Exhibit 10.3

This Instrument was prepared by

and after recording please return to:

Cooley LLP

3175 Hanover Street

Palo Alto, CA 94304-1130

Attn: John B. Hale, Esq.

MORTGAGE AND SECURITY AGREEMENT

Dated: July 31, 2012

ASC DEVENS LLC

Mortgagor

TO

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

Mortgagee

Mortgaged Property:

64 Jackson Road

Devens Enterprise Zone

Harvard, Massachusetts 01434-4020

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MORTGAGE AND SECURITY AGREEMENT

THIS MORTGAGE AND SECURITY AGREEMENT (the “Mortgage”) is entered into as of the
31st day of July, 2012, by and between ASC DEVENS LLC, a Delaware limited
liability company, having an address at c/o American Superconductor Corporation,
64 Jackson Road, Devens, Massachusetts 01434-4020 (“Mortgagor”), and HERCULES
TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation, having an office at 400
Hamilton Avenue, Suite 310, Palo Alto, California 94301, Attention: Chief Legal
Officer and Brad Pritchard (“Mortgagee”).

RECITALS

WHEREAS, pursuant to that certain Loan and Security Agreement of even date
herewith between American Superconductor Corporation (“Parent”), the direct 100%
owner of Mortgagor, and Mortgagee (the “Loan Agreement”), Mortgagee has made a
loan in the principal amount of $10,000,000 (the “Loan”) to Mortgagor and
Parent, which Loan is evidenced by that certain Secured Term Promissory Note in
the amount of the Loan executed by Mortgagor in favor of Mortgagee (the “Note”);
and

WHEREAS, this Mortgage secures the Secured Obligations (as defined in the Loan
Agreement);

NOW, THEREFORE, in consideration of the foregoing recitals, which are
incorporated into the operative provisions of this Mortgage by this reference,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby conclusively acknowledged, Mortgagor hereby represents and warrants
to and covenants and agrees with Mortgagee as follows:

GRANT

NOW, WITNESSETH, that Mortgagor, for better securing the observance, payment,
and performance by Parent of the Secured Obligations, and in further
consideration of the sum of ONE and 00/100 DOLLAR ($1.00) and for other good and
valuable consideration, the receipt whereof before the ensealing and delivery of
these presents is hereby acknowledged, Mortgagor does grant, bargain, sell, and
convey to Mortgagee and to its successors and assigns forever, WITH MORTGAGE
COVENANTS:

That tract or parcel of real property commonly known as 64 Jackson Road,
situate, lying, and being in Devens Enterprise Zone, Town of Harvard, County of
Worcester, and Commonwealth of Massachusetts, as more particularly described on
Exhibit A attached hereto and made a part hereof, (the “Property”), being the
same premises which were conveyed to Mortgagor by Deed from the Massachusetts
Development Finance Agency dated October 19, 2000 which Deed was recorded in the
Worcester District Registry of Deeds on October 20, 2000 in Book 23120, at Page
209;

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TOGETHER with all and singular the tenements, hereditaments, easements,
appurtenances, passages, waters, water courses, riparian rights, other rights,
liberties and privileges thereof or in any way now or hereafter appertaining,
Mortgagor’s proportionate undivided interest in all streets, alleys, passages
and ways, all other rights, liberties and privileges of whatsoever kind or
character, the reversions and remainders, and all the estate, right, title,
interest, property, possession, claim and demand whatsoever, as well at law or
in equity, in and to all the foregoing or any or every part thereof;

TOGETHER with all buildings and improvements of every kind and description now
or hereafter erected or placed thereon and all materials intended for
construction, reconstruction, alteration and repair of such improvements now or
hereafter erected thereon, all of which materials shall be deemed to be included
within the mortgaged premises immediately upon the delivery thereof to such
mortgaged premises, and all fixtures and articles of personal property now or
hereafter owned by Mortgagor and attached to or contained in and used in
connection with said premises; and all renewals or replacements thereof or
articles in substitution therefor, whether or not the same are or shall be
attached to the Property or building or buildings in any manner; it being
mutually agreed that all the aforesaid property owned by said Mortgagor and
placed by it on said premises shall, so far as permitted by law, be deemed to be
affixed to the realty and covered by this Mortgage (collectively, the
“Improvements”);

TOGETHER with all right, title and interest of Mortgagor, now owned or hereafter
acquired, in and to any and all sidewalks and alleys, and all strips and gores,
adjacent to or used in connection with, the Property;

TOGETHER with all of right, title and interest of Mortgagor, now owned or
hereinafter acquired, to any and all fixtures, partitions and dividers, and all
machinery, equipment, chattels, goods and other articles of property, whether
real estate or not, now or at any time hereafter attached to or situated in or
upon, and used or useful in the operation of, the Property, or of any business
now or hereafter operated by Mortgagor, (except any personal property,
furnishings or furniture owned by any tenant unrelated to Mortgagor occupying
any part of the Property, or any part of either or both and used by such tenant
in the space occupied by it, to the extent that the same does not become the
property of Mortgagor, as landlord, under the lease with such tenant or under
applicable law), including without limitation:

All gas and electric fixtures, radiators, heaters, engines and machinery,
boilers, elevators and motors, bathtubs, sinks, water closets, basins, pipes,
faucets, air conditioning equipment, plumbing fixtures, heating fixtures,
mirrors, mantels,

 

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refrigerating plant, carpeting, furniture, ranges, refrigerators, ovens,
dishwashers, laundry equipment, cooking apparatus and appurtenances, and all
building material and equipment now or hereafter delivered to the Improvements;
and

All renewals or replacements thereof, all additions thereto or articles in
substitution thereof and all of the estate, right, title and interest of
Mortgagor in and to all property of any nature whatsoever, now or hereafter
situate at the Property or intended to be used in connection with the operation
thereof shall be deemed to be fixtures and an accession to Mortgagor’s interest
in the Property as between the parties hereto and all persons claiming by,
through or under them and shall be deemed to be a portion of the security for
the indebtedness herein mentioned and secured by this Mortgage;

TOGETHER with its interest in any and all awards, damages, payments and other
compensation and any and all claims therefor and rights thereto which may result
from taking or injury by virtue of the exercise of the power of eminent domain
of or to, or any damage, injury or destruction in any manner caused to, the
Mortgaged Property (as hereinafter defined), or any part thereof, or from any
change of grade or vacation of any street abutting thereon, all of which awards,
damages, payments, compensation, claims and rights are hereby assigned,
transferred and set over to Mortgagee to the fullest extent that Mortgagor may
under the law so do. Mortgagee is hereby irrevocably appointed attorney-in-fact
coupled with an interest for Mortgagor to settle for, collect and receive any
such awards, damages, payments and compensation from the authorities making the
same, to appear in and prosecute any proceeding therefor, and to give receipts
and acquittances therefor;

TOGETHER with all right, title and interest of Mortgagor in and to all unearned
premiums accrued, accruing or to accrue under any and all insurance policies now
or hereafter obtained by Mortgagor with respect to the Mortgaged Property; and

TOGETHER with all rights, dividends and/or claims of any kind, nature or
description whatsoever (including, without limitation, damage, secured,
unsecured, lien, priority, or administration claims); together with the right to
take any action or file any papers or process in any Court of competent
jurisdiction, which may in the opinion of Mortgagee be necessary to preserve,
protect, or enforce such rights or claims, including without limitation the
filing of any proof of claim in any insolvency proceeding under any state,
federal or other laws; including any rights, claims or awards accruing to, or to
be paid to, Mortgagor in its capacity as landlord under any lease affecting all
or any portion of the Property. Mortgagee’s lien and interest in the foregoing
rights and claims is hereby deemed to be presently vested and perfected as of
the date hereof

 

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(said Improvements, fixtures, machinery, equipment, tenements, and other
property interests described and enumerated above are hereinafter collectively
referred to as the “Mortgaged Property”);

TO HAVE AND TO HOLD, the above granted and described Mortgaged Property, with
the appurtenances, fixtures, equipment and betterments, unto Mortgagee, its
successors and assigns, to its and their own proper use and benefit forever;

PROVIDED ALWAYS, and these Mortgaged Property are upon the express condition,
that if Mortgagor or Parent shall well and truly pay to Mortgagee its successors
or assigns, for the benefit of the Mortgagee, the Secured Obligations, and any
renewals or extensions thereof in whatever form, and the interest thereon as it
shall become due, according to the true intent and meaning thereof, together
with all advances hereunder, costs, charges and expenses, including reasonable
attorneys’ fees, which Mortgagee may incur or be put to in collecting the same
by foreclosure or otherwise; and if Parent or Mortgagor shall duly, promptly and
fully perform, discharge, execute, effect, complete, comply with and abide by
each and every of the stipulations, agreements, conditions and covenants of the
Loan Documents such that the Loan Agreement is terminated pursuant to
Section 10.18 thereof, then this Mortgage and the estate hereby created shall
cease and be null and void and this instrument shall be released by Mortgagee,
at the cost and expense of Mortgagor or Parent.

Mortgagor warrants, covenants and agrees with Mortgagee as follows:

 

  1. DEFINITIONS:

Unless the context otherwise connotes, as used herein:

(a) “Note” shall have the meaning set forth in the recitals of this Mortgage.

(b) “Title Binder” means: that certain title insurance policy issued by the
Title Insurance Company bearing policy number             .

(c) “Title Insurance Company” means: Fidelity National Title Insurance Company.

(d) All other capitalized terms used herein but not defined herein shall have
the respective meanings given such terms in the Loan Agreement.

 

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  2. [RESERVED.]

 

  3. FIRST LIEN:

(a) This Mortgage is a valid first mortgage and is a valid first lien against
the Mortgaged Property (subject to the Permitted Liens, if any), and secures:

(1) the Secured Obligations, including without limitation:

 

  (A) all amounts from time to time advanced, paid or expended by Mortgagee
under Article 18 of this Mortgage, with interest thereon at the date stated in
the Note to Mortgagee of even date herewith; and

 

  (B) any additional Advance made by Mortgagee in accordance with Section 2.6 of
the Loan Agreement;

(2) all other amounts which Mortgagor and Mortgagee may agree are to be secured
hereby, with interest thereon at the rate or rates agreed upon.

