage. This instrument is granted upon express condition tha if Borrower punctually pays and performs all of the Obligations in accordance with the terms of the an Documents and the terms hereof, then this Mortgage and the estate granted hereby shall cease d become void, except for those provisions hereof which by their terms survive, and the Property s all become wholly clear of the liens, security interests, conveyances and assignments evidenced here y, which shall be released by Lender in due form at Borrower's cost. No release of this Mortgage or the en hereof shall be valid unless executed by Lender. MORTGAGE - PAGE 50 Error! Unknown document property name. 1131K1991PG34334 5.3 Certain Rights of Lender. Without affecting Borrower's liability for the payment of any of the Obligations, Lender may from time to time and without notice to Borrower except as otherwise provided: (a) release any person liable for the payment of the Obligations; (b) with notice to and consent from Borrower extend or modify the terms of payment of the Obligations; (c) accept additional real or personal property of any kind as security or alter, substitute or release any prope securing the Obligations; (d) consent in writing to the making of any subdivision map or plat thereof; e) join in granting any easement therein; or (f) with notice to and consent from Borrower join in any extension agreement of the Mortgage or any agreement subordinating the lien hereof. 5.4 Waiver of Certain Defenses. No action for the enforcement of the lien hereof or of any provision hereof, shall be subject to any defense which would not be good and available to e party interposing the same in an action at law upon the Note or any of the other Loan Documents, tut nothing herein shall be construed as requiring Borrower to waive its right to make a compulsory counterclaim. 5.5 Notices. All notices, demands, requests or other communications to be sent by one party to the other hereunder or required by law shall be in writing and shall be deemed to have been validly given or served by delivery of the same in person to the intended addressee, or by depositing e same with Federal Express or another reputable private courier service for next business day delivery, with all charges prepaid, or by depositing the same in the United States mail, postage prepaid, certified mail, return receipt requested, in any event addressed to the intended addressee at its address set forth on the first page of this Mortgage or at such other address as may be designated by such party as he in provided. All notices, demands and requests shall be effective upon such personal delivery, or one (1) business day after being deposited with the private courier service, or three (3) business days after be g deposited in the United States mail as required above. Rejection or other refusal to accept or the inabi ity to deliver because of changed address of which no notice was given as herein required shall be deemed to be receipt of the notice, demand or request sent. By giving to the other party hereto at least fifteen (5) days' prior written notice thereof in accordance with the provisions hereof, the parties hereto shall have the right from time to time to change their respective addresses and each shall have the right to speci as its address any other address within the United States of America. A duplicate of all notices delivered to Borrower shall be delivered to Seyfarth Shaw LLP, 131 S. Dearborn Street, Suite 2400, Chicago, Illinois 60603, attn: Jeffrey D. Friedman, Esq ("Seyfarth"). However, Lender nor any of Lender's affiliates, successors, or assigns shall have any liability with regard to any failure to deliver duplicate notice to Seyfarth. 5.6 Successors and Assigns. The terms, provisions, indemnities, covenants d conditions hereof shall be binding upon Borrower and its successors and assigns, including all succes ors in interest of Borrower in and to all or any part of the Property, and shall inure to the benefit of Lender its successors and assigns, and shall constitute covenants running with the land. All indemnities in is Mortgage for the benefit of Lender shall inure to the benefit of Lender and each of its directors, offi rs, shareholders, partners, members, managers, employees and agents (including, without limitation, y servicers retained by Lender with respect to the Loan), and pledgees and participants of the Obligati ns, and their respective successors and assigns. All references in this Mortgage to Borrower or Lenders all be deemed to include each such party's successors and assigns. If Borrower consists of more than ne person or entity, each will be jointly and severally liable to perform the obligations of Borrower. 5.7 Severability. A determination that any provision of this Mortgage is unenforceable or invalid shall not affect the enforceability or validity of any other provision, and any determination that the application of any provision of this Mortgage to any person or circumstance is illegal or unenforceable shall not affect the enforceability or validity of such provision as it may apply to any other persons or circumstances. MORTGAGE - PAGE 51 Error! Unknown document property name. 1B'K1991PG3435, 5.8 Interpretation- Within this Mortgage, words of any gender shall be held construed to include any other gender, and words in the singular shall be held and construed to include plural, and vice versa, unless the context otherwise requires. The headings of the sections and paragra of this Mortgage are for convenience of reference only, are not to be considered a part hereof and s: not limit or otherwise affect any of the terms hereof. In the event of any inconsistency between provisions hereof and the provisions in any of the other Loan Documents, it is intended that provisions of this Mortgage shall be controlling. 5.9 Waiver: Discontinuance of Proceedings. Lender may waive any single Event f Default by Borrower hereunder without waiving any other prior or subsequent Event of Default. Len er may remedy any Event of Default by Borrower hereunder without waiving the Event of Default remedied. Neither the failure by Lender to exercise, nor the delay by Lender in exercising, any right, power or remedy upon any Event of Default by Borrower hereunder shall be construed as a waiver of such Event of Default or as a waiver of the right to exercise any such right, power or remedy at a later date. No single or partial exercise by Lender of any right, power or remedy hereunder shall exhaust the same orshall preclude any other or further exercise thereof, and every such right, power or remedy hereunder may be exercised at any time and from time to time. No modification or waiver of any provision hereof or consent to any departure by Borrower therefrom shall in any event be effective unless the same shall be in writing and signed by Lender, and then such waiver or consent shall be effective only in the speci is instance and for the specific purpose given. No notice to nor demand on Borrower in any case shall of itself entitle Borrower to any other or further notice or demand in similar or other circumstanc s. Acceptance by Lender of any payment in an amount less than the amount then due on any of e Obligations shall be deemed an acceptance on account only and shall not in any way affect the existe ce of a Default or an Event of Default hereunder. In case Lender shall have proceeded to invoke any rit, remedy or recourse permitted hereunder or under the other Loan Documents and shall thereafter elec to discontinue or abandon the same for any reason, Lender shall have the unqualified right to do so and in such an event, Borrower and Lender shall be restored to their former positions with respect to e Obligations, the Loan Documents, the Property and otherwise, and the :rights, remedies, recourses d powers of Lender shall continue as if the same had never been invoked. 5.10 Governing Law. This Mortgage will be governed by and construed in accordance with the laws of the State in which the Real Estate is located, provided that to the extent y of such laws may now or hereafter be preempted by Federal law, in which case such Federal law shall so govern and be controlling. 