minneapolismortgage.htm


    
      DRAFTED
        BY, RECORDING REQUESTED

    

    
      BY
        AND
        WHEN

    

    
      RECORDED
        RETURN TO:

    

    
      


    

    
      Rachel
        S.
        Brown, Esq.

    

    
      Katten
        Muchin Rosenman LLP

    

    
      525
        West
        Monroe Street

    

    
      Chicago,
        Illinois 60661

    

    


    


    


    


    


    


    


    


    


    


    


    


    


    MORTGAGE,
      SECURITY AGREEMENT AND

    


    FIXTURE
      FILING

    


    BY

    


    HINES
      REIT MINNEAPOLIS INDUSTRIAL LLC,

    a
      Delaware limited liability company,

    


    as
      Borrower

    


    TO

    


    METROPOLITAN
      LIFE INSURANCE COMPANY,

    a
      New
      York corporation,

    


    as
      Lender

    


    December
      20, 2007

    MORTGAGE,
      SECURITY AGREEMENT AND FIXTURE FILING

    


    DEFINED
      TERMS

    
      	
              Execution
                Date: December 20, 2007

            
	
              Note:  The
                promissory note dated as of the Execution Date made by Borrower to
                the
                order of Lender in the principal amount of Forty-Five Million and
                No/00
                Dollars ($45,000,000.00) (herein referred to as the
                “Note”).  The Note has a Maturity Date of
                January 1, 2013.

               

            
	
              Lender
                &
                Address:                                                      Metropolitan
                Life Insurance Company, a New York corporation

              10
                Park Avenue

              Morristown,
                New Jersey
                07962

              Attention:  Senior
                Vice President, Real Estate Investments

               

              With
                a Copy
                to:                                           Metropolitan
                Life Insurance Company

              125
                S. Wacker Drive, Suite
                1100

              Chicago,
                Illinois
                60606

              Attention:  Director,
                Mortgage Portfolio Services

               

            
	
              Borrower
                &
                Address:                                                      Hines
                REIT Minneapolis Industrial LLC,

              a
                Delaware limited liability
                company

              c/o
                Hines Interests Limited
                Partnership

              2800
                Post Oak Blvd., Suite 5000

              Houston,
                Texas 77056

              Attention:  Charles
                N. Hazen

               

              With
                a Copy
                to:                                           Hines
                Interests Limited Partnership

              1
                South Dearborn Street

              Suite
                2000

              Chicago,
                Illinois 60603

              Attention:
                C. Kevin Shannahan

               

              With
                a Copy
                to:                                           Baker
                Botts L.L.P.

              2001
                Ross Avenue

              Suite
                600

              Dallas,
                Texas 75201-2980

              Attn:  Joel
                M. Overton, Jr.

               

              With
                a Copy
                to:                                                      Hines
                REIT Minneapolis Industrial LLC

              c/o
                Hines Interests Limited
                Partnership

              2800
                Post Oak Boulevard, Suite
                5000

              Houston,
                Texas
                77056

              Attention:
                Jason P.
                Maxwell

               

               

            
	
              County
                and State in which the Property is located:  Hennepin
                and Ramsey Counties, State of Minnesota

               

            
	
              Use:  office,
                retail, industrial, commercial, warehouse and/or
                parking

            
	
              Insurance:

               

              Full
                Replacement Cost

               

              Boiler
                and Machinery: Full Replacement Cost

               

              Business
                Income: In an amount sufficient to recover twelve (12) months Business
                Income (as defined in Section 3.01(a)(3) hereof)

               

              Ordinance
                and Law: In the amount of $25,000,000.00.

               

              Windstorm:
                Full Replacement Cost plus an amount sufficient to recover twelve
                (12)
                months Business Income and subject to deductibles as approved
                Lender.

               

              Terrorism:
                $45,000,000.00

               

              Commercial
                General Liability:  Required Liability Limits:
                $25,000,000.00

               

              Address
                for Insurance Notification:

              Metropolitan
                Life Insurance
                Company

                      its
                affiliates and/or successors and assigns

                     10
                Park Avenue

                     Morristown,
                NJ   07962

                     Attn:  Insurance
                Risk Manager

               

            
	
              The
                Note, this Mortgage, the Initial Company Guaranty, the Pledge and
                Security
                Agreement Hines (MN) and any other documents executed by Borrower
                and
                related to the Note and/or this Mortgage, including without limitation,
                the Other Mortgages and Other Notes (each as defined herein) and
                all
                renewals, amendments, modifications, restatements and extensions
                of these
                documents (except the Indemnity Agreement).  Initial Payment
                Guaranty: Payment Guaranty dated as of the Execution Date and executed
                by
                Hines REIT 2007 Facility Holdings LLC, a Delaware limited liability
                company (“Hines Facility”) in favor of Lender.  Pledge and
                Security Agreement Hines (MN): Pledge and Security Agreement dated
                as of
                the Execution Date and executed by Hines Facility in favor of Lender
                and
                acknowledged by Borrower.  Indemnity
                Agreement:  Unsecured Indemnity Agreement dated as of the
                Execution Date and executed by Borrower in favor of Lender.  The
                Indemnity Agreement is not a Loan Document and shall survive in accordance
                with its terms the repayment of the Loan or other termination of
                the Loan
                Documents.  Liable Party or Liable Parties:  Any
                indemnitor with respect to the Loan, the Loan Documents or Indemnity
                Agreement.

            


    

    


    This
      MORTGAGE, SECURITY AGREEMENT AND
      FIXTURE FILING (this “Mortgage”) is entered into as of the
      Execution Date by Borrower to Lender with reference to the following
      Recitals:

    


    RECITALS

    


    A.  This
      Mortgage secures:
      (1) the payment of the indebtedness evidenced by the Note with interest at
      the
      rate set forth in the Note, together with (a) the payment
      of the indebtedness evidenced by that certain promissory note listed on
Exhibit D attached hereto and made a part hereof and (b)
      all other promissory notes, if any, issued for any future“Loan”
as defined in the $750,000,000.00 Loan Facility Agreement
      between Hines
      Facility and Borrower dated as of December 20, 2007 (said
      agreement, as amended, modified, supplemented, consolidated, extended or
      restated from time to time, is herein referred to as, the“Loan Facility
      Agreement”) (all such promissory notes referenced in 1(a) and
      1(b)  are herein referred to as, the “Other
      Notes”) together with all renewals, modifications, consolidations and
      extensions of the Note and Other Notes, all additional advances or fundings
      made
      by Lender pursuant to the terms of or as permitted by the Loan Documents, and
      any other amounts required to be paid by Borrower under any of the Loan
      Documents, (collectively,  the “Secured
      Indebtedness”, and sometimes referred to as the
“Loan”) and (2) the full performance by
      (a) the grantor or trustor, as applicable, under that
      certain deed of trust listed on Exhibit E attached
      hereto and made a part hereof and (b) all other mortgages and deeds of trust
      and
      similar instruments, if any, which secure a“Loan” under the
      Loan Facility Agreement  (as any of such agreements referenced in 2(a)
      and 2(b) are amended, modified, supplemented, consolidated, extended or restated
      from time to time, the “Other Mortgages”, and the grantors or
      trustors or mortgagors or borrowers, as applicable, under the Other Mortgages
      are collectively the “Other Borrowers” and individually, as the
      context may require, an “Other Borrower”) of all of the terms,
      covenants and obligations set forth in any of the Loan Documents or the Loan
      Facility Agreement.  The Other Mortgages by their terms secure the
      Note and the Other Notes, except as specifically provided in
      the Loan Facility Agreement.  The term “Real
      Property”, as defined in each of the Other Mortgages, is referred to
      herein individually as,  an “Other Mortgage Real
      Property” and collectively as, the “Other Mortgage Real
      Properties”.

    


    B.  Borrower
      makes the
      following covenants and agreements for the benefit of Lender .

    


    NOW,
      THEREFORE, IN CONSIDERATION of the Recitals and for other good and valuable
      consideration, the receipt and sufficiency of which are acknowledged, Borrower
      agrees as follows:

    


    Article
      I.                      

     

    GRANT
      OF SECURITY

    


    Section
      1.01                                  REAL
      PROPERTY GRANT.  Borrower irrevocably mortgages, sells, transfers,
      grants, conveys, assigns and warrants to Lender, its successors and assigns,
      in
      trust, with power of sale and right of entry and possession, all of Borrower’s
      present and future estate, right, title and interest in and to the following
      which are collectively referred to as the “Real
      Property”:

     

    (a)  that
      certain real property located in the County and State which is more particularly
      described in Exhibit A attached to this Mortgage or any
      portion of the real property; all easements, rights-of-way, gaps, strips and
      gores of land benefiting or forming a part of said real property; streets and
      alleys abutting or in any way benefiting said real property; sewers and water
      rights in any way benefiting said real property; privileges, licenses,
      tenements, and appurtenances appertaining to the real property, and the
      reversion(s), remainder(s), and claims of Borrower with respect to these items,
      and the benefits of any existing or future conditions, covenants and
      restrictions affecting the real property (collectively, the
“Land”);

     

    (b)  all
      things now or hereafter owned by Borrower and affixed to or placed on the Land,
      including all buildings, structures and improvements, all fixtures and all
      machinery, elevators, boilers, building service equipment (including, without
      limitation, all equipment for the generation or distribution of air, water,
      heat, electricity, light, fuel or for ventilating or air conditioning purposes
      or for sanitary or drainage purposes or for the removal of dust, refuse or
      garbage), partitions, and other property now or in the future owned by Borrower
      and attached, or installed in or forming a part of the improvements and all
      replacements, repairs, additions, or substitutions to these items (collectively,
      the “Improvements”);

     

    (c)  all
      present and future income, rents, revenue, profits, proceeds, accounts
      receivable and other benefits from the Land and/or Improvements which Borrower
      is or may be entitled to receive and all deposits made with respect to the
      Land
      and/or Improvements, including, but not limited to, any security given to
      utility companies by Borrower, any advance payment of real estate taxes or
      assessments, or insurance premiums made by Borrower in connection with the
      Land
      and/or Improvements and all claims or demands relating to such deposits and
      other security, including claims for refunds of tax payments or assessments,
      and
      all insurance proceeds payable to Borrower in connection with the Land and/or
      Improvements whether or not such insurance coverage is specifically required
      under the terms of this Mortgage (“Insurance Proceeds”) (all of
      the items set forth in this paragraph are referred to collectively as
“Rents and Profits”);

     

    (d)  all
      damages, payments and revenue of every kind that Borrower may be entitled to
      receive, from any person owning or acquiring a right to the oil, gas or mineral
      rights and reservations of the Land;

     

    (e)  all
      proceeds and claims arising on account of any damage to, or Condemnation (as
      hereinafter defined) of any part of the Land and/or Improvements, and all causes
      of action and recoveries for any diminution in the value of the Land and/or
      Improvements; and

     

    (f)  all
      licenses, contracts, management agreements, guaranties, warranties, franchise
      agreements, permits, or certificates relating to the ownership, use, operation
      or maintenance of the Land and/or Improvements.

     

    TO
      HAVE AND TO HOLD the Real Property,
      unto Lender, its successors and assigns, forever subject to the terms, covenants
      and conditions of this Mortgage.

    


    Section
      1.02                                  PERSONAL
      PROPERTY GRANT.  Borrower irrevocably sells, transfers, grants,
      conveys, assigns and warrants to Lender, its successors and assigns, a security
      interest in Borrower’s interest in the following personal property which is
      collectively referred to as “Personal Property”:

     

    (a)  any
      portion of the Real Property which may be personal property, and all other
      personal property, whether now existing or acquired in the future which is
      owned
      by Borrower and attached to, appurtenant to, or used in the construction or
      operation of, or in connection with, the Real Property;

     

    (b)  all
      rights to the use of water, including water rights appurtenant to the Real
      Property, pumping plants, ditches for irrigation, all water stock or other
      evidence of ownership of any part of the Real Property that is owned by Borrower
      in common with others and all documents of membership in any owner’s association
      or similar group;

     

    (c)  all
      plans
      and specifications prepared for construction of the Improvements; and all
      contracts and agreements of Borrower relating to the plans and specifications
      or
      to the construction of the Improvements;

     

    (d)  all
      appliances, furniture, furnishings, building materials, supplies, computers
      and
      software, window coverings and floor coverings, lobby furnishings, equipment,
      machinery, fixtures, goods, accounts, general intangibles, letters of credit,
      deposit accounts, documents, instruments and chattel paper owned by Borrower
      and
      used in connection with the ownership, operation, management and/or leasing
      of
      the Real Property, and all substitutions, replacements of, and additions to,
      any
      of the these items;

     

    (e)  all
      sales
      agreements, escrow agreements, similar agreements entered into with respect
      to
      the sale of any part of the Real Property, all deposits made in connection
      therewith and all net proceeds from any such sales (provided, however, Lender
      shall have no rights of approval or consent with respect to any such sales,
      escrow or other agreements);

     

    (f)  all
      proceeds from the voluntary or involuntary disposition or claim respecting
      any
      of the foregoing items (including judgments, condemnation awards or otherwise);
      and

     

    (g)  all
      names
      by which the Land and/or Improvements may be operated or known, and all rights
      to carry on business under those names, and all trademarks, trade names, and
      goodwill relating to the Land and/or Improvements.

     

    Notwithstanding
      the foregoing, the term “Personal Property” shall not include
      any trade fixtures or other personal property owned by tenants of the Property
      except to the extent that Borrower as landlord holds an interest in any such
      tenant’s trade fixtures or other personal property under any lease.

    


    All
      of
      the Real Property and the Personal Property are collectively referred to as
      the
“Property.”

    


    Section
      1.03                                  CONDITIONS
      TO GRANT.  If Borrower shall pay to Lender the Secured
      Indebtedness, at the times and in the manner stipulated in the Loan Documents,
      and if Borrower shall perform and observe each of the terms, covenants and
      agreements set forth in the Loan Documents and the Loan Facility Agreement,
      to
      the extent then required to be performed, then this Mortgage and all the rights
      granted by this Mortgage shall be released by Lender in accordance with the
      laws
      of the State (as defined in Section 14.05).

     

    


    Article
      II.                                

     

    BORROWER
      COVENANTS

    


    Section
      2.01                                  DUE
      AUTHORIZATION, EXECUTION, AND DELIVERY.

     

    (a)  Borrower
      represents and warrants that the execution of the Loan Documents and the
      Indemnity Agreement have been duly authorized and there is no provision in
      the
      organizational documents of Borrower requiring further consent for such action
      by any other entity or person.

     

    (b)  Borrower
      represents and warrants that it is duly organized, validly existing and is
      in
      good standing under the laws of the state of its formation and in the State
      of
      Minnesota, that it has all necessary licenses, authorizations, registrations,
      permits and/or approvals to own its properties and to carry on its business
      as
      presently conducted.

     

    (c)  Borrower
      represents and warrants that the execution, delivery and performance of the
      Loan
      Documents will not result in Borrower’s being in default under any provision of
      its organizational documents or of any deed of trust, mortgage, lease, credit
      or
      other agreement to which it is a party or which affects it or the
      Property.

     

    (d)  Borrower
      represents and warrants that the Loan Documents and the Indemnity Agreement
      have
      been duly authorized, executed and delivered by Borrower and constitute valid
      and binding obligations of Borrower which are enforceable in accordance with
      their terms.

     

    Section
      2.02                                  PERFORMANCE
      BY BORROWER.  Borrower shall pay the Secured Indebtedness to
      Lender and shall keep and perform each and every other obligation, covenant
      and
      agreement of the Loan Documents.

     

    Section
      2.03                                  WARRANTY
      OF TITLE.

     

    (a)  Borrower
      warrants that it holds marketable and indefeasible fee simple absolute title
      to
      the Real Property, and that it has the right and is lawfully authorized to
      sell,
      convey or encumber the Property subject only to those property specific
      exceptions to title contained in Schedule B-1 of the title insurance policy
      or
      policies which have been approved by Lender (the “Permitted
      Exceptions”).  The Property is free from all due and unpaid
      taxes, assessments and mechanics’ and materialmen’s liens.

     

    (b)  Borrower
      further covenants to warrant and forever defend Lender from and against all
      persons claiming any interest in the Property, subject, however, to the
      Permitted Exceptions.

     

    Section
      2.04                                  TAXES,
      LIENS AND OTHER CHARGES.

     

    (a)  Unless
      otherwise paid to Lender as provided in Section 2.05 or contested by Borrower
      in
      accordance with the provisions hereinafter set forth, Borrower shall pay all
      real estate and other taxes and assessments which may be payable, assessed,
      levied, imposed upon or become a lien on or against any portion of the Property
      (all of the foregoing items are collectively referred to as the
“Imposition(s)”).  The Impositions shall be paid not
      later than ten (10) days before the dates on which the particular Imposition
      would become delinquent and Borrower shall produce to Lender receipts of the
      imposing authority, or other evidence reasonably satisfactory to Lender,
      evidencing the payment of the Imposition in full.  If Borrower elects
      by appropriate legal action to contest any Imposition, Borrower shall first
      deposit cash with Lender as a reserve in an amount which Lender reasonably
      determines is sufficient to pay the Imposition plus all fines, interest,
      penalties and costs which may become due pending the determination of the
      contest. If Borrower deposits this sum with Lender, Borrower shall not be
      required to pay the Imposition provided that the contest operates to prevent
      enforcement or collection of the Imposition, or the sale or forfeiture of,
      the
      Property, and is prosecuted with due diligence and continuity.  Upon
      termination of any proceeding or contest, Borrower shall pay the amount of
      the
      Imposition as finally determined in the proceeding or
      contest.  Provided that there is not then an Event of Default (as
      defined in Section 11.01), the monies which have been deposited with Lender
      pursuant to this Section shall be applied toward such payment and the excess,
      if
      any, shall be returned to Borrower.

     

    (b)  In
      the
      event of the passage, after the Execution Date, of any law which deducts from
      the value of the Property, for the purposes of taxation, any lien or security
      interest encumbering the Property, or changing in any way the existing laws
      regarding the taxation of mortgages, deeds of trust and/or security agreements
      or debts secured by these instruments, or changing the manner for the collection
      of any such taxes, and the law has the effect of imposing payment of any
      Impositions upon Lender, at Lender’s option, the Secured Indebtedness shall be
      due and payable on the earlier of (i) one hundred twenty (120) days after
      written notice to Borrower, or (ii) the date upon which the Secured Indebtedness
      must be repaid in order to permit Lender to lawfully avoid the consequences
      of
      such law or the payment of any Impositions, but no Prepayment Fee or other
      premium or penalty shall be due in connection
      therewith..  Notwithstanding the preceding sentence, the Lender’s
      election to accelerate the Loan shall not be effective if (1) Borrower is
      permitted by law (including, without limitation, applicable interest rate laws)
      to, and actually does, pay the Imposition or the increased portion of the
      Imposition and (2) Borrower agrees in writing to pay or reimburse Lender in
      accordance with Section 11.07 for the payment of any such Imposition which
      becomes payable at any time when the Loan is outstanding.