 

  4. REPRESENTATIONS AND WARRANTIES:

Mortgagor represents, warrants and covenants as follows

(a) Organization and Existence. Mortgagor is duly organized and validly existing
as a limited liability company in good standing under the laws of the
jurisdiction in which Mortgagor was formed, and in the jurisdiction in which the
Mortgaged Property is located. Mortgagor has the power and authority to execute,
deliver and perform the obligations imposed on it under the Loan Documents to
which it is a party and to consummate the transactions contemplated by the Loan
Documents and Mortgagor has taken all necessary actions for the authorization of
the borrowing on account of the Loan and for the execution and delivery of the
Loan Documents to which it is a party.

(b) Enforceability/No Conflicts. All of the Loan Documents to which Mortgagor is
a party constitute valid, legal and binding obligations of Mortgagor and are
fully enforceable against Mortgagor in accordance with their terms by Mortgagee
and its successors, and permitted transferees and assigns under the Loan
Agreement, subject only to bankruptcy laws and general principles of equity. The
execution, delivery and performance of the obligations imposed on Mortgagor
under the Loan Documents will not cause Mortgagor to be in default, including
after due notice or lapse of time or both, under the provisions of any material
agreement, judgment or order to which Mortgagor is a party or by which Mortgagor
is bound.

 

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(c) Compliance with Applicable Laws and Regulations. All of the Improvements and
the use of the Mortgaged Property comply, in all material respects, with, and
shall remain in compliance with, all applicable laws, zoning and subdivision
ordinances (including without limitation, parking requirements), rules,
regulations, covenants and restrictions now or hereafter affecting or otherwise
relating to the ownership, construction, occupancy, use or operation of the
Mortgaged Property.

(d) Title. Mortgagor is indefeasibly seized of the Mortgaged Property in fee
simple and has full power and lawful right to convey the same in fee simple as
aforesaid. It shall be lawful for Mortgagee at all times peaceably and quietly
to enter upon, hold, occupy and enjoy the Mortgaged Property and every part
thereof. The Mortgaged Property is free from all liens and encumbrances except
(i) those matters shown of record as of the date hereof and (ii) the Permitted
Liens encumbering the Mortgaged Property, if any. Mortgagor will make such
further assurances to prove the fee simple title to all and singular the
Mortgaged Property in Mortgagee and to prove the lien and priority of this
Mortgage, as may be reasonably required, and will forever fully warrant and
defend the lien and priority of this Mortgage and the title to the Mortgaged
Property and every part thereof against the lawful claims and demands of all
persons whomsoever.

(e) Access/Utilities. The Mortgaged Property has adequate rights of access to
public ways and is served by adequate water, sewer, sanitary sewer and storm
drain facilities.

(f) Single Tax Lot; Subdivision. The Mortgaged Property consists of a single tax
lot or multiple tax lots; no portion of said tax lot(s) covers property other
than the Mortgaged Property or a portion of the Mortgaged Property and no
portion of the Mortgaged Property lies in any other tax lot.

(g) No Condemnation. No part of any property subject to this Mortgage has been
taken in condemnation or other like proceeding nor is any proceeding pending,
threatened in writing or known to Mortgagor to be contemplated for the partial
or total condemnation or taking of the Mortgaged Property.

(h) No Labor or Materialmen Claims. All parties furnishing labor and materials
to Mortgagor, and to the best of Mortgagor’s knowledge, the Mortgaged Property,
have been paid in full and, except for such liens or claims insured against by
the policy of title insurance to be issued in connection with the Loan, there
are no mechanics’, laborers’ or materialmens’ liens or, to the best of
Mortgagor’s knowledge, claims outstanding for work, labor or materials affecting
the Mortgaged Property, whether prior to, equal with or subordinate to the lien
of this Mortgage.

 

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(i) OFAC. Neither the Mortgagor nor any member or partner in the Mortgagor or
member of such partner nor any owner of a direct or indirect interest in the
Mortgagor (a) is listed on any Government Lists (as defined below), (b) is a
person who has been determined by competent authority to be subject to the
prohibitions contained in Presidential Executive Order No. 13224 (Sept. 23,
2001) or any other similar prohibitions contained in the rules and regulations
of OFAC (as defined below) or in any enabling legislation or other Presidential
Executive Orders in respect thereof, (c) has been previously indicted for or
convicted of any felony involving a crime or crimes of moral turpitude or for
any Patriot Act Offense (as defined below), or (d) is not currently under
investigation by any governmental authority for alleged criminal activity. For
purposes hereof, the term “Patriot Act Offense” means any violation of the
criminal laws of the United States of America or of any of the several states,
or that would be a criminal violation if committed within the jurisdiction of
the United States of America or any of the several states, relating to terrorism
or the laundering of monetary instruments, including any offense under (a) the
criminal laws against terrorism; (b) the criminal laws against money laundering,
(c) the Bank Secrecy Act, as amended, (d) the Money Laundering Control Act of
1986, as amended, or the (e) Patriot Act. “Patriot Act Offense” also includes
the crimes of conspiracy to commit, or aiding and abetting another to commit, a
Patriot Act Offense. For purposes hereof, the term “Government Lists” means
(i) the Specially Designated Nationals and Blocked Persons Lists maintained by
Office of Foreign Assets Control (“OFAC”), (ii) any other list of terrorists,
terrorist organizations or narcotics traffickers maintained pursuant to any of
the Rules and Regulations of OFAC that Mortgagee notified Mortgagor in writing
is now included in Governmental Lists, or (iii) any similar lists maintained by
the United States Department of State, the United States Department of Commerce
or any other government authority or pursuant to any Executive Order of the
President of the United States of America that Mortgagee notified Mortgagor in
writing is now included in Governmental Lists.

 

  5. REPAIR:

Mortgagor shall maintain the Mortgaged Property in a good and substantial state
of repair, subject to ordinary wear and tear.

 

  6. COMPLIANCE WITH LAW:

Mortgagor shall comply with and maintain the Mortgaged Property in compliance
with all laws and requirements of all governments and governmental authorities
applicable thereto, including, without limitation, all applicable environmental
laws, ordinances, rules, regulations, orders and requirements, whether federal,
state, county, regional or municipal, which are applicable to the Mortgaged
Property, including but not limited to, laws relating to air, water and noise
pollution, handling of toxic substances, underground storage tanks and
occupational safety and health requirements (“Laws”).

 

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  7. TAXES AND OTHER CHARGES:

Mortgagor covenants to pay (or cause to be paid) promptly as the same shall
become due and payable all taxes, assessments, water and sewer charges and
governmental charges on or with respect to the Mortgaged Property; and Mortgagor
shall not be entitled to any credit by reason of the payment of any tax,
assessment or other imposition thereon. Mortgagor shall provide Mortgagee with
such evidence as Mortgagee may reasonably require, within ten (10) days after
the final date any taxes, assessments, water and sewer charges or other
governmental charges can be paid without penalty, that all such taxes,
assessments, water and sewer charges and other governmental charges have been
paid in full.

 

  8. INSURANCE:

(a) In addition to insurance required to be maintained by Mortgagor pursuant to
the Loan Agreement, Mortgagor shall keep in effect upon the Mortgaged Property
Special Form Causes of Loss property insurance for not less than the full
replacement cost of the Mortgaged Property, with the following endorsements:
(i) valuation replacement cost (without depreciation), (ii) changes in laws and
ordinance coverage, (iii) pressure vessel, if applicable, (iv) agreed value,
(v) earthquake, and (vi) demolition costs.

(b) Mortgagor shall deliver to Mortgagee certificates of insurance that evidence
Mortgagor’s compliance with these insurance obligations. Mortgagor’s insurance
certificates shall state Mortgagee is an additional insured and a loss payee for
all risk property damage insurance, and a loss payee for property insurance and
additional insured for liability insurance for any future insurance that
Mortgagor may acquire from such insurer. Attached to the certificates of
insurance will be lender’s loss payable endorsements for all risk property
damage insurance. All certificates of insurance will provide for a minimum of
thirty (30) days advance written notice to Mortgagor of cancellation. Any
failure of Mortgagee to scrutinize such insurance certificates for compliance is
not a waiver of any of Mortgagee’s rights, all of which are reserved.

(c) If the insurance, or any part thereof shall expire, or be withdrawn or
become void or voidable by Mortgagor’s breach of any condition thereof, or
become void or unsafe by reason of failure or impairment of the capital of any
company in which the insurance may then be carried, Mortgagor shall immediately
place new insurance on the Mortgaged Property, which new insurance shall comply
with the requirements of this Article 8. In the event Mortgagor fails to comply
with this Article 8, or upon any other Event of Default, Mortgagee may procure,
at Mortgagor’s sole cost and expense, whether by a transfer of interest under
the current policy of insurance or by purchase of a new policy of insurance, a
single interest policy of insurance naming Mortgagee as sole loss payee for the
Mortgaged Property. If Mortgagee shall acquire title to the Mortgaged

 

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Property by virtue of a deed in lieu of foreclosure, or a judicial sale thereof
pursuant to the proceedings under the Note or Mortgage, then all of Mortgagor’s
estate, right, title and interest in and to all such policies, including
unearned premiums thereon and the proceeds thereof, shall vest in Mortgagee.

(d) Mortgagee shall be entitled to receive all insurance proceeds according to
the terms of a standard mortgagee clause, not subject to contribution, pursuant
to Subsection 8(g) below. Mortgagee shall have the right, at its election, to
adjust or compromise any loss claims under such insurance and to collect and
receive the proceeds thereof.

(e) Mortgagee is hereby irrevocably appointed by Mortgagor, as attorney-in-fact
of Mortgagor, to assign any policy to itself or its nominee in the event of
foreclosure of this Mortgage or other extinguishment of the Mortgage
indebtedness.

(f) Mortgagor shall not take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under this
Mortgage unless Mortgagee is included thereon as a named insured with loss
payable to Mortgagee under a standard mortgage endorsement of character above
described. Mortgagor shall immediately notify Mortgagee whenever any such
separate insurance is taken out and shall promptly deliver to Mortgagee the
policy or policies of such insurance.

(g) No damage or destruction of the Mortgaged Property or any application of
insurance proceeds to the payment of the Note secured by this Mortgage shall
postpone or reduce the amount of any of the current installments of interest
becoming due under the Note which shall continue to be made in accordance with
the terms of the Note until the Note and all interest due thereunder is paid in
full.

