Document:

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                                                                   EXHIBIT 10.34

                                PROMISSORY NOTE
                                    Term Loan
                                   Fixed Rate
                         Principal and Interest Payments

$10,607,953

DUE DATE:         December 31, 2014              DATED:   January 1, 2005

         FOR VALUE RECEIVED, the undersigned, jointly and severally if more than
one maker ("Borrower"), promise(s) to pay to the order of Star Insurance
Company, a Michigan corporation ("Lender") at 26255 American Drive, Southfield,
Michigan 48034, or at such other place as the Lender may designate in writing,
the principal sum of Ten Million Six Hundred Seven Thousand Nine Hundred
Fifty-Three Dollars ($10,607,953), plus interest as hereinafter provided on all
amounts outstanding hereunder, all in lawful money of the United States of
America.

         INTEREST RATE. The principal amount outstanding under this Note shall
bear interest on a basis of a year of 360 days for the actual number of days
amounts are outstanding hereunder at the rate of five and one-half percent
(5.5%) per annum.

         PAYMENT. Principal and accrued interest shall be paid in consecutive
monthly payments of principal and interest, in the amount of $65,142.11 each,
beginning on January 1, 2005, and continuing on the same day of each consecutive
month thereafter. A final payment will be due on the Due Date in an amount equal
to the then unpaid principal and accrued interest. In the event that the period
from the date of this Note to the first payment due date ("First Payment
Period") is more than one month, accrued interest for the number of days by
which the First Payment Period exceeds one month will be, at the Lender's
option: (a) collected at closing, (b) payable in the month following the month
in which this Note is signed, on the day of such month that the regular monthly
payments provided for in this Note are due, or (c) payable with the first
payment provided for in this Note. All payments required to be paid hereunder
shall first be applied to costs and expenses required to be paid hereunder, then
to accrued interest hereunder and the balance shall be applied against the
principal. Borrower understands that the installment payments of principal
provided for herein may not be sufficient to fully amortize the outstanding
principal balance of this Note by the Due Date and, in that case, the final
payment due on the Due Date will be a balloon payment of all then outstanding
principal and accrued interest.

         PREPAYMENT. This Note may be prepaid in whole or in part at any time.

         INTEREST RATE LIMITED TO MAXIMUM PROVIDED BY LAW. Nothing herein
contained, nor any transaction relating hereto, shall be construed or so operate
as to require the Borrower to pay, or be charged, interest at a greater rate
than the maximum allowed by the applicable law relating to this Note. Should any
interest, or other charges, charged, paid or payable by the Borrower in
connection with this Note, or any other document delivered in connection
herewith, result in the charging, compensation, payment or earning of interest
in excess of the maximum allowed by applicable law, then any and all such excess
shall be and the same is hereby waived by the holder, and any and all such
excess paid shall be automatically credited against and in reduction of the
principal due under this Note. If the Lender shall reasonably determine that the
interest rate (together with all other charges or payments related hereto that
may be deemed interest) stipulated under this Note is, or may be, usurious or
otherwise limited by law, the unpaid balance of this Note, with accrued interest
at the highest rate permitted to be charged by stipulation in writing between
the Lender and Borrower, at the option of the Lender, shall immediately become
due and payable.

         EVENTS OF DEFAULT. The Borrower, without notice or demand of any kind,
shall be in default under this Note if any amount due and owing on this Note or
any fees due the Lender, any expenses incurred by the Lender hereunder or any
and all other liabilities and obligations of the Borrower to the Lender,
howsoever created, arising or evidenced, and howsoever owned, held or acquired,
whether now or hereafter existing, whether now due or to become due,

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direct or indirect, absolute or contingent, and whether several, joint or joint
and several, whether by its terms or as otherwise provided herein, is not paid
when due, or if any other Event of Default pursuant to the Promissory Note or in
any other document executed in connection herewith shall occur ("Event of
Default").

         REMEDIES. Upon the occurrence of any Event of Default, the Lender may,
without notice, declare the entire unpaid and outstanding principal balance
hereunder and all accrued interest, together with all other indebtedness of
Borrower to the Lender, to be due and payable in full forthwith, without
presentment, demand or notice of any kind, all of which are hereby expressly
waived by Borrower, and thereupon the Lender shall have and may exercise any one
or more of the rights and remedies provided herein or in any loan agreement,
mortgage, guaranty, security agreement or other document relating hereto. The
remedies provided for hereunder are cumulative to the remedies for collection of
the amounts owing hereunder as provided by law or by any loan agreement,
mortgage, guaranty, security agreement or other document relating hereto.
Nothing herein is intended, nor should it be construed, to preclude the Lender
from pursuing any other remedy for the recovery of any other sum to which the
Lender may be or become entitled for breach of the terms of this Note or any
loan agreement, mortgage, guaranty, security agreement or other instrument
relating hereto.

         COSTS OF COLLECTION. Borrower agrees, in case of an Event of Default
under the terms of this Note or under any loan agreement, security or other
agreement executed in connection herewith, to pay all costs of the Lender for
collection of this Note and all other liabilities of Borrower to the Lender and
enforcement of its rights hereunder, including reasonable attorney fees and
legal expenses including participation in bankruptcy proceedings.

         DEFAULT RATE OF INTEREST. During any period(s) an Event of Default has
occurred and is continuing, or after the Due Date, or after acceleration of
maturity, the outstanding principal amount hereof shall bear interest at a rate
equal to two percent (2.0%) per annum greater than the interest rate otherwise
charged hereunder.

         LATE CHARGES. If any required payment is not made within ten (10) days
after the date it is due (other than any balloon payment of principal due on the
Due Date), then, at the option of the Lender, a late charge in the amount of
five percent (5.0%) of the payment so overdue may be charged.

         NO WAIVER OF DEFAULT. Acceptance by the Lender of any payment in an
amount less than the amount then due shall be deemed an acceptance on account
only, and the failure to pay the entire amount then due shall be and continue to
be an Event of Default. Upon any Event of Default, neither the failure of the
Lender promptly to exercise its right to declare the outstanding principal and
accrued unpaid interest hereunder to be immediately due and payable, nor the
failure of the Lender to demand strict performance of any other obligation of
the Borrower or any other person who may be liable hereunder shall constitute a
waiver of any such rights, nor a waiver of such rights in connection with any
future default on the part of the Borrower or any other person who may be liable
hereunder.

         WAIVER OF JURY TRIAL. BORROWER ACKNOWLEDGES THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. BORROWER, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS
CHOICE, KNOWINGLY AND VOLUNTARILY AND FOR ITS BENEFIT WAIVES ANY RIGHT TO A
TRIAL BY JURY WITH RESPECT TO ANY CLAIM, DISPUTE, CONFLICT, OR CONTENTION, IF
ANY, AS MAY ARISE UNDER THIS NOTE OR THE LOAN EVIDENCED BY THIS NOTE, AND AGREES
THAT ANY LITIGATION BETWEEN THE PARTIES CONCERNING THIS NOTE OR THE LOAN
EVIDENCED BY THIS NOTE SHALL BE HEARD BY A COURT OF COMPETENT JURISDICTION
SITTING WITHOUT A JURY.

         GENERAL. Borrower and all endorsers and guarantors hereof, if any,
hereby jointly and severally waive presentment for payment, demand, notice of
non-payment, notice of protest or protest of this Note, diligence in collection
or bringing suit, and hereby consent to any and all extensions of time,
renewals, waivers, or modifications that may be granted by the Lender with
respect to payment or any other provisions of this Note, and to the release of
any collateral or any part thereof, with or without substitution. The liability
of the Borrower shall be absolute and

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unconditional, without regard to the liability of any other party hereto. This
Note shall be deemed to have been executed in, and all rights and obligations
hereunder shall be governed by, the laws of the State of Michigan.

