We have two unexpected problems at Calvert Crossings - both of which need to be addressed as soon as possible.

First, we received a default notice on behalf of Foozer's Grille regarding a failure of the Site Plan Contingency. Foozer's withdrew their site plan amendment application several months ago in order to correct errors in their application but never resubmitted it for final approval. In the meantime, we obtained a use permit for all of the drive through lanes at the entire shopping center under Zoning Ordinance Section 23(C)(4)(e). As a result, Foozer's Grille technically has the right to use the drive through lanes next to their building under the use permit even though the site plan amendment hasn't been formally approved yet.

Second, we received a cease and desist letter on behalf of Darcy, LLC - the owner of the neighboring parcel - regarding the access easement that runs across the back of their property to connect the shopping center to Maryland Route 765. We constructed a road over the Easement Area several months ago and even walked the site with Elihu Root immediately after construction. At the time, he didn't mention any problems during the site inspection with the location. The facts in the default letter are thin as to what part of the access road may be located outside of the Easement Area and our surveyor is supposed to be at the property later this week to confirm the location of the road and all related improvements. I've attached some satellite photos showing the properties during the construction phase as well as after completion.

Another issue raised in the Darcy, LLC default letter may reveal the true motivations behind the default letter. Darcy, LLC alleges that the vehicular traffic traveling across the access easement is producing too much noise. You'll recall that the access easement was originally prepared by Elihu Root when he was an owner of the Calvert Crossings property and controlled Darcy, LLC. Phil heard that the access easement has become a problem for Elihu Root's efforts to sell the Darcy, LLC property to a national homebuilder and that he could fetch a much higher purchase price if he could reduce the size of the Easement Area or eliminate it all together. At this point, we don't have much time to address these problems; however, as Phil mentioned, we have a lot of material to work with in terms of confirming our position. While I coordinate efforts with outside counsel on both of these default letters, you can run point on the items noted below and let me know your thoughts by next week:

(1) Review the drive-through contingency in Section 29.29 of the Foozer's Grille lease and confirm the following:

a. Does our use permit approving all of the drive-through lanes in the entire shopping center satisfy the technical requirements of Section 29.29? If not, does the use permit satisfy the intent of the drive-through lanes?

b. Does the failure on the part of Foozer's Grille provide us with any sort of defense against the attempt by Foozer's Grille to terminate the Lease? Is there anything else we can do to prevent the termination?

(2) Review the Access Easement and Restriction Agreement and confirm the following:

a. Does the Access Easement restrict our use of the road in terms of noise or intensity of vehicular traffic?

b. Does the Access Easement provide for any specific remedies to Darcy, LLC for either allegation - the location of the road outside of the Easement Area or the use of the easement at a greater intensity than permitted?

c. From a practical standpoint, is there anything we can do to mitigate the impact on the Darcy, LLC property of the traffic traveling across the access road?

(3) Review the default provisions under the loan agreement (a copy of which can be found in the Project Documents folder) and confirm the following:

a. Are we in default of the loan terms at this time as a result of the Foozer's Grille default letter? If not, will we be in default of the loan terms once the Foozer's Grille lease is effectively terminated in 30 days?

b. Are we in default of the loan terms at this time as a result of the Darcy, LLC default letter? If not, when might we be in default of the loan terms as a result of the Darcy, LLC dispute?

(4) Review the HK Calvert Crossings, LLC operating agreement and confirm the following:

a. What authority we have to address both default letters. Specifically, what sort of approvals would we need to commence a lawsuit against either Foozer's Grille or Darcy, LLC?

b. Are there any adverse consequences to the company or Phil as a result of these default allegations? Regards, Lyla Gage Vice President and General Counsel Hyper Kapital HK Calvert Crossings Marketplace Construction Phase HK Calvert Crossings Marketplace Stabilization

