Document:

mis_8k0118ex103.htm

    Exhibit
      10.3

    

    REAL
      ESTATE NOTE

     

    
      	
              $1,250,000.00

            	 	
              January
                14, 2008

            

    

     

    For
      value
      received, the undersigned, MISCOR GROUP, LTD., an Indiana corporation
      (“MISCOR”), MAGNETECH INDUSTRIAL SERVICES, INC., an Indiana corporation (“MIS”),
      MARTELL ELECTRIC, LLC, an Indiana limited liability company (“Martell”), HK
      ENGINE COMPONENTS, LLC, an Indiana limited liability company (“HK”), MAGNETECH
      POWER SERVICES, LLC, an Indiana limited liability company (“MPS”) and IDEAL
      CONSOLIDATED, INC., an Indiana corporation (“Ideal”) , 3-D SERVICE, LTD., an
      Ohio limited liability company (“3D”) and AMERICAN MOTIVE POWER, INC., a Nevada
      corporation (“AMP” and together with MISCOR, MIS, Martell, HK, MPS, Ideal and
      3D, the “Borrowers” and each a “Borrower”), hereby jointly and severally promise
      to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Lender”),
      acting through its Wells Fargo Business Credit operating division, on the
      Termination Date set forth in the Credit and Security Agreement dated the same
      date as this Real Estate Note that was entered into by the Lender and the
      Borrower (as amended from time to time, the “Credit Agreement”), at Lender’s
      office located at Milwaukee, Wisconsin, or at any other place designated at
      any
      time by the holder hereof, in lawful money of the United States of America
      and
      in immediately available funds, the principal sum of One Million Two Hundred
      Fifty Thousand Dollars ($1,250,000) or the aggregate unpaid principal amount
      of
      all Real Estate Advances made by the Lender to the Borrowers under the Credit
      Agreement together with interest on the principal amount hereunder remaining
      unpaid from time to time, computed on the basis of the actual number of days
      elapsed and a 360-day year, from the date hereof until this Real Estate Note
      is
      fully paid at the rate from time to time in effect under the Credit
      Agreement.

     

    This
      Real
      Estate Note is the Real Estate Note referred to in the Credit Agreement, and
      is
      subject to the terms of, the Credit Agreement, which provides, among other
      things, for acceleration hereof.  Principal and interest due hereunder
      shall be payable as provided in the Credit Agreement, and this Real Estate
      Note
      may be prepaid only in accordance with the terms of the Credit
      Agreement.  This Real Estate Note is secured, among other things,
      pursuant to the Credit Agreement and the Security Documents as therein defined,
      and may now or hereafter be secured by one or more other security agreements,
      mortgages, deeds of trust, assignments or other instruments or
      agreements.

     

    The
      Borrowers hereby agrees to pay all costs of collection, including reasonable
      attorneys’ fees and legal expenses in the event this Real Estate Note is not
      paid when due, whether or not legal proceedings are commenced.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Presentment
      or other demand for payment, notice of dishonor and protest are expressly
      waived.

     

    
      	 	
              MISCOR
                GROUP, LTD.

            
	 	 	 
	 	 	 
	 	
              By:

            	 /s/
              John A. Martell
	 	
              Name:  John
                A. Martell

            
	 	
              Its:  Chief
                Executive Officer

            
	 	 	 
	 	 	 
	 	
              MAGNETECH
                INDUSTRIAL SERVICES, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 /s/
              John A. Martell
	 	
              Name:  John
                A. Martell

            
	 	
              Its:  Chief
                Executive Officer

            
	 	 	 
	 	 	 
	 	
              MARTELL
                ELECTRIC, LLC

            
	 	 	 
	 	 	 
	 	
              By:

            	 /s/
              John A. Martell
	 	
              Name:  John
                A. Martell

            
	 	
              Its:  Chief
                Executive Officer

            
	 	 	 
	 	 	 
	 	
              HK
                ENGINE COMPONENTS, LLC

            
	 	 	 
	 	 	 
	 	
              By:

            	 /s/
              John A. Martell
	 	
              Name:  John
                A. Martell

            
	 	
              Its:  Chief
                Executive Officer

            
	 	 	 
	 	 	 
	 	
              MAGNETECH
                POWER SERVICES, LLC

            
	 	 	 
	 	 	 
	 	
              By:

            	 /s/
              John A. Martell
	 	
              Name:  John
                A. Martell

            
	 	
              Its:  Chief
                Executive Officer

            
	 	 	 

    

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    
      	 	
              IDEAL
                CONSOLIDATED, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 /s/
              John A. Martell
	 	
              Name:  John
                A. Martell

            
	 	
              Its:  Chief
                Executive Officer

            
	 	 	 
	 	 	 
	 	
              3-D
                SERVICE, LTD.

            
	 	 	 
	 	 	 
	 	
              By:

            	 /s/
              John A. Martell
	 	
              Name:  John
                A. Martell

            
	 	
              Its:  Chief
                Executive Officer

            
	 	 	 
	 	 	 
	 	
              AMERICAN
                MOTIVE POWER, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 /s/
              John A. Martell
	 	
              Name:  John
                A. Martell

            
	 	
              Its:  Chief
                Executive Officer

            

    

    

    

    
-3-mis_8k0118ex104.htm

    Exhibit
      10.4

    

    
      
        

        
          	
                  STATE
                    OF ALABAMA

                   

                  COUNTY
                    OF MOBILE

                	 	 	 
	 	
                   

                   

                   

                  REAL
                    ESTATE MORTGAGE, SECURITY
                    AGREEMENT, AND ASSIGNMENT OF LEASES AND RENTS

                	 	 
	
                   

                  THIS
                    REAL ESTATE MORTGAGE, SECURITY AGREEMENT, AND ASSIGNMENT OF LEASES
                    AND
                    RENTS (“Mortgage”) is made as of the 14th
                    day of January,
                    2008, by MAGNETECH INDUSTRIAL SERVICES, INC., an Indiana corporation
                    having a notice address of 1125 S. Walnut Street, South Bend,
                    Indiana
                    46619 (“Mortgagor”) in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION,
                    acting through its WELLS FARGO BUSINESS CREDIT operating division,
                    a
                    national banking

                  association
                    having a notice address of 100 East Wisconsin Avenue, Milwaukee,
                    Wisconsin
                    53202 (“Mortgagee”).

                   

                	 	
                   

                   

                   

                   

                  THIS
                    SPACE RESERVED FOR RECORDING DATE

                
	
                   

                	 
                  
                  NAME
                    AND RETURN ADDRESS

                   

                  Kristin
                    A. Roeper

                  Godfrey
                    & Kahn, S. C.

                  780
                    North Water Street

                  Milwaukee,
                    WI 53202

                	 

        

      

       

      
        W
          I T N E
          S S E T H:

        

        Mortgagor
          and its affiliates, MISCOR Group, Ltd., Martell Electric, LLC, HK Engine
          Components, LLC, Magnetech Power Services, LLC, Ideal Consolidated, Inc.,
          3-D
          Service, Ltd. and American Motive Power, Inc. (the “Affiliates” and collectively
          with Mortgagor, the “Borrowers”) have entered into a Credit and Security
          Agreement with Mortgagee (the “Credit Agreement”) of even date herewith pursuant
          to which Mortgagee has agreed, subject to the terms and conditions in the
          Credit
          Agreement, to loan to and provide other financial accommodations to Borrowers
          in
          the aggregate principal sum of up to Fifteen Million Dollars ($15,000,000),
          as
          evidenced by that certain Revolving Note (the “Revolving Note”) of the Borrowers
          dated as of the date hereof in the principal amount of up to Thirteen Million
          Seven Hundred Fifty Thousand Dollars ($13,750,000), payable to the order
          of
          Mortgagee, and that certain Real Estate Note (the “Real Estate Note” and
          together with the Revolving Note, the “Notes”) of the Borrowers dated as of the
          date hereof in the principal amount of One Million Two Hundred Fifty Thousand
          Dollars ($1,250,000) payable to the order of Mortgagee.  To provide
          additional security for the Notes and the Credit Agreement, Mortgagor has
          agreed
          to execute this instrument and make this Mortgage, with full knowledge
          of the
          terms contained herein and in the Notes and the Credit Agreement.  As
          used herein, the term “Event of Default” has the meaning set forth in the Credit
          Agreement.