         OTHER DOCUMENTS. The Borrower and the Lender may also have signed other
documents in conjunction herewith providing for security for this Note or other
matters. Reference is hereby made to the foregoing documents for additional
terms relating to the transaction giving rise to this Note, the security or
support given for this Note and additional terms and conditions under which this
Note matures, may be accelerated or prepaid.

                                        BORROWER:

                                        MEADOWBROOK INSURANCE GROUP, INC., a
                                        Michigan corporation

                                        By:               /s/ Robert S. Cubbin
                                                 -------------------------------
                                                 ROBERT S. CUBBIN

                                        Its:     President and CEO

                                                 26255 American Drive
                                                 Southfield, Michigan  48304

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                                                                   EXHIBIT 10.35

                              COMMERCIAL MORTGAGE

                        THIS IS A FUTURE ADVANCE MORTGAGE

         THIS MORTGAGE is made on January 1, 2005 by and between the Grantor, as
herein defined, and Star Insurance Company, a Michigan corporation ("Lender"),
whose address is 26255 American Drive, Southfield, Michigan 48034.

         IN CONSIDERATION of loans, advances or other financial accommodations
from the Lender to the Grantor and/or the Borrower, Grantor does hereby
covenant, promise and agree to and with the Lender, which covenants, promises
and agreements shall, to the extent permitted by law, be deemed to run with the
land, as follows:

         1.       DEFINITIONS. The following terms shall have the following
                  meanings when used in this Mortgage:

         a.       "Borrower" or "GRANTOR" means Meadowbrook Insurance Group,
                  Inc., a Michigan corporation organized under the laws of the
                  State of Michigan, whose chief executive office or residence
                  is located at 26255 American Drive, Southfield, Michigan
                  48034.

         b.       "LEASE(S)" means and includes all leases and rental agreements
                  (including, without limitation, oil and gas leases and any
                  specific lease(s) described in an attachment to this
                  Mortgage), written or unwritten, now or hereafter demising the
                  Property in whole or in any part, and all amendments,
                  modifications, extensions, renewals, substitutions and
                  replacements for any of the foregoing.

         c.       "LIABILITIES" means all loans, advances or other financial
                  accommodations, including any renewals or extensions thereof,
                  from the Lender to Grantor and/or the Borrower and any and all
                  liabilities and obligations of any and every kind and nature
                  heretofore, now or hereafter owing from Grantor and/or the
                  Borrower to the Lender, however incurred or evidenced, whether
                  primary, secondary, contingent or otherwise, whether arising
                  under the Note, and any and all extensions and renewals
                  thereof, this Mortgage, under any other security agreement(s),
                  promissory note(s), guaranty(s), mortgage(s), lease(s),
                  instrument(s), document(s), contract(s), letter(s) of credit
                  or similar agreement(s) heretofore, now or hereafter executed
                  by Grantor and/or Borrower and delivered to the Lender, or by
                  oral agreement or by operation of law plus all interest,
                  costs, expenses and reasonable attorney fees which may be made
                  or incurred by the Lender in the disbursement, administration
                  or collection of such liabilities and obligations and in the
                  protection, maintenance and liquidation of the Property and
                  the performance of the covenants and conditions of this
                  Mortgage, and ANY FUTURE ADVANCES, WITH INTEREST THEREON, made
                  to Grantor and/or the Borrower by the Lender which are secured
                  by this Mortgage pursuant to the provisions hereof.

         d.       "NOTE" means a promissory note from the Borrower to the Lender
                  in the principal amount of Ten Million Six Hundred Seven
                  Thousand Nine Hundred Fifty-Three Dollars ($10,607,953) of
                  even date herewith.

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         e.       "PROPERTY" means the premises situated in the State of
                  Michigan described in Exhibit "A" attached hereto, together
                  with (1) all the estate, title, interest and rights of Grantor
                  in such premises and all buildings and improvements of every
                  kind and description now or hereafter placed on such premises,
                  (2) all of the rents, profits, and leases of such premises,
                  and the tenements, hereditaments, easements, privileges and
                  appurtenances with respect to such premises, including
                  heretofore or hereafter vacated alleys and streets abutting
                  the premises, (3) all goods (including furniture, fixtures,
                  equipment and appliances), accounts, books and records and
                  general intangibles now owned or hereafter acquired by Grantor
                  and now or at any time hereafter related to, affixed to,
                  attached to, placed upon or used in any way in connection with
                  the ownership, use, occupancy or operation of such premises
                  (except leased equipment and trade fixtures which, in either
                  case, are readily removable without damaging or reducing the
                  value or utility of the premises or the improvements thereto),
                  including, but not limited to, all lighting, heating, cooling,
                  ventilating, air conditioning, plumbing, sprinkling,
                  communicating and electrical systems, and machinery,
                  appliances, fixtures and equipment pertaining thereto,
                  awnings, stoves, refrigerators, dishwashers, disposals,
                  incinerators, carpeting and drapes, and all other furniture,
                  fixtures, equipment and appliances of every type, nature and
                  description, (4) any and all awards or payments, including
                  interest thereon, and the right to receive the same, which may
                  be made with respect to the premises as a result of (a) the
                  exercise of the right of eminent domain, (b) the alteration of
                  the grade of any street, (c) any loss of or damage to any
                  building or other improvement on the premises, (d) any other
                  injury to or decrease in the value of the premises or (e) any
                  refund due on account of the payment of real estate taxes,
                  assessments or other charges levied against or imposed upon
                  the premises, to the extent of all amounts which may be
                  secured by this Mortgage at the date of receipt of any such
                  award or payment by the Lender, and of the reasonable counsel
                  fees, costs and disbursements incurred by the Lender in
                  connection with the collection of such award or payment, (5)
                  all of Borrower's rights, title and interest in, to and under
                  all present and future land contracts, sales agreements and/or
                  option agreements relating to the premises or any portion
                  thereof and Borrower's rights under all construction contracts
                  and all plans and specifications relating to the premises, and
                  (6) all of Borrower's rights, title and interest in, to and
                  under all present and future permits, licenses, liquor
                  licenses, authorizations, franchises, management agreements
                  used or intended to be used in connection with the ownership
                  or operation of the premises or any portion thereof, and all
                  names, trade names, trademarks, logos and material used to
                  advertise the premises and all variations thereof.

         2.       GRANT OF MORTGAGE. Grantor does hereby MORTGAGE and WARRANT to
the Lender and its successors and assigns forever the Property and grants to the
Lender and its successors and assigns a continuing security interest in the
Property to secure the timely repayment and performance of the Liabilities, to
have and to hold the Property, with all of the tenements, hereditaments,
easements, appurtenances and other rights and privileges thereunto belonging or
in any manner now or hereafter appertaining thereto, for the use and benefit of
the Lender upon the conditions hereinafter set forth.

         3.       FUTURE ADVANCES. Upon request of Grantor, the Lender at the
Lender's option prior to release of this Mortgage, may make future advances to
Grantor. Such future advances, with interest thereon, shall be secured by this
Mortgage when evidenced by promissory notes stating that they are secured
hereby.