5.11 Counting of Days. The term "days" when used herein shall mean calendar d If any time period ends on a Saturday, Sunday or holiday officially recognized by the state within wl the Real Estate is located, the period shall be deemed to end on the next succeeding business day. term "business day" when used herein shall mean a weekday, Monday through Friday, except a 1 holiday or a day on which banking institutions in the State in which the Real Estate is located authorized by law to be closed. 5.12 Relationship of the Parties. The relationship between Borrower and Lende is that of a borrower and a lender only and neither of those parties is, nor shall it hold itself out to be, the agent, employee, joint venturer or partner of the other party. 5.13 Application of the Proceeds of the Note. To the extent that proceeds of the ote are used to pay indebtedness secured by any outstanding lien, security interest, charge or prior encumbrance against the Property, such proceeds have been advanced by Lender at Borrower's request and Lender shall be subrogated to any and all rights, security interests and liens owned by any owne or MORTGAGE - PAGE 52 Error! Unknown document property name. BK 1991 PG3436 holder of such outstanding liens, security interests, charges or encumbrances, irrespective of whether liens, security interests, charges or encumbrances are released. 5.14 Unsecured Portion of Indebtedness. If any part of the Obligations cannot lawfully secured by this Mortgage or if any part of the Property cannot be lawfully subject to the lien security interest hereof to the full extent of such indebtedness, then all payments made shall be applied said indebtedness first in discharge of that portion thereof which is unsecured by this Mortgage. 5.15 Cross Default. An Event of Default shall be a default under each of the Loan Documents. 5.16 Interest After Sale. In the event the Property or any part thereof shall be sold upon foreclosure as provided hereunder, to the extent permitted by law, the sum for which the same sh ll have been sold shall, for purposes of redemption (pursuant to the laws of the state in which the Property is located), bear interest at the Default Interest Rate. 5.17 Construction of this Document. This document may be construed as a mortga security deed, deed of trust, chattel mortgage, conveyance, assignment, security agreement, plec financing statement, hypothecation or contract, or any one or more of the foregoing, as determined Lender, in order to fully effectuate the liens and security interests created hereby and the purposes agreements herein set forth. 5.18 No Merger. It is the desire and intention of the parties hereto that this Mortgage- and the lien hereof do not merge in fee simple title to the Property. It is hereby understood and agreed that should Lender acquire any additional or other interests in or to the Property or the ownership thereof, then, unless a contrary intent is manifested by Lender as evidenced by an appropriate document d y recorded, this Mortgage and the lien hereof shall not merge in such other or additional interests in o to the Property, toward the end that this Mortgage may be foreclosed as if owned by a stranger to said o er or additional interests. 5.19 Rights With ReMect to Junior Liens. Any person or entity purporting to have or to take a junior mortgage or other lien upon the Property or any interest therein shall be subject to the rights of Lender to amend, modify, increase, vary, alter or supplement this Mortgage, the Note or an of the other Loan Documents and to extend the maturity date of the Obligations and to increase the amount of the Obligations and to waive or forebear the exercise of any of its rights and remedies hereunde or under any of the other Loan Documents and to release any collateral or security for the Obligations in each and every case without obtaining the consent of the holder of such junior lien and without the lie or security interest of this Mortgage losing its priority over the rights of any such junior lien. 5.20 Lender May File Proofs of Claim In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affec ' g Borrower or the principals or general partners or members in Borrower, or their respective creditors or property, Lender, to the extent permitted by law, shall be entitled to file such proofs of claim and o er documents as may be necessary or advisable in order to have the claims of Lender allowed in such proceedings for the entire Obligations at the date of the institution of such proceedings and for y additional amount which may become due and payable by Borrower hereunder after such date. 5.21 Fixture Filing. To the extent permitted under applicable law, this Mortgage s all be effective from the date of its recording as a financing statement filed as a fixture filing with respect to all goods constituting part of the Property which are or are to become fixtures. This Mortgage shall also be effective as a financing statement covering minerals or the like (including oil and gas) and is to be ed MORTGAGE - PAGE 53 Error! Unknown document property name. 6Kt'991PG3437" for record in the Real Estate Records of the county where the Property is situated. The mailing address Borrower and the address of Lender from which information concerning the security interests may obtained are set forth above. 5.22 After-Acquired Property. All property acquired by Borrower after the date this Mortgage which by the terms of this Mortgage shall be subject to the lien and the security inter created hereby, shall immediately upon the acquisition thereof by Borrower and without further mortgal conveyance or assignment become subject to the lien and security interest created by this Mortga; Nevertheless, Borrower and shall execute, acknowledge, deliver and record or file, as appropriate, all a every such further mortgages, security agreements, financing statements, assignments and assurances, Lender shall require for accomplishing the purposes of this Mortgage. 5.23 No Representation. By accepting delivery of any item required to be obser performed or fulfilled or to be given to Lender pursuant to the Loan Documents, including, but limited to, any officer's certificates, balance sheet, statement of profit and loss or other finaa statement, survey, appraisal or insurance policy, Lender shall not be deemed to have warranted, copse to, or affirmed the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provi or condition thereof, and such acceptance of delivery thereof shall not be or constitute any warm consent or affirmation with respect thereto by Lender. 5.24 Counterparts. This Mortgage may be executed in any number of counterp , each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature page of this Mortgage may be detached from any counterpart of this Mortgage without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Mortgage identical in form hereto but having attached to it on or more additional signature pages. 5.25 Exculpation Notwithstanding anything to the contrary contained in s Mortgage, the liability of Borrower and its direct and indirect principals, officers, directors, members, managers, general partners, agents and employees for the Obligations and for the performance of he other agreements, covenants and obligations contained herein and in the other Loan Documents shall be limited as set forth in Section 1.05 of the Note. 5.26 Recording and Filing. Borrower will cause the Loan Documents and all amendments and supplements thereto and substitutions therefor to be recorded, filed, re-recorded and re- filed in such manner and in such places as Lender shall reasonably request, and will pay on demand all such recording, filing, re-recording and re-filing taxes, fees and other charges. Borrower shall reimburse Lender, or its servicing agent, for the costs incurred in obtaining a tax service company to verify the s tus of payment of Taxes and Other Charges on the Property. 