(h) In the event of partial or total destruction of the Mortgaged Property in an
amount greater than $250,000 by fire or other insured casualty, provided
(1) there is no outstanding Event of Default, (2) that insurance proceeds are
sufficient to pay projected costs of repair and restoration, (3) that all
repairs and reconstruction can be completed at least one year prior to the Term
Loan Maturity Date, and (4) that repairs and restoration are not otherwise, in
Mortgagor’s reasonable judgment, impractical or economically unfeasible, then
the insurance proceeds shall be held in a trust fund by Mortgagee to be
disbursed for repairs and reconstruction of the Mortgaged Property on an “as
work progresses” basis in accordance with customary construction lending
requisition criteria and retainages. Any excess insurance proceeds after
completion of restoration shall be released and delivered to Mortgagor provided
that there is no outstanding Event of Default. In the event that any of the
foregoing conditions are not met, then Mortgagee may apply the insurance
proceeds toward reduction of the outstanding balance due under the Note without
prepayment penalty. In no event shall the Mortgage lien be reduced,

 

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except to the extent and by the amount of the proceeds of such insurance
retained by Mortgagee and applied upon said indebtedness. Said trust fund shall
be interest-bearing with said interest to be paid or credited to Mortgagor
provided that there is no outstanding Event of Default.

 

  9. EMINENT DOMAIN; CONDEMNATION:

(a) As to any taking of the Mortgaged Property by the exercise of power of
eminent domain or purchase under threat thereof:

(1) Mortgagor shall notify Mortgagee promptly of all action taken and, to
Mortgagor’s knowledge, proposed to be taken with respect thereto;

(2) Mortgagor shall not exercise or waive any right with respect thereto, unless
Mortgagee consents; and

(3) Mortgagee shall be entitled to receive the award of proceeds, and, at its
sole option, to apply the same on account of the Note and/or to reimburse
Mortgagor for the cost of the repair of the Mortgaged Property pursuant to this
Section.

(b) To further secure said indebtedness, Mortgagor hereby assigns to Mortgagee
any award of damages made in connection with any condemnation or taking with
respect to the Mortgaged Property or any part thereof. Mortgagee is authorized
and empowered (but not required) to collect and receive any such award and is
authorized to apply it in whole or in part in reduction of the then outstanding
debt secured by this Mortgage without prepayment penalty, notwithstanding the
fact that the same may not then be due and payable. Any amounts so applied to
principal shall be applied to the principal last maturing hereon. Mortgagor
agrees to execute such further assignments of any such awards as Mortgagee may
require.

(c) In the event of partial taking of the Mortgaged Property in an amount
greater than $250,000 by the exercise of power of eminent domain or purchase
under threat thereof, provided (1) there is no outstanding Event of Default,
(2) that award proceeds are sufficient to pay projected costs of repair and
restoration, (3) that all repairs and reconstruction can be completed at least
one year prior to the Term Loan Maturity Date, and (4) that repairs and
restoration are not otherwise, in Mortgagor’s reasonable judgment, impractical
or economically unfeasible, then the award proceeds shall be held in a trust
fund by Mortgagee to be disbursed for repairs and reconstruction of the
Mortgaged Property on an “as work progresses” basis in accordance with customary
construction lending requisition criteria and retainages. Any excess award
proceeds after completion of restoration shall be released and delivered to
Mortgagor provided that there is no outstanding Event of Default. In the event
that any of the foregoing conditions are not met, then Mortgagee may apply the
award proceeds toward reduction of the

 

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outstanding balance due under the Note without prepayment penalty. In no event
shall the Mortgage lien be reduced, except to the extent and by the amount of
the proceeds of such award retained by Mortgagee and applied upon said
indebtedness. Said trust fund shall be interest-bearing with said interest to be
paid or credited to Mortgagor provided that there is no outstanding Event of
Default.

 

  10. LEASES:

(a) Mortgagor hereby irrevocably, absolutely, presently and unconditionally
assigns to Mortgagee:

(1) all of Mortgagor’s right, title and interest in, to and under any and all
leases, licenses and other agreements of any kind relating to the use or
occupancy of all or any portion of the Mortgaged Property, whether now in effect
or entered into in the future (collectively, the “Leases” and each individually,
a “Lease”), including (i) all guarantees of and security for lessees’
performance under any and all Leases, and (ii) all amendments, extensions,
renewals or modifications to any Leases; and

(2) all rents (and payments in lieu of rents), income, profit, payments, charges
and revenue at any time payable under any and all Leases, any and all security
deposits received or to be received by Mortgagor pursuant to any and all Leases,
and all rights and benefits accrued or to accrue to Mortgagor under any and all
Leases (collectively, the “Rents”).

THIS IS AN ABSOLUTE ASSIGNMENT, NOT AN ASSIGNMENT FOR SECURITY ONLY.

(b) Mortgagee hereby confers upon Mortgagor a license (the “License”) to collect
and retain the Rents as they become due and payable, so long as no Event of
Default, as defined in Article 13, shall exist and be continuing. If an Event of
Default has occurred and is continuing, Mortgagee shall have the right, which it
may choose to exercise in its sole discretion, to terminate the License without
notice to or demand upon Mortgagor, and without regard to the adequacy of
Mortgagee’s security under this Mortgage.

(c) Subject to the License granted to Mortgagor above, Mortgagee has the right,
power and authority to collect any and all Rents. Mortgagor hereby appoints
Mortgagee its attorney-in-fact to perform any and all of the following acts, if
and at the times when Mortgagee in its sole discretion may so choose:

(1) demand, receive and enforce payment of any and all Rents;

(2) give receipts, releases and satisfactions for any and all Rents; or

 

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(3) sue either in the name of Mortgagor or in the name of Mortgagee for any and
all Rents.

Notwithstanding the foregoing, Mortgagee shall not exercise its rights under
this power of attorney except during the continuation of an Event of Default.

Mortgagee’s right to the Rents does not depend on whether or not Mortgagee takes
possession of the Mortgaged Property as permitted under Section 15(c). In the
event that Mortgagee exercises its rights under the foregoing power of attorney,
Mortgagee in its sole discretion may choose to collect Rents either with or
without taking possession of the Mortgaged Property. If an Event of Default
occurs while Mortgagee is in possession of all or part of the Mortgaged Property
and is collecting and applying Rents as permitted under this Mortgage, Mortgagee
and any receiver shall nevertheless be entitled to exercise and invoke every
right and remedy afforded any of them under this Mortgage and at law or in
equity, including the right to exercise the power of sale granted under
Section 40(c).

(d) All lessees under any and all Leases are hereby irrevocably authorized and
notified by Mortgagor to rely upon and to comply with (and are fully protected
in so doing) any notice or demand by Mortgagee for the payment to Mortgagee of
any rental or other sums which may at any time become due under the Leases, or
for the performance of any of lessees’ undertakings under the Leases, and
lessees shall have no right or duty to inquire as to whether any Event of
Default has actually occurred or is then existing hereunder.

(e) In the event that Mortgagee exercises its rights under the power of attorney
contained in Section 10(c) above, Mortgagee has the right to apply all amounts
received by it pursuant to this assignment to pay any of the following in such
amounts and in such order as Mortgagee deems appropriate: (a) any and all
Secured Obligations, together with all costs and reasonable attorneys’ fees;
(b) all expenses of leasing, operating, maintaining and managing the Mortgaged
Property, including without limitation, the salaries, fees, commissions and
wages of a managing agent and such other employees, agents or independent
contractors as Mortgagee deems necessary or desirable; (c) all taxes, charges,
claims, assessments, any other liens, and premiums for all insurance Mortgagee
deems necessary or desirable; (d) the cost of all alterations, renovations,
repairs or replacements, and all expenses incident to taking and retaining
possession of the Mortgaged Property.

(f) Regardless of whether or not Mortgagee, in person or by agent, takes actual
possession of the Mortgaged Property, Mortgagee is not and will not be deemed to
be:

(1) a “mortgagee in possession” for any purpose;

 

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(2) responsible for performing any of the obligations of Mortgagor under any
Lease;

(3) responsible for any waste committed by lessees or any other parties, any
dangerous or defective condition of the Mortgaged Property, or any negligence in
the management, upkeep, repair or control of the Mortgaged Property; or

(4) liable in any manner for the Mortgaged Property or the use, occupancy,
enjoyment or operation of all or any part of it.

(g) Mortgagor will not enter into, modify, amend, consent to the cancellation of
or terminate any Lease without the prior written consent of Mortgagee which
consent may be granted or withheld in Mortgagee’s sole discretion.

(h) Mortgagor (i) shall observe and perform all the obligations imposed upon the
lessor under all Leases and shall not do or permit to be done anything to impair
the value of the Leases as security for the Loan; (ii) shall promptly send
copies to Mortgagee of all notices of default which Mortgagor shall send or
receive thereunder; (iii) shall enforce all the terms, covenants and conditions
contained in the Leases upon the part of the lessee thereunder to be observed or
performed, (iv) shall not collect any rent more than one (1) month in advance;
(v) shall not execute any other assignment of the lessor’s interest in the
Leases or the rents; and (vi) shall deliver to Mortgagee, upon request, tenant
estoppel certificates from each commercial tenant at the Mortgaged Property in
form and substance reasonably satisfactory to Mortgagee, provided that,
Mortgagor shall not be required to deliver such certificates more frequently
than once in any calendar year. Except to the extent Mortgagor has received the
prior written consent of Mortgagee, which consent may be granted or withheld in
Mortgagee’s sole discretion, Mortgagor shall not consent to any assignment of or
subletting under any Lease not in accordance with its terms.

(i) If Mortgagor shall, in a timely manner, fail to cure any such default on its
part, as landlord under any such Lease, then Mortgagor expressly authorizes
Mortgagee, at its option, to cure such default in order to prevent termination
of any such Lease by any such tenant, and the Leases shall set forth the
foregoing provisions. If by reason of default of Mortgagor in the performance of
any such Lease, the tenant has the right to cancel such Lease or to claim any
diminution of or offset against future rents, then, at the option of Mortgagee,
such default shall be an Event of Default under the Note and this Mortgage.