         4.       COVENANT TO PAY LIABILITIES. Grantor shall promptly pay and
perform all Liabilities for which it is liable or obligated in accordance with
the terms thereof. Grantor acknowledges and agrees that this Mortgage shall not
be extinguished and the priority of this Mortgage shall not be altered in any
way until a Mortgage discharge has been executed by the Lender and recorded in
the proper county, even if the Liabilities are reduced to a balance of zero at
any time or from time to time.

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         5.       COVENANT OF TITLE. At the time of the execution and delivery
of this Mortgage, Grantor is the owner of the Property in fee simple, free of
all easements, liens and encumbrances whatever (other than those easements of
record as of the date hereof, the rights of the public in any part of the
Property used or taken for road purposes and any other mortgages, liens or
encumbrances to which the Lender has consented in writing), and will forever
warrant and defend the same against any and all other claims whatever, and the
lien created hereby is and will be kept as a valid lien upon the Property and
every part thereof, subject only to the foregoing exceptions.

         6.       MAINTENANCE OF PROPERTY. Grantor shall at all times preserve
and maintain the Property in good repair, working order and condition and shall
make all necessary improvements and repairs so the value and efficiency of the
Property is at all times maintained and Lender's security is not impaired.
Lender shall have the right to enter upon and inspect the Property at all
reasonable times and if, upon inspection of the Property, Lender determines the
Property or any part thereof requires repair, maintenance, or care of any kind
which the Grantor, after notice from Lender, fails to perform, Lender may
declare Grantor to be in default under this Mortgage and may, at Lender's
option, by its agent, enter, repair and care for the Property, paying such
amount therefor as the Lender deems appropriate, and all costs incurred by
Lender shall be added to the Liabilities secured by this Mortgage.

         7.       PAYMENT OF TAXES, LIENS AND INSURANCE. Grantor shall pay when
due all taxes, assessments, and governmental charges levied upon the Property
and all claims, liens, encumbrances, levies, judgments and charges which are at
any time levied, recorded, placed upon, or assessed against the Property, and
shall promptly deliver to Lender receipts evidencing such payment; provided,
however, that Grantor will not be required to pay any tax, assessment,
governmental charge, claim, lien, encumbrance, levy, judgment or charge if
Grantor is in good faith contesting the validity thereof and has provided for
payment of the entire amount of any such contested tax, assessment, governmental
charge, claim, lien, encumbrance, levy, judgment or charge in a cash reserve
deposited with Lender or in such other manner as is satisfactory to Lender.
Unless Lender and Grantor otherwise agree in writing, Grantor shall pay to
Lender with Grantor's payments of principal and interest, a pro rata portion of
the taxes, assessments, and insurance premiums next to become due, as estimated
by Lender, so Lender has sufficient funds on deposit to enable Lender to pay in
full all taxes, assessments, and insurance premiums thirty (30) days before the
due date thereof. All money so held by Lender will not bear interest, may be
commingled by Lender with other funds, and after the occurrence of any default
by Grantor may be applied by Lender to the Liabilities.

         8.       INSURANCE. Until the Liabilities are fully satisfied, Grantor
will keep the Property continuously insured against loss by fire, windstorm and
other hazards, casualties and contingencies, including vandalism and malicious
mischief, in such amounts and for such periods as may be required by the Lender.
Grantor shall pay promptly when due all premiums for such insurance and deliver
to the Lender, upon request, receipts showing such payment. All insurance shall
be carried in companies approved by the Lender and the policies and renewals
thereof shall be held by, and pledged to, the Lender (unless the Lender shall
direct or permit otherwise) as additional security hereunder, and shall have
attached thereto a mortgagee clause acceptable to the Lender, making all loss or
losses under such policies payable to the Lender, its successors and assigns, as
its or their interest may appear. In the event of loss or damage to the
Property, Grantor shall give immediate notice in writing by mail to the Lender,
who may make proof of loss if not made promptly by Grantor.

         In the event the amount of the loss is an amount equal to twenty
percent (20%) of the principal amount of the Liabilities or less, the insurance
proceeds shall be released to the Grantor, upon request by the Grantor. Grantor
shall be obligated to use such proceeds to restore or repair the Property unless
the Lender otherwise specifies in writing.

         In the event the amount of the loss is greater than an amount equal to
twenty percent (20%) of the principal amount of the Liabilities each insurance
company concerned is hereby authorized and directed upon request by the Lender,
to make payment for such loss, to the extent of the Liabilities, directly to the
Lender instead of to Grantor and the Lender jointly. Provided there has occurred
no Event of Default hereunder nor any event which with notice or the passage of
time or both would become an Event of Default hereunder and further provided
that the Lender shall

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reasonably determine that sufficient funds are available from insurance proceeds
and any funds to be provided by Grantor to repair or restore the Property within
a reasonable time and that such repair or restoration is economically feasible,
the Lender agrees, upon request by the Grantor, to apply the insurance proceeds
to repair or restore the Property, after reimbursement of all costs and expenses
of the Lender in collecting such proceeds, subject to the following terms and
conditions:

         a.       The Lender shall retain all insurance proceeds in a
non-interest bearing escrow account to be disbursed to pay the costs of repair
or restoration in accordance with procedures reasonably established by the
Lender.

         b.       All plans and specifications for repair or restoration shall
be approved by the Lender prior to the commencement of any repair or
restoration.

         c.       All repair or restoration shall be done by or under the
direction of Grantor, shall be in accordance with the approved plans and
specifications, shall be in a workmanlike manner free from all defects, shall be
in compliance with all statutes, ordinances, rules and regulations applicable
thereto and shall be completed free of all construction liens except those being
contested in good faith by appropriate proceedings and with respect to which
Grantor shall have provided the Lender satisfactory security.

         d.       The Lender shall have the right, at Grantor's expense, to
inspect all repairs and restoration and, if the Lender reasonably determines
that any work or materials are not in conformity with the approved plans and
specifications or other requirements of sub-paragraph (c) above, to stop the
work and order replacement or correction thereof by Grantor.

         e.       The Lender shall not be obligated to make disbursements more
frequently than monthly and the remaining undisbursed proceeds shall always be
sufficient to meet the total estimated remaining costs to complete the repair or
restoration.

         f.       All insurance proceeds in excess of the amounts necessary to
repair or restore the Property may be applied, at the Lender's option, to the
Liabilities (without penalty for prepayment), to fulfill any other covenant
herein or any other obligation of Grantor to the Lender, or released to Grantor.

         In the event all of the conditions to the use of the insurance proceeds
to repair or restore the Property which are outlined above are not satisfied,
the Lender, at its option, may apply the insurance proceeds or any part thereof,
first, toward reimbursement of all costs and expenses of the Lender in
collecting such proceeds, and then, to the Liabilities (without any penalty for
prepayment), to fulfill any other covenant herein or any other obligation of
Grantor to the Lender, or to the restoration or repair of the Property.
Application by the Lender of any insurance proceeds to the Liabilities shall not
excuse, extend or reduce the regularly scheduled payments due thereunder. In the
event of foreclosure of this Mortgage or other transfer of title to the Property
in extinguishment of the Liabilities, all right, title and interest of Grantor
in and to any insurance policies then in force shall pass to the purchaser or
grantee and Grantor hereby appoints the Lender its attorney-in-fact, in
Grantor's name, to assign and transfer all such policies and proceeds to such
purchaser or grantee.

         If at any time the Property is identified by the Director of the
Federal Emergency Management Agency or any other person or entity designated
with such responsibility under the National Flood Insurance Act of 1968, Flood
Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of
1994, all as amended (collectively called the "Flood Act"), as being located in
a flood hazard area, Grantor shall keep the Property covered by flood insurance
in such amount as is required by Lender and in at least the amount required by
the Flood Act and all regulations issued thereunder.