5.27 Entire Agreement and Modification. This Mortgage and the other L Documents contain the entire agreements between the parties relating to the subject matter hereof thereof and all prior agreements relative hereto and thereto which are not contained herein or therein terminated. This Mortgage and the other Loan Documents may not be amended, revised, wail discharged, released or terminated orally but only by a written instrument or instruments executed by party against which enforcement of the amendment, revision, waiver, discharge, release or terminatio asserted. Any alleged amendment, revision, waiver, discharge, release or termination which is no documented shall not be effective as to any party. MORTGAGE - PAGE 54 Error! Unknown document property name. i is so BKI99!PG3438` 5.28 Maximum Interest. The provisions of Section 2.03 of the Note are in this Mortgage by reference as if more fully set forth herein. 5.29 Secondary Market Transaction. (a) Cooperation Borrower acknowledges that Lender may effectuate a Secondary Market Transaction. Borrower shall cooperate in good faith with Lender in effecting any such Secondary Market Transaction and shall cooperate in good faith to implement all requirements imposed by arly Investor (as defined herein) or Rating Agency involved therein, including, without limitation, ill structural or other changes to Borrower and/or the Obligations, and modifications to any L Documents; provided, however, that the Borrower shall not be required to modify any Loan Documents if such modification would (A) increase the interest rate payable under the Note, (B) shorten the period til the stated maturity of the Note, (C) modify the amortization of principal of the Note, (D) modify a:iy other material term of the Obligations or (E) materially increase Borrower's obligations or materia y decrease Borrower's rights or otherwise have a material adverse effect on Borrower. Borrower shall provide such information and documents relating to Borrower, any Indemnitor, the Property and any Tenants as Lender may reasonably request in connection with such Secondary Market Transaction. Borrower shall make available to Lender all information concerning its business and operations at Lender may reasonably request. Borrower shall not be responsible for any costs of a Secondary Maz et Transaction other than Borrower's internal administrative expenses and Borrower's attorneys' fe s, provided, however, that Lender shall reimburse Borrower for its reasonable attorneys' fees incurred in connection with any modifications to the Loan Documents required by Lender pursuant to this Sec on 5.29(a). (b) Disclosure, Indemnification. Lender shall be permitted to share all informat on provided in connection with the Loan with the Investors, Rating Agencies, investment banking firms, accounting firms, law firms and other third-party advisory firms involved with the Loan Documents or he applicable Secondary Market Transaction. It is understood that the information provided to Lender in connection with the Loan may ultimately be incorporated into the offering documents for the Second try Market Transaction and thus potential Investors may also see some or all of the information with resp ct to the Loan, the Property, Borrower and the holders of direct or indirect interests in Borrower. Borrower irrevocably waives any and all rights it may have under any applicable laws (including, without limitation, any right of privacy) to prohibit such disclosure. Lender and all of the aforesaid third-party advisors and professional firms shall be entitled to rely on the information supplied by, or on behalf of, Borrower. Borrower hereby indemnifies Lender as to any losses, claims, damages or liabilities that aiise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the information provided by or on behalf of Borrower, or arise out of or are based upon the omissio or alleged omission to state therein a material fact required to be stated in such information, or necessary in order to make the statements in such information, or in light of the circumstances under which they were made, not misleading. Lender may publicize the existence of the Obligations in connection with its marketing for a Secondary Market Transaction or otherwise as part of its business development. (c) Borrower acknowledges that, as part of the documents creating and gove g any Secondary Market Transaction in which the Loan (or any portion of or interest in the Loan) may be included (the "Securitization Documents"), the parries to such Secondary Market Transaction may, in their sole discretion, elect to impose certain requirements as conditions precedent to certain actions by one or more of the servicing agents appointed with respect to the Loan (including, without limitation, at such servicing agent obtain written confirmation from each applicable Rating Agency that the propo ed action will not result in a downgrade, qualification or withdrawal of any rating issued on securi 'es evidencing an ownership interest in the Loan that was in effect immediately prior to such propo ed action). No requirement or condition imposed upon such servicing agent pursuant to such Securitiza on MORTGAGE - PAGE 55 Error! Unknown document property name. O K I 99 1 PG3439. Documents as a condition precedent to the granting or denying of any consent or approval, or the or refusal to take of any action, pursuant to this Mortgage (except only for any action required of hereunder) shall give rise to any claim or cause of action by Borrower against Lender, or give Bc any defense for failure to perform its obligations under the Loan Documents. Borrower acknowledges that the cost of any such rating confirmation required by the Securitization Doc shall be payable by Borrower. (d) Definitions: A "Secondary Market Transaction" shall be (1) any sale of e Mortgage, Note and other Loan Documents to one or more investors as a whole loan, (2) a participation of the Obligations to one or more investors, (3) a securitization of the Loan, (4) any other sale or trans er of the Obligations or any interest therein to one or more investors. "Rating Agency" shall mean each of Standard & Poor's Ratings ("S&P"), Moody's Investor Services, Inc ("Moody's"), and Fitch Investors Service, L.P. ("Fitch") and any other nationally-recognized statistical rating organizations that have b en designated by the Lender in its sole discretion. "Investor" shall mean any actual or potential purch er, transferee, assignee, servicer, participant or investor in a Secondary Market Transaction. 5.30 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. (a) BORROWER AND THE AGENCY, TO THE FULL EXTENT PERMITT D BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPO N THE ADVICE OF COMPETENT COUNSEL, (i) SUBMIT TO PERSONAL JURISDICTION IN T STATE IN WHICH THE REAL ESTATE IS LOCATED OVER ANY SUIT, ACTION R PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THE NOTE, T S MORTGAGE OR ANY OTHER OF THE LOAN DOCUMENTS, (ii) AGREE THAT ANY SU H ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL CO T OF COMPETENT JURISDICTION OVER THE COUNTY IN WHICH THE REAL ESTATE IS LOCATED, (iii) SUBMIT TO THE JURISDICTION OF SUCH COURTS, AND, (iv) TO T AE FULLEST EXTENT PERMITTED BY LAW, AGREE THAT THEY WILL NOT BRING AN Y ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM (BUT NOTHING HEREIN SH-A L AFFECT THE RIGHT OF LENDER TO BRING ANY ACTION, SUIT OR PROCEEDING IN OTHER FORUM). BORROWER AND THE AGENCY FURTHER CONSENT AND AGREE O SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH S IT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPA ID, TO THE BORROWER AND THE AGENCY AT THE ADDRESSES FOR NOTICES DESCRIBED IN SECTION 5.5 HEREOF, AND CONSENT AND AGREE THAT SUCH SERVICE SHA LL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NO G A HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN I?Y OTHER MANNER PERMITTED BY LAW). (b) LENDER AND BORROWER, TO THE FULL EXTENT PERMITTED LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON I ADVICE OF COMPETENT COUNSEL, WAIVE, RELINQUISH AND FOREVER FORGO 7 RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING C OF, OR IN ANY WAY RELATING TO THE OBLIGATIONS OR ANY CONDUCT, ACT OMISSION OF LENDER OR BORROWER, OR ANY OF THEIR DIRECTORS, OFFICE PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERS( AFFILIATED WITH LENDER OR BORROWER, IN EACH OF THE FOREGOING CA11 WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. MORTGAGE - PAGE 56 Error! Unknown document property name. 8K1991PG3440- 5.31 State-Suecific Provisions. The