         

        
          
            
            

          

          
            
               

            

            
              

            

          

          
            
            

          

        

         

        NOW,
          THEREFORE, Mortgagor, to secure the payment of the Notes, and the Borrowers’
obligations under the Credit Agreement, in accordance with their respective
          terms and all future advances up to and not to exceed Fifteen Million Dollars
          ($15,000,000) outstanding at one time, and all additions, extensions,
          modifications and renewals thereof, and all other sums which may become
          due from
          Borrowers to Mortgagee by virtue of the Credit Agreement, the Notes, this
          Mortgage and/or the transactions to which they relate, and to secure the
          performance of the covenants and agreements herein contained and in the
          Credit
          Agreement, by Borrowers to be performed, and in consideration of the sum
          of
          Ten Dollars ($10.00) in hand paid by Mortgagee and other good and
          valuable consideration, the receipt and sufficiency of which are hereby
          acknowledged by Mortgagor, does hereby grant, bargain, sell, mortgage,
          convey
          and warrant unto Mortgagee, its successors and assigns, forever, all that
          tract
          or parcel of land located in Mobile County, Alabama (“Real Estate”) legally
          described on Exhibit A attached hereto
          and incorporated herein by reference, and Mortgagor further grants, bargains,
          sells, mortgages, conveys and warrants unto Mortgagee, and grants to Mortgagee
          a
          security interest in and lien upon, all of its right, title and interest
          (whether now owned or hereafter acquired) into and under the
          following:

         

        I.           All
          right, title and interest of Mortgagor, including any after-acquired title
          or
          reversion, now or at any time hereafter existing, in and to all highways,
          roads,
          ways, streets, avenues, alleys and other public thoroughfares, bordering
          on or
          adjacent to the Real Estate or any part thereof, together with all right,
          title
          and interest of Mortgagor to the land lying within such highways, roads,
          ways,
          streets, avenues, alleys and other public thoroughfares, whether heretofore
          or
          hereafter vacated, and all strips and gores adjoining or within the Real
          Estate
          or any part thereof;

         

        II.           All
          and singular the tenements, hereditaments, licenses, permits, consents,
          easements, appurtenances, passages, waters, water courses, riparian rights,
          other rights and privileges thereof or in any way now or at any time hereafter
          belonging to or in any way appertaining to the Real Estate or any part
          thereof
          or to any property or right now or at any time hereafter comprising a part
          of
          the property and rights subject to this Mortgage; and all right, title
          and
          interest of Mortgagor, whether now or at any time hereafter existing, in
          all
          reversions and remainders to the Real Estate and such other property or
          right
          and all rents, income, issues, profits, royalties and revenues now or hereafter
          derived or accrued from or belonging to the Real Estate or any part thereof
          and
          such other property or right subject to this Mortgage;

         

        III.           All
          buildings and improvements of every kind and description now or hereafter
          located, erected or placed on the Real Estate, or any part thereof, including,
          but not limited to, all structures, railroad spur tracks and sidings, plants,
          works and all materials intended for construction, and repairs of such
          improvements now or hereafter erected thereon, all of which materials shall
          be
          deemed to be subject to this Mortgage immediately upon the delivery thereof
          to
          the Real Estate, and all fixtures now or hereafter owned by Mortgagor,
          and
          attached to or contained in and used in connection with the Real Estate,
          whether
          or not the same are or shall be attached to any building or buildings in
          any
          manner

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

         

        and,
          without any further act, all extensions, additions, betterments, substitutions
          and replacements to the foregoing (collectively, the
“Development”);

         

        IV.           All
          awards and other compensation (“Awards”), whether heretofore, now or hereafter
          made, to Mortgagor, its successors and assigns, for any taking by Eminent
          Domain, either permanent or temporary, of all or any part of the Real Estate
          or
          any part thereof and all the properties and rights described in Paragraphs
          I,
          II, and III above or any part thereof or any easement or appurtenance thereof,
          including any awards for any changes of grade of streets, which said awards
          and
          compensation are hereby assigned to Mortgagee; and

         

        V.           All
          monies or other funds or sums at any time on deposit with Mortgagee pursuant
          to
          the terms hereof, and all contract rights, general intangibles, actions
          and
          rights of action, including without limitation all rights to insurance
          proceeds
          and unearned premiums arising from or relating to the Real Estate or any
          part
          thereof or the properties and rights described in Paragraphs I, II, III
          and IV
          above, or any part thereof; and all proceeds, products, replacements, additions,
          substitutions, renewals and accessions of and to the Real Estate or any
          part
          thereof or the properties and rights described in Paragraphs I, II, III
          and IV
          above or any part thereof.

         

        Any
          reference herein to the “Mortgaged Premises” shall be deemed to apply to the
          Real Estate and all the properties and rights expressed in the foregoing
          five
          (5) paragraphs, unless the context shall require otherwise.  It is
          understood that the Real Estate, and all the properties and rights hereby
          granted, bargained, sold, mortgaged, conveyed and warranted are intended
          to be
          one unit and are hereby understood, agreed and declared to form a part
          and
          parcel of the Mortgaged Premises and to be appropriated to the use of the
          Mortgaged Premises, and shall for the purpose of this Mortgage, so far
          as
          permitted by law, be deemed to be real estate and covered by the lien of
          this
          Mortgage

         

        TO
          HAVE
          AND TO HOLD the Mortgaged Premises unto Mortgagee and its successors and
          assigns
          forever.

         

        AND
          Mortgagor covenants and warrants that it has good and indefeasible title
          to the
          Real Estate in fee simple and that it has good right to convey its interest
          in
          the Mortgaged Premises, free and clear of all liens, charges and encumbrances
          whatsoever, except as permitted under the Credit Agreement or as otherwise
          set
          forth on Exhibit B
          attached hereto and incorporated by reference (collectively, the “Permitted
          Encumbrances”); and Mortgagor and its successors in interest will forever
          warrant and defend the lien and priority of this Mortgage against the lawful
          claims and demands of all persons whomsoever.

         

        PROVIDED,
          HOWEVER, that if the principal, interest and all other sums provided in
          the
          Notes and the Credit Agreement are paid and all other sums hereinafter
          provided
          for or secured hereby are paid, and if Mortgagor properly performs all
          of the
          covenants herein contained, then this Mortgage shall be released, in accordance
          with the Credit Agreement, at the cost of Borrowers, otherwise this Mortgage
          will remain in full force and effect.

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

         

        IT
          IS
          FURTHER UNDERSTOOD AND AGREED THAT

         

        1.           Payment
          and
          Performance.  Borrowers shall promptly pay the principal of and
          interest on the indebtedness evidenced by the Notes and the Credit Agreement
          at
          the time and in the manner therein provided, and Mortgagor shall duly and
          punctually perform and observe all of the terms, covenants and conditions
          to be
          performed or observed by Mortgagor in the Notes, the Credit Agreement,
          this
          Mortgage and any other documents evidencing, securing or referring to said
          indebtedness.

