MORTGAGE OF LEASEHOLD, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING

EXHIBIT 10.7

MORTGAGE OF LEASHOLD, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND LEASES AND FIXTURE FILING

VERMILION COUNTY

This Document Prepared By And After Recording Mail To:

Edward J. Lieberman, Esq.

Husch Blackwell Sanders LLP

190 Carondelet Plaza, Suite 600

St. Louis, Missouri 63105-3441

Space Above for Recorder’s Use Only

DOCUMENT COVER SHEET

MORTGAGE OF LEASEHOLD, SECURITY AGREEMENT, ASSIGNMENT

OF LEASES AND RENTS AND FIXTURE FILING

(THIS IS A FUTURE ADVANCE MORTGAGE)

THIS MORTGAGE OF LEASEHOLD, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND LEASES AND FIXTURE FILING (“Leasehold Mortgage”) is executed as of the 9 ^th day of May, 2008, by and among BLACKHAWK BIOFUELS, LLC , a Delaware limited liability company (hereinafter referred to as “Mortgagor”), having an address of 22 Chicago Avenue, Freeport, Illinois 61032-4230, and FIFTH THIRD BANK , a Michigan banking corporation, and its successors and assigns, as beneficiary (hereinafter referred to as “Lender” or “Mortgagee”), having an address at 8000 Maryland Avenue, Suite 1400, St. Louis, Missouri 63105.

Recitals

The following recitals are a material part of this Leasehold Mortgage:

A.                                    Mortgagor has entered into a Loan Agreement with Lender dated of even date herewith (hereinafter, together with all amendments, modifications, replacements and restatements thereof, the “Loan Agreement”; capitalized terms used herein and not otherwise defined shall have the meaning given to them in the Loan Agreement);

B.                                      To evidence the Loans being made to Mortgagor under the terms of the Loan Agreement, Mortgagor has executed and delivered to Lender (i)  the Construction/Term Loan Note dated of even date herewith from Mortgagor, as maker, to Lender as payee, in the amount of Twenty-Four Million Six Hundred Fifty Thousand and 00/100 Dollars ($24,650,000.00) (the “Construction/Term Loan Note”) and (ii) the Revolving Credit Loan Note dated of even date herewith from Mortgagor, as maker, to Lender, as payee, in the amount of Five Million and 00/100 Dollars ($5,000,000.00)  (the “Revolving Credit Loan Note”; and together with the Construction/Term Loan Note and all amendments, modifications, replacements, restatements, renewals and extensions thereof, the “Notes”), which Notes evidence that Mortgagor has become justly indebted to Lender in the aggregate principal sum of Twenty-Nine Million Six Hundred Fifty Thousand and 00/100 Dollars ($29,650,000.00), lawful money of the United States, together with interest thereon and attorney’s fees and other charges and sums which may accrue thereon.  From the Effective Date until the Conversion Date, the Construction/Term Loan Note shall bear interest on the principal amount outstanding at the end of each day at a fluctuating rate per annum equal to 2.75% plus the LIBOR rate in effect on such day, with adjustments to the interest rate, if necessary, made each day based on any change in the LIBOR rate.  On and after the Conversion Date, the Construction/Term Loan Note shall bear interest on the principal amount outstanding at the end of each day at a fluctuating rate per annum equal to the Applicable Margin plus the LIBOR rate in effect on such day.  Advances on the Revolving Credit Loan Note shall, at the election of Mortgagor, bear interest on the principal amount outstanding at the end of

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each day at a fluctuating rate per annum equal to (i) 3.00% plus the LIBOR rate in effect on such day, with adjustments to the interest rate, if necessary, made each day based on any change in the LIBOR rate or (ii) 0.25% plus the Prime Rate in effect on such day, with adjustment to the interest rate, if necessary, made each day based on any change in the Prime Rate.  From and after the date of any Default, interest on funds outstanding under the Notes shall accrue at the Default Rate.  The entire principal balance outstanding plus all accrued but unpaid interest under the Construction/Term Loan Note shall become due and payable on the Construction/Term Loan Maturity Date.  The entire principal balance outstanding plus all accrued but unpaid interest under the Revolving Credit Loan Note shall become due and payable on the Revolving Credit Loan Termination Date. NOTICE TO MORTGAGOR:  EACH NOTE CONTAINS A VARIABLE INTEREST RATE.