     

    


    Section
      2.05                                  Section
      2.05                                ESCROW
      DEPOSITS.  Without limiting the effect of Section 2.04 and Section
      3.01, at any time within six (6) months of becoming aware of the occurrence
      of
      any of the following, Lender may require in its absolute discretion that
      Borrower begin paying Lender monthly deposits of (a) Impositions and (b)
      premiums for the insurance policies required under this Mortgage (collectively
      the “Premiums”), as applicable, notwithstanding the fact that
      the default may be cured, or that the transfer or change be approved by Lender:
      (i) an Event of Default under the Loan Documents or the Indemnity Agreement;
      (ii) Borrower no longer owns the Property, except in the case of a Permitted
      Transfer (as defined in Section 10.01); (iii) there has been a change, other
      than a Permitted Transfer, in the Borrower or in the general partners,
      stockholders or members of Borrower or in the constituent general partners
      or
      controlling shareholders or controlling members of any of the entities
      comprising the general partners of Borrower; or (iv)  with respect to
      Premiums only, at any time Borrower fails to furnish Lender, not later than
      ten
      (10) days before the dates on which any Premium would become delinquent,
      receipts for the payment of such Premium or appropriate proof of issuance of
      a
      new policy which continues in force the insurance coverage of the expiring
      policy.  In the event that deposits of Impositions and Premiums are
      required pursuant to this Section 2.05, Borrower shall pay to Lender monthly
      deposits of all Impositions and Premiums, as applicable, on the same date the
      monthly installment is payable under the Note and in an amount equal to
      one-twelfth (1/12) of the annual charges for these items as reasonably estimated
      by Lender until such time as Borrower has deposited an amount equal to the
      annual charges for these items. The deposits shall be held by Lender with
      interest being payable to Borrower and Lender may commingle the deposits with
      other funds of Lender.  If Lender sells or assigns the Loan to an
      unaffiliated lender, the deposits shall thereafter be made into an interest
      bearing account at a mutually approved national bank.

     

    Section
      2.06                                  CARE
      AND USE OF THE PROPERTY.

     

    (a)  Borrower
      represents and warrants to Lender as follows:

     

    (i)  To
      Borrower’s knowledge, all authorizations, licenses, including without limitation
      liquor licenses, if any, and operating permits required to allow the
      Improvements to be operated for the Use have been obtained, paid for and are
      in
      full force and effect.

     

    (ii)  To
      Borrower’s knowledge, the Improvements and their Use comply with (and no notices
      of violation have been received in connection with) all Requirements (as defined
      in this Section) and Borrower shall at all times comply in all material respects
      with all present or future Requirements affecting or relating to the Property
      and/or the Use.  Borrower shall furnish Lender, on request, proof of
      compliance with the Requirements.  Borrower shall not use or knowingly
      permit the use of the Property, or any part thereof, for any illegal
      purpose.  “Requirements” shall mean all laws,
      ordinances, orders, covenants, conditions and restrictions and other
      requirements relating to land and building design and construction, use and
      maintenance, that may now or hereafter pertain to or affect the Property or
      any
      part of the Property or the Use, including, without limitation, planning,
      zoning, subdivision, environmental, air quality, flood hazard, fire safety,
      handicapped facilities, building, health, fire, traffic, safety, wetlands,
      coastal and other governmental or regulatory rules, laws, ordinances, statutes,
      codes and requirements applicable to the Property, including permits, licenses
      and/or certificates that may be necessary from time to time to comply with
      any
      of the these requirements.

     

    (iii)  To
      Borrower’s knowledge, Borrower has complied in all material respects with all
      requirements of all instruments and agree­ments affecting the Property,
      whether or not of record, including without limitation all covenants and
      agree­ments by and between Borrower and any governmental or regulatory
      agency pertaining to the development, use or operation of the Property.
      Borrower, at its sole cost and expense, shall, subject to the provisions of
      this
      Mortgage, keep the Property in good order, condition, and repair, and make
      all
      necessary structural and non-structural, ordinary and extraordinary repairs
      to
      the Property and the Improvements.

     

    (iv)  Borrower
      shall abstain from, and not knowingly permit, the commission of material
      physical waste to the Property and shall not remove or alter in any substantial
      manner, the structure or character of any Improvements without the prior written
      consent of Lender; provided, however, Lender’s consent shall not be required for
      alterations which (1) are made pursuant to the terms of Leases either approved
      by Lender or as to which Lender’s approval is not required hereunder or (2) do
      not adversely affect any structural component of the Property and the aggregate
      cost of which does not exceed Two Hundred Fifty Thousand Dollars
      ($250,000.00).

     

    (v)  To
      Borrower’s knowledge, the zoning approval for the Property is not dependent upon
      the ownership or use of any property which is not encumbered by this
      Mortgage.

     

    (vi)  To
      Borrower’s knowledge, construction of the Improvements on the Property (other
      than any ongoing tenant improvement work) is complete.

     

    (vii)  To
      Borrower’s knowledge, the Property is in good repair and condition, free of any
      material damage, other than that disclosed in that certain Property Condition
      Report described on Exhibit C and delivered to
      Lender.

     

    


    (b)  Lender
      shall have the right, at any time and from time to time during normal business
      hours and upon two (2) days advance written notice to Borrower (other than
      in an
      emergency situation or during the continuance of an Event of Default, in which
      case no written notice shall be required), to enter the Property in order to
      ascertain Borrower’s compliance with the Loan Documents, to examine the
      condition of the Property, to perform an appraisal, to undertake surveying
      or
      engineering work, and to inspect premises occupied by tenants. Borrower, subject
      however, to the terms and provisions of the tenants’ leases.  Borrower
      shall cooperate with Lender performing these inspections.  If an Event
      of Default exists, Borrower shall pay all costs incurred by Lender in connection
      with any such inspection.

     

    (c)  Borrower
      shall use, or cause to be used, the Property only for the Use. Borrower shall
      not use, or permit the use of, the Property for any other use without the prior
      written consent of Lender.  Borrower shall not file or record a
      declaration of condominium, master mortgage or deed of trust or any other
      similar document evidencing the imposition of a so-called “condominium
      regime” whether superior or subordinate to this Mortgage and Borrower
      shall not permit any part of the Property to be converted to, or operated as,
      a
“cooperative apartment house” whereby the tenants or occupants
      participate in the ownership, management or control of any part of the
      Property.

     

    (d)  Without
      the prior written consent of Lender, Borrower shall not (i) initiate or
      acquiesce in a change in the zoning classification of and/or restrictive
      covenants affecting the Property or seek any variance under existing zoning
      ordinances, (ii) use or permit the use of the Property in a manner which may
      result in the Use becoming a non-conforming use under applicable zoning
      ordinances, or (iii) subject the Property to restrictive covenants.

     

    


    Section
      2.07                                  COLLATERAL
      SECURITY INSTRUMENTS.  Borrower covenants and agrees that if
      Lender at any time holds additional security for any obligations secured by
      this
      Mortgage, it may enforce its rights and remedies with respect to such security,
      at its option, either before, concurrently or after a sale of the Property
      is
      made pursuant to the terms of this Mortgage.  Lender may apply the
      proceeds of the additional security to the Secured Indebtedness without
      affecting or waiving any right to any other security, including the security
      under this Mortgage, and without waiving any breach or default of Borrower
      under
      this Mortgage or any other Loan Document.

     

    Section
      2.08                                  SUITS
      AND OTHER ACTS TO PROTECT THE PROPERTY.

     

    (a)  Borrower
      shall notify Lender within five (5) days of the commencement, or receipt of
      notice, of any and all actions or proceedings or other material matter or claim
      affecting the Property and/or the interest of Lender under the Loan Documents
      which accrue or arise at any time prior to the foreclosure of this Mortgage
      or
      other transfer of title to the Property in extinguishment of the Secured
      Indebtedness (collectively, “Actions”).  Borrower
      shall appear in and defend any Actions.

     

    (b)  Lender
      shall have the right, at the cost and expense of Borrower, to institute,
      maintain and participate in Actions and take such other action, as it may deem
      appropriate in the good faith exercise of its discretion to preserve or protect
      the Property and/or the interest of Lender under the Loan
      Documents.  Any money paid by Lender under this Section shall be
      reimbursed to Lender in accordance with Section 11.07 hereof.

     

    Section
      2.09                                  Section
      2.09  LIENS AND ENCUMBRANCES.  Without the prior written
      consent of Lender, to be exercised in Lender’s sole and absolute discretion,
      Borrower shall not create, place or allow to remain any lien or encumbrance
      on
      the Property, other than the Permitted Exceptions, including deeds of trust,
      mortgages, security interests, conditional sales, mechanic liens, tax liens
      or
      assessment liens regardless of whether or not they are subordinate to the lien
      created by this Mortgage (collectively, “Liens and
      Encumbrances”).  If any Liens and Encumbrances are recorded
      against the Property or any part of the Property, Borrower shall notify Lender
      within five (5) days after receipt of notice of any Liens or Encumbrances
      recorded against the Property and Borrower shall obtain a discharge and release
      of, or bond over, in a manner satisfactory to Lender, any Liens and Encumbrances
      within twenty (20) days after receipt of notice of their existence, but in
      all
      events prior to the foreclosure thereof.

     

    Section
      2.10                                  SINGLE
      PURPOSE ENTITY.  Borrower represents, warrants, and covenants with
      Lender that it has not and shall not: (i) engage in business other than owning,
      managing, leasing, repairing, maintaining and operating the Property; (ii)
      acquire or own a material asset other than the Property and incidental personal
      property; (iii) maintain its assets in a way difficult to segregate and
      identify, or commingle its assets with the assets of any other person or entity;
      (iv) fail to hold itself out to the public as a legal entity separate from
      any
      other; (v) fail to conduct business solely in its name or fail to maintain
      records, accounts or bank accounts separate from any other person or entity;
      or
      (vi) dissolve, liquidate, consolidate, merge or sell all or substantially all
      of
      its assets, except as permitted under Section 10.01 of this
      Agreement.

     

    Article
      III.                                

     

    INSURANCE

    


    Section
      3.01                                  REQUIRED
      INSURANCE AND TERMS OF INSURANCE POLICIES.

     

    (a)  During
      the term of this Mortgage, Borrower at its sole cost and expense must provide
      insurance policies and certificates of insurance for types of insurance
      described below all of which must be satisfactory to Lender as to form of
      policy, amounts, deductibles, sublimits, types of coverage, exclusions and
      the
      companies underwriting these coverages.  In no event shall such
      policies be terminated or otherwise allowed to lapse without replacement
      policies in effect complying with the requirements set forth
      below.  Borrower shall be responsible for its own
      deductibles.  Borrower shall also pay for any insurance, or any
      increase of policy limits, not described in this Mortgage which Borrower
      requires for its own protection or for compliance with government
      statutes.  Borrower’s insurance shall be primary and without
      contribution from any insurance procured by Lender including, without
      limitation, any insurance obtained by Lender pursuant to Section 3.01 (d)
      hereof.

     

    Policies
      of insurance shall be
      delivered to Lender in accordance with the following requirements:

    


    (1)           Property
      insurance on the Improvements and the Personal Property insuring against any
      peril now or hereafter included within the classification “All
      Risk” or “Special Perils,”   in each
      case (i) in an amount equal to 100% of the “Full Replacement
      Cost” (as hereinafter defined) of the Improvements and Personal
      Property with a waiver of depreciation and with a Replacement Cost Endorsement;
      (ii) containing no coinsurance provisions or, if such provisions are contained
      therein, then containing an agreed amount endorsement with respect to the
      Improvements and Personal Property waiving all co-insurance provisions; (iii)
      providing for no deductible in excess of $250,000.00; and (iv) containing
      Ordinance or Law Coverage, Operation of Building Laws, Demolition Costs and
      Increased Cost of Construction in an amount reasonably required by Lender.
      The
      Full Replacement Cost shall be determined from time to time by an appraiser
      or
      contractor designated and paid by Borrower and approved by Lender or by an
      engineer or appraiser in the regular employ of the insurer.  The
“Full Replacement Cost” for purposes of this Article III shall
      mean the estimated total cost of construction required to replace the
      Improvements with a substitute of like utility, and using modern materials
      and
      current standards, design and layout.  For purposes of calculating
      Full Replacement Cost direct (hard) costs shall include, without limitation,
      labor, materials, supervision and contractor’s profit and overhead and indirect
      (soft) costs shall include, without limitation, fees for architect’s plans and
      specifications, construction financing costs, permits, sales taxes, insurance
      and other costs included in the Marshall Valuation Service published by Marshall
      & Swifts.

    


    (2)           Commercial
      General Liability insurance against claims for personal injury, bodily injury,
      death or property damage occurring upon, in or about the Property, such
      insurance (i) to be on the so-called “occurrence” form with a combined single
      limit of not less than the amount set forth in the Defined Terms; (ii) to
      continue at not less than this limit until required to be changed by Lender
      in
      writing by reason of changed economic conditions making such protection
      inadequate; and (iii) to cover at least the following hazards: (a) premises
      and
      operations; (b) products and completed operations on an “if any” basis; (c)
      independent contractors; (d) blanket contractual liability for all written
      and
      oral contracts; and (e) contractual liability covering the indemnities contained
      in this Mortgage to the extent available.

    


    (3)           Business
      Income insurance in an amount sufficient to prevent Borrower from becoming
      a
      co-insurer within the terms of the applicable policies, and sufficient to
      recover twelve (12) months “Business Income” (as hereinafter
      defined) and with an Extended Period of Indemnity of twelve (12)
      months.  The amount of such insurance shall be increased from time to
      time during the terms of this Mortgage as and when new leases and renewal leases
      are entered into and rents payable increase or the annual estimate of gross
      income from occupancy of the Property increases to reflect such rental
      increases.  “Business Income” shall mean the sum of
      (i) the total anticipated gross income from occupancy of the Property, (ii)
      the
      amount of all charges (such as, but not limited to, operating expenses,
      insurance premiums and taxes) which are the obligation of tenants or occupants
      to Borrower, (iii) the fair market rental value of any portion of the Property
      which is occupied by Borrower, and (iv) any other amounts payable to Borrower
      or
      to any affiliate of Borrower pursuant to Leases.

    


    (4)           If
      Lender determines at any time that any part of the Property is located in an
      area identified on a Flood Hazard Boundary Map or Flood Insurance Rate Map
      issued by the Federal Emergency Management Agency as having special flood
      hazards and flood insurance has been made available, Borrower will maintain
      a
      flood insurance policy meeting the requirements of the current guidelines of
      the
      Federal Insurance Administration with a generally acceptable insurance carrier,
      in an amount not less than the lesser of (i) Full Replacement Cost or (ii)
      the
      maximum amount of insurance which is available under the National Flood
      Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National
      Flood Insurance Reform Act of 1994, as amended.

    


    (5)           During
      the period of any construction or renovation or alteration of the Improvements
      in an amount greater than $250,000.00, a so-called “Builder’s All
      Risk” insurance policy in non-reporting form for any Improvements under
      construction, renovation or alteration including, without limitation, for
      demolition and increased cost of construction or renovation, in an amount
      approved by Lender including an Occupancy endorsement and Worker’s Compensation
      Insurance covering all persons engaged in the construction, renovation or
      alteration in an amount at least equal to the minimum required by statutory
      limits of the State of Minnesota.

    


    (6)           Workers’
      Compensation insurance, subject to the statutory limits of the State of
      Minnesota, and employer’s liability insurance with a limit of at least
      $1,000,000 per accident and per disease per employee, and
      $1,000,000  for disease in the aggregate in respect of any work or
      operations on or about the Property, or in connection with the Property or
      its
      operations (if applicable).

    


    (7)           Boiler
      & Machinery insurance covering the major components of the central heating,
      air conditioning and ventilating systems, boilers, other pressure vessels,
      high
      pressure piping and machinery, elevators and escalators, if any, and other
      similar equipment installed in the Improvements, in an amount equal to one
      hundred percent (100%) of the full replacement cost of all equipment installed
      in, on or at the Improvements.  These policies shall insure against
      physical damage to and loss of occupancy and use of the Improvements arising
      out
      of an accident or breakdown.

    


    (8).                      Insurance
      from and against all losses, damages, costs, expenses, claims and liabilities
      related to or arising from acts of terrorism in an amount not less than
      $45,000,000.00, and of such types, with such deductibles, issued by such
      companies, and on such forms of insurance policies required by Lender and as
      may
      be commercially available. Coverage may be included in Borrower’s all-risk
      property insurance policy or in the form of a blanket policy or a stand-alone
      policy, in each case in a manner reasonably satisfactory to Lender.

    


    (9)           Business
      Automobile Insurance with a combined single limit of not less than $1,000,000
      per occurrence for bodily injury and property damage arising out of the use
      of
      owned, non-owned, hired and/or leased automotive equipment when such equipment
      is operated by Borrower, Borrower’s employees or Borrower’s agents in connection
      with the Property.

    


    (10)           [INTENTIONALLY
      DELETED]

    


    (11)           Such
      other insurance, to the extent commercially available, (i) as may from time
      to
      time be required by Lender to replace coverage against any hazard, which as
      of
      the date hereof is insured against under any of the insurance policies described
      in subsections (a) (1) through (a) (10) of this Section 3.01 and (ii) as may
      from time to time be reasonably required by Lender against other insurable
      hazards, including, but not limited to, vandalism, earthquake, environmental,
      sinkhole and mine subsidence.

    


    (b)  Lender’s
      interest must be clearly stated by endorsement in the insurance policies
      described in this Section 3.01 as follows:

     

    


    (1)           The
      policies of insurance referenced in subsections (a)(1), (a)(3), (a)(4), (a)(5),
      (a)(7) and (a)(8) of this Section 3.01 shall identify Lender under the New
      York
      Standard Mortgagee Clause (non-contributory) endorsement (or a clause approved
      by Lender in its sole and absolute discretion containing substantially the
      same
      terms and conditions).

    


    (2)           The
      insurance policies referenced in Sections 3.01 (a)(2) and 3.01 (a)(9) shall
      name
      Lender as an additional insured.

    


    (3)           [INTENTIONALLY
      DELETED]

    


    (4)           All
      of the policies referred to in Section 3.01 shall provide for at least thirty
      (30) days’ written notice to Lender in the event of policy cancellation and/or
      material change and/or non-renewal.

    


    (c)  All
      the
      insurance companies must be authorized to do business in New York State and
      the
      State of Minnesota and be approved by Lender.  The insurance companies
      must have a general policy rating of A or better and a financial class of X
      or
      better by A.M. Best Company, Inc. and a claims paying ability of BBB or better
      according to Standard & Poors. So called “Cut-through” endorsements shall
      not be permitted.  Borrower shall deliver evidence satisfactory to
      Lender of payment of premiums due under the insurance policies.

     

    (d)  Certified
      copies of the policies, and any endorsements, shall be made available for
      inspection by Lender upon request.  If Borrower fails to obtain or
      maintain insurance policies and coverages as required by this Section 3.01
      (“Required Insurance”) then Lender shall have the right but
      shall not have the obligation immediately to procure any Required Insurance
      at
      Borrower’s cost.

     

    (e)  Borrower
      shall be required during the term of the Loan to continue to provide Lender
      with
      original renewal policies or replacements of the insurance policies referenced
      in Section 3.01 (a).  Lender may accept Certificates of Insurance
      evidencing insurance policies referenced in subsections (a)(2), (a)(4), and
      (a)(6) of this Section 3.01 instead of requiring the actual
      policies.  Lender shall be provided with renewal Certificates of
      Insurance, or Binders, not less than fifteen (15) days prior to each expiration.
      The failure of Borrower to maintain the insurance required under this Article
      III shall not constitute a waiver of Borrower’s obligation to fulfill these
      requirements.

     

    (f)  All
      binders, policies, endorsements, certificates, and cancellation notices are
      to
      be sent to the Lender’s Address for Insurance Notification as set forth in the
      Defined Terms until changed by notice from Lender.

     

    


    Section
      3.02                                  ADJUSTMENT
      OF CLAIMS.  Borrower hereby authorizes and empowers Lender to
      settle, adjust or compromise any claims for damage to, or loss or destruction
      of, all or a portion of the Property, regardless of whether there are Insurance
      Proceeds available or whether any such Insurance Proceeds are sufficient in
      amount to fully compensate for such damage, loss or destruction; provided,
      however, except during the continuation of an Event of Default hereunder, no
      such settlement, adjustment or compromise by Lender shall be made without
      Borrower’s prior written consent to the terms and conditions thereof, which
      consent shall not be unreasonably withheld, conditional or delayed.

     

    Section
      3.03                                  ASSIGNMENT
      TO LENDER.  In the event of the foreclosure of this Mortgage or
      other transfer of the title to the Property in extinguishment of the Secured
      Indebtedness, all right, title and interest of Borrower in and to any insurance
      policy, or premiums or payments in satisfaction of claims or any other rights
      under the insurance policies required under Section 3.1(a) above and any other
      insurance policies pertaining to the Property with respect to the period prior
      to the foreclosure of this Mortgage, or other transfer of title to the Property
      in extinguishment of the Secured Indebtedness shall pass to the transferee
      of
      the Property.