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         9.       EMINENT DOMAIN. In the event the entire Property is taken
under the power of eminent domain, the entire award or payment in lieu of
condemnation, to the full extent of the Liabilities, shall be paid to the
Lender. The Lender shall apply such award or payment, first, toward
reimbursement of all of the Lender's costs and expenses incurred in connection
with collecting such award or payment, and then, at the Lender's option, to the
Liabilities (without any penalty for prepayment), to fulfill any other covenant
herein or to any other obligation of Grantor to the Lender.

         In the event of a partial taking of the Property under the power of
eminent domain, the entire award or payment in lieu of condemnation, to the full
extent of the Liabilities, shall be paid over to the Lender. Provided there has
occurred no Event of Default hereunder, nor any event which with notice or the
passage of time or both would become an Event of Default hereunder, and the
Lender shall reasonably determine that sufficient funds are available from the
award or payment and any funds to be provided by Grantor to repair or restore
the remaining portion of the Property within a reasonable time and that such
repair or restoration is economically feasible, the Lender agrees, upon request
by the Grantor, to apply the award or payment to repair or restore the remaining
portion of the Property, after reimbursement of all costs and expenses of the
Lender in collecting the award or payment, subject to the following terms and
conditions:

         a.       The Lender shall retain the award or payment in a non-interest
bearing escrow account to be disbursed to pay the costs of repair or restoration
in accordance with procedures reasonably established by the Lender.

         b.       All plans and specifications for repair or restoration shall
be approved by the Lender prior to the commencement of any repair or
restoration.

         c.       All repair or restoration shall be done by or under the
direction of Grantor, shall be in accordance with the approved plans and
specifications, shall be in a workmanlike manner free from all defects, shall be
in compliance with all statutes, ordinances, rules and regulations applicable
thereto and shall be completed free of all construction liens except those being
contested in good faith by appropriate proceedings and with respect to which
Grantor shall have provided the Lender satisfactory security.

         d.       The Lender shall have the right, at Grantor's expense, to
inspect all repairs and restoration and, if the Lender reasonably determines
that any work or materials are not in conformity with the approved plans and
specifications or other requirements of sub-paragraph (c) above, to stop the
work and order replacement or correction thereof by Grantor.

         e.       The Lender shall not be obligated to make disbursements more
frequently than monthly and the remaining undisbursed proceeds shall always be
sufficient to meet the total estimated remaining costs to complete the repair or
restoration.

         f.       All proceeds of the award or payment in excess of the amounts
necessary to repair or restore the Property may be applied, at the Lender's
option, to the Liabilities (without penalty for prepayment), to fulfill any
other covenant herein or any other obligation of Grantor to the Lender, or
released to Grantor.

         In the event all of the conditions to the use of the award or payment
to repair or restore the Property which are outlined above are not satisfied,
the Lender, at its option, may apply the award or payment or any part thereof,
first, toward reimbursement of all costs and expenses of the Lender in
collecting such award or payment, and then, to the Liabilities (without any
penalty for prepayment), to fulfill any other covenant herein or any other
obligation of Grantor to the Lender, or to the restoration or repair of the
Property. Application by the Lender of any condemnation award or payment or
portion thereof to the Liabilities shall not excuse, extend or reduce the
regularly scheduled payments due thereunder. The Lender is hereby empowered in
the name of Grantor to receive, and give acquittance

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for, any such award or payment, whether it is joint or several; provided,
however, that the Lender shall not be held responsible for failure to collect
any such award or payment, regardless of the cause of such failure.

         10.      REMOVAL OF IMPROVEMENTS. Except for replacement, maintenance,
and relocation in the ordinary course of business, Grantor shall not remove from
the Property any improvement, accessions, fixtures, machinery, or equipment
pertaining to or forming a part of the Property without Lender's prior written
consent. All replacements shall be with improvements, fixtures, machinery and
equipment of the same or better quality than those replaced.

         11.      LENDER'S RIGHT TO MAKE EXPENDITURES. Should an Event of
Default occur hereunder as a result of Grantor's failure to pay any taxes or
assessments or procure and maintain insurance or make necessary repairs to the
Property, the Lender may pay such taxes and assessments, effect such insurance
and make such repairs, and the monies so paid by it shall be a further lien on
the Property, payable forthwith, with interest at the highest rate applicable to
the Liabilities. The Lender may make advances without curing the Event of
Default and without waiving the Lender's right of foreclosure or any other right
or remedy of the Lender under this Mortgage. The exercise of the right to make
advances pursuant to this paragraph shall be optional with the Lender and not
obligatory and the Lender shall not be liable in any case for failure to
exercise such right or for failure to continue exercising such right once having
exercised it.

         12.      COMPLIANCE WITH LAW. Grantor will comply promptly with all
laws, ordinances, regulations and orders of all public authorities having
jurisdiction over the Property relating to the use, occupancy and maintenance
thereof, and shall upon request promptly submit to the Lender evidence of such
compliance. Nothing herein shall be deemed to prohibit Grantor from contesting
the enforceability or applicability of any law, ordinance, regulation or order;
provided, however, that the Lender, in its sole discretion, may require that
Grantor comply with any such law, ordinance, regulation or order during the
pendency of any such contest and all appeals therefrom. Grantor will not permit
the Property or any portion thereof to be used for any unlawful purpose.

         13.      ENVIRONMENTAL WARRANTIES, COMPLIANCE, AND INDEMNIFICATION.
Grantor represents and warrants to Lender that neither Grantor nor any prior
lessee, owner or operator of the Property has violated any Environmental Laws
(as subsequently defined) which concern or affect the Property or any part
thereof. Grantor agrees to at all times strictly observe and promptly comply
with all Environmental Laws. Grantor agrees to notify the Lender, not later than
ten (10) days after Grantor's receipt, of any letter, notice, summons,
complaint, citation, investigation, or other communication issued by or on
behalf of any governmental agency or department, or private person, regarding
any complaint or alleged violation of any Environmental Law concerning the
Property. Grantor agrees to indemnify and hold the Lender harmless from any and
all losses, costs, suits, harm, liability, and damages of any and every kind,
including reasonable attorney fees, which result from or are related to any
violation(s) by Grantor or Grantor's predecessors in title to the Property of
any Environmental Laws, and agrees that such indemnity shall survive the
foreclosure or discharge of this Mortgage and shall continue so long as Lender
has any interest in or liability for the Property. Grantor agrees to allow the
Lender or its agent access to the Property to confirm Grantor's compliance with
all Environmental Laws and Lender may at any time, at Grantor's sole cost and
expense, hire, or require Grantor to hire, an environmental consultant to
inspect, test and audit the Property and advise the Lender concerning Grantor's
compliance with Environmental Laws. Any costs paid by Lender for violations of
Environmental Laws or to hire an environmental consultant shall be added to the
Liabilities secured by this Mortgage. If Grantor shall lease the Property or any
part thereof, Grantor agrees to specifically provide in any such lease(s) that
Lender or its agent shall have access to the leased premises to insure the
lessee's full compliance with all Environmental Laws and any lessee violation of
any Environmental Law shall constitute a violation of Grantor's environmental
warranties and agreements under this Mortgage. The term "Environmental Laws"
shall mean all laws, regulations and rules of the United States of America,
State of Michigan, local authorities and their respective agencies and
departments which pertain to the environment including, but without limitation,
the Clean Air Act (42 USC 7401 et seq.), Clean Water Act (33 USC 1251 et seq.),
Resource Conservation and Recovery Act of 1976 (42 USC 6901 et seq.),
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
USC 9601 et seq.), Hazardous Materials Transportation Act (49 USC 1801 et seq.),
Solid Waste Disposal Act (42 USC 6901 et seq.), Toxic Substances

                                        6

<PAGE>

Control Act (15 USC 2601 et seq.), and the Michigan Natural Resources and
Environmental Protection Act (MCL 324.101 et seq.), as each of such laws have
been or are hereafter amended, together with all rules and regulations
promulgated by the U.S. Environmental Protection Agency or the Michigan
Departments of Natural Resources or of Environmental Quality, and all additional
environmental laws, rules and regulations in effect on the date of this Mortgage
and as are hereafter enacted. The provisions of this Section shall survive the
termination, satisfaction, release and discharge of this Mortgage and/or any or
all of the Liabilities.