following provisions shall govern and controlli the event of any conflict with any other provision of this Mortgage: (a) Pursuant to 42 Pa. C.S.A. §8144, this Mortgage secures the unpaid balance advances made, with respect to the Property, for the payment of taxes, assessments, maintenance charg insurance premiums or costs incurred by Lender for the protection of the Property or the lien of t Mortgage, and expenses incurred by Lender by reason of an Event of Default, and the priority of the 1 of such advances shall relate back to the date of recording of this Mortgage. [NO FURTHER TEXT ON THIS PAGE] MORTGAGE - PAGE 57 Error! Unknown document property name. BU 991 PG3441 IN WITNESS WHEREOF, Borrower has executed this Mortgage as of the day and year above written. HER INVESTORS LP, a Delaware limited partnership By: HSAMBEN LP, a Delaware limited partnership, its general partner By: HERSAM LLC, a Delaware limited liability companA, is general p4rtngq By: / (/ 44A^- v I--- Name: Samuel Kirschebaum Title: The address of the within Lender is: 300 Madison Avenue, 8 h Floor Attention: Real Estate Group New York, New York 10017 On behalf of the Lender MORTGAGE- SIGNATURE PAGE NY:1098157.1 BK'I991FIG 3442": IN WITNESS WHEREOF, Borrower has executed this Mortgage as of the day and year first above written. HER INVESTORS LP, a Delaware limited partnership By: HSAMBEN LP, a Delaware limited partnership, its general partner By: HERSAM LLC, a Delaware limited liability company, its general partner By: Name: Samuel Kirschebaum Title: The address of the within Lender is: 300 Madison Avenue, 8`h Floor Attention: Real Estate Group New York, New-YVk I N17 On bSWff Lender MORTGAGE- SIGNATURE PAGE NY:1098157.2B O K I 99 1 PG3443`` STATE OF NEW YORK COUNTY OF NEW YORK Mav% On ?4pril? 2007 before me, a Notary Public in and for the aforesaid County and State, personally appeared Samuel Kirschenbaum, known to me (or satisfactorily proven) to be the -06-M-3,ur, _ of HERSAM LLC, a Delaware limited liability company, the General Partner of HSAMBE LP, a Delaware limited partnership, in turn the General Partner A o^f- HER INVESTORS LP, a Delaware limited partnership, and acknowledged that he as such ,A? being duly authorized to do so, executed the foregoing instrument on behalf of HERSAM L LC, a Delaware limited liability company, the General Partner of HSAMBEN LP, a Delaware limited partnership, in turn the General Partner of HER INVESTORS LP, a Delaware limited partnership, for the purposes therein contained. WITNESS WHEREOF, I have hereunto set my official hand and seal. Name: My cp! [SEAL] JOHN P. GREELEY Notary Public, State of New York No. 02GR6109096 Qualified in New York County Commission Expires June 7, 2008 MORTGAGE - SIGNATURE PAGE NY:1098157.1 BK 19 9 1 PG 3444= steel re-bar found; thence continuing along the same, South 48° 27' East, a distance of 403.81 feet to a Stone found; thence continuing along the same, South 52° 33' West, a distance of 542.47 feet to an Oak Tree; thence along lands of Matilda A. Minnieh, South 52° 42' 10" Wes , a distance of 1,050.42 feet to a steel re-bar found; thence continuing along the same, South 13° 0' 10" East, a distance of 244.13 feet to a steel re-bar found in the northerly line of lands now or formerly of the Norfolk Southern Corporation; thence along the northerly line of lands now or formerly of Norfolk Southern Corporation, North 79° 32' West, a distance of 59724 feet to a steel re-bar found at corner of lands of Reading Terminals Corp., thence along lands of Reading Terminals Corp. North 38° 07'50" West, a distance of 668.98 feet to a steel rebar found; then 3e continuing along the same, South 65° 10' West, a distance of 565.93 feet to a "Mag" nail set, the point of BEGINNING. BEING identified as Tax Map Number 38-20-1823-OIOA TOGETHER with the easement as set forth in the Easement Agreement by and between 1 Distribution Services Co. and Hershey Foods Corporation dated November 10, 1982 and recorded in the Recorder's Office of Cumberland County, Pennsylvania in Miscellaneous 284, Page 802. TOGETHER with the benefits as set forth in the Agreement by and between Dauphin Distribution Services Co., a Pennsylvania corporation and Hershey Foods Corporation, dated November 10, 1982 as recorded in the Recorder's Office of Cumberland County, Pennsylvania in Miscellaneous Book 288, Page 581. BK 99:1PG3448 centerline of Locust Point Road; thence extending from said beginning iron pin along lands now or formerly of the New Kingston Industrial Park, North 26 degrees 11 minutes 02 seconds West, 164.43 feet to a hub found; thence continuing along same lands, North 64 degrees 25 minutes 0 seconds East, 2024.176 feet to an iron pin at a corner of land now or formerly of Max Hempt; thence extending along same South 37 degrees 02 minutes 01 second East 385.42 feet to an it pin; thence extending along same, South 64 degrees 14 minutes 59 seconds West, 1596.98 fee to an iron pin; thence continuing along lands now or formerly of Hempt, South 01 degree 35 minutes 30 seconds East, 244.13 feet to a post found on the right-of-way line of the Pennsylvania Railroad Company, aforesaid; thence extending along same, North 67 degrees 59 minutes 03 seconds West, 597.24 feet to the first mentioned iron pin and place of BEGINNING. BEING the same property that Daniel E. Beren, in his capacity as a partner of The New Kings or Quartet a/k/a the New Kingston Quartet, John M. Elliott, James McStravick, J. Thomas Seele , Burton J. Gray, Michael Nakonechny and Daniel E. Beren, co-partners t/d/b/a The New Partnership, all of the preceding t/d/b/a The New Kingston Quartet a/k/a the New Kingston Quartet, together with Joan Beren, Jane Elliott, Nanette McStravick, Joan Seeley, Gertrude Gray and Barbara Nakonechny, the respective spouses of the above-named partners, by deed dated November 10, 1982, and recorded in the Office of the Recorder of Deeds of Cumberland County Pennsylvania in Deed Book Y, Volume 29, Page 742, granted and conveyed unto Hershey Food, Corporation, a Delaware corporation. The property described as "Tract I" and "Tract II" above is also described in accordance with ALTA/ASCM Land Title Survey prepared by C. W. Junkins Associates, Inc., dated March 27 2007, as follows: ALL that certain tract or parcel of land situate in the Township of Silver Spring, County of Cumberland, Commonwealth of Pennsylvania, bounded and described as follows: BEGINNING at a "Mag" nail set in the centerline of S.R. 1007 (Locust Point Road), said nail being located at the northwest corner of lands of Reading Terminals Corp.; thence along the centerline of Locust Point Road, North 20° 56'30" West, a distance of 8.00 feet to a "Mag" n4 set; thence along lands now or formerly of Frank W. & Barbara Weiser and G. Lee Souder, North 65° 10' East, a distance of 578.34 feet to a steel re-bar set; thence along lands now or formerly of G. Lee Souder North 43" 28'30" West, a distance of 52.23 feet to a steel re-bar se corner of other lands of George Souder; thence along lands of George Souder, North 65° 14' 3 East, a distance of 35.59 feet to a steel re-bar set; thence continuing along the same, by a curvy the left having a radius of 910.72 feet, an are length of 193.92 feet, the chord of which is Nort 59° 08'30" East, 193.55 feet to a steel re-bar set; thence continuing along the same, North 53' 02'30" East, a distance of 128.18 feet to a steel re-bar found; thence continuing along the saran North 40° 38'20" West, a distance of 145.92 feet to a steel re-bar found; thence continuing at the same, North 47° 46' 10" East, a distance of 41.00 feet to a steel re-bar found; thence continuing along the same, North 30° 31' 20" West, a distance of 526.52 feet to a steel re-bar' thence along lands of 36 East Main Associates, UP., North 64° 23' 10" East, a distance of 617 feet to a "PK" nail found in Dauphin Drive; thence along lands of Exel Logistics, Inc. North E 05' 30" East, a distance of 905.32 feet to a steel re-bar found; thence continuing along lands n or formerly of Fry Family Holding, L.P., South 48° 44'45" East, a distance of 875.00 feet to ? t at 0" to .41 B 1991PG3447' EXHIBIT A PROPERTY DESCRIPTION MORTGAGE - SIGNATURE PAGE Error! Unimown document property name. BK1991PG3445 