EXHIBIT 10.4
Prepared by and after recording
return document to:
Stoel Rives LLP
600 University Street, Suite 3600
Seattle, Washington 98101
Attention: Virginia M. Pedreira
Loan No. 700218 & 700218A
Mortgage, Security Agreement, Assignment of Leases
and Rents, and Fixture Filing
(Kane County, Illinois)
This Mortgage, Security Agreement, Assignment of Leases and Rents, and Fixture
Filing (this “Mortgage”) is made and given as of the 7th day of February, 2008,
by JOHN B. SANFILIPPO & SON, INC., a Delaware corporation, as Mortgagor, whose
address is 1703 North Randall Road, Mail Code - 2NW-EX, Elgin, Illinois 60123
(the “Borrower”), to TRANSAMERICA LIFE INSURANCE COMPANY, an Iowa corporation,
as Mortgagee, having an office c/o AEGON USA Realty Advisors, Inc., 4333
Edgewood Road, N.E., Cedar Rapids, Iowa 52499-5443, and its successors and
assigns (the “Lender”). The definitions of capitalized terms used in this
Mortgage may be found either in Section 3 below, or through the cross-references
provided in that Section.

1.   RECITALS

  A.   Under the terms of a Second Revised Agricultural Mortgage Loan
Application/Commitment dated January 31, 2008 (the “Commitment”), AEGON USA
Realty Advisors, Inc. (“AEGON”), as agent for the Lender, agreed to fund a loan
in the original principal amount of Forty-five Million Dollars ($45,000,000)
(the “Loan”) bearing interest as provided in the Notes (hereinafter defined) and
maturing on March 1, 2023.     B.   The Commitment requires that the Loan be
secured by all of the Borrower’s existing and after-acquired interest in certain
real property and by certain tangible and intangible personal property.

2.   GRANTING CLAUSE       To secure the repayment of the Indebtedness, any
increases, modifications, renewals or extensions of the Indebtedness, and any
substitutions for the Indebtedness, as well as the performance of the Borrower’s
other Obligations, and in consideration of the sum of Ten Dollars ($10.00) and
other valuable consideration, the receipt and sufficiency of which are
acknowledged, the Borrower mortgages, grants, bargains, warrants, conveys,
alienates, releases,

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    assigns, sets over and confirms to the Lender, and to its successors and
assigns forever, all of the Borrower’s existing and after acquired interests in
the Real Property.   3.   DEFINED TERMS       The following defined terms are
used in this Mortgage. For ease of reference, terms relating primarily to the
Security Agreement are defined in Subsection 19.1.       an “Affiliate” of any
person means any entity controlled by, or under common control with, that
person.       “Appurtenances” means all rights, estates, titles, interests,
privileges, easements, tenements, hereditaments, titles, royalties, reversions,
remainders and other interests, whether presently held by the Borrower or
acquired in the future, that may be conveyed as interests in the Land under the
laws of Illinois. Appurtenances include the Easements and the Assigned Rights.  
    “Assigned Rights” means all of the Borrower’s rights, easements, privileges,
tenements, hereditaments, contracts, claims, licenses or other interests,
whether presently existing or arising in the future, which, in each case,
pertain to the Real Property. The Assigned Rights include all of the Borrower’s
rights in and to:

  (i)   any greater estate in the Real Property;     (ii)   insurance policies
required to be carried hereunder with respect to the Real Property, including
the right to negotiate claims and to receive Insurance Proceeds and unearned
insurance premiums with respect to insurance policies regarding the Real
Property (except as expressly provided in Subsection 8.1);     (iii)  
Condemnation Proceeds;     (iv)   licenses and agreements permitting the use of
sources of groundwater or water utilities, septic leach fields, railroad
sidings, sewer lines, means of ingress and egress;     (v)   drainage over other
property;     (vi)   air space above the Land;     (vii)   mineral rights and
water rights;     (viii)   party walls;     (ix)   vaults and their usage;    
(x)   franchises;     (xi)   commercial tort claims that arise during the Loan
term in respect of damages to the Real Property or to its operations, in respect
of any impairment to the value of the Real Property, or in respect of the
collection of any Rents;     (xii)   construction contracts;     (xiii)   roof
and equipment guarantees and warranties;     (xiv)   building and development
licenses and permits;     (xv)   tax credits or other governmental entitlements,
credits or rights, whether or not vested with respect to the Real Property;

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  (xvi)   licenses and applications (whether or not yet approved or issued) with
respect to the Property;     (xvii)   rights under management and service
contracts with respect to the Property;     (xviii)   leases of Fixtures; and  
  (xix)   agreements with architects, environmental consultants, property tax
consultants, engineers, and any other third party contractors whose services
benefit the Real Property.

    “Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended, 11
U.S.C. Sections 101 et seq., and the regulations promulgated pursuant to those
statutes.       “Business Day” means any day when state and federal banks are
open for business in Cedar Rapids, Iowa.       “Condemnation Proceeds” means all
money or other property that has been, or is in the future, awarded or agreed to
be paid or given in connection with any taking by eminent domain of all or any
part of the Real Property (including a taking through the vacation of any street
dedication or through a change of grade of such a street), either permanent or
temporary, or in connection with any purchase in lieu of such a taking, or as a
part of any related settlement.       “Curable Nonmonetary Default” means any of
the acts, omissions, or circumstances specified in Subsection 9.3 below.      
“Default” means any of the acts, omissions, or circumstances specified in
Section 9 below.       “Default Rate” means the rate of interest specified as
the “Default Interest Rate” in the Notes.       “Development Agreements” means
all development, utility or similar agreements included in the Permitted
Encumbrances.       “Easements” means the Borrower’s existing and future
interests in and to the declarations, easements, covenants, and restrictions
appurtenant to the Land.       “Environmental Indemnity Agreement” means the
Environmental Indemnity Agreement by the Borrower for the benefit of Lender
dated as of even date herewith.       “Environmental Laws” means all present and
future laws, statutes, ordinances, rules, regulations, orders, guidelines,
rulings, decrees, notices and determinations of any Governmental Authority to
the extent that they pertain to: (A) the protection of health against
environmental hazards; (B) the protection of the environment, including air,
soils, wetlands, and surface and underground water, from contamination by any
substance that may have any adverse health effect on humans, livestock, fish,
wildlife, or plant life, or which may disturb an ecosystem; (C) underground
storage tank regulation or removal; (D) wildlife conservation; (E) protection or
regulation of natural resources; (F) the protection of wetlands; (G) management,
regulation and disposal of solid and hazardous wastes; (H) radioactive
materials; (I) biologically hazardous materials; (J) indoor air quality; or (K)
the manufacture, possession, presence, use, generation, storage, transportation,
treatment, release, emission, discharge, disposal, abatement, cleanup, removal,
remediation or handling of any Hazardous Substances. “Environmental Laws”
include the Comprehensive Environmental Response, Compensation, and Liability
Act, as amended by the

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    Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §9601 et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq., the
Federal Water Pollution Control Act, as amended by the Clean Water Act, 33
U.S.C. §1251 et seq., the Clean Air Act, 42 U.S.C. §7401 et seq., the Toxic
Substances Control Act, 15 U.S.C. §2601 et seq., all similar state statutes and
local ordinances, and all regulations promulgated under any of those statutes,
and all administrative and judicial actions respecting such legislation, all as
amended from time to time.       “ESA” means the written environmental site
assessment of the Real Property obtained under the terms of the Commitment.    
  “Fixtures” means all materials, supplies, goods, equipment, apparatus and
other items now or hereafter attached to or installed on the Land and
Improvements in a manner that causes them to become fixtures under the laws of
Illinois, including all built-in or attached furniture or appliances, machinery,
elevators, escalators, heating, ventilating and air conditioning system
components, emergency electrical generators and related fuel storage or delivery
systems, septic system components, built-in loading, storage and processing
equipment, storm windows, doors, built-in electrical equipment, plumbing, water
conditioning, lighting, cleaning, snow removal, lawn, landscaping, irrigation,
security, incinerating, fire-fighting, sprinkler or other fire safety equipment,
wells, irrigation and wastewater equipment, built-in bridge cranes or other
installed materials handling equipment, satellite dishes or other built-in
telecommunication equipment, built-in video conferencing equipment, sound
systems or other built-in audiovisual equipment, and cable television
distribution systems. Fixtures do not include (A) trade fixtures, office
furniture and office equipment; (B) racking systems; (C) machinery and equipment
not specifically described above as constituting a Fixture; or (D) rolling
stock. Without limiting the foregoing, Fixtures expressly include HVAC,
mechanical, security and similar systems of general utility for the operation of
the Improvements as leasable commercial real property and as a warehouse and
processing facility.       “Governmental Authority” means any political entity
with the legal authority to impose any requirement on the Property, including
the governments of the United States, the State of Illinois, Kane County, the
Township of Dundee, and any other entity with jurisdiction to decide, regulate,
or affect the ownership, construction, use, occupancy, possession, operation,
maintenance, alteration, repair, demolition or reconstruction of any portion or
element of the Real Property.       “Hazardous Substance” means any substance
the release of or the exposure to which is prohibited, limited or regulated by
any Environmental Law, or which poses a hazard to human health, including:
(A) any “oil,” as defined by the Federal Water Pollution Control Act and
regulations promulgated thereunder (including crude oil or any fraction of crude
oil), (B) any radioactive substance and (C) Stachybotrys chartarum or other
molds. However, the term “Hazardous Substance” includes neither (i) a substance
used in the ordinary course of the business conducted on the Real Property in
accordance with the covenants herein contained by the Borrower or by a tenant
under a permitted Lease, or used in the cleaning and maintenance of the Real
Property, if the quantity, storage and manner of its use are customary, prudent,
and do not violate applicable law, nor (ii) automotive motor oil in immaterial
quantities, if leaked from vehicles in the ordinary course of the operation of
the Real Property and cleaned up in accordance with reasonable property
management procedures and in a manner that violates no applicable law.      
“Impositions” means all real and personal property taxes levied against the
Property; general or special assessments; ground rent; water, gas, sewer, vault,
electric or other utility charges;

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    common area charges; owners’ association dues or fees; fees for any
easement, license or agreement maintained for the benefit of the Property; and
any and all other taxes, levies, user fees, claims, charges and assessments
whatsoever that at any time may be assessed, levied or imposed on the Property
or upon its ownership, use, occupancy or enjoyment, and any related costs,
interest or penalties. In addition, “Impositions” include all documentary, stamp
or intangible personal property taxes that may become due in connection with the
Indebtedness, including Indebtedness in respect of any future advance made by
the Lender to the Borrower, or that are imposed on any of the Loan Documents.  
    “Improvements” means, to the extent of the Borrower’s existing and future
interest, all buildings and improvements of any kind erected or placed on the
Land now or in the future, including the Fixtures, together with all appurtenant
rights, privileges, Easements, tenements, hereditaments, titles, reversions,
remainders and other interests.       “Indebtedness” means all sums that are
owed or become due pursuant to the terms of the Notes, this Mortgage, or any of
the other Loan Documents, including scheduled principal payments, scheduled
interest payments, default interest, late charges, prepayment premiums,
accelerated or matured principal balances, advances, collection costs (including
reasonable attorneys’ fees), reasonable attorneys’ fees and costs in enforcing
or protecting the Notes, the Mortgage, or any of the other Loan Documents in any
probate, bankruptcy or other proceeding, receivership costs and all other
financial obligations of the Borrower incurred in connection with the Loan
transaction pursuant to the Loan Documents, provided, however, that this
Mortgage shall not secure any Loan Document or any particular person’s
liabilities or obligations under any Loan Document to the extent that such Loan
Document expressly states that it or such particular person’s liabilities or
obligations are unsecured by this Mortgage. Indebtedness shall also include any
obligations under agreements executed and delivered by Borrower which
specifically provide that such obligations are secured by this Mortgage.      
“Insurance Premiums” means all premiums or other charges required to maintain in
force any and all insurance policies that this Mortgage requires that the
Borrower maintain.       “Insurance Proceeds” means all Proceeds of all
insurance now or hereafter carried by or payable to the Borrower with respect to
the Property, including with respect to the interruption of Rents derived from
the Property, all unearned insurance premiums with respect to the Property and
all related claims or demands.       “Land” means that certain tract of land
located in the Township of Dundee, Kane County, Illinois, which is described on
the attached Exhibit A, together with the Appurtenances.       “Leasing Action”
means all executions, modifications, terminations and extensions of Leases, and
all other actions taken by the Borrower in exercising its rights as landlord
under the Leases.       “Leases” means all leases, subleases, licenses,
concessions, extensions, renewals and other agreements (whether written or oral,
and whether presently effective or made in the future) through which the
Borrower grants any possessory interest in and to, or any right to occupy or
use, all or any part of the Real Property, and any related guaranties.