(j) In the event that Mortgagee forecloses this Mortgage, Mortgagor authorizes
Mortgagee, at its option, to foreclose this Mortgage subject to the rights of
any tenants of the Mortgaged Property, and the failure to make any such tenants
party-defendants to any

 

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such foreclosure proceeding and to foreclose their rights will not be asserted
by Mortgagor as a defense to any proceeding instituted by Mortgagee to collect
the indebtedness secured hereby or any deficiency remaining unpaid after the
foreclosure sale of the Mortgaged Property, it being expressly understood and
agreed, however, that nothing herein contained shall prevent Mortgagor from
asserting in any proceeding disputing the amount of the deficiency or the
sufficiency of any bid at such foreclosure sale, that any such tenancies
adversely affect the value of the Mortgaged Property.

(k) Any agreement entered into by Mortgagor, its representatives, agents,
successors or assigns, which provides for the payment of leasing commissions,
(1) shall provide that the obligation to pay such leasing commissions will not
be enforceable against any party other than the party who entered into such
agreement, (2) shall be subordinate to this Mortgage, and (3) shall not be
enforceable against Mortgagee or its successors by foreclosure, deed in lieu of
foreclosure or by assignment of this Mortgage. Mortgagor shall, upon the request
of Mortgagee, furnish satisfactory evidence to Mortgagee of Mortgagor’s
compliance with the provisions of this Section.

(l) At the sole option of Mortgagee, this Mortgage shall become subject and
subordinate, in whole or in part (but not with respect to priority entitlement
to any award in condemnation), to any and all Leases of any part of the
Mortgaged Property upon the execution by Mortgagee and recording thereof, at any
time hereinafter, in the office of the recording of such documents for the
locality in which the Mortgaged Property are located, of a unilateral
declaration to that effect.

 

  11. [RESERVED.]

 

  12. RESTRICTIVE AND AFFIRMATIVE COVENANTS:

(a) Mortgagor shall not take or abstain from taking any action that would, if
taken by Parent, be a violation of the Loan Agreement.

(b) Mortgagor shall not suffer or permit waste on the Mortgaged Property or
remove or demolish the Mortgaged Property.

(c) Except as otherwise permitted in the Loan Documents, without the prior
written consent of Mortgagee, Mortgagor shall not make any material alterations
to the Mortgaged Property.

(d) Mortgagor shall not install, or permit to be installed, in or on the
Mortgaged Property any new fixture or equipment in replacement of, substitution
for, or addition to, any fixtures or equipment in or on the Mortgaged Property,
if such new fixture or equipment would be subject to a security interest held by
any person other than Mortgagee, unless such security interest is a Permitted
Lien.

 

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(e) Mortgagor covenants that it shall not, except to the extent expressly
permitted in Section 20 hereof, sell, transfer, convey, assign, pledge or
hypothecate any interest in the Mortgaged Property or any part thereof without
Mortgagee’s prior written approval which may be withheld in Mortgagee’s sole
discretion.

(f) Mortgagor shall not create nor permit to exist any interest, lien, charge,
encumbrance, or security interest in the Mortgaged Property other than (i) as
set forth in the Title Policy received by Mortgagee in connection with the
closing of the Loan, and (ii) Permitted Liens; provided however, Mortgagor shall
not be in default for failure to pay or discharge mechanic’s or materialman’s
lien asserted against the Mortgaged Property if, and so long as, (a) Mortgagor
shall have provided Mortgagee with written notice thereof within five (5) days
of obtaining knowledge thereof; (b) Mortgagor shall diligently and in good faith
contest the same by appropriate legal proceedings which shall operate to prevent
the enforcement or collection of the same and the sale of the Mortgaged Property
or any part thereof, to satisfy the same; (c) Mortgagor shall have furnished to
Mortgagee a cash deposit, or an indemnity bond satisfactory to Mortgagee with a
surety satisfactory to Mortgagee, in the amount of the mechanic’s or
materialman’s lien claim, plus a reasonable additional sum to pay all costs,
interest and penalties that may be imposed or incurred in connection therewith,
to assure payment of the matters under contest and to prevent any sale or
forfeiture of the Mortgaged Property or any part thereof; (d) Mortgagor shall
promptly upon final determination thereof pay the amount of any such claim so
determined, together with all costs, interest and penalties which may be payable
in connection therewith; (e) the failure to pay the mechanic’s or materialman’s
lien claim does not constitute a default under any other deed of trust, mortgage
or security interest covering or affecting any part of the Mortgaged Property;
and (f) notwithstanding the foregoing, Mortgagor shall immediately upon request
of Mortgagee pay any such claim (and if Mortgagor shall fail so to do, Mortgagee
may, but shall not be required to, pay or cause to be discharged or bonded
against), if in the opinion of Mortgagee, the Mortgaged Property or any part
thereof or interest therein may be in danger of being sold, forfeited,
foreclosed, terminated, cancelled or lost. Mortgagee may pay over any such cash
deposit or part thereof to the claimant entitled thereto at any time when, in
the judgment of Mortgagee, the entitlement of such claimant is established.

(g) Mortgagor shall not, except to the extent expressly permitted under the Loan
Documents, sell, convey, transfer, nor assign, whether directly or indirectly,
whether outright or as collateral security, any interest in the Mortgaged
Property held by Mortgagor.

(h) Mortgagor covenants that it shall not, except to the extent expressly
permitted under the Loan Documents, sell, lease or otherwise transfer all or any
portion of its assets during the term of the Loan which would materially impair
the financial condition, net worth, and/or liquidity of Mortgagor without the
express written consent of Mortgagee.

 

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(i) Mortgagor shall not lease any portion of the Mortgaged Property except as
may be permitted under this Mortgage or the other Loan Documents, and Mortgagor
shall not further assign the leases or rents affecting the Mortgaged Property.

(j) Mortgagor shall promptly notify Mortgagee of the occurrence of any of the
following: (1) fire or other casualty the restoration cost of which is in excess
of One Hundred Thousand and 00/100 Dollars ($100,000.00); (2) receipt of notice
of condemnation; (3) a change in tax assessment or proposed assessment; or
(4) other material facts affecting the Mortgaged Property.

(k) Mortgagor covenants that it shall, at all times, occupy the Mortgaged
Property, or use its best efforts to keep the Mortgaged Property fully rented at
market rents and that it shall not inventory or warehouse vacant units.

(l) Mortgagor shall comply with all applicable laws and regulations regarding
landlord’s handling of tenant security deposits.

(m) Except as expressly permitted under the Loan Documents, Mortgagor has not
and shall not: (1) merge into or consolidate with any person or entity or
dissolve, terminate or liquidate in whole or in part, transfer or otherwise
dispose of all or substantially all of its assets or change its legal structure,
without in each case Mortgagee’s consent; (2) fail to preserve its existence as
an entity duly organized, validly existing and in good standing (if applicable)
under the laws of the jurisdiction of its organization or formation, or without
the prior written consent of Mortgagee, amend, modify in any material respect,
terminate or fail to comply with the provisions of Mortgagor’s organizational
documents, as same may be further amended or supplemented, if such amendment,
modification, termination or failure to comply would adversely affect the
ability of Mortgagor to perform its obligations hereunder, under the Note or
under the other Loan Documents; (3) own any subsidiary or make any investment
in, any person or entity without the consent of Mortgagee, except as permitted
under the Loan Agreement or the other Loan Documents; (4) commingle its assets
with the assets of any of its affiliates, principals or of any other person or
entity; (5) incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than the Secured Obligations,
except as otherwise permitted under the Loan Agreement or the other Loan
Documents; (6) fail to pay its debts and liabilities from its assets as the same
shall become due; (7) fail to maintain its records, books of account and bank
accounts separate and apart from those of the principals and affiliates of
Mortgagor, the affiliates of a general partner of Mortgagor, and any other
person or entity; (8) enter into any contract or agreement with any principal or
affiliate of Mortgagor, except upon terms

 

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and conditions that are intrinsically fair and substantially similar to those
that would be available on an arms-length basis with third parties other than
any principal or affiliate of Mortgagor; (9) seek the dissolution or winding up
in whole, or in part, of Mortgagor; (10) make any loans or advances to any third
party, including any general partner, principal or affiliate of Mortgagor, or
any general partner, principal or affiliate thereof; (11) fail to file its own
tax returns unless included on a consolidated tax return; (12) fail either to
hold itself out to the public as a legal entity separate and distinct from any
other entity or person or to conduct its business solely in its own name in
order not to mislead others as to the identity with which such other party is
transacting business; (13) fail to maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations; or (14) file or consent to the
filing of any petition, either voluntary or involuntary, to take advantage of
any applicable insolvency, bankruptcy, liquidation or reorganization statute, or
make an assignment for the benefit of creditors.

(n) Mortgagor hereby represents and warrants, that except as previously
disclosed to Mortgagee, from the date of its formation to the date of this
Mortgage, Mortgagor has not: (1) failed to preserve its existence as an entity
duly organized, validly existing and in good standing (if applicable) under the
laws of the jurisdiction of its organization or formation; (2) commingled its
assets with the assets of any of its affiliates, principals or of any other
person or entity; (3) become insolvent and failed to pay its debts and
liabilities from its assets as the same had become due; (4) failed to maintain
its records, books of account and bank accounts separate and apart from those of
its affiliates, principals or of any other person or entity; (5) entered into
any contract or agreement with any principal or affiliate of Mortgagor, except
upon terms and conditions that are intrinsically fair and substantially similar
to those that would be available on an arms-length basis with third parties
other than any principal or affiliate of Mortgagor; (6) sought the dissolution
or winding up in whole, or in part, of Mortgagor; (7) maintained its assets in
such a manner that it will be costly or difficult to segregate, ascertain or
identify its individual assets from those of any principal or affiliate of
Mortgagor, or any general partner, principal or affiliate thereof or any other
person; (8) held itself out to be responsible for the debts of another person;
(9) made any loans or advances to any third party, including any principal or
affiliate of Mortgagor, or any general partner, principal or affiliate thereof;
(10) failed to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations; (11) filed or consented to the filing of any
petition, either voluntary or involuntary, to take advantage of any applicable
insolvency, bankruptcy, liquidation or reorganization statute, or make an
assignment for the benefit of creditors; or (14) other than as permitted under
the Loan Agreement, incurred any indebtedness that is still outstanding and has
not had any of its obligations guaranteed by an affiliate, except for guarantees
that have been either released or discharged (or that will be discharged as a
result of the closing of the Loan).

