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1.8. Protection of Mortgagee's Security. If Mortgagor fails to perform any of the
<br /> covenants and agreements contained in this Mortgage and such failure shall continue beyond any
<br /> applicable notice and cure period contained in Article Two hereof or if any action or proceeding
<br /> is commenced which does or may adversely affect the Mortgaged Property or the interest of
<br /> Mortgagor or Mortgagee therein, or the title of Mortgagor thereto, then Mortgagee, at
<br /> Mortgagee's option, may perform such covenants and agreements, defend against such action or
<br /> proceeding, or otherwise act as Mortgagee deems necessary to protect its interest. In the event
<br /> that, after damage to or destruction of the Mortgaged Property or condemnation of a portion of
<br /> the Mortgaged Property or a sale under threat thereof, the proceeds are used to restore the
<br /> Mortgaged Property, and the insurance, sale or condemnation proceeds which are paid to
<br /> Mortgagee are not sufficient to pay for such restoration, Mortgagee may nevertheless effect the
<br /> restoration. Any amounts disbursed or costs incurred by Mortgagee pursuant to this Section,
<br /> including interest and reasonable attorney's fees, shall become additional Obligations of
<br /> Mortgagor secured by this Mortgage. All amounts disbursed or costs incurred by Mortgagee
<br /> pursuant to this paragraph shall be payable upon demand, and shall bear interest from the date of
<br /> disbursement or incurrence at the rate set forth in the Note unless payment of interest at such rate
<br /> would be contrary to law, in which event such amounts shall bear interest at the highest rate
<br /> permitted by law. Mortgagee shall, at its option, be subrogated to any encumbrance, lien, claim
<br /> or demand, and to all the rights and securities for the payment thereof, paid or discharged with
<br /> the principal sum secured hereby or by Mortgagee under the provisions hereof, and any such
<br /> subrogation rights shall be additional and cumulative security for this Mortgage. Nothing
<br /> contained in this Section shall require Mortgagee to incur any expense or do any act hereunder,
<br /> and Mortgagee shall not be liable to Mortgagor for any damages or claims arising out of action
<br /> taken by Mortgagee pursuant to this paragraph.
<br /> 1.9. Hazardous Materials. Mortgagor hereby represents and warrants to Mortgagee
<br /> that the Mortgaged Property has not at any time been used for storage, transfer, transportation or
<br /> disposal of hazardous substances, hazardous wastes, pollutants, contaminants or similar
<br /> substances (collectively "Hazardous Substances"), or for the discharge of the same into the
<br /> environment in violation of any law, regulation, or judicial or administrative order or judgment;
<br /> and the Mortgaged Property is not contaminated by, and does not contain, any Hazardous
<br /> Substances. Mortgagor will not use or permit the use of the Mortgaged Property for such
<br /> purposes. Mortgagor will fully indemnify Mortgagee and defend Mortgagee against any claims,
<br /> losses, damages, actions, costs and expenses of any kind, including without limitation, court
<br /> costs and reasonable attorneys' fees, in connection with any Hazardous Substances now or
<br /> hereafter located on the Mortgaged Property or any other violation of any federal, state or local
<br /> environmental statute, ordinance, rule or regulation ("Environmental Laws"). This indemnity
<br /> shall not apply to the extent that the willful act or omission of the Mortgagee contributes to the
<br /> actual or threatened discharge, dispersal, release, storage, treatment, generation, disposal or
<br /> escape of the Hazardous Substances. The indemnity provisions of this Section shall survive the
<br /> foreclosure or other termination of this Mortgage.
<br /> Without limiting the generality of the foregoing, Mortgagor agrees that upon the discovery
<br /> of a release or threatened release of Hazardous Substances on or from the Mortgaged Property, it
<br /> will promptly, diligently and without cost to Mortgagee, proceed to remediate all contamination
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<br /> 477384v3 EL185-40
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