Document:

Exhibit
10.59

 

Allstate
Life Insurance Company

Loan
No. 122827

 

MORTGAGE
NOTE

 

	
   

  	
   

  	
  Chicago,
  Illinois

  
	
  $8,800,000

  	
   

  	
  May
  12, 2006

  

 

                1.             Payment of Principal and Interest. FOR VALUE
RECEIVED, MB SHAKOPEE VIERLING, L.L.C., a Delaware limited liability company
(the “Maker”), hereby promises to pay to the order of ALLSTATE LIFE INSURANCE
COMPANY, and any subsequent holder of this Note (“Holder” or “Holders”) in the
manner hereinafter provided, the principal amount of the EIGHT MILLION EIGHT
HUNDRED THOUSAND DOLLARS ($8,800,000), together with interest on the
outstanding principal balance from the date of the initial disbursement (for
purposes of this Note, “disbursement” means the date funds are wire transferred
from Holder’s account) of all or part of the principal of this Note (“Disbursement
Date”) until maturity at the rate of five and 30/100 percent (5.30%) per annum
(“Contract Rate”) as follows:

                (a)           on the Disbursement Date, interest only, in advance,
accruing from the Disbursement Date to the last day of May, 2006, both
inclusive; and

                (b)           interest only, in arrears, in the amount of THIRTY EIGHT
THOUSAND EIGHT HUNDRED SIXTY SIX THOUSAND AND 67/100 DOLLARS ($38,866.67) on
the first day of July, 2006, and on the first day of each month thereafter
until this Note is fully paid (the initial payment and each subsequent payment
under this subparagraph (b) shall each hereinafter be referred to as “Monthly
Payment”); and

                (c)           on May 1, 2011, the entire unpaid principal amount and any
interest accrued but remaining unpaid and all other sums due under this Note.

                Except for the interest payable
under paragraph (a) above, interest shall be payable in arrears and calculated
on the basis of the 360 day year containing twelve 30 day months. All such
payments on account of the indebtedness evidenced by this Note shall be first
applied to interest accrued on the unpaid principal amount and the remainder
toward reduction of the unpaid principal amount.

                2.             Payment Information. All payments required to be
made hereunder shall be made during regular business hours to Holder at its
office c/o Allstate Investments, LLC, Commercial Mortgage Division, Allstate
Plaza South, Suite G5C, 3075 Sanders Road, Northbrook, Illinois 60062,
Attention: Servicing Manager, with sufficient information to identify the
source and application of such payment to Holder’s Loan #122827, or at such
other place as Holder may from time to time designate in writing. All payments
shall be made in currency of the United States of America without presentment
or surrender of this Note. Payments to Holder shall be made by transferring
immediately available federal funds by bank wire or interbank transfer for the
account of Holder. Any payment of principal or interest received after 1:00
p.m. Chicago time shall be deemed to have been received by Holder on the next
business day and shall bear interest accordingly. If and so long as Holder
directs Maker to make payments to a servicing

 

agent,
then payments may be made by check. Payments made by check will not be deemed
made until good funds for such check are received by Holder or the servicing
agent.

                3.             Security For Note. The payment of this Note and
all other sums due Holder is secured by, inter alia, (a)
a Mortgage, Assignment of Leases, Rents and Contracts, Security Agreement and
Fixture Filing (the “Mortgage”) of even date herewith, from Maker, as
mortgagor, to Holder, as mortgagee, covering certain real property, the
improvements thereon and certain personal property situated in the County of
Scott, State of Minnesota and described in the Mortgage (“Property”), and (b)
those certain instruments of indebtedness and security described as “Related
Agreements” in the Mortgage. Except as otherwise defined herein, all of the
defined terms contained in the Mortgage and the Related Agreements are hereby
incorporated herein by express reference.

                4.             Late Charges. If any Monthly Payment required
under this Note is not paid in full on or before the fifth (5th) day of the
month in which such payment is due, Maker acknowledges that the Holder will
incur extra expenses for the handling of the delinquent payment and servicing
the indebtedness evidenced hereby, and that the exact amount of these extra
expenses is extremely difficult and impractical to ascertain, but that a charge
of five percent (5%) of the amount of the delinquent payment (“Late Charge”)
would be a fair approximation of the expense so incurred by Holder. If
applicable law requires a lesser charge, however, then the maximum charge
permitted by such law may be charged by Holder for said purpose. Therefore,
Maker shall, in such event, without further notice, and without prejudice to
the right of Holder to collect any other amounts provided to be paid hereunder
or under the Mortgage, the Related Agreements or any other instrument executed
for purposes of further securing payment of the obligations evidenced by this
Note, or to declare an Event of Default, as defined below, pay to Holder
immediately upon demand the Late Charge to compensate Holder for expenses
incurred in handling delinquent payments.

                5.             Interest Payable Upon Default. If there occurs an
Event of Default under this Note or the Mortgage or under any Related
Agreement, then the unpaid principal amount of this Note, and all accrued and
unpaid interest thereon shall bear interest at the Contract Rate plus five
percent (5%) per annum compounded monthly (“Default Rate”) from the date of
expiration of any applicable cure or grace period until such time, if any, as
the Event of Default is cured and the Mortgage and this Note are reinstated as
permitted by applicable law, or otherwise until such time as the unpaid
principal amount of this Note and all other indebtedness evidenced by this Note
are fully repaid, whichever is earlier.

                6.             Events of Default. An “Event of Default” shall
exist under this Note:

                (a)           in the event Maker shall fail to make any payment due
under this Note, other than the final payment and Prepayment Premium, on or
before the fifth (5th) day of the month in which such payment is due;

                (b)           in the event Maker shall fail to make the final payment or
the Prepayment Premium when such payment is due; or

 

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                (c)           if there shall exist an Event of Default under the
Mortgage, or in any of the Related Agreements.

                7.             Additional Payments. The additional payments
called for under Paragraphs 4 and 5 shall be in addition to, and shall in no
way limit, any other rights and remedies provided for in this Note, the
Mortgage, any Related Agreements, or otherwise provided by law.

                8.             Payment of Taxes and Expenses. Maker further
promises to pay to Holder, immediately upon written notice from Holder; (i) all
recordation, transfer, stamp, documentary or other fees or taxes levied on
Holder (exclusive of Holder’s income taxes) by reason of the making or
recording of this Note, the Mortgage or any of the Related Agreements, and (ii)
all intangible property taxes levied upon any Holder of this Note or mortgagee
under the Mortgage or secured party under the Related Agreements.

                Maker further promises to pay
Holder, immediately upon written notice from Holder, all actual costs,
expenses, disbursements, intangible property taxes imposed upon any Holder of
this Note or mortgagee under the Mortgage or secured party under any of the Loan
Documents, escrow fees, title charges and reasonable legal fees and expenses
actually incurred by Holder and its counsel in connection with (i) the
collection, attempted collection, or negotiation and documentation of any
settlement or workout of the principal amount of this Note, the interest
thereon or any installment or other payment due hereunder, and (ii) any suit or
proceeding whatsoever at all trial and appellate levels in regard to this Note
or to protect, sustain or enforce the lien of any instrument securing this
Note, including, without limitation, in any bankruptcy proceeding or judicial
or nonjudicial foreclosure proceeding. It is the intent of the parties that
Maker pay all expenses and reasonable attorneys’ and paralegals’ fees incurred
by Holder as a result of or in connection with (A) matters described in clauses
(i) and (ii) above, (B) the negotiation and closing of the loan transaction
evidenced by this Note, and any supplements or amendments thereto, (C) the
protection of property given as security for the indebtedness evidenced hereby
, and (D) responding to requests from Maker that Holder take certain actions,
and as may otherwise be reasonably incurred by Holder as a result of or in
connection with entering into the loan transaction evidenced by this Note.

                9.             Prepayment. Maker is prohibited from prepaying
this Note until June 1, 2007 (the “No-Prepayment Period”). Subsequent to the
No-Prepayment Period, at any time with thirty (30) days prior written notice to
Holder, specifying the date of prepayment, Maker will have the privilege of
prepaying all, but not less than all, of the outstanding principal amount of
this Note, together with any accrued but unpaid interest, any other sums
secured by the Mortgage and the Related Agreements, and a prepayment premium (“Prepayment
Premium”) equal to the greater of:

                (a)           one percent of the principal amount prepaid, or

                (b)           the yield maintenance payment calculated as follows:

If the Prevailing Interest
Rate is less than the Contract Rate, the yield maintenance payment shall be the
remainder of (x) minus (y) where “(x)” is the present value of all unpaid
installments of principal and interest due under this Note from the 

 

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date of prepayment to and
including the original maturity date of this Note, discounted at the Prevailing
Interest Rate, plus 0.50 percent (50 basis points), and “(y)” is the
outstanding principal balance of this Note as of the prepayment date. The term “Prevailing
Interest Rate” as used herein shall mean the yield to maturity on a United
States Treasury Bond or Treasury Note selected by Holder having a maturity date
as near as possible to the original maturity date of this Note and an “ask”
price, as close as possible to par (as published two weeks prior to the
specified date of prepayment in the Wall Street Journal
or similar publication or available from the Federal Reserve Bank of New York),
less the Basis Point Adjustment as computed in accordance with Exhibit A
attached hereto to convert the monthly payments to semi-annual equivalent.

                No Prepayment Premium shall be
due on the principal balance prepaid within the thirty (30) day period prior to
Maturity Date of this Note.

                Written notice of Maker’s
election to make a prepayment in full of this Note shall be given in the manner
provided for notices under the Mortgage. Partial prepayment of the outstanding
principal amount of this Note shall not be permitted except in accordance with
the terms of the Mortgage. In the event of such a permitted partial prepayment,
the Prepayment Premium calculated in this Paragraph 9 shall be prorated based
on the amount of the partial prepayment relative to the then current
outstanding principal balance of this Note.

                Maker acknowledges that Holder:

                (a)           has advanced the amounts evidenced by this Note with the
expectation that such amounts would be outstanding for a period at least equal
to the No-Prepayment Period;

                (b)           would not have been willing to advance such amounts on
these terms for a shorter period of time;

                (c)           in making the loan evidenced by this Note, is relying on
Maker’s creditworthiness and its agreement to pay in strict accordance with the
terms set forth in the Note; and

                (d)           would not make the loan evidenced by this Note without
full and complete assurance by Maker of its agreement not to prepay all or a
part of the principal of this Note except as expressly permitted herein and in
the Mortgage.

                Maker has been advised and
acknowledges that Holder is relying on the receipt of payments under this Note
to, among other things, match and support its obligations under contracts
entered into by Holder with third parties and that in the event of a
prepayment, Holder could suffer loss and additional expenses which are
extremely difficult and impractical to ascertain. Accordingly, it is the
express intent of Maker and Holder that: (a) Maker shall have no right to
prepay this Note during the No-Prepayment Period; (b) any prepayment of this
Note during the No-Prepayment Period shall only occur in the event Holder
accelerates payment under this Note or as otherwise set forth in he Mortgage;
(c) any prepayment described in foregoing clause (b) shall (unless otherwise
expressly permitted in the Mortgage) require the payment of the Prepayment
Premium; and (d) to the extent permitted by applicable law, Maker has waived,
and hereby waives, any right to prepay this Note except as expressly provided
in the Mortgage or 

 

4

 

this
Note during the No-Prepayment Period. In the event, notwithstanding the
foregoing express intent of Maker and Holder and the express waiver by Maker of
any right to prepay this Note during the No-Prepayment Period, that the
applicable law of the jurisdiction in which the Property is located permits the
Maker to prepay this Note during the No-Prepayment Period, then the applicable
Prepayment Premium described in clause (c) in the third sentence of this
grammatical paragraph shall be paid to Holder as a condition to any such
prepayment.

                Maker expressly acknowledges
that, pursuant to the previsions of this Note and except as otherwise provided
in this Note or the Mortgage, Maker has no right to prepay this Note in whole
or in part during the No-Prepayment Period. In the event any prepayment is required
or expressly permitted, Maker shall be liable for the payment of the Prepayment
Premium unless expressly stated otherwise in this Note or in the Mortgage.
Furthermore, Maker waives any rights it may have under any applicable state
laws as they relate to any prepayment restrictions contained in this Paragraph
9 or otherwise contained in this Note and expressly acknowledges that Holder
has made the loan evidenced by this Note in reliance upon such agreement and
waiver of Maker and that Holder would not have made the loan evidenced by this
Note without such agreement and waiver of Maker. Maker acknowledges that
specific weight has been given to the consideration given for such agreement,
which consideration is the granting of the loan.

                10.           Evasion of Prepayment Premium. Maker acknowledges
that in the event of an acceleration of payment of this Note following an Event
of Default by Maker, a tender of payment of an amount necessary to satisfy the
entire indebtedness evidenced hereby, but not including the Prepayment Premium,
made at any time prior to a foreclosure sale by Maker, its successors or
assigns or by anyone on behalf of Maker, or by a buyer upon foreclosure or
power of sale, shall constitute a prepayment hereunder and shall be presumed to
be and conclusively deemed to constitute a deliberate evasion of the prepayment
provisions hereof and shall therefore be subject to the Prepayment Premium in
accordance with this Note with the date of prepayment being deemed the date of
occurrence of the foreclosure sale or the tender of payment of the amount
necessary to pay the entire indebtedness evidenced hereby in full, including
the Prepayment Premium.

                11.           Maker’s Covenants. Maker agrees that:

                (a)           this instrument and the rights and obligations of all
parties hereunder shall be governed by and construed under the laws of the
state or commonwealth in which the Property is located;

                (b)           the obligation evidenced by this Note is an exempted
transaction under the Truth-in-Lending Act, 15 U.S.C § 1601, et seq. (1982);

                (c)           said obligation constitutes a business loan for the
purpose of the application of any laws that distinguish between consumer loans
and business loans and that have as their purpose the protection of consumers
in the state or commonwealth in which the Property is located;

                (d)           at the option of the Holder, the United State District
Court for the district in which the Property is located or any court of
competent jurisdiction of the state or

 

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commonwealth
in which the Property is located shall have jurisdiction in any action, suit or
other proceeding arising out of or relating to any act taken or omitted
hereunder or the enforcement of this Note, the Mortgage and the Related
Agreements and Maker shall not assert in any such action, suit or other
proceeding that is not personally subject to the jurisdiction of such courts,
that the action, suit or other proceeding is brought in an inconvenient forum
or the venue of the action, suit or other proceeding is improper;

                (e)           it hereby waives any objections to venue; and

                (f)            it hereby waives its right to a trial by jury.

                12.           Severability. The parties hereto intend and believe
that each provision of this Note comports with all applicable local, state and
federal laws and judicial decisions. However, if any provision or any portion
of any provision contained in this Note is held by a court of law to be
invalid, illegal, unlawful, void or unenforceable as written in any respect,
then it is the intent of all parties hereto that such portion or provision
shall be given force tot he fullest possible extent that it is legal, valid and
enforceable, that remainder of the Note shall be construed as if such illegal,
invalid, unlawful, void or unenforceable portion or provision was not contained
therein, and the rights, obligations and interests of Maker and Holder under
the remainder of this Note shall continue in full force and effect.

                13.           Usury Laws. It is the intention of Maker and Holder
to conform strictly to the usury laws now and hereafter in force in the State
of Minnesota, and any interest payable under this Note, the Mortgage, or any
other Related Agreement (as defined in the Mortgage) shall be subject to
reduction to an amount not to exceed the maximum non-usurious amount for
commercial loans allowed under the usury laws of the State of Minnesota as now
or hereafter construed by the courts having jurisdiction over such matters. In
the event such interest (whether designated as interest, service charges,
points, or otherwise) does exceed the maximum legal rate, it shall be:

                (a)           cancelled automatically to the extent that such interest
exceeds the maximum legal rate;

                (b)           if already paid, at the option of the Holder, either be
rebated to Maker or credited on the principal amount of the Note; and

                (c)           if the Note has been prepaid in full, then such excess
shall be rebated to Maker.

                14.           Acceleration. Upon an Event of Default, Holder
shall have the right, without further demand or notice, to declare the entire
principal amount of this Note and/or any Future Advance (as defined the
Mortgage) then outstanding, all accrued and unpaid interest thereon and all
other further sums payable under this Note, which shall include the Prepayment
Premium (calculated as provided in Paragraph 9 above), the Mortgage or any note
evidencing any Future Advance, to be immediately due and payable and,
notwithstanding the stated maturity in this Note or any note evidencing any
Future Advance, all such sums declared due and payable shall thereupon become
immediately due and payable. During the existence of such Event of Default
Holder may apply payments received on any amounts due under the Note, the
Mortgage, any 

 

6

 

Related
Agreement or any note evidencing any Future Advance as Holder may determine in
its sole discretion.

                15.           Waivers by Maker. As to this Note, the Mortgage,
the Related Agreements and any other instruments securing the indebtedness,
Maker and all guarantors, sureties and endorsers, severally waive all
applicable exemption rights, whether under any state constitution, homestead
laws or otherwise, and also severally waive diligence, valuation and
appraisement, presentment for payment, protest and demand, notice of protest,
demand and dishonor and diligence in collection and nonpayment of this Note and
all other notices in connection with the delivery, acceptance, performance,
default, or enforcement of the payment of this Note (except notice of default
specially provided for the Mortgage and the Related Agreements). To the extent
permitted by law, Maker further waives all benefit that might accrue Maker by
virtue of any present or future laws exempting the Property, or any other
property, real or personal, or the proceeds arising from any sale of any such
property, from attachment, levy, or sale under execution, or providing for any
stay of execution to be issued on any judgment recovered on this Note or in any
action to foreclose the Mortgage, injunction against sale pursuant to power of
sale, exemption from civil process or extension of time for payment. Maker
agrees that any real estate or any personalty that may be levied upon pursuant
to a judgment obtained by virtue of this Note, or any writ of execution issued
thereon, may be sold upon any such writ in whole or in part in any order
desired by Holder.

                16.           Maker Not Released. No delay or omission of Holder
to exercise any of its rights and remedies under this Note, the Mortgage or any
Related Agreements at any time following the happening of an Event of Default
shall constitute a waiver of the right of Holder to exercise such rights and
remedies at a later time by reason of such Event of Default or by reason of any
subsequently occurring Event of Default. The acceptance by Holder of payment of
any sum payable hereunder after the due date of such payment shall not be a
waiver of Holder’s right to either require prompt payment when due of all other
sums payable hereunder or to declare a default for failure to make prompt
payment.  This Note, or any payment
hereunder, may be extended from time to time by agreement in writing between
Maker and Holder without in any other way affecting the liability and
obligations of Maker and endorsers, if any.