C.                                      For purposes of this Leasehold Mortgage the following are hereinafter sometimes collectively referred to as the “Obligations”:

(i)                                      Mortgagor’s obligations to Lender under the Notes, the Loan Agreement, this Leasehold Mortgage (including, without limitation, the performance of each covenant and agreement or Mortgagor incorporated herein by reference or contained herein), and any other Loan Documents (as hereinafter defined) now or hereafter executed and delivered by Mortgagor;

(ii)                                   Mortgagor’s and/or Lender’s obligations to the IFA pursuant to the IFA Guaranty Documents, whether resulting from any Lender recovery under the IFA Guaranty or otherwise;

(iii)                                any other indebtedness or other obligations of Mortgagor to Lender, owing or which may hereafter become owing, now or hereafter existing, whether monetary, nonmonetary, direct, indirect, acquired, joint, several, joint and several, liquidated, unliquidated, existing, future, fixed, contingent or otherwise; and

(iv)                               any replacements, renewals, consolidations, extensions and other modifications of any of the above, together with any interest, fees, expenses and other charges thereon, and any amounts expended by or on behalf of Lender for the protection and preservation of the mortgage lien and security interest granted herein.

D.                                     The Loan Agreement, the Notes, this Mortgage and any other agreements, documents or instruments evidencing, securing or otherwise relating to any of the Obligations, and any replacements, renewals, extensions and other modifications of any of the foregoing, are hereinafter sometimes collectively called the “Loan Documents”; and

E.                                       The rights and obligations of Biofuels Company of America, LLC, an Illinois limited liability company (“BCA”) with respect to the real property located in County of Vermilion, City of Danville, State of Illinois, as described in Exhibit A attached hereto (the “Leased Premises”) under that certain Amended and Restated Ground Lease Agreement dated as of November 3, 2006 (as amended, modified, renewed, extended or restated from time to time, the “Lease”) between Bunge Milling, Inc., an Illinois corporation, an Illinois corporation (“Lessor”), as landlord and BCA, as tenant, were assigned to and assumed by Mortgagor, and Lessor consented to such assignment and assumption, pursuant to that certain First Amendment,

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Assignment and Assumption and Consent to Assignment of Ground Lease and Conveyance of Leasehold Improvements dated as of May 9, 2008 by and among BCA, Lessor and Mortgagor, a memorandum of which was recorded May       , 2008 as document no.                       .