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    “Legal Requirements” means all laws, statutes, rules, regulations,
ordinances, judicial decisions, administrative decisions, building permits,
development permits, certificates of occupancy, or other requirements of any
Governmental Authority.       “Loan Agreement” means the Loan Agreement executed
as of even date herewith between Borrower and Lender.       “Loan Documents”
means the Notes, the Loan Agreement, this Mortgage, the other Mortgages
described in the Loan Agreement and all other documents evidencing the Loan,
whether entered into at the closing of the Loan or in the future, as amended in
writing from time to time.       “Maximum Permitted Rate” means the highest rate
of interest permitted to be paid or collected by applicable law with respect to
the Loan.       “Notes” means (i) the Promissory Note dated of even date
herewith in the original principal amount of Thirty-Six Million Dollars
($36,000,000) evidencing Tranche A of the Indebtedness; and (ii) the Promissory
Note dated of even date herewith in the original principal amount of Nine
Million Dollars ($9,000,000) evidencing Tranche B of the Indebtedness, together
with all extensions, renewals and modifications thereof.       “Notice” means a
notice given in accordance with the provisions of Subsection 21.13.      
“Obligations” means all of the obligations required to be performed under the
terms and conditions of any of the Loan Documents by any Obligor.      
“Obligor” means the Borrower, or any other Person that is liable under the Loan
Documents for the payment of any portion of the Indebtedness, or the performance
of any other obligation required to be performed under the terms and conditions
of any of the Loan Documents, under any circumstances.       “Participations”
means participation interests in the Loan Documents granted by the Lender.      
“Permitted Encumbrances” means (A) the lien of taxes and assessments not yet due
and payable, (B) the liens and security interests in favor of Lender created by
the Loan Documents, (C) Leases permitted under the terms of this Mortgage, which
shall include the Leases identified in the rent roll attached to the Closing
Certificate executed as one of the Loan Documents; and (D) those matters listed
as special exceptions in the Lender’s title insurance policy insuring the
priority of this Mortgage.       “Person” means any individual, corporation,
limited liability company, partnership, trust, unincorporated association,
government, governmental authority or other entity.       “Property” means the
Real Property and the Leases, Rents and Personal Property (as defined in
Subsection 19.1 below).       “Real Property” means the Land and the
Improvements.       “Rents” means all rents, income, receipts, issues and
profits and other benefits paid or payable for using, leasing, licensing,
possessing, operating from or in, residing in, selling, mining, extracting

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    minerals from, or otherwise enjoying the Real Property as commercial real
estate (but not any such income, receipts, issues, profits or other benefits
arising from the specific business operations of Borrower and/or its
subsidiaries), whether presently existing or arising in the future, to which the
Borrower may now or hereafter become entitled or may demand or claim from the
commencement of the Loan term through the time of the satisfaction of all of the
Obligations, including security deposits, amounts drawn under letters of credit
securing tenant obligations, minimum rents, additional rents, common area
maintenance charges, parking revenues, deficiency rents, termination payments,
space contraction payments, damages following default under a Lease, premiums
payable by tenants upon their exercise of cancellation privileges, proceeds from
lease guarantees, proceeds payable under any policy of insurance covering loss
of rents resulting from untenantability caused by destruction or damage to the
Real Property, all rights and claims of any kind which the Borrower has or may
in the future have against the tenants under the Leases, lease guarantors, or
any subtenants or other occupants of the Real Property, all proceeds of any sale
of the Real Property in violation of the Loan Documents, any future award
granted the Borrower in any court proceeding involving any such tenant in any
bankruptcy, insolvency, or reorganization proceedings in any state or federal
court, and any and all payments made by any such tenant in lieu of rent.      
“Restoration” means (A) in the case of a casualty resulting in damage to or the
destruction of the Improvements, the repair or rebuilding of the Improvements to
their original condition, or (B) in the case of the condemnation of a portion of
the Real Property, the completion of such work as may be necessary in order to
remedy the effects of the condemnation so that the value and income-generating
characteristics of the Real Property are restored.   4.   TITLE       The
Borrower represents to and covenants with the Lender that, at the point in time
of the grant of the lien created by this Mortgage, the Borrower is well seized
of good and indefeasible title to the Real Property, in fee simple absolute,
subject to no lien or encumbrance except the Permitted Encumbrances. The
Borrower warrants this estate and title to the Lender forever, against all
lawful claims and demands of all persons. The Borrower shall maintain mortgagee
title insurance issued by a solvent carrier, covering the Real Property in an
amount at least equal to the amount of the Loan’s original principal balance.
This Mortgage is and shall remain a valid and enforceable first lien on the Real
Property, and if the validity or enforceability of this first lien is attacked
by appropriate proceedings, the Borrower shall diligently and continuously
defend it through appropriate proceedings. Should the Borrower fail to do so,
the Lender may at the Borrower’s expense take all necessary action, including
the engagement and compensation of legal counsel, the prosecution or defense of
litigation, and the compromise or discharge of claims. The Borrower shall
defend, indemnify and hold the Lender harmless in any suit or proceeding brought
to challenge or attack the validity, enforceability or priority of the lien
granted by this Mortgage. If a prior construction, mechanics’ or materialmen’s
lien on the Real Property arises by operation of statute during any construction
or repair of the Improvements, the Borrower shall either cause the lien to be
discharged by paying when due any amounts owed to such persons, or shall comply
with Section 11 of this Mortgage.   5.   REPRESENTATIONS OF THE MORTGAGOR

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    The Borrower represents to the Lender as follows:

  5.1   Formation, Existence, Good Standing         The Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware and has obtained all licenses and permits and filed all statements
of fictitious name and registrations necessary for the lawful operation of its
business in Delaware.     5.2   Qualification to Do Business         The
Borrower is qualified to do business as a foreign corporation under the laws of
Illinois and has obtained all licenses and permits and filed all statements of
fictitious name and registrations necessary for the lawful operation of its
business in Illinois.     5.3   Power and Authority         The Borrower has
full power and authority to carry on its business as presently conducted, to own
the Property, to execute and deliver the Loan Documents, and to perform its
Obligations.     5.4   Anti-Terrorism Regulations         No Borrower or
Borrower Affiliate is a “Specially Designated National” or a “Blocked Person” as
those terms are defined in the Office of Foreign Asset Control Regulations (31
CFR Section 500 et seq.).     5.5   Due Authorization         The Loan
transaction and the performance of all of the Borrower’s Obligations have been
duly authorized by all requisite corporate action, and each individual executing
any Loan Document on behalf of the Borrower has been duly authorized to do so.  
  5.6   No Default or Violations         The execution and performance of the
Borrower’s Obligations will not result in any breach of, or constitute a default
under, any contract, agreement, document or other instrument to which the
Borrower is a party or by which the Borrower may be bound or affected, and do
not and will not violate or contravene any law to which the Borrower is subject;
nor do any such other instruments impose or contemplate any obligations which
are or will be inconsistent with the Loan Documents.     5.7   No Further
Approvals or Actions Required         No approval by, authorization of, or
filing with any federal, state or municipal or other governmental commission,
board or agency or other governmental authority is necessary in connection with
the authorization, execution and delivery of the Loan Documents by the Borrower.
    5.8   Due Execution and Delivery         Each of the Loan Documents to which
the Borrower is a party has been duly executed and delivered on behalf of the
Borrower.

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  5.9   Legal, Valid, Binding and Enforceable         Each of the Loan Documents
to which the Borrower is a party constitutes the legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms.     5.10   Accurate Financial Information         All financial
information furnished by the Borrower to the Lender in connection with the
application for the Loan is true, correct and complete in all material respects
and does not omit to state any fact or circumstance necessary to make the
statements in them not misleading in any material respect, and there has been no
material adverse change in the financial condition of the Borrower since the
date of such financial information.     5.11   Compliance with Legal
Requirements         All governmental approvals and licenses required for the
conduct of the Borrower’s business and for the maintenance and operation of the
Real Property in compliance with applicable law are in full force and effect,
and the Real Property is currently being operated in compliance with the Legal
Requirements in all material respects.     5.12   Contracts and Franchises      
  All contracts and franchises necessary for the conduct of the Borrower’s
business and for the operation of the Real Property in accordance with good
commercial practice are in force.     5.13   No Condemnation Proceeding        
As of the date of this Mortgage, the Borrower has no knowledge of any present,
pending or threatened condemnation proceeding or award affecting the Real
Property.     5.14   No Casualty         As of the date of this Mortgage, no
damage to the Real Property by any fire or other casualty has occurred, other
than damage that has been completely repaired in accordance with good commercial
practice and in compliance with applicable law.     5.15   Independence of the
Real Property         The Real Property may be operated independently from other
land and improvements not included within or located on the Land, and it is not
necessary to own or control any property other than the Real Property in order
to meet the obligations of the landlord under any Lease, or in order to comply
with the Legal Requirements.     5.16   Complete Lots and Tax Parcels        
The Land is comprised exclusively of tax parcels that are entirely included
within the Land, and, if the Land is subdivided, of subdivision lots that are
entirely included within the Land.

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  5.17   Ownership of Fixtures         The Borrower owns the Fixtures free of
any encumbrances, including purchase money security interests, rights of
lessors, and rights of sellers under conditional sales contracts or other
financing arrangements.     5.18   Real Property is not Homestead Property      
  The Real Property is NOT HOMESTEAD PROPERTY of the Borrower or of the spouse
of any person named as the Borrower.     5.19   Performance under Development
Agreements         To the best of Borrower’s knowledge, all of the obligations
of the owner of the Real Property due under the Development Agreements have been
fully, timely and completely performed to the extent required thereunder and
such performance has been accepted by the related governmental agency or utility
company, and Borrower has received no notice by any Governmental Authority that
any default exists under any of the Development Agreements.     5.20   Status of
Certain Title Matters         To Borrower’s knowledge, neither Borrower nor any
tenant under the Leases is in material default under the terms of any Easement.
    5.21   No Prohibited Transactions         The Borrower represents to the
Lender that either (a) the Borrower is not an “employee benefit plan” within the
meaning of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), that is subject to Title I of ERISA, a “plan” within the meaning of
Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), or
an entity that is deemed to hold “plan assets” within the meaning of 29 C.F.R.
§2510.3-101 of any such employee benefit plan or (b) the entering into of the
Loan Documents, the acceptance of the Loan by the Borrower and the existence of
the Loan will not result in a non-exempt prohibited transaction under §406 of
ERISA or Section 4975 of the Code. The Borrower further warrants and covenants
that the foregoing representation will remain true during the term of the Loan.