                17.           Nonrecourse. Except as otherwise set forth in this
Paragraph, Holder’s recourse under this Note, the Mortgage and the Related
Agreements shall be limited to and satisfied from the Property and proceeds
thereof, the rents and all other income arising therefrom during and after the
month in which an Event of Default has occurred, the other assets of Maker
arising out of the Property which are given as collateral for this Note, and
any other collateral given in writing to Holder as security for repayment of
this Note (all the foregoing are collectively referred to as the “Loan
Collateral”). Notwithstanding the preceding sentence:

                (a)           Holder may, in accordance with the terms of this Note, the
Mortgage or any Related Agreement: (i) foreclose the lien of the Mortgage; (ii)
take appropriate action to enforce this Note, the Mortgage and the Related
Agreements to realize upon and/or protect the Loan Collateral; (iii) name Maker
as a party defendant in any action brought under this Note, the Mortgage or the
Related Agreements so long as the exercise of any remedy is limited to the Loan
Collateral; (iv) pursue all of its rights and remedies against any guarantor or
surety or master tenant whether or not a partner, member or other owner of
Maker; and (v) pursue all of its rights 

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and remedies against Maker and the
indemnitors under that certain Environmental Indemnity Agreement of even date
herewith and that certain Terrorism Insurance Indemnity Agreement of even date
herewith;

 

                (b)           Holder may seek damages or other
monetary relief, to the extent of actual monetary loss, or any other remedy at
law or in equity against Maker, and the indemnitors/guarantors, if any, under
any nonrecourse exception indemnity agreements (“Nonrecourse Indemnitors”) by
reason of or in connection with: (i) the failure of Maker to pay to Holder,
upon demand, all rents, issues and profits of the Property to which Holder is
entitled pursuant to this Note, the Mortgage or the Related Agreements
following an Event of Default; (ii) any waste of the Property or any willful
act or omission by Maker which damages or materially reduces the value of the
Property; (iii) the distribution of rents, issues and profits from the Property
prior to the payment of operating expenses or the provision for reserves, if
any, to be made pursuant to this Note, the Mortgage or the Related Agreements
prior to any other expenditure or distribution by Maker; (iv) the failure to
account for and to turn over security deposits (and interest required by law or
agreement to be paid thereon) or prepaid rents following the occurrence of an
Event of Default under this Note, the Mortgage or any Related Agreements; (v)
the failure to timely pay all real estate taxes or any regular or special
assessments affecting the Property; (vi) the failure to account for and to turn
over real estate tax accruals following the occurrence of an Event of Default
under this Note, the Mortgage or any Related Agreements; (vii) the failure to
maintain casualty and liability insurance as required under the Mortgage or the
Related Agreements or to apply insurance proceeds or condemnation awards
relating to the Property or other collateral in the manner required under
applicable provisions of this Note, the Mortgage or any Related Agreement;
(viii) any modification, termination or cancellation of any lease of all or any
portion of the Property without Holder’s prior written consent, if and to the
extent such consent is required under the Mortgage or the Related Agreements
and if and to the extent such modification, termination or cancellation has a
material adverse affect on the value of the Property; (ix) a default by Maker
under any lease of all or any portion of the Property; or (x) costs and
expenses, including, without limitation, reasonable attorney’s fees and
transfer taxes, incurred by Holder in connection with the enforcement of this
Note, the Mortgage or the Related Agreements or in connection with a
deed-in-lieu of foreclosure if the Event of Default giving rise to the
enforcement action is one described in subsections (b) or (c) as an exception
to the nonrecourse provisions; or if the Maker or any principal of Maker
objects to any actions taken by Holder to exercise its remedies under the Loan
Documents; Maker or principal of Maker commences any lawsuit to enjoin or delay
a foreclosure of the Property by Holder, or raises defenses or counterclaims to
a foreclosure action; Maker applies for the appointment of a receiver, trustee
or liquidator for it or for any of its property, or, as a debtor, files a
voluntary petition in bankruptcy, or petition or answer seeking reorganization
or an arrangement with creditors or takes advantage of any bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or liquidation
law or statute, or makes a general assignment for the benefit of creditors; or
if in the event of any bankruptcy or reorganization proceedings (voluntary or
involuntary), the Maker or any principal of Maker opposes any motion by Holder
for relief from the Automatic Stay; and

 

                (c)           Maker, its sole member or general
partners and the Nonrecourse Indemnitor(s), if any, shall become personally
liable for payment of all the indebtedness evidenced by this Note and
performance of all other obligations of Maker under this Note, the Mortgage and
Related 

 

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Agreements upon the occurrence of any of the
following: (i) fraud or willful misrepresentation of a material fact by Maker,
its sole member or general partners, or Nonrecourse Indemnitor(s), if any, in
connection with this Note, the Mortgage, the Related Agreements or any request
for any action or consent by Holder; (ii) a Transfer of any interest in Maker
or all or any portion of the Property or any interest therein in violation of
the terms of this Note, the Mortgage or the Related Agreements; or (iii) the
incurrence by Maker of any indebtedness in violation of the terms of this Note,
the Mortgage or Related Agreements (whether secured or unsecured, direct or
contingent), other than unsecured debt or routine trade payables incurred in
the ordinary course of business in connection with the operation of the
Property.

 

                In
addition, Maker, its sole member or general partners and the Nonrecourse
Indemnitors, if any, shall be responsible for any costs and expenses incurred
by Holder in connection with the collection of any amounts for which Maker, its
sole member or general partners, if any, and the Nonrecourse Indemnitors, if
any, are personally liable under this Paragraph 17, including attorneys’ fees
and expenses, court costs, filing fees and all other costs and expenses
incurred in connection therewith.

 

                18.           Successors and Assigns. The
provisions of this Note shall be binding upon Maker and its legal
representatives, successors and assigns and shall inure to the benefit of any
Holder and its successors and assigns. In the event Maker is composed of more
than one party, obligations arising from this Note are and shall be joint and
several as to each such party.

 

                19.           Remedies Cumulative. The remedies
of Holder as provided in this Note, or in the Mortgage or the Related
Agreements, and the warranties contained herein or therein shall be cumulative
and concurrent, may be pursued singly, successively or together at the sole
discretion of Holder, may be exercised as often as occasion for their exercise
shall occur and in no event shall the failure to exercise any such right or
remedy be construed as a waiver or release of such right or remedy. No remedy
under this Note, conferred upon or reserved to Holder is intended to be
exclusive of any other remedy provided in this Note, the Mortgage or any of the
Related Agreements or provided by law, but each shall be cumulative and shall
be in addition to every other remedy given under the Mortgage or any of the
Related Agreements or hereunder or now or hereafter existing at law or in
equity or by statute.

 

                20.           Notices. All notices, written
confirmation of wire transfers and all other communications with respect to
this Note shall be directed as follows:

 

If
to Holder:

 

Allstate
Life Insurance Company

Allstate
Plaza South, Suite G5C

3075
Sanders Road

Northbrook,
Illinois 60062

Attention:
     Commercial Mortgage Division

                        Servicing
Manager

 

With
a copy to:

 

9

 

Allstate
Life Insurance Company

Allstate
Plaza South, Suite G5A

3075
Sanders Road

Northbrook,
Illinois 60062

Attention:
     Investment Law Division

 

If
to Maker:

 

MB
Shakopee Vierling, L.L.C.

2901
Butterfield Road

Oak
Brook, Illinois 60523

Attention:
     Lori Foust

 

With
a copy to:

 

The
Inland Real Estate Group, Inc.

2901
Butterfield Road

Oak
Brook, Illinois 60523

Attention:
     General Counsel

 

or at such other place as Holder or Maker may
from time to time designate in writing. All notices shall be in writing and
shall be (a) hand-delivered, (b) sent by United States express mail or by
private overnight courier, or (c) served by certified mail postage prepaid,
return receipt requested, to the appropriate address set forth above. Notices
served as provided in (a) and (b) shall be deemed to be effective upon
delivery. Any notice served by certified mail shall be deposited in the United
States mail with postage thereon fully prepaid and shall be deemed effective on
the day of actual delivery as shown by the addressee’s return receipt or the
expiration of three business days after the date of mailing, whichever is
earlier in time.

 

                21.           No Oral Modification. This
Note may not be modified or discharged orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver,
modification or discharge is sought.

 

                22.           Time. Time is of the essence
with regard to the performance of the obligations of Maker in this Note and
each and every term, covenant and condition herein by or applicable to Maker.

 

                23.           Captions. The captions and
headings of the paragraphs of this Note are for convenience only and are not to
be used to interpret, define or limit the provisions hereof.

 

                24.           Transfer of Note. Holder may,
at any time, sell, transfer or assign this Note, the Mortgage, and any of the
Loan Documents, and any or all servicing rights with respect to this Note, or
grant participations in this Note or issue mortgage pass-through certificates
or other securities evidencing a beneficial interest in this Note. Holder may
forward to any prospective purchaser or any rating agency rating securities all
documents and information Holder now has or may acquire, as Holder determines
necessary or desirable, including, without limitation, financial information
regarding Maker, its general partners, shareholders, members or other
principals.

 

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25.           Replacement
Note. Upon receipt of evidence reasonably satisfactory to Maker of the
loss, theft, destruction or mutilation of this Note, and in the case of any
such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory to Maker or, in the case of any such mutilation, upon
surrender and cancellation of this Note, Maker will execute and deliver to Holder
in lieu thereof, a replacement note dated as of the date of this Note,
identical in form and substance to this Note and upon such execution and
delivery all references in the Mortgage to this Note shall be deemed to refer
to such replacement note.

 

*              *              *              *              *

 

[Signature Page Follows]

 

 

11

 

                IN WITNESS
WHEREOF, Maker has caused this Mortgage Note to be duly executed on the date
first above written.

 

	
   

  	
  MAKER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MB SHAKOPEE VIERLING, L.L.C.,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:  MINTO
  BUILDERS (FLORIDA), INC.,

  
	
   

  	
  a Florida corporation,

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its sole member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Debra A. Palmer

  
	
   

  	
   

  	
  Its:

  	
  Debra A. Palmer

  
	
   

  	
   

  	
   

  	
  Assistant Secretary

  
								

 

12

 

EXHIBIT A

 

BASIS POINT ADJUSTMENT
TABLE

 

	
  U.S. Treasury

  	
   

  	
   

  	
   

  	
  U.S. Treasury

  	
   

  	
   

  	
   

  
	
  Bond or Note

  	
   

  	
  Basis Point

  	
   

  	
  Bond or Note

  	
   

  	
  Basis Point

  	
   

  
	
  Yield

  	
   

  	
  Adjustment

  	
   

  	
  Yield

  	
   

  	
  Adjustment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0.00
  - 1.55

  	
   

  	
  .00

  	
   

  	
  14.07
  - 14.24

  	
   

  	
  .40

  	
   

  
	
  1.56
  - 2.69

  	
   

  	
  .01

  	
   

  	
  14.25
  - 14.41

  	
   

  	
  .41

  	
   

  
	
  2.70
  - 3.48

  	
   

  	
  .02

  	
   

  	
  14.42
  - 14.59

  	
   

  	
  .42

  	
   

  
	
  3.49
  - 4.12

  	
   

  	
  .03

  	
   

  	
  14.60
  - 14.77

  	
   

  	
  .43

  	
   

  
	
  4.13
  - 4.68

  	
   

  	
  .04

  	
   

  	
  14.78
  - 14.94

  	
   

  	
  .44

  	
   

  
	
  4.69
  - 5.17

  	
   

  	
  .05

  	
   

  	
  14.95
  - 15.11

  	
   

  	
  .45

  	
   

  
	
  5.18
  - 5.63

  	
   

  	
  .06

  	
   

  	
  15.12
  - 15.28

  	
   

  	
  .46

  	
   

  
	
  5.64
  - 6.05

  	
   

  	
  .07

  	
   

  	
  15.29
  - 15.44

  	
   

  	
  .47

  	
   

  
	
  6.06
  - 6.44

  	
   

  	
  .08

  	
   

  	
  15.45
  - 15.61

  	
   

  	
  .48

  	
   

  
	
  6.45
  - 6.82

  	
   

  	
  .09

  	
   

  	
  15.62
  - 15.77

  	
   

  	
  .49

  	
   

  
	
  6.83
  - 7.17

  	
   

  	
  .10

  	
   

  	
  15.78
  - 15.94

  	
   

  	
  .50

  	
   

  
	
  7.18
  - 7.51

  	
   

  	
  .11

  	
   

  	
  15.95
  - 16.10

  	
   

  	
  .51

  	
   

  
	
  7.52
  - 7.83

  	
   

  	
  .12

  	
   

  	
  16.11
  - 16.26

  	
   

  	
  .52

  	
   

  
	
  7.84
  - 8.14

  	
   

  	
  .13

  	
   

  	
  16.27
  - 16.41

  	
   

  	
  .53

  	
   

  
	
  8.15
  - 8.44

  	
   

  	
  .14

  	
   

  	
  16.42
  - 16.57

  	
   

  	
  .54

  	
   

  
	
  8.45
  - 8.73

  	
   

  	
  .15

  	
   

  	
  16.58
  - 16.73

  	
   

  	
  .55

  	
   

  
	
  8.74
  - 9.02

  	
   

  	
  .16

  	
   

  	
  16.74
  - 16.88

  	
   

  	
  .56

  	
   

  
	
  9.03
  - 9.29

  	
   

  	
  .17

  	
   

  	
  16.89
  - 17.03

  	
   

  	
  .57

  	
   

  
	
  9.30
  - 9.55

  	
   

  	
  .18

  	
   

  	
  17.04
  - 17.18

  	
   

  	
  .58

  	
   

  
	
  9.56
  - 9.81

  	
   

  	
  .19

  	
   

  	
  17.19
  - 17.33

  	
   

  	
  .59

  	
   

  
	
  9.82
  - 10.07

  	
   

  	
  .20

  	
   

  	
  17.34
  - 17.48

  	
   

  	
  .60

  	
   

  
	
  10.08
  - 10.31

  	
   

  	
  .21

  	
   

  	
  17.49
  - 17.63

  	
   

  	
  .61

  	
   

  
	
  10.32
  - 10.55

  	
   

  	
  .22

  	
   

  	
  17.64
  - 17.78

  	
   

  	
  .62

  	
   

  
	
  10.56
  - 10.79

  	
   

  	
  .23

  	
   

  	
  17.79
  - 17.92

  	
   

  	
  .63

  	
   

  
	
  10.80
  - 11.02

  	
   

  	
  .24

  	
   

  	
  17.93
  - 18.07

  	
   

  	
  .64

  	
   

  
	
  11.03
  - 11.25

  	
   

  	
  .25

  	
   

  	
  18.08
  - 18.21

  	
   

  	
  .65

  	
   

  
	
  11.26
  - 11.47

  	
   

  	
  .26

  	
   

  	
  18.22
  - 18.35

  	
   

  	
  .66

  	
   

  
	
  11.48
  - 11.69

  	
   

  	
  .27

  	
   

  	
  18.36
  - 18.49

  	
   

  	
  .67

  	
   

  
	
  11.70
  - 11.90

  	
   

  	
  .28

  	
   

  	
  18.50
  - 18.63

  	
   

  	
  .68

  	
   

  
	
  11.91
  - 12.11

  	
   

  	
  .29

  	
   

  	
  18.64
  - 18.77

  	
   

  	
  .69

  	
   

  
	
  12.12
  - 12.32

  	
   

  	
  .30

  	
   

  	
  18.78
  - 18.91

  	
   

  	
  .70

  	
   

  
	
  12.33
  - 12.52

  	
   

  	
  .31

  	
   

  	
  18.92
  - 19.05

  	
   

  	
  .71

  	
   

  
	
  12.53
  - 12.72

  	
   

  	
  .32

  	
   

  	
  19.06
  - 19.18

  	
   

  	
  .72

  	
   

  
	
  12.73
  - 12.92

  	
   

  	
  .33

  	
   

  	
  19.19
  - 19.32

  	
   

  	
  .73

  	
   

  
	
  12.93
  - 13.12

  	
   

  	
  .34

  	
   

  	
  19.33
  - 19.45

  	
   

  	
  .74

  	
   

  
	
  13.13
  - 13.31

  	
   

  	
  .35

  	
   

  	
  19.46
  - 19.59

  	
   

  	
  .75

  	
   

  
	
  13.32
  - 13.50

  	
   

  	
  .36

  	
   

  	
  19.60
  - 19.72

  	
   

  	
  .76

  	
   

  
	
  13.51
  - 13.69

  	
   

  	
  .37

  	
   

  	
  19.73
  - 19.85

  	
   

  	
  .77

  	
   

  
	
  13.70
  - 13.87

  	
   

  	
  .38

  	
   

  	
  19.86
  - 19.99

  	
   

  	
  .78

  	
   

  
	
  13.88
  - 14.06

  	
   

  	
  .39

  	
   

  	
  20.00
  - 20.12

  	
   

  	
  .79Exhibit 10.60

This document prepared by, 

and after recording return to:

Michael J. Roth

Bell, Boyd & Lloyd LLC

70 West Madison Street

Suite 3100

Chicago, Illinois 60602

Allstate Life Insurance
Company

Loan No. 122827

MORTGAGE, ASSIGNMENT OF LEASES,

RENTS AND CONTRACTS, SECURITY AGREEMENT

AND FIXTURE FILING

FROM

MB SHAKOPEE VIERLING,
L.L.C., AS MORTGAGOR

TO

ALLSTATE LIFE INSURANCE
COMPANY, AS MORTGAGEE

DATED: May 12, 2006

LOAN AMOUNT: $8,800,000

PROPERTY ADDRESS:

1698 VIERLING DRIVE

SHAKOPEE, MINNESOTA

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE

  	
   

  	
  SECTION

  	
   

  	
  DESCRIPTION

  	
   

  	
  PAGE NUMBER

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
   

  	
   

  	
   

  	
  COVENANTS OF MORTGAGOR

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.01.

  	
   

  	
  Performance
  of Obligations Secured

  	
   

  	
  5

  
	
   

  	
   

  	
  1.02.

  	
   

  	
  Insurance

  	
   

  	
  5

  
	
   

  	
   

  	
  1.03.

  	
   

  	
  Condemnation

  	
   

  	
  6

  
	
   

  	
   

  	
  1.04.

  	
   

  	
  Damage to Property

  	
   

  	
  8

  
	
   

  	
   

  	
  1.05.

  	
   

  	
  Escrow Fund
  for Condemnation and Insurance Proceeds

  	
   

  	
  9

  
	
   

  	
   

  	
  1.06.

  	
   

  	
  Taxes, Liens
  and other Items

  	
   

  	
  11

  
	
   

  	
   

  	
  1.07.

  	
   

  	
  Assignment
  of Leases, Contracts, Rents and Profits

  	
   

  	
  l2

  
	
   

  	
   

  	
  1.08.

  	
   

  	
  Due on Sale or
  Encumbrance

  	
   

  	
  16

  
	
   

  	
   

  	
  1.09.

  	
   

  	
  Preservation
  and Maintenance of Property

  	
   

  	
  16

  
	
   

  	
   

  	
  1.10.

  	
   

  	
  Use of Property

  	
   

  	
  17

  
	
   

  	
   

  	
  1.11.

  	
   

  	
  Alterations
  and Additions

  	
   

  	
  18

  
	
   

  	
   

  	
  1.12.

  	
   

  	
  Offset Certificates

  	
   

  	
  18

  
	
   

  	
   

  	
  1.13.

  	
   

  	
  Mortgagee’s
  Costs and Expenses

  	
   

  	
  19

  
	
   

  	
   

  	
  1.14.

  	
   

  	
  Protection
  of Security; Costs and Expenses

  	
   

  	
  19

  
	
   

  	
   

  	
  1.15.

  	
   

  	
  Mortgagor’s
  Covenants Respecting Collateral

  	
   

  	
  20

  
	
   

  	
   

  	
  1.16.

  	
   

  	
  Covenants
  Regarding Financial Statements

  	
   

  	
  23

  
	
   

  	
   

  	
  1.17.

  	
   

  	
  Environmental
  Covenants

  	
   

  	
  24

  
	
   

  	
   

  	
  1.18.

  	
   

  	
  Further Assurances

  	
   

  	
  25

  
	
   

  	
   

  	
  1.19.

  	
   

  	
  Mortgagor’s
  Continued Existence

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
   

  	
   

  	
  EVENTS OF DEFAULT

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.01.

  	
   

  	
  Monetary
  and Performance Defaults

  	
   

  	
  26

  
	
   

  	
   

  	
  2.02.

  	
   

  	
  Bankruptcy,
  Insolvency, Dissolution

  	
   

  	
  27

  
	
   

  	
   

  	
  2.03.

  	
   

  	
  Misrepresentation

  	
   

  	
  27

  
	
   

  	
   

  	
  2.04.

  	
   

  	
  Default
  under Subordinate Loans

  	
   

  	
  27

  
	
   

  	
   

  	
  2.05.

  	
   

  	
  Liens

  	
   

  	
  27

  
	
   

  	
   

  	
  2.06.

  	
   

  	
  Judgments

  	
   

  	
  28

  
	
   

  	
   

  	
  2.07.

  	
   

  	
  Leases

  	
   

  	
  28

  
	
   

  	
   

  	
  2.08.

  	
   

  	
  Mortgagor’s
  Continued Existence

  	
   

  	
  28

  
	
   

  	
   

  	
  2.09.

  	
   

  	
  Breach of
  Due on Sale or Encumbrance Provision

  	
   

  	
  28

  
	
   

  	
   

  	
  2.10.

  	
   

  	
  Default
  under Related Agreements

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
   

  	
   

  	
  REMEDIES

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.01.

  	
   

  	
  Acceleration

  	
   

  	
  28

  
	
   

  	
   

  	
  3.02.

  	
   

  	
  Entry

  	
   

  	
  29

  
	
   

  	
   

  	
  3.03.

  	
   

  	
  Judicial Action

  	
   

  	
  30

  
	
   

  	
   

  	
  3.04.

  	
   

  	
  Power of Sale

  	
   

  	
  31

  
	
   

  	
   

  	
  3.05.

  	
   

  	
  Rescission
  of Notice of Default

  	
   

  	
  31

  
	
   

  	
   

  	
  3.06.

  	
   

  	
  Mortgagee’s
  Remedies Respecting Collateral

  	
   

  	
  31

  
	
   

  	
   

  	
  3.07.