     

    Article
      IV.                                

     

    BOOKS,
      RECORDS AND ACCOUNTS

    


    Section
      4.01                                  BOOKS
      AND RECORDS.  Borrower shall keep adequate books and records of
      account in accordance with generally accepted accounting principles
      (“GAAP”), or in accordance with other methods acceptable to
      Lender in its sole discretion, consistently applied and furnish to
      Lender:

     

    (a)  a
      quarterly operating statement of the Property detailing the total revenues
      received, total expenses incurred, total cost of all capital improvements,
      total
      debt service and total cash flow, and a current rent roll, each to be prepared
      and certified by Borrower in the form reasonably required by Lender, and if
      available, any quarterly operating statement prepared by an independent
      certified public accountant, within thirty to sixty (30-60) days after the
      close
      of each fiscal quarter of Borrower;

     

    (b)  an
      annual
      balance sheet and profit and loss statement of Borrower in the form required
      by
      Lender, prepared and certified by an officer of Borrower within one hundred
      twenty (120) days after the close of each fiscal year of Borrower, provided
      that
      if the requirements of any of clauses (a), (b) and (c) of Section 10.01(c)(i)
      are no longer satisfied and Borrower is not a Hines Affiliate (as defined
      below), if required by Lender, such annual balance sheet and profit and loss
      statement of Borrower shall be audited and prepared by an independent certified
      public accountant acceptable to Lender;

     

    (c)  an
      annual
      operating budget presented on a monthly basis consistent with the annual
      operating statement described above for the Property including cash flow
      projections for the upcoming two (2) year period and all proposed capital
      replacements and improvements at least fifteen (15) days prior to the start
      of
      each calendar year; and

     

    (d)  an
      annual
      ARGUS © valuation file in electronic form which includes, without limitation, a
      then current rent roll, all income of the Property and all Property
      expenses.

     

    Section
      4.02                                  PROPERTY
      REPORTS.  Upon request from Lender or its representatives and
      designees, Borrower shall furnish in a timely manner to Lender:

     

    (a)  a
      property management report for the Property, showing the number of inquiries
      made and/or rental applications received from tenants or prospective tenants
      and
      deposits received from tenants and any other information reasonably requested
      by
      Lender, in reasonable detail and certified by Borrower (or an officer, general
      partner, member or principal of Borrower if Borrower is not an individual)
      to be
      true and complete in all material respects to its (or his or her, as the case
      may be) knowledge, but no more frequently than quarterly; and

     

    (b)  an
      accounting of all security deposits held in connection with any Lease of any
      part of the Property, including the name and identification number of the
      accounts in which such security deposits are held, the name and address of
      the
      financial institutions in which such security deposits are held and the name
      of
      the person to contact at such financial institution, along with any authority
      or
      release necessary for Lender to obtain information regarding such accounts
      directly from such financial institutions.

     

    Section
      4.03                                  ADDITIONAL
      MATTERS.

     

    (a)  Borrower
      shall furnish Lender with such other additional financial or management
      information (including State and Federal tax returns) as may, from time to
      time,
      be reasonably required by Lender in form and substance satisfactory to
      Lender.

     

    (b)  Borrower
      shall furnish Lender and its agents convenient facilities for the examination
      and audit of any such books and records.

     

    (c)  Lender
      and its representatives shall have the right upon prior written notice to
      examine and audit the records, books, management and other papers of Borrower
      and its affiliates (including any Liable Parties) which reflect upon their
      financial condition and/or the income, expenses and operations of the Property,
      at the Property or at any office regularly maintained by Borrower, its
      affiliates (including any Liable Parties) where the books and records pertaining
      to the Property are located.  Lender shall have the right upon advance
      notice to make copies and extracts from the foregoing records and other
      papers.

     

    Article
      V.                                

     

    LEASES
      AND OTHER AGREEMENTS AFFECTING THE PROPERTY

    


    Section
      5.01                                  BORROWER’S
      REPRESENTATIONS AND WARRANTIES.

     

    Borrower
      represents and warrants to
      Lender and Lender, as of the date hereof, as follows:

    


    (a)  There
      are
      no leases or occupancy agreements affecting the Property except those leases
      and
      amendments listed on the Certificate Relative to Rent Roll of even date executed
      by Borrower and Borrower has delivered to Lender true, correct and complete
      copies of all leases, including amendments (collectively, “Existing
      Leases”) and all guaranties and amendments of guaranties given in
      connection with the Existing Leases (the
“Guaranties”).

     

    (b)  There
      are
      no defaults by Borrower under the Existing Leases and Guaranties and, to the
      best knowledge of Borrower, there are no defaults by any tenants under the
      Existing Leases (except for certain defaults by Premier Systems, Inc. which
      have
      been disclosed to Beneficiary) or any guarantors under the Guaranties, except
      in
      each case, such defaults as may have been previously disclosed to Lender in
      any
      executed estoppel certificate obtained by Borrower and delivered to Lender
      in
      connection with the Loan.  The Existing Leases and the Guaranties are
      in full force and effect.

     

    (c)  To
      the
      best knowledge of Borrower, except as may have been previously disclosed to
      Lender in any executed estoppel certificate obtained by Borrower and delivered
      to Lender in connection with the Loan, none of the tenants now occupying 10%
      or
      more of the Property or having a current lease affecting 10% or more of the
      Property is the subject of any bankruptcy, reorganization or insolvency
      proceeding or any other debtor-creditor proceeding.

     

    (d)  No
      Existing Leases may be amended, terminated or canceled unilaterally by a tenant
      and no tenant may be released from its obligations, except (1) in the event
      of
      (i) material damage to, or destruction of, the Property or (ii) condemnation,
      or
      (2) as expressly set forth in the Existing Leases.

     

    Section
      5.02                                  ASSIGNMENT
      OF LEASES.  In order to further secure payment of the Secured
      Indebtedness and the performance of Borrower’s obligations under the Loan
      Documents, Borrower absolutely, presently and unconditionally grants, assigns
      and transfers to Lender all of Borrower’s right, title, interest and estate in,
      to and under (i) all of the Existing Leases and Guaranties affecting the
      Property and (ii) all of the future leases of the Property (meaning leases
      entered into after the date hereof of space in the Property by Borrower) and
      all
      amendments thereof, and all guaranties and amendments of guaranties with respect
      thereto, and (iii) the Rents and Profits.  Borrower acknowledges that
      it is permitted to collect the Rents and Profits pursuant to a revocable license
      unless and until an Event of Default occurs.  The Existing Leases and
      Guaranties and all such future leases, lease amendments, guaranties and
      amendments of guaranties are collectively referred to as the
“Leases”.

     

    Section
      5.03                                  PERFORMANCE
      OF OBLIGATIONS.

     

    (a)  Borrower
      shall perform all of its obligations under any and all Leases.  If any
      of the acts described in this Section requiring the consent or approval of
      Borrower are done without the written consent of Lender (unless Lender’s consent
      is deemed given pursuant to the provisions of this Section), then, at the option
      of Lender, such acts shall be of no force or effect and Borrower’s actions shall
      constitute a default under this Mortgage.

     

    (b)  Borrower
      agrees to furnish Lender executed copies of all future Leases.

     

    (c)  Borrower
      shall not, without the express written consent of Lender (unless pursuant to
      provisions of this Section such consent is deemed given by reason of Lender’s
      failure to timely respond to a request for consent):

     

    (i)  enter
      into any new Lease unless (x) such Lease is consistent with the Leasing
      Guidelines, and (y) such new Lease is on a standard form of Lease developed
      for
      the Property which has been previously approved by Lender (the “Standard
      Lease Form”), provided, however, that Borrower may make non-material
      changes to such Standard Lease Form so long as such changes do not conflict
      with
      the Leasing Guidelines.  The Leasing Guidelines are attached hereto as
Exhibit B; or

     

    (ii)  extend
      any Lease, provided, however, that Borrower may extend any Lease so long as
      the
      terms of such extension are consistent with the Leasing Guidelines agreed to
      by
      Lender from time to time or if such extension is pursuant to a right the tenant
      exercises under its Lease; or

     

    (iii)  cancel
      or
      terminate any Leases except in the case of a default unless Borrower has entered
      into new Leases (which must comply with clause (i) above) (a) covering all
      of
      the premises of the Leases being terminated or surrendered, or (b) less than
      all
      of the premises of the Leases being terminated or surrendered if the rent
      payable under the new Leases is equal to or greater than the rent payable under
      the Leases being terminated or surrendered, or

     

    (iv)  modify
      or
      amend any Leases in any material way or reduce the rent unless, after giving
      effect to such amendment or modification, the Lease is consistent with the
      Leasing Guidelines; provided, however, (a) that any such amendment or
      modification may include non-material modifications so long as such amendment
      or
      modification is consistent with the Leasing Guidelines and (b) nothing in this
      clause (iv) shall be deemed to prevent Borrower from entering into amendments
      required under the terms of Leases; or

     

    (v)  unless
      the tenants remain liable under the Leases, consent to an assignment of the
      tenant’s interest or to a subletting of the demised premises under any Lease;
      or

     

    (vi)  accept
      payment of advance rents in an amount in excess of one month’s rent;
      or

     

    (vii)  enter
      into or grant any options to purchase the Property; or

     

    (viii)  enter
      into any lease that grants recourse against Borrower which is not limited to
      Borrower’s interest in the Property or to the proceeds thereof.

     

    When
      Lender’s approval is required under this Section 5.03, Lender shall respond to
      Borrower’s request for approval within five (5) business days after submittal of
      all required information. If Lender does not respond within such initial five
      (5) business day period, Borrower may send a written notice notifying Lender
      that if Lender does not provide a response within an additional five (5)
      business days after receipt of such notice, such proposed lease or amendment
      to
      lease will be deemed approved, provided that such notice must be sent after
      the
      expiration of such initial five (5) business day period and must include the
      following statement on the first page in all capital letters and boldface type
      in order for it to be deemed validly delivered to Lender:

    


    “YOUR
      FAILURE TO RESPOND IN WRITING TO BORROWER’S SECOND REQUEST FOR APPROVAL OF THE
      MATTER DESCRIBED HEREIN RELATING TO A LEASE AT [INSERT STREET ADDRESS OF
      PROPERTY], AS SET FORTH HEREIN WITHIN FIVE (5) BUSINESS DAYS FROM THE
      DATE YOU RECEIVE THIS REQUEST SHALL BE DEEMED TO CONSTITUTE LENDER’S APPROVAL OF
      SUCH REQUEST.”

     

    For
      purposes of this Section and any letter delivered to Lender pursuant to this
      Section, the term “business days” shall mean any day other than Saturday or
      Sunday or any other day on which banks in the State of New York are authorized
      to be closed.

    


    Notwithstanding
      anything herein to the contrary, Borrower shall have the right to enter into
      Leases or amendments to Leases without Lender’s consent which (i) comply with
      the Leasing Guidelines then in effect, and (ii) are based on the Standard Lease
      Form developed for the Property with such non-material changes to such Standard
      Lease Form that do not conflict with the Leasing Guidelines.

    


    Section
      5.04                                  SUBORDINATE
      LEASES.  Each Lease entered into after the date hereof affecting
      the Property shall be absolutely subordinate to the lien of this Mortgage and
      shall also contain a provision, satisfactory to Lender, to the effect that
      in
      the event of the judicial or non-judicial foreclosure of the Property, at the
      election of the acquiring foreclosure purchaser, the particular Lease shall
      not
      be terminated and the tenant shall attorn to the purchaser.  If
      Borrower requests, Borrower shall cause a tenant or tenants to enter into
      subordination and attornment agreements or nondisturbance agreements with Lender
      on forms which have been approved by Lender, subject to such changes and
      modifications thereto to which Lender shall agree in its reasonable
      discretion.  Notwithstanding the foregoing, if the Lease prepared for
      said tenant has been approved by Lender (or if such Lease does not require
      Lender’s prior written consent as set forth in Section 5.03(c)), then, upon
      Borrower’s request, Lender hereby agrees to a provide a non-disturbance
      agreement to such tenant on Lender’s standard form of non-disturbance agreement,
      subject to such changes and modifications thereto to which Lender shall agree
      in
      its reasonable discretion.  Borrower agrees to pay Lender, if and only
      if Borrower requests such non-disturbance agreement, (i) a $2,500 fee per
      non-disturbance agreement provided by Lender, plus (ii) any and all reasonable
      third party attorneys’ fees incurred by Lender in connection with providing any
      such non-disturbance agreement.

     

    Section
      5.05                                  LEASING
      COMMISSIONS.  Borrower covenants and agrees that all contracts and
      agreements relating to the Property requiring the payment of leasing
      commissions, management fees or other similar compensation shall (i) provide
      that the obligation will not be enforceable against Lender and (ii) be
      subordinate to the lien of this Mortgage.  Lender will be provided
      evidence of Borrower’s compliance with this Section upon request.

     

    Article
      VI.                                

     

    ENVIRONMENTAL
      HAZARDS

    


    Section
      6.01                                  REPRESENTATIONS
      AND WARRANTIES.

     

    (a)  Representations
      and Warranties.  Borrower hereby represents, and warrants to
      Lender that, as of the date hereof (i) except as disclosed to Lender in that
      certain Environmental Report described on
Exhibit C and
      delivered to Lender (the “Environmental Report”), neither
      Borrower nor, to Borrower’s actual knowledge, any tenant, subtenant or occupant
      of the Property, has at any time placed, suffered or permitted the presence
      of
      any Hazardous Materials (as defined in Section 6.05) at, on, under, within
      or
      about the Property except for Permitted Materials (as hereinafter defined)
      and
      except as expressly approved by Lender in writing, (ii) except as disclosed
      to
      Lender in writing in the Environmental Report, all operations or activities
      upon
      the Property by Borrower, and any use or occupancy of the Property by Borrower
      are presently in compliance with all Requirements of Environmental Laws (as
      defined in Section 6.06), (iii) except as disclosed to Lender in the
      Environmental Report, Borrower does not know of, and has not received, any
      written or oral notice or other communication from any person or entity
      (including, without limitation, a governmental entity) relating to (a) Hazardous
      Materials at the Property or any other property in reasonable proximity to
      the
      Property in violation of Requirements of Environmental Laws or the performance
      of Remedial Work pertaining thereto, (b) possible liability of any person or
      entity relating to the Property pursuant to any Requirements of Environmental
      Laws, (c) other adverse environmental conditions in connection with the
      Property, or (d) any actual administrative or judicial proceedings in connection
      with any of the foregoing, and (iv) Borrower has truthfully and fully provided
      to Lender, in writing, any and all information relating to environmental
      conditions in, on, under or from the Property that is known to Borrower and
      that
      is contained in Borrower’s files and records, including, without limitation, any
      reports relating to Hazardous Materials in, on, under or from the Property
      and/or to the environmental condition of the Property.  As used
      herein, the term “Permitted Materials” shall mean and be
      limited to (i) such cleaning fluids, office products and similar Hazardous
      Materials as are typically used by owners, managers, operators and tenants
      of
      properties similar to the Property in connection with the ownership, operation,
      maintenance, repair, management and/or leasing of such property, and (ii) with
      respect to passenger vehicles parking in the parking facilities located on
      the
      Land, motor fuel, oil, lubricants and similar substances typically contained
      within such vehicles, provided the same are only maintained in such quantities
      and are of such composition as not to pose a risk of a violation
      of  Environmental Laws and are at all times used, stored and disposed
      of in compliance with the Requirements of Environmental Laws.

     

    (b)  Covenants.  Borrower
      hereby covenants and agrees with Lender that (i) all operations or activities
      upon the Property by Borrower and any use or occupancy of the Property by
      Borrower shall be in compliance with all requirements of Environmental Laws,
      (ii) Borrower will use commercially reasonable efforts to assure that any
      tenant, subtenant or occupant of the Property shall in the future be in
      compliance with all Requirements of Environmental Laws applicable to their
      operations or activities at the Property, and (iii) Borrower shall not do and
      shall exercise commercially reasonable efforts not to permit any tenant or
      other
      user of the Property to do any act that impairs the value of the Property,
      is
      contrary to any requirement of any insurer, constitutes a public or private
      nuisance, constitutes waste, or violates any covenant, condition, agreement
      or
      easement applicable to the Property.

     

    Section
      6.02                                    REMEDIAL
      WORK.  In the event any investigation or monitoring of site
      conditions or any clean-up, containment, restoration, removal or other remedial
      work (collectively, the “Remedial Work”) is required at the
      Property or as a result of conditions at the Property under any Requirements
      of
      Environmental Laws, Borrower shall perform or cause to be performed the Remedial
      Work in compliance with the applicable law, regulation, order or
      agreement.  Unless otherwise agreed in writing by Lender, all Remedial
      Work shall be performed by one or more contractors, selected by Borrower and
      reasonably approved in advance in writing by Lender, and under the supervision
      of a consulting engineer, selected by Borrower and reasonably approved in
      advance in writing by Lender.  All costs and expenses of Remedial Work
      shall be paid by Borrower including, without limitation, the charges of the
      contractor(s) and/or the consulting engineer, and Lender’s reasonable
      attorneys’, architects’ and/or consultants’ fees and costs incurred in
      connection with monitoring or review of the Remedial Work.  In the
      event Borrower shall fail to timely commence, or cause to be commenced, or
      fail
      to diligently prosecute to completion, the Remedial Work, Lender may, but shall
      not be required to, cause such Remedial Work to be performed, subject to the
      provisions of Sections 11.5 and 11.6.  Notwithstanding anything to the
      contrary contained herein, Borrower shall have no obligation to Lender (for
      reimbursement or otherwise) with respect to Remedial Work required as a direct
      result of (i) any grossly negligent or willful act of Lender or its respective
      officers, agents, contractors, subcontractors or employees, or (ii) events
      or
      circumstances first occurring after a foreclosure of this Mortgage or other
      transfer of title to the Property in extinguishment of the Secured
      Indebtedness.

     

    Section
      6.03                                    ENVIRONMENTAL
      SITE ASSESSMENT.  Lender shall have the right, if an Event of
      Default has occurred and is continuing, as frequently as Lender may deem it
      appropriate in its sole discretion, to undertake, at the expense of Borrower,
      an
      environmental site assessment on the Property, including any testing that Lender
      may determine, in its sole discretion, is necessary or desirable to ascertain
      the environmental condition of the Property and the compliance of the Property
      with Requirements of Environmental Laws.  Additionally, Lender shall
      have the right to undertake, at Lender’s expense, such additional environmental
      site assessments on the Property as Lender from time to time deems advisable
      in
      its reasonable discretion.  Borrower shall cooperate fully with Lender
      and its consultants performing such assessments and tests.

     

    Section
      6.04                                    UNSECURED
      OBLIGATIONS.  The lien of this Mortgage shall not secure (i) any
      obligations evidenced by or arising under the Indemnity Agreement
      (“Unsecured Obligations”), or (ii) any other obligations to the
      extent that they are the same or have the same effect as any of the Unsecured
      Obligations.  The Unsecured Obligations shall continue in full force,
      and any breach or default of any such obligations shall constitute a breach
      or
      default under this Mortgage but the proceeds of any foreclosure sale shall
      not
      be applied against Unsecured Obligations.  Nothing in this Section
      shall in any way limit or otherwise affect the right of Lender to obtain a
      judgment in accordance with applicable law for any deficiency in recovery of
      all
      obligations that are secured by this Mortgage following foreclosure,
      notwithstanding that the deficiency judgment may result from diminution in
      the
      value of the Property by reason of any event or occurrence pertaining to
      Hazardous Materials or any Requirements of Environmental Laws.

     

    Section
      6.05                                    HAZARDOUS
      MATERIALS.