         14.      ASSIGNMENT OF RENTS AND LEASES. As additional security for the
Liabilities and performance of the covenants and agreements set forth herein,
pursuant to Michigan Compiled Laws 565.81 et seq. and Michigan Compiled Laws
554.231 et seq., each as amended, Grantor hereby assigns to the Lender, and
grants Lender a security interest in, any oil and gas located in, on or under
the Property, any and all Leases of the Property, and all rents, issues, income
and profits derived from the use of the Property or any portion thereof, whether
due or to become due. These assignments shall run with the land and shall be
good and valid against Grantor and all persons claiming by, under, or through
Grantor from the date of recording of this Mortgage and shall continue to be
operative during foreclosure or any other proceedings taken to enforce this
Mortgage. If any foreclosure sale results in a deficiency, the assignments shall
continue as security during the foreclosure redemption period.

         Grantor covenants with and warrants to Lender that as of the date of
this Mortgage:

         a.       Each Lease is in full force and effect and there are no
defaults existing thereunder; and

         b.       Grantor has not, except as may be described in an attachment,
if any, to this Mortgage: (1) executed or granted any prior assignment,
encumbrance, or security interest in any Lease or the rentals thereunder; (2)
performed any acts or executed any other instruments or agreements which would
limit or prevent Lender from obtaining the benefit of and exercising its rights
conferred by this Mortgage; or (3) executed or granted any modification of any
Lease, either orally or in writing.

and, as of the date of this Mortgage and for so long as any of the Liabilities
remains unpaid or unperformed:

         c.       Grantor shall promptly inform Lender of, assign, and deliver,
any subsequent Lease of the Property or any part thereof, and make, execute and
deliver to the Lender, upon demand, any and all documents, agreements and
instruments as may, in Lender's opinion, be necessary to protect the Lender's
rights under this Mortgage; provided, that Grantor's failure to do so will not
impair Lender's interest in or rights with respect to any subsequent Lease, nor
in any way affect the applicability of this Mortgage to such Lease and the
unpaid rents due or to become due thereunder.

         d.       Grantor shall not, without the prior written consent of
Lender: (1) Cancel or accept surrender of a Lease; (2) modify or alter a Lease
in any way, either orally or in writing; (3) reduce the amount of or postpone
payment of any Lease rents; (4) consent to any assignment of the lessee's
interest in a Lease, or any subletting thereunder; (5) collect or accept payment
of rents under a Lease for more than one (1) month in advance; (6) make any
other assignment, pledge, encumbrance, or other disposition of a Lease or any
Lease rents, issues, income or profits.

Any of the above acts, if done without the Lender's prior written consent, shall
be null and void; and

         e.       Grantor shall perform and discharge each and every obligation,
covenant, and agreement required to be performed by the landlord under any Lease
and should Grantor fail to do so the Lender, at Lender's sole option and without
releasing Grantor from any such obligation, may make or do the same in such
manner and to such extent as the Lender deems necessary to protect its rights
and interests under this Mortgage. Any and all costs, expenses and sums paid by
the Lender in performing under any Lease, including reasonable attorney fees,
shall be added to the Liabilities secured by this Mortgage. This assignment of
rents is given as collateral security only and will

                                       7

<PAGE>

not be construed as obligating Lender to perform any of the covenants or
undertakings required to be performed by Grantor under any Lease.

         15.      ASSIGNMENT OF CONTRACTS AND AGREEMENTS. Grantor hereby
assigns to the Lender, as further security for the Liabilities, Grantor's
interest in all agreements, contracts (including contracts for the lease or sale
of the Property or any portion thereof), licenses and permits affecting the
Property. Such assignment shall not be construed as a consent by the Lender to
any agreement, contract, license, or permit so assigned, or to impose upon the
Lender any obligations with respect thereto. Grantor shall not cancel or amend
any of the agreements, contracts, licenses and permits hereby assigned (nor
permit any of the same to terminate if they are necessary or desirable for the
operation of the Property), except in the ordinary course of business, without
first obtaining, on each occasion, the written approval of the Lender. This
paragraph shall not be applicable to any agreement, contract, license or permit
that terminates if it is assigned without the consent of any party thereto
(other than Grantor) or issuer thereof, unless such consent has been obtained or
this assignment is ratified by such party or issuer; nor shall this paragraph be
construed as a present assignment of any agreement, contract, license or permit
that Grantor is required by law to hold in order to operate the Property for the
purposes intended.

         16.      DUE ON SALE. The Lender in making the loan secured by this
Mortgage is relying upon the integrity of Grantor and its undertaking to
maintain the Property. If Grantor should (a) sell, transfer, convey or assign
the Property, or any right, title or interest therein, whether legal or
equitable, whether voluntarily or involuntarily, by outright sale, deed,
installment sale contract, land contract, contract for deed, leasehold interest
(other than leases to tenants) with a term greater than three years, lease
option contract or any other method of conveyance of real property interests; or
(b) cause, permit or suffer any change in the current ownership or management of
the Grantor; or (c) cause, permit or suffer any change in the current management
and control of the Property or in the degree of control Grantor exercises or is
empowered to exercise over the decisions affecting the ownership and operation
of the Property as of the date hereof, then, and in any such event, the Lender
shall have the right at its sole option thereafter to declare all sums secured
hereby and then unpaid to be due and payable forthwith although the period
limited for the payment thereof shall not then have expired, anything contained
to the contrary hereinbefore notwithstanding, and thereupon to exercise all of
its rights and remedies under this Mortgage. If the ownership of the Property,
or any part thereof, becomes vested in a person other than the Grantor (with or
without the Lender's consent), the Lender may deal with such successor or
successors in interest with reference to this Mortgage, and the Liabilities, in
the same manner as with the Grantor, without in any manner vitiating, releasing
or discharging the Grantor's liability hereunder or upon the Liabilities. No
sale of the Property and no forbearance or extensions by the Lender of the time
for payment of the Liabilities or the performance of the covenants and
agreements herein provided shall in any way operate to release, discharge,
modify, change or affect the lien of this Mortgage or the liability of Grantor,
if any, on the Liabilities or for the performance hereof, either in whole or in
part.