  	
   

  	
  Proceeds of Sales

  	
   

  	
  31

  
	
   

  	
   

  	
  3.08.

  	
   

  	
  Condemnation
  and Insurance Proceeds

  	
   

  	
  32

  

 

 

 

	
  ARTICLE

  	
   

  	
  SECTION

  	
   

  	
  DESCRIPTION

  	
   

  	
  PAGE NUMBER

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.09.

  	
   

  	
  Waiver of
  Marshalling, Rights of Redemption, Homestead and Valuation

  	
   

  	
  33

  
	
   

  	
   

  	
  3.10.

  	
   

  	
  Remedies Cumulative

  	
   

  	
  33

  
	
   

  	
   

  	
  3.11.

  	
   

  	
  Nonrecourse

  	
   

  	
  33

  
	
   

  	
   

  	
  3.12.

  	
   

  	
  Evasion of
  Prepayment Premium

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
   

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.01.

  	
   

  	
  Severability

  	
   

  	
  35

  
	
   

  	
   

  	
  4.02.

  	
   

  	
  Certain
  Charges and Brokerage Fees

  	
   

  	
  35

  
	
   

  	
   

  	
  4.03.

  	
   

  	
  Notices

  	
   

  	
  36

  
	
   

  	
   

  	
  4.04.

  	
   

  	
  Mortgagor
  Not Released; Certain Mortgagee Acts

  	
   

  	
  37

  
	
   

  	
   

  	
  4.05.

  	
   

  	
  Inspection

  	
   

  	
  38

  
	
   

  	
   

  	
  4.06.

  	
   

  	
  Release or
  Reconveyance or Cancellation

  	
   

  	
  38

  
	
   

  	
   

  	
  4.07.

  	
   

  	
  Statute of
  Limitations

  	
   

  	
  38

  
	
   

  	
   

  	
  4.08.

  	
   

  	
  Interpretation

  	
   

  	
  38

  
	
   

  	
   

  	
  4.09.

  	
   

  	
  Captions

  	
   

  	
  38

  
	
   

  	
   

  	
  4.10.

  	
   

  	
  Consent

  	
   

  	
  38

  
	
   

  	
   

  	
  4.11.

  	
   

  	
  Delegation to
  Subagents

  	
   

  	
  38

  
	
   

  	
   

  	
  4.12.

  	
   

  	
  Successors and
  Assigns

  	
   

  	
  39

  
	
   

  	
   

  	
  4.13.

  	
   

  	
  Governing Law

  	
   

  	
  39

  
	
   

  	
   

  	
  4.14.

  	
   

  	
  Changes in Taxation

  	
   

  	
  39

  
	
   

  	
   

  	
  4.15.

  	
   

  	
  Maximum Interest
  Rate

  	
   

  	
  39

  
	
   

  	
   

  	
  4.16.

  	
   

  	
  Time of Essence

  	
   

  	
  39

  
	
   

  	
   

  	
  4.17.

  	
   

  	
  Reproduction
  of Documents

  	
   

  	
  39

  
	
   

  	
   

  	
  4.18.

  	
   

  	
  No Oral
  Modifications

  	
   

  	
  40

  
	
   

  	
   

  	
  4.19.

  	
   

  	
  Further Assurances

  	
   

  	
  40

  
	
   

  	
   

  	
  4.20.

  	
   

  	
  Future Advances

  	
   

  	
  40

  
	
   

  	
   

  	
  4.21.

  	
   

  	
  Commercial Property

  	
   

  	
  41

  

 

 

ii

 

MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND CONTRACTS,

SECURITY AGREEMENT AND FIXTURE FILING

THIS MORTGAGE, ASSIGNMENT OF
LEASES, RENTS AND CONTRACTS, SECURITY AGREEMENT AND FIXTURE FILING is
made as of May 12, 2006, from MB SHAKOPEE VIERLING, L.L.C., a Delaware limited
liability company (“Mortgagor”), whose mailing address is 2901 Butterfield
Road, Oak Brook, Illinois 60523, in favor of ALLSTATE LIFE INSURANCE COMPANY,
an Illinois insurance corporation (“Mortgagee”), whose mailing address is
Allstate Plaza South, Suite G5C, 3075 Sanders Road, Northbrook, Illinois,
60062.

Agreements

In consideration of the indebtedness herein recited
and as security for payment and performance of the payment of both principal
and interest and the other obligations set forth below, Mortgagor hereby
irrevocably grants, conveys, transfers and assigns to Mortgagee, its successors
and assigns, with power of sale and right of entry and possession, all of
Mortgagor’s estate, right, title and interest in, to and under those certain
parcels real property located in Shakopee, County of Scott, State of Minnesota,
more particularly described in Exhibit A attached hereto and
incorporated herein by this reference (the “Land”);

TOGETHER with all of Mortgagor’s now or hereafter
acquired estate, right, title and interest in, to and under all buildings,
structures, improvements and fixtures now existing or hereafter erected on the
Land and all right, title and interest, if any, of Mortgagor in and to the
streets and roads, opened or proposed, abutting the Land to the center lines
thereof, and strips within or adjoining the Land, the air space and right to
use said air space above the Land, all rights of ingress and egress on or
within the Land, all easements, rights and appurtenances thereto or used in
connection with the Land, including, without limitation, all lateral support,
alley and drainage rights, all revenues, income, rents, cash or security
deposits, advance rental deposits, profits, royalties, and other benefits
thereof or arising from the use or enjoyment of all or any portion thereof
(subject however to the rights and authorities given herein to Mortgagor to
collect and apply such revenues, and other benefits), all interests in and
rights, royalties and profits in connection with all minerals, oil and gas and
other hydrocarbon substances thereon or therein, and water stock, all options
to purchase or lease, all development or other rights relating to the Land or
the operation thereof or used in connection therewith (including, without
limitation, all concurrency rights, permits, prepaid utilities and impact fees
of any nature, storm water drainage rights and reservations, sanitary sewer
rights and reservations, potable water rights and reservations, allocations of
traffic trips, use, rights and reservations, law enforcement, library, park and
educational fees, uses, rights and reservations), including all Mortgagor’s right,
title and interest in all fixtures, attachments, partitions, machinery,
equipment, building materials, appliances and goods of every nature whatever,
whether now or hereafter located on, or attached to, the Land, all of which,
including replacements and additions thereto, shall, to the fullest extent
permitted by law and for the purposes of this Mortgage, be deemed to be real
property and, whether affixed or annexed thereto or not, be deemed conclusively
to be real property; and Mortgagor agrees to execute and deliver, from time to
time, such further instruments and documents as may be required by Mortgagee to
confirm the legal operation and effect of this Mortgage on any of the
foregoing. All of the foregoing property described in this

 

1

 

Section (the “Improvements”) together with the Land and the hereinafter
defined Collateral, shall be hereinafter referred to as the “Property”).

 

MORTGAGOR HEREBY FURTHER
GRANTS to Mortgagee a security interest in, and assigns, all of Mortgagor’s now
existing or hereafter acquired right, title and interest in the following with
the understanding and intention that this Mortgage shall also constitute a
security agreement pursuant to the Uniform Commercial Code of the State of
Minnesota.

 

(A) All equipment,
fixtures, inventory, goods, farm goods, instruments, appliances, furnishings,
machinery, tools, raw materials, component parts, work in progress and
materials, and all other tangible personal property of whatsoever kind, used or
consumed in the improvement, use or enjoyment of the Property now or any time
hereafter owned or acquired by Mortgagor, wherever located and all products
thereof whether in possession of Mortgagor or whether located on the Property
or elsewhere;

 

(B) To the extent such
general intangibles are assignable, all general intangibles relating to the
Property or the design, development, operation, management and use of the
Property (other than trademarks that contain the word “Inland”), including, but
not limited to, (1) all names under which or by which the Property may at any
time be owned and operated or any variant thereof, and all goodwill in any way
relating to the Property and all service marks and logotypes used in connection
therewith, (2) all permits, licenses, authorizations, variances, land use
entitlements, approvals, consents, clearances, and rights obtained from
governmental agencies issued or obtained in connection with the Property, (3)
all permits, licenses, approvals, consents, authorizations, franchises and
agreements issued or obtained in connection with the construction, use,
occupation or operation of the Property, (4) all materials prepared for filing
or filed with any governmental agency, and (5) all of the books and records of
Mortgagor in any way relating to construction or operation of the Property;

 

(C) All shares of stock
or partnership interest or other evidence of ownership of any part of the
Property that is owned by Mortgagor in common with others, including all water
stock relating to the Property, if any, and all documents or rights of
membership in any owners’ or members’ association or similar group having
responsibility for managing or operating any part of the Property provided,
however, that the foregoing shall not include any ownership interests in
Mortgagor;

 

(D) All accounts, deposit
accounts, supporting obligations, letter-of-credit rights, tax and insurance
escrows held pursuant to or in connection with this Mortgage, accounts
receivable, instruments, documents, documents of title, general intangibles,
rights to payment of every kind, judgments, settlements, all of Mortgagor’s
rights, direct or indirect, under or pursuant to any and all construction,
development, financing, guaranty, indemnity, maintenance, management, service,
supply and warranty agreements, commitments, contracts, subcontracts, insurance
policies, licenses and bonds now or anytime hereafter arising from construction
on the Land or the use or enjoyment of the Property to the extent such are assignable;

 

(E) All condemnation and
eminent domain proceeds (including payments in lieu thereof) and insurance
proceeds related to the Property;

 

2

TOGETHER with all additions to, substitutions for and
the products of all of the above, and all proceeds therefrom, whether cash
proceeds or noncash proceeds, received when any such property (or the proceeds
thereof) is sold, used, exchanged, leased, licensed, or otherwise disposed of,
whether voluntarily or involuntarily. Such proceeds shall include any of the
foregoing specifically described property of Mortgagor acquired with cash
proceeds. Together with, and without limiting the above items, all Goods,
Accounts, Documents, Instruments, Money, Chattel Paper, Deposit Accounts,
Letter-of-Credit Rights, Investment Property, Equipment and General Intangibles
(other than trademarks that contain the word “Inland”) arising from or used in
connection with the Property, as those terms are defined in the Uniform
Commercial Code from time to time in effect in the State of Minnesota. (All of
the foregoing including such products and proceeds thereof, are collectively
referred to as “Collateral”.)

To the extent any of the Collateral described herein
is personal property owned by a tenant of the Property, then the security
interest therein granted by this Mortgage shall extend only to the reversionary
interest of Mortgagor, if any, to such personal property.

MORTGAGOR HEREBY WARRANTS AND REPRESENTS that it is
the owner in fee title to the Property (and the Collateral) free and clear of
all liens and encumbrances except for: the lien for current real estate taxes
not yet due and payable; and such other encumbrances as are set forth in Exhibit
C attached hereto and incorporated herein by this reference.

The personal property in which Mortgagee has a
security interest includes goods which are or shall become fixtures on the
Property. This Mortgage is intended to serve as a security agreement and
fixture filing pursuant to the terms of the applicable provisions of the
Uniform Commercial Code of the State of Minnesota. This filing is to be
recorded in the real estate records of the appropriate city, town or county in
which the Property is located. In that regard, the following information is
provided:

 

	
  Names of Debtor:

  	
   

  	
  MB Shakopee Vierling, L.L.C., a Delaware limited
  liability company

  
	
   

  	
   

  	
   

  
	
  Organizational Number of Debtor

  	
   

  	
  4126600

  
	
   

  	
   

  	
   

  
	
  Address of Debtor:

  	
   

  	
  See Section 4.03 hereof

  
	
   

  	
   

  	
   

  
	
  Name of Secured Party:

  	
   

  	
  Allstate Life Insurance Company, an Illinois
  insurance corporation

  
	
   

  	
   

  	
   

  
	
  Address of Secured Party:

  	
   

  	
  See Section 4.03 hereof.

  

This document covers goods which are or are to become
fixtures.

The name of the record owner of the Property is the
Debtor described above.

Mortgagor’s tax identification or social security
number: 20-4522794.

 

3

Mortgagor hereby represents, warrants and agrees that
at the time of execution of this Mortgage and so long as any payments or
performance obligation of the Mortgage, Note (as defined herein) or the Related
Agreements (as defined herein) shall remain outstanding, (i) there is not and
will not be any financing statement other than those granting a security
interest in favor of Mortgagee covering the Collateral, the Property, or any
part thereof, on file in any public office, including, without limitation, the
office of the Secretary of State of the State of Delaware, the Secretary of
State of the State of Minnesota, or the clerks office in any county in which the
Property or Collateral are located; (ii) that none of the Collateral is in the
possession of anyone other than Mortgagor; and (iii) that all of the Collateral
has been in continuous, exclusive possession of Mortgagor.

TO HAVE AND TO HOLD the Property hereby conveyed or
mentioned and intended so to be, unto Mortgagee, its successors and assigns,
forever subject to and for the purposes and uses herein set forth. This
Mortgage secures:

(A) The repayment of the indebtedness evidenced by
that certain Mortgage Note (the “Note”) of even date herewith with a maturity
date of May 1, 2011, executed by Mortgagor and payable to the order of
Mortgagee, in the principal sum of EIGHT MILLION EIGHT HUNDRED THOUSAND DOLLARS
($8,800,000), with interest thereon as provided therein and all late charges,
loan fees, commitment fees, Prepayment Premium (as described in the Note), and
all extensions, renewals, modifications, amendments and replacements of the
Note;

(B) The payment of all other sums which may be
advanced by or otherwise be due to Mortgagee under any provision of this
Mortgage or under any other instrument or document referred to in clause (C)
below, with interest thereon at the rate provided herein or therein;

(C) The performance of each and every covenant and
agreement of Mortgagor contained (1) herein, in the Note, or in any note
evidencing a Future Advance (as hereinafter defined), and (2) in the
obligations of Mortgagor upon any and all pledge or other security agreements,
loan agreements, disbursement agreements, supplemental agreements,
environmental indemnity agreements (the foregoing shall not include the
Commitment Letter between Mortgagor and Mortgagee), assignments (both present
and collateral) and all instruments of indebtedness or security now or hereafter
executed by Mortgagor in connection with any indebtedness referred to in
clauses (A), (B), (D), (E) or (F) of this Section (including but not limited to
the Assignment of Leases and Rents of even date herewith from Mortgagor to
Mortgagee (the “Assignment of Leases and Rents”) or for the purpose of
supplementing or amending this Mortgage or any instrument secured hereby (all
of the foregoing in this clause (C), as the same may be amended, modified or
supplemented from time to time, together with the Note and this Mortgage, being
referred to hereinafter as “Related Agreements”) and all costs and
expenses,  including reasonable attorneys’
and paralegals’  fees  with respect to all such documents,
including, without limitation, the negotiation and drafting of any loan
settlement or workout agreement;

(D) All costs, expenses, losses, damages and other
charges sustained or incurred by Mortgagee because of: (1) Mortgagor’s default
in payment or performance, as the case may be, of any provision contained in
this Mortgage or in any Related Agreement; (2) defense of actions instituted by
Mortgagor or a third party against Mortgagee arising out of or related to the
loan

 

4

evidenced by the Note (the “Loan”), or in the realizing upon,
protecting, perfecting or defending the Property or the Collateral; or (3)
actions brought or defended by Mortgagee in enforcing Mortgagee’s security
interest in the Property or the Collateral. All of these costs and expenses
include reasonable attorneys’ fees and paralegals’ fees, whether incurred with
respect to collection, litigation, bankruptcy proceedings, interpretation,
dispute, negotiation, trial, appeal, defensive actions instituted by a third
party against mortgagee, or enforcement or any judgment based upon the Note,
this Mortgage, or any of the Related Agreements, whether or not suit is brought
to collect such amounts or to enforce such rights or, if brought, is prosecuted
to judgment;

(E) All costs, expenses, and amounts arising under or
pursuant to any indemnity contained within the Note, this Mortgage, or in any
of the Related Agreements, or in any separate agreement executed by Mortgagor
in favor of Mortgagee; and

(F) The repayment of any other loans or advances, with
interest thereon, hereafter made to Mortgagor (or any successor in interest to
Mortgagor as the owner of the Property or any part thereof) by Mortgagee when
the promissory note evidencing the loan or advance specifically states that
said note is secured by this Mortgage, together with all extensions, renewals,
modifications, amendments and replacements thereof (herein and in the Related
Agreements “Future Advance”).

ARTICLE I

COVENANTS OF MORTGAGOR

To protect the security of this Mortgage, and as
additional consideration to Mortgagee, Mortgagor covenants, warrants and agrees
as follows:

1.01.            Performance of Obligations
Secured. Mortgagor shall promptly pay when due the principal of and interest on the
indebtedness evidenced by the Note, the principal of and interest on any Future
Advance, any Prepayment Premium and late charges provided for in the Note or in
any note evidencing a Future Advance, and shall further perform fully and in a
timely manner all other obligations of Mortgagor contained herein or in the
Note or in any note evidencing a Future Advance or in any of the Related
Agreements.

1.02.            Insurance. For all times
during the period there remains any indebtedness under the Note, or any and all other indebtedness (including
without limitation Future Advances) secured by this Mortgage, Mortgagor shall
keep the Property insured against all risks or hazards as Mortgagee may
reasonably require.  Such insurance shall
be in policy form, amount and coverage reasonably satisfactory to Mortgagee,
including, but not limited to:

(A) Fire and extended coverage on an “all risk”
replacement cost basis, in an amount equal to the insurable value of the
Improvements, without coinsurance or deducting for depreciation, containing a
waiver of subrogation clause and a deductible amount acceptable to Mortgagee;

 

5

(B) General public liability insurance, in such form,
amount and deductible satisfactory to Mortgagee, and naming Mortgagee c/o
Mortgagee’s servicing agent, if any, as additional insured covering Mortgagee’s
interest in the Property;

(C) Business interruption or rent loss insurance
endorsement in an amount at least equal to 100 percent of the sum of: annual
debt service on the Note, the annual debt service on any other financing permitted
by Mortgagee, ground rents, if any, and operating expenses (without
contribution from Mortgagor for a period of 12 months), including, without
limitation, real estate taxes and assessments and insurance, for the Property;

(D) Flood insurance (whether or not available through
the National Flood Insurance Program) sufficient to cover any damage which may
be anticipated in the event of flood unless Mortgagor has provided Mortgagee
evidence satisfactory to Mortgagee that no portion of the Property is located
within the boundaries of the 100 year flood plain (Flood Zone A);

(E) “Dram shop” insurance if alcoholic beverages are
sold on the Property;

(F) Boiler and machinery insurance when risks covered
thereby are present and Mortgagee requires such insurance;

(G) Earthquake insurance if Mortgagee requires such
insurance;

(H) Windstorm insurance: and

(I) Hurricane insurance.

The insurance coverages described in subsections (A),
(C), (D), and (F-I) above shall
name Mortgagee c/o Mortgagee’s servicing agent, if any, under a standard
noncontributory mortgagee loss payable clause (and naming Mortgagee as loss
payee for rent loss coverage) or otherwise directly insure Mortgagee’s interest
in the Property. All losses under said insurance shall be payable to Mortgagee in
the manner provided in Sections 1.04 and 1.05 hereof. All policies of insurance
required under this Section 1.02 shall be with a company or companies with a
policy rating of A and financial rating of at least Class X in the most current
edition of Best’s Key Rating Guide and authorized to do business in the state
in which the Property is located. All policies of insurance shall provide that
they will not be canceled or modified without 30 days’ prior written notice to
Mortgagee. True copies of the above mentioned insurance policies or evidence of
such insurance (in the form of Acord Form 28) satisfactory to Mortgagee shall
be delivered to and held by Mortgagee. True copies of all renewal and
replacement policies or evidences of such insurance forms (Acord Form 28)
thereof shall be delivered to Mortgagee at least 30 days before the expiration
of the expiring policies. If any renewal or replacement policy is not obtained
as required herein, Mortgagee is authorized to obtain the same in Mortgagor’s
name and at Mortgagor’s expense. Mortgagee shall not by the fact of failing to
obtain any insurance, incur any liability for or with respect to the amount of
insurance carried, the form or legal sufficiency of insurance contracts,
solvency of insurance companies, or payment or defense of lawsuits, and
Mortgagor hereby expressly assumes full responsibility therefor and all
liability, if any, with respect thereto.