NOW, THEREFORE, Mortgagor does hereby MORTGAGE, WARRANT, GRANT, BARGAIN, SELL, CONVEY, ASSIGN AND PLEDGE, to Lender, and to Lender’s successors and assigns forever, all of Mortgagor’s right, title and interest, if any, in and to the following property, whether such property or interest therein is now owned or existing or hereafter acquired or arising (collectively, the “Property”): (i) the Lease and the leasehold estate created by the Lease (collectively, the “Leasehold”), including, without limitation, (a) all modifications, extensions and renewals of the Lease and in and to all rights and options to purchase or to renew or extend the term of the Lease; (b) all credits, deposits, options, privileges and rights of the Mortgagor, as lessee under the Lease, including, without limitation any right to receive any payments under the Lease in connection with the exercise of any purchase option(s) under the Lease; (c) all awards heretofore made or hereafter to be made for the taking by eminent domain of the whole or any part of the Leased Premises, or any estate or easement therein, including any awards for change of grade of streets, all of which awards are hereby assigned to the Lender; and (d) all insurance proceeds relating to the Leased Premises including, but not limited to, any proceeds attributable to any injury to or decrease in the value of the Leased Premises or the Property; (ii) the Leased Premises, including any fee interest in the Leased Premises hereafter acquired by the Mortgagor; (iii) all estates, easements, interests, licenses, privileges, tenements, hereditaments, appurtenances, rights and rights of way, public or private, pertaining, belonging or otherwise relating to the Leased Premises or any of the other Property, including, without limitation, (a) that certain Soybean Oil Pipeline Easement Agreement dated as of the date hereof with respect to the real property located in County of Vermilion, City of Danville, State of Illinois, as described in Exhibit B attached hereto, (b) that certain Access Right of Way Easement Agreement dated as of the date hereof with respect to the real property located in County of Vermilion, City of Danville, State of Illinois, as described in Exhibit C attached hereto, (c) that certain Underground Gas Pipeline Easement Agreement dated as of the date hereof with respect to the real property located in County of Vermilion, City of Danville, State of Illinois, as described in Exhibit D attached hereto and (d) that certain Biodiesel Pipeline Easement Agreement dated as of the date hereof with respect to the real property located in County of Vermilion, City of Danville, State of Illinois, as described in Exhibit E attached hereto (collectively, the “Easement Premises”); (iv) all buildings and improvements now or later situated under, upon or over any of the Leased Premises or the Easement Premises; (v) all franchises, permits, licenses and other rights therein respecting the use, occupation or operation of the Leased Premises or the activities conducted thereon or thereabout; (vi) all rents, income and other benefits arising out of or otherwise related to the Leased Premises and all leases on or affecting the Leased Premises, and any security deposits, contract rights, general intangibles, actions, rights of action, and unearned insurance premiums relating to such leases or the Leased Premises; (vii) all building materials and supplies, equipment, furniture, fixtures, inventory, and operating supplies, attached to or used or usable in connection with the operation or maintenance of the Leased Premises, HVAC equipment, lighting fixtures, electrical boxes, and plumbing fixtures, whether now or hereafter acquired or installed, and in all additions, parts, and accessions attached to or used in connection therewith, and the cash and non-cash proceeds thereof;  and (viii) all accessions to, substitutes for, and all modifications, replacements,

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renewals, products and proceeds of any of the foregoing.   Unless otherwise indicated, a reference to the “Property” means all and/or any part of the Property.

Mortgagor, on a continuing basis, warrants, represents, covenants and agrees to and with Lender (which covenants, representations, warranties and agreements to the extent permitted by law shall be deemed to run with the land) as follows:

1.                                        Indebtedness Secured .  This Mortgage has been given and is intended to secure the full and prompt payment and performance of the Obligations.  This Mortgage shall secure, among other things, the payment and performance of all future advances, future obligations and future extensions of credit.  The priority of the lien hereunder securing such future advances, future obligations, and future extensions of credit shall relate back to the date this Mortgage was recorded.  The lien of the mortgage will be valid even if no advance is made at the date of execution or if there is no indebtedness when a future advance is made.  THE MAXIMUM PRINCIPAL AMOUNT OF OBLIGATIONS THAT MAY BE SECURED BY THIS MORTGAGE AT ANY ONE TIME IS TWENTY-NINE MILLION SIX HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($29,650,000.00) .   In addition, the Mortgage shall secure unpaid balances of advances made by Lender (together with interest thereon) with respect to the Property, for the payment of Impositions, as hereinafter defined, insurance premiums and costs incurred for the protection of the Property and any charges, expenses and fees, including, without limitation, attorneys’ fees, which, by the terms hereof, shall be added to and increase the Obligations.  This Mortgage shall remain in full force and effect with respect to all of the Property until all Obligations shall have been paid and performed in full.  If the Obligations are paid and performed in accordance with the terms of the applicable Loan Documents, including, without limitation, the observance of all the agreements contained in this Mortgage, this Mortgage shall become void and shall be released at the sole expense of Mortgagor.

2.                                        Payment of Obligations .  Mortgagor shall promptly pay when due all sums of any nature whatsoever due and owing on the Obligations.