     

    “Hazardous
      Materials” shall mean:

    


    (a)  Those
      substances included within the definitions of “hazardous substances,” “hazardous
      materials,” “toxic substances,” or “solid waste” in the Comprehensive
      Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
      Section 9601 et seq.) (“CERCLA”), as amended by Superfund
      Amendments and Reauthorization Act of l986 (Pub. L. 99-499 100 Stat. 1613)
      (“SARA”) the Resource Conservation and Recovery Act of 1976 (42
      U.S.C. Section 6901 etseq.) (“RCRA”), and the
      Hazardous Materials Transportation Act, 49 U.S.C. Section 5101
etseq., and in the regulations promulgated pursuant to said laws,
      all as amended;

     

    (b)  Those
      substances defined as “hazardous substances,” “hazardous wastes,” or “hazardous
      materials” in the Minnesota Environmental Response and Liability Act, Minn.
      Stat. Chapter 115B, the Minnesota Petroleum Tank Release Cleanup Act, Minn.
      Stat. Chapter 115C, and in the regulations promulgated pursuant to such laws,
      and any other state or local law, code or ordinance relating to the environment
      and human health and safety, and in the rules and regulations promulgated
      pursuant to such state or local law, code or ordinances;

     

    (c)  Those
      chemicals known to cause cancer or reproductive toxicity, as published pursuant
      to state or local law, code or ordinance relating to the environment and human
      health and safety, or in the rules and regulations promulgated pursuant to
      such
      state or local law, code or ordinances;

     

    (d)  Those
      substances listed under Minnesota Rules Section 7045.0135;

     

    (e)  Those
      substances listed in the United States Department of Transportation Table (49
      CFR 172.101 and amendments thereto) or by the Environmental Protection Agency
      (or any successor agency) as hazardous substances (40 CFR Part 302 and
      amendments thereto);

     

    (f)  Any
      material, waste or substance which is (A) petroleum, including crude oil or
      any
      fraction thereof, natural gas, natural gas liquids, liquefied natural gas,
      synthetic gas usable for fuel, or any mixture thereof, (B) asbestos, (C)
      polychlorinated biphenyls, (D) designated as a “hazardous substance” pursuant to
      Section 311 of the Clean Water Act, 33 U.S.C. Sections 1251 etseq.
      (33 U.S.C. Section 1321) or listed pursuant to Section 307 of the Clean Water
      Act (33 U.S.C. Section 1317); (E) a chemical substance or mixture regulated
      under the Toxic Substances Control Act of 1976, 15 U.S.C. Sections 2601
etseq.; (F) flammable explosives; or (G) radioactive materials;
      and

     

    (g)  Such
      other substances, materials and wastes which are or become regulated as
      hazardous or toxic under applicable local, Minnesota or federal law, or the
      United States government, or which are classified as hazardous or toxic under
      federal, Minnesota, or local laws or regulations.

     

    Section
      6.06                                  REQUIREMENTS
      OF ENVIRONMENTAL LAWS.  “Requirements of Environmental
      Laws” shall mean all requirements of environmental, ecological, or
      health (to the extent relating to environmental matters) laws or regulations
      or
      rules of common law related to the environmental condition of the Property,
      including, without limitation, all require­ments imposed by any
      environmental permit, law, rule, order, or regulation of any federal, state,
      or
      local executive, legislative, judicial, regulatory, or administrative agency,
      which relate to (i) exposure to Hazardous Materials; (ii) pollution or
      protection of the air, surface water, ground water, land; (iii) solid, gaseous,
      or liquid waste generation, treatment, storage, disposal, or
      transpor­tation; or (iv) regulation of the manufacture, pro­cessing,
      distribution and commerce, use, or storage of Hazardous Materials.

     

    


    Article
      VII.                                

     

    CASUALTY,
      CONDEMNATION AND RESTORATION

    


    Section
      7.01                                  BORROWER’S
      REPRESENTATIONS.

     

    Borrower
      represents and warrants, as of the date hereof, as follows:

    


    (a)  Except
      as
      expressly approved by Lender in writing, no casualty or damage to any part
      of
      the Property which would cost more than $50,000 to restore or replace has
      occurred which has not been fully restored or replaced.

     

    (b)   No
      part of the Property has been taken in condemnation or other similar proceeding
      or transferred in lieu of condemnation, nor has Borrower received notice of
      any
      proposed condemnation or other similar proceeding affecting the
      Property.

     

    (c)  There
      is
      no pending proceeding for the total or partial condemnation of the
      Property.

     

    Section
      7.02                                  RESTORATION.

     

    (a)  Borrower
      shall give prompt written notice of any casualty to the Property to Lender
      whether or not required to be insured against.  The notice shall
      describe the nature and cause of the casualty and the extent of the damage
      to
      the Property. Borrower covenants and agrees to commence and diligently pursue
      to
      completion the Restoration.  Notwithstanding the foregoing, Borrower
      shall not be required to pursue or complete the Restoration if Lender receives
      and thereafter fails to make available to Borrower Insurance
      Proceeds.

     

    (b)  Borrower
      assigns to Lender all Insurance Proceeds which Borrower is entitled to receive
      in connection with a casualty to the Property whether or not such insurance
      is
      required under this Mortgage.  In the event of any damage to or
      destruction of the Property, and provided (1) an Event of Default does not
      currently exist, and (2) Lender has reasonably determined that (i) there has
      not
      been an Impairment of the Security (as defined in Section 7.02 (c)), and (ii)
      the repair, restoration and rebuilding of any portion of the Property that
      has
      been partially damaged or destroyed (the “Restoration”) can be
      accomplished during the Term of the Loan in full compliance with all
      Requirements to substantially the same condition, character and general utility
      as nearly as possible to that existing immediately prior to the casualty and
      at
      least equal in value as that existing immediately prior to the casualty, the
      Net
      Insurance Proceeds shall be applied to the Cost of Restoration in accordance
      with the terms of this Article. Lender shall hold and disburse the Insurance
      Proceeds less the cost, if any, to Lender of recovering the Insurance Proceeds
      including, without limitation, reasonable attorneys’ fees and expenses, and
      adjusters’ fees (the “Net Insurance Proceeds”) to the
      Restoration.

     

    (c)  For
      the
      purpose of this Article, “Impairment of the Security” shall
      mean any or all of the following: (i) any of the Leases for more than 40,000
      square feet existing immediately prior to the damage, destruction condemnation
      or casualty shall have been cancelled, or shall contain any exercisable right
      (unless such right is waived in writing) to cancel as a result of the damage,
      destruction or casualty; (ii) the casualty or damage occurs during the last
      year
      of the term of the Loan; or (iii) restoration of the Property is estimated
      to
      require more than one year to complete from the date of the
      occurrence.

     

    (d)  If
      the
      Net Insurance Proceeds are to be used for the Restoration in accordance with
      this Article, Borrower shall comply with Lender’s Requirements For Restoration
      as set forth in Section 7.04 below.  Upon Borrower’s satisfaction and
      completion of the Requirements For Restoration and upon confirmation that there
      is no Event of Default then existing, Lender shall pay any remaining Restoration
      Funds (as defined in Section 7.04 below) then held by Lender to
      Borrower.

     

    (e)  In
      the
      event that the conditions for Restoration set forth in this Section have not
      been met, Lender may, at its option, apply the Net Insurance Proceeds to the
      reduction of the Secured Indebtedness in such order as Lender may determine
      and
      Lender may declare the entire Secured Indebtedness immediately due and payable,
      it being understood that the right of Lender to receive a Prepayment Fee in
      connection with such payment of the Secured Indebtedness shall be governed
      by
      the provisions of Section 9(d) of the Note.  After payment in full of
      the Secured Indebtedness, any remaining Restoration Funds shall be paid to
      Borrower.

     

    Section
      7.03                                  CONDEMNATION.

     

    (a)  If
      the
      Property or any part of the Property is taken by reason of any condemnation
      or
      similar eminent domain proceeding, or by a grant or conveyance in lieu of
      condemnation or eminent domain (“Condemnation”), Lender shall
      be entitled to all compensation, awards, damages, proceeds and payments or
      relief for the Condemnation (“Condemnation
      Proceeds”).  At its option, Lender shall be entitled to
      commence, appear in and prosecute in its own name any action or proceeding
      or to
      make any compromise or settlement in connection with such
      Condemnation.  Borrower hereby irrevocably constitutes and appoints
      Lender as its attorney-in-fact, which appointment is coupled with an interest,
      to commence, appear in and prosecute any action or proceeding or to make any
      compromise or settlement in connection with any such
      Condemnation.  Notwithstanding the foregoing, except during the
      continuation of an Event of Default hereunder, Lender shall not exercise such
      power of attorney, nor shall any such settlement, adjustment or compromise
      by
      Lender be made without Borrower’s prior written consent to the terms and
      conditions thereof, unless an Event of Default then exists hereunder, which
      consent shall not be unreasonably withheld, conditioned or delayed.

     

    (b)  Borrower
      hereby assigns to Lender all Condemnation Proceeds which Borrower is entitled
      to
      receive.  In the event of any Condemnation, and provided (1) an Event
      of Default does not currently exist, and (2) Lender has reasonably determined
      that (i) there has not been an Impairment of the Security, and (ii) the
      Restoration of any portion of the Property that has not been taken can be
      accomplished during the Term of the Loan in full compliance with all
      Requirements to substantially the same condition, character and general utility
      as nearly as possible to that existing immediately prior to the taking and
      at
      least equal in value as that existing immediately prior to the taking, then
      Borrower shall commence and diligently pursue to completion the
      Restoration.  Lender shall hold and disburse the Condemnation Proceeds
      less the cost, if any, to Lender of recovering the Condemnation Proceeds
      including, without limitation, reasonable attorneys’ fees and expenses, and
      adjusters’ fees (the “Net Condemnation Proceeds”) to the
      Restoration.

     

    (c)  In
      the
      event the Net Condemnation Proceeds are to be used for the Restoration, Borrower
      shall comply with Lender’s Requirements For Restoration as set forth in Section
      7.04 below.  Upon Borrower’s satisfaction and completion of the
      Requirements For Restoration and upon confirmation that there is no Event of
      Default then existing, Lender shall pay any remaining Restoration Funds (as
      defined in Section 7.04 below) then held by Lender to Borrower.

     

    (d)  In
      the
      event that the conditions for Restoration set forth in this Section have not
      been met, Lender may, at its option, apply the Net Condemnation Proceeds to
      the
      reduction of the Secured Indebtedness in such order as Lender may determine
      and
      Lender may declare the entire Secured Indebtedness immediately due and payable,
      it being understood that the right of Lender to receive a Prepayment Fee in
      connection with such payment of the Secured Indebtedness shall be governed
      by
      the provisions of Section 9(d) of the Note.  After payment in full of
      the Secured Indebtedness, any remaining Restoration Funds shall be paid to
      Borrower.

     

    Section
      7.04                                  REQUIREMENTS
      FOR RESTORATION.  Unless otherwise expressly agreed in a writing
      signed by Lender, the following are the Requirements For
      Restoration:

     

    (a)  If
      the
      Net Insurance Proceeds or Net Condemnation Proceeds are to be used for the
      Restoration, prior to the commencement of any Restoration work (the
“Work”), Borrower shall provide Lender for its review and
      written approval (i) to the extent damage is sufficient to require plans to
      restore, complete plans and specifications for the Work which (A) have been
      approved by all required governmental authorities, (B) have been approved by
      an
      architect reasonably satisfactory to Lender (the “Architect”)
      and (C) are accompanied by Architect’s signed statement of the total estimated
      cost of the Work (the “Approved Plans and Specifications”);
      (ii) the amount of money  (or a letter of credit in such amount, form,
      scope and substance acceptable to Lender in its sole discretion) which Lender
      reasonably determines will be sufficient when added to the Net Insurance
      Proceeds or Condemnation Proceeds to pay the entire cost of the Restoration
      (collectively referred to as the “Restoration Funds”), which
      Restoration Funds shall be held in an interest bearing account, with all
      interest earned therein becoming part of the Restoration Funds; (iii) evidence
      that the Approved Plans and Specifications and the Work are in compliance with
      all Requirements; (iv) an executed contract for construction with a contractor
      reasonably satisfactory to Lender (the “Contractor”) in a form
      approved by Lender in writing; and (v) a surety bond and/or guarantee of payment
      with respect to the completion of the Work. The bond or guarantee shall be
      satisfactory to Lender in form and amount and shall be signed by a surety or
      other entities who are acceptable to Lender.

     

    (b)  Borrower
      shall not commence the Work, other than temporary work to protect the Property
      or prevent interference with business, until Borrower shall have complied with
      the requirements of subsection (a) of this Section 7.04.  So long as
      there does not currently exist an Event of Default and the following conditions
      have been complied with or, in Lender’s reasonable discretion, waived, Lender
      shall disburse the Restoration Funds in increments to Borrower, from time to
      time as the Work progresses:

     

    (i)  Borrower
      shall be in charge of the Work.

     

    (ii)  Lender
      shall disburse the Restoration Funds directly or through escrow with a title
      company selected by Borrower and reasonably approved by Lender, upon not less
      than ten (10) days’ prior written notice from Borrower to Lender and Borrower’s
      delivery to Lender of (A) Borrower’s written request for payment (a
“Request for Payment”) accompanied by a certificate by
      Architect in a form reasonably satisfactory to Lender which states that (a)
      all
      of the Work completed to that date has been completed in substantial compliance
      with the Approved Plans and Specifications and in accordance with all
      Requirements, (b) the amount requested has been paid or is then due and payable
      and is properly a part of the cost of the Work, and  (c) when added to
      all sums previously paid by Lender, the requested amount does not exceed the
      value of the Work completed to the date of such certificate; and (B) evidence
      satisfactory to Lender that the balance of the Restoration Funds remaining
      after
      making the payments shall be sufficient to pay the balance of the cost of the
      Work.  Each Request for Payment shall be accompanied by (x) waivers of
      liens covering that part of the Work previously paid for, if any (y) a title
      search or by other evidence reasonably satisfactory to Lender that no mechanic’s
      or materialmen’s liens or other similar liens for labor or materials supplied in
      connection with the Work have been filed against the Property and not discharged
      of record (or if such liens exist, adequate security (including, if applicable,
      a bond in form and substance satisfactory to Lender) shall have been provided
      therefor, provided that in all events any lien must be discharged, released
      or
      adequately bonded around, in a manner satisfactory to Lender, within thirty
      (30)
      days after receipt of notice of its existence but in all events prior to the
      foreclosure thereof), (z) an endorsement to Lender’s title policy insuring that
      no encumbrance exists on or affects the Property other than the Permitted
      Exceptions and such other matters as Lender may approve in writing; provided,
      that if such endorsement is not available under applicable title insurance
      regulations, each Request for Payment shall be accompanied by a title search
      showing no new encumbrances exiting on or affecting the Property other than
      the
      Permitted Exceptions and such other matters as Lender may approve in
      writing..

     

    (iii)  The
      final
      Request for Payment shall be accompanied by (i) a final certificate of occupancy
      or other evidence of approval of appropriate governmental authorities for the
      use and occupancy of the Improvements, (ii) evidence that the Restoration has
      been completed in substantial accordance with the Approved Plans and
      Specifications and in accordance with all Requirements, (iii) evidence that
      the
      costs of the Restoration have been paid in full, (or with the application of
      the
      sums requested in such final Request for Payment will be paid in full), and
      (d)
      evidence that no mechanic’s or similar liens for labor or material supplied in
      connection with the Restoration are outstanding against the Property, including
      final waivers of liens covering all of the Work and an endorsement to Lender’s
      title policy insuring that no encumbrance exists on or affects the Property
      other than the Permitted Exceptions and such other matters as Lender may approve
      in writing; provided, that if such endorsement is not available under applicable
      title insurance regulations, the final Request for Payment shall be accompanied
      by a title search showing no new encumbrances exiting on or affecting the
      Property other than the Permitted Exceptions and such other matters as Lender
      may approve in writing.

     

    (c)  If
      (i)
      within sixty (60) days after the occurrence of any damage, destruction or
      condemnation requiring Restoration and plans and specifications are required
      in
      connection therewith, Borrower fails to submit to Lender and receive from Lender
      Lender’s approval of the applicable plans and specifications or after such
      approval is obtained fails to deposit with Lender the additional amount
      necessary to accomplish the Restoration as provided in subparagraph (a) above,
      or (ii) after such plans and specifications are approved by all such
      governmental authorities and Lender, Borrower fails to commence promptly or
      diligently continue to completion the Restoration, or (iii) Borrower becomes
      delinquent in payment to mechanics, materialmen or others for the costs incurred
      in connection with the Restoration and has not protected Lender against the
      consequences thereof by bonding over in a manner reasonably satisfactory Lender,
      or (iv) there exists an Event of Default, then, in addition to all of the rights
      herein set forth and after ten (10) days’ written notice of the non-fulfillment
      of one or more of these conditions, Lender may apply the Restoration Funds
      to
      reduce the Secured Indebtedness in such order as Lender may determine, and
      at
      Lender’s option and in its sole discretion, Lender may declare the Secured
      Indebtedness immediately due and payable, but no Prepayment Fee shall be payable
      except in accordance with Section 9(d) of the Note.

     

    Article
      VIII.                                

     

    REPRESENTATIONS
      OF BORROWER

    


    Section
      8.01                                  ERISA.  Borrower
      hereby represents, warrants and agrees that: (i) it is acting on its own behalf
      and that it is not an employee benefit plan as defined in Section 3(3) of the
      Employee Retirement Income Security Act of 1974, as amended
      (“ERISA”), which is subject to Title 1 of ERISA, nor a plan as
      defined in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended
      (each of the foregoing hereinafter referred to collectively as a
“Plan”); (ii) Borrower’s assets do not constitute “plan assets”
of one or more such Plans within the meaning of Department
      of Labor Regulation
      Section 2510.3-101; and (iii) it will not be reconstituted as a Plan or as
      an
      entity whose assets constitute “plan assets”.

     

    Section
      8.02                                  NON-RELATIONSHIP.  Neither
      Borrower nor any direct partner of Borrower is (i) a director or officer of
      Lender, (ii) a parent, son or daughter of a director or officer of Lender,
      or a
      descendent of any of them, (iii) a stepparent, adopted child, step­son or
      step­daughter of a director or officer of Lender, or (iv) a spouse of a
      director or officer of Lender.

     

    Section
      8.03                                  NO
      ADVERSE CHANGE.

     

    Borrower
      represents and warrants that, as of the date hereof:

    


    (a)  There
      has
      been no material adverse change from the conditions shown in the application
      submitted for the Loan by Borrower (“Application”) or in the
      materials submitted in connection with the Application in the credit rating
      or
      financial condition of Borrower or its general partner (collectively,
“Borrower’s Constituents”).

     

    (b)  Borrower
      has delivered to Lender true and correct copies of all Borrower’s organizational
      documents and except as expressly approved by Lender in writing, there have
      been
      no changes in Borrower’s Constituents since the date that the Application was
      executed by Borrower.

     

    (c)  Neither
      Borrower, nor any of the Borrower’s Constituents, is involved in any bankruptcy,
      reorganization, insolvency, dissolution or liquidation proceeding, and to the
      best knowledge of Borrower, no such proceeding is contemplated or
      threatened.

     

    (d)  Borrower
      has received reasonably equivalent value for the granting of this
      Mortgage.

     

    (e)  Neither
      Borrower nor any direct partner of Borrower has been convicted of, or been
      indicted for a felony criminal offense.

     

    (f)  Neither
      Borrower nor any direct partner of Borrower is in default under any mortgage,
      deed of trust, note, loan or credit agreement.

     

    (g)  Neither
      Borrower nor any direct partner of Borrower is involved in any litigation,
      arbitration, or other proceeding or governmental investigation pending which
      if
      determined adversely would materially adversely affect Borrower’s ability to
      perform in accordance with the Loan Documents.