6.   COVENANTS

  6.1   Good Standing         The Borrower shall remain in good standing as a
corporation under the laws of Delaware and shall maintain in force any
statements of fictitious name and registrations necessary to remain in good
standing as a corporation under the laws of the State of Delaware during the
term of the Loan.     6.2   Qualification to Do Business         The Borrower
shall remain qualified to do business as a foreign corporation under the laws of
Illinois and shall maintain in force any statements of fictitious name and
registrations necessary to remain in good standing as a corporation under the
laws of the

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      State of Illinois during the term of the Loan. The Borrower shall also
maintain in force any licenses and permits, filings and statements of fictitious
name and registrations necessary for the lawful operation of its business in
Illinois.     6.3   No Default or Violations         The Borrower shall not
enter into any contract, agreement, document or other instrument, if the
performance of the Borrower’s Obligations would result in any breach of, or
constitute a default under, any such contract, agreement, document or other
instrument, or if the contract, agreement, document or other instrument would
impose any obligations the performance of which would result in a Default under
the Loan Documents.     6.4   Payment and Performance         The Borrower shall
pay the Indebtedness and perform all of its other Obligations, as and when the
Loan Documents require such payment and performance.     6.5   Payment of
Impositions         The Borrower shall pay the Impositions on or before the last
day on which they may be paid without penalty or interest, and shall, within
thirty (30) days, furnish the Lender with a paid receipt or a cancelled check as
evidence of payment. If the Lender does not receive such evidence, the Lender
may obtain it directly. If it does so, the Lender will charge the Borrower an
administrative fee of Two Hundred Fifty Dollars ($250) for securing the evidence
of payment. The payment of this fee shall be a demand obligation of the
Borrower. If the Borrower wishes to contest the validity or amount of an
Imposition, it may do so by complying with Section 11. If any new Legal
Requirement (other than a general tax on income or on interest payments) taxes
the Mortgage so that the yield on the Indebtedness would be reduced, and the
Borrower may lawfully pay the tax or reimburse the Lender for its payment, the
Borrower shall do so.     6.6   Maintenance of the Real Property         The
Borrower shall not commit or permit any waste of the Real Property as a physical
or economic asset, and agrees to maintain (or cause to be maintained) in good
repair the Improvements, including structures, roofs, mechanical systems,
parking lots or garages, and other components of the Real Property that are
necessary or desirable for the use of the Real Property, or which the Borrower
as landlord under any Lease is required to maintain for the benefit of any
tenant. In its performance of this Obligation, the Borrower shall promptly and
in a good and workmanlike manner repair or restore, as required under Subsection
6.16, any elements of the Improvements that are damaged or destroyed. The
Borrower shall also replace roofs, parking lots, mechanical systems, and other
elements of the Improvements requiring periodic replacement. The Borrower shall
carry out such replacements no less frequently than would a commercially
reasonable owner of properties of a similar use, value, age, nature and
construction. The Borrower shall not, without the prior written consent of the
Lender, which consent shall not be unreasonably withheld, demolish, reconfigure,
or materially alter the structural elements of the Improvements, unless such an
action is the obligation of the Borrower under a Lease approved by Lender or for
which the Lender’s approval is not required. The Lender agrees that any request
for its consent to such an action shall be deemed given if the Lender does not
respond within fifteen (15) Business Days to any written request for such

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      a consent, if the request is accompanied by all materials required to
permit the Lender to analyze the proposed action.     6.7   Use of the Real
Property         The Borrower agrees that the Real Property may only be used as
a commercial property and industrial processing facility and distribution
warehouse and its related office building, for ancillary uses related thereto
and for no other purpose.     6.8   Legal Requirements         The Borrower
shall maintain in full force and effect all governmental approvals and material
permits and licenses required for the conduct of the Borrower’s business and for
the maintenance and operation of the Real Property in compliance with applicable
law, and shall comply in all material respects with all Legal Requirements
relating to the Real Property at all times.     6.9   Contracts and Franchises  
      The Borrower shall maintain in force all material contracts and franchises
necessary for the conduct of the Borrower’s business and for the operation of
the Real Property in accordance with good commercial practice.     6.10  
Covenants Regarding Certain Title Matters         The Borrower shall promptly
pay, perform and observe all of its obligations under the Easements included
within the Appurtenances or under reciprocal easement agreements, operating
agreements, declarations, and restrictive covenants included in the Permitted
Encumbrances, shall not modify or consent to the termination of any of them
without the prior written consent of the Lender, shall promptly furnish the
Lender with copies of all notices of default under them, and shall enforce all
covenants and conditions under them and benefiting the Real Property.     6.11  
Independence of the Real Property         The Borrower shall maintain the
independence of the Real Property from other land and improvements not included
within or located on the Land. In fulfilling this covenant, the Borrower shall
neither take any action which would make it necessary to own or control any
property other than the Real Property in order to meet the obligations of the
landlord under any Lease, or in order to comply with the Legal Requirements, nor
take any action which would cause any land or improvements other than the Land
and the Improvements to rely upon the Land or the Improvements for those
purposes.     6.12   Complete Lots and Tax Parcels         The Borrower shall
take no action that would result in the inclusion of any portion of the Land in
a tax parcel or subdivision lot that is not entirely included within the Land.  
  6.13   Real Property is not Homestead Property         The Real Property shall
NOT BECOME HOMESTEAD PROPERTY of the Borrower or of the spouse of any person
named as the Borrower.

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  6.14   Performance under Development Agreements         The Borrower shall
fully, timely and completely perform all of the obligations of the owner of the
Real Property due under the Development Agreements and shall cause no default
under any of the Development Agreements.     6.15   Status of Certain Title
Matters         The Borrower shall not take or fail to take any action with
respect to the Easements included within the Appurtenances or the reciprocal
easement agreements, operating agreements, declarations, and restrictive
covenants included in the Permitted Encumbrances if, as the result of such an
action or failure, the subject Easement or other title matter would (a) be
rendered invalid or without force or effect, (b) be amended or supplemented
without the consent of the Lender, (c) be placed in default or alleged default,
(d) result in any lien against the Real Property, or (e) give rise to any
assessment against the Real Property, unless immediately paid in full.     6.16
  Restoration upon Casualty or Condemnation         If a casualty or
condemnation occurs, the Borrower shall promptly commence the Restoration of the
Real Property, to the extent that the Lender has made Insurance Proceeds or
Condemnation Proceeds available to the Borrower for such Restoration.     6.17  
Performance of Landlord Obligations         The Borrower shall perform, in all
material respects, its obligations as landlord under the Leases. The Borrower
shall not, without the Lender’s written consent, which consent shall not be
unreasonably withheld, or except as otherwise provided in Section 13 below,
extend, modify, terminate, or enter into any Lease of the Real Property.    
6.18   Financial Reports and Operating Statements

  (a)   Maintenance of Books and Records         During the term of the Loan,
the Borrower shall maintain complete and accurate accounting and operational
records, including copies of all Leases and other material written contracts
relating to the Real Property, copies of all tax statements, and evidence to
support the payment of all material property-related expenses.     (b)  
Delivery of Financial and Property-Related Information         Within one
hundred twenty (120) days after the end of each of its fiscal years, or, if a
Default exists, on demand by the Lender, and within sixty (60) days after the
end of each fiscal quarter, the Borrower shall deliver to the Lender (A) copies
of the financial statements of the Borrower and its Affiliates, including
balance sheets and earnings statements, and (B) a complete and accurate
operating statement for the Real Property, all in form satisfactory to the
Lender. The annual financial statements shall include a complete rent roll
certified by the Borrower to be true and correct and must include each tenant’s
name, premises, square footage, rent, lease expiration date, renewal options and
related rental rates, delinquencies and vacancies and the existence of any
unsatisfied landlord obligations, e.g. in respect of free rent periods,
unfinished tenant improvements or other leasing costs. If the Borrower fails to
deliver the items required in this

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      Subsection, then subject to the Notice and cure period set forth in
Subsection 6.18(c) below, the Lender may engage an accounting firm to prepare
the required items. The Borrower shall cooperate fully with any investigative
audit required to permit the accounting firm to produce these items, and the
fees and expenses incurred in connection with their preparation shall be paid on
demand by the Borrower.     (c)   Effect of Failure to Deliver Financial and
Property Reports         If no Default exists and the Borrower fails to provide
the financial and property reports required under this Section within one
hundred twenty (120) days of the close of any fiscal year, the Lender will
provide a Notice of this failure and a thirty (30)-day opportunity to cure
before a Default shall exist.     (d)   Certification of Information         The
annual financial and operating statements provided under this Subsection shall
be certified by an independent certified public accountant as having been
prepared in accordance with generally accepted accounting principles,
consistently applied, or, in the case of financial statements prepared on a cash
or income tax basis, or of operating statements, as not materially misleading
based on an audit conducted in accordance with generally accepted auditing
standards. The quarterly financial and operating statements provided under this
Subsection need not be audited. The Borrower shall, however certify that such
statements are true and correct.

  6.19   Estoppel Statements

      Upon request by the Lender, the Borrower shall, within ten (10) Business
Days of Notice of the request, furnish to the Lender or to whom it may direct, a
written statement acknowledging the amount of the Indebtedness and disclosing
whether any offsets or defenses exist against the Indebtedness.

  6.20   Prohibition on Certain Distributions         If a Default exists or
would occur as a result, the Borrower shall not pay any dividend or make any
partnership, trust or other distribution, and shall not make any payment or
transfer any property in order to purchase, redeem or retire any interest in its
beneficial interests or ownership.     6.21   Use of Loan Proceeds         The
Loan proceeds shall be used solely for business and commercial purposes.    
6.22   Prohibition on Cutoff Notices         The Borrower shall not issue any
Notice to the Lender to the effect that liens on the Real Property after the
date of the Notice will enjoy priority over the lien of this Mortgage.     6.23
  Prohibited Person Compliance         Borrower warrants, represents and
covenants that neither Borrower nor any Obligor nor any of their respective
Affiliates is or will be an entity or person (i) that is listed in the Annex to,
or is otherwise subject to the provisions of, Executive Order 13224 issued on
September 24, 2001 (“EO13224”), (ii) whose name appears on the United States

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      Treasury Department’s Office of Foreign Assets Control (“OFAC”) most
current list of “Specifically Designated National and Blocked Persons” (which
list may be published from time to time in various mediums including, but not
limited to, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf), (iii) who
commits, threatens to commit or supports “terrorism”, as that term is defined in
EO 13224, or (iv) who is otherwise affiliated with any entity or person listed
above (any and all parties or persons described in subparts [i] — [iv] above are
herein referred to as a “Prohibited Person”). Borrower covenants and agrees that
neither Borrower, nor any Obligor nor any of their respective Affiliates will
(i) knowingly conduct any business, nor engage in any transaction or dealing,
with any Prohibited Person, including, but not limited to, the making or
receiving of any contribution of funds, goods, or services to or for the benefit
of a Prohibited Person, or (ii) engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in EO13224. Borrower
further covenants and agrees to deliver (from time to time) to Lender any such
certification or other evidence as may be requested by Lender in its sole and
absolute discretion, confirming that (i) neither Borrower nor any Obligor is a
Prohibited Person and (ii) neither Borrower nor any Obligor has knowingly
engaged in any business, transaction or dealings with a Prohibited Person,
including, but not limited to, the making or receiving of any contribution of
funds, goods, or services, to or for the benefit of a Prohibited Person.

7.   INSURANCE REQUIREMENTS       At all times until the Indebtedness is paid in
full, the Borrower shall maintain insurance coverage and administer insurance
claims in compliance with this Section.

  7.1   Required Coverages

  (a)   Open Perils/Special Form/Special Perils Property         The Borrower
shall maintain “Open Perils,” “Special Form,” or “Special Perils” property
insurance coverage in an amount not less than one hundred percent (100%) of the
replacement cost of all insurable elements of the Real Property and of all
tangible Personal Property, with coinsurance waived, or if a coinsurance clause
is in effect, with an agreed amount endorsement acceptable to the Lender.
Coverage shall extend to the Real Property and to all tangible Personal
Property.     (b)   Broad Form Boiler and Machinery         If any boiler or
other machinery is located on or about the Real Property, the Borrower shall
maintain broad form boiler and machinery coverage, including a form of business
income coverage.     (c)   Flood         If the Real Property is located in a
special flood hazard area (that is, an area within the 100-year floodplain)
according to the most current flood insurance rate map issued by the Federal
Emergency Management Agency and if flood insurance is available, the Borrower
shall maintain flood insurance coverage on all insurable elements of Real
Property and of all tangible Personal Property.     (d)   Comprehensive/General
Liability

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      The Borrower shall maintain commercial general liability coverage (which
may be in the form of umbrella/excess liability insurance) with a One Million
Dollar ($1,000,000) combined single limit per occurrence and a minimum aggregate
limit of Two Million Dollars ($2,000,000). Lender reserves the right to require
increased coverage with respect to these amounts.     (e)   Worker’s
Compensation         The Borrower shall maintain worker’s compensation if
applicable.     (f)   Elective Coverages         The Lender may require
additional coverages appropriate to the property type and site location.
Additional coverages may include liquor liability, earthquake, windstorm, mine
subsidence, sinkhole, supplemental liability, or coverages of other
property-specific risks, as determined by Lender.