         17.      SECONDARY FINANCING. Grantor will not, without the prior
written consent of the Lender, mortgage or pledge the Property or any part
thereof as security for any other loan or obligation of Grantor. If any such
mortgage or pledge is entered into without the prior written consent of the
Lender, the entire Liabilities, may, at the option of the Lender, be declared
immediately due and payable without notice. Further, Grantor also shall pay any
and all other obligations, liabilities or debts which may become liens, security
interests, or encumbrances upon or charges against the Property for any repairs
or improvements that are now or may hereafter be made thereon, and shall not,
without the Lender's prior written consent, permit any lien, security interest,
encumbrance or charge of any kind to accrue and remain outstanding against the
Property or any part thereof, or any improvements thereon, irrespective of
whether such lien, security interest, encumbrance or charge is junior to the
lien of this Mortgage. Notwithstanding the foregoing, if any personal property
by way of additions, replacements or substitutions is hereafter purchased and
installed, affixed or placed by Grantor on the Property under a security
agreement, the lien or title of which is superior to the lien created by this
Mortgage, all the right, title and interest of Grantor in and to any and all
such personal property, together with the benefit of any deposits or payments
made thereon by Grantor, shall nevertheless be and are hereby assigned to the
Lender and are covered by the lien of this Mortgage.

                                       8

<PAGE>

         18.      WASTE. Grantor's failure, refusal or neglect to pay any taxes
or assessments levied against the Property or any insurance premiums due upon
policies of insurance covering the Property will constitute waste under Michigan
Compiled Laws 600.2927, and the Lender shall have a right to appointment of a
receiver of the Property and of the rents and income from the Property, with
such powers as the Court making such appointment confers. Grantor hereby
irrevocably consents to such appointment in such event, and agrees that Lender's
costs and expenses, including reasonable attorney fees, incurred in such
proceeding shall be added to the Liabilities secured by this Mortgage. Payment
by the Lender for and on behalf of Grantor of any delinquent taxes, assessments,
or insurance premiums payable by Grantor under the terms of this Mortgage will
not cure the default herein described nor in any manner impair the Lender's
right to appointment of a receiver as set forth herein.

         19.      REMEDIES UPON DEFAULT. Immediately upon the occurrence of an
event of default under any of the Liabilities or any default in the performance
of any of the covenants, conditions and agreements contained in this Mortgage
(an "Event of Default"), the Lender may, in addition to and not in lieu of or
substitution for, all other rights and remedies provided by law:

         a.       ACCELERATE LIABILITIES. Without notice, except as expressly
required by law, declare the entire unpaid and outstanding principal balance of
the Liabilities, and all accrued interest, to be due and payable in full
forthwith, and at the Lender's option, to bring suit therefor and to take any
and all steps and institute any and all other proceedings that the Lender deems
necessary to enforce the Liabilities and to protect the lien of this Mortgage.

         b.       ADVANCE SUMS FOR OTHER LIENS. Upon the occurrence of any Event
of Default arising out of the existence of any lien upon the Property, the
Lender shall have the right (without being obligated to do so or to continue to
do so), without notice to Grantor, to advance on and for the account of Grantor
such sums as the Lender in its sole discretion deems necessary to cure such
Event of Default or to induce the holder of any such lien to forbear from
exercising its rights thereunder. The repayment of all such advances, with
interest thereon at the highest rate applicable to the Liabilities from the date
of each such advance, shall be secured hereby and shall be immediately due and
payable without demand.

         c.       MORTGAGE FORECLOSURE. To foreclose this Mortgage and sell the
Property at public auction or venue pursuant to Michigan Compiled Laws 600.3201
et seq. or judicially foreclose this Mortgage under the provisions of Michigan
Compiled Laws 600.3101 et seq., and Grantor agrees to pay all of Lender's costs
and expenses, including reasonable attorney fees, which shall be added to the
Liabilities secured by this Mortgage. At any foreclosure sale held under the
foregoing Michigan statutes, Grantor agrees that in its foreclosure sale bid
price the Lender shall be allowed to deduct from the appraised value of the
Property: (i) a brokerage commission of not more than ten percent (10%) of the
Property value; (ii) the unpaid balance of any mortgage or other liens which
have priority over the lien of this Mortgage; and (iii) the sum of all unpaid
property taxes and assessments and insurance premiums due and to become due on
the Property through the date upon which the foreclosure redemption period shall
expire. Any foreclosure sale may, at the sole option of the Lender, be made en
masse or in parcels, any law to the contrary notwithstanding, and Grantor hereby
knowingly, voluntarily and intelligently waives any right to require any such
foreclosure sale to be made in parcels or any right to select which parcels
shall be sold. The proceeds of any foreclosure sale shall be applied, as the
Lender elects, to the payment of Lender's collection and other expenses,
including reasonable attorney fees, and/or payment of the Liabilities, with the
surplus, if any, to Grantor or Grantor's successor in interest. Commencement of
proceedings to foreclose this Mortgage in any manner authorized by law shall be
deemed an exercise of the Lender's option to accelerate the Liabilities. After
the date upon which the maturity of the Liabilities secured by this Mortgage has
been accelerated, Lender acceptance of any amount(s) paid by Grantor less than
the full unpaid principal balance of the Liabilities plus accrued interest, late
charges and Lender's costs and expenses in this Mortgage described, shall not
waive the default or acceleration, but shall only be credited upon the unpaid
balance of the Liabilities unless the Lender specifically agrees in writing to
waive any such default and/or acceleration.

                                       9

<PAGE>

         THIS MORTGAGE CONTAINS A POWER OF SALE AND UPON DEFAULT MAY BE
FORECLOSED BY ADVERTISEMENT. IN A FORECLOSURE BY ADVERTISEMENT, NO HEARING IS
INVOLVED AND THE ONLY NOTICE REQUIRED IS PUBLICATION OF A FORECLOSURE NOTICE IN
A LOCAL NEWSPAPER AND POSTING A COPY OF THE NOTICE UPON THE PROPERTY. IF THIS
MORTGAGE IS FORECLOSED BY ADVERTISEMENT UNDER THE PROVISIONS OF MICHIGAN
COMPILED LAWS 600.3201 ET SEQ., GRANTOR HEREBY KNOWINGLY, VOLUNTARILY, AND
INTELLIGENTLY WAIVES ALL RIGHTS UNDER THE CONSTITUTION AND LAWS OF THE STATE OF
MICHIGAN AND THE CONSTITUTION AND LAWS OF THE UNITED STATES OF AMERICA TO ANY
NOTICE OR HEARING IN CONNECTION WITH A FORECLOSURE BY ADVERTISEMENT EXCEPT AS
SET FORTH IN THE MICHIGAN STATUTE.

         d.       COLLECTION OF RENTS. Enter into peaceful possession of the
Property and/or to collect and receive all rents, issues, income and profits
from the Property, terminate any tenancy, maintain proceedings to recover rents
or possession of any of the Property from any tenant or trespasser, rent or
lease the Property or any portion thereof upon such terms as the Lender deems
best, and have the right to all oil and gas royalties and any other income from
the Property. Lender, in such order as Lender in its sole discretion elects, may
apply the proceeds of any rents, issues, profits and income to: (i)
preservation, maintenance or operation of the Property, (ii) payment of taxes
due on the Property; and (iii) payment of the Liabilities. Grantor irrevocably
consents and agrees that the lessee(s) under any Lease, upon demand and notice
from Lender of Grantor's default, shall be required to pay all rents, issues,
profits and income to Lender, without any obligation upon such lessee(s) to
determine the actual existence of any default by Grantor. Lender may enter upon
the Property or any part thereof, by its officers, agents, or employees, for the
collection of the rents, issues and profits and for the operation and
maintenance of the Property, and Grantor hereby authorizes Lender in general to
perform all acts necessary for the operation and maintenance of the Property in
the same manner and to the same extent that the Grantor might so act. Such entry
and taking possession of the Property or any part thereof by Lender, may be made
by actual entry and possession or by written notice served personally upon or
sent by certified mail to the last owner of the Property appearing on the
records of the Lender, as the Lender elects, without further authorization or
notice.