EXHIBIT "A" LEGAL DESCRIPTION TRACT I: ALL THAT CERTAIN piece, parcel or tract of land situate in the Township of Silver Spring, County of Cumberland and Commonwealth of Pennsylvania, bounded and described as follov to wit: BEGINNING at a point in the public road leading to New Kingstown at the private road into t tract; thence along land formerly of Cumberland Valley Railroad, now of United Refining Co North 65 degrees 45 minutes East 566 feet (34.3 perches) to a point; thence by same South 37 degrees 45 minutes East 514.8 feet (31.2 perches) to a stone; thence along land now or former of Harry Blough, North 53 degrees 30 minutes East, 2,000.5 feet to a point; thence along land' now or formerly of Max Hempt, North 48 degrees West 875 feet to a stone; thence along landi now or formerly of Patwest Corp., Charles W. Sunday and J. Wayne Markle South 66 degrees minutes West 1,575.95 feet to a post; thence along land now or formerly of Norman C. Eshelman, South 42 degrees 45 minutes East 414 feet (25.1 perches) to a post; thence along so South 49 degrees West 371 feet (22.5 perches) to a stone; thence along same South 43 degreed East 264 feet (16 perches) to a post; thence along same and land now or formerly of Keller Adams South 65 degrees 45 minutes West 581 feet (35.2 perches) to a point in the aforesaid public road; thence by said public road South 19 degrees 45 minutes East 8 feet (.5 perches) tc the place of BEGINNING. CONTAINING 44 acres, 78 perches, more or less. EXCEPTING AND RESERVING Tract No. 2 from the above described piece of ground as shown on Final Subdivision Plan for Russell L. & Beatrice E. Potteiger dated September 29, 1980 and recorded in the Office of Recorder of Deeds in and for Cumberland County in Plan Book 39, Page 4. TOGETHER with the right of ingress, egress and regress to use in common with others the of-way more particularly described in the Deed recorded in the Office aforesaid at Deed Bc Volume 29, Page 339. TRACT II ALL THAT CERTAIN tract of land situate in Silver Spring Township, Cumberland County, Pennsylvania, being more fully bounded and described in accordance with a plan of survey prepared by Robert C. Hartman, Jr., Professional Engineer, Whittock and Hartman, dated December 8, 1980 and bearing drawing No. D-80-18 as follows to wit: BEGINNING at an iron pin found on the right-of-way line of the lands now or formerly of Pennsylvania Railroad Company, said iron pin being measured 885.00 feet, more or less, to y 15 F, BK199IPG3445 EXHIBIT B DEFERRED MAINTENANCE ITEMS Repair Item Cost Pavement and Parking $26,200.00 Roofing $148,380.00 ADA Compliance $5,000.00 Sub Total $179,580.00 Additional Reserve Amount (additional 25%) $48,895.00 Total $224,475.00 Certify tljtS; Tin Curabeyjcond A. C ?Vr. MORTGAGE - SIGNATURE PAGE Error! Untmown document property name. BK-1991PG 34h 9 f1 V V H x W EXHIBIT "C" (00247877;1) I. ho 1111111111 001 P PARCEL NO. 38-20-1823-O10A Larva. Settia' u s V yk ?AFA Oq-lg3a ASSIGNMENT OF MORTGAGE, ASSIGNMENT OF LEASE AND RENTS SECURITY AGREEMENT, AND FIXTURE FILING CIBC, INC., a Delaware corporation, as assignor to EXETER 40 EAST MAIN, L.P., as assignee, a Pennsylvania limited partnership 40 East Main Street New Kingston, Pennsylvania County: Cumberland RECORD AND RETURN TO: Silverang & Donohoe, LLC 595 E. Lancaster Avenue, Suite 203 St. Davids, Pennsylvania 19087 Attention: Kelly Anne Donohoe, Esquire 1a-1028953 Assignment o£ Mortgage - 40 East main ASSIGNMENT OF MORTGAGE, ASSIGNMENT OF LEASE AND RENTS SECURITY AGREEMENT, AND FIXTURE FILING KNOW THAT CIBC, INC., a Delaware corporation, having an address at 425 Lexington Avenue, 4th Fl, New York, NY 10417 ("Assignor"), for' good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby grants, conveys, assigns and transfers to EXETER 40 EAST MAIN; L.P., a Pennsylvania limited partnership, having an address at 2260 Butler Puce, Suite 200, Plymouth Meeting, Pennsylvania 19462 ("Assignee'D, all right, title and interest of Assignor in, to and under or arising out of that certain MORTGAGE, ASSIGNMENT OF LEASE AND RENTS SECURITY AGREEMENT, AND FIXTURE FILING more particularly described in Exhibit A attached hereto and made a part hereof, which document relates to certain interests in the real property located in the County of Cumberland and Commonwealth of Pennsylvania, more particularly described on Schedule I attached hereto and made a part hereof. TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns, forever. It is expressly understood that, except as otherwise expressly set forth herein, this Assignment of Mortgage, Assignment of Lease and Rents Security Agreement, and Fixture Filing (this "Assignment') is made by Assignor and assumed and accepted by Assignee without any guarantee, representation or warranty of any kind on the part of Assignor and without recourse to Assignor in any event or for any cause, and Assignee hereby releases Assignor from any and all claims, demands, causes of action, losses, damages, liabilities, costs and expenses (including, without limitation, attorneys' fees and disbursements) suffered or incurred by Assignor arising from or in connection with this Assignment, except as may otherwise be expressly set forth in that certain Mortgage Loan Sale Agreement dated May 7, 2009, by and between CIBC, Inc., as Seller and Exeter 40 East Main, L.P., as Buyer. The word "Assignor" or "Assignee" shall be construed as if it reads "Assignors" or "Assignees" whenever the sense of this instrument so requires. THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STAET OF NEW YORK. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK) la 1028953 Assignment of Mortgage - 40 East Main IN WITNESS WHEREOF, Assignor has duly executed this Assignment as of the ly f4' day of May, 2009. CIBC, INC., a Delaware corporation, as assignor ByfNa!mn e • Title: 1a-1028953 Assignment of Mortgage - 40 East Main STATE OF U k ) ) ss:: CO UNTY OF NW 40t On the day of in the year 2Q 1A before me, the and si Qed,??tary ublic in and for said State, personally appeared personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual, or the p son on behalf of which the individual acted, executed the instrument. r4 Notary Public [NOTARY STAMP] 1a-1028953 Assignment of Mortgage - 40 East Main Exhibit A The Mortgage MORTGAGE, ASSIGNMENT OF LEASE AND RENTS SECURITY AGREEMENT AND FIXTURE FILING from HER Investors LP to CIBC Inc. dated March 29, 2007 and recorded may 9, 2007 in Mortgage Book 1991 page 3384. 1a-1028953 Assignment of Mortgage - 40 East Schedule I Legal Description (see attached) }a-1 D28953 Assignment of Mortgage - 40 East Main TRACT I ALL THAT CERTAIN piece, parcel or tract of land SITUATE in the Township of Silver Spring, County of Cumberland and Commonwealth of Pennsylvania, bounded and described as follows, to wit: BEGINNING at a point in the public road leading to New Kingstown at the private road into this tract; thence along land formerly of Cumberland Valley Railroad, now of United Refining Co. North 65 degrees 45 minutes East 566 feet (34.3 perches) to a point; thence by same South 37 degrees 45 minutes East 514.8 feet (31.2 perches) to a stone; thence along land now or formerly of Harry Blough, North 53 degrees 30 minutes East, 2,000.5 feet to a point; thence along land now or formerly of Max Hempt, North 48 degrees West 875 feet to a stone; thence along lands now or formerly of Patwest Corp., Charles W. Sunday and J. Wayne Markle South 66 degrees 15 minutes West 1,575.95 feet to a post; thence along land now or formerly of Norman C. Eshelman, South 42 degrees 45 minutes East 414 feet (25.1 perches) to a point; thence along same South-degrees West 371 feet (22.5 perches) to a stone; thence along same South 43 degrees East 264 feet (16 perches) to a post; thence along same and land now or formerly of Keller Adams South 65 degrees 45 minutes West 581 feet (35.2 perches) to a point in the aforesaid public road; thence by said public road South 19 degrees 45 minutes East 8 feet (5 perches) to the place of beginning. EXCEPTING AND RESERVING Tract No. 2 from the above described piece of ground as shown on Final Subdivision Plan for Russell L. & Beatrice E. Pottelger dated September 29, 1980 and recorded in the Officer of Recorder