     

    Section
      8.04                                  FOREIGN
      INVESTOR.  Borrower represents and warrants that neither Borrower
      nor any of Borrower’s direct partners are a “foreign person” within the meaning
      of Sections 1445 and 7701 of the Internal Revenue Code of l986, and the
      amendments of such Code or Regulations as promulgated pursuant to such
      Code.  Borrower is a “disregarded entity” within the meaning of such
      Code or Regulations.

     

    Section
      8.05                                  PATRIOT
      ACT/PROHIBITED PERSON.

     

    (a)  Neither
      Borrower, nor any person holding a controlling interest in Borrower, is (i)
      engaged in any money laundering in violation of the AML Laws (as hereinafter
      defined), including the Patriot Act (as hereinafter defined) or (ii) a
      Prohibited Person (as hereinafter defined).  No person has a direct or
      indirect controlling interest (as hereinafter defined) in Borrower other than
      as
      disclosed to Lender.

     

    (b)  Borrower
      shall notify Lender promptly upon its senior management obtaining actual
      knowledge (without any duty to conduct any investigation or inquiry except
      to
      the extent, if any, required by applicable law) that Borrower or any person
      owning any direct or indirect controlling interest in Borrower, is or becomes
      (i) engaged in any money laundering in violation of the AML Laws or (ii) a
      Prohibited Person.

     

    (c)  For
      the
      purposes of this Section 8.05:

     

    (i)  “AML
      Laws” shall mean money laundering and anti-terrorist laws, rules,
      regulations and executive orders of the United States, including the Patriot
      Act
      and those issued by the U.S. Office of Foreign Asset Control and the U.S.
      Department of Treasury, all as amended from time to time.

     

    (ii)  “controlling
      interest” with respect to any entity shall mean either (A) ownership
      directly or indirectly of more than 50% of all equity interests in such entity
      or (B) the possession, directly or indirectly, of the power to direct or cause
      the direction of the day to day management and policies of such entity, through
      the ownership of voting securities, by contract or otherwise.

     

    (iii)  “Patriot
      Act” shall mean Title III of the Uniting and Strengthening America by
      Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
      of
      2001, as amended from time to time.

     

    (iv)  “Prohibited
      Person” shall mean (A) any individual or entity listed in the Annex to,
      or which is otherwise subject to the provisions of Section 1 of, Executive
      Order
      No. 13224 on Terrorist Financing, effective September 24, 2001, and relating
      to
      Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
      to Commit or Support Terrorism, (B) any individual or entity that is named
      as a
“specifically designated national (SDN)” on the most current list published by
      the U.S. Treasury Department Office of Foreign Assets Control at its official
      website (http://www.treas.gov/offices/eotffc/ofac/sdn/t11sdn.pdf) or at any
      replacement website or other replacement official publication of such list
      or is
      named on any other similar U.S. or foreign government or regulatory list issued
      post 9/11/01, (C) any terrorist organizations or narcotics traffickers,
      including those individuals or entities that are included on any lists of
      persons with whom Borrower is prohibited from transacting business and
      maintained by the U.S. Office of Foreign Assets Control.

     

    Section
      8.06                                  BROKERS.  Borrower
      hereby represents and warrants that Churchill Capital
      (“Broker”) is its broker in connection with the Loan, and
      Borrower agrees to pay the fees of Broker in accordance with the written
      agreement between Borrower and Broker.  Lender shall have no
      obligations for, and Borrower hereby indemnifies and holds Lender harmless
      from,
      the payment of any brokerage commissions or fees of any kind and any legal
      fees
      and/or expenses incurred by Lender in connection with any claims for brokerage
      commissions or fees with respect to the Loan by anyone claiming by, through
      or
      under Borrower.  Borrower acknowledges that Lender may be affiliated
      with, or may have been involved in other transactions with Broker, and Borrower
      agrees that it shall have no rights against Lender or defenses to Borrower’s
      obligations under the Loan Documents because of any such
      relationship.

     

    Section
      8.07                                  SECURITIES
      LAWS.  The limited partnership interests evidenced by the
      Borrower’s Organizational Documents have been issued in accordance with all
      applicable federal and state securities laws, or authorized exemptions from
      such
      securities laws, including, but not limited to, the Securities Act of 1933,
      as
      amended, the Securities and Exchange Act of 1934, as amended.  The
      limited partnership interests of Borrower have not been issued in violation
      of
      any federal, state or local securities law, and to the extent that these
      securities have been issued in reliance on exemptions from such federal or
      state
      securities law, all necessary steps have been taken to qualify for such
      exemptions.  The limited partners of Borrower have been properly
      notified of all applicable securities laws and related restrictions on their
      ability to transfer, sell or otherwise dispose of their partnership interests
      in
      Borrower.  Except for identification of Lender as a lender to
      Borrower, the name of Lender will not be in any of the offering materials
      provided or to be provided to any person, including but not limited to any
      of
      the limited partners of Borrower. There has not been any representation, whether
      written, oral or otherwise, that Lender in any way has participated or endorsed
      the offering of the partnership interests in Borrower.

     

    


    Article
      IX.                                

     

    EXCULPATION
      AND LIABILITY

    


    Section
      9.01                                  LIABILITY
      OF BORROWER.

     

    (a)  Notwithstanding
      anything contained herein or in the other Loan Documents to the contrary, upon
      the occurrence of an Event of Default, except as provided in this Section 9.01,
      Lender will look solely to the Property and the security under the Loan
      Documents for the repayment of the Loan and will not enforce a deficiency
      judgment against Borrower or any direct or indirect partner, member or
      shareholder or other holder of a beneficial interest in
      Borrower.  However, nothing contained in this section shall limit the
      rights of Lender to proceed against Borrower (but not its direct or indirect
      partners, members, shareholders or other holders of any beneficial interests
      in
      Borrower) (i) to enforce any Leases entered into by Borrower or its affiliates
      as tenant, or guarantees, or other agreements entered into by Borrower in a
      capacity other than as borrower or any policies of insurance; (ii) to recover
      damages for fraud, intentional material misrepresentation or breach of warranty
      or intentional physical waste; (iii) to recover any Condemnation Proceeds or
      Insurance Proceeds or other similar funds which have been misapplied by Borrower
      or which, under the terms of the Loan Documents, should have been paid to
      Lender; (iv) to recover any tenant security deposits, tenant letters of credit
      or other deposits or fees paid to Borrower and not applied to rent or returned
      to tenants pursuant to the terms of the tenant leases that are part of the
      collateral for the Loan or prepaid rents for a period of more than 30 days
      which
      have not been delivered to Lender; (v) to recover Rents and Profits received
      by
      Borrower during the period beginning six (6) months prior to the date a notice
      of acceleration of maturity of the Note is delivered to Borrower through the
      date Lender acquires title to the Property which have not been applied to the
      Loan in accordance with the Loan Documents for leasing, repair, management,
      operating and maintenance expenses of the Property, insurance premiums,
      Imposition deposits, deposits into a reserve for replacements or taxes upon
      the
      Property or any other sum required to be paid under the Loan Documents, but
      only
      to the extent Rents and Profits were available but not so applied; (vi) to
      recover damages, costs and expenses arising from, or in connection with Article
      VI of this Mortgage pertaining to hazardous materials or any warranty in the
      Indemnity Agreement; and (vii) to recover damages arising from Borrower’s
      failure to comply with Section 8.01 of this Mortgage pertaining to
      ERISA.  If Lender exercises the rights and remedies of an unsecured
      creditor in accordance with the preceding sentence, Borrower promises to pay
      to
      Lender, on demand by Lender following such exercise, all amounts owed to Lender
      pursuant to this Section 9.01, and Borrower agrees that it (but not any direct
      or indirect partner, member, shareholder or other holder of a beneficial
      interest in Borrower) will be personally liable for the payment of all such
      sums.

     

    (b)  Notwithstanding
      the foregoing, the limitation of liability set forth in this Section 9.01 shall
      not apply and the Loan shall be fully recourse to Borrower (but not to any
      direct or indirect partner, member, shareholder or other holder of beneficial
      interests in Borrower) in the event that (i) a Transfer occurs without the
      consent of Lender (other than a transfer which is permitted without Lender’s
      consent pursuant to the terms of Section 10.01 of this Mortgage or pursuant
      to
      Section 3.3 or Section 3.4 of the Loan Facility Agreement), (ii) a Subordinate
      Financing occurs in violation of Section 10.02 of this Mortgage without the
      consent of Lender (other than a Credit Facility Pledge which is permitted
      without Lender’s consent pursuant to the terms of Section 10.02 of this
      Mortgage), (iii) Borrower commences a voluntary proceeding under applicable
      federal bankruptcy law, or (iv) a collusive involuntary proceeding under
      applicable federal bankruptcy law is commenced against Borrower and is not
      dismissed within 120 days.  In addition, this agreement shall not
      waive any rights which Lender would have under any provisions of the U.S.
      Bankruptcy Code to file a claim for the full amount of the Secured Indebtedness
      or to require that the Property shall continue to secure all of the Secured
      Indebtedness.

     

    Article
      X.                                

     

    


     

    CHANGE
      IN OWNERSHIP, CONVEYANCE OF PROPERTY

     

    Section
      10.01                                  CONVEYANCE
      OF PROPERTY, CHANGE IN OWNERSHIP AND COMPOSITION.

     

    (a)  Except
      as
      otherwise expressly provided in this Section 10.01 or in Section 3.3 or Section
      3.4 of the Loan Facility Agreement, Borrower shall not cause or permit directly
      or indirectly: (i) the Property or Borrower’s interest in the Property, to be
      conveyed, transferred, assigned, encumbered, sold or otherwise disposed of;
      or
      (ii)  any transfer, assignment or conveyance of any interest in
      Borrower or in the partners, or stockholders, or members or beneficiaries of,
      Borrower or of any of Borrower’s Constituents or (iii) any merger,
      reorganization, dissolution or other change in the ownership structure of
      Borrower or any of the general partners of Borrower, including, without
      limitation, any conversion of Borrower or any general partner of Borrower from
      a
      general partnership to a limited partnership, a limited liability partnership
      or
      a limited liability company (collectively,
“Transfers”).

     

    (b)  The
      prohibitions on transfer shall not be applicable to (i) transfers of ownership
      as a result of the death, or in connection with estate planning, of a natural
      person to a spouse, son or daughter or descendant of either, or to a stepson
      or
      stepdaughter or descendant of either, or to trusts for the benefit of such
      family members, or (ii) Leases approved or deemed approved pursuant to the
      terms
      of this Mortgage, or (iii) any transfer in connection with Condemnation, or
      (iv)
      liens in compliance with Section 2.09 or 7.04(c). In addition, the prohibitions
      on transfer shall not be applicable to the transfer of all of the indirect
      ownership interests in Borrower pursuant to the Credit Facility Pledge (as
      defined in Section 10.02 below), as the result of a default under the Credit
      Agreement (as defined in Section 10.02 below) so long as the transferee is
      a
      Qualified Institutional Investor (as defined below) and so long as Borrower
      pays
      to Lender all out of pocket costs and expenses incurred by Lender in connection
      with any proposed Transfer pursuant to the preceding, including without
      limitation, reasonable attorneys’ fees and costs.  As used herein, the
      term “Qualified Institutional Lender” and “Qualified
      Institutional Investor” shall mean any insurance company, bank,
      investment bank, savings and loan association, trust company, commercial credit
      corporation, pension plan, pension fund or pension fund advisory firm, mutual
      fund or other investment company, government entity or plan, “qualified
      institutional buyer” within the meaning of Rule 144A under the
      Securities Act of 1933, as amended (other than a broker/dealer), or real estate
      investment trust, in each case having at least $200,000,000 in capital/statutory
      surplus, shareholder’s equity or net worth, as applicable, and being experienced
      in making commercial real estate loans or otherwise investing in commercial
      real
      estate. Any corporation, partnership, joint venture, limited liability company
      or trust created and controlled by any of the foregoing entities shall also
      be
      deemed a “Qualified Institutional Investor”.

     

    (c)  Notwithstanding
      anything contained in Loan Documents to the contrary, and
      provided  there is no Event of Default under the Loan Documents or the
      Indemnity Agreement as of the time of the transfer, the following transfers,
      done at Borrower’s sole cost and expense, shall be deemed “Permitted
      Transfers” and the entities to which the transfer is made shall be
      deemed “Permitted Transferees” and shall not require Lender’s
      prior written approval:

     

    (i)  Any
      assignments or transfers of interests among, between, to or from Hines
      Affiliates so long as (a) Hines Affiliates continue to control, directly or
      indirectly, the management and operations of the investment advisor of Hines
      Real Estate Investment Trust, Inc., a publicly traded Maryland real estate
      investment trust (“Hines REIT”), (b) Hines REIT continues to be
      the general partner of and retains management and operational control of Hines
      REIT Properties, L.P., a Delaware limited partnership (“Operating
      Partnership”), (c) Operating Partnership continues to own directly all
      of the interests in Hines Facility and (d) Hines Facility continues to own,
      directly or indirectly, all of the partnership interests in Borrower and retains
      management and operational control of the Borrower and the
      Property;

     

    (ii)  Any
      assignments, transfers, pledges, encumbrances, hypothecations or redemptions
      of
      limited partnership interests, or issuance of new limited partnership interests,
      in Operating Partnership or Hines Facility, so long as (a) Hines Affiliates
      continue to control, directly or indirectly, the management and operation of
      the
      investment advisor of Hines REIT, (b) Hines REIT continues to be the general
      partner of and retains management and operational control of Operating
      Partnership and (c) Operating Partnership continues to be the member of and
      retains management and operational control of Hines Facility;

     

    (iii)  Any
      assignments, transfers, pledges, encumbrances, hypothecations, redemptions
      of
      shares, stock or other interests, or issuance of new shares, stock, or other
      interests, in Hines REIT so long as a Hines Affiliates continue to control,
      directly or indirectly, the management and operation of the investment advisor
      of Hines REIT;

     

    (iv)  Any
      assignments, transfers, pledges, encumbrances, hypothecations, redemptions
      of
      shares, stock, partnership or other interests, or issuance of new shares, stock
      partnership, or other interests in any direct or indirect owner or holder of
      beneficial interests in Hines REIT or in Operating Partnership so long as
      clauses (a), (b) and (c) of subparagraph (i) above are satisfied.

     

    A
      “Hines Affiliate” or “Hines Affiliates” shall
      mean any partnership, limited liability company, corporation, trust or other
      entity owned (wholly or partially, directly or indirectly) and controlled
      (directly or indirectly) by Gerald D. Hines, Jeffery C. Hines, Hines Interests
      Limited Partnership, a Delaware limited partnership (“HILP”),
      trusts established for the benefit of the Hines Family (as defined below),
      or in
      the event of the death or disability of Jeffery C. Hines and/or Gerald D. Hines,
      the estate of either of them.  As used herein, the “Hines
      Family” shall mean Gerald D. Hines and/or Jeffery C. Hines, their
      respective parents, brothers and sisters, their respective spouses and children
      and/or grandchildren of any of the foregoing (including children or
      grandchildren by adoption).  For the avoidance of doubt, Hines Real
      Estate Investment Trust, Inc. shall be deemed to be a “Hines
      Affiliate” for all purposes under this Article 10.

    


    The
      parties agree that the terms of this Section 10.01 shall in all cases be subject
      to the terms of Section 4.9 of the Loan Facility Agreement, and accordingly
      in
      the event of an inconsistency between the terms of this Section 10.01 and
      Section 4.9 of the Loan Facility Agreement, Section 4.9 of the Loan Facility
      Agreement shall govern and control.

    


    Section
      10.02                                  PROHIBITION
      ON SUBORDINATE FINANCING.  Borrower shall not incur or permit the
      incurring of any of the following (each of the following referred to as
“Subordinate Financing”): (i) any financing in addition to the
      Loan that is secured by a lien, security interest or other encumbrance of any
      part of the Property (but excluding any encumbrance of Borrower’s interest in
      Personal Property arising out of purchase money debt for, or the leasing of,
      equipment or other personal property items, which shall be allowed), or (ii)
      any
      pledge or other similar encumbrance of the interest of a partner, member or
      shareholder or holder of any other beneficial interest in Borrower; except
      for a
      pledge (the “Credit Facility Pledge”) of 100% of the ownership
      interests in Hines Facility, which Hines Facility is the direct parent of and
      owner of 100% of the interests in Borrower (it being agreed, for the avoidance
      of doubt, that under no circumstances shall a pledge of the direct ownership
      interests in Borrower be permitted), which Credit Facility Pledge secures (x)
      a
      Credit Agreement in the original principal amount of $250,000,000 with an
      accordian to $350,000,000 dated as of September 9, 2005 (as amended November
      8,
      2006) between Operating Partnership and KeyBank National Association, a national
      banking association (“KeyBank”), as Administrative Agent, and
      the lending institutions party to or as may become parties to the Credit
      Agreement, as supplemented, amended, extended or renewed on substantially
      similar economic and material business terms from time to time, or (y) any
      refinancing or replacement thereof on substantially similar economic and
      material business terms provided by KeyBank or other Qualified Institutional
      Lender (the Credit Agreement as described in the foregoing clauses (x) and
      (y)
      is referred to herein collectively, as the “Credit Agreement”),
      provided that the Credit Agreement shall not be secured by a lien, pledge or
      security interest or other encumbrance of any part of the Property of
      Borrower.

     

    Section
      10.03                                  RESTRICTIONS
      ON ADDITIONAL OBLIGATIONS.  During the term of the Loan, Borrower
      shall not, without the prior written consent of Lender, become liable with
      respect to any indebtedness or other obligation except for (i) the Loan, (ii)
      Leases entered into in the ordinary course of owning and operating the Property
      for the Use, (iii) other liabilities incurred in the ordinary course of owning
      and operating the Property for the Use but excluding any loans or borrowings,
      (iv) liabilities or indebtedness disclosed in writing to and approved by Lender
      on or before the Execution Date, and (v) any other single item of indebtedness
      or liability which does not exceed $500,000 or, when aggregated with other
      items
      or indebtedness or liability, does not exceed $1,000,000.

     

    Section
      10.04                                  STATEMENTS
      REGARDING OWNERSHIP.  Borrower agrees to submit or cause to be
      submitted to Lender within ten (10) days after request by Lender, a sworn,
      notarized certificate, signed by an authorized (i) individual who is
      Borrower or one of the individuals comprising Borrower, (ii) member of
      Borrower, (iii) partner of Borrower or (iv) officer of Borrower (or an
      officer of Borrower’s general partner), as the case may be, stating whether (x)
      any part of the Property, or any interest in the Property, has been conveyed,
      transferred, assigned, encumbered, or sold, and if so, to whom (excluding
      Leases); (y) any conveyance, transfer, pledge or encumbrance of any direct
      interest in Borrower has been made by Borrower and if so,  to whom; or
      (z) there has been any change in the direct individual(s) comprising
      Borrower or in the direct partners, members, stockholders or beneficiaries
      in
      Borrower from those on the Execution Date, and if so, a description of such
      change or changes.

     

    Article
      XI.                                

     

    


     

    DEFAULTS
      AND REMEDIES

     

    Section
      11.01                                  EVENTS
      OF DEFAULT.  Any of the following shall be deemed to be a material
      breach of Borrower’s covenants in this Mortgage and shall constitute a default
      (“Event of Default”):

     

    (a)  The
      failure of Borrower to pay any installment of principal, interest or principal
      and interest, any required escrow deposit or any other sum required to be paid
      under any Loan Document, whether to Lender or otherwise, within seven (7) days
      after Lender shall have given Borrower written notice of the due date of such
      payment (provided, however, such written notice shall not be required more
      than
      once in any period of twelve (12) consecutive months, and after such written
      notice shall have been given once during any such 12-month period, Borrower
      shall be in default hereunder if such sums remain unpaid for more than seven
      (7)
      days after the due date thereof).