  7.2   Primary Coverage         Each coverage required under this Section shall
be primary rather than contributing or secondary to the coverage Borrower may
carry for other properties or risks, provided, however, that blanket coverage
shall be acceptable if (a) the policy includes limits by property location and
(b) the Lender determines, in the exercise of its discretion, that the amount of
such coverage is sufficient in light of the other risks and properties insured
under the blanket policy.     7.3   How the Lender Shall Be Named         On all
property insurance policies and coverages required under this Section (including
coverage against loss of business income), the Lender must be named as “first
mortgagee” under a standard mortgage clause. On all liability policies and
coverages, the Lender must be named as an “additional insured.” The Lender shall
be referred to verbatim as follows: Transamerica Life Insurance Company and its
successors, assigns, and affiliates; as their interest may appear; c/o AEGON USA
Realty Advisors, Inc.; Mortgage Loan Dept.; 4333 Edgewood Rd., NE; Cedar Rapids,
Iowa 52499-5443.”     7.4   Rating         Each insurance carrier providing
insurance required under this Section must have, independently of its parent’s
or any reinsurer’s rating, a General Policyholder Rating of A, and a Financial
Rating of X or better, as reported in the most current issue of Best’s Insurance
Guide, or as reported by Best on its internet web site.     7.5   Deductible    
    The maximum deductible on each required coverage or policy is One Hundred
Thousand Dollars ($100,000).     7.6   Notices, Changes and Renewals         All
policies required under this Section must require the insurance carrier to give
the Lender a minimum of thirty (30) days’ notice in the event of modification,
cancellation or termination or non renewal and shall provide that no act or
omission by the insured shall invalidate or diminish the insurance provided to
Lender. The Borrower shall report to the Lender immediately any facts known to
the Borrower that may adversely affect the

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      appropriateness or enforceability of any insurance contract, including,
without limitation, changes in the ownership or occupancy of the Real Property,
any hazard to the Real Property and any matters that may give rise to any claim.
Prior to expiration of any policy required under this Section, the Borrower
shall provide either (a) an original or certified copy of the renewed policy, or
(b) a “binder,” an Acord 28 (real property), Acord 27 (personal property) or
Acord 25 (liability) certificate, or another document satisfactory to the Lender
conferring on the Lender the rights and privileges of mortgagee. If the Borrower
meets the foregoing requirement under clause (b), the Borrower shall supply an
original or certified copy of the original policy within ninety (90) days. All
binders, certificates, documents, and original or certified copies of policies
must name the Borrower as a named insured or as an additional insured, must
include the complete and accurate property address and must bear the original
signature of the issuing insurance agent.     7.7   Unearned Premiums         If
this Mortgage is foreclosed, the Lender may at its discretion cancel any of the
insurance policies required under this Section and apply any unearned premiums
to the Indebtedness.     7.8   Insurance Disclosure Notice Under 815 ILCS 180/10
        Unless the Borrower provides the Lender with evidence of the insurance
coverage required by this Section, the Lender may purchase insurance at the
expense of the Borrower to protect the interests of the Lender in the Property.
This insurance may, but need not, protect the Borrower’s interests. The coverage
that the Lender purchases may not pay any claim that the Borrower makes or any
claim that is made against the Borrower in connection with the Property. The
Borrower may later cancel any insurance purchased by the Lender, but only after
providing the Lender, in accordance with this Section, with evidence that the
Borrower has purchased the insurance required by this Section. If the Lender
purchases insurance covering the Property, the Borrower will be responsible for
the costs of that insurance, including interest at the Default Rate and any
other charges imposed by the Lender in connection with the placement of the
insurance, until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance may be added to the Indebtedness. The
costs of the insurance may be more than the cost of insurance the Borrower may
be able to obtain on its own.

8.   INSURANCE AND CONDEMNATION PROCEEDS

  8.1   Adjustment and Compromise of Claims and Awards         The Borrower may
settle any insurance claim or condemnation proceeding if the effect of the
casualty or the condemnation may be remedied for Two Hundred Fifty Thousand
Dollars ($250,000) or less. If a greater sum is required, the Borrower may not
settle any such claim or proceeding without the advance written consent of the
Lender. If a Default exists, the Borrower may not settle any insurance claim or
condemnation proceeding without the advance written consent of the Lender.    
8.2   Direct Payment to the Lender of Proceeds

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      If the Insurance Proceeds received in connection with a casualty or the
Condemnation Proceeds received in respect of a condemnation exceed Two Hundred
Fifty Thousand Dollars ($250,000), or if there is a Default, then such proceeds
shall be paid directly to the Lender. The Lender shall have the right to endorse
instruments which evidence proceeds that it is entitled to receive directly.    
8.3   Availability to the Borrower of Proceeds         The Borrower shall have
the right to use the Insurance Proceeds or the Condemnation Proceeds to carry
out the Restoration of the Real Property, if the amount received is less than
Five Million Dollars ($5,000,000), subject to the conditions set forth in
Subsections 8.4, 8.5, and 8.6 of this Section.         If the amount received in
respect of a casualty or condemnation equals or exceeds Five Million Dollars
($5,000,000), and if the Loan-to-Value ratio of the Property on completion will
be sixty-five percent (65%) or less, as determined by the Lender in its
discretion based on its estimate of the market value of the Real Property, the
Lender shall receive such Insurance Proceeds or Condemnation Proceeds directly
and hold them in a fund for Restoration subject to the conditions set forth in
Subsections 8.4, 8.5, and 8.6 of this Section. If the Lender’s estimate of the
market value of the Real Property implies a Loan-to-Value ratio of over
sixty-five percent (65%), and the Borrower disagrees with the Lender’s estimate,
the Borrower may require that the Lender engage an independent appraiser (the
“Fee Appraiser”) to prepare and submit to AEGON a full narrative appraisal
report estimating the market value of the Real Property. The Fee Appraiser shall
be certified in Illinois and shall be a member of a national appraisal
organization that has adopted the Uniform Standards of Professional Appraisal
Practice (USPAP) established by the Appraisal Standards Board of the Appraisal
Foundation. The Fee Appraiser will be required to use the procedure for the
appraisal of the Real Property at the time of the origination of the Loan,
including the required assumptions and limiting conditions. For purposes of this
Section, the independent appraiser’s value conclusion shall be binding on both
the Lender and the Borrower. The Borrower shall have the right to make a
prepayment of the Loan, without premium, sufficient to achieve this
Loan-to-Value ratio. The independent fee appraisal shall be at the Borrower’s
expense.         Unless the Borrower has the right to use the Insurance Proceeds
or the Condemnation Proceeds under the foregoing paragraphs, the Lender may, in
its sole and absolute discretion, either apply them to the Loan balance or
disburse them for the purposes of repair and reconstruction, or to remedy the
effects of the condemnation. No prepayment premium will be charged on Insurance
Proceeds or Condemnation Proceeds applied to reduce the principal balance of the
Loan.     8.4   Conditions to Availability of proceeds         The Lender shall
have no obligation to release Insurance Proceeds or Condemnation Proceeds to the
Borrower, and may hold such amounts as additional security for the Loan, if
(a) a Default exists, (b) a payment Default has occurred during the preceding
twelve (12) months, or (c) if the Insurance Proceeds or Condemnation Proceeds
received by the Lender and any other funds deposited by the Borrower with the
Lender are insufficient, as determined by the Lender in its reasonable
discretion, to complete the Restoration. If a Default exists, the Lender may at
its sole and absolute discretion apply

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      such Insurance Proceeds and Condemnation Proceeds to the full or partial
cure of the Default.     8.5   Permitted Mezzanine Financing for Rebuilding or
Remediation of the Effect of Taking by Eminent Domain         If the Lender
reasonably determines that the Insurance Proceeds or Condemnation Proceeds
received in respect of a casualty or condemnation, as the case may be, would be
insufficient to permit the Borrower to restore the Improvements to their
condition before the casualty, or to remedy the effect on the Real Property of
the condemnation, then the Borrower shall use its commercially reasonable
efforts to secure such additional funds as are necessary to effect the
Restoration. The Borrower’s obligation to use its commercially reasonable
efforts shall be limited to securing such funds on a non-recourse basis.
Interests in the Borrower may be pledged as security to the extent necessary in
connection with any such financing.     8.6   Draw Requirements         The
Borrower’s right to receive Insurance Proceeds and Condemnation Proceeds held by
the Lender under this Section shall be conditioned on the Lender’s approval of
plans and specifications for the Restoration, which approval shall not be
unreasonably withheld. Each draw shall be in the minimum amount of Fifty
Thousand Dollars ($50,000). Draw requests shall be accompanied by customary
evidence of construction completion, and by endorsements to the Lender’s
mortgagee title insurance coverage insuring the absence of construction,
mechanics’ or materialmen’s liens. Draws based on partial completion of the
Restoration shall be subject to a ten percent (10%) holdback. All transactional
expenses shall be paid by the Borrower.

9.   DEFAULT

  9.1   Payment Defaults         A “Default” shall exist without Notice upon the
occurrence of any of the following events:

  (a)   Scheduled Payments         The Borrower’s failure to pay, or to cause to
be paid, (i) any regular monthly payment of principal and interest under the
Notes, on or before the tenth (10th) day of the month in which it is due or
(ii) any other scheduled payment under the Notes, this Mortgage or any other
Loan Document within ten (10) days of its due date.     (b)   Payment at
Maturity         The Borrower’s failure to pay, or to cause to be paid, the
Indebtedness when the Loan matures by acceleration under Section 14, because of
a transfer or encumbrance under Section 12, or by lapse of time.

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  (c)   Demand Obligations         The Borrower’s failure to pay, or to cause to
be paid, within five (5) Business Days of the Lender’s demand, any other amount
required under the Notes, this Mortgage or any of the other Loan Documents.

  9.2   Incurable Nonmonetary Default         A Default shall exist upon any of
the following:

  (a)   Material Untruth or Misrepresentation         The Lender’s discovery
that any representation made by the Borrower in any Loan Document was materially
and adversely untrue or misleading when made, if the misrepresentation either
was intentional or is not capable of being cured as described in Subsection
9.3(a) below.     (b)   Due on Sale or Encumbrance         The occurrence of any
sale, conveyance, transfer or vesting that would result in the Loan becoming
immediately due and payable at the Lender’s option under Section 12.     (c)  
Voluntary Bankruptcy Filing         The filing by the Borrower of a petition in
bankruptcy or for relief from creditors under any present or future law that
affords general protection from creditors.     (d)   Insolvency         The
failure of the Borrower generally to pay its debts as they become due, its
admission in writing to an inability so to pay its debts, the making by the
Borrower of a general assignment for the benefit of creditors, or a judicial
determination that the Borrower is insolvent.     (e)   Receivership         The
appointment of a receiver or trustee to take possession of any of the assets of
the Borrower.     (f)   Levy or Attachment         The taking or seizure of any
material portion of the Property under levy of execution or attachment.     (g)
  Lien         The filing against the Real Property of any lien or claim of lien
for the performance of work or the supply of materials, or the filing of any
federal, state or local tax lien against the Borrower, or against the Real
Property, unless the Borrower promptly complies with Section 11 of this
Mortgage.     (h)   Defaults under other Loan Documents         The existence of
any default or Default under the Loan Agreement or any other Loan Document,
provided any required Notice of such default has been given and any applicable
cure period has expired.     (i)   Dissolution or Liquidation

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      The Borrower shall initiate or suffer the commencement of a proceeding for
its dissolution or liquidation, and such proceeding shall not be dismissed
within sixty (60) days, or the Borrower shall cease to exist as a legal entity.