         

        2.           Payment
          of
          Taxes.  Subject to such exceptions as set forth under the terms
          of the Credit Agreement, (a) Mortgagor shall pay before delinquent and
          before
          any interest or penalty for nonpayment attaches thereto, all taxes, assessments,
          water rates, sewer rentals and other governmental charges of every nature
          and to
          whomever assessed that may now or hereafter be levied or assessed upon
          the
          Mortgaged Premises (“Taxes”) or any part thereof, or upon Mortgagor’s interest
          in the rents, issues, income or profits thereof, whether any or all of
          said
          items be levied directly or indirectly or as excise taxes or income taxes
          and
          (b) Mortgagor shall deliver to Mortgagee, at least ten (10) days before
          delinquent, receipted bills evidencing payment therefor.

         

        3.           Deposits
          for Taxes and
          Assessments.  Following the occurrence of an Event of Default,
          Borrowers will, upon Mortgagee’s demand, deposit with Mortgagee, in addition to
          the required installments of principal and/or interest due under the terms
          of
          the Notes, monthly until the Notes are paid in full, a sum equal to all
          Taxes
          next due on the Mortgaged Premises (all as estimated by Mortgagee), divided
          by
          the number of months to elapse before one (1) month prior to the date when
          such
          Taxes will become delinquent.  Such deposits (i) shall not be deemed
          to be trust funds but may be commingled with any funds of Mortgagee; and
          (ii)
          shall be used, subject to the provisions of this Section 3, for the payment
          of
          Taxes on the Mortgaged Premises next due and payable when they become
          due.  If the sums so deposited are insufficient to pay any such Taxes
          for any year when the same shall become due and payable, Borrowers shall
          on
          demand deposit such additional funds as may be necessary to pay such Taxes
          in
          full.  If the sums so deposited exceed the amount required to pay such
          Taxes for any year, the excess shall be credited to a subsequent deposit
          or
          deposits required hereunder.

         

        Upon
          acceleration of the amounts due under the Notes, Mortgagee may thereafter,
          at
          its option, without being required to do so, apply (i) any monies at the
          time on deposit first pursuant to the foregoing provisions of this Section
          3,
          and (ii) any deposits and any payments by Borrowers, on any Borrowers’
obligations herein contained or obligations under the Notes or Credit
          Agreement, in such order and manner as Mortgagee may elect.  When the
          indebtedness secured hereby has been fully paid, any remaining deposits
          shall be
          paid to Borrowers.  Such deposits are hereby pledged as additional
          security for the indebtedness hereunder and shall be irrevocably applied
          by
          Mortgagee for the purposes for which made hereunder and shall not be subject
          to
          the direction or control of Borrowers; provided, however,
          that
          Mortgagee shall not be liable for any failure to apply such funds to the
          payment
          of Taxes unless Borrowers, provided there has been no acceleration of the
          amounts due under the Notes, shall have requested Mortgagee in writing
          to make
          application of such funds to the payment of the particular Taxes for payment
          of
          which they were deposited,

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

        accompanied
          by the bills for such Taxes.  Mortgagee shall not be liable for any
          act or omission taken in good faith or pursuant to the instruction of any
          party,
          and shall be liable only for its willful misconduct.

         

        Mortgagee
          shall have the right to make any such payment for Taxes unless any such
          Tax is
          then being contested by Borrowers, in which event, Mortgagee shall make
          such
          payment under protest in the manner prescribed by law or shall withhold
          such
          payment.  In the event such contest shall or might result in interest,
          penalty or other charges; Borrowers shall likewise deposit monthly pro-rata
          the
          amount of any such interest, penalty or additional charge.

         

        4.           Effect
          of New Taxation or
          Changes in Law Regarding Taxation.  If, by the laws of the
          United States of America or of any state having jurisdiction over Mortgagor
          or
          the Mortgaged Premises, any tax, assessment or governmental charge of any
          character whatever is due or becomes due on account of this Mortgage or
          the
          indebtedness secured hereby, except for income or franchise taxes of Mortgagee,
          Mortgagor covenants and agrees to pay any such tax, assessment or governmental
          charge of any character whatever in the manner required by any such law
          when the
          same shall become due; provided that
          Mortgagor shall not be required to pay any such tax, assessment or governmental
          charge whose amount, applicability or validity is being contested in good
          faith
          by appropriate proceedings and for which proper reserves have been
          made.  Mortgagor further covenants to hold harmless and agrees to
          indemnify Mortgagee, its successors or assigns, against any liability incurred
          by reason of the imposition of any such tax, assessment or government charge
          on
          account of this Mortgage or the indebtedness secured hereby.  In the
          event of the enactment after this date of any law of the state in which
          the
          Mortgaged Premises are located deducting from the value of land for the
          purpose
          of taxation any lien thereon, or imposing upon Mortgagee the payment of
          the
          whole or any part of the taxes or assessments or charges or liens herein
          required to be paid by Mortgagor, or changing in any way the laws relating
          to
          the taxation of mortgages or debts secured by mortgages or Mortgagee’s interest
          in the property, or the manner of collecting taxes, so as to affect this
          Mortgage or the debt secured hereby or the holder thereof, then, and in
          any such
          event, Mortgagor, upon demand by Mortgagee, shall pay such taxes or assessments
          or charges or liens or reimburse Mortgagee therefor.

         

        5.           Mortgagor’s
          Covenants.  Mortgagor will not do or permit to be done to, in,
          upon or about any portion of the Mortgaged Premises, anything that may
          in any
          manner materially impair the value thereof, or materially weaken, diminish
          or
          impair the security of this Mortgage.  In furtherance of the
          foregoing:

         

        (a)           Mortgagor
          shall keep the Mortgaged Premises in good condition and repair, in all
          material
          respects, and not commit or permit the commission of any material waste
          of any
          kind whatsoever on the Mortgaged Premises or any part thereof;

         

        (b)           Mortgagor
          shall promptly repair, restore or rebuild any buildings or improvements
          now or
          hereafter on the Mortgaged Premises which may become damaged or be destroyed
          by
          any cause whatsoever (excluding minor inconsequential damage costing less
          than
          Five Thousand Dollars ($5,000.00) to repair which does not materially impair
          the
          value or utility of the improvements), so that upon completion of the repair,
          restoration and rebuilding of said

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

           

          buildings
            and improvements there will not be any liens of any nature arising out
            of said
            repair, restoration and rebuilding, and the Mortgaged Premises will have
            a
            commercial value at least as great as the value of the Mortgaged Premises
            prior
            to such damage or destruction;

        

         

        (c)           Mortgagor
          shall not, directly or indirectly, without Mortgagee’s prior written consent,
          create, incur, permit to exist or assume any mortgage, pledge or other
          lien or
          claim for lien or encumbrance upon the Mortgaged Premises or any part thereto
          other than (i) the lien and security interest of Mortgagee as created by
          this
          Mortgage and any other documents evidencing, securing or referring to the
          Notes
          and (ii) the other Permitted Encumbrances;

         

        (d)           Mortgagor
          shall promptly comply, and use reasonable efforts to cause each lessee
          or other
          user of any part of the Mortgaged Premises to promptly comply, in all material
          respects, with (i) all laws, ordinances, regulations and orders of all
          public
          authorities having jurisdiction of the Mortgaged Premises and (ii) all
          restrictions of record pertaining to the Mortgaged Premises;

         

        (e)           Mortgagor
          shall not make any material alterations to the Mortgaged Premises without
          the
          prior written consent of Mortgagee;

         