     

    (b)  The
      failure of Borrower to perform or observe any other term, provision, covenant,
      condition or agreement under any Loan Document, for a period of more than thirty
      (30) days after receipt of notice of such failure (or, if applicable, for such
      shorter period as is expressly provided in such documents prior to the
      occurrence of an Event of Default); provided, however, if such failure cannot
      be
      cured within such 30-day period (and if such default is not a monetary default),
      Borrower shall have such additional period of time as shall be reasonably
      necessary to effect the cure thereof provided Borrower promptly institutes
      the
      appropriate curative action within such 30-day period and diligently pursues
      same, but in no event more than sixty (60) days (including the original 30-day
      period) in the aggregate.

     

    (c)  The
      filing by Borrower or one of the Liable Parties (an “Insolvent
      Entity”) of a voluntary petition or application for relief in
      bankruptcy, the filing against an Insolvent Entity of an involuntary petition
      or
      application for relief in bankruptcy which is not dismissed within one hundred
      twenty (120) days, or an Insolvent Entity’s adjudication as a bankrupt or
      insolvent, or the filing by an Insolvent Entity of any petition, application
      for
      relief or answer seeking or acquiescing in any reorganization, arrangement,
      composition, readjustment, liquidation, dissolution or similar relief for itself
      under any present or future federal, state or other statute, law, code or
      regulation relating to bankruptcy, insolvency or other relief for debtors,
      or an
      Insolvent Entity’s seeking or consenting to or acquiescing in the appointment of
      any trustee, custodian, conservator, receiver or liquidator of an Insolvent
      Entity or of all or any substantial part of the Property or of any or all of
      the
      Rents and Profits, or the making by an Insolvent Entity of any general
      assignment for the benefit of creditors, or the admission in writing by an
      Insolvent Entity of its inability to pay its debts generally as they become
      due;

     

    (d)  If
      any
      warranty, representation, certification, financial statement or other
      information made or furnished at any time pursuant to the terms of the Loan
      Documents by Borrower, or by any person or entity otherwise liable under any
      Loan Document shall be materially false or misleading (provided, however, if
      Borrower or such person or entity, as applicable, in good faith believed such
      warranty, representation, certification, financial statement or other
      information to be true in all material respects when made, then, to the extent
      any such breach of warranty, representation, certification, financial statement
      or other information is curable, Borrower shall have ten (10) days after receipt
      of written notice from Lender that such warranty, representation, certification,
      financial statement or other information is materially false or misleading
      in
      which to take and complete such action as is required so that such warranty,
      representation, certification, financial statement or other information is
      true
      and correct in all material respects as of the end of such 10-day period);
      or

     

    (e)  If
      Borrower shall suffer or permit the Property, or any part of the Property,
      to be
      used in a manner which would reasonably be expected to, if continued, (1) impair
      Borrower’s title to the Property, (2) create rights of adverse use or
      possession, or (3) constitute an implied dedication of any part of the Property;
      provided, however, that no event described in this subsection (e) shall be
      deemed an Event of Default until the expiration of the cure period set forth
      in
      Subsection 11.01(b) above, unless prior to the expiration of the cure period
      such event (x) impairs Borrower’s title to the Property, (y) creates rights of
      adverse use or possession, or (z) constitutes an implied dedication of any
      part
      of the Property.

     

    (f)  If
      Borrower shall default under the Indemnity Agreement.

     

    (g)  The
      occurrence of an Event of Default under any of the Other Mortgages.

     

    (h)           The
      occurrence of an Event of Default under the Loan Facility
      Agreement.

     

    Section
      11.02                                  REMEDIES
      UPON DEFAULT.  Upon the happening of an Event of Default, the
      Secured Indebtedness shall, at the option of Lender, become immediately due
      and
      payable, without further notice or demand, and Lender may undertake any one
      or
      more of the following remedies:

     

    (a)  Foreclosure.  Institute
      a foreclosure action in accordance with the law of the State of Minnesota,
      or
      take any other action as may be allowed, at law or in equity, for the
      enforcement of the Loan Documents and realization on the Property or any other
      security afforded by the Loan Documents.  In the case of a judicial
      proceeding, Lender may proceed to final judgment and execution for the amount
      of
      the Secured Indebtedness owed as of the date of the judgment, together with
      all
      costs of suit, reasonable attorneys’ fees and interest on the judgment at the
      maximum rate permitted by law from the date of the judgment until
      paid.  If Lender is the purchaser at the foreclosure sale of the
      Property, the foreclosure sale price shall be applied against the total amount
      due Lender; and/or

     

    (b)  Power
      of Sale.  Institute a non-judicial foreclosure proceeding in
      compliance with applicable law in effect on the date foreclosure is commenced
      for the Lender to sell the Property either as a whole or in separate parcels
      as
      Lender may determine at public sale or sales to the highest bidder for cash,
      in
      order to pay the Secured Indebtedness.  If the Property is sold as
      separate parcels, Lender may direct the order in which the parcels are sold.
      Lender shall deliver to the purchaser a deed or deeds without covenant or
      warranty, express or implied. Lender may postpone the sale of all or any portion
      of the Property by public announcement at the time and place of sale, and from
      time to time may further postpone the sale by public announcement in accordance
      with applicable law; and/or

     

    (c)  Entry.  Enter
      into possession of the Property, lease the Improvements, collect all Rents
      and
      Profits and, after deducting all costs of collection and administration
      expenses, apply the remaining Rents and Profits in such order and amounts as
      Lender, in Lender’s sole discretion, may elect to the payment of Impositions,
      operating costs, costs of maintenance, restoration and repairs, Premiums and
      other charges, including, but not limited to, costs of leasing the Property
      and
      reasonable fees and costs of counsel and receivers, and in reduction of the
      Secured Indebtedness; and/or

     

    (d)  Receivership.  Have
      a receiver appointed to enter into possession of the Property, lease the
      Property, collect the Rents and Profits  and apply them as the
      appropriate court may direct.  Lender shall be entitled to the
      appointment of a receiver without the necessity of proving either the inadequacy
      of the security or the insolvency of Borrower or any of the Liable
      Parties.  Borrower and Liable Parties shall be deemed to have
      consented to the appointment of the receiver.  The collection or
      receipt of any of the Rents and Profits by Lender or any receiver shall not
      affect or cure any Event of Default.

     

    Section
      11.03                                  [INTENTIONALLY
      DELETED]

     

    Section
      11.04                                  APPLICATION
      OF PROCEEDS OF SALE.  In the event of a sale of the Property
      pursuant to Section 11.02 of this Mortgage, to the extent permitted by law,
      the
      Lender shall determine in its sole discretion the order in which the proceeds
      from the sale shall be applied to the payment of the Secured Indebtedness,
      including without limitation, the expenses of the sale and of all proceedings
      in
      connection with the sale, and reasonable attorneys' fees and expenses; the
      reimbursement of Lender for all sums expended or incurred by Lender under the
      terms of this Mortgage or to establish, preserve or enforce this Mortgage or
      to
      collect the Secured Indebtedness (including, without limitation, reasonable
      attorneys' fees as provided herein or in the Note); Impositions, Premiums,
      liens, and other charges and expenses; the outstanding principal balance of
      the
      Secured Indebtedness; any accrued interest; any Prepayment Fee; any other unpaid
      portion of the Secured Indebtedness; and any other amounts owed under any of
      the
      Loan Documents.

     

    Section
      11.05                                  WAIVER
      OF JURY TRIAL.  To the fullest extent permitted by law, Borrower
      and Lender HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY in any action,
      proceeding and/or hearing on any matter whatsoever arising out of, or in any
      way
      connected with, the Note, this Mortgage or any of the Loan Documents, or the
      enforcement of any remedy under any law, statute, or
      regulation.  Neither party will seek to consolidate any such action in
      which a jury has been waived, with any other action in which a jury trial cannot
      or has not been waived.  Each party has received the advice of counsel
      with respect to this waiver.

     

    Section
      11.06                                  LENDER’S
      RIGHT TO PERFORM BORROWER’S OBLIGATIONS.  Borrower agrees that, if
      Borrower fails to perform any act or to pay any money which Borrower is required
      to perform or pay under the Loan Documents, Lender may make the payment or
      perform the act at the cost and expense of Borrower and in Borrower’s name or in
      its own name.  Any money paid by Lender under this Section 11.06 shall
      be reimbursed to Lender in accordance with Section 11.07.

     

    Section
      11.07                                  LENDER
      REIMBURSEMENT.  All payments made, or funds expended or advanced
      by Lender pursuant to the provisions of Section 11.06 or otherwise in any Loan
      Document, shall (1) become a part of the Secured Indebtedness, (2) bear interest
      at the Interest Rate (as defined in the Note) from the date such payments are
      made or funds expended or advanced, (3) become due and payable by Borrower
      upon
      demand by Lender, and (4) bear interest at the Default Rate (as defined in
      the
      Note) from the date of such demand.  Borrower shall reimburse Lender
      within ten (10) days after receipt of written demand for such
      amounts.

     

    Section
      11.08                                  FEES
      AND EXPENSES.  If Lender becomes a party (by intervention or
      otherwise) to any action or proceeding affecting, directly or indirectly,
      Borrower, the Property or the title thereto or Lender’s interest under this
      Mortgage, or employs an attorney to collect any of the Secured Indebtedness
      or
      to enforce performance of the obligations, covenants and agreements of the
      Loan
      Documents, Borrower shall reimburse Lender in accordance with Section 11.07
      for
      all reasonable expenses, costs, charges and legal fees incurred by Lender
      (including, without limitation, the fees and expenses of experts and
      consultants), whether or not suit is commenced.

     

    Section
      11.09                                  WAIVER
      OF CONSEQUENTIAL DAMAGES.  Borrower covenants and agrees that in
      no event shall Lender be liable for consequential damages, and to the fullest
      extent permitted by law, Borrower expressly waives all existing and future
      claims that it may have against Lender for consequential damages.

     

    Article
      XII.                                

     

    


     

    BORROWER
      AGREEMENTS AND FURTHER ASSURANCES

     

    Section
      12.01                                  PARTICIPATION
      AND SALE OF LOAN.  Lender may sell, transfer or assign its entire
      interest or one or more participation interests in the Loan and the Loan
      Documents pursuant to the terms and condition set forth in Section 7 of the
      Loan
      Facility Agreement.

     

    Section
      12.02                                  REPLACEMENT
      OF NOTE.  Upon notice to Borrower of the loss, theft, destruction
      or mutilation of the Note and receipt by Borrower of Lender’s sworn affidavit
      confirming same, Borrower will execute and deliver, in lieu of the original
      Note, a replacement note, identical in form and substance to the Note and dated
      as of the Execution Date.  Upon the execution and delivery of the
      replacement note, all references in any of the Loan Documents to the Note shall
      refer to the replacement note.

     

    Section
      12.03                                  BORROWER’S
      ESTOPPEL.  Within ten (10) business days after a request by Lender
      (but no more frequently than once in any particular calendar year, unless the
      same is required in connection with a participation of the Loan or an assignment
      of the Note), Borrower shall furnish an acknowledged written statement in form
      reasonably satisfactory to Lender (i) setting forth the amount of the
      Secured Indebtedness, (ii) stating to Borrower’s knowledge, that either no
      offsets or defenses exist against the Secured Indebtedness, or if any offsets
      or
      defenses are alleged to exist, their nature and extent, (iii)  whether
      to Borrower’s knowledge, any default then exists under the Loan Documents or any
      event has occurred and is continuing, which, with the lapse of time, the giving
      of notice, or both, would constitute such a default, and (iv) any other matters
      as Lender may reasonably request.

     

    Section
      12.04                                  FURTHER
      ASSURANCES.  Borrower shall, without expense to Lender, execute,
      acknowledge and deliver all further acts, deeds, conveyances, mortgages, deeds
      of trust, assignments, security agreements, and financing statements as Lender
      shall from time to time reasonably require, to assure, convey, assign, transfer
      and confirm unto Lender and the Property and rights conveyed or assigned by
      this
      Mortgage or which Borrower may become bound to convey or assign to Lender and,
      or for carrying out the intention or facilitating the performance of the terms
      of this Mortgage or any of the other Loan Documents, or for filing, refiling,
      registering, reregistering, recording or re-recording this
      Mortgage.  If Borrower fails to comply with the terms of this Section
      within ten (10) days after receiving Lender’s initial written request for such
      compliance, Lender may, at Borrower’s expense, perform Borrower’s obligations
      for and in the name of Borrower, and Borrower hereby irrevocably appoints Lender
      as its attorney-in-fact to do so.  The appointment of Lender as
      attorney-in-fact is coupled with an interest.

     

    Section
      12.05                                  SUBROGATION.  Lender
      shall be subrogated to the lien of any and all encumbrances against the Property
      paid out of the proceeds of the Loan and to all of the rights of the recipient
      of such payment.

     

    Article
      XIII.                                

     

    


     

    SECURITY
      AGREEMENT

     

    Section
      13.01                                  SECURITY
      AGREEMENT.

     

    THIS
      MORTGAGE CREATES A LIEN ON THE PROPERTY. IN ADDITION, TO THE EXTENT THE PROPERTY
      IS PERSONAL PROPERTY OR FIXTURES UNDER APPLICABLE LAW, THIS MORTGAGE CONSTITUTES
      A SECURITY AGREEMENT UNDER THE MINNESOTA UNIFORM COMMERCIAL CODE (THE
“U.C.C.”) AND ANY OTHER APPLICABLE LAW AND IS FILED AS A
      FIXTURE FILING.  UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, LENDER
      MAY, AT ITS OPTION, PURSUE ANY AND ALL RIGHTS AND REMEDIES AVAILABLE TO A
      SECURED PARTY WITH RESPECT TO ANY PORTION OF THE PROPERTY, AND/OR LENDER MAY,
      AT
      ITS OPTION, PROCEED AS TO ALL OR ANY PART OF THE PROPERTY IN ACCORDANCE WITH
      LENDER’S RIGHTS AND REMEDIES WITH RESPECT TO THE LIEN CREATED BY THIS
      MORTGAGE.  THIS FINANCING STATEMENT SHALL REMAIN IN EFFECT AS A
      FIXTURE FILING UNTIL THIS MORTGAGE IS RELEASED OR SATISFIED OF
      RECORD.

    


    Section
      13.02                                  REPRESENTATIONS
      AND WARRANTIES.

     

    Borrower
      warrants, represents and covenants, as of the date hereof and at all times
      hereafter, as follows:

    


    (a)  Borrower
      owns the Personal Property free from any lien, security interest, encumbrance
      or
      adverse claim, except for the Permitted Exceptions, and as otherwise expressly
      approved by Lender in writing.  Borrower will notify Lender of, and
      will protect, defend and indemnify Lender against, all claims and demands of
      all
      persons at any time claiming any rights or interest in the Personal Property
      except for the matters aforesaid.

     

    (b)  The
      Personal Property has not been used and shall not be used or bought for
      personal, family, or household purposes, but shall be bought and used solely
      for
      the purpose of carrying on Borrower’s business.

     

    (c)  Borrower
      will not remove the Personal Property without the prior written consent of
      Lender, except the items of Personal Property which are consumed or worn out in
      ordinary usage shall be promptly replaced by Borrower with other Personal
      Property of value equal to or greater than the value of the replaced Personal
      Property.

     

    (d)  Borrower
      authorizes Lender to file Uniform Commercial Code Financing Statements in any
      applicable recording or filing office covering any Property or collateral
      described in this Mortgage or in any of the other Loan
      Documents.  Borrower is a Delaware limited liability company whose
      organizational identification number is 4425053.

     

    Section
      13.03                                  CHARACTERIZATION
      OF PROPERTY.  The grant of a security interest to Lender in this
      Mortgage shall not be construed to limit or impair the lien of this Mortgage
      or
      the rights of Lender with respect to any property which is real property or
      which the parties have agreed to treat as real property.  To the
      fullest extent permitted by law, everything used in connection with the
      production of Rents and Profits is, and at all times and for all purposes and
      in
      all proceedings, both legal and equitable, shall be regarded as real property,
      irrespective of whether or not the same is physically attached to the Land
      and/or Improvements.

     

    Section
      13.04                                  PROTECTION
      AGAINST PURCHASE MONEY SECURITY INTERESTS.  It is understood and
      agreed that in order to protect Lender from the effect of U.C.C. Section 9-334,
      as amended from time to time and as enacted in the State of Minnesota, in the
      event that Borrower intends to purchase any goods which may become fixtures
      attached to the Property, or any part of the Property, and such goods will
      be
      subject to a purchase money security interest held by a seller or any other
      party:

     

    (a)  Before
      executing any security agreement or other document evidencing or perfecting
      the
      security interest, Borrower shall obtain the prior written approval of
      Lender.  All requests for such written approval shall be in writing
      and contain the following information: (i) a description of the fixtures; (ii)
      the address at which the fixtures will be located; and (iii) the name and
      address of the proposed holder and proposed amount of the security
      interest.

     

    (b)  Borrower
      shall pay all sums and perform all obligations secured by the security
      agreement.  A default by  Borrower under the security
      agreement which continues beyond any notice and/or cure period applicable
      thereto shall constitute a default under this Mortgage.  If Borrower
      fails to make any payment on an obligation secured by a purchase money security
      interest in the Personal Property or any fixtures and such failure continues
      beyond any notice and/or cure period applicable thereto, Lender, at its option,
      may pay the secured amount and Lender shall be subrogated to the rights of
      the
      holder of the purchase money security interest.

     

    (c)  Lender
      shall have the right to acquire by assignment from the holder of the security
      interest for the Personal Property or fixtures, all contract rights, accounts
      receivable, negotiable or non-negotiable instruments, or other evidence of
      indebtedness and to enforce the security interest as assignee.

     

    (d)  The
      provisions of subparagraphs (b) and (c) of this Section 13.04 shall not apply
      if
      the goods which may become fixtures are of at least equivalent value and quality
      as the Personal Property being replaced and if the rights of the party holding
      the security interest are expressly subordinated to the lien and security
      interest of this Mortgage in a manner satisfactory to Lender.

     

    Article
      XIV.                                

     

    


     

    MISCELLANEOUS
      COVENANTS

     

    Section
      14.01                                  NO
      WAIVER.  No single or partial exercise by Lender, or delay or
      omission in the exercise by Lender, of any right or remedy under the Loan
      Documents shall preclude, waive or limit the exercise of any other right or
      remedy.  Lender shall at all times have the right to proceed against
      any portion of, or interest in, the Property without waiving any other rights
      or
      remedies with respect to any other portion of the Property.  No right
      or remedy under any of the Loan Documents is intended to be exclusive of any
      other right or remedy  but shall be cumulative and, subject to
      applicable law, may be exercised concurrently with or independently
      from  any other right and remedy under any of the Loan Documents or
      under applicable law.

     

    Section
      14.02                                  NOTICES.  All
      notices, demands and requests given or required to be given by, pursuant to,
      or
      relating to, this Mortgage shall be in writing.  All
      notices  shall be deemed to have been properly given if mailed by
      United States registered or certified mail, with return receipt requested,
      postage prepaid, or by United States Express Mail or other comparable overnight
      courier service to the parties at the addresses set forth in the Defined Terms
      (or at such other addresses as shall be given in writing by any party to the
      others) and shall be deemed complete upon receipt or refusal to accept delivery
      as indicated in the return receipt or in the receipt of such United States
      Express Mail or courier service.  

     

    Section
      14.03                                  HEIRS
      AND ASSIGNS; TERMINOLOGY.

     

    (a)  This
      Mortgage applies to, inures to the benefit of, and binds Lender and Borrower,
      and their heirs, legatees, devisees, administrators, executors, successors
      and
      assigns.  The term “Lender” shall include Lender as
      defined in the Defined Terms and including any successor direct holder of all
      or
      any portion of the Loan from time to time.  The term
“Borrower” shall include both the original Borrower and any
      subsequent owner or owners of any of the Property.  The term
“Lender” shall include both the original Lender and any
      subsequent holder or holders of the Note.  The term “Liable
      Parties” shall include both the original Liable Parties and any
      subsequent or substituted Liable Parties.