1.03.            Condemnation.

 

6

(A) Immediately upon obtaining knowledge of the
commencement or threat of any action in connection with (1) any condemnation,
(2) any other taking of the Property or any part thereof by any public
authority or private entity having the power of eminent domain, or (3) any
conveyance in lieu of such condemnation or taking of the Property or any part
thereof (“Condemnation”), Mortgagor shall notify Mortgagee in writing but in no
event later than ten (10) days after Mortgagor obtains knowledge of the
commencement of or threat or likelihood of a Condemnation. Mortgagee shall have
the right, but not the obligation, to participate in any proceedings relating
to any Condemnation and may, in its sole discretion, consent or withhold its
consent to  any settlement,  adjustment, 
or compromise of any claims 
arising from the Condemnation and no such settlement, adjustment or
compromise shall be final or binding upon Mortgagee without Mortgagee’s prior
consent.

(B) Except as expressly provided in Section 1.03(C),
if all or part of the Property is taken by Condemnation and Mortgagee in its
reasonable judgment determines that the remainder of the Property, if any,
cannot be operated as an economically viable entity at substantially the same
level of operations as immediately prior to such Condemnation, then all
proceeds of the Condemnation (“Condemnation Proceeds”) shall be paid over to
Mortgagee and shall be applied first toward reimbursement of the costs and
expenses (including reasonable attorneys’ and paralegals’ fees) of Mortgagee,
if any, in connection with the recovery of such Condemnation Proceeds, and
then, in the sole and absolute discretion of Mortgagee and without regard to
the adequacy of its security under this Mortgage, shall be applied against all
amounts due hereunder or under the Note and any remaining Condemnation Proceeds
shall be released to Mortgagor. Partial prepayment of the Note under this
Section 1.03(B) with Condemnation Proceeds shall not be subject to the
Prepayment Premium; however, such partial prepayment shall not entitle Mortgagor
to prepay the portion of the Note remaining unpaid after application of the
Condemnation Proceeds. Full or partial prepayment of the balance shall continue
to be subject to the terms and conditions of the Note, including the
No-Prepayment Period and the Prepayment Premium described therein.

(C) If less than all of the Property is taken by
Condemnation and Mortgagee in its reasonable judgment determines that the
remainder of the Property can be operated as an economically viable entity at
substantially the same level of operations as immediately prior to such
Condemnation, then Mortgagor shall diligently restore the Property to a
condition and use as close as possible to its condition immediately prior to
the Condemnation and all Condemnation Proceeds shall be made available to
Mortgagor for such restoration. If the estimated cost of restoration, as
reasonably determined by Mortgagee, is equal to or less than One Hundred Fifty
Thousand Dollars  ($150,000),  all 
Condemnation Proceeds  shall be
released directly to Mortgagor for restoration of the Property.  If the estimated cost of restoration exceeds
One Hundred Fifty Thousand Dollars ($150,000), all Condemnation Proceeds shall
be deposited into an escrow fund in accordance with Section 1.05 below.
Mortgagee shall have the right to obtain an opinion of an independent
contractor or engineer satisfactory to Mortgagee, at Mortgagor’s expense, to
estimate the cost to restore the remaining portion of the Property. If the
amount of the Condemnation Proceeds is not sufficient to restore the Property
based on the opinion of an independent contractor or engineer, subject to
revision as restorations are made, Mortgagor shall be obligated to pay the
difference toward the restoration of the Property, prior to the disbursement of
any Condemnation Proceeds to, or for the account of, Mortgagor.

 

 

7

 

(D) If an Event of Default exists at any time from the
time of a Condemnation through the completion of restoration and payment of any
Condemnation Proceeds, the use of the Condemnation Proceeds shall be governed
by the remedies set forth in Article III below. If an event has occurred which
with notice, the passage of time, or both, could become an Event of Default,
then, the Condemnation Proceeds shall be held by Mortgagee or in the Escrow
Fund (as defined below), as applicable, pending cure of such event prior to the
expiration of any applicable cure or grace period. The application of any
Condemnation Proceeds to the indebtedness secured hereby shall not cure or
waive any Event of Default hereunder, or invalidate any act done pursuant to
any notice thereof.

1.04.            Damage to Property.

(A) Promptly upon obtaining knowledge of any damage to
the Property or any part thereof with an estimated cost of restoration in
excess of One Hundred Thousand Dollars ($100,000), but in no event later than
ten (10) days after Mortgagor obtains such knowledge, Mortgagor shall notify
Mortgagee of such damage in writing. Mortgagor shall diligently restore the
Property to the same condition that existed immediately prior to the damage
whether or not insurance proceeds are sufficient for such restoration.  All proceeds of any insurance on the Property
(“Insurance Proceeds”) received by Mortgagor shall be applied to such
restoration. Mortgagee shall have the right to obtain an opinion of an
independent contractor or engineer satisfactory to Mortgagee, at Mortgagor’s
expense, to estimate the cost to restore the Property to its original
condition, which opinion may be revised as restorations are made. If the amount
of the Insurance Proceeds is not sufficient to restore the Property based on an
independent contractor’s or engineer’s opinion, subject to revision as
restorations are made, Mortgagor shall be obligated to pay the difference
toward the restoration of the Property, prior to the application of any
Insurance Proceeds to such restoration as provided herein.

(B) If the estimated cost of restoration is equal to
or less than Two Hundred Fifty Thousand Dollars ($250,000), Mortgagor shall
promptly settle and adjust any claims under the insurance policies which insure
against such risks and, upon receipt of the Insurance Proceeds, Mortgagee shall
deliver such to Mortgagor for use in restoration of the Property.

(C) If the estimated cost of restoration is greater
than Two Hundred Fifty Thousand Dollars ($250,000), Mortgagee shall have the right,
but not the obligation, to participate in the settlement of the insurance
claims and may, in its sole discretion, consent or withhold its consent to any
settlement, adjustment, or compromise of such insurance claims and no such
settlement, adjustment, or compromise shall be final or binding upon Mortgagee
without its prior consent. Upon settlement of insurance claims, and if
Mortgagor can demonstrate to the reasonable satisfaction of Mortgagee that the
projected ratio of Net Operating Income, as defined below, to annual debt
service due under the Notes and any other notes secured by the Property (“Debt
Coverage Ratio”) will be at least one hundred five percent (105%) for the
twelve (12) months immediately following reconstruction of the Property, the Insurance
Proceeds shall be deposited into an escrow fund in accordance with Section 1.05
below.

As used in this Mortgage, “Net Operating Income” shall
mean:

 

8

(i) all gross operating revenues anticipated to be
received during the following twelve-month period based on leases in effect as
of the date of calculation and only for such time as those leases are
contracted to remain in effect without expiration by their terms or optional
termination by the tenant (unless the tenant has waived its termination rights
in writing or the term of the lease has been extended in writing), including
without limitation all amounts to be received from tenants as payment of
operating expenses (including real estate taxes and insurance and/or other
operating expenses reimbursed by tenants) but not including refundable
deposits, lease termination payments, excess tenant improvement and leasing
commission payments included as additional rent, principal or interest payments
received by Mortgagor on loans to tenants and fees and reimbursements for work
performed for tenants by Mortgagor, less:

(ii) all amounts, calculated on a pro forma basis, for
the operation or maintenance of the Property for the following 12 month period,
including ground rents, the cost of property management (which shall be no less
than three percent (3%) of gross revenues), maintenance, cleaning, security,
landscaping, parking maintenance and utilities, and other costs and expenses
approved in writing by Mortgagee and amounts reasonably estimated by Mortgagee
for the payment of real estate taxes and assessments and other taxes related to
the operation of the Property, insurance premiums, necessary repairs and future
replacements of equipment; payments under the Note shall not be included in Net
Operating Income.

Notwithstanding the foregoing, if any of the Related
Agreements require a historical calculation of Net Operating Income, it shall
be calculated on a cash basis for the previous twelve-month period as of the
date of such calculation.

(D) If in the reasonable judgment of Mortgagee the
conditions of Section 1.04(C) cannot be satisfied, then at any time from and
after the occurrence of the damage, upon written notice to Mortgagor, Mortgagee
may declare the entire balance of the Note and/or any Future Advances then
outstanding and accrued and unpaid interest thereon, and all other sums or
payments required thereunder or under this Mortgage, without any Prepayment
Premium (provided there is no Event of Default hereunder), to be immediately
due and payable, and all Insurance Proceeds shall be applied by Mortgagee first
to the reimbursement of any costs or expenses incurred by Mortgagee in
connection with the damage or the determination to be made hereunder, and then
to the payment of the indebtedness secured by this Mortgage in such order as
Mortgagee may determine in its sole discretion.

(E) Notwithstanding any provision herein to the
contrary, if an Event of Default exists at any time from the time of damage through
the completion of restoration and the final release of any Insurance Proceeds
to Mortgagor, the use of the Insurance Proceeds shall be governed by the
remedies set forth in Article III below. 
If an event has occurred which with notice, the passage of time, or
both, could become an Event of Default, then the Insurance Proceeds shall be
held by Mortgagee or in the Escrow Fund, as applicable, pending cure of such
event prior to the expiration of any applicable cure or grace period. The
application of any Insurance Proceeds to the indebtedness secured hereby shall
not cure or waive any Event of Default hereunder or invalidate any act done
pursuant to any notice thereof.

1.05.            Escrow Fund for Condemnation and
Insurance Proceeds.

 

9

(A) In the circumstances indicated above in
subsections 1.03(C) and 1.04(C), all Condemnation Proceeds and Insurance
Proceeds (“Proceeds”) shall be deposited in an interest bearing escrow fund (“Escrow
Fund”). The escrow agent and the form of the escrow agreement shall be
reasonably satisfactory to Mortgagee and Mortgagor. The costs and fees of such
escrow agent shall be paid by Mortgagor. If the amount of the Proceeds is not
sufficient to restore the Property based on an independent contractor’s or
engineer’s opinion obtained by Mortgagee at Mortgagor’s expense, subject to
revision as restorations are made, Mortgagor shall be obligated to deposit in
the Escrow Fund the difference between the contractor’s or engineer’s estimate
and the amount of the Proceeds or deliver to the escrow agent an irrevocable,
unconditional letter of credit issued in the amount of such difference in a
form and by a financial institution acceptable to Mortgagee or other cash
equivalent acceptable to Mortgagee. Mortgagor’s funds, if necessary, and the
Proceeds shall be deposited into the Escrow Fund and shall not be released by
the escrow agent unless used to restore the Property to its original condition
and unless a disbursement agent satisfactory to Mortgagee and Mortgagor
approves such disbursements from time to time. The escrow agreement shall
provide that the escrow agent shall only disburse funds to Mortgagor so long as
the restoration work is being diligently performed by Mortgagor and only after
(1) Mortgagor has delivered to Mortgagee and Mortgagee has approved the plans
and specifications for the restoration of the Property; (2) Mortgagor has
executed a contract acceptable to Mortgagee with a general contractor
acceptable to Mortgagee for the restoration of the Property; (3) the general
contractor has submitted lien waivers and/or releases, executed by the general
contractor and all subcontractors and suppliers which may be partial to the
extent of partial payments and which, in the case of releases, may be
contingent upon payment if the escrow agent makes payment directly to such
contractor, subcontractor or supplier; (4) Mortgagor has furnished Mortgagee
with an endorsement to its title policy showing no additional exceptions; and
(5) Mortgagor has deposited its funds in the Escrow Fund as provided in this
Section and has submitted such other documents and information as may be
reasonably requested by Mortgagee to determine that the work to be paid for has
been performed in accordance with the plans and specification’s reasonably
approved by Mortgagee. If any requisition for payment of work performed is for
an amount which would result in the remaining balance of the Escrow Fund to be
insufficient to complete the remainder of the restoration, Mortgagor shall
advance the requisite amount in cash to the Escrow Fund immediately upon
written request from the disbursement agent or Mortgagee. Any failure by
Mortgagor to satisfy any of the conditions to the disbursement of Proceeds set
forth in this Section upon demand by Mortgagee shall constitute a Performance
Default, as hereinafter defined.

(B) Any Condemnation Proceeds and any interest thereon
remaining in the Escrow Fund after payment of the costs to complete the
restoration of the Property pursuant to the approved plans and specifications
and the costs of the escrow agent and other costs described in Section 1.05(A)
shall be paid first, to Mortgagor to the extent of any funds of Mortgagor’s
contributed to the restoration pursuant to Section 1.05(A) (so long as there is
no Event of Default or an event which with notice, the passage of time, or
both, could become an Event of Default); thereafter any remaining Condemnation
Proceeds shall be returned to Mortgagor (i) if in Mortgagee’s sole discretion
(reasonably exercised) the restoration of the Property has been completed in a
satisfactory manner and with satisfactory results and (ii) so long as there is
no Event of Default or an event which with notice, the passage of time, or
both, could become an Event of Default. If the conditions of Section 1.05(B)(i)
are not satisfied, then any remaining

 

10

Condemnation Proceeds shall be applied to the
partial payment or prepayment of the Note without payment of any Prepayment
Premium; provided, however, that any such partial prepayment shall not entitle
Mortgagor to prepay the portion of the Note remaining unpaid after application
of the Proceeds. Prepayment of the balance shall continue to be subject to the
terms and conditions of the Note, including the No-Prepayment Period and the
Prepayment Premium described therein. If an Event of Default exists, the use of
the Condemnation Proceeds shall be governed by Article III below. If, however,
an event exists which with notice, the passage of time, or both, could become
an Event of Default, the remaining balance in the Escrow Fund shall be held by
the escrow agent pending cure of the event prior to the expiration of any
applicable cure or grace period.

(C) Any Insurance Proceeds and
any interest thereon remaining in the Escrow Fund after payment of the costs to
complete the restoration of the Property pursuant to the approved plans and
specifications and the costs of the escrow agent and other costs described in
Section 1.05(A) shall be paid first, to Mortgagor to the extent of any funds of
Mortgagor’s contributed to the restoration pursuant to Section 1.05)(A) (so
long as there is no Event of Default or an event which with notice, the passage
of time, or both, could become an Event of Default); thereafter any remaining
Insurance Proceeds shall be returned to Mortgagor (i) if in Mortgagee’s sole
discretion (reasonably exercised) the restoration of the Property has been
completed in a satisfactory manner and with satisfactory results and (ii) so
long as there is no Event of Default or an event which with notice, the passage
of time, or both, could become an Event of Default. If the conditions of
Section 1.05(C)(i) are not satisfied, then any remaining Insurance Proceeds
shall be applied to the partial payment or prepayment of the Note without
payment of any Prepayment Premium; provided, however, that any such partial
prepayment shall not entitle Mortgagor to prepay the portion of the Note
remaining unpaid after application of the Proceeds. Prepayment of the balance
shall continue to be subject to the terms and conditions of the Note, including
the No-Prepayment Period and the Prepayment Premium described therein. If an
Event of Default exists, the use of the Insurance Proceeds shall be governed by
Article III below. If, however, an event exists which with notice, the passage
of time, or both, could become an Event of Default, the remaining balance in
the Escrow Fund shall be held by the escrow agent pending cure of the event
prior to the expiration of any applicable cure or grace period.

1.06.            Taxes, Liens and other Items.

(A) Mortgagor shall pay or cause to be paid any and
all taxes (including any deed tax or mortgage registry tax), bonds,
assessments, fees, liens, charges, fines, impositions and any accrued interest
or penalty thereon, and any and all other items which are attributable to or
affect the Property (collectively, “Impositions”) by making payment prior to
delinquency directly to the payee thereof and promptly furnish copies of paid
receipts for these to Mortgagee. Mortgagor shall promptly discharge or bond any
lien or encumbrance on the Property whether or not said lien or encumbrance has
or may attain priority over this Mortgage. This Mortgage shall be the sole
encumbrance on the Property and, if with the consent of Mortgagee it is not the
sole encumbrance, then it shall be prior to any and all other liens or
encumbrances on the Property. Mortgagor may in good faith and with due
diligence protest the payment of any Imposition which it believes unwarranted
or excessive and may defer payment of such Imposition pending conclusion of
such contest if legally permitted to do so, provided that the priority of this

 

11

Mortgage and Mortgagee’s security is not
materially and adversely affected and that Mortgagor shall have furnished
Mortgagee or the taxing authority such security as may be required.

(B) As further security for the payment of the Note
and the payment of real estate taxes, regular or special assessments and
insurance premiums, Mortgagor shall be required to deposit one-twelfth (1/12)
of the annual amounts of such items as estimated by Mortgagee, with each
monthly payment on the Note, so that Mortgagee will hold a sufficient amount to
pay all such charges not less than thirty (30) days prior to the date on which
such items become due and payable. Mortgagee shall be furnished evidence to
allow it to estimate such amounts, including paid receipts or annual insurance
premium statements, assessment notices and tax receipts. All funds so deposited
shall, until applied to the payment of the aforesaid items, as hereinafter
provided, be held by Mortgagee without interest (except to the extent required
under applicable law) and may be commingled with other funds of Mortgagee. All
funds so deposited shall be applied to the payment of the aforesaid items only
upon the satisfaction of the following conditions: (1) no Event of Default or
event, which with notice or the passage of time or both could become an Event
of Default, shall have occurred; (2) Mortgagee shall have sufficient funds to
pay the full amounts of such items (which funds may include amounts paid solely
for such purpose by Mortgagor in addition to the escrowed funds); and (3) Mortgagor
shall have furnished Mortgagee with prior written notification that such items
are due and with the bills and invoices therefor in sufficient time to pay the
same before any penalty or interest attaches and before policies of insurance
lapse, as the case may be, and shall have deposited any additional funds as
Mortgagee may determine as necessary to pay such items.

(C) Mortgagee expressly disclaims any obligation to
pay the aforesaid items unless and until Mortgagor complies with all of the
provisions set forth in subsections 1.06(A) and (B). Mortgagor hereby pledges
and grants a security interest in any and all monies now or hereafter deposited
pursuant to subsection 1.06(B) as additional security for the Note and Related
Agreements. If any Event of Default shall have occurred, or if the Note shall
be accelerated as herein provided, all funds so deposited may, at Mortgagee’s
option, be applied as determined solely by Mortgagee or to cure said Event of
Default or as provided in this Section 1.06. In no event shall Mortgagor claim
any credit against the principal and interest due hereunder for any payment or
deposit for any of the aforesaid items.

1.07.            Assignment of Leases Contracts
Rents and Profits.

(A) Mortgagor hereby absolutely, presently and unconditionally
grants, assigns, transfers, conveys and sets over to Mortgagee, subject to all
of the terms, covenants and conditions set forth herein, all of Mortgagor’s
right, title and interest in and to the following whether arising under the
Leases (as defined herein), by statute, at law, in equity, or in any other way:

(1) All of the leases of
the Property that are in effect on the date hereof and all leases entered into
or in effect from time to time after the date hereof, including, without
limitation, all amendments, extensions, replacements, modifications and
renewals thereof and all subleases, concession agreements, any ground leases or
ground subleases and all other agreements affecting the same (the “Leases”) and
all guaranties thereunder;

 

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(2) All of the rents,
income, profits, revenue, security deposits, judgments, Condemnation Proceeds,
Insurance Proceeds, unearned insurance premiums, all termination and/or
cancellation payments received by Mortgagor in connection with any Lease,
proceeds from the surrender, sale or other disposition of any Lease, any other
fees or sums payable to Mortgagor or any other person as landlord and any award
or payment in connection with any enforcement action of any Lease, including,
without limitation, any award to Mortgagor made hereafter in any court
involving any of the tenants under the Leases in any bankruptcy, insolvency, or
reorganization proceeding in any state or federal court, and Mortgagor’s right
to appear in any action and/or to collect any such award or payment, and all
payments by any tenant in lieu of rent (collectively, “Rents and Profits”); and

(3) All contracts,
agreements, management, operating and maintenance agreements, warranties,
licenses, permits, guaranties and sales contracts relating to the Property and
the Collateral entered into by, or inuring to the benefit of, Mortgagor (the “Contracts”).