3.                                        Title to Leasehold and Other Representations and Warranties .  Mortgagor represents, warrants and covenants to Lender that:  (i) Mortgagor is lawfully vested with and possessed of the Leasehold, owns the improvements now located thereon in fee simple absolute, shall own any improvements hereafter located thereon, and has good and marketable title to the remainder of the Property that is currently owned by Mortgagor;  (ii) the Property is free of all liens, encumbrances, adverse claims and other defects of title whatsoever, except for liens created pursuant to this Mortgage and except as set forth on Exhibit F hereto; (iii) Mortgagor does hereby and shall forever warrant and defend Mortgagor’s title to and interest in the Property and the validity and priority of the lien of this Mortgage against all claims and demands whatsoever of any Person; (iv) the improvements presently on the Premises are in full compliance with all applicable zoning and building codes, ordinances and regulations; (v) any improvements hereafter constructed on the Premises shall be constructed in compliance with the Plans and Specifications, all applicable Laws, appropriate set back requirements, restrictive covenants and the requirements of any governmental authority, and shall lie wholly within the boundaries of the Premises; (vi) to Mortgagor’s knowledge there are no actions, suits or proceedings pending or threatened against or affecting Mortgagor or the Property; and (vii) 

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Mortgagor has the good and unrestricted right, full power and lawful authority to subject the Property to this Mortgage.

4.                                        Lease Obligations .  Mortgagor shall perform and comply with all agreements, covenants, terms and conditions imposed upon or assumed by it as lessee under the Lease.  If Mortgagor shall fail to do so, Lender may, but shall not be obligated to, take any action it deems necessary or desirable to prevent or to cure any default under the Lease.  Lender may rely upon any written notice of default received by it from the Lessor and may take any action to cure such default even though the existence of such default or the nature thereof is questioned or denied by Mortgagor.  Mortgagor hereby expressly grants to Lender, and agrees that Lender shall have, the absolute and immediate right, to enter in and on the Property to such extent and as often as Lender, in its sole discretion, deems reasonably necessary or desirable in order to prevent or cure any such defaults by Mortgagor.  Lender may pay such sums of money as it reasonably deems necessary in its sole discretion for any such purpose and Mortgagor agrees to pay to Lender, immediately upon demand, all such sums paid by Lender together with interest thereon from the date of such payment at the annual default rate under the Notes.  All sums paid and extended by Lender and the interest thereon shall be added to the Obligations secured by the lien hereof.  No such payment or performance made or taken by Lender shall relieve Mortgagor from any default hereunder.

Mortgagor shall not surrender the Leasehold, fail to renew the Lease, terminate or cancel the Lease, or modify or amend the Lease, either orally or in writing, without the prior written consent of Lender.

5.                                        Charges and Liens .  Mortgagor shall pay all taxes, assessments, and other charges, fines, and impositions attributable to the Property, together with any interest or penalties imposed for late payments thereof, that are due or may become due and be a lien against the Property (“Impositions”).  Mortgagor shall submit to Lender evidence of the timely payment of such Impositions.

6.                                        Preservation and Maintenance of Property .  Mortgagor (a) shall put, keep and maintain the Property and the sidewalks, curbs and alleys adjoining or abutting the same in good and lawful order, condition and repair, excepting ordinary wear and tear, (b) shall make or cause to be made, as and when the same shall become necessary, all structural and non-structural repairs, whether exterior or interior, ordinary or extraordinary, foreseen or unforeseen, (c) shall not commit or suffer any waste or permit impairment or deterioration of the Property, (d) shall not cause, conduct or permit any nuisance on or to the Property (e) shall pay when due all claims for labor performed and materials furnished that, if not paid, may result in the filing of a mechanic’s or other lien against the Property, and (f) shall not demolish, remove, or materially alter any part of the Property without the prior written consent of Lender.

7.                                        Restoration .  If any of the improvements or equipment comprising the Property shall be damaged or destroyed, in whole or in part, by fire or other casualty (whether or not covered by insurance), or by any taking in condemnation proceedings or the exercise of any right of eminent domain, Mortgagor shall use its reasonable best efforts to restore, replace or rebuild the same in accordance with the Plans and Specifications, with such alterations or changes as may be approved in writing by Lender, which approval shall not be unreasonably withheld. 

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Mortgagor shall give prompt notice to Lender of any damage to the Property by fire or other casualty, irrespective of the amount of such damage.

8.                                        Inspection .  Lender, and its agents, contractors and representatives, may, with twenty-four (24) hours prior written notice, enter upon and inspect the Property for any purposes until this Mortgage is released, provided that such inspection does not interfere with the business operations of Mortgagor, and further provided, that no notice shall be required if a Default shall have occurred.  Without limiting the generality of the foregoing, Lender, and its agents, contractors and representatives, may from time to time enter upon the Property and conduct upon the Property inspections and tests to determine the extent to which any hazardous substances, wastes or other environmentally unsound material have been placed or discharged upon or otherwise affect the Property.