     

    (b)  In
      this
      Mortgage, whenever the context so requires, the masculine gender includes the
      feminine and/or neuter, and the singular number includes the
      plural.

     

    Section
      14.04                                  SEVERABILITY.  If
      any provision of this Mortgage should be held unenforceable or void, then that
      provision shall be separated from the remaining provisions and shall not affect
      the validity of this Mortgage except that if the unenforceable or void provision
      relates to the payment of any monetary sum, then, Lender may, at its option,
      declare the Secured Indebtedness immediately due and payable, but no Prepayment
      Fee or other premium or penalty shall be due in connection
      therewith.

     

    Section
      14.05                                  APPLICABLE
      LAW.  This Mortgage shall be construed and enforced in accordance
      with the laws of the State of Minnesota (the
“State”).

     

    Section
      14.06                                  CAPTIONS.  The
      captions are inserted only as a matter of convenience and for reference, and
      in
      no way define, limit, or describe the scope or intent of any provisions of
      this
      Mortgage.

     

    Section
      14.07                                  TIME
      OF THE ESSENCE.  Time shall be of the essence with respect to all
      of Borrower’s obligations under this Mortgage and the other Loan
      Documents.

     

    Section
      14.08                                  NO
      MERGER.  In the event that Lender should become the owner of the
      Property, there shall be no merger of the estate created by this Mortgage with
      the fee estate in the Property.

     

    Section
      14.09                                  NO
      MODIFICATIONS.  This Mortgage may not be changed, amended or
      modified, except in a writing expressly intended for such purpose and executed
      by Borrower and Lender.

     

    Article
      XV.                                

     

    NON-UNIFORM
      COVENANTS

     

    Section
      15.01                                  Cross
      Default and Cross Collateralization.  The Note, the Other Notes
      and the other Loan Documents and the Loan Facility
      Agreement are secured by, among other things, this
      Mortgage and the Other Mortgages (except as specifically set forth in certain
      Other Mortgages).  The Loan may be accelerated in accordance with the
      provisions of in any of the Loan Documents and an Event of Default shall occur
      under this Mortgage upon the occurrence of an Event of Default under any of
      the
      Other Mortgages or the Loan Facility Agreement.  In consequence of an
      Event of Default, Lender may accelerate the Loan and foreclose on or under
      any
      one or more of this Mortgage or the Other Mortgages or resort to any one or
      more
      of its other rights and remedies under the Other Mortgages or otherwise pursuant
      to applicable law.  Except as specifically set forth in certain Other
      Mortgages, all of the properties of all kinds conveyed
      and/or mortgaged by the Other Mortgages are security for the Loan without
      allocation of any one or more of the parcels or portions thereof to any portion
      of the Loan less than the whole amount thereof, except for the sole purpose
      of
      paying mortgage registry tax under Minn. Stat. § 287.05.  After
      application of proceeds to the Note and expenses and legal fees incident to
      the
      Note, Lender may allocate any excess proceeds received by Lender upon the
      exercise of its remedies and rights, including foreclosure, to the Loan, as
      Lender in its sole discretion may determine to be advisable.  Subject
      to the requirements of applicable law, Lender may proceed, at the same or
      different times, to foreclose on or under any one or more of the Mortgage or
      the
      Other Mortgages by any proceedings appropriate in the state where any of the
      land lies, including, private sale, trustee’s sale, or exercise of power of sale
      if permitted, and no event of enforcement taking place in any state, including
      without limiting the generality of the foregoing, any pending judicial
      foreclosure, judgment or decree of foreclosure, judicial foreclosure sale,
      rents
      received, possession taken, deficiency judgment or decrees, or judgment taken
      on
      the Note, shall in any way stay, preclude or bar enforcement of any of the
      Loan
      Documents or the Other Mortgages in this state or any other state, and Lender
      may pursue any or all of its remedies to the maximum extent permitted by
      applicable law until all obligations now or hereafter secured by any or all
      of
      the Loan Documents or the Other Mortgages have been paid or discharged in
      full.  Additionally, subject to the requirements of applicable law,
      and without limitation of any other provision of this Mortgage, if this Mortgage
      is foreclosed and sale is made of the Property (or any part thereof which
      remains subject to this Mortgage) pursuant to foreclosure or other proceedings
      or actions, and if the proceeds of such sale (after application of such proceeds
      as provided elsewhere in this Mortgage and after deducting all accrued general
      and special taxes and assessments) are not sufficient to pay the total amount
      then owing under the Loan Documents (herein sometimes collectively referred to
      as the “Balance Owed”), then the Loan shall not be satisfied to
      the extent of the deficiency in such proceeds to pay the Balance Owed, but
      such
      Loan shall continue in existence and continue to be evidenced by the Note (to
      the extent the Note is not paid in full from the proceeds of such sale) and,
      to
      the extent the Note is not paid in full from the proceeds of such sale, shall
      continue to be secured by all of the Other Mortgages.  Subject to the
      requirements of applicable law, if Lender shall acquire the Property as a result
      of any such foreclosure sale (whether by bidding all or any portion of the
      Loan
      or otherwise), the proceeds of such sale shall not be deemed to include (and
      Borrower shall not be entitled to any benefit or credit on account of) proceeds
      of any subsequent sale of the Property by Lender, its successors and
      assigns.  Without limitation of any other provision hereof, Borrower
      further agrees that if any of the Other Mortgages are foreclosed and sale is
      made of any of the property subject to any Other Mortgages, and if the proceeds
      of such sale (after application of such proceeds as provided for in the Other
      Mortgages and after deducting all accrued and general and special taxes and
      assessments) are not sufficient to pay the Loan and any amounts then owing
      under
      the Loan Documents, thereby creating a Balance Owed, then the Loan then
      outstanding shall not be satisfied to the extent of the deficiency in such
      proceeds to pay such Balance Owed, but the Loan shall continue in existence
      and
      shall continue to be secured by this Mortgage (to the extent the Note is not
      paid in full from the proceeds of such sale) and all of the Other Mortgages
      existing immediately prior to any such foreclosure, except such Other Mortgages
      foreclosed upon.  No release of personal liability of any person
      whatsoever and no release of any portion of the property now or hereafter
      subject to the lien of this Mortgage or any of the Other Mortgages shall have
      any effect whatsoever by way of impairment or disturbance of the lien or
      priority of any of this Mortgage or any of the Other Mortgages or the unreleased
      properties encumbered by any of the Other Mortgages.  To the extent
      permitted by applicable law, Borrower hereby waives the benefit of all
      appraisement, valuation, stay, extension, reinstatement and redemption laws
      now
      or hereafter in force and all rights of marshalling in the event of any sale
      hereunder of the Property or any part thereof or any interest
      therein.  Further, Borrower hereby expressly waives any and all rights
      of redemption from sale under any order or decree of foreclosure of this
      Mortgage or the Other Mortgages on behalf of Borrower, and on behalf of each
      and
      every person acquiring any interest in or title to the Property subsequent
      to
      the date of this Mortgage and on behalf of all persons to the extent permitted
      by applicable law.

     

    Section
      15.02                                  RIGHT
      OF SUBSTITUTION.  Borrower shall have the right to substitute
      different individually subdivided properties for all but not less than all
      of
      the Real Property pursuant to terms and conditions of Section 3.3 of the Loan
      Facility Agreement.

     

    Section
      15.03                                  PARTIAL
      RELEASE.  Borrower shall have the right to release the Real
      Property from the lien of Mortgage pursuant to the terms and conditions of
      Section 3.4 of the Loan Facility Agreement.

     

    Section
      15.04                                  STATE
      SPECIFIC PROVISIONS.  A Minnesota rider is attached hereto and
      made a part hereof as Exhibit F (the “Minnesota
      Rider”).  Notwithstanding anything contained in this
      Mortgage, in the event of a conflict between the provisions of the Minnesota
      Rider and any other part of this Mortgage, the terms and provisions of the
      Minnesota Rider shall modify and supersede and shall govern and control over
      such other conflicting portion of this Mortgage.

     

    


    [Remainder
      of Page Intentionally Left Blank;

    Signature
      Page Follows]

    IN
      WITNESS WHEREOF,
      Borrower has executed this Mortgage as of the Execution Date.

    


     

    BORROWER:

     

    HINES
      REIT MINNEAPOLIS INDUSTRIAL LLC, a Delaware liability
      company

     

    By:           

    Name:                      

    Title:                      

    


    


    


    


    STATE
      OF
      TEXAS                                                      )

    )

    COUNTY
      OF
      HARRIS                                                      )

    


    The
      foregoing instrument was
      acknowledged before me this __ day of December, 2007, by _____________________,
      the _____________ of Hines REIT Minneapolis Industrial LLC, a Delaware limited
      liability company, on behalf of said limited liability company.

    


    ___________________________________

    [Notary
      Seal]                                                                                                Notary                      Public

    


    My
      Commission Expires:
      __________________________

    


    


    


    


    EXHIBIT
      “A”

     

    PROPERTY
      DESCRIPTION

     

    10900
      Hampshire Avenue South, Bloomington, Minnesota

     

    Parcel
      A:
      Lot 1, Block 1, Noble Addition, Hennepin County, Minnesota.

    


    Torrens
      Property

    Torrens
      Certificate No. 1212835

    


    Parcel
      B:
      Non-exclusive easements for ponding and conservation purposes over parts of
      Outlot A, Noble Addition, as contained in the Drainage Pond/Wetland Agreement
      and Easement dated February 9, 1998, recorded February 20, 1998 in the office
      of
      the Hennepin County Registrar of Titles as Doc. No. 2889549.

    


    


    7600-7688
      Executive Drive, Eden Prairie, Minnesota

    


    Lot
      1,
      Block 1, Edenvale Executive Center, Hennepin County, Minnesota.

    


    (Certificate
      of Title No. 1212836)

    


    


    2200
      University Avenue West, St. Paul, Minnesota

    


    Parcel
      1:

    


    Lots
      88,
      89, 90 and 91, and the Southeasterly 20.00 feet of vacated Pillsbury Street
      lying Southwesterly of the Northwesterly extension of the Northeasterly line
      of
      said Lot 88, and lying Northeasterly of the Northwesterly extension of the
      Southwesterly line of said Lot 88, all being in "Hewitts Out Lots First
      Division", according to the recorded plat thereof, Ramsey County, Minnesota,
      excepting therefrom the Southwesterly 27.00 feet of the Southeasterly 279.00
      feet.

    


    Parcel
      2:

    


    Lot
      87,
      "Hewitts Out Lots First Division", according to the recorded plat thereof,
      together with those parts of vacated Pillsbury Street and Myrtle Avenue accruing
      thereto by reason of the vacation thereof.

    


    Parcel
      3:

    


    Lot
      86 of
      "Hewitts Out Lots First Division", according to the plat thereof on file and
      of
      record in the Office of the Register of Deeds of Ramsey County, together with
      that part of vacated Myrtle Avenue accruing thereto by reason of the vacation
      thereof.

    


    Parcel
      4:

    


    Lot
      85,
      "Hewitts Out Lots First Division", according to the recorded plat thereof,
      together with that part of vacated Myrtle Avenue accruing thereto by reason
      of
      the vacation thereof.

    


    Parcel
      5:

    


    That
      part
      of vacated Myrtle Avenue accruing to Lot 84, "Hewitts Out Lots First Division",
      according to the recorded plat thereof, by reason of the vacation
      thereof.

    


    Parcel
      6:

    


    That
      part
      of vacated Pillsbury Street accruing to Lot 88 except the Southeasterly 20.00
      feet thereof lying Southwesterly of the Northwesterly extension of the
      Northeasterly line of said Lot 88, and lying Northeasterly of the Northwesterly
      extension of the Southwesterly line of said Lot 88, located in "Hewitts Out
      Lots
      First Division", according to the recorded plat thereof, Ramsey County,
      Minnesota.

    


    Parcel
      7:

    


    Subject
      to and together with the benefits and burdens of Mutual Easement and Operating
      Agreement dated March 9, 1994, filed of record March 22, 1994 as Document No.
      2794418.

    


    


    5900
      Golden Hills Drive, Golden Valley, Minnesota

    


    PARCEL
      1:

    Lot
      2,
      Block 1, Golden Hills West P.U.D. No. 78, according to the recorded plat
      thereof, Hennepin County, Minnesota.

    


    (Torrens
      property: Part of certificate of title number 1212838).

    


    PARCEL
      2:

    Non-exclusive
      easement for storm water runoff and signage purposes over part of Lot 1, Block
      2, Golden Hills West 3rd Addition, Hennepin County, Minnesota, as contained
      and
      described in the instrument recorded as Document No. 6771060 in the office
      of
      the County Recorder and recorded as Document No. 2835274 in the office of the
      Registrar of Titles, Hennepin County, Minnesota.

    


    PARCEL
      3:

    Non-exclusive
      easement to connect to and use the storm water retention pond located on Lot
      1,
      Block 2, Golden Hills West 3rd Addition, Hennepin County, Minnesota, as
      contained and described in the Pond Easement Agreement recorded as Document
      No.
      6995577 in the office of the County Recorder and recorded as Document No.
      3077426 in the office of the Registrar of Titles, Hennepin County,
      Minnesota.

    


    


    6100
      Golden Hills Drive, Golden Valley, Minnesota

    


    PARCEL
      1:

    Lot
      1,
      Block 1, Golden Hills West P.U.D. No. 78, according to the recorded plat
      thereof, Hennepin County, Minnesota.

    


    (abstract
      and torrens property, torrens certificate of title no. 1212700)

    


    PARCEL
      2:

    Non-exclusive
      easement to connect to and use the storm water retention pond located on Lot
      1,
      Block 2, Golden Hills West 3rd Addition, Hennepin County, Minnesota, as
      contained and described in the Pond Easement Agreement recorded as Document
      No.
      6995577 in the office of the County Recorder and recorded as Document No.
      3077426 in the office of the Registrar of Titles, Hennepin County,
      Minnesota.

    


    


    6105
      Golden Hills Drive, Golden Valley, Minnesota

    


    PARCEL
      1:

    Lot
      1,
      Block 2, Golden Hills West 4th Addition, according to the recorded plat thereof,
      Hennepin County, Minnesota.

    


    PARCEL
      2:

    Non-exclusive
      easement to connect to and use the storm water retention pond located on Lot
      1,
      Block 2, Golden Hills West 3rd Addition, Hennepin County, Minnesota, as
      contained in the Pond Easement Agreement recorded as Document No. 6995577 in
      the
      office of the County Recorder and recorded as Document No. 3077426 in the office
      of the Registrar of Titles, Hennepin County, Minnesota.

    


    (Abstract
      property).

    


    


    800
      South Fifth Street, Hopkins, Minnesota

    


    PARCEL
      1:

    Lots
      5,
      6, 7, 8, 9, 10, 11, 14, 15, and 16, Block 52, West Minneapolis, except that
      part
      of said Lots 5, 6, 7, 8, 9, 14, 15, and 16 embraced within the plat of Supervalu
      Second Addition;

    


    Lot
      12,
      Block 52, West Minneapolis, except that part of said Lot 12 lying Southwesterly
      of Line A described below;

    


    Lot
      13,
      Block 52, West Minneapolis, except that part of said Lot 13 embraced within
      the
      plat of Supervalu Second Addition, and further excepting that part of said
      Lot
      13 lying southwesterly of Line A described below and southeasterly of the
      following described line: Beginning at the point of termination of Line A;
      thence southwesterly along a curve parallel with and 30.00 feet southeasterly
      of
      the curved southeasterly line of Supervalu Second Addition to the southerly
      line
      of said Lot 13 and there terminating;

    


    That
      part
      of the vacated alley in said Block 52 lying southerly of the plat of Supervalu
      Second Addition and northerly of Line A described below;

    


    That
      part
      of the west half of vacated 9th Avenue lying northerly of the extension across
      it of the south line of said Block 52 and southerly of the plat of Supervalu
      Second Addition;

    


    Line
      A:
      Commencing at the southeast corner of said Lot 12; thence North 89 degrees
      21
      minutes 26 seconds West, assumed bearing, along the south line of said Lot
      12 a
      distance of 82.65 feet to the actual point of beginning of the line to be
      described; thence northwesterly a distance of 65.25 feet along a tangential
      curve concave to the northeast having a radius of 89.50 feet and a central
      angle
      of 41 degrees 46 minutes 08 seconds; thence North 47 degrees 35 minutes 18
      seconds West, tangent to last described curve, a distance of 32.53 feet to
      the
      intersection with a line drawn parallel with and 30.00 feet southeasterly of
      the
      curved southeasterly line of Supervalu Second Addition and there
      terminating.

    


    Torrens
      property: Certificate of Title No. 1212837.

    


    PARCEL
      2:

    That
      part
      of Lot 7, Auditor's Subdivision Number 195, and the East 1/2 of vacated 9th
      Avenue adjacent to said Lot 7, which lies southerly and southeasterly of a
      line
      described as follows: Beginning at the intersection of the center line of 5th
      Street South and the center line of 7th Avenue as dedicated in the recorded
      plat
      of West Minneapolis; thence Westerly, along the westerly extension of the center
      line of said 5th Street South, a distance of 127.00 feet; thence Westerly a
      distance of 576.03 feet along a tangential curve concave to the South having
      a
      radius of 835.19 feet and a central angle of 39 degrees 31 minutes 00 seconds;
      thence Southwesterly, a distance of 255.54 feet, along a compound curve concave
      to the Southeast having a radius of 563.48 feet and a central angle of 25
      degrees 59 minutes 00 seconds; thence Southwesterly, tangent to the last
      described curve, a distance of 176.85 feet; thence Southwesterly a distance
      of
      209.78 feet, along a tangential curve concave to the Northwest having a radius
      of 183.69 feet and a central angle of 65 degrees 26 minutes 00 seconds and
      said
      line there terminating.

    


    Abstract
      property.

    


    


    10025
      Valley View Road, Bloomington, Minnesota

     

    Parcel
      1:

    


    Lot
      1,
      Block 1, Norseman Industrial Park 6th Addition, Hennepin County,
      Minnesota.

    


    Parcel
      2:

    


    Non-exclusive
      easements for drainage and driveway purposes over part of Lot 2, Block 1,
      Norseman Industrial Park 6th Addition, as contained and described in the
      Warranty Deed recorded as Document No. 5046619 in the office of the Hennepin
      County Recorder.

    


    (abstract
      property)

    


     

    EXHIBIT
      “B”

     

    LEASING
      GUIDELINES

     

    “Leasing
      Guidelines” shall mean the guidelines approved in writing by Borrower
      and Lender, from time to time, with respect to the leasing of the
      Property.  The following are the initial Leasing
      Guidelines:

     

    
      	
              (1)

            	
              The
                Lease does not deviate substantially from the standard lease
                form.

            


    

    


    
      	
              (2)

            	
              The
                leased space does not exceed 40,000 square feet of Net Rentable
                Area.

            


    

    


    
      	
              (3)

            	
              Effective
                Base Rent, Percentage Rent and the Tenant's obligations, if any,
                to pay
                CAM, taxes, insurance and other operating expenses collectively are
                at the
                then current prevailing market rates for similar tenant leases in
                similarly situated office
                buildings.

            


    

    


    
      	
              (4)

            	
              There
                exists no uncured Event of Default under the Loan
                Documents.

            


    

    EXHIBIT
      “C”

     

    REPORTS

     

    Property
      Condition Reports.

     

    
      	
              1.

            	
              Property
                Evaluation Report for 800 South 5th
                Street,
                Hopkins, Minnesota prepared by LM Consultants, Inc. dated September
                28,
                2007 and designated Project No.
                693.008.08.

            


    

     

    
      	
              2.

            	
              Property
                Evaluation Report for 2200 University Avenue West, Saint Paul, Minnesota
                prepared by LM Consultants, Inc. dated September 28, 2007 and designated
                Project No. 693.008.06.

            


    

     

    
      	
              3.

            	
              Property
                Evaluation Report for 6100 Golden Hills Drive, Golden Valley, Minnesota
                prepared by LM Consultants, Inc. dated September 25, 2007 and designated
                Project No. 693.008.03.