  9.3   Curable Non-Monetary Default         A Default shall exist, following
the cure periods specified below, under the following circumstances:

  (a)   Unintentional Misrepresentations that are Capable of Being Cured        
A “Default” shall exist, with Notice, if the Lender discovers that the Borrower
has unintentionally made any material and adverse misrepresentation that is
capable of being cured, unless the Borrower promptly commences and diligently
pursues a cure of the misrepresentation approved by the Lender, and completes
the cure within one hundred twenty (120) days of its receipt of Notice. Any such
cure shall place the Lender in the risk position that would have existed had the
false representation been true when made. The Lender shall afford the Borrower
an additional one hundred twenty (120) day period in cases where construction or
repair is needed to cure the potential Default, and the cure cannot be completed
within the first one hundred twenty (120) day cure period. During the cure
period, the Borrower has the obligation to provide on demand satisfactory
documentation of its effort to cure, and, upon completion, evidence that the
cure has been achieved.     (b)   Involuntary Bankruptcy or Similar Filing      
  The Borrower becomes the subject of any petition or action seeking to
adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief, or that may result in a composition of its debts,
provide for the marshaling of the Borrower’s assets for the satisfaction of its
debts, or result in the judicially ordered sale of the Borrower’s assets for the
purpose of satisfying its obligations to creditors, unless dismissed within
sixty (60) days of the filing of the petition or other action.     (c)   Entry
of a Material Judgment         Any judgment is entered against the Borrower or
any other Obligor involving an aggregate amount of One Million Five Hundred
Thousand and 00/100 Dollars ($1,500,000.00) or more (unless another Default then
exists, in which event there shall be no dollar limitation), and the judgment
may materially and adversely affect the value, use or operation of the Real
Property, unless the judgment is satisfied within thirty (30) days or the
Borrower’s insurer accepts full coverage and liability in writing within such
thirty (30) day period.     (d)   Other Defaults         The Borrower fails to
observe any promise or covenant made in this Mortgage, unless the failure
results in a Default described elsewhere in this Section 9, provided the Lender
delivers written Notice to the Borrower of the existence of such an act,
omission or circumstance, and that such an act, omission or circumstance shall
constitute a Default under the Loan Documents unless the Borrower promptly
initiates an effort to cure the potential Default, pursues the

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      cure diligently and continuously, and succeeds in effecting the cure
within one hundred twenty (120) days of receipt of Notice. The Lender shall
afford the Borrower an additional one hundred twenty (120) day period in cases
where construction or repair is needed to cure the potential Default, and the
cure cannot be completed within the first one hundred twenty (120) day cure
period. During the cure period, the Borrower has the obligation to provide on
demand satisfactory documentation of its effort to cure, and, upon completion,
evidence that the cure has been achieved. All notice and cure periods provided
in this Mortgage shall run concurrently with any notice or cure periods provided
by law and in any of the other Loan Documents.

10.   RIGHT TO CURE       The Lender shall have the right to cure any Default.
The expenses of doing so shall be part of the Indebtedness, and the Borrower
shall pay them to the Lender on demand.   11.   CONTEST RIGHTS       The
Borrower may secure the right to contest Impositions and construction,
mechanics’ or materialmen’s liens, through appropriate proceedings conducted in
good faith, by either (A) depositing with the Lender an amount equal to one
hundred twenty five percent (125%) of the amount of the Imposition or the lien,
or (B) obtaining and maintaining in effect a bond issued by a surety acceptable
to the Lender, in an amount equal to the greater of (i) the amount of a required
deposit under clause (A) above and (ii) the amount required by the surety or by
the court in order to obtain a court order staying the foreclosure of the lien
pending resolution of the dispute, and releasing the lien of record. The
proceeds of such a bond must be payable directly to the Lender. The surety
issuing such a bond must be acceptable to the Lender in its reasonable
discretion. After such a deposit is made or bond issued, the Borrower shall
promptly commence the contest of the lien and continuously pursue that contest
in good faith and with reasonable diligence. If the contest of the related
Imposition or lien is unsuccessful, any deposits or bond proceeds shall be used
to pay the Imposition or to satisfy the obligation from which the lien has
arisen. Any surplus shall be refunded to the Borrower.   12.   DUE ON TRANSFER
OR ENCUMBRANCE       Upon the sale or transfer of any portion of the Property or
any other conveyance, transfer or vesting of any direct or indirect interest in
the Property, including (i) any encumbrance (other than a Permitted Encumbrance)
of the Real Property (unless the Borrower contests the encumbrance in compliance
with Section 11); and (ii) the granting of any security interest in the Property
(other than Permitted Encumbrances), the Indebtedness shall, at the Lender’s
option, become immediately due and payable without Notice to the Borrower.   13.
  ABSOLUTE ASSIGNMENT OF LEASES AND RENTS

  13.1   ASSIGNMENT OF RENTS AND PROCEEDS AND LEASES

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      In connection with the Loan, Borrower hereby absolutely, presently and
irrevocably assigns, grants, transfers, and conveys to Lender, its successors
and assigns, all of Borrower’s right, title, and interest in, to, and under all
Leases, now or hereafter affecting all or any part of the Property or Borrower’s
use thereof, including without limitation the right to take all Leasing Actions,
together with all of Borrower’s right, title, and interest in and to all Rents,
and the right, without taking possession of the Real Property, to collect the
same as they become due and to apply such Rents and Proceeds to the Secured
Obligations. It is the intent of Borrower and Lender to establish a present
transfer and assignment of all of the Leases and the Rents to Lender.     13.2  
DISCLAIMER         Neither the assignments set forth in Section 13.1 above nor
Lender’s exercise of its rights thereunder shall be deemed or construed to
constitute the Lender a mortgagee in possession of the Real Property, nor shall
the Lender be deemed to have assumed, by accepting this Assignment, the
landlord’s obligations to any tenant. In particular, acceptance by Lender of
this Assignment shall not obligate the Lender (a) to appear in or to defend any
action or proceeding relating to the Leases or to the Real Property, (b) to
perform any obligation as landlord under the Leases, (c) to pay any amount or to
assume any future financial obligation of the landlord, including any obligation
to pay to any tenant a security or other deposit not actually received by Lender
or (d) to indemnify any tenant for any injury or damage to person or property
sustained by any person or persons, firm or corporation in or about the Real
Property.     13.3   REPRESENTATIONS, WARRANTIES AND COVENANTS         Borrower
hereby represents, warrants, and covenants as follows.

  (a)   Borrower is the sole holder of the landlord’s interest under the Leases,
is entitled to receive the Rents and Proceeds from the Leases and from the
Property, and has the full right to sell, assign, transfer, and set over the
same and to grant to and confer upon Lender the rights, interests, powers, and
authorities herein granted and conferred.     (b)   If the Borrower receives any
written notice from any tenant asserting a material default by the landlord
under a Lease, or advising the Borrower that a condition exists which may become
a material default with the passage of time, the Borrower shall send a copy or
memorandum of the notice to the Lender.     (c)   The Borrower agrees upon
written request of the Lender following the revocation of the licenses granted
in Section 13.4, to notify the tenants under the Leases of this Assignment, to
direct them in writing to send the Lender, simultaneously, copies of all notices
of default that they serve on the Borrower, and to direct them, at the Lender’s
request, to pay all future Rent directly to the Lender. The Rents and copies of
such notices shall be sent to the Lender at such address as is specified by the
Lender to tenants from time to time.

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  (d)   The Borrower shall not create or permit any lien, charge, or encumbrance
of the Leases or of the Rents, and shall not pledge, transfer, or otherwise
assign the Leases or the Rents unless at the Lender’s request, or unless
otherwise agreed to by the Lender in writing.     (e)   Borrower has made no
pledge or assignment of the Leases or Rents prior to the date hereof, other than
collateral assignments to other lenders that will be released concurrently with
the delivery and recordation of this Mortgage, and Borrower shall not, after the
date hereof, make or permit any such pledge or assignment.     (f)   Borrower
shall provide Lender with a fully-executed copy of each Lease, amendment,
modification or alteration thereto.

  13.4   LICENSE         The Lender grants to the Borrower a conditional
license, subject to the Lender’s rights under Section 13.5 below, to collect the
Rents, other than those Rents paid more than one (1) month in advance. The
Borrower may use the Rents so collected for any lawful purpose which is
consistent with the Borrower’s ongoing performance of its obligations under the
Loan Documents, provided (a) no Default then exists and (b) the Borrower does
not intend to cause, and has no reason to expect the occurrence of, any Default
in respect of the Obligations due to be performed in the following calendar
month.         Any Rents excluded from the scope of this license shall be trust
funds for the benefit of the Lender. The Lender may require that such Rents be
deposited in a reserve fund to serve as additional security for the Loan, or to
be used to benefit the Real Property, under such terms and conditions as the
Lender may determine in the exercise of its sole and absolute discretion.      
  The Lender further grants to the Borrower a conditional license subject to the
Lender’s rights under Section 13.5 to take all Leasing Actions in the ordinary
course of business. The license does not extend to any Leasing Action that
permits (i) less than reasonable market rent during its original term or any
extension period, (ii) that permits prepayment of rent more than one (1) year in
advance, or such shorter period as is actually provided for rentals under the
Lease, or (iii) that modifies a Lease in any manner that increases the liability
or obligations of any successor to Borrower’s interest in such Lease or affects
the notice and cure rights available thereunder. Furthermore, any Leases to
Affiliates of Borrower, or other Leases specifically identified by Lender, must
be unconditionally subordinated to this Mortgage.     13.5   Revocation of
License         Upon Default, the Lender may by Notice to the Borrower or
Assignor immediately terminate the Borrower’s licenses under Section 13.4,
regardless of whether the Real Property or any other collateral adequately
secures the Loan’s eventual repayment. Upon the termination of the Borrower’s
license, the Borrower shall immediately deliver to the Lender all Rents then in
the Borrower’s possession, and all Rents then due or accruing

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      thereafter shall be payable by tenants directly to the Lender. This
Assignment shall constitute a direction to and full authority to any tenant of
the Real Property, upon the Lender’s written request, to pay all Rents to the
Lender, without requiring the Lender to prove to the tenant the existence of
Default. The Borrower agrees to deliver immediately to the Lender any Rents
received by the Borrower after the revocation of the Borrower’s license under
Section 4, and at the Lender’s written request, shall execute such further
assignments to the Lender of any Lease as the Lender may in its sole judgment
request. This Assignment is given in connection with the Loan and in support of
the performance of the Obligations, and nothing herein contained shall be
construed as (a) constituting the Lender a “mortgagee-in-possession” of the Real
Property, or (b) an assumption by the Lender of the Borrower’s obligations as
landlord under the Leases.         Upon the cure of all Defaults, the Lender may
by Notice to the Borrower, reinstate the licenses of the Borrower under
Section 13.4 of this Mortgage.

14.   ACCELERATION       If a Default exists, the Lender may, at its option,
declare the unpaid principal balance of the Notes to be immediately due and
payable, together with all accrued interest on the Indebtedness, all costs of
collection (including reasonable attorneys’ fees and expenses) and all other
charges due and payable by the Borrower under the Notes or any other Loan
Document.       If the subject Default is nonmonetary in nature other than a
Default arising under Section 9.2(b), the Lender shall exercise its option to
accelerate only by giving Notice of acceleration to the Borrower. The Lender
shall not give any such Notice of acceleration until (a) the Borrower has been
given any required Notice of the prospective Default and (b) any applicable cure
period has expired.       Except as expressly described in this Section, no
notice of acceleration shall be required in order for the Lender to exercise its
option to accelerate the Indebtedness in the event of Default.   15.   RIGHTS OF
ENTRY AND TO OPERATE

  15.1   Entry on Real Property         If a Default exists, the Lender may, to
the extent permitted by applicable law, enter upon the Real Property and take
exclusive possession of the Real Property and of all books, records and
accounts, all without Notice and without being guilty of trespass, but subject
to the rights of tenants in possession under the Leases. If the Borrower remains
in possession of all or any part of the Property after Default and without the
Lender’s prior written consent, the Lender may, without Notice to the Borrower,
invoke any and all legal remedies to dispossess the Borrower.     15.2  
Operation of Real Property         If a Default exists, the Lender may hold,
lease, manage, operate or otherwise use or permit the use of the Real Property,
either itself or by other persons, firms or entities, in such manner, for such
time and upon such other terms as the Lender may deem to be

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      prudent under the circumstances (making such repairs, alterations,
additions and improvements thereto and taking any and all other action with
reference thereto, from time to time, as the Lender deems prudent), and apply
all Rents and other amounts collected by the Lender to the Obligations.