(B) Notwithstanding the provisions of subsection
1.07(A), so long as no Event of Default has occurred and is continuing
hereunder, and, subject to subsection 1.07(F) and Article III, Mortgagor shall
have a license to manage the Property; to collect, receive and use all Rents
and Profits in accordance with the terms of the Leases; to let the Property
subject to the terms hereof and to take all actions which a reasonable and
prudent landlord would take in enforcing the provisions of the Leases and
Contracts; provided, however, that all amounts so collected shall be applied
toward operating expenses, real estate taxes and insurance relating to the
Property, capital repair items necessary to the operation of the Property on a
current basis, and the payment of sums due and owing under the Note and this
Mortgage prior to any other expenditure or distribution by Mortgagor. From and
after the occurrence of an Event of Default (whether or not Mortgagee shall
have exercised Mortgagee’s option to declare the Note immediately due and
payable), such license shall be automatically revoked without any action
required by Mortgagee. Any amounts received by Mortgagor or its agents in the
performance of any acts prohibited by the terms of this Mortgage, including but
not limited to any amounts received in connection with any cancellation,
modification or amendment of any of the Leases prohibited by the terms of this
Mortgage and any amounts received by Mortgagor as rents, income, issues or
profits from the Property from and after the occurrence of an Event of Default,
shall be held by Mortgagor as trustee for Mortgagee and all such amounts shall
be accounted for to Mortgagee and shall not be commingled with other funds of
the Mortgagor. Any person acquiring or receiving all or any portion of such
trust funds shall acquire or receive the same in trust for Mortgagee as if such
person had actual or constructive notice that such funds were impressed with a
trust in accordance herewith.

(C) Upon the occurrence of an Event of Default,
Mortgagee shall have the right but not the obligation to perform as landlord
under the Leases and as a party under the Contracts. The assignment of Rents
and Profits set forth herein constitutes an irrevocable direction and
authorization to all tenants under the Leases to pay all Rents and Profits to
Mortgagee upon demand and without further consent or other action by Mortgagor.
Mortgagor irrevocably appoints Mortgagee its true and lawful attorney, at the
option of Mortgagee at any time after the

 

 

13

occurrence of an Event of Default, to demand, receive and enforce
payment, to give receipts, releases and satisfactions, and to sue, either in
the name of Mortgagor or in the name of Mortgagee, for all such Rents and
Profits and apply the same to the indebtedness secured by this Mortgage.

(D) Neither the foregoing assignment of Rents and
Profits, Leases and Contracts to Mortgagee nor the exercise by Mortgagee of any
of its rights or remedies under Article III shall be deemed to make Mortgagee a
“mortgagee-in-possession” or otherwise liable in any manner with respect to the
Property, unless Mortgagee, in person or by agent, assumes actual possession
thereof. Nor shall appointment of a receiver for the Property by any court at
the request of Mortgagee or by agreement with Mortgagor, or the entering into
possession of the Property by such receiver, be deemed to make Mortgagee a “mortgagee-in-possession”
or otherwise liable in any manner with respect to the Property, Collateral or
any of the Rents and Profits.

(E) In the event Mortgagee collects and receives any
Rents and Profits under this Section 1.07 pursuant to any Monetary or
Performance Default as defined in Section 2.01 hereof, such collection or
receipt shall in no way constitute a curing of the Monetary or Performance
Default.

(F) Mortgagor shall not, without the prior written
consent of Mortgagee, (1) enter into any lease, extend or renew any Lease
(other than extensions or renewals in accordance with the terms of a lease
approved by Mortgagee), or consent to or permit the assignment or subletting of
any Leases (other than assignments or subleases in accordance with the terms of
a lease approved by Mortgagee), or amend or terminate any Lease; (2) alter,
modify, change or terminate the terms of any guaranties of any Leases; (3)
create or permit any lien or encumbrance which, upon foreclosure, would be
superior to any such Leases or in any other manner impair Mortgagee’s rights
and interest with respect to the Rents and Profits; (4) pledge, transfer,
mortgage or otherwise encumber or assign the Leases, the Contracts or the Rents
and Profits; or (5) collect rents more than 30 days prior to their due date.
Notwithstanding the foregoing, so long as no Event of Default has occurred and
is continuing hereunder, Mortgagor may enter into Leases, extend or renew
Leases, and permit the assignment or sublease of Leases which demise 5,000
rentable square feet or less for a term of five years or less (“Non-material
Leases”), provided they are on rental rates, including rental concessions, at
least equal to that charged for comparable properties within the Property’s
submarket area, have been negotiated at arm’s length, and do not contain
material modifications to the form of lease previously approved by Mortgagee.
Mortgagor may also amend Non-material Leases without Mortgagee’s prior written
consent if, in Mortgagor’s prudent business judgment, such amendments are
necessary and do not impair the value of the Property. Mortgagee will not
unreasonably withhold or delay its consent to any item submitted to it for
approval pursuant to subsections 1.07(F)(1) or (2) above. Any lease submitted
for Mortgagee’s consent shall, at Mortgagee’s option, be accompanied by a
Subordination, Nondisturbance and Attornment Agreement in Mortgagee’s then
current form or another form reasonably acceptable to Mortgagee.

(G) Mortgagor shall promptly give notice to Mortgagee
of any default under any of the Leases meeting the criteria of a lease for
which Mortgagee’s consent would have been required pursuant to Section 1.07(F)
regardless of whether such Leases were executed before or after the date of
this Mortgage, together with a complete copy of any notices delivered to or by

 

14

the tenant as a result of such default. Mortgagee shall have the right,
but not the obligation, to cure any default of Mortgagor under any of the
Leases and all amounts disbursed in connection with said cure shall be deemed
to be indebtedness secured hereby.

(H) Mortgagee shall have the right to approve any
lease forms used by Mortgagor for lease of space in the Property.

(I) Mortgagor hereby represents, warrants and agrees
that:

(1) Mortgagor has the right, power and capacity to
make this assignment and that no person, firm or corporation or other entity
other than Mortgagor has or will have any right, title or interest in or to the
Leases or the Rents and Profits.

(2) Mortgagor shall, at its sole cost and expense,
perform and discharge all of the obligations and undertakings of the landlord
under the Leases. Mortgagor shall enforce the performance of each obligation of
the tenants under the Leases and will appear in and prosecute or defend any
action connected with the Leases or the obligations of the tenants thereunder.

(J) Mortgagee shall not be obligated to perform or
discharge, nor does it hereby undertake to perform or discharge, any
obligation, duty or liability under the Leases or under or by reason of this
assignment. Mortgagor shall and does hereby agree to indemnify Mortgagee for
and to defend and hold Mortgagee harmless from any and all liability, loss or
damage which Mortgagee may or might incur under the Leases or under or by
reason of this assignment, and from any and all claims whatsoever which may be
asserted against Mortgagee by reason of any alleged obligations or undertakings
on Mortgagee’s part to perform or discharge any of the terms, covenants or
agreements contained in the Leases; provided, however, that the foregoing
indemnity shall not apply to the extent any of the foregoing arises wholly or
in substantial part from the gross negligence or willful misconduct of
Mortgagee. Should Mortgagee incur any liability, loss or damage under the
Leases or under or by reason of this assignment, or in the defense of any of
such claims or demands, the amount thereof, including costs, expenses and
attorneys’ and paralegals’ fees at all trial and appellate levels and whether
suit be brought or not, shall be secured by this Mortgage; and Mortgagor shall
reimburse Mortgagee therefor immediately upon demand, and upon failure of
Mortgagor to do so, Mortgagee may declare all sums so secured to be immediately
due and payable.

(K) Mortgagee may take or release other security, may
release any party primarily or secondarily liable for any indebtedness secured
hereby, may grant extensions, renewals or indulgences with respect to such
indebtedness, and may apply any other security therefor held by it to the
satisfaction of such indebtedness, without prejudice to any of its rights
hereunder.

(L) Nothing herein contained and no act done or
omitted by Mortgagee pursuant to the powers and rights granted it herein shall
be deemed to be a waiver by Mortgagee of its other rights and remedies under
the Note, this Mortgage and the Related Agreements, and this assignment is made
and accepted without prejudice to any of the other rights and remedies
possessed by Mortgagee under the terms thereof. The right of Mortgagee to
collect said indebtedness and to enforce any other security therefor held by it
may be exercised by Mortgagee either prior to, simultaneously with, or
subsequent to any action taken by it

 

15

hereunder. It is the intent of both Mortgagor and Mortgagee that this
assignment be supplementary to, and not in substitution or derogation of, any
other provision contained in this Mortgage giving Mortgagee any interest in or
rights with respect to the Leases or Rents and Profits.

(M) Neither this assignment nor pursuit of any remedy
hereunder by Mortgagee shall cause or constitute a merger of the interests of the
tenant and Mortgagor under any of the Leases such that any of the Leases hereby
assigned are no longer valid and binding legal obligations of the parties
executing the same.

(N) Mortgagor agrees, from time to time, to execute
and deliver, upon demand, all assignments and any and all other writings as
Mortgagee may reasonably deem necessary or desirable to carry out the purpose
and intent hereof, or to enable Mortgagee to enforce any right or rights
hereunder.

1.08.            Due on Sale or Encumbrance.
Neither Mortgagor nor its sole member shall, without the prior written consent of Mortgagee:
(i) create, effect, consent to, suffer to exist, assume, incur, permit
(voluntarily or involuntarily, by operation of law or otherwise) any direct or
indirect conveyance, sale, assignment, transfer, grant, lien, pledge, mortgage,
security interest or other encumbrance or disposition (each of the foregoing
defined as “Transfer”) of the Property or an interest therein; (ii) be divested
of its title to the Property or any interest therein; (iii) enter into a
contract to sell or grant any option to purchase that results in a transfer of
possession or equitable title to the Property or any portion thereof prior to
the payment of the Note in accordance with its terms; (iv) enter into any lease
giving the tenant any option to purchase the Property or any portion thereof;
(v) permit or suffer any Transfer of any direct or indirect ownership interest
in the Mortgagor or any indemnitor or guarantor under this Mortgage or any of
the Related Agreements; (vi) permit or suffer any Transfer of any ownership
interest in any direct or indirect owner of a legal or beneficial interest in
the Mortgagor (including, without limitation its partners, members, trustees,
beneficiaries or shareholders); (vii) permit or suffer the merger, dissolution,
liquidation, or consolidation of the Mortgagor or any of the direct or indirect
owners of Mortgagor or the conversion of one type of legal entity into another
type of legal entity. Except as expressly consented to in writing by Mortgagee,
Mortgagor shall not permit any additional encumbrances on the Property or incur
any additional indebtedness (secured or unsecured, direct or contingent) other
than unsecured debt or trade payables incurred in the ordinary course of
business in connection with the operation of the Property.   Upon the occurrence of any of the prohibited
actions specified herein, then Mortgagee shall have the right, at its option,
to declare the indebtedness secured by this Mortgage immediately due and
payable, irrespective of the maturity date specified in the Note.

1.09.            Preservation and Maintenance of
Property. Mortgagor shall hire competent and responsible property managers who shall
be reasonably acceptable to Mortgagee. Mortgagor, at its sole cost and expense,
shall keep the Property and every part thereof in good condition and repair, in
accordance with sound and prudent property management practices, and shall
promptly and faithfully comply with and obey all laws, ordinances, rules,
regulations, requirements and orders of every duly constituted governmental
authority or agent having jurisdiction with respect to the Property. All
repairs, replacements and renewals shall be at least equal in quality to the
original Improvements.  Mortgagor shall
not permit or commit any waste, impairment, or

 

16

deterioration of the Property, nor commit, suffer or permit any act
upon or use of the Property in violation of law or applicable order of any
governmental authority, whether now existing or hereafter enacted, or in
violation of any covenants, conditions or restrictions affecting the Property
or bring or keep any article in the Property or cause or permit any condition
to exist thereon which would be prohibited by or invalidate the insurance
coverage required to be maintained hereunder. Mortgagor shall promptly bond or
discharge any mechanics’ liens against the Property.

Unless required by applicable law or unless Mortgagee
has otherwise first agreed in writing. Mortgagor shall not make or allow any
changes which will adversely affect the value of the Property to be made in the
nature of the occupancy or use of the Property or any part thereof for which
the Property or such part was intended at the time this Mortgage was delivered.
Mortgagor shall not initiate or acquiesce in any change which will adversely
affect the value of the Property in any zoning or other land use classification
now or hereafter in effect and affecting the Property or any part thereof without
in each case obtaining Mortgagee’s prior written consent thereto.

1.10.            Use of Property. Except as
may have been previously agreed in writing by Mortgagee, Mortgagor shall continue to operate the
Property for the purposes for which it was used on the date hereof and for no
other purpose. Mortgagor shall not make or suffer any improper or offensive use
of the Property or any part thereof and will not use or permit to be used any
part of the Property for any dangerous, noxious, offensive or unlawful trade or
business or for any purpose which will reduce the value of the Property in any
respect or will cause the Property or any part thereof or interest therein to
be subject to forfeiture. Mortgagor at its expense will promptly comply with
all rights of way or use, privileges, franchises, servitudes, licenses,
easements, tenements, hereditaments and appurtenances forming a part of the
Property and all instruments relating or evidencing the same, in each case, to
the extent compliance therewith is required of Mortgagor under the terms
thereof. Mortgagor will not take any action which results in a forfeiture or
termination of the rights afforded to Mortgagor under any such instruments and
will not, without the prior written consent of Mortgagee, amend in any material
respect any of such instruments. Mortgagor shall at all times comply with all
laws affecting the Property and comply with any instruments of record at the
time in force affecting the Property or any part thereof and shall procure,
maintain and comply with all permits, licenses, and other authorizations
required for any use of the Property or any part thereof then being made, and
for the proper erection, installation, operation and maintenance of the
Improvements or any part thereof. Mortgagor shall not initiate, join in,
acquiesce in, or consent to any change in any private restrictive covenant,
zoning law or other public or private restriction, limiting or defining the
uses which may be made of the Property or any part thereof. In furtherance of the
foregoing sentence, Mortgagor will not, by act or omission: (i) impair the
integrity of the Property as a single zoning lot separate and apart from all
other premises; or (ii) permit or suffer to permit the Property to be used by
the public or any party in such manner as might make possible a claim of
adverse usage or possession or any implied dedication or easement. If under
applicable zoning provisions the use of all or any portion of the Property is
or shall become a nonconforming use, Mortgagor will not cause or permit such
nonconforming use to be discontinued or abandoned, if such discontinuance or
abandonment would prevent the same or similar nonconforming use in the future,
without the express written consent of Mortgagee (except that a nonconformnig
use

 

 

17

that results from a tenant’s use may be discontinued without Mortgagee’s
consent if such tenant’s lease terminates or expires by its terms).

Mortgagor shall not conduct or permit or allow to be
conducted on the Property any dry cleaning plant or facility or similar
operation, provided that Mortgagor may conduct or permit or allow to be
conducted on the Property a dry cleaning drop-off establishment, so long as no
dry cleaning is performed therein.

1.11.            Alterations and Additions.
Mortgagor shall not cause, suffer or permit:

(A) Any material alterations of the Property except
(1) as required by any law, statute, ordinance, order, rule, regulation, decree
or other requirement of the United States, the applicable state or county in
which the Property is located or any political subdivision of any of the
foregoing, or any agency, department, commission, board, court, bureau or
instrumentality of any of them (“Governmental Authority”) or by any condition
of any approval, consent, registration, franchise, permit, license, variance,
certificate of occupancy or other authorization with regard to zoning,
landmark, ecological, environmental, air quality, subdivision, planning,
building or land use required by any Governmental Authority for the
construction, lawful occupancy and operation of the Property and the actual and
contemplated uses thereof, or (2) as permitted or required to be made by the
terms of any Leases approved by Mortgagee (with respect to work in any space
demised thereunder);

(B) Any demolition or removal of any portion of the
Property;

(C) Any change which would increase the risk of fire
or other hazard;

(D) Any zoning, reclassification with respect to the
Property; or

(E) Any unlawful use of, or nuisance to exist upon,
the Property.

As used herein, the term “material alteration” shall
mean any alteration, improvement or replacement (i) the cost of which
(including any related alteration, improvement or replacement) shall exceed two
percent of the principal amount of the indebtedness secured by this Mortgage
(excluding tenant improvement work pursuant to Leases), or (ii) which
materially and adversely affects the mechanical, electrical, heating,
ventilating, air-conditioning or other building or operating systems of any of
the Improvements, or materially and adversely affects the cost of operation or
maintenance of any such building or operating systems, affects the structure or
structural soundness of any of the improvements of the Property, or the
exterior or appearance of the Property, or otherwise has a material adverse
effect on the Property including the use and/or value thereof.

1.12.            Offset Certificates.
Mortgagor, within five days upon request in person or within ten days upon request by mail, shall furnish a
written statement duly acknowledged and notarized, of all amounts due on any
indebtedness secured hereby or secured by any of the Related Agreements,
whether for principal or interest on the Note or otherwise, and stating whether
any offsets or defenses exist against the indebtedness secured hereby and
covering such other matters with respect to any such indebtedness as Mortgagee
may reasonably require.

 

18

 

1.13.            Mortgagee’s Costs and Expenses.
Mortgagor shall pay all costs, fees and expenses of Mortgagee, its agents and
counsel, in connection with the performance of Mortgagee’s obligations, duties,
rights, options and permitted actions hereunder. Mortgagor will pay or
reimburse Mortgagee upon demand for all reasonable attorney’s and paralegals’
fees, costs and expenses, including those in connection with appellate
proceedings, incurred by Mortgagee in any proceedings involving the estate of a
decedent or an insolvent, or in any action, legal proceeding or dispute of any
kind in which Mortgagee is a plaintiff or defendant, affecting the indebtedness
secured hereby or the Property or Collateral, this Mortgage or the interest
created herein, any condemnation action involving the Property or any action to
protect the security hereof; and any such amounts paid by Mortgagee shall be
secured by this Mortgage. If Mortgagor shall default in the payment of any tax,
lien, assessment or charge levied or assessed against the Property; in the
payment of any utility charge, whether public or private; in the payment of any
insurance premium; in the procurement of insurance coverage and the delivery of
the insurance policies required hereunder; in the performance of any covenant,
term or condition of any leases affecting all or any part of the Property; or
in the performance or observance of any covenant, condition or term of this
Mortgage; then Mortgagee, at its option, may perform or observe the same, and
all payments made or costs incurred by Mortgagee in connection therewith, shall
be secured hereby and shall be, without demand, immediately repaid by Mortgagor
to Mortgagee with interest thereon at the Default Rate as described in the
Note. Mortgagee shall be the sole judge of the legality, validity and priority
of any such tax, lien, assessment, charge, claim, premium and obligation, of
the necessity for any such actions and of the amount necessary to be paid in
satisfaction thereof. Mortgagee is hereby empowered to enter and to authorize
others to enter upon the Property or any part thereof for the purpose of performing
or observing any such defaulted covenant, condition or term, without thereby
becoming liable to Mortgagor or any other person in possession holding under
Mortgagor. All rights of Mortgagee as set forth herein are rights to be
exercised at the sole option and discretion of Mortgagee and Mortgagee shall
have no duty to Mortgagor or any other person or entity to perform any acts
authorized by this Section or to incur any expense, make any appearance or take
any other action.

1.14.            Protection of Security; Costs and
Expenses.

(A) In addition to any other rights or remedies of
Mortgagee hereunder, under any of the Related Agreements, or in law or in
equity, upon the occurrence and during the continuance of an Event of Default
(or prior thereto after notice to Mortgagor, when possible, if Mortgagor is not
paying or performing the act itself and Mortgagee determines in its sole good
faith judgment that the same is appropriate to preserve the Property or the
lien of this Mortgage or any other collateral securing the indebtedness
evidenced by the Note, either before or after acceleration of the indebtedness)
Mortgagee may, but shall not be required to, make any payment or perform any
act required to be performed by Mortgagor hereunder or under any of the Related
Agreements in any form and manner deemed expedient to Mortgagee, including,
without limitation, if applicable: (1) paying any Impositions which remain
unpaid; (2) procuring the release, discharge, compromise or settlement of any
lien filed or otherwise asserted against the Property which has not been
discharged by Mortgagor in accordance with the provisions of this Mortgage or
any of the Related Agreements, and (3) obtaining insurance policies where
insurance coverage was required to be obtained hereunder and the required
evidence that Mortgagor had obtained the same has not been delivered to
Mortgagee as required hereunder.

 

19

 

Nothing herein shall be construed to require Mortgagee to advance or
expend monies for any purpose mentioned herein, or for any other purpose.