        (f)           Mortgagor
          shall promptly notify Mortgagee in writing of (i) any material loss or
          damage to
          any part of the Mortgaged Premises, (ii) any material change, whether
          contemplated, pending or final, in the assessment of any part of the Mortgaged
          Premises by taxing authorities or in the zoning classification, (iii) the
          actual
          or threatened commencement of any proceedings under condemnation or eminent
          domain affecting any part of the Mortgaged Premises, including those proceedings
          relating to severance and consequential damage and change in grade of streets,
          copies of any and all papers served in connection with any such proceedings
          to
          be delivered to Mortgagee upon such service, and (iv) any other action,
          whether
          contemplated (when known to Mortgagor), pending or final, by any public
          authority or otherwise, that could materially affect the value of any part
          of
          the Mortgaged Premises;

         

        (g)           Mortgagor
          shall not suffer or permit any material change in the general nature of
          the
          occupancy of the Mortgaged Premises, without the prior written consent
          of
          Mortgagee;

         

        (h)           Mortgagor
          shall not initiate any material zoning reclassification, without the prior
          written consent of Mortgagee, excluding, however,
          variances
          and reclassifications consistent with Mortgagor’s use of the Mortgaged
          Premises;

         

        (i)           Mortgagor
          shall not make or permit any use of the Mortgaged Premises that could with
          the
          passage of time result in the creation of any right of use, or any claim
          of
          adverse possession or easement on, to or against any part of the Mortgaged
          Premises in favor of any person or the public;

         

        (j)           Mortgagor
          shall not permit any portion of the Mortgaged Premises to be used for any
          unlawful purpose;

         

        (k)           Mortgagor
          shall permit Mortgagee to enter the Mortgaged Premises at any time during
          normal
          business hours.

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

         

        6.           Insurance.  Mortgagor
          shall keep in full force and effect all insurance coverage on the Mortgaged
          Premises required under the Credit Agreement and Mortgagor shall provide
          Mortgagee evidence of the same.

         

        7.           Adjustment
          of Losses with
          Insurer and Application of Proceeds of Insurance.  In case of
          any casualty loss, or damage to the Mortgaged Premises, Mortgagor shall
          give
          prompt notice to Mortgagee, and Mortgagee shall consult with Mortgagor
          as to how
          to proceed but may in its sole discretion, either (i) settle and adjust
          any
          claim under any insurance policy or policies required hereunder as aforesaid,
          without consent of Mortgagor, or (ii) allow Mortgagor to agree with the
          insurance company or companies on the amount to be paid upon the
          loss.  In either case, the insurance proceeds shall be paid to
          Mortgagee and Mortgagee is authorized to collect and to give receipts
          therefor.  All such insurance proceeds shall be held by Mortgagee, and
          used to reimburse Mortgagor for the cost of the rebuilding or restoration
          of
          said improvements on the Mortgaged Premises, in which event the proceeds
          so used
          shall not be deemed a payment on the indebtedness secured hereby and Mortgagee
          shall make such proceeds available, from time to time, for such reconstruction
          costs in a manner similar to the procedures set forth for the disbursement
          of
          loan proceeds under the Credit Agreement.  Notwithstanding the
          foregoing, following the occurrence, and at all times during the continuance,
          of
          any Event of Default, Mortgagee shall, in lieu of allowing the proceeds
          to be
          used as aforesaid, have the right, in its sole discretion, to require that
          all
          insurance proceeds be applied in reduction of the indebtedness secured
          hereby,
          in such order as Mortgagee shall determine.  If Mortgagee allows
          insurance proceeds to be made available for rebuilding or restoration in
          accordance with this paragraph, and if the amount of such proceeds are
          insufficient to cover the cost of rebuilding or restoration, Mortgagor
          shall pay
          such cost in excess of the proceeds, before being entitled to reimbursement
          out
          of the proceeds.  Any surplus which may remain out of said proceeds
          after payment of such cost of rebuilding or restoration shall, at the option
          of
          Mortgagee, be applied on account of the indebtedness secured hereby or
          be paid
          to any other party entitled thereto.

         

        8.           Condemnation.  Mortgagee
          is hereby authorized, at its option, to commence, appear in and prosecute
          in its
          own or Mortgagor’s name any action or proceeding relating to any condemnation or
          power of eminent domain and to settle or compromise any claim in connection
          therewith, provided Mortgagee agrees to consult with Mortgagor concerning
          such
          action.  The Award is included in the Mortgaged Premises and shall be
          held by Mortgagee and used to reimburse Mortgagor for the cost of rebuilding
          or
          restoring buildings or improvements on the Mortgaged Premises, in which
          event
          the proceeds so used shall not be deemed a payment on the indebtedness
          secured
          hereby and the proceeds of the Award shall be applied and paid out in the
          same
          manner as is provided in Section 7 hereof for the payment of insurance
          proceeds
          toward the cost of rebuilding or restoration. Notwithstanding the foregoing,
          following the occurrence, and at all times during the continuance, of any
          Event
          of Default, Mortgagee shall, in lieu of allowing the proceeds of any Award
          to be
          used as aforesaid, have the right, in its sole discretion, to require that
          all
          such proceeds be applied in reduction of the indebtedness secured hereby,
          in
          such order as Mortgagee shall determine.  If the amount of such Award
          is insufficient to cover the cost of rebuilding or restoration, Mortgagor
          shall
          pay such cost in excess of the Award, before being entitled to reimbursement
          out
          of the Award.  Any surplus which may remain out of said Award after
          payment of such cost of rebuilding or restoration shall, at the option
          of
          Mortgagee, be applied on account of the indebtedness secured hereby or
          be paid
          to any other party entitled thereto.

         

        
          
            
            

          

          
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        9.           Hold
          Harmless.  Mortgagor shall save Mortgagee harmless from and
          indemnify Mortgagee against all loss, liability, damages, costs and expenses,
          including reasonable attorney’s fees, incurred by reason of any action, suit,
          proceeding, hearing, motion or application before any Court or administrative
          body in and to which Mortgagee may be or become a party by reason hereof,
          including but not limited to condemnation, bankruptcy, probate and
          administrative proceedings, as well as any other of the foregoing wherein
          proof
          of claim is by law required to be filed or in which it becomes necessary
          to
          defend or uphold the terms of and the lien created by this Mortgage, unless
          caused by the malicious act or omission of Mortgagee, and all money paid
          or
          expended by Mortgagee in that regard, together with interest thereon from
          date
          of such payment at the rate set forth in the Notes shall be so much additional
          indebtedness secured hereby and shall be immediately and without notice
          due and
          payable to Mortgagee.

         

        10.           Mortgagee’s
          Performance of
          Defaulted Acts.  Upon the occurrence of an Event of Default,
          Mortgagee may, at its option and whether electing to declare the whole
          indebtedness due and payable or not, (i) perform the same without waiver of
          any other remedy, and/or (ii) purchase, discharge, compromise or settle any
          tax lien or other prior lien or title or claim thereof, or redeem from
          any tax
          lien or other prior lien or title or claim thereof, or redeem from any
          tax sale
          or forfeiture affecting the Mortgaged Premises and the maintenance of the
          lien
          created hereby, including reasonable attorney’s fees, with interest on all such
          items at the rate at which principal bears interest under the Notes, shall
          be
          repayable by Borrowers without demand and shall be tacked and impressed
          as an
          additional lien upon the Mortgaged Premises prior to any right, title,
          interest
          or claim attaching or accruing subsequent to the lien of this Mortgage
          and shall
          be deemed to be secured by and collectible as part of this
          Mortgage.  Inaction of Mortgagee shall never be considered as a waiver
          of any right accruing to it on account of any such default on the part
          of
          Mortgagor.

