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Page 3 of 5 Minnesota Uniform Conveyancing Blanks Form 20.1.2 completion of and payment for the Repairs, there remains any undisbursed escrow funds, such funds shall be applied to payment of the amounts owed by Borrower under the Note in accordance with Paragraph 3(c). (e) If all or any part of the Property is taken in condemnation proceedings instituted under power of eminent domain or is conveyed in lieu thereof under threat of condemnation, the money paid pursuant to such condemnation or conveyance in lieu thereof must be applied to payment of the amounts due by Borrower to Lender under the Note as set forth in Paragraph 3(c), even if such amounts are not then due to be paid. (f) Borrower will not commence construction of any new Improvements on the Property unless and until Borrower repays in its entirety the Indebtedness to Lender and Lender delivers to Borrower a Satisfaction of this Mortgage. (g) Borrower will pay all dues, fees or assessments, if any, which are due and payable by Borrower to any homeowners or similar association as a result of the Property's inclusion therein. (h) Borrower will pay any other expenses and attorneys' fees incurred by Lender pursuant to the Note or as reasonably required for the protection of the lien of this Mortgage. (d) Payment by Lender. If Borrower fails to pay any amounts to be paid hereunder to Lender or any third parties, or to insure the Improvements, and deliver the policies as required herein, Lender may make such payments or secure such insurance. The sums so paid shall be additional Indebtedness, bear interest from the date of such payment at the same rate set forth in the Note, be an additional lien upon the Property, and be immediately due and payable upon written demand. This Mortgage secures the repayment of such advances. (e) Default. In case of default (i) in the payment of sums to be paid under the Note or this Mortgage, when the same becomes due, (ii) in any of the covenants set forth in this Mortgage, (iii) under the terms of the Note, or (iv) under any addendum attached to this Mortgage, Lender may declare the unpaid balance of the Note and the interest accrued thereon, together with all sums advanced hereunder, immediately due and payable without notice, and Borrower hereby authorizes and empowers Lender to foreclose this Mortgage by judicial proceedings or to sell the Property at public auction and convey the same in fee simple in accordance with Minn. Stat. Ch. 580, and out of the monies arising from such sale, to retain all sums secured hereby, with interest and all legal costs and charges of such foreclosure and the maximum attorneys' fees permitted by law, which costs, charges, and fees Borrower agrees to pay. (f) Governing Law; Severability. This Mortgage shall be governed by the laws of Minnesota. In the event that any provision or clause of this Mortgage or the Note conflicts with applicable law, such conflict shall not affect other provisions of this Mortgage or the Note which can be given effect without the conflicting provision. 7. Binding Effect. The terms of this Mortgage will run with the Property and bind the parties hereto and their successors in interest. 8. No Improvements or Lienable Work. Lender and Borrower acknowledge and agree that the Property is currently vacant and unimproved. Prior to Borrower's satisfaction of this Mortgage by payment in full of the Indebtedness, Borrower may not engage any third party to (a) perform any engineering or land surveying services with respect to the Property; (b) contribute to the improvement of the Property by performing labor or furnishing skill, materials or machinery to the Property; or (c) take any other action or provide any other service or thing which may give rise to a lien against the real property under Minnesota Statutes, Chapter 514, unless prior to the commencement of any such actions or the delivery of any such materials, Borrower provides Lender with documentation, satisfactory to Lender in Lender's sole and absolute discretion, legally sufficient to waive and release any claims the party providing the services, labor, skill, materials or machinery may have to assert a lien against the Property pursuant to Minnesota Statutes, Chapter 514. 4487392v4 [Signature page follows.]