of Deeds in and for Cumberland County in Plan Book 39, Page 4. TRACT II ALL THAT CERTAIN tract of land SITUATE in Silver Spring Township, Cumberland County, Pennsylvania, being more fully bounded and described in accordance with a plan of survey prepared by Robert C. Hartman, Jr., Professional Engineer, Whlttock and Hartman, dated December 8, 1980 and bearing drawing No. D-80-18 as follows to wit: BEGINNING at an iron pin found on the right-of-way line of the lands now or formerly of Pennsylvania Railroad Company, said iron pin being measured 885.00 feet, more or less, to the centerline of Locust Point Road; thence extending from said beginning iron pin along lands now or formerly of the New Kingston Industrial Park, North 26 degrees 11 minutes 02 seconds West, 164.43 feet to a hub found; thence continuing along same lands, North 64 degrees 25 minutes 00 seconds East, 2024.176 feet to an iron pin at a corner of land now or formerly of Max Hempt; thence extending along same South 37 degrees 02 minutes 01 second East 385.42 feet to an iron pin; thence extending along same, South 64 degrees 14 minutes 59 seconds West 1596.98 feet to an iron pin; thence continuing along lands now or formerly of Hempt, South 01 degrees 35 minutes 30 seconds East, 244.13 feet to a post found on the right-of-way line of the Pennsylvania Railroad Company, aforesaid; thence extending along same, North 67 degrees'59 minutes 03 seconds West, 597.24 feet to the first mentioned iron pin and place of beginning. The property described as "Tract I" and "Tract 11" on Exhibit "A" above is also described in accordance with an ALTA/ASCM Land Title Survey prepared by C.W. 3unkins Associates, Inc., dated December 8, 2005, and last revised on January 30, 2006, as follows: BEGINNING at a "Mag" nail set In the centerline of S.R. 1007 (Locust Point Road), said nail being located at the Northwest corner of lands of Reading Terminals Corp.; thence along the centerline of Locust Point Road, North 20 degrees 56 minutes 30 seconds West, a distance of 8.00 feet to a "Mag" nail set; thence along lands now or formerly of Frank W. & Barbara Weiser and G. Lee Souder, North 65 degrees 10 minutes East, a distance of 578.34 feet to a steel re-bar set; thence along lands now or formerly of G. Lee Souder North 43 degrees 28 minutes 30 seconds West, a distance of 52.23 feet to a steel re-bar set at corner of other lands of George Souder; thence along lands of George Souder, North 65 degrees 14 minutes 30 seconds East, a distance of 35.9 feet to a steel re-bar set; thence continuing along the same, by a curve to the left having a radius of 910.72 feet, an arc length of 193.92 feet, the chord of which is North 59 degrees 08 minutes 30 seconds East, 193:55 feet to a steel re-bar set; thence continuing along the same, North 53-degrees 02 minutes 30 seconds East, a distance of 128.18 feet to a steel re-bar found; thence continuing along the same, North 40 degrees 38-minutes 20 seconds West, a distance of 145.92 feet to a steel re-bar found; thence continuing along the same, North 47 degrees 46 minutes 10 seconds East, a distance of 41.00 feet to a steel re-bar found; thence continuing along the same, North 30 degrees 31 minutes 20 seconds West, a distance of 526.52 feet to a steel re-bar set; thence along lands of 36 East Main Associates, L.P., North 64 degrees 23 minutes 10 seconds East, a distance of 617.41 feet to a "PK" nail found in Dauphin Drive; thence along lands of Exei Logistics, Inc., North 66 degrees 05 minutes 30 seconds East, a distance of 905.32 feet to a steel re-bar found; thence continuing along lands now or formerly of Fry Family Holding, L.P., South 48 degrees 44 minutes 45 seconds East, a distance of 875.00 feet to a steel re-bar found; thence continuing along the same, South 48 degrees 27 minutes East, a distance of 403.81 feet to a Stone found; thence continuing along the same, South 52 degrees 33 minutes West, a distance of 542.47 feet to an Oak Tree; thence along lands of Matilda A. Minnich, South 52 degrees 42 minutes 10 seconds West, a distance of 1,050.42 feet to a steel re-bar found; thence continuing along the same, South 13 degrees 10 minutes 10 seconds East, a distance of 244.13 feet to a steel re-bar found in the Northerly line of lands now or formerly of the Norfolk Southern Corporation; thence along the Northerly line of lands now or formerly of Norfolk Southern Corporation,, -North 79 degrees 32 minutes West, a distance of 597.24 feet to a steel re-bar found at corner of lands of Reading Terminals Corp., thence along lands of Reading Terminals Corp. North 38 degrees 07 minutes 50 seconds West, a distance of 668.98 feet to a steel re-bar found; thence continuing along the same, South 65 degrees 10 minutes West, a distance of 565.93 feet to a "Mag" nail set, the point of beginning. BEING No. 40 East Main Street. BEING PARCEL NO. 38-20-1823-010A ROBERT P. ZIEGLER RECORDER OF DEEDS CUMBERLAND COUNTY 1 COURTHOUSE SQUARE' CARLISLE, PA 17013 117-240-6370 Instrument Number - 200916586 Recorded On 5/20/2009 At 10:25:23 AM * Instrument Type - ASSIGNMENT OF MORTGAGE Invoice Number - 44010 User ID - RAK * Mortgagor - CIBC INC * Mortgagee - EXTER 40 EAST MAIN L P * Customer - LAND'SERVICES USA INC * FEES STATE WRIT TAX $0.50 STATE JCS/ACCESS TO $10.00 JUSTICE RECORDING FEES - $19.50 RECORDER OF DEEDS PARCEL CERTIFICATION $10.00 FEES COUNTY ARCHIVES FEE $2.00 ROD ARCHIVES FEE $3.00 TOTAL PAID $45.00 * Total Pages - 9 Certification Page DO NOT DETACH This page is now part of this legal document. I Certify this to be recorded in Cumberland County PA p CU RECORDER O D DS r7ga k - Information denoted by an asterisk may change during the verification process and may not be reflected on this page. 001E9X (I) ?III??II???Nfl101?? EXHIBIT "D" {00283766;3} n f1 V V H x ?C W EXHIBIT "D" (00247877;1) Silverang & Donohoe, LLC ATTORNEYS 595 East Lancaster Avenue Suite 293 St. Davids. Pennsylvania 19087 May 10, 2012 Telephone IAA FEDERAL EJ&RESS (610) 263-0115 Facsimile (215) 754-4934 HER INVESTORS LP 1181 Sussex Road Teaneck, New Jersey 07666 Re: $18,100,000 Loan from 40 E. Main, L.P., successor in interest to CIBC Inc. ("Lender") to BE, R Investors LP ("Borrower") made on or about Apra 12, 2007 (as amended from time-to-time, the "Loan") Ladies and Gentlemen: Please be advised that this Firm represents Lender in connection with the above-captioned matter. Reference is hereby made to that certain Promissory Note, dated as of Marcli 29, 2007 and effective as of April 12, 2007, made by Borrower in favor of Lender (the "Note"). The Note and Borrower's obligations thereunder are secured by, among other things, (i) that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of March 29, 2007 and effective as of April 12, 2007, and recorded in the Office of the Recorder of Deeds of Cumberland County, Pennsylvania on May 9, 2007 in Book 1991, Page 3384 (the "Mortgage") encumbering the Property (as defined in the Mortgage), (ii) that certain Assignment of Leases and Rents dated April 12, 2007 and recorded in the Office of the Recorder of Deeds of Cumberland County, Pennsylvania on May 9, 2007 in Book 736, Page 3724 (the "ALR"), (iii) that certain Indemnity and Guaranty Agreement made as of April 12, 2007 executed by Samuel Kirschenbaum in favor of Lender (the "Guaranty"); and (vi) certain other documents evidencing any/or securing the Loan. The Note, Mortgage, ALR, Guaranty and all other documents executed in connection with the Loan are collectively referred to herein as the "Loan Documents". Please be advised that Borrower is currently in default under the Loan Documents for, inter alia, failing to repay the Loan in full on the Maturity Date, May 1, 2012. Pursuant to the terms of Section 1.06 of the Note and Section 2.1(a) of the Mortgage, failure to make such payment constitutes an Event of Default under the Loan Documents. (00282752;1) HER In•eslors LP May 10, 2011 Page 2 Accordingly, Lender hereby accelerates the principal balance due and payable to Lender in its entirety and demands payment from Borrower for the entire sum due and payable under the Loan Documents, which as of the date hereof is $18,239,571.11, inclusive of outstanding principal and interest under the Note through the date