16.   RECEIVERSHIP       Following Default, the Lender may apply to a court of
competent jurisdiction for the appointment of a receiver of the Property, ex
parte without Notice to the Borrower, whether or not the value of the Property
exceeds the Indebtedness, whether or not waste or deterioration of the Real
Property has occurred, and whether or not other arguments based on equity would
justify the appointment. The Borrower irrevocably, with knowledge and for
valuable consideration, consents to such an appointment. Any such receiver shall
have all the rights and powers customarily given to receivers in Illinois,
including the rights and powers granted to the Lender by this Mortgage, the
power to maintain, lease and operate the Real Property on terms approved by the
court, and the power to collect the Rents and apply them to the Indebtedness or
otherwise as the court may direct. Once appointed, a receiver may at the
Lender’s option remain in place until the Indebtedness has been paid in full.  
17.   FORECLOSURE; POWER OF SALE

  17.1   Availability of Remedies         Upon Default, the Lender may
immediately proceed to foreclose the lien of this Mortgage, against all or part
of the Property, or to sell the Property, by judicial or nonjudicial foreclosure
in accordance with the laws of Illinois and may pursue any other remedy
available to commercial mortgage lenders under the laws of Illinois.     17.2  
Construction with Illinois Mortgage Foreclosure Law         In the event that
any provision of this Mortgage shall be inconsistent with any provision of the
Illinois Mortgage Foreclosure Law (Chapter 735, Sections 5/15-1101 et seq.,
Illinois Compiled Statutes) (the “Act”), the provisions of the Act shall take
precedence over the provisions of this Mortgage, but shall not invalidate or
render unenforceable any other provision of this Mortgage that can be construed
in a manner consistent with the Act.     17.3   Availability of all Remedies
under the Act         If any provision of this Mortgage shall grant to Mortgagee
any rights or remedies upon default of the Mortgagor which are more limited than
the rights that would otherwise be vested in Mortgagee under the Act in the
absence of said provision, the Mortgagee shall be vested with the rights granted
in the Act to the full extent permitted by law.     17.4   Expenses included in
Indebtedness         Without limiting the generality of the foregoing, all
expenses incurred by the Mortgagee to the extent reimbursable under
Section 15-1512 of the Act, whether incurred before or after any decree or
judgment of foreclosure, and whether enumerated in this Mortgage,

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      shall be added to the Indebtedness secured by this Mortgage or by the
judgment of foreclosure.

18.   WAIVERS       To the maximum extent permitted by applicable law, the
Borrower irrevocably and unconditionally WAIVES and RELEASES any present or
future rights (a) of reinstatement or redemption pursuant to 735 ILSC 5/15-1601
or similar reinstatement or redemption rights now or hereafter available to the
Lender following a Default, (b) that may exempt the Property from any civil
process, (c) to appraisal or valuation of the Property, (d) to extension of time
for payment, (e) that may subject the Lender’s exercise of its remedies to the
administration of any decedent’s estate or to any partition or liquidation
action, (f) to any homestead and exemption rights provided by the Constitution
and laws of the United States and of Illinois, (g) to notice of acceleration or
notice of intent to accelerate (other than as expressly stated herein) following
a Default, and (h) that in any way would delay or defeat the right of the Lender
to cause the sale of the Real Property for the purpose of satisfying the
Indebtedness following a Default,. The Borrower agrees that the price paid at a
lawful foreclosure sale, whether by the Lender or by a third party, and whether
paid through cancellation of all or a portion of the Indebtedness or in cash,
shall conclusively establish the value of the Real Property.       The foregoing
waivers shall apply to and bind any party assuming the Obligations of the
Borrower under this Mortgage.   19.   SECURITY AGREEMENT AND FIXTURE FILING

  19.1   Definitions         “Account” shall have the definition assigned in the
UCC.         “Account Collateral” means all Accounts that arise from the
leasing, licensing or use by third parties of the Property, from the
commencement of the Loan term through the satisfaction of all of the
Obligations.         “Chattel Paper” shall have the definition assigned in the
UCC.         “Chattel Paper Collateral” means all Chattel Paper arising from the
sale or other disposition of all or part of the Property.         “Control
Agreement” means a Deposit Account or Securities Account control agreement by
and among the Borrower, the Lender and the relevant depository or securities
intermediary providing the Lender with “control” of such Deposit Account or
Securities Account within the meaning of Articles 8 and 9 of the UCC.        
“Deposit Account” shall have the definition assigned in the UCC.        
“Deposit Account Collateral” means that certain demand account number 0692-37808
established with Cole Taylor Bank in Rosemont, Illinois (the “Proceeds Account”)
and any replacement or successor accounts and all other Deposit Accounts and/or
Securities

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      Accounts over which Lender has obtained a Control Agreement into which
Rents , Insurance Proceeds, Condemnation Proceeds or Proceeds of the Property
are deposited or held at any time from the commencement of the Loan term through
the satisfaction of all of the Obligations and shall include all funds in such
Deposit Accounts.         “Document” shall have the definition assigned in the
UCC.         “Document Collateral” means all Documents that evidence title to
all or any part of the Goods Collateral.         “Equipment” shall have the
definition assigned in the UCC.         “Equipment Collateral” means all
Equipment that relates to the Real Property arising from the sale or other
disposition of all or part of the Property.         “Excluded Collateral” means
(A) trade fixtures, office furniture and office equipment; (B) racking systems;
(C) machinery and equipment which does not constitute a Fixture or Equipment
Collateral; or (D) rolling stock.         “Financing Statements” shall have the
definition assigned in the UCC.         “General Intangibles” shall have the
definition assigned in the UCC.         “General Intangible Collateral” means
all General Intangibles that have arisen or that arise in the future in
connection with the Borrower’s ownership, operation or leasing of the Real
Property as commercial real estate (but not any General Intangibles arising from
the specific business operations of Borrower and/or its subsidiaries), at any
time from the commencement of the Loan term through the satisfaction of all of
the Obligations.         “Goods” shall have the definition assigned in the UCC.
“Goods” include all detached Fixtures, items of Personal Property that may
become Fixtures, property management files, accounting books and records,
reports of consultants relating to the Real Property as commercial real estate,
site plans, test borings, environmental or geotechnical surveys, samples and
test results, blueprints, construction and shop drawings, and plans and
specifications.         “Goods Collateral” means all Goods that relate to the
Real Property as commercial real estate and are used in the operation of the
Real Property as commercial real estate.         “Instrument” shall have the
definition assigned in the UCC.         “Instrument Collateral” means all
Instruments received as Rents or identifiable Proceeds of Property or purchased
by the Borrower with Rents or identifiable Proceeds.         “Investment
Property” shall have the definition assigned in the UCC.         “Investment
Property Collateral” means all the Investment Property purchased using Rents or
identifiable Proceeds of Property, or received in respect of Account Collateral.

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      “Money Collateral” means all money received in respect of Rents.        
“Personal Property” means Account Collateral, Chattel Paper Collateral,
Commercial Tort Claim Collateral, Deposit Account Collateral, Document
Collateral, Equipment Collateral, General Intangibles Collateral, Goods
Collateral, Instrument Collateral, Investment Property Collateral, and Money
Collateral, but shall not include the Excluded Collateral.         “Proceeds”
mean all proceeds (as defined in the UCC) of any Property.         “UCC” means
the Uniform Commercial Code as adopted in Illinois.     19.2   Creation of
Security Interest         This Mortgage shall be self-operative and shall
constitute a security agreement pursuant to the provisions of the UCC with
respect to the Personal Property. The Borrower, as debtor, hereby grants the
Lender, as secured party, for the purpose of securing the Indebtedness, a
security interest in the Account Collateral, Chattel Paper Collateral,
Commercial Tort Claim Collateral, Deposit Account Collateral, Document
Collateral, Equipment Collateral, General Intangible Collateral, Goods
Collateral, Instrument Collateral, Investment Property Collateral, and Money
Collateral, in the accessions, additions, replacements, substitutions and
Proceeds of any of the foregoing items of collateral. Upon Default, the Lender
shall have the rights and remedies of a secured party under the UCC as well as
all other rights and remedies available at law or in equity, and, at the
Lender’s option, the Lender may also invoke the remedies provided elsewhere in
this Mortgage as to such Property. The Borrower and the Lender agree that the
rights granted to the Lender as secured party under this Section 19 are in
addition to rather than a limitation on any of the Lender’s other rights under
this Mortgage with respect to the Property.     19.3   Filing Authorization    
    The Borrower irrevocably authorizes the Lender to file, in the appropriate
locations for filings of UCC financing statements in any jurisdictions as the
Lender in good faith deems appropriate, such financing statements and amendments
as the Lender may require in order to perfect or continue this security
interest, or in order to prevent any filed financing statement from becoming
misleading or from losing its perfected status.     19.4   Additional Searches
and Documentation         Borrower shall provide to Lender upon request,
certified copies of any searches of UCC records deemed necessary or appropriate
by Lender to confirm the first priority status of its security interest in the
Personal Property, together with copies of all documents or records evidencing
security interests disclosed by such searches.     19.5   Costs         The
Borrower shall pay all filing fees and costs and all reasonable costs and
expenses of any record searches (or their continuations) as the Lender may
require.

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  19.6   Representations, Warranties and Covenants of the Borrower

  (a)   Ownership of the Personal Property         All of the Personal Property
is owned by the Borrower, and except for the Collateral Use Agreement executed
among Borrower, Lender and Wells Fargo Foothill, LLC, in its capacity as agent
for the Revolving Credit Lenders referenced therein, is not the subject matter
of any lease, control agreement or other instrument, agreement or transaction
whereby any ownership, security or beneficial interest in the Personal Property
is held by any person or entity other than the Borrower, subject only to (1) the
Lender’s security interest, (2) the rights of tenants occupying the Property
pursuant to Leases approved by the Lender, which shall include the Leases
identified in the rent roll attached to the Closing Certificate executed as one
of the Loan Documents, and (3) the Permitted Encumbrances.     (b)   No Other
Identity         Except as set forth on Schedule 19.6, the Borrower represents
and warrants that the Borrower has not used or operated under any other name or
identity for at least five (5) years. The Borrower covenants and agrees that
Borrower will furnish Lender with notice of any change in its name, form of
organization, or state of organization within thirty (30) days prior to the
effective date of any such change.     (c)   Location of Equipment         All
Equipment Collateral is located upon the Land.     (d)   Removal of Goods      
  The Borrower will not remove or permit to be removed any detached Fixtures or
Goods that may become Fixtures from the Land, unless the same is replaced
immediately with unencumbered assets (1) of a quality and value equal or
superior to that which it replaces and (2) which is located on the Land. All
such replacements, renewals, and additions shall become and be immediately
subject to the security interest of this Mortgage.     (e)   Proceeds        
The Borrower shall not, without the Lender’s prior written consent, dispose of
any Personal Property in any other manner, except in compliance with Subsection
19.6(d) above

  19.7   Fixture Filing         This Mortgage constitutes a financing statement
filed as a fixture filing in the Official Records of the County Recorder of Kane
County, Illinois with respect to any and all fixtures comprising Property. The
“debtor” is John B. Sanfilippo & Son, Inc., a corporation organized under
Delaware law, the “secured party” is Transamerica Life Insurance Company, the
collateral is as described in Subsection 19.1 above and the granting clause of
this Mortgage, and the addresses of the debtor and secured party are the
addresses stated in Subsection 21.13 of this Mortgage for Notices to such
parties. The organizational identification number of the debtor is 0878236. The
owner of record of the Real Property is John B. Sanfilippo & Son, Inc.

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  19.8   Deposit Account

  (a)   Borrower shall deposit all Rents, Insurance Proceeds and Condemnation
Proceeds, as well as the Proceeds of any of the other Property described herein,
in the Proceeds Account, all of which shall be subject to the terms of this
Agreement.     (b)   Borrower shall maintain the Proceeds Account in effect at
all times during the term of the Loan.     (c)   Borrower shall take all steps
necessary to create in Lender a perfected security interest in the Proceeds
Account, and shall afford Lender control of the Proceeds Account within the
meaning of Section 9104 of the UCC (and any successor or replacement statutes)
within ten (10) business days following the recordation of this instrument in
the real estate records of the County in which the Real Property is located.    
(d)   If the depository bank at which the Proceeds Account is located becomes
insolvent, ceases doing business or is otherwise incapable in Lender’s
reasonable discretion of holding and administering the Proceeds Account for its
intended purposes, the Proceeds Account shall be moved to a replacement
depository bank reasonably acceptable to Lender, and Lender’s security interest
therein shall be perfected by control agreement with the replacement depository
bank.     (e)   Upon the occurrence of a Default, Lender shall be entitled to
provide the depository bank with notice of exclusive control of the Proceeds
Account and Lender shall have the unilateral right to provide instructions as to
the use, disposition and application of the funds or other financial assets in
the Proceeds Account.

20.   ENVIRONMENTAL MATTERS

  20.1   Representations         The Borrower represents as follows:

  (a)   No Hazardous Substances         To the best of the Borrower’s knowledge,
and except as disclosed in the ESA, no release of any Hazardous Substance has
occurred on or about the Real Property in a quantity or at a concentration level
that (i) violates any Environmental Law, or (ii) requires reporting to any
regulatory authority or may result in any obligation to remediate under any
Environmental Law.     (b)   Absence of Mold Contamination         To the best
of Borrower’s knowledge, there are no mold issues present in the Improvements
that result in a violation of Environmental Laws. Borrower has received no
mold-related tenant complaint or notice of any legal proceeding relating to mold
affecting the Improvements.     (c)   Compliance with Environmental Laws

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      The Real Property and its current use and presently anticipated uses
comply with all Environmental Laws, including those requiring permits, licenses,
authorizations, and other consents and approvals.