         

        11.           Mortgagee’s
          Reliance in
          Making Payments.  Mortgagee, in making any payment herein and
          as hereby authorized, (i) relating to Taxes, may do so according to any
          bill,
          statement or estimate procured from the appropriate public office without
          inquiry into the validity or accuracy thereof, and (ii) relating to any
          prior
          lien or title or claim thereof, may do so without inquiry as to the validity
          or
          amount of any such prior lien or title or claim which may be asserted,
          and (iii)
          may do so whenever, in its sole judgment, such payment or payments shall
          seem
          necessary or desirable to protect the security created by this Mortgage;
provided, however,
          that in
          connection with any such payment as aforesaid, Mortgagee, at its option,
          may and
          is hereby authorized to obtain a continuation report of title prepared
          by a
          title insurance company, the expense of which shall be repayable by Mortgagor
          upon demand and shall be secured hereby.

         

        12.           Assignment
          of Rents and
          Leases.  All right, title and interest of Mortgagor in and to
          all present leases affecting the Mortgaged Premises, and including and
          together
          with (i) any and all future leases upon all or any part of the Mortgaged
          Premises, (ii) all of the rents, income, receipts, revenues, issues and
          profits
          (“Rents”) from or due or arising out of the Mortgaged Premises and (iii) all
          deposits given as security for the faithful performance of each of such
          leases
          and all guaranties of any or all of such leases, are hereby collaterally
          assigned simultaneously herewith to Mortgagee as security for the payment
          of the
          Notes.  All leases affecting the Mortgaged Premises for a term of more
          than one (1) year (including renewal options) shall be submitted by
          Mortgagor to Mortgagee for its approval prior to the execution
          thereof.  All approved and executed leases for a term of more than one
          (1) year (including

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

         

        renewal
          options) shall, at Mortgagee’s option, be specifically assigned to Mortgagee by
          instrument in form satisfactory to Mortgagee.  All or any such leases
          shall be subordinate to this Mortgage.  Mortgagor, as lessor under
          such leases, shall comply with all material provisions in such leases with
          which
          the lessor is required to comply, and shall faithfully and fully enforce
          all
          material terms and conditions of such leases.  If Mortgagor shall not
          comply with or enforce each such lease, Mortgagee may (without being required
          to), after ten (10) days prior written notice to Mortgagor, perform and
          enforce
          such leases, and all amounts expended by Mortgagee in connection therewith
          shall
          be immediately due Mortgagee and shall be secured by the lien
          hereof.  Mortgagee hereby grants to Mortgagor, so long as no Event of
          Default has occurred and is continuing, a license to collect the rents
          due under
          any such leases, without any obligation to apply the same to the indebtedness
          secured hereby.

         

        Upon
          any
          Event of Default, Mortgagee may at any time without notice, either in person,
          by
          agent or by a receiver appointed by a court, and without regard to the
          adequacy
          of any security for the indebtedness hereby secured, enter upon and take
          possession of the Mortgaged Premises, or any part thereof, in its own name
          sue
          for same, less costs and expenses of operation and collection, including
          attorneys’ fees, upon any indebtedness secured hereby, and in such order as
          Mortgagee may determine.  The collection of such Rents or the entering
          upon and taking possession of the Mortgaged Premises, or the application
          thereof
          as aforesaid, shall not cure or waive any default or notice of default
          hereunder
          or invalidate any act done in response to such default or pursuant to such
          notice of default.

         

        In
          any case in which under the
          provisions of this Mortgage Mortgagee has a right to institute foreclosure
          proceedings, whether before or after the whole principal sum secured hereby
          is
          declared to be immediately due, or whether before or after the institution
          of
          legal proceedings to foreclose the lien hereof or before or after sale
          thereunder, forthwith, upon demand of Mortgagee, Mortgagor shall surrender
          to
          Mortgagee and Mortgagee shall be entitled to take actual possession of
          the Real
          Estate or any part thereof personally, or by its agent or attorneys, as
          for
          condition broken.  In such event Mortgagee in its discretion may, with
          process of law, enter upon and take and maintain possession of all or any
          part
          of the Real Estate, together with all documents, books, records, papers,
          and
          accounts of Mortgagor or then owner of the Mortgaged Property relating
          thereto,
          and may exclude Mortgagor, its agents or servants, wholly therefrom and
          may as
          attorney in fact or agent of Mortgagor, or in its own name as Mortgagee
          and
          under the powers herein granted, hold, operate, manage and control the
          Mortgaged
          Premises and conduct the business, if any, thereof, either personally or
          by its
          agents, and will full power to use such measures, legal or equitable, as
          in its
          discretion or in the discretion of its successors or assigns, may be deemed
          proper or necessary to enforce the payment or security of the avails, rents,
          issues, and profits of the Mortgaged Premises, including actions for the
          recovery of rent, actions in forcible detainer and actions in distress
          for rent,
          and with full power: (a) to cancel or terminate any lease or sublease for
          any
          cause or on any ground which would entitle Mortgagor to cancel the same;
          (b) to
          elect to disaffirm any lease or sublease which is then subordinate to the
          lien
          hereof; (c) to extend or modify any then existing leases and to make new
          leases,
          which extensions, modifications and new leases may provide for terms to
          expire,
          or for options to lessees to extend or renew terms to expire, beyond the
          maturity date of the indebtedness hereunder and beyond the date of the
          issuance
          of a deed or deeds to a purchaser or purchasers at a foreclosure sale,
          it being
          understood and agreed that any such leases, and the options or other such
          provisions to be contained therein, shall be binding upon Mortgagor and
          all
          persons whose

         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

         

        interest
          in the Mortgaged Premises are subject to the lien hereof and upon the purchaser
          or purchasers at any foreclosure sale, notwithstanding any redemption from
          sale,
          discharge of the indebtedness secured hereby, satisfaction of any foreclosure
          decree, or issuance of any certificate of sale or deed to any purchaser;
          (d) to
          make all necessary or proper repairs, decorating, renewals, replacements,
          alterations, additions, betterments and improvements to the Mortgaged Property
          as to it may seem judicious; (e) to insure and reinsure the same and all
          risks
          incidental to Mortgagee’s possession, operation and management thereof; and (f)
          to receive all of such avails, rents, issues and profits; hereby granting
          full
          power and authority to exercise each and every of the rights, privileges
          and
          powers herein granted at any and all times hereinafter, without notice
          to
          Mortgagor.

         

        Mortgagee
          shall not be obligated to
          perform or discharge, nor does it hereby undertake to perform or discharge,
          any
          obligation, duty or liability under any leases.  Mortgagor shall and
          does hereby agree to indemnify and hold Mortgagee harmless of and from
          any and
          all liability, loss or damage which it may or might incur under said leases
          or
          under or by reason of the assignment thereof and of and from any and all
          claims
          and demands whatsoever which may be asserted against it by reason of any
          alleged
          obligations or undertaking on its part to perform or discharge any of the
          terms,
          covenants or agreements contained in said leases.  Should Mortgagee
          incur any such liability, loss or damage, under said leases or under or
          by
          reason of the assignment thereof, or in the defense of any claims or demands,
          the amount thereof, including costs, expenses and reasonable attornenys’ fees,
          shall be secured hereby, and Mortgagor shall reimburse Mortgagee therefor
          immediately upon demands.