hereof (collectively, the "Obligations"). As of the Maturity Date, interest has been accruing at the Default Interest Rate as set forth in the Note. Please be advised that Lender hereby reserves the right to charge and collect any and all additional late fees, default interest, satisfaction fees, attorneys fees and any other costs incurred as a result of Borrower's failure to pay all amounts due under the Loan Documents. Please immediately send a certified or bank check in the full amount of the Obligations to Lender at the following address: Exeter 40 E. Main, L.P. 140 W, Germantown Pike, Suite 150 Plymouth Meeting, PA 19462 Alternatively, the full amount of the Obligations may be immediately wired to Lender pursuant to the following wiring instructions enclosed herewith. Please be advised that as a result of the aforementioned defaults, Lender has exercised its rights under the Mortgage and ALR to revoke any license afforded to Borrower to collect the rents at the Property, and to retain full complete control and ownership of the same as provided therein. Notwithstanding anything contained herein to the contrary, this letter does not constitute and shall not be deemed to constitute a waiver of any other default occurring or existing on or before the date hereof, nor an election of any right or remedy by Lender. Moreover, Lender reserves the right to pursue any right or remedy it may have against Borrower, Guarantor or any other person who may be obligated to Lender with respect to the subject obligations under the Loan Documents, contemporaneously with, or subsequent to, the pursuit of any other right or remedy afforded to Lender thereunder. Furthermore, any and all other rights and remedies afforded to Lender under any of the Loan Documents or any other document, instrument, agreement or understanding between Lender and Borrower and/or Guarantor in connection herewith are hereby expressly reserved and may be exercised by Lender without further notice or demand, except as otherwise provided in the Loan Documents. With respect to any other liabilities or obligations of Borrower and/or Guarantor which are not discussed herein, this letter is not to be deemed a waiver of Lender's rights and remedies to collect such obligations and/or enforce its rights and remedies in accordance with the Loan Documents and applicable law, all of which rights and remedies are hereby reserved. {00206658:1 HEW Investors LP NTny 111, 2012 Pnge 3 Legal proceeding to collect the Obligations are imminent. There will be no further notices sent prior to commencement of such proceeding. Please guide your actions accordingly. Should you have any questions, please feel free to contact me directly. KAD/s Enclosure cc: Jeffrey D. Friedman, Esquire (via Federal Express) Timothy J. Weber (via electronic mail) Matthew Brodnik (via electronic mail) (00206658;1 T WIRING INSTRUCTIONS Exeter Operating Partnership, L.P. Account # 3830 0040 1 148 Banlc of America, Charlotte, NC ABA # 026009593 100282752;1) SILVERANG & DONOHOE, LLC By: Mark S. Haltzman, Esquire mhaltzman(&,sanddlawyers.com Attorney ID No: 38957 595 E. Lancaster Avenue, Suite 203 St. Davids, PA 19087 (610) 263-0115 EXETER 40 EAST MAIN, L.P., AS ASSIGNEE OF CIBC, INC. 140 West Germantown Pike, Suite 150 Plymouth Meeting, PA 19462 PLAINTIFF, VS. HER INVESTORS, LP 1181 Sussex Road Teaneck, New Jersey 07666 DEFENDANT. Attorneys for Plaintiff, Exeter 40 East Main, L.P., As Assignee of CIBC, Inc. COURT OF COMMON PLEAS CUMBERLAND COUNTY DOCKET NO: ENTRY OF APPEARANCE TO THE PROTHONOTARY: a-y7 D t"'I / C7 C ev Cz i- -GD o Q? Co Kindly enter my appearance on behalf of Plaintiff, Exeter 40 East Main, L.P., As Assignee of CIBC, Inc., 140 West Germantown Pike, Suite 150, Plymouth Meeting, PA 19462, in the above-captioned matter. SILVERANG & DONOHOE, LLC By: Mark S. altzman, Esquire 595 E. Lancaster Avenue, Suite 203 St. Davids, PA 19087 Attorneys for Plaintiff Dated: July 23, 2012 {00299452;1} SILVERANG & DONOHOE, LLC By: Edmund J. Campbell, Jr., Esquire ecamnbell(a)sanddlawyers.com Attorney ID No: 63587 595 E. Lancaster Avenue, Suite 203 St. Davids, PA 19087 (610) 263-0115 EXETER 40 EAST MAIN, L.P., AS ASSIGNEE OF CIBC, INC. 140 West Germantown Pike, Suite 150 Plymouth Meeting, PA 19462 PLAINTIFF, VS. HER INVESTORS, LP 1181 Sussex Road Teaneck, New Jersey 07666 DEFENDANT. " HE PROTHONOTARY 2012 JUL 30 AM 11: 14 At 'or WW TY Exeter 40 East Main, L.P., As Assignee of CIBC, Inc. COURT OF COMMON PLEAS CUMBERLAND COUNTY DOCKET NO: l "? ?1 01? ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly enter my appearance on behalf of Plaintiff, Exeter 40 East Main, L.P., As Assignee of CIBC, Inc., 140 West Germantown Pike, Suite 150, Plymouth Meeting, PA 19462, in the above-captioned matter. SILVERANG & DONOHOE, LLC 1-41 01 By: 'o? , 'JOE J. Campbell, J ., Esquire 595 Lancaster A4ue, Suite 203 St. Davids, PA 19087 Attorneys for Plaintiff {00299452;1} SILVERANG & DONOHOE, LLC By: Mark S. Haltzman, Esquire Edmund J. Campbell, Jr., Esquire mhaltzman(a~sanddlawvers.com ecamabelt(a7sa,,~ddlawyers.com Attorney Identification Nos.: 38957/ 63587 595 E. Lancaster Avenue, Suite 203 St. Davids, PA 19087 (610) 263-0115 EXETER 40 EAST MAIN, L.P., As Assignee of CIBC, Inc. 140 West Germantown Pike Suite 150 Plymouth Meeting, PA 19462 Plaintiff, v. HER Investors, LP, 1181 Sussex Road Teaneck, New Jersey 07b66 Defendant. ,., S ~ ?011 AUG 1 ~ TA~t aMla. ~8 ~~MOERLANp C PFNNSyLVAN~k~TY Attorneys for Plaintiff, Exeter 40 East Main, L.P., as Assignee of CIBC, Inc. COURT OF COMMON PLEAS CUMBERLAND COUNTY DOCKET NO. 12-4746 PROOF OF SERVICE I declare that on August 13, 2012, I served a Complaint in Mortgage Foreclosure upon Defendant, HER Investors, LP, located at 1181 Sussex Road, Teaneck, NJ 07666, via Certified Mail, Returned Receipt Requested, signed and accepted by J. Kirschenbaum (attached hereto as Exhibit "A"). SILVERANG & DONOHOE, LLC By: Edmund J. ampbell, Jr., Esquire 595 E. Lancaster Avenue, Ste. 203 St. Davids, PA 19087 Attorney for Plaintiffs {00305911;1} i ^ Complete (tams 1, 2, and 3. Also complete Rem 4 ff Restricted Delivery is desired. . ^ Print your name and address on the revers® so that we can return the card to you. ^ Attach this card to the back of the mailplece, or on the front ff space permRs. 1. Article Addressed to: HER INVESTORS, LP 1181 SUSSEX ROAD TEANECK, NJ 07666 A. '. ant X ~ ressee B. ed ~~ Name) C. o D@tivery l t7 D. Is deNvery address dKferent items 11 If YES, enter delivery address beYow: ' 3. Service Type riffled Mail ^ Express Mail Registered Receipt for M handise ^ Insured Mail C.O.p. 4. Restricted Delivery? (Extra Fee) ^ s 2. ArtideNumber 7010 1870 QQQ2 1666 345 ~rar>s~r from 9ervfoe -aneq PS Form 3811, February 2004 Domestic Return Receipt 'UNITED STATES POS~~I,~~~S~+~x«.~:~~+~`:'F .. .aRrr ,, ..o K.~.,~ E..,; W ,. • Edmund J. Campbell, Jr., Esquire Silverang & Donohoe, LLC 595 E. Lancaster Avenue, 2"d Floor St. Davids, PA 19087 Re: Exeter/40 East Maie Foreclosure Complaint Service of Mortgag Docket No: 12-4746 ~sss~~~s~ut{ssslsslslsss~s~s~ssss~~s~es~s~s~ss~s}sss~~sss~s~~ Wi SILVERANG & DONOHOE, LLC By: Mark S. Haltzman, Esquire Edmund J. Campbell, Jr., Esquire mhaltzmanCa~sanddlawyers.com ecampbell(ysanddlawyers.com Attorney Identification Nos.: 38957/ 63587 595 E. Lancaster Avenue, Suite 203 St. Davids, PA 19087 (610) 263-0115 EXETER 40 EAST MAIN, L.P., As Assignee of CIBC, Inc. 140 West Germantown Pike Suite 150 Plymouth Meeting, PA 19462 Plaintiff, v. HER Investors, LP, 1181 Sussex Road Teaneck, New Jersey 07666 Defendant. Attorneys for Plaintiff, Exeter 40 East Main, LAP., as Assignee of CIBC, Inc. COURT OF COMMON PLEAS CUMBERLAND COUNTY DOCKET NO. 12-4746 CERTIFICATE OF SERVICE The undersigned hereby certifies that on the date set forth below, I served a true and correct copy of the foregoing Plaintiff's Amended Complaint on the following via U.S. First Class Mail: HER Investors, LP, 1181 Sussex Road Teaneck, New Jersey 07666 By: SILVERANG & DONOHOE, LLC Edmund J ampbeIl, Jr`.