 

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  13. EVENTS OF DEFAULT:

The occurrence of any of the following events shall constitute an Event of
Default:

(a) The occurrence of any “Event of Default” as defined in Section 8 of the Loan
Agreement;

(b) The failure of Mortgagor to duly observe or fulfill or perform any
non-monetary covenant, condition or agreement contained in this Mortgage other
than the other Event of Defaults set forth in this Section 13, and such default
shall have remained uncured for a period of thirty (30) days after the earlier
of (i) the date Mortgagee has given notice of such default to Mortgagor, or
(ii) Mortgagor has actual knowledge of such default. If such default cannot
reasonably be cured within such thirty (30) day period and Mortgagor shall have
commenced to cure such default within such thirty (30) day period and thereafter
diligently and expeditiously proceeds to cure the same, such thirty (30) day
period shall be extended for so long as it shall require Mortgagor in the
exercise of due diligence to cure such default, it being agreed that no such
extension shall be for a period in excess of ninety (90) days;

(c) Any state, local or federal government or any department, bureau,
administration or instrumentality thereof or any corporation having the power of
eminent domain shall take any estate or interest in the Mortgaged Property, the
taking of which would be reasonably likely to cause a Material Adverse Effect;

(d) Mortgagor shall have transferred or caused to have been transferred title to
or possession of any interest in the Mortgaged Property, or any part thereof, or
the making of an installment contract therefor, to any party, or any member of
Mortgagor shall have transferred or caused to have been transferred title to or
possession of any interest in the Mortgagor, or the making of an installment
contract therefor, to any party, in each case in a manner which constitutes an
Event of Default under any Loan Document;

(e) The sale, transfer, conveyance, assignment, pledge, hypothecation or
encumbrance of any interest in the ownership of the Mortgagor or the Mortgaged
Property except as expressly permitted under the Loan Documents;

(f) Mortgagor suffers or permits any waste on the Mortgaged Property, reasonable
wear and tear excepted;

 

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(g) Subject to the terms of Section 19 hereof, Mortgagor shall fail to comply
promptly with all applicable requirements of the federal, state and municipal
governments, or of any departments officials or bureaus thereof having
jurisdiction, or shall use the Mortgaged Property or property in any way that
violates any federal, state or local law ordinance, rule, regulation, or
requirement, or any restrictive covenant on the use of the Mortgaged Property,
and such failure or violation would be reasonably likely to cause a Material
Adverse Effect;

(h) Mortgagor’s failure to maintain the insurance as required by Article 8
hereof;

(i) Mortgagor fails to repair or replace any Improvements damaged by fire or
other casualty to the reasonable satisfaction of Mortgagee to the condition of
the Mortgaged Property existing immediately prior to the casualty, provided,
however, that such failure shall not constitute an Event of Default hereunder if
(i) such damage or casualty is covered by the insurance required to be
maintained by Mortgagor pursuant to Article 8 hereof, and (ii) Mortgagee fails
to make insurance proceeds available to Mortgagor for such repair or replacement
in accordance with Section 8(h) hereof;

(j) Mortgagor fails to maintain the Mortgaged Property and property in a
rentable and tenantable condition and state of repair recognizing industry
standards and with reasonable wear and tear excepted; or

(k) Mortgagor abandons all or part of the Mortgaged Property.

 

  14. RENTS AFTER DEFAULT:

(a) Pursuant to Article 10 above, Mortgagor is assigning to Mortgagee the Rents
heretofore accrued and hereafter accruing;

(b) During the continuation of an Event of Default, Mortgagor shall hold in
trust for Mortgagee the Rents which Mortgagor receives, shall not commingle the
same with Mortgagor’s other property, and shall pay the same promptly to
Mortgagee, and

(c) If Mortgagor remains in occupancy of the Mortgaged Property during a
foreclosure action it shall keep the Mortgaged Property in good repair and
condition or Mortgagee shall have the right to have Mortgagor removed, in any
event Mortgagor’s occupancy shall terminate upon delivery of deed whether
voluntary or in foreclosure.

 

  15. REMEDIES:

During the continuation of any Event of Default, Mortgagee in its sole
discretion may declare the entire unpaid balance of the principal, all accrued
interest, and all other

 

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sums secured by this Mortgage immediately due and payable without further notice
or demand, and in any such Event of Default, Mortgagee may forthwith undertake
any one or more of the following:

(a) Declare the Loan to be immediately due and payable, and thereupon the same
shall become immediately due and payable;

(b) Recover judgment against Mortgagor for any debt; and neither the recovery of
judgment nor the levy of execution thereof on any property, including the
Mortgaged Property, shall affect Mortgagee’s rights hereunder or the lien
hereof;

(c) Enter upon and take possession of the Mortgaged Property, or have a receiver
of the rents, issues and profits thereof appointed on an ex parte basis without
notice to Mortgagor, without proof of depreciation in the value of the Mortgaged
Property, inadequacy of the Mortgaged Property, or insolvency of Mortgagor; and
Mortgagee or the receiver may lease the Mortgaged Property, in the name of
Mortgagor, Mortgagee or the receiver, and may receive the rents issues and
profits and apply the same:

(1) to the payment of expenses of operating, maintaining, repairing and
improving the Mortgaged Property, including renting commission and rental
collection commissions paid to an agent of Mortgagee or of the receiver; and/or

(2) on account of the Note, in such order and in such amounts as Mortgagee or
the receiver determines, but while in possession of the Mortgaged Property,
Mortgagee or the receiver shall be liable to account only for the rents, issues
and profits actually received; and/or

(d) Take such other action to protect and enforce Mortgagee’s rights hereunder
and the lien hereof, as Mortgagee deems advisable, including:

(1) the foreclosure hereof, subject, at Mortgagee’s option, and upon the filing
of a Complaint in Foreclosure, Mortgagee shall be entitled to the appointment of
a receiver of the rents of the Mortgaged Property without the necessity of
either inadequacy of the security or insolvency of Mortgagor or any person who
may be legally or equitably liable to pay money secured by this Mortgage, and
Mortgagor and each person waives such proof and consents to the appointment of
such receiver; and in any proceeding to enforce any liability of the debt,
Mortgagor shall not assert as a defense that Mortgagee failed to foreclosure any
such rights or that any such rights adversely affected the value of the
Mortgaged Property; and

(2) the sale of the Mortgaged Property, in a foreclosure proceeding, and without
obligation to have the Mortgaged Property marshaled.

 

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  16. MORTGAGEE’S RIGHTS CUMULATIVE:

The rights and remedies of Mortgagee hereunder shall be in addition to every
other right and remedy now and hereafter provided by law; the rights and
remedies of Mortgagee shall be cumulative and not exclusive one or the other;
Mortgagee may exercise the same at such times, in such order, to such extent,
and as often as Mortgagee deems advisable, and without regard to whether the
exercise of one precedes, concurs with, or succeeds the exercise of another; no
delay or omission by Mortgagee in exercising a right or remedy shall exhaust or
impair the same, or constitute a waiver of, or acquiescence in, the default; and
no waiver of a default by Mortgagee shall extend to or affect any other default
or impair any right or remedy with respect thereto.

 

  17. INDULGENCES AND EXTENSIONS:

Mortgagee may: (i) allow Mortgagor or Parent any indulgences, forbearances and
extensions with respect to the Note, the other Loan Documents, the Mortgaged
Property and Mortgagor’s obligations hereunder; (ii) waive compliance with any
of the provisions hereof, or of any other Loan Document; (iii) release all or
any part of the Mortgaged Property from the lien hereof; and/or (iv) release all
or any part of any other property securing the Secured Obligations from any lien
thereon in favor of Mortgagee, all without affecting any obligations of
Mortgagor under this Mortgage, or the priority of the lien hereof upon the
remainder of the Mortgaged Property.

 

  18. ADVANCES BY MORTGAGEE:

During the continuation of any Event of Default, if Mortgagor does not pay any
amount payable by it under, or fails to comply with any provision of, this
Mortgage or the other Loan Documents to which Mortgagor is a party, Mortgagee
may pay such amount or comply with such provision of this Mortgage or the other
Loan Documents, and make such expenditures, including reasonable counsel fees,
in connection therewith and with enforcing this Mortgage and the other Loan
Documents, for repairing, maintaining and preserving the Mortgaged Property, for
establishing, preserving, protecting and restoring the priority of the lien
hereof, for obtaining official tax searches of the Mortgaged Property, for
protecting and preserving any use being made of the Mortgaged Property now or
hereafter, and for advances to any trustee or receiver of the Mortgaged
Property, as Mortgagee reasonably deems advisable; each amount so paid or
expended, with interest at the rate stated in the Note, shall become part of the
Secured Obligations and be secured hereby; and Mortgagor shall pay to Mortgagee,
on demand, the amount of each such payment or expenditure with interest at the
rate stated in the Note; but no such payment or compliance by Mortgagee shall
constitute a waiver of Mortgagor’s failure to do so or affect any right or
remedy of Mortgagee with respect thereto.

 

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  19. WASTE - IMPAIRMENT OF SECURITY:

Mortgagor shall abstain from the commission of waste on the Mortgaged Property
and shall not remove, alter (subject to Section 12(a) hereof), or demolish any
of the Improvements and shall not remove or demolish any fixtures or personal
property covered by this Mortgage without the written consent of Mortgagee,
which consent shall not be unreasonably withheld. Mortgagor covenants and agrees
with Mortgagee and the successors and assigns of Mortgagee that Mortgagor will
keep and maintain (or cause to be kept and maintained) the Mortgaged Property
and all improvements thereon and all personal property included in this Mortgage
in a good condition and complete state of repair and will promptly comply with
all the requirements of the federal, state, and municipal governments or of any
departments or bureaus thereof having jurisdiction (unless the same are being
contested in good faith in accordance with the terms of the Loan Documents);
that neither the value of the Mortgaged Property nor the lien of this Mortgage
will be diminished or impaired in any way by any act or omission of Mortgagor;
and that Mortgagor will not do or permit to be done to, in, upon or about said
Mortgaged Property or any part thereof, anything that may in any way
substantially impair the value thereof, or substantially weaken, diminish, or
impair the security of this Mortgage; provided, however, that Mortgagor may
replace obsolete or worn out items of personal property by similar items of
equal or greater value and utility, in accordance with sound practice ordinarily
employed by prudent and diligent owners of similar property. This paragraph is
based upon industry standards and with reasonable wear and tear excepted.