         

        Mortgagee,
          in the exercise of the
          rights and powers hereinabove conferred upon it by this Section 12 shall
          have
          full power to use and apply the avails, rents, issues and profits of the
          Real
          Estate to the payment of or on account of the following, in such order
          as
          Mortgagee may determine:

         

        (a)           to
          the payment of the operating expenses of the Real Estate, including cost
          of
          management and leasing thereof (which shall include reasonable compensation
          to
          Mortgagee and its agent or agents, if management be delegated to an agent
          or
          agents, and shall also include lease commissions and other compensation
          and
          expenses of seeking and procuring tenants and entering into leases), established
          claims for damages, if any, and premiums on insurance hereinafter
          authorized;

         

        (b)           to
          the payment of taxes and special assessments now due or which may hereafter
          become due on the Mortgaged Premises;

         

        (c)           to
          the payment of all repairs, decorating, renewals, replacements, alterations,
          additions, betterments, and improvements of the Property, and of placing
          the
          Real Estate in such condition as will, in the judgment of Mortgagee, make
          it
          readily rentable;

         

        (d)           to
          the payment of any indebtedness secured hereby or any deficiency which
          may
          result from any foreclosure sale.

         

        13.           Change
          in Ownership or Other
          Transfers.  Notwithstanding anything herein to the contrary,
          unless otherwise agreed to in writing by the Mortgagee, Mortgagor covenants
          and

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

         

        agrees
          that it will not permit or agree to (i) any voluntary or involuntary change
          in
          the legal or equitable ownership of the Mortgaged Premises or any part
          thereof,
          except as may be otherwise permitted under the Credit Agreement, (ii) any
          voluntary or involuntary transfer, conveyance, encumbrance (other than
          a
          Permitted Encumbrance), sale, lease for a term of over one (1) year or
          other
          disposition of the Mortgaged Premises, or any part thereof, not otherwise
          permitted under the terms of the Credit Agreement or (iii) any agreement
          to do
          any of the foregoing.  Consent to one transfer shall not imply consent
          to any subsequent transfer.  No consent of Mortgagee, even if granted,
          shall release Mortgagor or any other person liable for any indebtedness
          secured
          hereby.

         

        14.           Acceleration
          Upon Default,
          Additional Remedies.  Upon the occurrence of any Event of
          Default, Mortgagee may declare all indebtedness secured hereby to be due
          and
          payable and the same shall thereupon become immediately due and payable
          without
          any presentment, demand, protest or notice of any kind.  Thereafter,
          Mortgagee may:

         

        (a)           Either
          in person or by agent, with or without bringing any action or proceeding,
          enter
          upon and take possession of the Development in accordance with applicable
          law,
          or any part thereof, in its own name, and do any acts which it deems necessary
          or desirable to preserve the value, marketability or rentability of the
          Development or part thereof or interest therein, increase the income therefrom
          or protect the security hereof and, with or without taking possession of
          the
          Development, sue for or otherwise collect the rents, issues and profits
          thereof,
          including those past due and unpaid, and apply the same in accordance with
          Section 12 hereof.  The entering upon and taking possession of the
          Development, the collection of such rents, issues and profits and the
          application thereof as aforesaid, shall not cure or waive any default or
          notice
          of default hereunder or invalidate any act done in response to such default
          or
          pursuant to such notice of default and notwithstanding the continuance
          in
          possession of the Development or the collection, receipt and application
          of
          rents, issues or profits, Mortgagee shall be entitled to exercise every
          right
          provided for in the Credit Agreement or any of Loan Documents (as defined
          in the
          Credit Agreement) or by law upon occurrence of any Event of
          Default;

         

        (b)           Commence
          an action to foreclose this Mortgage, appoint a receiver, or specifically
          enforce any of the covenants hereof;

         

        (c)           Foreclose
          this Mortgage either by sale at public outcry or by proceedings in law
          or
          equity; and Mortgagee may become the purchaser at any foreclosure sale
          if the
          highest bidder, and, in the event of sale at public outcry, Mortgagee may
          sell
          or cause to be sold, all and singular, the Development and all the estate,
          right, title and interest, claim and demand therein, such sale or sales
          to be
          made at public outcry at the North door of the courthouse of the county
          in which
          the Real Estate is located at such time or times and upon such terms as
          may be
          required by law or as Mortgagee may determine, after having first given
          notice
          of the time, place and terms of sale, together with the description of
          the
          property to be sold, by publication once a week for three consecutive weeks
          prior to said sale in any newspaper then published in the county in Alabama
          in
          which the Property is located, and after giving such other notice of the
          time,
          place and terms of sale as may be required by law.  In the event of a
          sale hereunder, Mortgagee or owners of the debt and Mortgage, or the auctioneer,
          shall execute to the purchaser for and in the name of Mortgagor, a good
          and
          sufficient deed to the Development,  Mortgagee may sell such property
          either as a whole or in separate parcels and in such order as Mortgagee
          may
          direct

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

         

        (Mortgagor
          waiving any right to direct the order of sale), at public auction to the
          highest
          bidder for cash in lawful money of the United States (or cash equivalents
          acceptable to Mortgagee to the extent permitted by applicable law), payable
          at
          the time of sale.  Mortgagee may postpone the sale of all or any part
          of the Development by public announcement at such time and place of sale,
          and
          from time to time after any such postponement may postpone such sale by
          public
          announcement at the time fixed by the preceding
          postponement.  Mortgagee shall deliver to the purchaser at such sale
          its deed conveying the property so sold, but without any covenant or warranty,
          express or implied, and the recitals in such deed of any matters or facts
          shall
          be conclusive proof of the truthfulness thereof.  Any person,
          including Mortgagee, may purchase at such sale, and any bid by Mortgagee
          may be,
          in whole or in part, in the form of cancellation of all or any part of
          the
          Obligations secured hereby.

         

        15.           Foreclosure;
          Expense of
          Litigation.  When the indebtedness hereby secured, or any part
          thereof, shall become due, whether by acceleration or otherwise, Mortgagee
          shall
          have the right to foreclose the lien hereof for such indebtedness or part
          thereof.  In any suit to foreclose the lien hereof or to enforce the
          obligations of Mortgagor hereunder, or under the Notes or the Credit Agreement,
          or any other instrument securing the performance of such obligations, there
          shall be allowed and included as additional indebtedness in the decree
          for sale
          or other judgment or decree all expenditures and expenses which may be
          paid or
          incurred by or on behalf of Mortgagee for attorneys’ costs and fees (including
          the costs and fees of paralegals), survey charges, appraisers’ fees, inspecting
          engineers’ and/or architects’ fees, fees for environmental studies and
          assessments and all additional expenses incurred by Mortgagee with respect
          to
          environmental matters, outlays for documentary and expert evidence,
          stenographers’ charges, publication costs, and costs (which may be estimated as
          to items to be expended after entry of the decree) or procuring all such
          abstracts of title, title searches and examinations, title insurance policies,
          Torrens certificates, and similar data and assurances with respect to title
          as
          Mortgagee may deem reasonably necessary either to prosecute such suit or
          to
          evidence to bidders at any sale which may be had pursuant to such decree
          the
          true condition of the title to or the value of, or the environmental condition
          of, the Mortgaged Premises.  All expenditures and expenses of the
          nature in this paragraph mentioned, and such expenses and fees as may be
          incurred in the protection of the Mortgaged Premises and the Maintenance
          of the
          lien of this Mortgage, including the fees of any attorney employed by Mortgagee
          in any litigation or proceeding affecting this Mortgage, the Credit Agreement
          or
          the Mortgaged Premises or defense of any suit or proceeding or threatened
          suit
          or proceeding, shall be immediately due and payable by Mortgagor, with
          interest
          thereon at the Default Rate and shall be secured by this Mortgage.

         

        16.           Application
          of Proceeds of
          Foreclosure Sale.  The proceeds of any foreclosure sale of the
          Mortgaged Property shall be distributed and applied in the following order
          of
          priority:  First, on account of all costs and expenses incident to the
          foreclosure proceedings, including all such items as are mentioned in the
          preceding paragraph hereof, second, all other items which under the terms
          hereof
          constitute additional secured indebtedness; third, all principal and interest
          remaining unpaid on the Notes or otherwise pursuant to the Credit Agreement;
          fourth, any overplus to Mortgagor, its successors or assigns, as their
          rights
          may appear.