~EsquiY Mark S. altzman, Esquire 595 Eas Lancaster Avenue, St. Davids, PA 19087 Suite 203 (610) 263-0115 (610) 263-0122 (Fax) {00305911;1} SILVERANG & DONOHOE, LLC By: Mark. S. Haltzman, Esquire Edmund J. Campbell, Jr., Esquire m haltzman(a~sanddlawyers.com ecamnbell(u)sanddlawyers.com Attorney ID Nos: 38957/63587 595 E. Lancaster Avenue, Suite 203 St. Davids, PA 19087 (610) 263-0115 EXETER 40 EAST MAIN, L.P., AS ASSIGNEE OF CIBC, INC. 140 West Germantown Pike, Suite 150 Plymouth Meeting, PA 19462 PLAINTIFF, VS. HER INVESTORS, LP 1181 Sussex Road Teaneck, New Jersey 07666 DEFENDANT. f _ t_ f: - e < p~ r v '' r '-j 1.. i V' 1 c::: a >' i ,,,- r , f ~'i 1 m~ C t~ I~ t a g ,`., ~_'~',~A. i ~ Z Attorneys for Plaintiff, Exeter 40 East Main, L.P., As Assignee of CIBC, Inc. COURT OF COMMON PLEAS CUMBERLAND COUNTY DOCKET NO: 12 - 4746 PLAINTIFF'S ANSWER TO DEFENDANT'S NEW MATTER Plaintiff, Exeter 40 East Main, L.P. (hereinafter "Plaintiff'), by and through its attorneys Silverang & Donohoe, LLC, files Answer to the Defendant's New Matter, and, in support hereof, states as follows: PARTIES 32. Plaintiff incorporates paragraphs 1 - 31 of its Complaint as if set forth fully herein. 33. Admitted. By way of further response, the Defendant has made significant admissions in the Confession Action in response to discovery requests which are binding upon (00325468;3} them in this proceeding. Relevant excerpts from those discovery responses are attached hereto and reflect that the Defendant has made the following admissions: a. The Maturity Date under the Loan was May 1, 2012. (Req. for Admission #1). b. The entire amount of outstanding principal and interest was due on the Maturity Date. (Req. for Admission #4). c. The failure to pay all sums due and owing under the Note on the Maturity Date is an event of Default. (Req. for Admission #51. d. The Defendant failed to pay the principal amount of $18,100,00.00 on or before the Maturity Date. (Req. for Admission #6 ). e. The Defendant failed to pay interest of $89,595.00 on or before the Maturity Date. (Req. for Admission #7). £ The Defendant received the Default Notice on May 10, 2012. (Req. for Admission #8). g. As of the filing of the [Confession Action], June 1, 2012, the Maturity Default remained uncured. (Req. for Admission #9). h. As of the date of the Defendants response to Plaintiffs written discovery requests; the Maturity Default remained uncured. (Req. for Admission #10). i. The principal amount due under the Loan as of the Maturity Date was $18,100,00.00. (Response to Interrogatories # 10). 34. Admitted. {00325468;3; 35. Denied. This averment is a conclusion of law to which no responsive pleading is required. By way of further response, although it may be true that Plaintiff may not recover twice for the same debt, there is no prohibition against the Plaintiff from pursuing all remedies at its disposal to make itself whole. The remedies provided by the Note, Mortgage and Loan Documents are cumulative. See Note, Section 2.01, Mortgage, Article III. Plaintiff's right to exercise any remedy does not prohibit it from pursuing alternative remedies to be made whole. Id. The right to pursue confession of judgment and mortgage foreclosure actions as alternative remedies is consistent with Pennsylvania law. See generally, Continental Bank v. Andrew Bldg. Co., 436 Pa. Super. 559, 648 A.2d. 551 (1994). 36. Denied. This averment is a conclusion of law to which no responsive pleading is required. By way of further response, although it may be true that Plaintiff may not recover twice for the same debt, there is no prohibition against the Plaintiff from pursuing all remedies at its disposal to make itself whole. The remedies provided by the Note, Mortgage and Loan Documents are cumulative. See Note, Section 2.01, Mortgage, Article III. Plaintiff's right to exercise any remedy does not prohibit it from pursuing alternative remedies to be made whole. Id. The right to pursue confession of judgment and mortgage foreclosure actions as alternative remedies is consistent with Pennsylvania law. See generally, Continental Bank v. Andrew Bldg. Co., 436 Pa. Super. 559, 648 A.2d. 551 (1994). 37. Denied. This averment is a conclusion of law to which no responsive pleading is required. By way of further response, although it may be true that Plaintiff may not recover twice for the same debt, there is no prohibition against the Plaintiff from pursuing all remedies at its disposal to make itself whole. The remedies provided by the Note, Mortgage and Loan Documents are cumulative. See Note, Section 2.01, Mortgage, Article III. Plaintiff's right to {00325468;3} exercise any remedy does not prohibit it from pursuing alternative remedies to be made whole. ~~ Id. The right to pursue confession of judgment and mortgage foreclosure actions as alternative remedies is consistent with Pennsylvania law. See generally, Continental Bank v. Andrew Bldg. Co., 436 Pa. Super. 559, 648 A.2d. 551 (1994). 38. - 48. Admitted in part; denied in part. It is admitted that the Mortgage is attached to Plaintiff s Complaint as Exhibit "B." The Mortgage is a writing, the terms of which speak for themselves. Accordingly, to the extent that the Defendant seeks to characterize the terms of the Mortgage, such characterizations are denied as conclusions of la«~ to which no response is required. By way of further response, after reasonable investigation, Plaintiff is unable to form an option as to the truth of the fact asserted. Strict proof is demanded at the time of trial if relevant. By way of further response, please note the Defendant's admissions as set forth in response to paragraph 33 above. By way of additional response, although not styled or captioned as a counterclaim, it appears that the argument that the Defendant is trying to set forth in paragraphs 38 - 48 is in fact a counterclaim. The Defendant alleges in these paragraphs that the Plaintiff (or its predecessors) failed or breached a duty with regard to the payment of a brokerage commission, which the Defendant alleges damaged the Defendant. Pennsylvania Rule of Civil Procedure 1148 provides -that a counterclaim in a Mortgage Foreclosure Action must arise "from the same transaction or occurrence or series of transaction or occurrences from which plaintiff s cause of action arose." Pa.R.Civ.P. 1148. See also, Cunningham v. McWilliams et al, 714 A.2d 1054 (Pa. Super. 1998). It is inconsistent with the Rules of Civil Procedure to permit a Defendant to pursue as new matter, that which would otherwise be prohibited as a counterclaim. Respectfully submitted, SILVERANG & DONOHOE, LLC (00325468;3; (..,~`' By: Mark S. altzman, Esquire Edmund J. Campbell, Jr., Esquire mhaltzman(a,sanddlawyers.com ecampbell(a,sanddlawyers.com Attorney Identification Nos.: 38957/63587 595 E. Lancaster Avenue, Suite 203 St. Davids, PA 19087 (610)263-0115 Attorneys for Plaintiff, Exeter 40 East Main, L.P., As Assignee of CIBC, Inc. {00325468;3; SILVERANG & DONOHOE, LLC ,By: Mark S. Haltzman, Esquire ` Edmund J. Campbell, Jr., Esquire mhaltzman(a,sanddlawyers.com ecampbellnsanddlawyers.com Attorney ID Nos: 38957/63587 595 E. Lancaster Avenue, Suite 203 St. Davids, PA 19087 (610) 263-0115 EXETER 40 EAST MAIN, L.P., . AS ASSIGNEE OF CIBC, INC. 140 West Germantown Pike, Suite 150 Plymouth Meeting, PA 19462 PLAINTIFF, . VS. , HER INVESTORS, LP . 1181 Sussex Road . Teaneck, New Jersey 07666 DEFENDANT. Attorneys for Plaintiff, Exeter 40 East Main, L.P., As Assignee of CIBC, Inc. COURT OF COMMON PLEAS CUMBERLAND COUNTY DOCKE'C NO: 2012-3472_, _ . CERTIFICATE OF SERVICE .~ .-~ The undersigned hereby certifies that on the date set forth below, I served a true and correct copy of the Plaintiffs Answer to Defendant's New Matter via U.S. First Class Mail, postage prepaid upon the following: jbuch(u~seyfarth.com Jerome F. Buch, Esquire Sayfarth Shaw, LLP 131 South Dearborn Street, Suite 2400 Chicago, IL 60603-5577 (312) 460 - 7000 {00325468;3 } ddeardorff(a,martsonlaw.com ' + Daniel Deardorff, Esquire • Martson, Deardorff, Williams & Otto, PC 10 E. High Street Carlisle, PA 17013 (717) 243 - 3341 SILVERANG & By: Dated: October 25, 2012 OH ,LLC Mark S. Haltzman, Esquire Edmund J. Campbell, Jr. Esquire mhaltzman(a~sanddlawyers.com ecampbellnsanddlawvers.com Attorney Identification Nos.: 38957/63587 595 E. Lancaster Avenue, Suite 203 St. Davids, PA 19087 (610) 263-0115 Attorneys for Plaintiff, Exeter 40 East Main, L.P., as Assignee of CIBC, Inc. { 0037.5468;3 }