Re: Notice of Default and Reservation of Rights Dear Landlord: This letter is being sent on behalf of Pansat, LLC (the \"Tenant\") under the Deed of Lease (the \"Lease\") with HK Calvert Crossings Marketplace, LLC (the \"Landlord) for the rentable space located at Calvert Crossings Marketplace (the \"Premises\"). This letter shall constitute a notice to Landlord of Tenant's intent to terminate the Lease that a site plan amendment in accordance with Section 29.29 of the Lease as a result of the failure of the Site Plan Contingency which requires issuance of a Site Plan Amendment permitting a single drive through lane with no less than four (4) vehicle spaces along the Building on or before that date which is one hundred eighty (180) days following the Effective Date of the Lease. Specifically, as of the date of this letter, the site plan submitted by Tenant (the \"Site Plan) providing for eight (8) spaces has not been approved by the local government authorities. Accordingly, the Lease shall be terminated upon that date which is thirty (30) days after the date hereof. Please be governed accordingly. Yours Truly Re: CEASE AND DESIST Violation of Access Easement and Restriction Agreement by and between Darcy, LLC and Elihu Root, et al. To Whom It May Concern: This firm represents Darcy, LLC (\"Darey\") the owner of certain real property located at 8765 Rousby Hall Road, Lusby, Maryland (the \"Property\"). Upon information and belief, you have are i violation of that certain Access Easement and Restriction Agreement (the \"Agreement\") by and between Darcy, LLC (\"Darcy\") and Elihu Root, et al. (as predecessor in interest to HK Calvert Crossings Marketplace). Specifically, certain improvements constructed upon the Property by or on behalf of you are located outside of the permitted Easement Area. In addition, you have used or permitted the use of the Easement Area for vehicular traffic in excess of the intensity contemplated by the Agreement resulting in unreasonable noise on the Property. I understand that you have already been made aware by a representative of Darcy that your actions are nof permitted pursuant to the Agreement. YOU ARE HEREBY INSTRUCTED TO IMMEDIATELY CEASE AND DESIST FROM THE AFOREMENTIONED CONDUCT. MY CLIENT INTENDS TO VIGOROUSLY PURSUE ALL OF THEIR RIGHTS UNDER THE LAW IN RELATION TO YOUR CONDUCT. Please be governed accordingly. Nothing contained herein is to be construed as an admuission on the part of Darcy or a waiver on the part of Darcy. Very truly yours, X. DEFAULTS AND REMEDIES Section 10.1 Events of Default. The following shall be deemed to be Events of Default under this Agreement (whatever the reason therefor and whether voluntary, involuntary or effected by operation of Law): (a) Borrower shall fail to make any principal payment due under the Loan or shall fail to pay any interest on the Loan or any other scheduled payment owing hereunder or under the other Loan Documents after such principal, interest or other scheduled payment shall become due and payable in accordance with the terms hercof; (b) Any representation or warranty made at any time by any of the Loan Parties herein or in any other Loan Document, or in any certificate, other instrument or written statement furnished by any Loan Party pursuant to the provisions hereof or thereof, shall prove to have been false or misleading in any material respect as of the time it was made or furnished; (c) Any Loan Party shall fail to comply with any covenant or obligation contained in this Agreement or any of the other Loan Documents which calls for the payment of money, other than those monetary defaults expressly referred to in subsection 10.1(a) above, and shall not cure that failure within ten (10) days after written demand by Lender; (d) Any of the Loan Parties shall fail to comply with any covenant or obligation contained in this Agreement or any of the other Loan Documents, other than (1) defaults or Events of Default under the Note and the Mortgage, or (11) those defaults expressly referred to in the other subparagraphs of this Section 10.1, and shall not cure that failure within thirty (30) days after written notice thereof by Lender to Borrower or such shorter period of time for cure specified in any Loan Document (such grace period to be applicable only in the event such default can be remedied by corrective action of the applicable Loan Party as determined by Lender in its sole discretion), provided that, in the event that such default cannot be remedied with reasonable due diligence during such thirty (30) day period, such default shall not constitute an Event of Default so long as the applicable Loan Party continues with reasonable due diligence to attempt to remedy the same for such additional period of time as may be required not to exceed a total of sixty (60) days from the date of the giving of the written notice referred to above by Lender; (e) Any of the Loan Parties, as applicable, shall fail to comply with any of the following sections of this Agreement, as applicable to the respective Loan Parties; Section 4.7 [Maintenance of Insurance], Section 4.26 [Anti-Terrorism Laws], Section 5.2 [Transfer of Land and Improvements], Section 5.3 [Change in Ownership], Section 5.4 [Liquidations, Mergers, Consolidations, Acquisitions], or Section 5.10 [Continuation of or Change in Business|; (f) Any of the Loan Parties shall fail to comply with any covenant or obligation contained in any agreement with the Lender other than the Loan Documents and such failure is not cured with any applicable grace of cure period pursuant to the terms and conditions of such agreement; (g) Any of the Loan Parties shall cease to be Solvent or shall be unable to pay their respective debts as the same shall mature; (h) Any Lien or encumbrance, other than a Permitted Encumbrance, is entered against the Land or Improvements and such Lien or encumbrance is not discharged, by bond or otherwise within ten (10) days after the filing thereof; (1) Any final judgment(s) for the payment of money shall be entered against any Loan Party by a court having jurisdiction which is not discharged, vacated, bonded or stayed pending appeal within a period of thirty (30) days from the date of entry of such judgment(s); (j) There shall occur any uninsured or inadequately insured damage to or loss, theft or destruction of any of the Collateral including, without limitation, the Land and/or any of the Improvements; (k) The Collateral or any other of the Loan Parties' assets are attached, seized, levied upon or subiected to a writ or distress warrant. or such come within the possession of anv receiver. trustee. custodian (n) Any party shall obtain an order or decree in any court of competent jurisdiction enjoining or prohibiting Lender or the Loan Parties from carrying out the terms and conditions of any of the Loan Documents to which they are a party and such order or decree 1s not vacated or stayed within ten (10) days after the filing thereof; (0) [Reserved]; (p) A proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of any Loan Party in an involuntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of any Loan Party for any substantial part of its property, or for the winding-up or liquidation of its affairs, and such proceeding shall remain undismissed or unstayed and in effect for a period of thirty (30) consecutive days or such court shall enter a decree or order granting any of the relief sought in such proceeding; (q) Any Loan Party shall commence a voluntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an voluntary case under any such law, or shall consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or other similar official) of itself or for any substantial part of its property or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any action in furtherance of any of the foregoing; (r) An Event of Default shall have occurred under the Note or the Mortgage or any other document executed and delivered in connection therewith; (s) A default or event of default is alleged to have occurred under any other lien or claim against the Land and/or the Improvements, whether alleged to be superior or junior to the lien of the Mortgage; (t) A Material Adverse Change shall have occurred; (u) Any action or proceeding is commenced, excepting an action to foreclose the lien of the Mortgage or to collect the indebtedness thereby secured, to which action or proceeding Lender is made a party by reason of the execution of the Mortgage or the Note, or in which it becomes necessary to defend or uphold the lien of the Mortgage, or the priority thereof or possession of the Land and the Improvements, or otherwise protect the security under the Mortgage and such action or proceeding is not dismissed within thirty (30) days of the commencement thereof; or (v) Borrower shall sell, assign, give, mortgage, pledge, hypothecate, encumber or otherwise transfer the Land and/or the Improvements, or any part thercof or interest therein, voluntarily or involuntarily, other than Leases approved in writing by Lender if required hereunder