         

        17.           Appointment
          of
          Receiver.  Upon, or at any time after the filing of a complaint
          to foreclose this Mortgage, Mortgagee shall be entitled to the appointment
          of a
          receiver of the Development by the court in which such complaint is filed,
          and
          Mortgagor hereby consents to

         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

         

        such
          appointment.  Such appointment may be made either before or after
          sale, without notice, without regard to the solvency or insolvency of Mortgagor
          at the time of application for such receiver and without regard to the
          then
          value of the Development or whether the same shall be then occupied as
          a
          homestead or not and Mortgagee or any holder of the Notes may be appointed
          as
          such receiver.  Such receiver shall have power:  (a) to
          collect the rents, issues and profits of the Development during the pendency
          of
          such foreclosure suit and, in case of a sale and a deficiency, during the
          full
          statutory period of redemption, whether there be redemption or not, as
          well as
          during any further times when Mortgagor, except for the intervention of
          such
          receiver, would be entitled to collect such rents, issues and profits;
          (b) to extend or modify any then existing leases and to make new leases,
          which extensions, modifications and new leases may provide for terms to
          expire,
          or for options to lessees to extend or renew terms to expire, beyond the
          maturity date of the indebtedness hereunder and beyond the date of the
          issuance
          of a deed or deeds to a purchaser or purchasers at a foreclosure sale,
          it being
          understood and agreed that any such leases, and the options or other such
          provisions to be contained herein, shall be binding upon Mortgagor and
          all
          persons whose interests in the premises are subject to the lien hereof
          and upon
          the purchaser or purchasers at any foreclosure sale, notwithstanding any
          redemption from sale, discharge or the mortgage indebtedness, satisfaction
          of
          any foreclosure decree, or issuance of any certificate of sale or deed
          to any
          purchaser, and (c) all other powers which may be necessary or are usual
          in such
          cases for the protection, possession, control, management, and operation
          of the
          Development or the Mortgaged Premises during the whole of said
          period.  The court from time to time may authorize the receiver to
          apply the net income of his hands in payment in whole or in part
          of:  (a) the indebtedness secured hereby, or by any decree
          foreclosing this mortgage, or any tax, special assessment, or other lien
          which
          may be or become superior to the lien hereof or of such decree, provided
          such
          application is made prior to foreclosure sale; (b) the deficiency in case
          of a sale and deficiency.

         

        18.           Remedies
          Not
          Exclusive.  Mortgagee shall be entitled to enforce payment and
          performance of any indebtedness or obligations secured hereby and to exercise
          all rights and powers under this Mortgage or other agreement or any laws
          now or
          hereafter in force, notwithstanding some or all of the said indebtedness
          and
          obligations secured hereby may now or hereafter be otherwise secured, whether
          by
          mortgage, deed of trust, pledge, lien, assignment or
          otherwise.  Neither the acceptance of this Mortgage nor its
          enforcement whether by court action or pursuant to the other powers herein
          contained, shall prejudice or in any manner affect Mortgagee’s right to realize
          upon or enforce any other security now or hereafter held by Mortgagee,
          it being
          agreed that Mortgagee shall be entitled to enforce this Mortgage and any
          other
          security now or hereafter held by Mortgagee in such order and manner as
          Mortgagee may, in its absolute discretion determine.  No remedy herein
          conferred upon or reserved to Mortgagee is intended to be exclusive of
          any other
          remedy herein or by law provided or permitted, but each shall be cumulative
          and
          shall be in addition to every other remedy given hereunder or now or hereafter
          existing at law or in equity or by statute.  Every power or remedy
          given by the Credit Agreement, any of the Loan Documents to Mortgagee may
          be
          exercised, concurrently or independently, from time to time and as often
          as may
          be deemed expedient by Mortgagee and Mortgagee may pursue inconsistent
          remedies.

         

        19.           Mortgagor’s
          Waiver of
          Rights.  To the extent permitted by law, Mortgagor waives the
          benefit of all laws now existing or that hereafter may be enacted providing
          for
          (i) any appraisement before sale of any portion of the Mortgaged Premises,
          and
          (ii) the benefit of all

         

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

         

        laws
          that
          may be hereafter enacted in any way extending the time for the enforcement
          of
          the collection of the obligations secured hereby or creating or extending
          a
          period of redemption from any sale made in collecting said debt.  To
          the full extent Mortgagor may do so, Mortgagor agrees that it will not
          at any
          time insist upon, plead, claim or take the benefit or advantage of any
          law nor
          or hereafter in force providing for any appraisement, valuation, stay,
          extension
          or redemption, and Mortgagor, for itself, its heirs, devisees, representatives,
          successors and assigns, and for any and all persons ever claiming any interest
          in the Mortgaged Premises, to the extent permitted by law, hereby waives
          and
          releases all rights of redemption, valuation, appraisement, stay of execution,
          notice of election to mature or declare due the whole of the secured
          indebtedness and marshaling in the event of foreclosure of the liens hereby
          created.  If any law referred to in this Section and now in force, of
          which Mortgagor, Mortgagor’s heirs, devisees, representatives, successor and
          assigns or other person might take advantage despite this Section, shall
          hereafter be repealed or cease to be in force, such law shall not thereafter
          be
          deemed to preclude the application of this Section.  Mortgagor
          expressly waives and relinquishes any and all rights and remedies which
          it may
          have or be able to assert by reason of the laws of the State of Alabama
          pertaining to the rights and remedies of sureties.

         

        20.           Transferees
          of Mortgaged
          Premises.  Subject to the provisions of Section 13, in the
          event of the sale or transfer by operation of law or otherwise, of all
          or any
          part of the Mortgaged Premises, Mortgagee is hereby authorized and empowered
          to
          deal with such vendee or transferee with reference to the Mortgaged Premises,
          or
          the debt secured hereby, or with reference to any of the terms or conditions
          hereof, as fully and to the same extent as it might have dealt with
          Mortgagor.

         

        21.           No
          Effect on
          Liability.  In the event Mortgagee (a) releases any part of the
          security described herein or any person liable for any indebtedness secured
          hereby; (b) grants one or more renewals, modifications or extensions of
          any Note
          for any period or periods of time; (c) takes other or additional security
          for the payment thereof; or (d) waives or fails to exercise any right granted
          herein or in any Note, said act or omission shall not release Mortgagor,
          subsequent purchasers of the Mortgaged Premises or any part thereof, or
          makers,
          guarantors or sureties of this Mortgage or of any Note, under any covenant
          of
          this Mortgage or of the Notes or the Credit Agreement, nor preclude Mortgagee
          from exercising any rights, power or privilege herein granted or intended
          to be
          granted in the event of any default then made or any subsequent
          default.

         

        22.           Notices.  All
          notices, requests and demands to or upon the parties hereto to be effective
          shall be in writing and, unless otherwise expressly provided herein, shall
          be
          deemed to have been duly given or made when given in accordance with the
          terms
          of the Credit Agreement, at the addresses set forth on the first page
          hereof.

         

        23.           Governing
          Law.  The terms of this Mortgage, with respect to the
          obligations of Mortgagor hereunder and other matters related to the Notes,
          the
          Credit Agreement and all other matters unrelated to this Mortgage, shall
          be
          governed by and construed in accordance with the laws of the State of Wisconsin;
          provided, however,
          all other
          provisions of this Mortgage, including the creation of this Mortgage, the
          attachment and perfection of the lien or security interest in the Mortgaged
          Premises, the rights and remedies of Mortgagee and the enforcement

         

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

         

        thereof
          with respect to the Mortgaged Premises and procedural matters as provided
          herein
          shall be governed by and construed in accordance with the internal laws
          of the
          State of Alabama.