(B) Mortgagor and its property manager, if applicable,
shall appear in and defend any action or proceeding purporting to affect the
security of this Mortgage or any additional or other security for the
obligations secured hereby, or the rights or powers of the Mortgagee, and shall
pay all costs and expenses actually incurred, including, without limitation,
cost of evidence of title and actual attorneys’ and paralegals’ fees, in any
such action or proceeding in which Mortgagee may appear, and in any suit
brought by Mortgagee to foreclose this Mortgage or to enforce or establish any
other rights or remedies of Mortgagee hereunder or under any other security for
the obligations secured hereby. If Mortgagor fails to perform any of the
covenants or agreements contained in this Mortgage, or if any action or
proceeding is commenced which affects Mortgagee’s interest in the Property or
any part thereof, including, eminent domain, code enforcement, or proceedings
of any nature whatsoever under any federal or state law, whether now existing
or hereafter enacted or amended, relating to bankruptcy, insolvency,
arrangement, reorganization or other form of debtor relief, or to a decedent,
then Mortgagee may, but without obligation to do so and without notice to or
demand upon Mortgagor, perform such covenant or agreement and compromise any
encumbrance, charge or lien which in the judgment of Mortgagee appears to be
prior or superior hereto. Mortgagor shall further pay all expenses of Mortgagee
actually incurred (including reasonable and actual fees and disbursements of
counsel) incident to the protection or enforcement of the rights of Mortgagee
hereunder, and enforcement or collection of payment of the Note or any Future
Advance whether by judicial or nonjudicial proceedings, or in connection with
any bankruptcy, insolvency, arrangement, reorganization or other debtor relief
proceeding of Mortgagor, or otherwise.

(C) Mortgagor shall pay to Mortgagee, immediately upon
written notice from Mortgagee: (i) all recordation, transfer, stamp,
documentary or other fees or taxes levied on Mortgagee (exclusive of Mortgagee’s
income taxes) by reason of the making or recording of the Note, this Mortgage
or any of the Related Agreements, and (ii) all intangible property taxes levied
upon any holder of the Note or Mortgagee under this Mortgage or secured party
under the Related Agreements.

Any amounts disbursed by Mortgagee pursuant to this
Section or Section 1.13, including, without limitation, reasonable attorneys’
and paralegals’ fees, whether or not the indebtedness as a result thereof shall
exceed the face amount of the Note, shall be additional indebtedness of
Mortgagor secured by this Mortgage and each of the Related Agreements as of the
date of disbursement shall become immediately due and payable on demand and
shall bear interest at the Default Rate set forth in the Note, from demand
until paid. All such amounts shall be payable by Mortgagor immediately upon
demand. Nothing contained in this section shall be construed to require
Mortgagee to incur any expense, make any appearance, or take any other action.

1.15.            Mortgagor’s Covenants Respecting
Collateral.

(A) This instrument also creates a security interest
in the Collateral, the Contracts and in any sums held by Mortgagee, its
servicing agent or any escrow agent appointed under the terms of this Mortgage,
which security interest Mortgagor hereby grants in favor of Mortgagee under the
Minnesota Uniform Commercial Code, and Mortgagee shall also have all the rights

 

20

 

and remedies of a secured party under the Minnesota Uniform Commercial
Code, and without limitation upon or in derogation of the rights and remedies
created and accorded to Mortgagee by this Mortgage pursuant to the common law
or any other laws of the State of Minnesota or any other jurisdiction, it being
understood that the rights and remedies of Mortgagee under the Minnesota
Uniform Commercial Code shall be cumulative and in addition to all other rights
and remedies of Mortgagee arising under the Related Agreements, the common law
or any other laws of the State of Minnesota or any other jurisdiction. The
security interest granted by this Mortgage is for the purpose of securing all
obligations of Mortgagor as set forth in the Related Agreements. Mortgagor
acknowledges that this Mortgage shall constitute a Security Agreement as that
term is used under the laws of the State of Minnesota in favor of Mortgagee. To
the extent a security interest cannot be granted or perfected under the
applicable Uniform Commercial Code provisions in any personal property in which
Mortgagor has any right, title or interest, Mortgagor hereby pledges to
Mortgagee all of its right, title and interest in all such personal property
including, but not limited to, deposit accounts, escrowed funds, cash and cash
receipts, as the same shall relate to the Property or the Collateral or the
conduct of business on the Property, now existing, hereafter acquired, wherever
located and however held. Any person holding property in which Mortgagor has
any interest shall be deemed to be holding such property in trust for
Mortgagee.

(B) Mortgagor shall execute and deliver financing and
continuation statements covering the Collateral from time to time and in such
form as Mortgagee may require to perfect and continue the perfection of
Mortgagee’s security interest with respect to such property, and Mortgagor
shall pay all reasonable costs and expenses of any record searches for
financing statements Mortgagee may require. Mortgagor hereby authorizes and
empowers Mortgagee to file (and hereby irrevocably appoints Mortgagee its agent
and attorney-in-fact, which shall be coupled with an interest, to execute and
file, on Mortgagor’s behalf) at any time and from time to time any initial
financing statements, amendments thereto and continuation statements with or
without signature of Mortgagor as authorized by applicable law, as applicable
to the Collateral. For purposes of such filings, Mortgagor agrees to furnish
any information requested by Mortgagee promptly upon request by Mortgagee
describing the Collateral. Mortgagor hereby ratifies and approves all filings
of financing statements, amendments and continuations applicable to the
Collateral made or filed by Mortgagee prior to the date of this Mortgage.

(C) Without the prior written consent of Mortgagee,
Mortgagor shall not create or suffer to be created any other security interest
in or lien or encumbrance on the Collateral, including replacements and
additions thereto.

(D) Without the prior written consent of Mortgagee or
except in the ordinary course of business, Mortgagor shall not sell, transfer
or encumber any of the Collateral, or remove any of the Collateral from the
Property unless Mortgagor shall promptly substitute and replace the property
removed with similar property of at least equivalent value on which Mortgagee
shall have a continuing security interest ranking at least equal in priority to
Mortgagee’s security interest in the property removed.

(E) Mortgagor shall (1) upon reasonable notice (unless
an emergency or Event of Default exists) permit Mortgagee and its
representatives to enter upon the Property to inspect the Collateral and
Mortgagor’s books and records relating to the Collateral and make extracts

 

21

 

 therefrom and to arrange for
verification of the amount of Collateral, under procedures acceptable to
Mortgagee, directly with Mortgagor’s debtors or otherwise at Mortgagor’s
expense; (2) promptly notify Mortgagee of any attachment or other legal process
levied against any of the Collateral and any information received by Mortgagor
relative to the Collateral, Mortgagor’s debtors or other persons obligated in
connection therewith, which may in any way affect the value of the Collateral
or the rights and remedies of Mortgagee in respect thereto; (3) reimburse
Mortgagee upon demand for any and all costs actually incurred, including,
without limitation, reasonable and actual attorneys’, paralegals’ and
accountants’ fees, and other expenses incurred in collecting any sums payable
by Mortgagor under any obligation secured hereby, or in the checking, handling
and collection of the Collateral and the preparation and enforcement of any
agreement relating thereto; (4) notify Mortgagee of each location at which the
Collateral is or will be kept, other than for temporary processing, storage or
similar purposes, and of any removal thereof to a new location, including, without
limitation, each office of Mortgagor at which records relating to the
Collateral are kept; (5) provide, maintain and deliver to Mortgagee originals
or certified copies of the policies of insurance and certificates of insur­ance
insuring the Collateral against loss or damage by such risks and in such
amounts, form and by such companies as Mortgagee may require and with loss
payable to Mortgagee, and in the event Mortgagee takes possession of the
Collateral, the insurance policy or policies and any unearned or returned
premium thereon shall at the option of Mortgagee become the sole property of
Mortgagee; and (6) do all acts necessary to maintain, preserve and protect all
Collateral, keep all Collateral in good condition and repair and prevent any
waste or unusual or unreasonable depreciation thereof.

(F) Until Mortgagee exercises
its right to collect proceeds of the Collateral pursuant hereto, Mortgagor will
collect with diligence any and all proceeds of the Collateral. If an Event of
Default exists, any proceeds received by Mortgagor shall be held in trust for
Mortgagee, and Mortgagor shall keep all such collections separate and apart
from all other funds and property so as to be capable of identification as the
property of Mortgagee and shall deliver to Mortgagee such collections at such
time as Mortgagee may request in the identical form received, properly endorsed
or assigned when required to enable Mortgagee to complete collection thereof.

(G) Mortgagee shall have all
of the rights and remedies granted to a secured party under the Uniform
Commercial Code of the state in which the Collateral is located, as well as all
other rights and remedies available at law or in equity. During the continuance
of any Event of Default hereunder or under any of the Related Agreements,
Mortgagee shall have the right to take possession of all or any part of the
Collateral, to receive directly or through its agent(s) collections of proceeds
of the Collateral (including notification of the persons obligated to make
payments to Mortgagor in respect of the Collateral), to release persons liable
on the Collateral and compromise disputes in connection therewith, to exercise
all rights, powers and remedies which Mortgagor would have, but for the
security agreement contained herein, to all of the Collateral and proceeds
thereof, and to do all other acts and things and execute all documents in the
name of Mortgagor or otherwise, deemed by Mortgagee as necessary, proper and
convenient in connection with the preservation, perfection or enforcement of
its rights hereunder; and

(H) After any Event of
Default, Mortgagor shall, at the request of Mortgagee, assemble and deliver the
Collateral and books and records pertaining to the Property at a place
designated by Mortgagee, and Mortgagee may, with reasonable notice to Mortgagor
(unless an

 

22

 

emergency exists), enter onto the Property and
take possession of the Collateral. It is agreed that public or private sales,
for cash or on credit to a wholesaler or retailer or investor, or user of
collateral of the types subject to the security agreement, or public auction,
are all commercially reasonable since differences in the sales prices generally
realized in the different kinds of sales are ordinarily offset by the
differences in the costs and credit risks of such sales. The proceeds of any
sale of the Collateral shall be applied first to the expenses of Mortgagee
actually incurred in retaking, holding, preparing for sale, or selling the
Collateral or similar matters, including reasonable and actual attorneys’ and
paralegals’ fees, and then, as Mortgagee shall solely determine.

(I) Upon the request of
Mortgagee, Mortgagor will cooperate with Mortgagee in obtaining control with
respect to those items of Collateral consisting of deposit accounts, investment
property, letter-of-credit rights or any other Collateral as to which “control”
is required under the applicable Uniform Commercial Code for perfection of a
security interest.

1.16.            Covenants Regarding Financial
Statements.

(A) Mortgagor shall keep true
books of record and account in which full, true and correct entries in
accordance with sound accounting practice and principles applied on a
consistent basis from year to year shall be made of all dealings or
transactions with respect to the Property.

(B) (1) Mortgagor shall
deliver to Mortgagee:

(a) Within one hundred twenty
(120) days after the last day of each fiscal year of Mortgagor and Mortgagor’s
sole member during the term of the Note, unaudited financial reports prepared
on a cash basis, including income statements and cash flow statements covering
the operation of the Property and unaudited annual financial reports prepared
on a cash basis, including balance sheets, income statements and cash flow
statements covering the financial condition of Mortgagor and Mortgagor’s sole
member for the previous fiscal year, all certified to Mortgagee to be complete,
correct and accurate by the individual, managing member, manager or chief
financial officer of the party whom the report concerns; and

(b) If available, within
thirty (30) days after receipt by Mortgagor, original annual audit reports of
an independent certified public accountant prepared in accordance with
generally accepted accounting principles containing an unqualified opinion,
including balance sheets, income statements and cash flow statements covering
the operation of the Property and the financial condition of Mortgagor and
Mortgagor’s sole member for the previous fiscal year.

(2) If, in Lender’s
reasonable opinion, the loan to value ratio is the 75% or greater, Mortgagor
shall also deliver, at the request of Mortgagee from time to time (but no more
often than once in each fiscal quarter of Mortgagor during the term of the
Note), Mortgagor shall also deliver to Mortgagee unaudited financial reports
prepared on a cash basis, including income statements and cash flow statements
covering the operation of the Property and unaudited financial reports prepared
on a cash basis, including balance sheets, income statements and cash flow
statements covering the financial condition of Mortgagor and Mortgagor’s sole
member for the previous fiscal quarter, a portfolio analysis report covering
the operation of all properties of

 

23

 

which Mortgagor or Mortgagor’s sole member is
the owner (direct or indirect) or a general partner of the owner (direct or
indirect), setting out a cash flow statement (including debt service payments)
for each such property, and a current rent roll of the Property, all certified
to Mortgagee to be complete, correct and accurate by the individual, managing
member, manager or chief financial officer of the party whom the report
concerns.

(3) All reports covering the
financial condition of Mortgagor or Mortgagor’s sole member shall include,
without limitation, balance sheets and statements of income and of partner’s
equity, if applicable, setting forth in each case in comparative form the
figures for the previous fiscal quarter or year, as the case may be. All
interim quarterly reports shall also include a breakdown of all categories of
revenues and expenses, and any supporting schedules and data requested by
Mortgagee. Each set of annual or quarterly financial reports or quarterly rent rolls
delivered to Mortgagee pursuant to this Section shall also be accompanied by a
certificate of the chief financial officer, the managing member or the manager
of the party whom the report concerns, stating whether any condition or event
exists or has existed during the period covered by the annual or quarterly
reports which then constituted or now constitutes an Event of Default, or which
if continued or not cured would, after passage of time, constitute an Event of
Default, and if any such condition or event then existed or now exists,
specifying its nature and period of existence and what Mortgagor did or
proposes to do with respect to such condition or event.

(C) In the event such
statements are not in a form reasonably acceptable to Mortgagee or Mortgagor
fails to furnish such statements and reports, then Mortgagee shall have the
immediate and absolute right to audit the respective books and records of the
Property and Mortgagor or Mortgagor’s member, as applicable, at the expense of
Mortgagor.

(D) Notwithstanding the
foregoing, Mortgagor shall not be required to deliver financial reports
covering the financial condition of Mortgagor if and so long as (1) the
Property is Mortgagor’s only asset, and (2) Mortgagor delivers the unaudited
financial reports covering the operation of the Property when and as described
above.

1.17.            Environmental Covenants.

Mortgagor covenants:

(A) That no Hazardous
Materials (as defined below) are currently on or in the Property (except as
expressly described in that certain Phase I Environmental Site Assessment of
the Property prepared by ATC Associates, Inc., dated March 17, 2006), or shall
be installed, used, generated, manufactured, treated, handled, refined,
produced, processed, stored or disposed of, in, on or under the Property other
than Hazardous Materials in quantities and of types reasonably and customarily
associated with general office use which have been and are stored, used and
disposed of in compliance with Hazardous Material Laws (as defined below) and
the presence of which do not require compliance with any reporting requirements
under any Hazardous Material Laws;

(B) That no activity shall be
undertaken on the Property which would cause:

 

24

 

(1)    the Property to become a hazardous waste
treatment, storage or disposal facility under any Hazardous Material Law,

(2)    a release or threatened release of Hazardous
Material from the Property in violation of any Hazardous Material Law, or

(3)    the discharge of Hazardous Material into any
watercourse, body of surface or subsurface water or wetland, or the discharge
into the atmosphere of any Hazardous Material which would require a permit
under any Hazardous Material Law and for which no such permit has been issued;

(C) That no activity shall be undertaken or permitted
to be undertaken, by the Mortgagor on the Property which would result in a
violation under any Hazardous Material Law; and

(D) To obtain 
and deliver to Mortgagee,  within
a reasonable  time following completion
of actions required by an appropriate governmental agency, certifications of
engineers or other professionals reasonably acceptable to Mortgagee, in form
and substance satisfactory to Mortgagee, certifying that all necessary and
required actions to clean up, remove, contain, prevent and eliminate all
releases or threats of release of Hazardous Materials on or about the Property
to the levels required by the appropriate governmental agencies have been taken
and, to the knowledge of such professional, the Property is then in compliance
with applicable Hazardous Material Laws as then in effect and applicable to
such actions. For purposes of this Mortgage, “Hazardous Materials” means and
includes asbestos or any substance containing asbestos, polychlorinated biphenyls,
any explosives, radioactive materials, chemicals known or suspected to cause
cancer or reproductive toxicity, pollutants, effluents, contaminants,
emissions, infectious wastes, any petroleum or petroleum-derived waste or
product or related materials and any items defined as hazardous, special or
toxic materials, substances or waste under any Hazardous Material Law, or any
material which shall be removed from the Property pursuant to any
administrative order or enforcement proceeding or in order to place the
Property in a condition that is suitable for ordinary use. “Hazardous Material
Laws” means all federal, state and local laws (whether under common law,
statute or otherwise), ordinances, rules, regulations and guidance documents
now in force, as amended from time to time, in any way relating to or
regulating human health or safety, industrial hygiene or environmental
conditions, protection of the environment, pollution or contamination of the
air, soil, surface water or groundwater, and includes, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
42 U.S.C. §9601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
§6901, et seq., the Clean Water Act, 33 U.S.C. §1251 et seq., the Clean Air
Act, as amended, 42 U.S.C. §7401 et seq., the Occupational Safety and Health
Act, 29 U.S.C. §651 et seq., the Hazardous Materials Transportation Act, 49
U.S.C. §1801 et seq., the Federal Water Pollution Control Act, 33 U.S.C. §1321
et seq., and the Toxic Substances Control Act, 15 U.S.C. §2601 et seq.

1.18.            Further Assurances.
Mortgagor, from time to time, will execute, acknowledge, subscribe and deliver to or at the direction of
Mortgagee such documents and further assurance as Mortgagee may reasonably require
for the purpose of evidencing, perfecting or confirming the lien and security
interest created by this Mortgage or the security to be afforded by the Related

 

25

 

Agreements, or all. Without limiting the foregoing and notwithstanding
anything in this Mortgage or the Related Agreements to the contrary, Mortgagor
will defend, indemnify and hold Mortgagee harmless with respect to any suit or
proceeding in which the validity, enforceability or priority of any such lien
or security interest, or both, is endangered or contested, directly or
indirectly. If Mortgagor fails to undertake the defense of any such claim in a
timely manner, or, in Mortgagee’s sole determination, fails to prosecute such
defense with due diligence, then Mortgagee is authorized to take, at the sole
expense of Mortgagor, all necessary and proper action in defense of any such
claim, including, without limitation, the retention of legal counsel, the
prosecution or defense of litigation and the compromise or discharge of claims,
including payment of all costs and reasonable attorneys’ and paralegals’ fees.
All costs, expenses and losses, if any, so incurred by Mortgagee, including all
reasonable attorneys’ and paralegals’ fees, regardless of whether suit is
brought, for all administrative, trial and appellate proceedings, if any, will
constitute advances by Mortgagee as provided in Section 1.14 hereinabove.

1.19.            Mortgagor’s Continued Existence.
Mortgagor shall at all times during the term of the Loan maintain its legal
existence and qualification to do or transact business in the state in which
the Property or any of the Collateral is located. Mortgagor’s exact legal name,
state of organization and chief executive office are as set forth respectively
in the initial paragraph of this Mortgage. So long as any of the indebtedness
secured hereby remains outstanding, Mortgagor will provide Mortgagee with
thirty (30) days prior written notice of any change in Mortgagor’s name,
organizational identification number, state of organization or, if any
individual, principal residence.

ARTICLE II

EVENTS OF DEFAULT

Each of the following shall constitute an event of
default (“Event of Default”) hereunder:

2.01.            Monetary and Performance Defaults.

(A) Failure to make any payment due under the Note or
any note evidencing a Future Advance, other than the final payment and
Prepayment Premium, or to make any payment due under this Mortgage to Mortgagee
or any other party, including without limitation, payment of escrow deposits,
real estate taxes, insurance premiums and ground rents, if any, on or before
the fourth (4th) day after such payment is due; or

(B) Failure to make the final payment or the
Prepayment Premium due under the Note or any note evidencing a Future Advance
when such payment is due whether at maturity, by reason of acceleration, as
part of a prepayment or otherwise (the defaults in (A) and (B) hereinafter “Monetary
Default”); or

(C) Breach or default in the performance of any of the
covenants or agreements of Mortgagor contained herein, in the Note or in any
Related Agreement (“Performance Default”), if such Performance Default shall
continue for thirty (30) days or more after written notice to Mortgagor from
Mortgagee specifying the nature of the Performance Default; provided, however,
that if such Performance Default is of a nature that it cannot be cured within
the thirty (30)

 

26

 

day period, then Mortgagor shall not be in default if it commences good
faith efforts to cure the Performance Default within the thirty (30) day
period, demonstrates continuous diligent efforts to cure the Performance
Default in a manner reasonably satisfactory to Mortgagee and, within a
reasonable period, not to exceed one hundred eighty (180) days after the date
of the original written notice of the Performance Default, completes the cure
of such Performance Default. Notwithstanding the foregoing, if the breach or
default is one which is defined as an Event of Default elsewhere in this
Article II or in the default definition of any Related Agreement, then
Mortgagor shall not be entitled to any notice or cure period upon the
occurrence of such breach or default except for such notice and cure periods,
if any, as may be expressly granted in such other defined Event of Default.