  (d)   No Actions or Proceedings         To the best of Borrower’s knowledge,
no governmental authority or agency has commenced any action, proceeding or
investigation based on any suspected or actual violation of any Environmental
Law on or about the Real Property. To the best of the Borrower’s knowledge, no
such authority or agency has threatened to commence any such action, proceeding,
or investigation.

  20.2   Environmental Covenants         The Borrower covenants as follows:

  (a)   Compliance with Environmental Laws         The Borrower shall, and the
Borrower shall cause all employees, agents, contractors, and tenants of the
Borrower to, keep and maintain the Real Property in compliance with all
Environmental Laws.     (b)   Notices, Actions and Claims         The Borrower
shall immediately advise the Lender in writing of (i) any written notices from
any governmental or quasi-governmental agency or authority of violation or
potential violation of any Environmental Law received by the Borrower, (ii) any
and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened pursuant to any Environmental Law
about which Borrower has received written notice, (iii) all claims made or
threatened by any third party against the Borrower or the Real Property relating
to damage, contribution, cost recovery, compensation, loss or injury resulting
from any Hazardous Substances, and (iv) discovery by the Borrower of any
occurrence or condition on any real property adjoining or in the vicinity of the
Real Property that creates a foreseeable risk of contamination of the Real
Property by or with Hazardous Substances.

  20.3   The Lender’s Right to Control Claims         The Lender shall have the
right (but not the obligation) to join and participate in, as a party if it so
elects, any legal proceedings or actions initiated in connection with any
Hazardous Substances and to have its related and reasonable attorneys’ and
consultants’ fees paid by the Borrower upon demand.     20.4   Indemnification  
      The Borrower shall be solely responsible for, and shall indemnify, defend,
and hold harmless the Lender and its directors, officers, employees, agents,
successors and assigns, from and against, any claim, judgment, loss, damage,
demand, cost, expense or liability of whatever kind or nature, known or unknown,
contingent or otherwise, directly or indirectly arising out of or attributable
to the use, generation, storage, release, threatened release, discharge,
disposal, or presence (whether prior to or after the date of this Mortgage) of
Hazardous Substances on, in, under or about the Real Property (whether by the
Borrower, a predecessor in title, any tenant, or any employees, agents,
contractor or subcontractors of any of the foregoing or any third persons at any
time occupying or

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      present on the Real Property), including: (i) personal injury; (ii) death;
(iii) damage to property; (iv) all consequential damages; (v) the cost of any
required or necessary repair, cleanup or detoxification of the Real Property,
including the soil and ground water thereof, and the preparation and
implementation of any closure, remedial or other required plans; (vi) damage to
any natural resources; and (vii) all reasonable costs and expenses incurred by
the Lender in connection with clauses (i) through (vi), including reasonable
attorneys’ and consultants’ fees; provided, however, that nothing contained in
this Section shall be deemed to preclude the Borrower from seeking
indemnification from, or otherwise proceeding against, any third party including
any tenant or predecessor in title to the Real Property, and further provided
that this indemnification will not extend to matters caused by the Lender’s
gross negligence or willful misconduct, or arising from a release of Hazardous
Substances which occurs after the Lender has taken possession of the Real
Property, so long as the Borrower has not caused the release through any act or
omission. The covenants, agreements, and indemnities set forth in this Section
shall be binding upon the Borrower and its successors and assigns, and shall
survive repayment of the Indebtedness, foreclosure of the Real Property, and the
Borrower’s granting of a deed to the Real Property in lieu of foreclosure.
Payment shall not be a condition precedent to this indemnity. Any costs or
expenses incurred by the Lender for which the Borrower is responsible or for
which the Borrower has indemnified the Lender shall be paid to the Lender on
demand, with interest at the Default Rate from the date incurred by the Lender
until paid in full, and shall be secured by this Mortgage. Without the prior
written consent of the Lender, which consent shall not be unreasonably withheld,
the Borrower shall not enter into any settlement agreement, consent decree, or
other compromise in respect to any claims relating to Hazardous Substances. The
Lender agrees that it shall not unreasonably delay its consideration of any
written request for its consent to any such settlement agreement, consent
decree, or other compromise once all information, reports, studies, audits, and
other documentation have been submitted to the Lender.

  20.5   Environmental Audits         If a Default exists, or the Lender has a
reasonable basis to believe that a release of Hazardous Substances may have
occurred, the Lender may require that the Borrower retain, or the Lender may
retain directly, at the sole cost and expense of the Borrower, a licensed
geologist, industrial hygienist or an environmental consultant acceptable to the
Lender to conduct an environmental assessment or audit of the Real Property. In
the event that the Lender makes a reasonable determination of the need for an
environmental assessment or audit, the Lender shall inform the Borrower in
writing that such a determination has been made and, if requested to do so by
the Borrower, give the Borrower a written explanation of that determination
before the assessment or audit is conducted. The Borrower shall afford any
person conducting an environmental assessment or audit access to the Real
Property and all materials reasonably requested; provided that such person shall
not unreasonably interfere with the use and operation of the Real Property.
Except as set forth below, the Borrower shall pay on demand the cost and
expenses of any environmental consultant engaged by the Lender under this
Subsection. The Borrower shall, at the Lender’s request and at the Borrower’s
sole cost and expense, take such investigative and remedial measures determined
by the geologist, hygienist or consultant to be necessary to address any
condition discovered by the assessment or audit so that (i) the Real Property
shall be in compliance with all

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      Environmental Laws, (ii) the condition of the Real Property shall not
constitute any identifiable risk to human health or to the environment, and
(iii) the value of the Real Property shall not be affected by the presence of
Hazardous Substances. Notwithstanding the foregoing, the Borrower shall not be
required to pay for the costs of such audit or assessment if it reasonably
disagrees with the Lender’s determination that there is a reasonable basis that
a release of a Hazardous Substance has occurred, the Lender proceeds with such
audit or assessment and the audit or assessment does not reveal any material
violation of Environmental Laws that were not identified on the ESA.

21.   MISCELLANEOUS

  21.1   Successors and Assigns         All of the terms of the Loan Documents
shall apply to, be binding upon and inure to the benefit of the successors and
assigns of the Obligors, or to the holder of the Notes, as the case may be.    
21.2   Survival of Obligations         Each and all of the Obligations shall
continue in full force and effect until the latest of (a) the date the
Indebtedness has been paid in full and the Obligations have been performed and
satisfied in full, (b) the last date permitted by law for bringing any claim or
action with respect to which the Lender may seek payment or indemnification in
connection with the Loan Documents, and (c) the date on which any claim or
action for which the Lender seeks payment or indemnification is fully and
finally resolved and, if applicable, any compromise thereof of judgment or award
thereon is paid in full.     21.3   Further Assurances         The Borrower,
upon the request of the Lender, shall complete, execute, acknowledge, deliver
and record or file such further instruments and do such further acts as may be
reasonably necessary to carry out more effectively the purposes of this
Mortgage, to subject any property intended to be covered by this Mortgage to the
liens and security interests it creates, to place third parties on notice of
those liens and security interests, or to correct any defects which may be found
in any Loan Document.     21.4   Right of Inspection         The Lender shall
have the right from time to time, upon reasonable advance notice to the
Borrower, to enter onto the Real Property during regular business hours for the
purpose of inspecting and reporting on its physical condition, tenancy and
operations; provided the Lender shall not unreasonably interfere with the use
and operation of the Real Property.     21.5   Expense Indemnification        
The Borrower shall pay all filing and recording fees, documentary stamps,
intangible taxes, and all expenses incident to the execution and acknowledgment
of this Mortgage, the Notes or any of the other Loan Documents, any supplements,
amendments, renewals or extensions of any of them, or any instrument entered
into under Subsection 21.3. The Borrower shall pay or reimburse the Lender, upon
demand, for all costs and expenses,

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      including appraisal and reappraisal costs of the Property and reasonable
attorneys’ and legal assistants’ fees, which the Lender may incur in connection
with enforcement proceedings under the Notes, this Mortgage, or any of the other
Loan Documents (including all fees and costs incurred in enforcing or protecting
the Notes, this Mortgage, or any of the other Loan Documents in any bankruptcy
proceeding), and reasonable attorneys’ and legal assistants’ fees incurred by
the Lender in any other suit, action, legal proceeding or dispute of any kind in
which the Lender is made a party or appears as party plaintiff or defendant,
affecting the Indebtedness, the Notes, this Mortgage, any of the other Loan
Documents, or the Property, or required to protect or sustain the lien of this
Mortgage. The Borrower shall be obligated to pay (or to reimburse the Lender)
for such fees, costs and expenses and shall indemnify and hold the Lender
harmless from and against any and all loss, cost, expense, liability, damage and
claims and causes of action, including reasonable attorneys’ fees, incurred or
accruing by reason of the Borrower’s failure to promptly repay any such fees,
costs and expenses. If any suit or action is brought to enforce or interpret any
of the terms of this Mortgage (including any effort to modify or vacate any
automatic stay or injunction, any trial, any appeal, any petition for review or
any bankruptcy proceeding), the Lender shall be entitled to recover all expenses
reasonably incurred in preparation for or during the suit or action or in
connection with any appeal of the related decision, whether or not taxable as
costs. Such expenses include reasonable attorneys’ fees, witness fees (expert or
otherwise), deposition costs, copying charges and other expenses. Whether or not
any court action is involved, all reasonable expenses, including the costs of
searching records, obtaining title reports, appraisals, environmental
assessments, surveying costs, title insurance premiums, and reasonable
attorneys’ fees, incurred by the Lender that are necessary at any time in the
Lender’s opinion for the protection of its interest or enforcement of its rights
shall become a part of the Indebtedness payable on demand and shall bear
interest from the date of expenditure until repaid at the interest rate as
provided in the Notes.

  21.6   General Indemnification         The Borrower shall indemnify, defend
and hold the Lender harmless against: (i) any and all claims for brokerage,
leasing, finder’s or similar fees which may be made relating to the Real
Property or the Indebtedness and (ii) any and all liability, obligations,
losses, damages, penalties, claims, actions, suits costs and expenses (including
the Lender’s reasonable attorneys’ fees, together with reasonable appellate
counsel fees, if any) of whatever kind or nature which may be asserted against,
imposed on or incurred by the Lender in connection with the Indebtedness, this
Mortgage, the Real Property or any part thereof, or the operation, maintenance
and/or use thereof, or the exercise by the Lender of any rights or remedies
granted to it under this Mortgage or pursuant to applicable law; provided,
however, that nothing herein shall be construed to obligate the Borrower to
indemnify, defend and hold harmless the Lender from and against any of the
foregoing which is imposed on or incurred by the Lender by reason of the
Lender’s willful misconduct or gross negligence.     21.7   Recording and Filing
        The Borrower shall cause this Mortgage and all amendments, supplements,
and substitutions to be recorded, filed, re-recorded and re-filed in such manner
and in such places as the Lender may reasonably request. The Borrower will pay
all recording filing, re-recording and re-filing taxes, fees and other charges.