         In connection with the Lender's right to possession of the Property
upon the occurrence of an Event of Default, as specified in the foregoing
paragraph, Grantor acknowledges that it has been advised that there is a
significant body of case law in Michigan which purportedly provides that in the
absence of a showing of waste of a character sufficient to endanger the value of
the Property, or other special factors, a mortgagor is entitled to remain in
possession of the Property, and to enjoy the income, rents and profits
therefrom, during the pendency of foreclosure proceedings and until the
expiration of the redemption period, even if the mortgage documents expressly
provide to the contrary. Grantor further acknowledges that it has been advised
that the Lender recognizes the value of the security covered hereby is
inextricably intertwined with the effectiveness of the management, maintenance
and general operation of the Property, and that the Lender would not make the
loan secured hereby unless it could be assured that it would have the right to
take possession of the Property in order to manage or to control management
thereof, and to enjoy the income, rents and profits therefrom, immediately upon
the occurrence of an Event of Default hereunder, notwithstanding that
foreclosure proceedings may not have been instituted, or are pending, or the
redemption period may not have expired. Accordingly, Grantor hereby knowingly,
intelligently and voluntarily waives all right to possession of the Property
from and after the occurrence of an Event of Default hereunder, upon demand for
possession by the Lender, and Grantor agrees not to assert any objection or
defense to the Lender's request or petition to a court for possession. The
rights hereby conferred upon the Lender have been agreed upon prior to the
occurrence of an Event of Default hereunder and the exercise by the Lender of
any such rights shall not be deemed to put the Lender in the status of a
"mortgagee in possession". Grantor acknowledges that this provision is material
to this transaction and that the Lender would not make the loan secured hereby
but for this paragraph.

         e.       TITLE REPORTS. Procure mortgage foreclosure or title reports.
Grantor covenants to pay forthwith to the Lender all sums paid for such purposes
with interest at the highest rate applicable to the Liabilities, and such sums
and the interest thereon shall constitute a further lien upon the Property.

         f.       APPRAISALS AND AUDITS. Procure appraisals, environmental
audits and such other investigations or analyses of the Property as the Lender
may determine to be required by regulatory or accounting rules, procedures

                                       10

<PAGE>

or practices or to otherwise be prudent or necessary. Grantor shall grant the
Lender free and unrestricted access to the Property for such purposes. Grantor
covenants to pay forthwith to the Lender all sums paid for such purposes with
interest at the highest rate applicable to the Liabilities, and such sums and
the interest thereon shall constitute a further lien upon the Property.

         20.      COSTS OF LEGAL PROCEEDINGS. The Grantor shall pay the Lender
a reasonable attorney's fee in addition to all other legal costs in case the
Lender shall become a party, either as plaintiff or defendant, to any legal
proceedings in relation to the Property or the lien created hereby, which sums
shall be secured hereby and shall be payable forthwith at the highest rate
applicable to the Liabilities.

         21.      BOOKS AND RECORDS. The Grantor covenants and agrees to furnish
to the Lender promptly certificates of occupancy and such other books, records,
documents, information and statements pertaining to the Grantor, the Property
and its operations and any guarantor(s) as the Lender may request. All books,
records and other information provided by Grantor hereunder shall be in a form
that is acceptable to the Lender and all costs of providing the same shall be
borne entirely by Grantor.

         22.      PAYMENT UPON ACCELERATION SUBJECT TO ANY PREPAYMENT PENALTY.
Upon the occurrence of an Event of Default by Grantor hereunder and following
the acceleration of maturity of the Liabilities, a tender of payment of the
amount necessary to satisfy the entire Liabilities, made at any time prior to
the foreclosure sale by Grantor, or by anyone in behalf of the Grantor, shall
constitute an evasion of the payment terms of the Liabilities and shall be
deemed to be a voluntary prepayment thereunder, and any such payment, to the
extent permitted by law, will therefore include the premium required under the
prepayment privilege, if any, applicable to the Liabilities.

         23.      SECURITY AGREEMENT AND FINANCING STATEMENTS. Grantor shall
execute, acknowledge and deliver any and all such further conveyances,
documents, mortgages and assurances as the Lender may reasonably require for
accomplishing the purposes hereof, including financing statements required by
the Lender to protect its interest under the provisions of the Michigan Uniform
Commercial Code, as amended, forthwith upon the written request of the Lender.
Upon any failure of Grantor to do so, the Lender may execute, record, file,
re-record and refile any and all such documents for and in the name of Grantor,
and Grantor hereby irrevocably appoints the Lender as agent and attorney-in-fact
of Grantor for the foregoing purposes. This instrument is intended by the
parties to be, and shall be construed as, a security agreement, as that term is
defined and used in Article Nine of the Michigan Uniform Commercial Code, as
amended, and shall grant to the Lender a security interest in that portion of
the Property with respect to which a security interest can be granted under
Article Nine of the Michigan Uniform Commercial Code, as amended, which security
interest shall include a security interest in all personalty owned by Grantor,
whether now owned or subsequently acquired, which is or in the future may be
physically located on or affixed to the Property described in Exhibit "A"
hereto, regardless of whether such personalty consists of fixtures under
Michigan law, a security interest in the proceeds and products of the proceeds
of all insurance policies now or hereafter covering all or any part of such
collateral. For purposes of Article Nine of the Michigan Uniform Commercial
Code, (a) Grantor herein is the "debtor", (b) the Lender herein is the "secured
party", (c) information concerning the security interest created hereby may be
obtained from the Lender at its address set forth on page 1 hereof, and (d)
Grantor's mailing address is that set forth on page 1 hereof.

         24.      NON-LENDER LIENS, INSOLVENCY PROCEEDINGS. If any non-Lender
mortgage foreclosure proceeding or any Federal, State or local tax lien,
seizure, levy, forfeiture, or any other lien or proceeding shall be instituted,
recorded, or filed against the Property which is not discontinued, reserved for
in cash in an amount and manner satisfactory to Lender, or bonded by a company
satisfactory to Lender within thirty (30) days after initiation, recording or
filing, or if any insolvency or receivership proceedings, either voluntary or
involuntary, are instituted by or against Grantor for the liquidation or
rehabilitation of Grantor's assets and affairs, or if any criminal proceedings
are initiated wherein forfeiture of the Property is a potential penalty, the
Lender may, at its option and without notice, declare the entire Liabilities to
be immediately due and payable and may institute all such proceedings, including
foreclosure of this Mortgage, as the Lender deems necessary to protect its
interest in the Property.