2.02.        Bankruptcy, Insolvency, Dissolution.

(A) Any court of competent jurisdiction  shall sign an order (1)  adjudicating Mortgagor, its sole member, or
any Guarantor (which term when used in this Mortgage shall mean any guarantor
of payment of the indebtedness) bankrupt or insolvent, (2) appointing a
receiver, trustee or liquidator of the Property or Collateral or of a
substantial part of the property of Mortgagor, its sole member, or any
Guarantor, or (3) approving a petition for, or effecting an arrangement in
bankruptcy, or any other judicial modification or alteration of the rights of
Mortgagee or of other creditors of Mortgagor, its sole member, or any
Guarantor; or

(B) Mortgagor, its sole member, or any Guarantor shall
(1) apply for or consent to the appointment of a receiver, trustee or
liquidator for it or for any of its property, (2) as debtor, file a voluntary
petition in bankruptcy,  or petition or
answer seeking reorganization or an arrangement with creditors or to take
advantage of any bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute, or an answer admitting the material
allegations of a petition filed against it and any proceeding under such law,
(3) admit in writing an inability to pay its debts as they mature, or (4) make
a general assignment for the benefit of creditors; or

(C) An involuntary petition in bankruptcy is filed
against Mortgagor, its sole member, or any Guarantor and the same is not
vacated or stayed within 90 days of the filing date.

2.03.            Misrepresentation. Mortgagor
makes or furnishes a representation, warranty, statement, certificate, schedule and/or report
to Mortgagee in or pursuant to this Mortgage or any of the Related Agreements
which is false or misleading in any material respect as of the date made or
furnished, or becomes false or breached upon or after execution of this
Mortgage.

2.04.            Default under Subordinate Loans.
An occurrence of a default under any loan subordinate to this Mortgage which is not an
independent default under this Mortgage which results in the commencement of
foreclosure proceedings or the taking of any other remedial action under such
subordinate loan.

2.05.            Liens. Any federal, state or
local tax lien or any claim of lien for labor or materials or any other lien or encumbrance of any nature whatsoever is
recorded against Mortgagor or any of the Property or Collateral and is not
removed by payment or transferred to

 

 

27

 

 

substitute security in the manner provided by law, within thirty (30)
days after it is recorded in accordance with applicable law.

2.06.            Judgments. (A) A final
judgment, other than a final judgment in connection with any condemnation, is entered against Mortgagor
that (1) materially and adversely affects the value, use or operation of the
Property or other Collateral, or (2) adversely affects, or reasonably may
adversely affect, the validity or enforceability of this Mortgage, any of the
Related Agreements or the Note or priority of the liens or security interests
created by this Mortgage or any of the Related Agreements; or (B) execution or
other final process issues on such a final judgment with respect to the
Property or other Collateral; and (C) Mortgagor does not discharge such a final
judgment or provide for its discharge in accordance with its terms, or procure
a stay of execution thereon, in any event within 30 days from entry, or
Mortgagor shall not, within such period or such longer period during which
execution on such judgment shall have been stayed, appeal therefrom or from the
order, decree or process upon or pursuant to which such judgment shall have
been entered, and cause its execution to be stayed during such appeal, or if on
appeal such order, decree or process shall be affirmed and Mortgagor shall not
discharge such judgment or provide for its discharge in accordance with its
terms within 60 days after the entry of such order or decree or affirmance, or
if any stay of execution on appeal is released or otherwise discharged.

2.07.            Leases. Mortgagor’s default
in the performance of its obligations as lessor under any Lease of 10,000 square feet or more, which default could
result, in Mortgagee’s judgment, in the termination of said Lease.

2.08.            Mortgagor’s Continued Existence.
Mortgagor ceases to exist or to be qualified to do or transact business in the state in
which the Property or any of the Collateral is located or is dissolved or is a
party to a merger, consolidation or reorganization, or sells all or
substantially all of its assets.

2.09.            Breach of Due on Sale or
Encumbrance Provision. Any occurrence of a prohibited Transfer under Section 1.08 hereof.

2.10.            Default under Related Agreements.
A “Default” or “Event of Default” shall have occurred under or as defined in any
of the Note, the Assignment of Leases and Rents or any other Related Agreement.

 

ARTICLE III

REMEDIES

Upon the occurrence of any Event of Default, Mortgagee
shall have the following rights and remedies set forth in this Article, as well
as the remedies provided for in the Related Agreements:

3.01.            Acceleration. Notwithstanding
the stated maturity date in the Note, or any note evidencing any Future Advance, Mortgagee may without
notice or demand, declare the entire principal amount of the Note and/or any
Future Advances then outstanding and accrued and

 

28

 

unpaid interest thereon, and all other sums or payments required
thereunder or under this Mortgage or the Related Agreements including, but not
limited to the Prepayment Premium described in the Note, to be due and payable
immediately.

3.02.            Entry. Irrespective of
whether Mortgagee exercises the option provided in Section 3.01 above, Mortgagee in person or by agent or by court-appointed
receiver (and Mortgagee shall have the right to the immediate appointment of
such a receiver without regard to waste, the adequacy of the security, or the
insolvency of Mortgagor. Mortgagor hereby irrevocably consents to such
appointment and waives notice of any application therefor whether or not
foreclosure proceedings have been commenced, whether or not a foreclosure sale
has occurred. 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
Property or the adequacy of Mortgagee’s security. Mortgagee or any holder of
the Note may be appointed as such receiver may, at its option, without any
action on its part being required, without in any way waiving such Event of
Default, with or without the appointment of a receiver, or an application
therefor:

(A) enter and take possession of the Property and
Collateral and conduct tests of, manage or hire a manager to manage, lease and
operate the Property and Collateral or any part thereof, on such terms and for
such period of time as Mortgagee may deem proper, with full power to make, from
time to time, all alterations, renovations, maintenance, repairs or
replacements thereto as may seem proper to Mortgagee;

(B) with or without taking possession of the Property
or Collateral, collect demand, sue for, attach, levy on, recover, compromise,
adjust, receive, and make, execute and deliver receipts for all Rents and
Profits, notify tenants under the Leases or any other parties in possession of
the Property or Collateral to pay Rents and Profits directly to Mortgagee, its
agent or a court-appointed receiver and apply such Rents and Profits to the payment
of:

(1) all reasonable fees of the receiver approved by
the court;

(2) all tenant security deposits then owing to tenants
under any of the leases pursuant to the provisions of Minn Stat. 

§ 504.20 or otherwise;

(3) all real estate taxes and special assessments past
due and owing with respect to the Property or if the Mortgage requires periodic
escrow payments for such taxes and assessments, to the escrow payments then
due;

(4) all premiums then due for the insurance required
by the provisions of the Mortgage, or if the Mortgage requires periodic escrow
payments for such premiums, to the escrow payments then due;

(5) expenses incurred for normal maintenance of the
Property;

(6) if received prior to any foreclosure sale of the
Property, to Mortgagee for the indebtedness secured by the Mortgage, but no
such payment made after acceleration of the indebtedness shall affect such
acceleration;

 

29

(7) if received during or with respect to the period
of redemption after a foreclosure sale of the Property:

(i) If the purchaser at the foreclosure sale is not
Mortgagee, first to Mortgagee to the extent of any deficiency of the sale
proceeds to repay the indebtedness secured by this Mortgage, second to the
purchaser as credit to the redemption price, but if the Property is not
redeemed, then to the purchaser of the Property;

(ii) If the purchaser at
the foreclosure sale is Mortgagee, to Mortgagee to the extent of any deficiency
of the sale proceeds to repay the indebtedness secured by this Mortgage and the
balance to be retained by Mortgagee as a credit to the redemption price, but it
the Property is not redeemed, then to Mortgagee, whether or not any such
deficiency exists.

(C) exclude Mortgagor, its agents and servants, wholly
from the Property;

(D) have joint access with Mortgagor to the books,
papers and accounts of Mortgagor relating to the Property or the Collateral, at
the expense of Mortgagor;

(E) commence, appear in and/or defend any action or
proceedings purporting to affect the interests, rights, powers and/or duties of
Mortgagee hereunder, whether brought by or against Mortgagor or Mortgagee; and

(F) pay, purchase, contest or compromise any claim,
debt, lien, charge or encumbrance which in the judgment of Mortgagee may affect
or appear to affect the interest of Mortgagee or the rights, powers and/or
duties of Mortgagee hereunder.

The receipt by Mortgagee of any Rents and Profits
pursuant to this Mortgage after the institution of foreclosure or other
proceedings under the Mortgage shall not cure any such Event of Default or
affect such proceedings or any sale pursuant thereto. After deducting the
expenses and amounts set forth above in this Section 3.02, as well as just and
reasonable compensation for all Mortgagee’s employees and other agents
(including, without limitation, reasonable and actual attorneys’ and paralegals’
fees and management and rental commissions) engaged and employed, the moneys
remaining, at the option of Mortgagee, may be applied to the indebtedness
secured hereby. Any amounts collected hereunder by Mortgagee which are in
excess of those applied to pay in full the aforesaid liabilities and
indebtedness at the time due shall be promptly paid to Mortgagor. Whenever all
amounts due on the Note and under this Mortgage shall have been paid and all
Events of Default have been cured and any such cure has been accepted by
Mortgagee, Mortgagee shall surrender possession to Mortgagor. The same right of
entry, however, shall exist if any subsequent Event of Default shall occur;
provided, however, Mortgagee shall not be under any obligation to make any of
the payments or do any of the acts referred to in this Section 3.02.

3.03.            Judicial Action. Mortgagee
may bring an action in any court of competent jurisdiction to foreclose this instrument or to enforce
any of the covenants and agreements hereof. The Property may be foreclosed in
parts or as an entirety.

 

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3.04.            Power of Sale. The Mortgagee
may (and is hereby authorized and empowered to) foreclose this Mortgage by action or advertisement,
pursuant to the statutes of the State of Minnesota in such case made and
provided, power being expressly granted to sell the Property at public auction
and convey the same to the purchaser in fee simple and, out of the proceeds
arising from such sale, to pay all indebtedness with interest, and all legal
costs and charges of such foreclosure and the maximum attorneys’ fees permitted
by law, which costs, charges and fees Mortgagor agrees to pay. Should Mortgagee
elect to sell the Property, or any part thereof, which is real property as
provided above, Mortgagee shall give such notice of default and election to
sell as may then be required by law. Thereafter, upon the expiration of such
time and the giving of such notice of sale as may then be required by law, and
without the necessity of any demand on Mortgagor, Mortgagee, at the time and
place specified in the notice of sale, shall sell the Property or any part
thereof at public auction to the highest bidder for cash in lawful money of the
United States payable at the time of sale. Mortgagee may, from time to time,
postpone any sale hereunder by public announcement thereof at the time and
place noticed therefor or by giving notice of the time and place of the
postponed sale in the manner required by law. If the Property consists of
several lots, parcels or items of property, Mortgagee may designate the order
in which such lots, parcels or items shall be offered for sale or sold. Any
person, including Mortgagor or Mortgagee, may purchase at any sale hereunder,
and Mortgagee shall have the right to purchase at any sale hereunder by
crediting upon the bid price the amount of all or any part of the indebtedness
secured hereby or by the Other Mortgage plus interest, late charges, prepayment
fees, and reasonable attorneys’ fees and trustees’ fees, as herein provided.

3.05.            Rescission of Notice of Default.
Mortgagee, from time to time before any Mortgagee’s sale, public sale or deed in lieu
of foreclosure, may rescind any such notice of breach or default and of
election to cause the Property to be sold by executing and delivering to
Mortgagor a written notice of such rescission, which notice, when recorded,
shall also constitute a cancellation of any prior declaration of default and
demand for sale or such documents as may be required by the laws of the state
in which the Property is located to effect such rescission. The exercise by
Mortgagee of such right of rescission shall not constitute a waiver of any
breach or Event of Default then existing or subsequently occurring, or impair
the right of Mortgagee to execute and deliver to Mortgagor, as above provided,
other declarations of default and demand for sale, and notices of breach or
default, and of election to cause the Property to be sold to satisfy the
obligations hereof, nor otherwise affect any provision, agreement, covenant or
condition of the Related Agreements, the Note or of this Mortgage or any of the
rights, obligations or remedies of the parties thereunder.

3.06.            Mortgagee’s Remedies Respecting
Collateral. Mortgagee may realize upon the Collateral, enforce and exercise all of
Mortgagor’s rights, powers, privileges and remedies in respect of the
Collateral, dispose of or otherwise deal with the Collateral in such order as
Mortgagee may in its discretion determine, and exercise any and all other
rights, powers, privileges and remedies afforded to a secured party under the
laws of the state in which the Property is located as well as all other rights
and remedies available at law or in equity.

 

3.07.            Proceeds of Sales. The
proceeds of any sale made under or by virtue of this Article III, together with all other sums which then may be
held by Mortgagee under this Mortgage, whether under the provisions of this
Article III or otherwise, shall be applied as follows:

 

31

 

(A) To the payment of the costs, fees and expenses of
sale and of any judicial proceedings (including reasonable attorneys’ and
paralegals’ fees and costs, whether incurred before, during or after such
proceedings, in any appellate proceedings, before during or after sale of the
Property or the Collateral, or otherwise incurred) wherein the same may be
made, including the cost of evidence of title in connection with the sale,
compensation to Mortgagee, and to the payment of all expenses, liabilities and
advances made or incurred by Mortgagee under this Mortgage, together with
interest on all advances made by Mortgagee at the interest rate applicable
under the Note, but limited to any maximum rate permitted by law to be charged
by Mortgagee;

(B) To the payment of any and all sums expended by
Mortgagee under the terms hereof or the Related Agreements, not then repaid,
with accrued interest at the Default Rate set forth in the Note, as applicable,
and all other sums (except advances of principal and interest thereon) required
to be paid by Mortgagor pursuant to any provisions of this Mortgage, or the
Note, or any note evidencing any Future Advance, or any of the Related
Agreements, including, without limitation, all expenses, liabilities and
advances made or incurred by Mortgagee under this Mortgage or the Related
Agreements or in connection with the enforcement thereof, together with interest
thereon as herein provided; and

(C) To the payment of the entire amount then due,
owing or unpaid for principal and interest upon the Note, any notes evidencing
any Future Advance, and any other obligation secured hereby, with interest on
the unpaid principal at the rate set forth therein from the date of advancement
thereof until the same is paid in full; and then

(D) The remainder, if any, to the person or persons,
including Mortgagor, legally entitled thereto.

3.08.            Condemnation and Insurance Proceeds.
All Condemnation Proceeds, Insurance Proceeds and any interest earned thereon
shall be paid over either by the condemning authority, insurance company or
escrow agent to Mortgagee and shall be applied first toward reimbursement of
the costs and expenses of Mortgagee (including reasonable attorneys’ and
paralegals’ fees), if any, in connection with the recovery of such Proceeds,
and then shall be applied in the sole and absolute discretion of Mortgagee and
without regard to the adequacy of its security under this Mortgage or the
Related Agreements (A) to the payment or prepayment of all or any portion of
the Note including the Prepayment Premium described in the Note, as applicable;
(B) to the reimbursement of expenses incurred by Mortgagee in connection with
the restoration of the Property or Collateral; or (C) to the performance of any
of the covenants contained in this Mortgage or the Related Agreements as
Mortgagee may determine. Any prepayment of the Note or portion thereof pursuant
to Mortgagee’s election under this Section shall be subject to the Prepayment
Premium described in the Note. Upon any Event of Default, all right, title and
interest of Mortgagor in and to all any and all insurance policies then in
force, including any and all unearned premiums and existing claims, will inure
to Mortgagee, which, at its sole option, and as attorney-in-fact for Mortgagor,
may then make, settle and give binding acquittances for claims under all such
policies, and may assign and transfer such policies or cancel or surrender
them, applying any unearned premium in such manner as Mortgagee may elect. The
foregoing appointment of Mortgagee as attorney-in-fact for Mortgagor is coupled
with an interest, and is irrevocable.

 

 

32

 

3.09.            Waiver of Marshalling, Rights of
Redemption, Homestead and Valuation.

 

                (A) Mortgagor, for
itself and for all persons hereafter claiming through or under it or who may at
any time hereafter become holders of liens junior to the lien of this Mortgage,
hereby expressly waives and releases all rights to direct the order in which
any of the Property or Collateral shall be sold in the event of any sale or
sales pursuant hereto and to have any of the Property and/or any other property
now or hereafter constituting security for any of the indebtedness secured
hereby marshalled upon any foreclosure of this Mortgage or of any other
security for any of said indebtedness.

 

                (B) To the fullest
extent permitted by law, Mortgagor, for itself and all who may at any time
claim through or under it, hereby expressly waives, releases and renounces all
rights of redemption from any foreclosure sale, all rights of homestead,
exception, monitoring reinstatements, forbearance, appraisement, valuation,
stay and all rights under any other laws which may be enacted extending the
time for or otherwise affecting enforcement or collection of the Note, the debt
evidenced thereby, or this Mortgage.

 

3.10.            Remedies Cumulative. No
remedy herein conferred upon or reserved to Mortgagee is intended to be exclusive of any other remedy
herein or by law or equity provided, 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. No delay or omission of Mortgagee to
exercise any right or power accruing upon any Event of Default shall impair any
right or power or shall be construed to be a waiver of any Event of Default or
any acquiescence therein. Every power and remedy given by this Mortgage or the
Related Agreements to Mortgagee may be exercised separately, successively or
concurrently from time to time as often as may be deemed expedient by
Mortgagee. If there exists additional security for the performance of the
obligations secured hereby, Mortgagee, at its sole option, and without limiting
or affecting any of its rights or remedies hereunder, may exercise any of the
rights and remedies to which it may be entitled hereunder either concurrently
with whatever rights and remedies it may have in connection with such other
security or in such order as it may determine. Any application of any amounts
or any portion thereof held by Mortgagee at any time as additional security or
otherwise, to any indebtedness secured hereby shall not extend or postpone the
due dates of any payments due from Mortgagor to Mortgagee hereunder or under
the Note, any Future Advance, or under any of the Related Agreements, or change
the amounts of any such payments or otherwise be construed to cure or waive any
default or notice of default hereunder or invalidate any act done pursuant to
any such default or notice.