         

        24.           Covenants
          Run with the
          Land.  All the covenants hereof shall run with the
          land.

         

        25.           Time
          is of the
          Essence.  It is specifically agreed that time is of the essence
          of this Mortgage.

         

        26.           Binding
          on Successors and
          Assigns.  This Mortgage and all the provisions hereof shall
          extend to and be binding upon Mortgagor and all persons claiming under
          or
          through Mortgagor, including but not limited to its successors and assigns,
          heirs, administrators or executors.

         

        27.           Captions.  The
          captions of various Sections of this Mortgage are for convenience only
          and are
          not to be construed as defining or limiting, in any way, the scope or intent
          of
          the provisions thereof.

         

        28.           Amendments.  This
          Mortgage may not be amended or altered in any manner other than by a writing
          signed by the party sought to be charged or bound thereby.

         

        29.           Subrogation.  As
          additional security for the Notes and all other sums secured hereby, Mortgagee
          shall be and is hereby subrogated to the lien of any mortgage, encumbrance
          or
          other lien, whether or not released of record, paid or discharged, in whole
          or
          in part, by the proceeds of the Notes.

         

        30.           Mortgagee’s
          Lien for Service
          Charge and Expenses.  At all times, regardless of whether any
          loan proceeds have been disbursed, this Mortgage secures (in addition to
          any
          loan proceeds disbursed from time to time) the payment of any and all loan
          commissions, service charges, liquidated damages, expenses, and advances
          due to
          or incurred by Mortgagee in connection with the loan to be secured
          hereby.

         

        31.           Invalidity.  Nothing
          contained herein nor any transaction related hereto shall be construed
          or shall
          so operate either presently or prospectively to require Mortgagor to make
          any
          payment or do any act contrary to law; but if any clause or provision contained
          herein shall otherwise operate to invalidate this Mortgage, in whole or
          in part,
          then such clause(s) or provision(s) only shall be held for naught as though
          not
          contained herein and the remainder of this Mortgage shall remain operative
          and
          in full force and effect.

         

        32.           Business
          Purposes.  Mortgagor covenants and agrees that the indebtedness
          secured by this Mortgage, and the proceeds of such indebtedness, are for
          business purposes only.

         

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

      

    

     

    
      IN
        WITNESS WHEREOF, this Real Estate Mortgage, Security Agreement and Assignment
        of
        Leases and Rents has been executed and delivered at __________, ______________,
        as of the 14th
        day of January,
        2008.

       

      

      
        	 	 	
                MAGNETECH
                  INDUSTRIAL SERVICES, INC.

              
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	
                By:

              	
                 /s/
                  John A. Martell

              
	 	 	
                Name:  John
                  A. Martell

              
	 	 	
                Title:  President

              

      

      

    

    
      
        	
                STATE
                  OF INDIANA

              	
                )

              	 
	 	
                )

              	
                SS

              
	
                COUNTY
                  OF ST. JOSEPH

              	
                )

              	 

      

      

      On
        this 11th day of January, 2008, personally came before me John A. Martell,
        to me known to be the President of Magnetech Industrial Services, Inc., an
        Indiana corporation, and the person who executed the foregoing instrument
        on
        behalf of said corporation, and acknowledged the same.

    

     

    
      
        	
                [Notarial
                  Seal]

              	 	 /s/
                James M. Lewis
	 	 	
                Notary
                  Public, State of  Indiana

              
	 	 	
                My
                  commission expires
                  2/9/2008

              

      

    

     

     

    
      This
        instrument was drafted by and

      after
        recording should be returned to:

      

      Kristin
        A. Roeper, Esq.

      GODFREY
        & KAHN, S. C.

      780
        North
        Water Street

      Milwaukee,
        Wisconsin  53202

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A

     

    
      Legal
        Description

       

      Parcel
        A:

      That
        portion of Block 2”, Jacintoport, Unit One, Section A, as recorded in Map Book
        21, Page 93 of the Probate Court Records of Mobile County, Alabama, being
        more
        particularly described as follows:

      Beginning
        at the Northwest corner of Block 2”, Jacintoport, Unit One, Section A, as
        recorded in Map Book 21, Page 93 of the Probate Court records of Mobile County,
        Alabama, run South 86 Degrees 05 Minutes 47 Seconds East along the North
        boundary of said Block 2”, a distance of 94.77 feet to a point; thence
        continuing along said North boundary of Block 2”, run South 89 Degrees 40
        Minutes 47 Seconds East 703.43 Feet to a point on the West right of way line
        of
        Station Street; thence along said West right of way line of Station Street,
        run
        South 11 Degrees 45 Minutes 12 Seconds East 0.54 Feet to the P.C. of a curve
        to
        the right having a central angle of 72 degrees 25 Minutes 52 Seconds and
        a
        radius of 50 feet; thence continuing along said West right of way line of
        Station Street, run Southwestwardly along the arc of said curve, 63.21 feet
        to
        the P.T. of said curve; said point being on the West right of way line of
        Bill
        Myles Drive West, and on the arc of a 263.16 foot radius curve concave
        Southeastwardly; thence along said West right of way line of Bill Myles Drive
        West, run Southwestwardly along said arc of curve 252.96 feet to the P.T.
        of
        said curve; thence continuing along said West right of way line of Bill Myles
        Drive West, run South 05 Degrees 36 Minutes 05 Seconds West 186.51 Feet to
        a
        point; thence run North 86 degrees 39 minutes 23 seconds West 664.25 feet
        to a
        point on the East Line of a 100 Foot Southern Railway right of way; thence
        along
        said East line of the 100 foot Southern Railway right of way, run North 05
        Degrees 36 Minutes 05 Seconds East 417.31 Feet to the Point of
        Beginning.

      

      Parcel
        B:

      Lot
        1,
        Jacintoport, Unit One, Section A, Resubdivision of Block 4, as recorded in
        Map
        Book 38, Page 119 of the Probate Court Records of Mobile County, Alabama,
        being
        more particularly described as follows:

      Commencing
        at the Southwest Corner of Block “4”, Jacintoport, Unit One, Section “A”, as
        Recorded in Map Book 21, Page 93 of the Probate Court Records, Mobile County,
        Alabama; said Point being on the East right of way line of Bill Myles Drive
        West; thence along said East right of way line of Bill Myles Drive West,
        run
        North 05 Degrees 36 Minutes 05 Seconds East 362.85 feet to the point of
        beginning of the property herein described; thence continuing North 05 Degrees
        36 minutes 04 Seconds East along said East right of way line of Bill Myles
        Drive
        West, run 157.73 Feet to the P.C. of a curve to the right having a radius
        of
        163.16 feet; thence continuing along said East right of way line of Bill
        Myles
        Drive West, run Northeastwardly along the arc of said curve 241.25 feet to
        the
        P.T. of said curve; said point being on the South right of way line of Bill
        Myles Drive North; thence along said South right of way Line of Bill Myles
        Drive
        North and an Eastwardly projection thereof, run South 89 degrees 40 minutes
        47
        seconds East 323.03 feet to a point; thence run South 00 degrees 19 minutes
        13
        seconds West 305.0 feet to a point; thence run North 89 degrees 40 minutes
        47
        seconds West 500.00 feet to the point of beginning.

      Tax
        PPIN/Key No. 02973704, 01942919 and 00166536

      

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      B

     

    
      Permitted
        Encumbrances

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