 

  20. ALIENATION

The Loan shall be accelerated and become due and payable, and subject to
Prepayment Charge upon any Transfer, unless such Transfer is expressly permitted
under the Loan Documents. For purposes hereof, the term “Transfer” means (a) any
sale, transfer, conveyance, alienation, pledge or encumbrance of (i) the
Mortgaged Property (except for leases to commercial tenants for portions of the
Mortgaged Property as permitted hereunder), or (ii) any direct or indirect
“controlling interest” in Mortgagor or of any direct or indirect interests
comprising forty-nine percent (49%) or more (in the aggregate) of the direct or
indirect ownership of Mortgagor, or (b) a change in the management of the
Mortgaged Property without the prior written consent of Mortgagee. “Controlling
interest” means any direct or indirect interest in Mortgagor which grants the
holder of such interests the rights to direct and/or manage the Mortgagor.
Notwithstanding the foregoing: (x) transfers of interests in Mortgagor solely
for estate planning purposes to “Family Members” (defined as any spouse, child,
grandchild, parent or sibling) or to a trust (or limited partnership or limited
liability company established and structured for estate planning purposes)
solely for the benefit of Family Members shall be permitted with Mortgagee’s
prior written consent, which consent shall

 

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not be unreasonably withheld provided that there is no change in the direct or
indirect control of Mortgagor or management of the Mortgaged Property; and
(y) transfers of the direct or indirect interests in Mortgagor among the
existing shareholders of Mortgagor as of the date hereof shall be permitted with
Mortgagee’s prior written consent, which consent shall not be unreasonably
withheld provided that there is no change in the direct or indirect control of
Mortgagor or management of the Mortgaged Property.

 

  21. NOTICES:

All notices, requests, consents, approvals, waivers, service of process or other
communications under this Mortgage shall be given in the manner set forth in
Section 10.2 of the Loan Agreement, at the address for each party specified in
the preamble hereto, or at such other address as the parties may designate by
written notice given accordance with Section 10.2 of the Loan Agreement.

 

  22. INSPECTION:

Mortgagee shall have the right to conduct inspections of the interior and
exterior of the Mortgaged Property from time to time upon written notice during
reasonable hours and without interfering with Mortgagor’s operation of the
property. If no Event of Default shall have occurred, Mortgagee shall conduct
such inspections no more frequently than once per calendar year. During the
continuation of any Event of Default, Mortgagee may conduct such inspections as
often as it reasonably deems necessary or advisable.

 

  23. THIRD PARTY SECURED OBLIGATIONS:

(a) As used in this Section 23, “Third Party Secured Obligation” means any
Secured Obligation which is required to be performed by any person or entity
other than Mortgagor. As used in this Section 8, “Obligor” means the person or
entity obligated to perform any Third Party Secured Obligation. All other
capitalized words used herein are used as defined in this Mortgage.

(b) Mortgagor authorizes Mortgagee to perform any or all of the following acts
at any time in its sole discretion, all without notice to Mortgagor and without
affecting Mortgagee’s rights or Mortgagor’s obligations under this Mortgage,
provided that such acts do not violate the terms of the Loan Agreement:

(1) Mortgagee may alter any terms of the Third Party Secured Obligation or any
part of it, including renewing, compromising, modifying, extending or
accelerating, terminating early, or otherwise changing the time for payment of,
or increasing or decreasing the rate of interest on, the Third Party Secured
Obligation or any part of it.

 

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(2) Mortgagee may enforce or forbear from enforcing the Third Party Secured
Obligations on a net or gross basis.

(3) Mortgagee may take and hold security for the Third Party Secured Obligation,
accept additional or substituted security for that obligation, and subordinate,
exchange, enforce, waive, release, reconvey, compromise, fail to perfect and
sell or otherwise dispose of any such security.

(4) Mortgagee may direct the order and manner of any sale of all or any part of
any security now or later to be held for the Third Party Secured Obligation, and
Mortgagee may also bid at any such sale and may apply all or any part of the
Third Party Secured Obligation against the amount so bid.

(5) Mortgagee may apply any payments or recoveries from Obligor, Mortgagor or
any other source, and any proceeds of any security, to the Third Party Secured
Obligation in such manner, order and priority as Mortgagee may elect, whether
that obligation is secured by this Mortgage or not at the time of the
application.

(6) Mortgagee may substitute, add or release any one or more Obligors,
guarantors or endorsers.

(7) In addition to the Third Party Secured Obligation, Mortgagee may extend
other credit to Obligor, and may take and hold security for the credit so
extended, whether or not such security is also security for the Third Party
Secured Obligation, all without affecting Mortgagee’s rights or Mortgagor’s
liability under this Mortgage.

(c) Mortgagor expressly agrees that until the Third Party Secured Obligation is
paid and performed in full, and each and every term, covenant and condition of
this Mortgage is fully performed, Mortgagor shall not be released by or because
of:

(1) Any act or event which might otherwise discharge, reduce, limit or modify
Mortgagor’s obligations under this Mortgage;

(2) Any waiver, extension, modification, forbearance, delay or other act or
omission of Mortgagee, or its failure to proceed promptly or otherwise against
Obligor, Mortgagor or any security;

(3) Any action, omission or circumstance which might increase the likelihood
that Mortgagor may be called upon to perform under this Mortgage or which might
affect the rights or remedies of Mortgagor against Obligor; or

(4) Obligor becoming insolvent or subject to any bankruptcy or other voluntary
or involuntary proceeding, in or out of court, for the adjustment of
debtor-creditor

 

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relationships (“Insolvency Proceeding”) and as a result thereof some or all of
the Third Party Secured Obligation being terminated, rejected, discharged,
modified or abrogated.

(d) This Mortgage shall remain in full force and effect without regard to, and
shall not be affected or impaired, by any invalidity, irregularity or
unenforceability, in whole or in part (including with respect to any netting
provision) of any Loan Document secured hereunder or any limitation on the
liability of Obligor thereunder or any limitation on the method or terms of
payment thereunder which may now or in the future be caused or imposed in any
manner whatsoever. Mortgagor hereby acknowledges that absent this Section 23(d),
Mortgagor might have a defense to the enforcement of this Mortgage as a result
of one or more of the foregoing acts, omissions, agreements, waivers or matters.
Mortgagor hereby expressly waives and surrenders any defense to any liability
under this Mortgage based upon any of such acts, omissions, agreements, waivers
or matters. It is the express intent of Mortgagor that Mortgagor’s obligations
under this Mortgage are and shall be absolute, unconditional and irrevocable.

(e) Mortgagor waives:

(1) All statutes of limitations as a defense to any action or proceeding brought
against Mortgagor by Mortgagee, to the fullest extent permitted by law;

(2) Any right it may have to require Mortgagee to proceed against Obligor or any
other party, proceed against or exhaust any security held from Obligor or any
other party, or pursue any other remedy in Mortgagee’s power to pursue;

(3) To the extent permitted by applicable law, the benefit of all laws now
existing or which may hereafter be enacted providing for any appraisement,
valuation, stay, extension, redemption or moratorium;

(4) All rights of marshaling in the event of foreclosure;

(5) Any defense based on any claim that Mortgagor’s obligations exceed or are
more burdensome than those of Obligor;

(6) Any defense based on: (i) any legal disability of Obligor, (ii) any release,
discharge, modification, impairment or limitation of the liability of Obligor to
Mortgagee from any cause, whether consented to by Mortgagee or arising by
operation of law or from any Insolvency Proceeding and (iii) any rejection,
disallowance or disaffirmance of the Third Party Secured Obligation, or any part
of it, or any security held for it, in any such Insolvency Proceeding;

 

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(7) Any defense based on any action taken or omitted by Mortgagee in any
Insolvency Proceeding involving Obligor, including. without limitation, filing,
defending, settling or obtaining a judgment or order on any proof of claim or
any adversary proceeding, making any election to have Mortgagee’s claim allowed
as being secured, partially secured or unsecured, including any election under
11 U.S.C. Section 1111(b), seeking relief from the automatic stay or adequate
protection, including submitting an appraisal of any security, voting to reject
or accept or failing to vote on any reorganization plan, making any extension of
credit by Mortgagee to Obligor in any Insolvency Proceeding, and the taking and
holding by Mortgagee of any security for any such extension of credit, whether
or not such security is also security for the Third Party Secured Obligation;

(8) All presentments, demands for performance, notices of nonperformance,
protests, notices of protest, notices of dishonor, notices of acceptance of this
Mortgage and of the existence, creation, or incurring of new or additional
indebtedness, and demands and notices of every kind; and

(9) Any defense based on or arising out of any defense that Obligor may have to
the payment or performance of the Third Party Secured Obligation or any part of
it.

(f) Mortgagor acknowledges, covenants and agrees that:

(1) The obligations of Mortgagor hereunder are independent of the obligations of
Obligor, and a separate action or actions may be brought against Mortgagor
whether or not action or suit is brought against Obligor or Obligor is joined in
any such action or actions. At the option of Mortgagee, Mortgagor may be joined
in any action or proceeding commenced by Mortgagee against Obligor in connection
with or based on the Third Party Secured Obligation or any security for such
obligation, and recovery may be had against Mortgagor in such action or
proceeding without any requirement that Mortgagee first assert, prosecute or
exhaust any remedy or claim against Obligor.

(2) Upon a default by Obligor, Mortgagee in its sole discretion, without prior
notice to or consent of Mortgagor, may elect to: (i) foreclose either judicially
or nonjudicially against any real or personal property security that Mortgagee
may hold for the Third Party Secured Obligation other than the Property hereby
encumbered, (ii) accept a transfer of any such security in lieu of foreclosure,
(iii) compromise or adjust the Third Party Secured Obligation or any part of it
or make any other accommodation with Obligor or Mortgagor, or (iv) exercise any
other remedy against Obligor or any security other than the Property hereby
encumbered. With respect to security other than the Property hereby encumbered,
no such action by Mortgagee shall release or limit the

 

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liability of Mortgagor, who shall remain liable under this Mortgage after the
action, even if the effect of the action is to deprive Mortgagor of any
subrogation rights, rights of indemnity, rights of contribution, or other rights
to collect reimbursement from Obligor for any recovery by Mortgagee against
Mortgagor, whether contractual or arising by operation of law or otherwise.
After any foreclosure or deed in lieu of foreclosure of any real or personal
property pledged to secure the Third Party Secured Obligation, Mortgagor shall
under no circumstances be deemed to have any right, title, interest or claim in
or to such property, whether it is held by Mortgagee or any third party.