                                       11

<PAGE>

         25.      PRIOR MORTGAGE. If Lender has consented and agreed that this
Mortgage is to be second and subordinate to a prior recorded mortgage, Grantor
expressly covenants and agrees that Grantor shall not borrow any additional sum
nor incur any additional indebtedness or other obligation secured by the prior
mortgage, shall promptly pay the prior mortgage indebtedness in accordance with
the terms of the note or obligation secured by the prior mortgage, shall fully
and promptly keep and perform all of the terms, conditions, and covenants of the
prior note, obligation, mortgage, and other agreements pertaining thereto, and
any default by Grantor thereunder shall constitute a default by Grantor under
this Mortgage. The Lender may, at Lender's sole option but without obligation to
do so, cure any default by Grantor in any indebtedness or other agreement
secured by any prior mortgage, as the Lender deems necessary to protect Lender's
mortgage lien, assignments and security interests under this Mortgage, and all
moneys advanced by Lender and all costs incurred in effecting any such cure,
including reasonable attorney fees, shall be added to the Liabilities secured by
this Mortgage. Grantor shall not be required to make monthly payments under this
Mortgage for the payment of taxes, assessments, and insurance premiums if the
prior mortgage requires such payment and the prior mortgagee maintains a reserve
fund which, in the opinion of Lender, is adequate for the payment of all taxes,
assessments and insurance premiums due and to become due upon the Property.
Grantor hereby consents and agrees that Lender may contact any prior mortgagee
or other lienor at any time to obtain the payment status, unpaid balance, copies
of any documents and agreements pertaining to Grantor or the Property, and such
other information as Lender deems advisable.

         26.      SURETYSHIP WAIVERS. This mortgage secures an obligation of
payment and not of collection, and the Grantor agrees that the Lender's recourse
on this Mortgage shall be immediate at any time after the Liabilities or any
part thereof have not been paid when due (whether by acceleration or otherwise)
or the Grantor or the Borrower has defaulted or otherwise failed to perform when
due any of its obligations, covenants, representations or warranties to the
Lender. The Lender's rights under this Mortgage shall not be contingent upon the
exercise or enforcement by the Lender of whatever remedies it may have against
the Borrower or others, or the enforcement of any other lien or realization upon
any other security or collateral the Lender may at any time possess. Any one or
more successive and/or concurrent actions may be brought hereon against Grantor
either in the same action, if any, brought against Borrower or in separate
actions, as often as the Lender, in its sole discretion, may deem advisable. No
election to proceed in one form of action or proceeding, or against any party,
or on any obligation, shall constitute a waiver of the Lender's right to proceed
in any other form of action or proceeding or against other parties unless the
Lender has expressly waived such right in writing. Specifically, but without
limiting the generality of the foregoing, no action or proceeding by the Lender
against Borrower under any document or instrument evidencing or securing the
Liabilities shall serve to diminish the rights of the Lender under this
Mortgage, except to the extent the Lender realizes payment by such action or
proceeding, notwithstanding the effect of any such action or proceeding upon
Grantor's right of subrogation against Borrower, if any.

         The obligations of the Grantor under this Mortgage shall in no way be
affected or impaired by: (a) any amendment, alteration, extension, renewal,
waiver, indulgence or other modification of the Liabilities; (b) any settlement
or compromise in connection with the Liabilities; (c) any subordination of
payments under the Liabilities to any other debt or claim; (d) any substitution,
exchange, release or other disposition of all or any part of any collateral for
the Liabilities; (e) any failure, delay, neglect, act or omission by the Lender
to act in connection with the Liabilities; (f) any advances for the purpose of
performing any covenant or agreement of the Borrower, or curing any breach; (g)
the filing by or against Borrower of Lenderruptcy, insolvency, reorganization or
other debtor's relief afforded Borrower pursuant to the present or future
provisions of the Lenderruptcy Code or any other state or federal statute or by
the decision of any court; or (h) any other matter whether similar or dissimilar
to the foregoing. The obligations of Grantor are unconditional, notwithstanding
any defect in the genuineness, validity, regularity or enforceability of the
Liabilities or any other circumstances whether or not referred to herein, which
might otherwise constitute a legal or equitable discharge or defense of a surety
or Grantor.

         The Grantor hereby waives each and every defense which, under
principles of suretyship law or otherwise, would otherwise operate to impair or
diminish the liability of Grantor or the rights of the Lender hereunder,
including, without limitation: (a) notice of acceptance of this Mortgage and of
creations of Liabilities of Borrower to the Lender;

                                       12

<PAGE>

(b) any subrogation to the rights of the Lender against Borrower until the
Liabilities have been paid in full; (c) presentment and demand for payment of
any Liabilities of Borrower; (d) protest, notice of protest, and notice of
dishonor or default to the Grantor or to any other party with respect to any of
the Liabilities; (e) all other notices to which the Grantor might otherwise be
entitled; (f) any demand for payment under this Mortgage; (g) any defense
arising by reason of any disability or other defense of Borrower by reason of
the cessation from any cause whatsoever of the liability of the Borrower; (h)
any rights to extension, composition or otherwise under the Lenderruptcy Code or
any amendments thereof, or under any state or other federal statute; and (i) any
right or claim or claim of right to cause a marshalling of Borrower's assets. No
notice to or demand on the Grantor shall be deemed to be a waiver of the
obligations of the Grantor or of the right of the Lender to take further action
without notice or demand as provided herein.

         27.      BINDING EFFECT. Until this Mortgage is discharged in full, all
of the covenants and conditions hereof shall run with the land and shall be
binding upon the successors and assigns of Grantor, and shall inure to the
benefit of the successors and assigns of the Lender. Any reference herein to
"Grantor" or the "Lender" shall include their respective successors and assigns.

         28.      NOTICES. All notices, demands and requests required or
permitted to be given to Grantor hereunder or by law shall be deemed delivered
when deposited in the United States mail, with full postage prepaid thereon,
addressed to Grantor at the last address of Grantor on the records of the
Lender.

         29.      NO WAIVER. No waiver by the Lender of any right or remedy
granted hereunder shall affect or extend to any other right or remedy of the
Lender hereunder, nor affect the subsequent exercise of the same right or remedy
by the Lender for any further or subsequent Event of Default by Grantor
hereunder, and all such rights and remedies of the Lender hereunder are
cumulative. Time is of the essence.

         30.      SEVERABILITY. If any provision(s) hereof are in conflict with
any statute or rule of law of the State of Michigan or are otherwise
unenforceable for any reason whatever, then such provision(s) shall be deemed
null and void to the extent of such conflict or unenforceability, but shall be
deemed separable from and shall not invalidate any other provisions of this
Mortgage.

         31.      PRONOUNS. If more than one person joins in the execution
hereof, or is of the feminine sex, or a corporation, the pronoun and relative
words herein used shall be read as if in plural, feminine or neuter,
respectively.

         IN WITNESS WHEREOF, this Mortgage was executed and delivered by the
undersigned on the date stated in the first paragraph above.

                                       13

<PAGE>

                                  GRANTOR:

                                  MEADOWBROOK INSURANCE GROUP, INC., a
                                  Michigan corporation

                                  By:              /s/ Robert S. Cubbin
                                           --------------------------------
                                           ROBERT S. CUBBIN
                                  Its:     President and CEO

STATE OF MICHIGAN   )
                    )ss
COUNTY OF OAKLAND   )

         The foregoing instrument was acknowledged before me on January 1, 2005
by Robert S. Cubbin, who is the President and CEO of Meadowbrook Insurance
Group, Inc., a Michigan corporation, on behalf of the corporation.

                                           --------------------------------

                                           Notary Public,             County, MI
                                                          -----------
                                           My commission expires:
                                                                 ---------------

DRAFTED BY:

Scott K. Lites, Esq.
Plunkett & Cooney, P.C.
38505 Woodward Avenue
Suite 2000
Bloomfield Hills, Michigan  48304

WHEN RECORDED RETURN TO:

Meadowbrook Insurance Group, Inc.
26255 American Drive
Southfield, Michigan  48034

                                       14

<PAGE>

                                   "EXHIBIT A"

         Land in the City of Southfield, County of Oakland and State of
Michigan, described as:

Tax Parcel No.:

Commonly known as:

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