            


    

     

    
      	
              4.

            	
              Property
                Evaluation Report for 6105 Golden Hills Drive, Golden Valley, Minnesota
                prepared by LM Consultants, Inc. dated September 28, 2007 and designated
                Project No. 693.008.04.

            


    

     

    
      	
              5.

            	
              Property
                Evaluation Report for 5900 Golden Hills Drive, Golden Valley, Minnesota
                prepared by LM Consultants, Inc. dated September 28, 2007 and designated
                Project No. 693.008.02.

            


    

     

    
      	
              6.

            	
              Property
                Evaluation Report for 10900 Hampshire Avenue South, Bloomington,
                Minnesota
                prepared by LM Consultants, Inc. dated September 28, 2007 and designated
                Project No. 693.008.05.

            


    

     

    
      	
              7.

            	
              Property
                Evaluation Report for 10025 Valley View Road, Eden Prairie, Minnesota
                prepared by LM Consultants, Inc. dated September 28, 2007 and designated
                Project No. 693.008.07.

            


    

     

    
      	
              8.

            	
              Property
                Evaluation Report for 7600 and 7688 Executive Drive, Eden Prairie,
                Minnesota prepared by LM Consultants, Inc. dated September 28, 2007
                and
                designated Project No. 693.008.01.

            


    

     

    Environmental
      Reports.

     

    
      	
              1.

            	
              Phase
                I Environmental Site Assessment for 7650 Executive Drive, Eden Prairie,
                Minnesota prepared by Geomatrix Consultants, Inc. dated October 5,
                2007
                and designated Project No.
                013781.000.0.

            


    

     

    
      	
              2.

            	
              Phase
                I Environmental Site Assessment for 800 South 5th
                Street,
                Hopkins, Minnesota prepared by Geomatrix Consultants, Inc. dated
                October
                5, 2007 and designated Project No.
                013781.000.0.

            


    

     

    
      	
              3.

            	
              Phase
                I Environmental Site Assessment for 2200 University Avenue West,
                St. Paul,
                Minnesota prepared by Geomatrix Consultants, Inc. dated October 5,
                2007
                and designated Project No.
                013781.000.0.

            


    

     

    
      	
              4.

            	
              Phase
                I Environmental Site Assessment for 6100 Golden Hills Drive, Golden
                Valley, Minnesota prepared by Geomatrix Consultants, Inc. dated October
                5,
                2007 and designated Project No.
                013781.000.0.

            


    

     

    
      	
              5.

            	
              Phase
                I Environmental Site Assessment for 6105 Golden Hills Drive, Golden
                Valley, Minnesota prepared by Geomatrix Consultants, Inc. dated October
                5,
                2007 and designated Project No.
                013781.000.0.

            


    

     

    
      	
              6.

            	
              Phase
                I Environmental Site Assessment for 5900 Golden Hills Drive, Golden
                Valley, Minnesota prepared by Geomatrix Consultants, Inc. dated October
                5,
                2007 and designated Project No.
                013781.000.0.

            


    

     

    
      	
              7.

            	
              Phase
                I Environmental Site Assessment for 10900 Hampshire Avenue South,
                Bloomington, Minnesota prepared by Geomatrix Consultants, Inc. dated
                October 5, 2007 and designated Project No.
                013781.000.0.

            


    

     

    
      	
              8.

            	
              Phase
                I Environmental Site Assessment for 10025 Valley View Road, Eden
                Prairie,
                Minnesota prepared by Geomatrix Consultants, Inc. dated October 5,
                2007
                and designated Project No.
                013781.000.0.

            


    

     

    
      	
              9.

            	
              Phase
                I Environmental Site Assessment for 7600 Executive Drive, Eden Prairie,
                Minnesota prepared by Geomatrix Consultants, Inc. dated October 5,
                2007
                and designated Project No.
                013781.000.0.

            


    

     

    
      	
               

            	
              EXHIBIT
                “D”

            


    

     

    
      	
               

            	
              OTHER
                NOTES

            


    

     

    Promissory
      Note dated December 20, 2007 executed by Hines REIT 2200 Ross Avenue LP, a
      Delaware limited partnership, in favor of Lender.

     

    


     

    
      	
               

            	
              EXHIBIT
                “E”

            


    

     

    OTHER
      MORTGAGES

    


    Deed
      of
      Trust, Security Agreement and Fixture Filing dated December 20, 2007 by Hines
      REIT 2200 Ross Avenue LP, a Delaware limited partnership, to
      Lender.

    
      	
               

            	
              EXHIBIT
                “F”

            


    

     

    MINNESOTA
      RIDER

     

    1.       Drafting
      Information.  This instrument was drafted
      by:

    


    Rachel
      S.
      Brown, Esq.

    Katten
      Muchin Rosenman LLP

    525
      West
      Monroe Street

    Chicago,
      Illinois 60661

    


    2.       Secured
      Obligations.  Notwithstanding anything in this Mortgage
      to the contrary, this Mortgage shall secure the following
      obligations:

    


    (a)           the
      debt evidenced by the Note in the principal face amount of Forty-Five Million
      and 00/100 Dollars ($45,000,000.00);

    


    (b)           any
      and all other charges and amounts payable under the Note, this Mortgage or
      the
      Loan Documents, as are exempt from Minnesota mortgage registry tax (the
“Registry Tax”) under Minn. Stat. § 287.05, Subd.
      4;

    


    (c)           any
      and all charges, amounts and non-monetary obligations under the Note, this
      Mortgage or the Loan Documents, which are not otherwise subject to Registry
      Tax;

    


    (d)           any
      and all charges and amounts payable under the Note, this Mortgage or the Loan
      Documents, not referred to in clauses (a), (b) or (c) on which the Registry
      Tax
      has been paid; and

    


    (e)           interest
      from time to time payable on any or all of the foregoing.

    


    3.       Minnesota
      Remedies.  If an Event of Default
      exists, Lender may, at Lender’s election, exercise any of the following rights,
      remedies and recourses:

    


    (a)           Foreclosure
      and Sale.  Foreclose this Mortgage by judicial proceedings or by
      advertisement with full authority to sell the Property at public auction and
      convey the same to the purchaser in fee simple, all in accordance with and
      in
      the manner prescribed by law, and out of the proceeds arising from sale and
      foreclosure to retain the principal, the Prepayment Fee, and interest due on
      the
      Note and the Secured Indebtedness, together with all sums of money as Lender
      shall have expended or advanced pursuant to this Mortgage or pursuant to
      statute, together with interest thereon as provided in the Loan Documents,
      and
      all costs and expenses of such foreclosure, including lawful attorneys’ fees
      with the balance, if any, due to be paid to the person entitled thereto by
      law.

    


    (b)           Receiver.  As
      a matter of right, without notice and without regard to the solvency or
      insolvency of Borrower, or the existence of waste of the Property or adequacy
      of
      the security of the Property, and without giving bond, apply for the appointment
      of a receiver in accordance with the statutes and law made and provided for
      who
      shall have all the rights, powers and remedies as provided by such statute
      or
      law, including without limitation the rights of receiver pursuant to Minn.
      Stat.
      Section 576.01, as amended, and who shall from the date of its appointment
      through any period of redemption existing at law collect the Rents and Profits,
      manage the Property so as to prevent waste, execute leases within or beyond
      the
      period of receivership, pay all expenses for normal maintenance of the Property,
      and perform the terms of this Mortgage and apply the Rents and Profits to the
      payment of the expenses enumerated in Minn. Stat. Section 576.01, Subd. 2 in
      the
      priority mentioned therein and to all expenses for maintenance of the Property
      and to the costs and expenses of the receivership, including attorneys’ fees, to
      the repayment of the Secured Indebtedness and as further provided in the
      Assignment of Leases executed by Borrower to Lender whether contained in this
      Mortgage or in a separate instrument.  Borrower does hereby
      irrevocably consent to such appointment.

    


    (c)           U.C.C.  Exercise
      all rights, remedies and recourse available to a secured party under the U.C.C.
      (in addition to the rights available to a Lender of real property), including
      the right to proceed under the provisions of the U.C.C. governing default as
      to
      any collateral which may be included on the Property or which may be deemed
      non-realty in a foreclosure of this Mortgage or to proceed as to such collateral
      in accordance with the procedures and remedies available pursuant to a
      foreclosure of real estate.

    


    4.       Acknowledgment
      of Waiver of Hearing Before
      Sale.  Borrower understands and agrees
      that if an Event of Default shall occur, Lender has the right, inter alia,
      to
      foreclose this Mortgage by advertisement pursuant to Minn. Stat. Chapter 580,
      as
      hereafter amended, or pursuant to any similar or replacement statute hereafter
      enacted; that if Lender elects to foreclose by advertisement, it may cause
      the
      Property or any part thereof to be sold at public action; that notice of such
      sale must be published for six (6) successive weeks at least once a week in
      a
      newspaper of general circulation, and that no personal notice is required to
      be
      served upon Borrower.  Borrower further understands that upon the
      occurrence of an Event of Default, Lender may also elect its rights under the
      U.C.C. and take possession of the non-real estate items of the Property and
      dispose of the same by sale or otherwise in one or more parcels, provided that
      at least ten (10) days’ prior notice of such disposition must be given, all as
      provided for by the U.C.C., as hereinafter amended or by any similar or
      replacement statute hereafter enacted.  Borrower further understands
      that under the Constitution of the United States and the Constitution of the
      State of Minnesota it may have the right to notice and hearing before the
      Property may be sold and that the procedure for foreclosure by advertisement
      described above does not insure that notice will be given to Borrower and
      neither said procedure for foreclosure by advertisement nor the UCC requires
      any
      hearing or other judicial proceeding.  BORROWER HEREBY EXPRESSLY
      CONSENTS AND AGREES THAT THE PROPERTY MAY BE FORECLOSED BY ADVERTISEMENT AND
      THAT THE PERSONAL PROPERTY MAY BE DISPOSED OF PURSUANT TO THE U.C.C., ALL AS
      DESCRIBED ABOVE.  BORROWER ACKNOWLEDGES THAT IT IS REPRESENTED BY
      LEGAL COUNSEL; THAT BEFORE SIGNING THIS DOCUMENT THIS SECTION AND BORROWER’S
      CONSTITUTIONAL RIGHTS WERE FULLY EXPLAINED BY SUCH COUNSEL AND THAT BORROWER
      UNDERSTANDS THE NATURE AND EXTENT OF THE RIGHTS WAIVED HEREBY AND THE EFFECT
      OF
      SUCH WAIVER.

    


    5.       Leases
      and Rents.  (a)  Upon the
      occurrence of any Event of Default, Borrower’s revocable license to collect the
      Rents and Profits set forth in the Mortgage (and the Income as defined and
      set
      forth in the separate Assignment of Leases) executed by Borrower to Lender
      shall
      immediately cease and terminate.  Upon or at any time during the
      continuance of an Event of Default, including but not limited to failure of
      the
      Borrower to pay any of the items set forth in subparagraphs 5(c)(i) (v) below,
      or if any material representation or warranty herein proves to be untrue, then
      the Lender, without regard to waste, adequacy of the security or solvency of
      the
      Borrower, may declare all obligations immediately due and payable and may,
      at
      its option, without notice:

    


    (i)        In
      person or by agent, with or without taking possession of or entering the
      Property, with or without bringing any action or proceeding, give, or require
      the Borrower to give, notice to the tenants under the Leases authorizing and
      directing the tenants to pay all Rents and Profits directly to the Lender;
      collect all of the Rents and Profits; enforce the payment thereof and exercise
      all of the rights of the Borrower under the Leases and all of the rights of
      the
      Lender hereunder; and may enter upon, take possession of, manage and operate
      the
      Property, or any part thereof; may cancel, enforce or modify the Leases, and
      fix
      or modify Rents and Profits, and do any acts which the Lender deems proper
      to
      protect the security hereof, and/or

    


    (ii)           Whether
      or not foreclosure proceedings have commenced or a foreclosure sale has
      occurred, apply for appointment of a receiver in accordance with the statutes
      and law made and provided for, which receivership Borrower hereby consents
      to,
      who shall collect the Rents and Profits; manage the Property so to prevent
      waste; execute Leases within or beyond the period of receivership; perform
      the
      terms of this Mortgage and apply the Rents and Profits as hereinafter
      provided.

    


    (b)           The
      exercise of any of the foregoing rights or remedies and the application of
      the
      Rents and Profits pursuant to this Rider, shall not cure or waive any Event
      of
      Default (or notice of default) or invalidate any act done pursuant to such
      notice nor in any way operate to prevent the Lender from pursuing any remedy
      which now or hereafter it may have under the terms and conditions of the
      Mortgage or the Note secured thereby or any other instruments securing the
      same.  The rights and powers of the Lender hereunder shall remain in
      full force and effect both prior to and after any foreclosure of the Mortgage
      and any sale pursuant thereto and until expiration of the period of redemption
      from said sale, regardless of whether a deficiency remains from said
      sale.  The purchaser at any foreclosure sale, including the Lender,
      shall have the right, at any time and without limitation as provided in Minn.
      Stat. Section 582.03, to advance money to any receiver appointed hereunder
      to
      pay any part or all of the items which the receiver would otherwise be
      authorized to pay if cash were available from the Property and the sum so
      advanced, with interest at the rate then in effect under the terms of the Note,
      shall be a part of the sum required to be paid to redeem from any foreclosure
      sale.  The rights under this Paragraph 5(b) shall in no way be
      dependent upon and shall apply without regard to whether the Property is in
      danger of being lost, materially injured or damaged or whether the Property
      is
      adequate to discharge the Secured Indebtedness.

    


    (c)           Notwithstanding
      anything in this Mortgage or the other Loan Documents to the contrary, and
      specifically replacing contrary provisions in this Mortgage and in the
      Assignment of Leases, all Rents and Profits collected by Lender or the receiver
      each month following the occurrence and continuance of an Event of Default
      shall
      be applied as follows:

    


    (i)        to
      payment of all reasonable fees of the receiver approved by the
      court;

    


    (ii)           to
      payment of all tenant security deposits then owing to tenants under any of
      the
      Leases pursuant to the provisions of Minn. Stat. § 504B.178;

    


    (iii)           to
      payment of all prior or current Impositions with respect to the Mortgaged
      Property, or if this Mortgage or any other instrument relating to the
      obligations requires periodic escrow payments for such Impositions, to the
      escrow payments then due;

    


    (iv)           to
      payment of all Premiums then due, or if this Mortgage or any other instrument
      relating to the obligations requires periodic escrow payments for such Premiums,
      to the escrow payments then due;

    


    (v)        to
      payment of expenses incurred for normal maintenance of the
      Property;

    


    (vi)           if
      received prior to any foreclosure sale of the Property pursuant to this
      Mortgage, to Lender for payment of the Secured Indebtedness, but no such payment
      made after acceleration of the Secured Indebtedness shall affect such
      acceleration; and

    


    (vii)           if
      the Property shall be foreclosed and sold pursuant to a foreclosure sale,
      then:

    


    (A)           If
      the Lender is the purchaser at the foreclosure sale, the Rents and Profits
      shall
      be paid to the Lender to be applied to the extent of any deficiency remaining
      after the sale, the balance to be retained by the Lender, and if the Property
      be
      redeemed by the Borrower or any other party entitled to redeem, to be applied
      as
      a credit against the redemption price with any remaining excess Rents and
      Profits to be paid to the Borrower, provided, if the Property not be redeemed,
      any remaining excess Rents and Profits to belong to the Lender, whether or
      not a
      deficiency exists; and

     

    (B)           If
      the Lender is not the purchaser at the foreclosure sale, the Rents and Profits
      shall be paid to the Lender to be applied first, to the extent of any deficiency
      remaining after the sale, the balance to be retained by the purchaser, and
      if
      the Property be redeemed by the Borrower or any other party entitled to redeem,
      to be applied as a credit against the redemption price with any remaining excess
      Rents and Profits to be paid to the Borrower, provided, if the Property not
      be
      redeemed any remaining excess Rents and Profits shall be paid first, to the
      purchaser at the foreclosure sale in an amount equal to the interest accrued
      upon the sale price pursuant to Minn. Stat. Section 580.23 or Section 581.10,
      then to the Lender to the extent of any deficiency remaining unpaid and the
      remainder to the purchaser.

     

    The
      rights and powers of Lender and receivers under this Mortgage and the
      application of Rents and Profits under this Rider shall continue until
      expiration of the redemption period from any foreclosure sale, whether or not
      any deficiency remains after a foreclosure sale.

     

    6.       Borrower’s
      Federal Taxpayer Identification
      Number.  The following information
      supplements that given in the Defined Terms of this Mortgage:

    


    The
      Federal taxpayer identification number of Borrower (debtor) is
      26-1093863.

     

    7.       Non-Agricultural
      Use.  Borrower represents and warrants
      that as of the date of this Mortgage the Property is not in agricultural use
      as
      defined in Minn. Stat. § 40A.02, Subd. 3 and is not used for agricultural
      purposes.

    


    8.       Maturity
      Date.  The latest obligation secured by
      this Mortgage matures on January 1, 2013 (the “Maturity Date”).

    


    9.       Future
      Advances.  To the extent that this
      Mortgage is deemed to secure future advances including, but not limited to,
      interest accrued at the Default Rate (as defined in the Note), the amount of
      such advances is not currently known.  The delivery and acceptance of
      this Mortgage by Borrower and Lender, however, constitutes an acknowledgment
      that Borrower and Lender are aware of the provisions of Minn. Stat. § 287.05,
      Subd. 5, and intend to comply with the requirements contained
      therein.  The maximum principal amount of indebtedness secured by this
      Mortgage at any one time, excluding any amounts constituting an “indeterminate
      amount” under Minn. Stat. § 287.05, Subd. 5, and excluding advances made by the
      Lender in protection of the Property or the lien of this Mortgage, shall be
      $45,000,000.00.  The representations contained in this Rider are made
      solely for the benefit of county recording authorities in determining the
      mortgage registry tax payable as a prerequisite to the recording of this
      Mortgage.  Borrower acknowledges that such representations do not
      constitute or imply an agreement by Lender to make any future advances to
      Borrower.

    


    10.           Mortgage
      Registry Tax.  Borrower covenants and
      agrees to pay any mortgage registry tax or additional mortgage registry tax
      payable for this Mortgage pursuant to Minn. Stat. Ch. 287.

    12.           Fixture
      Financing Statement.  This Mortgage
      shall be deemed to be a fixture financing statement within the meaning of the
      Minnesota Uniform Commercial Code and for such purpose, the following
      information is given:

    


    
      	
              a.

            	
              Name
                and address of Debtor:

            	
              The
                Borrower as set forth in the Defined Terms

            
	
              b.

            	
              Type
                of organization:

            	
              Limited
                Liability Company

            
	
              c.

            	
              Jurisdiction
                of organization:

            	
              Delaware

            
	
              d.

            	
              Organization
                ID No.:

            	
              4425053

            
	
              e.

            	
              Name
                and address of Secured Party:

            	
              The
                Lender as set forth in the Defined Terms

            
	
              f.

            	
              Description
                of the types (or items) of property covered by this Financing
                Statement:

            	
              See
                Article 1 of this Mortgage

            
	
              g.

            	
              Description
                of real estate to which the collateral is attached or upon which
                it is or
                will be located:

            	
              See
                Exhibit “A” hereto

            
	
              h.

            	
              Record
                owner of real estate to which the collateral is attached or upon
                which it
                is or will be located:

            	
              Borrower

            


    

    


    Some
      of
      the above-described collateral is or is to become fixtures upon the
      above-described real estate and this Financing Statement is to be filed for
      record in the public real estate records.

    


    13.           Wells
      and Sewage Systems.  Borrower does not know of any Wells
      (as defined by Minn. Stat. §103I.005, subd. 21, as amended) on the Property, nor
      of any individual sewage systems on or serving the Property, within the meaning
      of Minn. Stat. §115.55, subd. c, as amended.