 

3.11.            Nonrecourse. Except as
otherwise set forth in this Section, and subject to Section 3.12 hereof, Mortgagee’s recourse under this Mortgage,
the Note and the Related Agreements shall be limited to and satisfied from the
Property and the proceeds thereof, the rents and all other income arising
therefrom during and after the month in which an Event of Default has occurred,
the other assets of Mortgagor arising out of the Property which are given as
collateral for the Note, and any other collateral given in writing to Mortgagee
as security for repayment of the Note (all of the foregoing are collectively
referred to as the “Loan Collateral”). Notwithstanding the preceding sentence:

 

 

33

 

(A) Mortgagee may, in
accordance with the terms of this Mortgage, the Note or any Related Agreement:
(1) foreclose the lien of this Mortgage; (2) take appropriate action to enforce
this Mortgage, the Note and the Related Agreements to realize upon and/or
protect the Loan Collateral; (3) name Mortgagor as a party defendant in any
action brought under this Mortgage, the Note or the Related Agreements so long
as the exercise of any remedy is limited to the Loan Collateral; (4) pursue all
of its rights and remedies against any guarantor or surety or master tenant
whether or not a partner, member or other owner of Mortgagor; and (5) pursue
all of its rights and remedies against Mortgagor and the indemnitors under that
certain Environmental Indemnity Agreement of even date herewith and that
certain Terrorism Insurance Indemnity Agreement of even date herewith;

(B) Mortgagee may seek damages or other monetary
relief, to the extent of actual monetary loss, or any other remedy at law or in
equity against Mortgagor, and the indemnitors/guarantors, if any, under any
nonrecourse exception indemnity agreements (“Nonrecourse Indemnitors”) by
reason of or in connection with: (1) the failure of Mortgagor to pay to
Mortgagee, upon demand, all rents, issues and profits of the Property to which
Mortgagee is entitled pursuant to this Mortgage, the Note or the Related
Agreements following an Event of Default; (2) any waste of the Property or any
willful act or omission by Mortgagor which damages or materially reduces the
value of the Property; (3) the distribution of rents, issues and profits from
the Property prior to the payment of operating expenses or the provision for
reserves, if any, to be made pursuant to this Mortgage, the Note or the Related
Agreement prior to any other expenditure or distribution by Mortgagor; (4) the
failure to account for and to turn over security deposits (and interest
required by law or agreement to be paid thereon) or prepaid rents following the
occurrence of an Event of Default under this Mortgage, the Note or any Related
Agreements; (5) the failure to timely pay all real estate taxes or any regular
or special assessments affecting the Property; (6) the failure to account for
and to turn over real estate tax accruals following the occurrence of an Event
of Default under this Mortgage, the Note or any Related Agreements; (7) the
failure to maintain casualty and liability insurance as required under the Note
or the Related Agreements or to apply insurance proceeds or condemnation awards
relating to the Property or other collateral in the manner required under
applicable provisions of this Mortgage, the Note or any Related Agreements; (8)
any modification, termination or cancellation of any lease of all or any
portion of the Property without Mortgagee’s prior written consent, if and to
the extent such consent is required under the Note or the Related Agreements
and if and to the extent such modification, termination or cancellation has a
material adverse affect on the value of the Property; (9) a default by
Mortgagor under any lease of all or any portion of the Property; or (10) costs
and expenses, including, without limitation, reasonable attorneys’ and
paralegals’ fees and transfer taxes, incurred by Mortgagee in connection with
the enforcement of this Mortgage, the Note or the Related Agreements or in
connection with a deed-in-lieu of foreclosure if the Event of Default giving
rise to the enforcement action is one described in subsections (B) or (C) as an
exception to the nonrecourse provisions, or if the Mortgagor or any principal
of Mortgagor objects to any actions taken by Mortgagee to exercise its remedies
under this Mortgage, the Note or the Related Agreements; Mortgagor or principal
of Mortgagor commences any lawsuit to enjoin or delay a foreclosure of the
Property by Mortgagee, or raises defenses or counterclaims to a foreclosure
action; Mortgagor applies for the appointment of a receiver, trustee or
liquidator for it or for any of its property, or, as a debtor, files a
voluntary petition in bankruptcy, or petition or answer seeking reorganization
or an

 

34

arrangement with creditors or takes advantage of any bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution or liquidation law or statute, or
makes a general assignment for the benefit of creditors; or in the event any
bankruptcy or reorganization proceedings (voluntary or involuntary), the
Mortgagor or any principal of Mortgagor opposes any motion by Mortgagee for
relief from the Automatic Stay; and

(C) Mortgagor, any general partners of Mortgagor and
the Nonrecourse Indemnitor(s), if any, shall become personally liable for
payment of all the indebtedness evidenced by the Note and performance of all
other obligations of Mortgagor under this Mortgage, the Note and Related
Agreements upon the occurrence of any: (i) fraud or willful misrepresentation
of a material fact by Mortgagor, any general partners of Mortgagor, or
Nonrecourse Indemnitor(s), if any, in connection with this Mortgage, the Note,
the Related Agreements or any request for any action or consent by Mortgagee;
(ii) a Transfer of any interest in Mortgagor or all or any portion of the
Property or any interest therein in violation of the terms of this Mortgage,
the Note or the Related Agreements; or (iii) the incurrence by Mortgagor of any
indebtedness in violation of the terms of this Mortgage, the Note or Related
Agreements (whether secured or unsecured, direct or contingent), other than
unsecured debt or routine trade payables incurred in the ordinary course of
business in connection with the operation of the Property.

In addition, Mortgagor, any general partners of
Mortgagor and the Nonrecourse Indemnitors, if any, shall be responsible for any
costs and expenses incurred by Mortgagee in connection with the collection of
any amounts for which Mortgagor, its general partners, if any, and the
Nonrecourse Indemnitors, if any, are personally liable under this Section 3.11,
including reasonable attorneys’ and paralegals’ fees and expenses, court costs,
filing fees and all other costs and expenses incurred in connection therewith.

3.12.            Evasion of Prepayment Premium.
Mortgagor agrees that in the event Mortgagee exercises its right to accelerate the
maturity date of the Note following an Event of Default, a tender of payment of
an amount necessary to satisfy the entire indebtedness evidenced by the Note,
but without including the Prepayment Premium described in the Note, made at any
time prior to foreclosure sale either by Mortgagor, its successors and assigns
or by anyone on behalf of Mortgagor, shall be deemed to constitute an evasion
of the prepayment provisions of the Note and such payment shall therefore be
deemed to be a prepayment under the Note, and to the extent permitted by law,
shall include the Prepayment Premium described in the Note.

ARTICLE IV

MISCELLANEOUS

4.01.            Severabilitv. In the event
any one or more of the provisions contained in this Mortgage shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Mortgage, but
this Mortgage shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein, but only to the extent that it is
invalid, illegal or unenforceable.

 

4.02.             Certain Charges and Brokerage
Fees.

 

35

 

(A) Mortgagor agrees to
pay Mortgagee its standard charge (or if there is no standard charge, then
Mortgagor shall reimburse Mortgagee for its reasonable expenses) for each
written statement requested of Mortgagee as to the obligations secured hereby,
furnished at Mortgagor’s request. Mortgagor further agrees to pay the charges
of Mortgagee for any other service rendered Mortgagor, or on its behalf,
connected with this Mortgage or the indebtedness secured hereby, including,
without limitation, the delivery to an escrow holder of a request for full or
partial release or reconveyance of this Mortgage, transmittal to an escrow
holder of moneys secured hereby, changing its records pertaining to this
Mortgage and indebtedness secured hereby to show a new owner of the Property,
and replacing an existing policy of insurance held hereunder with another such
policy.

(B) Mortgagor agrees to indemnify and hold Mortgagee
harmless from any responsibility and/or liability for the payment of any
commission charge or brokerage fees to anyone which may be payable in
connection with the funding of the loan evidenced by the Note and this Mortgage
or refinancing of any prior indebtedness, if applicable, based upon any action
taken by Mortgagor. It is understood that any such commission charge or
brokerage fees shall be paid directly by Mortgagor to the entitled parties.

4.03.            Notices.

(A) All notices expressly provided hereunder to be
given by Mortgagee to Mortgagor and all notices, demands and other
communications of any kind or nature whatever which Mortgagor may be required
or may desire to give to or serve on Mortgagee shall be in writing and shall be
(1) hand-delivered, effective upon receipt, (2) sent by United States Express
Mail or by private overnight courier, effective upon receipt, or (3) served by
certified mail, to the appropriate address set forth below, or at such other
place as Mortgagor or Mortgagee, as the case may be, may from time to time
designate in writing by ten (10) days prior written notice thereof. Any such
notice or demand served by certified mail, return receipt requested, shall be
deposited in the United States mail, with postage thereon fully prepaid and
addressed to the party so to be served at its address stated below or at such
other address of which said party shall have theretofore notified in writing,
as provided above, the party giving such notice. Service of any such notice or
demand so made shall be deemed effective on the day of actual delivery as shown
by the addressee’s return receipt or the expiration of three (3) business days
after the date of mailing, whichever is the earlier in time. Any notice
required to be given by Mortgagee shall be equally effective if given by
Mortgagee’s agent, if any.

(B) Mortgagor hereby requests that any notice, demand,
request or other communication (including any notice of an Event of Default and
notice of sale as may be required by law) desired to be given or required
pursuant to the terms hereof be addressed to Mortgagor as follows:

MB Shakopee Vierling, L.L.C.

2901 Butterfield Road

Oak Brook, Illinois 60523

Attention: Lori Foust

 

With a copy to:

 

36

 

 

 

The Inland Real Estate Group, Inc.

2901 Butterfield Road

Oak Brook, Illinois 60523

Attention:       General Counsel

All notices and other communications to Mortgagee
shall be addressed as follows:

Allstate Life Insurance Company

Allstate Plaza South, Suite G5C

3075 Sanders Road

Northbrook, Illinois 60062

Attention:                      Commercial
Mortgage Division

Servicing Manager

With a copy to:

Allstate Life Insurance Company

Investment Law Division

Allstate Plaza South, Suite G5A

3075 Sanders Road

Northbrook, Illinois
60062

4.04.            Mortgagor Not Released; Certain
Mortgagee Acts.

(A) Extension of the time for payment or modification
of the terms of payment of any sums secured by this Mortgage granted by
Mortgagee to any successor in interest of Mortgagor shall not operate to
release, in any manner, the liability of Mortgagor. Mortgagee shall not be
required to: commence proceedings against such successor or refuse to extend
time for payment or otherwise modify the terms of payment of the sums secured
by this Mortgage, by reason of any demand made by Mortgagor. Without affecting
the liability of any person, including Mortgagor, but subject to the terms and
provisions of Section 3.11, for the payment of any indebtedness secured hereby,
or the legal operation and effect of this Mortgage on the remainder of the
Property for the full amount of any such indebtedness and liability unpaid,
Mortgagee is empowered as follows: Mortgagee may from time to time and without
notice (1) release any person liable for the payment of any of the
indebtedness; (2) extend the time or otherwise alter the terms of payment of
any of the indebtedness; (3) accept additional real or personal property of any
kind as security therefor, whether evidenced by deeds of trust, mortgages,
security agreements or any other instruments of security; or (4) alter,
substitute or release any property securing the indebtedness.

(B) Mortgagee may at its sole option and without any
duty to do so, at any time, and from time to time, (1) upon request of
Mortgagor, consent to the making of any map or plan of the Property or any part
thereof; (2) upon request of Mortgagor, join in granting any easement or
creating any restriction thereon; (3) join in any subordination or other
agreement affecting this Mortgage or the legal operation and effect or charge
hereof; or (4) release or reconvey, without any warranty, all or part of
the Property from the lien of this Mortgage.

 

37

 

 

4.05.            Inspection. Upon reasonable
prior notice and subject to the rights of tenants under the Leases, Mortgagee may at any reasonable time make
or cause to be made entry upon and make inspections, reappraisals, surveys,
construction and environmental testing of the Property or any part thereof in
person or by agent, and if Mortgagee has a reasonable basis to believe that
Mortgagor is in breach of any covenant of this Mortgage in regard to the
Property, the cost of any such inspection shall be borne by the Mortgagor.

4.06.            Release or Reconveyance or
Cancellation. Upon the payment in full of all sums secured by this Mortgage, Mortgagee shall
cancel and release this Mortgage and shall surrender this Mortgage and all
notes evidencing indebtedness secured by this Mortgage to Mortgagor. Upon
payment of its fees and any other sums owing to it under this Mortgage,
Mortgagee shall release this Mortgage or reconvey the Property without warranty
to the person or persons legally entitled thereto. The duly recorded release or
reconveyance of the Property shall constitute a reassignment of the Leases by
the Mortgagee to the Mortgagor. Such person or persons shall pay all fees of
Mortgagee and costs of recordation, if any. The recitals in such release or
reconveyance of any matters or facts shall be conclusive proof of the
truthfulness thereof.

4.07.            Statute of Limitations.
Mortgagor hereby expressly waives and releases to the fullest extent permitted by law, the pleading of
any statute of limitations as a defense to any and all obligations secured by
this Mortgage.

4.08.            Interpretation. Wherever used
in this Mortgage, unless the context otherwise indicates a contrary intent, or unless otherwise
specifically provided herein, the word “Mortgagor” shall mean and include both
Mortgagor and any subsequent owner or owners of the Property, and the word “Mortgagee”
shall mean and include not only the original Mortgagee hereunder but also any
future owner and holder, including pledgees, of the Note or other obligations
secured hereby. In this Mortgage, the Note and the Related Agreements, whenever
the context so requires, the masculine gender includes the feminine and/or
neuter, and the neuter includes the feminine and/or masculine, and the singular
number includes the plural. In this Mortgage, the Note and the Related
Agreements, the use of the word “including” shall not be deemed to limit the
generality of the term or clause to which it has reference, whether or not non-limiting
language (such as “without limitation,” or “but not limited to,” or words of
similar import) is used with reference thereto.

4.09.            Captions. The captions and
headings of the Articles and Sections of this Mortgage, the Note and the Related Agreements are for
convenience only and are not to be used to interpret, define or limit the
provisions hereof.

4.10.            Consent. The granting or
withholding of consent by Mortgagee to any transaction as required by the terms hereof shall not be deemed a
waiver of the right to require consent to future or successive transactions. Mortgagor
covenants and agrees to reimburse Mortgagee promptly on demand for all legal
and other expenses incurred by Mortgagee or its servicing agent in connection
with all requests by Mortgagor for consent or approval under this Mortgage.

4.11.            Delegation to Subagents.
Wherever a power of attorney is conferred upon Mortgagee hereunder or under the Related Agreements,
it is understood and agreed that such power is conferred with full power of
substitution, and Mortgagee may elect in its sole discretion

 

38

 

to exercise such power itself or to delegate such power, or any part
thereof, to one or more subagents and such power shall be deemed to be coupled
with an interest and irrevocable so long as this Mortgage has not been
cancelled.

4.12.            Successors and Assigns. All
of the grants, obligations, covenants, agreements, terms, provisions and conditions herein
shall run with the land and shall apply to, bind and inure to the benefit of,
the heirs, administrators, executors, legal representatives, successors and
assigns of Mortgagor (but this shall not permit any assignment prohibited
hereby) and the endorsees, transferees, successors and assigns of Mortgagee. In
the event Mortgagor is composed of more than one party, the obligations,
covenants, agreements, and warranties contained herein and in the Related
Agreements as well as the obligations arising therefrom are and shall be joint
and several as to each such party.

4.13.            Governing Law. THIS MORTGAGE
IS INTENDED TO BE GOVERNED BY AND CONSTRUED
UNDER THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED. MORTGAGOR HEREBY
WAIVES ITS RIGHT TO A TRIAL BY JURY.

4.14.            Changes in Taxation. If,
after the date of this Mortgage, any law is passed by the state in which the Property is located or by any
other governing entity, imposing upon Mortgagee any tax against the Property,
or changing in any way the laws for the taxation of mortgages or deeds of trust
or debts secured by mortgages or deeds of trust so that an additional or
substitute tax is imposed on Mortgagee or the holder of the Note, Mortgagor
shall reimburse Mortgagee for the amount of such taxes immediately upon receipt
of written notice from Mortgagee. Provided, however, that such requirement of
payment shall be ineffective if Mortgagor is permitted by law to pay the whole
of such tax in addition to all other payments required hereunder, without any
penalty or charge thereby accruing to Mortgagee and if Mortgagor in fact pays
such tax prior to the date upon which payment is required by such notice.

4.15.            Maximum Interest Rate. No
provision of this Mortgage or of the Note or of any note evidencing a Future Advance shall
require the payment or permit the collection of interest in excess of the
maximum non-usurious rate permitted by applicable law. In the event such
interest does exceed the maximum legal rate, it shall be canceled automatically
to the extent that such interest exceeds the maximum legal rate and if
theretofore paid, credited on the principal amount of the Note or, if the Note
has been prepaid, then such excess shall be rebated to Mortgagor. It is the
intent of Mortgagor and Mortgagee that the interest rate charged under the
Note, this Mortgage, any note representing any Future Advance and any of the Related
Agreements shall comply with all applicable law and not exceed the maximum rate
allowed by law.

4.16.            Time of Essence. Time is of
the essence of the obligations of Mortgagor in this Mortgage and the Related Agreements and each and
every term, covenant and condition made herein or therein by or applicable to
Mortgagor.

4.17.            Reproduction of Documents.
This Mortgage and all documents relating thereto, including, without limitation, consents,
waivers and modifications which may hereafter be executed, financial and
operating statements, certificates and other information previously or
hereafter furnished to Mortgagee, may be reproduced by Mortgagee by any
photographic,

 

39

 

photostatic, microfilm, micro-card, miniature photographic or other
similar process and Mortgagee may destroy any original document (“Master”) so
reproduced. Mortgagor agrees and stipulates that any such reproduction is an
original and shall be admissible in evidence as the Master in any judicial or
administrative proceeding (whether or not the Master is in existence and
whether or not such reproduction was made or preserved by Mortgagee in the
regular course of business) and any enlargement, facsimile or further
reproduction of such a reproduction shall be no less admissible.

4.18.            No Oral Modifications. This
Mortgage may not be amended or modified orally, but only by an agreement in writing signed by the
party against whom enforcement of any amendment or modification is sought.

4.19.            Further Assurances.
Mortgagor, from time to time, will execute, acknowledge, subscribe and deliver to or at the direction of
Mortgagee such documents and further assurances as Mortgagee may reasonably
require for the purpose of evidencing, perfecting or confirming the lien and
security interest created by this Mortgage or the security to be afforded by the
Related Agreements, or both. Without limiting the foregoing and notwithstanding
anything in this Mortgage or the Related Agreements to the contrary, Mortgagor
will defend, indemnify and hold Mortgagee harmless with respect to any suit or
proceeding in which the validity, enforceability or priority of any such lien
or security interest, or both, is endangered or contested, directly or
indirectly. If Mortgagor fails to undertake the defense of any such claim in a
timely manner, or, in Mortgagee’s sole determination, fails to prosecute such
defense with due diligence, then Mortgagee is authorized to take, at the sole
expense of Mortgagor, all necessary and proper action in defense of any such
claim, including, without limitation, the retention of legal counsel, the
prosecution or defense of litigation and the compromise or discharge of claims,
including payment of all costs and reasonable attorneys’ and paralegals’ fees.
All costs, expenses and losses, if any, so incurred by Mortgagee, including all
reasonable attorneys’ and paralegals’ fees, regardless of whether suit is
brought, for all administrative, trial and appellate proceedings, if any, will
constitute advances by Mortgagee as provided herein.

4.20.            Future Advances.

(A) To the extent that this Mortgage secures Future
Advances, the amount of such advances is not currently known. The acceptance of
this Mortgage by Mortgagee, however, constitutes an acknowledgment that
Mortgagee is aware of the provisions of Minnesota Statutes § 287.05, subd. 5,
and intends to comply with the requirements contained therein.

(B) The representations contained in this section are
made solely for the benefit of county recording authorities in determining the
mortgage registry tax payable as a prerequisite to the recording of this
Mortgage. Mortgagor acknowledges that such representations do not constitute or
imply an agreement by Mortgagee to make any future advances to Mortgagor.

(C) Notwithstanding any other provision of this
Mortgage to the contrary, any indebtedness as to which mortgage registry tax is
payable shall not be secured by this Mortgage unless and until the tax is paid.

 

40

 

4.21.            Commercial Property. The
Property is commercial property and is not the homestead of any person, and is not residential or
agricultural property as those terms are defined under Minnesota Law.

*       *       *       *       *

[Signature Page Follows]

 

 

 

 

 

41

 

IN WITNESS WHEREOF, the undersigned has executed and
delivered this Mortgage as of the day and year first hereinabove written.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MORTGAGOR AND “DEBTOR”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MB SHAKOPEE VIERLING, L.L.C., a Delaware limited
  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: MINTO BUILDERS (FLORIDA), INC., a Florida
  corporation,

  

 

	
   

  	
  Its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Debra A. Palmer

  
	
   

  	
  Its:

  	
  Debra A. Palmer

  
	
   

  	
   

  	
  Assistant Secretary

  

 

 

42

 

STATE OF ILLINOIS    
)

) SS.

COUNTY OF DU PAGE)

I, the undersigned, a Notary Public, in and for the
County and State aforesaid, DO HEREBY CERTIFY, that Debra A. Palmer, the Assistant Secretary of MINTO BUILDERS (FLORIDA), INC., a
Florida corporation, the sole member of MB SHAKOPEE VIERLING, L.L.C., a
Delaware limited liability company, personally known to me to be the same
person whose name is subscribed to the foregoing instrument, appeared before me
this day in person and acknowledged that as such officer he/she signed and
delivered the said instrument as his/her free and voluntary act and deed and as
the free and voluntary act and deed of said entities, for the uses and purposes
therein set forth.

GIVEN under my hand and notarial seal this 22nd
day of May, 2006.

(SEAL)

 

	
   

  	
   

  	
  /s/ Erin P Sloan

  
	
   

  	
   

  	
  Notary Public

  

 

My commission expires:

 

	
  “OFFICIAL
  SEAL”

  Erin P Sloan

  	
   

  
	
  Notary
  Public, State of Illinois

  My Commission Exp. 10/18/2009

  	
   

  

 

 

 

EXHIBIT A

(Property Description)

Lot 1, Block 1 Vierling Plaza, Scott County, Minnesota

P.I.N.: 27-278-001-0

Address:                1698
Vierling Drive, Shakopee, Minnesota

 

A-1

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