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  21.8   No Waiver         No deliberate or unintentional failure by the Lender
to require strict performance by the Borrower of any Obligation shall be deemed
a waiver, and the Lender shall have the right at any time to require strict
performance by the Borrower of any Obligation.     21.9   Covenants Running with
the Land         All Obligations are intended by the parties to be and shall be
construed as covenants running with the Land.     21.10   Severability        
The Loan Documents are intended to be performed in accordance with, and only to
the extent permitted by, all applicable Legal Requirements. Any provision of the
Loan Documents that is prohibited or unenforceable in any jurisdiction shall
nevertheless be construed and given effect to the extent possible. The
invalidity or unenforceability of any provision in a particular jurisdiction
shall neither invalidate nor render unenforceable any other provision of the
Loan Documents in that jurisdiction, and shall not affect the validity or
enforceability of that provision in any other jurisdiction. If a provision is
held to be invalid or unenforceable as to a particular person or under a
particular circumstance, it shall nevertheless be presumed valid and enforceable
as to others, or under other circumstances.     21.11   Usury         The
parties intend that no provision of the Notes or the Loan Documents be
interpreted, construed, applied, or enforced so as to permit or require the
payment or collection of interest in excess of the Maximum Permitted Rate. In
this regard, the Borrower and the Lender each stipulate and agree that it is
their common and overriding intent to contract in strict compliance with
applicable usury laws. Accordingly, none of the terms of this Mortgage, the
Notes or any of the other Loan Documents shall ever be construed to create a
contract to pay, as consideration for the use, forbearance or detention of
money, interest at a rate in excess of the Maximum Permitted Rate, and the
Borrower shall never be liable for interest in excess of the Maximum Permitted
Rate. Therefore, (a) in the event that the Indebtedness and Obligations are
prepaid or the maturity of the Indebtedness and Obligations is accelerated by
reason of an election by the Lender, unearned interest shall be canceled and, if
theretofore paid, shall either be refunded to the Borrower or credited on the
Indebtedness, as the Lender may elect; (b) the aggregate of all interest and
other charges constituting interest under applicable laws and contracted for,
chargeable or receivable under the Notes and the other Loan Documents or
otherwise in connection with the transaction contemplated thereby shall never
exceed the maximum amount of interest, nor produce a rate in excess of the
Maximum Permitted Rate; and (c) if any excess interest is provided for or
received, it shall be deemed a mistake, and the same shall, at the option of the
Lender, either be refunded to the Borrower or credited on the unpaid principal
amount (if any), and the Indebtedness shall be automatically reformed so as to
permit only the collection of the interest at the Maximum Permitted Rate.
Furthermore, if any provision of the Notes or any of the other Loan Documents is
interpreted, construed, applied, or enforced, in such a manner as to provide for
interest in excess of the Maximum Permitted Rate, then the parties intend that
such provision automatically shall be deemed reformed retroactively so as to
require payment only of

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      interest at the Maximum Permitted Rate. If, for any reason whatsoever,
interest paid or received during the full term of the applicable Indebtedness
produces a rate which exceeds the Maximum Permitted Rate, then the amount of
such excess shall be deemed credited retroactively in reduction of the then
outstanding principal amount of the Indebtedness, together with interest at such
Maximum Permitted Rate. The Lender shall credit against the principal of such
Indebtedness (or, if such Indebtedness shall have been paid in full, shall
refund to the payor of such interest) such portion of said interest as shall be
necessary to cause the interest paid to produce a rate equal to the Maximum
Permitted Rate. All sums paid or agreed to be paid to the Lender for the use,
forbearance or detention of money shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread in equal parts throughout the
full term of the applicable Indebtedness, so that the interest rate is uniform
throughout the full term of such Indebtedness. In connection with all
calculations to determine the Maximum Permitted Rate, the parties intend that
all charges be excluded to the extent they are properly excludable under
applicable usury laws, as they from time to time are determined to apply to this
transaction. The provisions of this Section shall control all agreements,
whether now or hereafter existing and whether written or oral, between the
Borrower and the Lender.

  21.12   Entire Agreement         The Loan Documents contain the entire
agreements between the parties relating to the financing of the Real Property,
and all prior agreements which are not contained in the Loan Documents, other
than the unsecured Environmental Indemnity Agreement, are terminated. The Loan
Documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the
parties. The Loan Documents may be amended, revised, waived, discharged,
released or terminated only by a written instrument or instruments executed by
the party against whom enforcement of the amendment, revision, waiver,
discharge, release or termination is asserted. Any alleged amendment, revision,
waiver, discharge, release or termination that is not so documented shall be
null and void.     21.13   Notices         In order for any demand, consent,
approval or other communication to be effective under the terms of this
Mortgage, “Notice” must be provided under the terms of this Subsection. All
Notices must be in writing. Notices may be (a) delivered by hand,
(b) transmitted by facsimile (with a duplicate copy sent by first class mail,
postage prepaid), (c) sent by certified or registered mail, postage prepaid,
return receipt requested, or (d) sent by reputable overnight courier service,
delivery charges prepaid. Notices shall be addressed as set forth below:

If to the Lender:
Transamerica Life Insurance Company
c/o AEGON USA Realty Advisors, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-5443
Attn: Mortgage Loan Department

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Reference: Loan No. D700218
Fax Number: (319) 369-2277
If to the Borrower:
John B. Sanfilippo & Son, Inc.
1703 North Randall Road
Mail Code — 2NW-EX
Elgin, Illinois 60123
Attn: Michael J. Valentine
Fax Number: (866) 610-1294

      Notices delivered by hand or by overnight courier shall be deemed given
when actually received or when refused by their intended recipient. Notices sent
by facsimile will be deemed delivered when a legible copy has been received
(provided receipt has been verified by telephone confirmation or one of the
other permitted means of giving Notices under this Subsection). Mailed Notices
shall be deemed given on the date of the first attempted delivery (whether or
not actually received). Either the Lender or the Borrower may change its address
for Notice by giving at least fifteen (15) Business Days’ prior Notice of such
change to the other party.     21.14   Counterparts         This Mortgage may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute but one instrument.     21.15   Choice of
Law         This Mortgage shall be interpreted, construed, applied, and enforced
according to, and will be governed by, the laws of Illinois, without regard to
any choice of law principle which, but for this provision, would require the
application of the law of another jurisdiction and regardless of where executed
or delivered, where payable or paid, where any cause of action accrues in
connection with this transaction, where any action or other proceeding involving
the Loan is instituted, or whether the laws of Illinois otherwise would apply
the laws of another jurisdiction.     21.16   Forum Selection         The
Borrower and Lender (by acceptance hereof) agree that the sole and exclusive
forum for the determination of any action relating to the validity and
enforceability of the Notes, this Mortgage and the other Loan Documents, and any
other instruments securing the Notes shall be either in an appropriate court of
the State of Illinois or the applicable United States District Court, except as
otherwise set forth in the Loan Documents.     21.17   Sole Benefit         This
Mortgage and the other Loan Documents have been executed for the sole benefit of
the Borrower and the Lender and the successors and assigns of the Lender. No
other party shall have rights thereunder or be entitled to assume that the
parties thereto will insist upon strict performance of their mutual obligations
hereunder, any of which may be

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      waived from time to time. The Borrower shall have no right to assign any
of its rights under the Loan Documents to any party whatsoever.

  21.18   Release of Claims         The Borrower hereby RELEASES, DISCHARGES and
ACQUITS forever the Lender and its officers, directors, trustees, agents,
employees and counsel (in each case, past, present or future) from any and all
Claims existing as of the date hereof (or the date of actual execution hereof by
the Borrower, if later). As used herein, the term “Claim” shall mean any and all
liabilities, claims, defenses, demands, actions, causes of action, judgments,
deficiencies, interest, liens, costs or expenses (including court costs,
penalties, attorneys’ fees and disbursements, and amounts paid in settlement) of
any kind and character whatsoever, including claims for usury, breach of
contract, breach of commitment, negligent misrepresentation or failure to act in
good faith, in each case whether now known or unknown, suspected or unsuspected,
asserted or unasserted or primary or contingent, and whether arising out of
written documents, unwritten undertakings, course of conduct, tort, violations
of laws or regulations or otherwise.     21.19   No Partnership         Nothing
contained in the Loan Documents is intended to create any partnership, joint
venture or association between the Borrower and the Lender, or in any way make
the Lender a co-principal with the Borrower with reference to the Property.    
21.20   Payoff Procedures         If the Borrower pays or causes to be paid to
the Lender all of the Indebtedness, then Lender’s interest in the Real Property
shall cease, and upon receipt by the Lender of such payment, the Lender shall
either (a) release this Mortgage or (b) assign the Loan Documents and endorse
the Notes (in either case without recourse or warranty of any kind) to a takeout
lender, upon payment (in the latter case) of an administrative fee of Seven
Hundred Fifty Dollars ($750).     21.21   Future Advances         Under this
Mortgage, “Indebtedness” is defined to include certain advances made by the
Lender in the future. Such advances include any additional disbursements to the
Borrower (unless in connection with another, independent mortgage financing) and
any obligations under agreements which specifically provide that such
obligations are secured by this Mortgage. In addition, Indebtedness is defined
to include any amounts advanced to pay Impositions, to cure Defaults, or to pay
the costs of collection and receivership. Accordingly, all such advances and
obligations shall be equally secured with, and shall have the same priority as,
the Indebtedness, and shall be subject to all of the terms and provisions of
this Mortgage. The Borrower shall pay any taxes that may be due in connection
with any such future advance. Notwithstanding anything to the contrary contained
herein, the total unpaid balance so secured at any one time by this Mortgage
shall not exceed the maximum principal amount of Ninety Million and 00/100
Dollars ($90,000,000.00), which includes the principal of the Loan, interest,
any disbursements made under the Mortgage for the payment of impositions, taxes,
assessments, levies, insurance, or otherwise, with interest on such
disbursements, and any other costs set forth in the Loan Documents.     21.22  
Interpretation

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  (a)   Headings and General Application         The section, subsection,
paragraph and subparagraph headings of this Mortgage are provided for
convenience of reference only and shall in no way affect, modify or define, or
be used in construing, the text of the sections, subsections, paragraphs or
subparagraphs. If the text requires, words used in the singular shall be read as
including the plural, and pronouns of any gender shall include all genders.    
(b)   Result of Negotiations         This Mortgage results from negotiations
between the Borrower and the Lender and from their mutual efforts. Therefore, it
shall be so construed, and not as though it had been prepared solely by the
Lender.     (c)   Reference to Particulars         The scope of a general
statement made in this Mortgage or in any other Loan Document shall not be
construed as having been reduced through the inclusion of references to
particular items that would be included within the statement’s scope. Therefore,
unless the relevant provision of a Loan Document contains specific language to
the contrary, the term “include” shall mean “include, but shall not be limited
to” and the term “including” shall mean “including, without limitation.”

  21.23   Joint and Several Liability         If there is more than one
individual or entity executing this Mortgage as the Borrower, liability of such
individuals and entities under this Mortgage shall be joint and several.    
21.24   Time of Essence         Time is of the essence of each and every
covenant, condition and provision of this Mortgage to be performed by the
Borrower.     21.25   Jury Waiver         The Borrower and by its acceptance
hereof, the Lender, hereby waive any right to a trial by jury in any action or
proceeding to enforce or defend any rights (i) under this Mortgage or any other
Loan Document or (ii) arising from any lending relationship existing in
connection with this Mortgage or any other Loan Document, and the Borrower and
by its acceptance hereof, the Lender, agree that any such action or proceeding
shall be tried before a judge and not before a jury.     21.26   Renewal,
Extension, Modification and Waiver         The Lender may enter into a
modification of any Loan Document or of the Environmental Indemnity Agreement
without the consent of any person not a party to the document being modified.
The Lender may waive any covenant or condition of any Loan Document or of the
Environmental Indemnity Agreement, in whole or in part, at the request of any
person then having an interest in the Property or in any way liable for any part
of the Indebtedness. The Lender may take, release, or resort to any security for
the Notes and the Obligations and may release any party primarily or secondarily
liable on any Loan Document or on the Environmental Indemnity Agreement, all
without affecting any liability not expressly released in writing by the Lender.

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  21.27   Cumulative Remedies         Every right and remedy provided in this
Mortgage shall be cumulative of every other right or remedy of the Lender,
whether conferred by law or by grant or contract, and may be enforced
concurrently with any such right or remedy. The acceptance of the performance of
any obligation to cure any Default shall not be construed as a waiver of any
rights with respect to any other past, present or future Default. No waiver in a
particular instance of the requirement that any Obligation be performed shall be
construed as a waiver with respect to any other Obligation or instance.    
21.28   No Obligation to Marshal Assets         No holder of any mortgage,
security interest or other encumbrance affecting all or any portion of the Real
Property, which encumbrance is inferior to the lien and security interest of
this Mortgage, shall have any right to require the Lender to marshal assets.    
21.29   Transfer of Ownership         The Lender may, without notice to the
Borrower, deal with any person in whom ownership of any part of the Real
Property has vested, without in any way vitiating or discharging the Borrower
from liability for any of the Obligations.

IN WITNESS WHEREOF, the Borrower has caused this Mortgage to be duly executed as
of the date first above written.

            BORROWER:

JOHN B. SANFILIPPO & SON, INC.,
a Delaware corporation
      By:   /s/ Michael J. Valentine         Michael J. Valentine        Its
Chief Financial Officer and Group President     

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