(3) Regardless of whether Mortgagee may have recovered against Mortgagor,
Mortgagor hereby waives: (i) all rights of subrogation, all rights of indemnity,
and any other rights to collect reimbursement or contribution from Obligor or
any other party for any recovery by Mortgagee against Mortgagor, whether
contractual or arising by operation of law (including the United States
Bankruptcy Code or any successor or similar statute) or otherwise (collectively,
“Reimbursement Rights”), (ii) all rights to enforce any remedy that Mortgagee
may have against Obligor, and (iii) all rights to participate in any security
now or later to be held by Mortgagee for the Third Party Secured Obligation. To
the extent Mortgagor’s waiver of Reimbursement Rights is found by a court of
competent jurisdiction to be void or voidable for any reason, any Reimbursement
Rights Mortgagor may have against Obligor or any collateral or security shall be
junior and subordinate to any rights Mortgagee may have against Obligor and to
all right, title and interest Mortgagee may have in any such collateral or
security. If any amount should be paid to Mortgagor on account of any
Reimbursement Rights at any time when the Third Party Secured Obligation has not
been paid in full, such amount shall be held in trust for Mortgagee and shall
immediately be paid over to Mortgagee to be credited and applied against the
Third Party Secured Obligation, whether matured or unmatured, in accordance with
the terms of the Loan Documents. The covenants and waivers of Mortgagor set
forth in this Section 23(f)(3) shall be effective until the Third party Secured
Obligation has been paid and performed in full and are made solely for the
benefit of Mortgagee.

(4) Mortgagor waives any and all rights and defenses described in
Section 2856(a) of the California Civil Code that are or may become available to
Mortgagor, including, without limitation, any rights and defenses by reason of
Sections 2787 to 2855, inclusive, of the California Civil Code.

 

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(5) Mortgagor waives all rights and defenses that Mortgagor may have because the
Third Party Secured Obligation may be secured by real property other than the
Property hereby encumbered. This means, among other things:

 

  (A) Mortgagee may collect from Mortgagor (including enforcing this Mortgage
against Mortgagor) without first foreclosing on any real or personal property
collateral pledged by Obligor;

 

  (B) If Mortgagee forecloses on any real property collateral pledged by
Obligor, (i) the amount of the Third Party Secured Obligation may be reduced
only by the price for which that collateral is sold at the foreclosure sale,
even if the collateral is worth more than the sale price and (ii) Mortgagee may
collect from Mortgagor (including enforcing this Mortgage against Mortgagor)
even if Mortgagee, by foreclosing on the real property collateral pledged by
Obligor, has destroyed any right Mortgagor may have to collect from Obligor.

This Section 23(f)(5) is an unconditional and irrevocable waiver of any rights
and defenses Mortgagor may have because the Third Party Secured Obligation may
be secured by real property other the Property hereby encumbered. These rights
and defenses include, but are not limited to, any rights or defenses based upon
Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

(6) Without limiting the generality of the foregoing Section 23(f)(5), Mortgagor
understands and acknowledges that if Mortgagee forecloses judicially or
nonjudicially against any real property securing the Third Party Secured
Obligation other than the Property hereby encumbered, that foreclosure could
impair or destroy any ability that Mortgagor may have to seek reimbursement,
contribution or indemnification from Obligor or others based on any
Reimbursement Right Mortgagor may have for any recovery by Mortgagee under this
Mortgage. Mortgagor further understands and acknowledges that in the absence of
this Section 23(f), such potential impairment or destruction of Mortgagor’s
rights, if any, may entitle Mortgagor to assert a defense to this Mortgage based
on Section 580d of the California Code of Civil Procedure as interpreted in
Union Bank v. Gradsky, 265 Cal.App.2d 40 (1968). By executing this Mortgage,
Mortgagor freely, irrevocably and unconditionally: (i) waives and relinquishes
that defense and agrees that Mortgagor will be fully liable under this Mortgage
even though Mortgagee may foreclose judicially or nonjudicially against any real
property security for the Third Party Secured Obligation other than the
Property; (ii) agrees that Mortgagor will not assert that defense in any action
or proceeding which Mortgagee may commence to enforce this Mortgage;
(iii) acknowledges and agrees that the rights and defenses waived by Mortgagor
under this Mortgage include any right or defense that Mortgagor may have or be
entitled to assert based upon or arising out of any one or more of Sections
580a, 580b, 580d or 726 of the California Code of Civil Procedure or
Section 2848 of the California Civil Code; and (iv) acknowledges and agrees that
Mortgagee is relying on this waiver in extending credit to Obligor in the form
of the Third Party Secured Obligation, and that this waiver is a material part
of the consideration which Mortgagee is receiving for extending such credit to
Obligor.

 

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(7) Mortgagor waives any right or defense it may have at law or equity,
including California Code of Civil Procedure Section 580a, to a fair market
value hearing or action to determine a deficiency judgment after a foreclosure
of any property other than the Property hereby encumbered.

(8) No provision or waiver in this Mortgage shall be construed as limiting the
generality of any other provision or waiver contained in this Mortgage.

(g) If Mortgagee is required to pay, return or restore to Obligor or any other
person any amounts previously paid on the Third Party Secured Obligation because
of any Insolvency Proceeding of Obligor, any stop notice or any other reason,
the obligations of Mortgagor shall be reinstated and revived and the rights of
Mortgagee shall continue with regard to such amounts, all as though they had
never been paid, and this Mortgage shall continue to be effective or be
reinstated, as the case may be.

(h) Mortgagor represents that: (a) Mortgagee has made no representation to
Mortgagor as to the creditworthiness of Obligor, and (b) no oral promises,
assurances, representations or warranties have been made by or on behalf of
Mortgagee to induce Mortgagor to execute and deliver this Mortgage. Mortgagor
has received and approved copies of all other requested Loan Documents. Before
signing this Mortgage, Mortgagor investigated the financial condition and
business operations of Obligor and such other matters as Mortgagor deemed
appropriate to assure itself of Obligor’s ability to discharge its obligations
in connection with the Third Party Secured Obligation. Mortgagor assumes full
responsibility for that due diligence and for keeping informed of all matters
which may affect Obligor’s ability to pay and perform its obligations to
Mortgagee. Mortgagee has no duty to disclose to Mortgagor any information which
Mortgagee may have or receive about Obligor’s financial condition or business
operations or any other circumstances bearing on Obligor’s ability to perform.

(i) Mortgagor acknowledges that Mortgagor has had adequate opportunity to
carefully read this Mortgage and to consult with an attorney of Mortgagor’s
choice prior to signing it. No consent, approval or authorization of or notice
to any person or entity is required in connection with Mortgagor’s execution of
and obligations under this Mortgage, and Mortgagor acknowledges its execution
and delivery of this Mortgage is made voluntarily without any duress or undue
influence of any kind. No course of prior dealing, usage of trade, parol or
extrinsic evidence of any nature shall be used to supplement, modify or vary any
of the terms hereof. This Mortgage is intended by the parties to be a fully
integrated and final expression of their agreement. This Mortgage and the other
Loan Documents incorporate all negotiations of the parties and constitute

 

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the parties’ entire agreement. Mortgagor acknowledges that is relying on no
written or oral agreement, representation, warranty or understanding of any kind
made by Mortgagee or any employee, attorney or agent of Mortgagee, except for
the agreements of Mortgagee set forth herein and in the Loan Documents.

 

  24. [RESERVED.]

 

  25. NO CREDIT FOR TAXES:

Mortgagor will not claim or demand or be entitled to receive any credit or
credits on the principal indebtedness to secure payment of which this Mortgage
is made, or on the interest payable thereon, for so much of the taxes assessed
against said Mortgaged Property as is equal to the tax rate applied to the
principal indebtedness due on this Mortgage or any part thereof, and no
deduction shall be claimed from the taxable value of said Mortgaged Property by
reason of this Mortgage.

 

  26. SUCCESSORS AND ASSIGNS:

The provisions hereof shall bind and inure to the benefit of Mortgagor and
Mortgagee and their respective successors and assigns.

 

  27. COUNSEL FEES:

If Mortgagee becomes a party (by intervention or otherwise) to any action or
proceeding affecting the Mortgaged Property or the title thereto or Mortgagee’s
interest under this Mortgage, or employs an attorney to collect any of the
indebtedness or to enforce performance of the obligations, covenants and
agreements secured hereby, or to advise Mortgagee with respect to its rights and
remedies hereunder in case of an Event of Default or threatened Event of
Default, Mortgagor shall reimburse Mortgagee forthwith, upon written notice, and
without further demand, for all reasonable costs, charges and counsel fees
actually incurred by Mortgagee in any such case, whether or not suit shall be
commenced, and the same shall be added to the principal sum secured hereby as a
further charge and lien upon the Mortgaged Property and shall bear interest at
the rate provided for in the Note.

 

  28. TAXATION OF NOTE AND MORTGAGE:

If at any time before the Note hereby secured is fully paid, any law of the
Commonwealth of Massachusetts shall be enacted deducting from the value of the
real estate for the purposes of taxation, the amount of any lien thereon, or
imposing upon Mortgagee the payment of the whole or any part of the taxes or
assessments or charges or liens herein required to be paid by Mortgagor or
revising or changing in any way the laws relating to the taxation of mortgages
or debts secured by mortgages or Mortgagee’s

 

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interest in the Mortgaged Property or the manner of collection of taxes so as to
affect adversely this Mortgage or the debt hereby secured, or the owner and
holder thereof in respect thereto, then and in any such event, Mortgagor, upon
demand by Mortgagee, shall pay such taxes or assessments or reimburse Mortgagee
therefor; provided, however, that if, in the opinion of counsel for Mortgagee,
(a) it might be unlawful to require Mortgagor to make such payment; or (b) the
making of such payment might result in the imposition of interest beyond the
maximum amount permitted by law, then, and in such event, Mortgagee may elect,
by notice in writing given to Mortgagor, to declare all the indebtedness secured
hereby to be and become due and payable within ninety (90) days from the giving
of such notice.