9.                                        Compliance with Laws; Use of Property .  Mortgagor shall promptly comply with all present and future laws, statutes, ordinances, rules, regulations and other requirements (including, without limitation, applicable zoning and building requirements) of all governmental and quasi-governmental authorities whatsoever having jurisdiction in respect of the Property and the sidewalks, curbs and alleys adjoining or abutting the Leased Premises, and the condition, repair, maintenance, use and occupation thereof.  Mortgagor shall promptly make all changes, alterations and improvements necessary to comply with all such present and future laws, statutes, ordinances, rules, regulations and other requirements.

Mortgagor shall promptly perform and observe all of the terms, covenants and conditions of all instruments of record affecting the Property, non-compliance with which may affect the security of this Leasehold Mortgage, or which shall impose any duty or obligation upon Mortgagor or any tenant or other occupant of the Leased Premises, and Mortgagor shall do or cause to be done all things necessary to preserve intact and unimpaired any and all easements, appurtenances and other interests and rights in favor of or constituting any portion of the Property.

Mortgagor shall use the Leased Premises solely for the operation of an industrial plant for the production of biodiesel fuel and any uses related thereto, and Mortgagor shall not use or permit the use of the Property in any manner which would tend to impair the value of the Property or materially increase the risk of fire or other casualty.

10.                                  Insurance .  Mortgagor shall insure the Property in accordance with and upon the terms and conditions provided for in the Loan Agreement.  In all events Mortgagor shall maintain the insurance coverages required by the Lease.

If Mortgagor fails to maintain any insurance required hereunder or under the other Loan Documents or fails to provide evidence of such insurance as required hereunder or under the other Loan Documents, Lender may, but shall not be obligated to, purchase such required insurance at Mortgagor’s expense to protect its interests in the Property.  This insurance may, but need not, protect the Mortgagor’s interests in the Property.  The coverage that Lender purchases shall not be required to pay any claim that the Mortgagor makes or any claim that is made against the Mortgagor in connection with the Property.  The Mortgagor may later cancel any insurance purchased by Lender, but only after providing evidence that the Mortgagor has

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obtained the insurance required hereunder and under any other Loan Document.  If Lender purchases insurance for the Property, Mortgagor will be responsible for the costs of the insurance, including the insurance premium, interest thereon from the date of each such payment or expenditure at the then applicable rate under the Notes and any other charges Lender may impose in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance.  All sums so paid or expended by Lender, the interest thereon and the other charges in connection therewith shall be added to the Obligations and shall be secured by the lien of this Leasehold Mortgage.  The costs of the insurance obtained by the Lender may be more than the cost of insurance Mortgagor may be able to obtain on its own.