 

  29. FURTHER ASSURANCES:

At any time, and from time to time, upon request by Mortgagee, Mortgagor will
make, execute, acknowledge and deliver or cause to be made, executed,
acknowledged and delivered to Mortgagee any and all further instruments,
mortgages, conveyances, deeds, certificates, and other documents as may, in the
reasonable opinion of Mortgagee, be necessary or desirable in order to
effectuate, complete, confirm or perfect or to continue and preserve the
obligation of Mortgagor under the Note and the lien of this Mortgage. Upon any
failure by Mortgagor to do so, Mortgagee may make, execute and record any and
all such instruments, certificates and documents for and in the name of
Mortgagor and Mortgagor hereby irrevocably appoints Mortgagee as the agent and
attorney-in-fact of Mortgagor to do so. Mortgagor agrees to pay all filing,
registration and recording fees and all federal, state, county and municipal
stamp taxes or other duties, imposts, assessments and charges on all such
instruments, certificates and documents.

 

  30. DECLARATION OF NO SET-OFFS:

Within ten (10) days after requested to do so by Mortgagee, Mortgagor shall
certify to Mortgagee or to any proposed assignee of Mortgagee in writing duly
acknowledged, the amount of principal, interest, and other charges then owing on
the obligation secured by this Mortgage and by any prior liens, if any, whether
there are any set-offs or defenses against them and whether any default has been
asserted by any tenant of the Mortgaged Property.

 

  31. SECURITY AGREEMENT:

This Mortgage creates a security interest in the personal property included in
the Mortgaged Property and constitutes a security agreement under the
Commonwealth of Massachusetts Uniform Commercial Code. Mortgagor, at its
expense, shall execute, file and refile, and authorize Mortgagee to file and
refile, such financing statements or other security agreements as Mortgagee
shall reasonably require from time to time with respect to all of the personal
property owned by Mortgagor included in the Mortgaged Property.

 

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  32. SEVERABILITY:

In case any one or more of the covenants, agreements, terms or provisions
contained in this Mortgage or the Note shall be invalid, illegal or
unenforceable in any respect, the validity of the remaining covenants,
agreements, terms or provisions contained herein and in the Note shall be in no
way affected, prejudiced or disturbed hereby.

 

  33. GOVERNING LAW:

This Agreement shall be governed by, and construed and enforced in accordance
with, the laws of the Commonwealth of Massachusetts. All judicial proceedings
arising in or under or related to this Agreement shall be brought in any state
or federal court located in the Commonwealth of Massachusetts. By execution and
delivery of this Agreement, each party hereto generally and unconditionally:
(a) consents to nonexclusive personal jurisdiction in Worcester County,
Commonwealth of Massachusetts; (b) waives any objection as to jurisdiction or
venue in Worcester County, Commonwealth of Massachusetts; (c) agrees not to
assert any defense based on lack of jurisdiction or venue in the aforesaid
courts; and (d) irrevocably agrees to be bound by any judgment rendered thereby
in connection with this Agreement. Service of process on any party hereto in any
action arising out of or relating to this Agreement shall be effective if given
in accordance with the requirements for notice set forth in the Loan Agreement,
and shall be deemed effective and received as set forth in the Loan Agreement.

 

  34. MODIFICATION:

This Mortgage cannot be changed or modified except by agreement between the
parties hereto, signed and acknowledged for recordation. The parties to this
Mortgage may agree to change the interest rate, due date or other terms or
conditions of this Mortgage or the obligations secured by this Mortgage. If the
parties agree to a change, Mortgagor shall pay for, and deliver to Mortgagee, a
title insurance endorsement insuring that this Mortgage, as modified, remains a
first lien on the Mortgaged Property.

 

  35. ASSUMPTION:

This Mortgage is not assumable.

 

  36. FORBEARANCE BY MORTGAGEE NOT A WAIVER:

Any forbearance by Mortgagee in exercising any right or remedy shall not be a
waiver of or preclude the exercise of any right or remedy.

 

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  37. LOAN CHARGES:

Any and all payments under the Loan Documents, including, without limitation,
the interest rate, any applicable default interest rate, late charges,
Prepayment Charge and any other charges or amounts due hereunder constitute
material covenants of the underlying loan and are (a) a material inducement for
Mortgagee to enter into this Mortgage; (b) Mortgagee would not have entered into
the Loan Documents without Mortgagor’s agreement and covenant to make the
payments as specified in the Loan Documents; (c) some additional payments, such
as any applicable default interest rate, are deemed by Mortgagee as compensation
to Mortgagee for the increased risk associated with the Note not being timely
repaid; and (d) the additional payments represent reasonable estimates to
Mortgagee in allocating its resources (both personnel and financial) to the
ongoing review, monitoring, administration and collection of the Loan.

If the loan secured by this Mortgage is subject to a law which sets maximum loan
charges, and that law is finally interpreted so that the interest or other loan
charges collected or to be collected in connection with the loan exceed the
permitted limits, then (a) any such loan charge shall be reduced by the amount
necessary to reduce the charge to the permitted limit; and (b) any sums already
collected from Mortgagor which exceeded permitted limits will be refunded to
Mortgagor. Mortgagee may choose to make this refund be reducing the principal
owed under the Note or by making a direct payment to Mortgagor. If a refund
reduces principal, the reduction will be treated as a partial prepayment without
any prepayment charge under the Note.

 

  38. WAIVER OF JURY TRIAL:

(a) Because disputes arising in connection with complex financial transactions
are most quickly and economically resolved by an experienced and expert person
and the parties wish applicable state and federal laws to apply (rather than
arbitration rules), the parties desire that their disputes be resolved by a
judge applying such applicable laws. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF MORTGAGOR AND MORTGAGEE SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO
TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD
PARTY CLAIM OR ANY OTHER CLAIM (COLLECTIVELY, “CLAIMS”) ASSERTED BY MORTGAGOR
AGAINST MORTGAGEE OR ITS ASSIGNEE OR BY MORTGAGEE OR ITS ASSIGNEE AGAINST
MORTGAGOR. This waiver extends to all such Claims, including Claims that involve
Persons other than Mortgagor and Mortgagee; Claims that arise out of or are in
any way connected to the relationship between Mortgagor and Mortgagee; and any
Claims for damages, breach of contract, tort, specific performance, or any
equitable or legal relief of any kind, arising out of this Mortgage, any other
Loan Document.

 

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(b) If the waiver of jury trial set forth in above is ineffective or
unenforceable, the parties agree that all Claims shall be resolved by reference
to a private judge sitting without a jury, before a mutually acceptable referee
or, if the parties cannot agree, a referee selected by the Presiding Judge of
Worcester County, Massachusetts. Such proceeding shall be conducted in Worcester
County, Massachusetts, with Massachusetts rules of evidence and discovery
applicable to such proceeding.

(c) In the event Claims are to be resolved by judicial reference, either party
may seek from a court identified in Article 39, any prejudgment order, writ or
other relief and have such prejudgment order, writ or other relief enforced to
the fullest extent permitted by law notwithstanding that all Claims are
otherwise subject to resolution by judicial reference.

 

  39. [RESERVED.]

 

  40. STATE-SPECIFIC PROVISIONS

(a) Principles of Construction. In the event of any inconsistencies between the
terms and conditions of this Article 40 and the other terms and conditions of
this Mortgage, the terms and conditions of this Article 40 shall control and be
binding.

(b) Mortgagor hereby, as continuing security for payment or performance of the
Secured Obligations in accordance with the terms of the Loan Documents, grants
with MORTGAGE COVENANTS and assigns to Mortgagee, and grants to Mortgagee a
continuing security interest in and to all the Mortgaged Property.

(c) This Mortgage is upon the STATUTORY CONDITION and upon the further condition
that all covenants and agreements on the part of Mortgagor herein undertaken
shall be kept and fully and seasonably performed and that no breach of any other
of the covenants or conditions specified herein shall be permitted, for any
breach of which, upon the occurrence of an Event of Default Mortgagee shall have
the STATUTORY POWER OF SALE together with all other remedies now or hereafter
permitted by law.

MORTGAGOR HEREBY DECLARES AND ACKNOWLEDGES THAT IT HAS RECEIVED, WITHOUT CHARGE
A TRUE COPY OF THIS MORTGAGE AND SECURITY AGREEMENT.

Exhibits Attached:

A – Mortgaged Property

[Signature Page Follows]

 

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IN WITNESS WHEREOF, Mortgagor has executed this Mortgage and Security Agreement
as of the date first above written.

 

    MORTGAGOR: WITNESS:     ASC DEVENS LLC, a Delaware limited     liability
company       By:   American Superconductor         Corporation, its authorized
signatory

/s/ John R. Samia

        Print Name: John R. Samia     By:  

/s/ David A. Henry

    Name:   David A. Henry     Title:   Senior Vice President, Chief Financial
Officer and Treasurer

Commonwealth of Massachusetts

Worcester County

 

On this 31st day of July, 2012, before me appeared David A. Henry, to me
personally known, who, being by me duly sworn (or affirmed), did say that he is
the Senior Vice President, Chief Financial Officer and Treasurer of AMERICAN
SUPERCONDUCTOR CORPORATION, a Delaware Corporation and that the seal affixed to
said instrument is the seal of said corporation, and that said instrument was
signed and sealed in behalf of said corporation by authority of its Board of
Directors, and said David A. Henry acknowledged said instrument to be the free
act and deed of said corporation.

 

/s/ Russet L. Morrow

Notary Public Print Name:  

Russet L. Morrow

My commission expires:

December 22, 2017

 

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EXHIBIT A

LEGAL DESCRIPTION

The land with the improvements thereon situated on the southwesterly side of
Givry Street, Harvard, Worcester County, Massachusetts and being shown as Lot 7
on plan entitled “Level 1 Subdivision Lot 7 Givry Street” dated July 19, 2000,
prepared by Howe Surveying Associates, Inc. and recorded with the Worcester
District Registry of Deeds in Plan Book 761, Plan 44.

Together with the benefit of the appurtenant rights as set forth in the
following deeds:

a. Deed from the USA recorded with said Deeds in Book 17907, Page 1;

b. Deed to ASC Devens LLC recorded with said Deeds in Book 23120, Page 209,
except the slope easements recited therein, which have been released.