11.                                  Deposits for Impositions and Insurance .  Upon notice from Lender (which notice shall not be given unless an Event of Default has occurred), Mortgagor shall deposit with Lender on the first day of each month an amount equal to one-twelfth (1/12th) of (i) the aggregate annual payments for the Impositions, and (ii) the annual insurance premiums on the policies of insurance required to be obtained and kept in force by Mortgagor under this Leasehold Mortgage.  In addition, upon notice from Lender (which notice shall not be given unless an Event of Default has occurred), Mortgagor shall deposit with Lender such sum of money which, together with such monthly installments, shall be sufficient to pay all the Impositions and insurance premiums at least thirty (30) days prior to the due date thereof.  If the amounts of any Impositions are not ascertainable at the time any deposit is required to be made, the deposit shall be made on the basis of the amounts of the Impositions for the prior tax year and, upon the amounts of the Impositions being fixed for the then current year, Mortgagor shall, upon notice from Lender, deposit any deficiency with Lender.  If the amount of the insurance premiums is not ascertainable at the time any deposit is required to be made, the deposit shall be made on the basis of the amount of the insurance premiums for the prior year of the policy or policies, and, upon the amount of the insurance premiums being fixed for the then current year of the policy or policies, Mortgagor shall, upon notice from Lender, deposit any deficiency with Lender.  If on a date thirty (30) days prior to the due date for the payment of any of the Impositions or the insurance premiums there shall be insufficient funds on deposit with Lender to pay the same, Mortgagor shall, upon notice from Lender, forthwith make a deposit with Lender in the amount of such deficiency.  The funds so deposited with Lender shall be held by Lender without interest, and may be commingled with other funds of Lender, and provided that an Event of Default has not occurred, such funds shall be applied in payment of the Impositions and insurance premiums when due to the extent that Mortgagor shall have deposited funds with Lender for such purpose.  Upon the occurrence of an Event of Default, the funds deposited with Lender may, at the option of Lender, be retained and applied toward the payment of any or all of the Obligations, but no such application shall be deemed to have been made by operation of law or otherwise until actually made by Lender.  Mortgagor shall furnish Lender with a bill for each of the Impositions and insurance premiums and such other documents necessary for their payment at least thirty (30) days prior to the date they first become due.  Upon an assignment of this Leasehold Mortgage prior to any default hereunder by Mortgagor, Lender shall have the right and obligation to pay over the balance of such deposits in its possession to the assignee, and thereupon Lender shall be completely released from all liability with respect to such deposits and Mortgagor shall look solely to the assignee in reference thereto.  The provisions of the preceding sentence shall apply to each and every assignment or transfer of such deposits to a new assignee.

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12.                                  Condemnation .  If any of the Property is taken by condemnation, eminent domain or other taking, any award or other compensation due or received by Mortgagor in respect thereof shall be paid over to Lender.   All such awards or other compensation which are received by Lender may, at Lender’s election, except as otherwise provided in the Loan Agreement, (i) be applied to reduce the outstanding balance of the Obligations, whether then due or not, or (ii) turned over, in whole or in part, by Lender to Mortgagor on such terms and conditions as Lender may elect for the purposes of rebuilding or otherwise improving the Property.

The application of any award or other compensation toward payment or performance of any of the Obligations shall not be deemed a waiver by Lender of its right to receive payment or performance of the balance of the Obligations in accordance with the provisions of the Loan Documents.  Lender shall have the right, but shall be under no obligation, to question the amount of the award or other compensation, and Lender may accept same without prejudice to the rights that Lender may have to question such amount.  In any such condemnation or eminent domain action or proceeding Lender may be represented by attorneys selected by Lender if the counsel selected by Mortgagor is not reasonably satisfactory to Lender, and all sums paid by Lender in connection with such action or proceeding, including, without limitation, attorneys’ fees, shall, on demand, be immediately due from Mortgagor to Lender and the same shall be added to the Obligations and shall be secured by this Mortgage.

13.                                  Assignment of Rents and Leases .  Mortgagor hereby presently assigns to Lender all of Mortgagor’s right, title and interest in and to any Leases, as defined hereinafter, with respect to the Property, and all rents, issues and profits of the Property.  “Lease” shall mean every lease or sublease or occupancy agreement for the use or hire of all or any portion of the Property which shall be in effect on the date hereof, or which shall hereafter be entered into, and by which Mortgagor is a lessor or the like, and any renewals, extensions or other modifications thereof.  Mortgagor grants to Lender, with or without Lender or any other Person (including, without limitation, a receiver) taking possession of the Property, the right to give notice to the tenants of this assignment, to collect rents, issues and profits from the tenants and to enter onto the Property for purposes of collecting the same and to let the Property and to apply such rents, issues and profits, after payment of all charges and expenses relating to the Property, to the Obligations.  This assignment shall be an absolute assignment, subject to the license herein granted to Mortgagor and Mortgagor’s obligations hereunder, and shall continue in effect until the Obligations are fully paid and performed.  Lender hereby grants a revocable license to Mortgagor to collect and use such rents, issues and profits; provided , however , that the foregoing license shall be automatically revoked, without any action on Lender’s part, upon the occurrence of an Event of Default.  Mortgagor hereby agrees to indemnify Lender for, and hold Lender harmless from, any and all liability and expenses arising from any such Lease or other agreement or any assignments thereof, and no assignment of any such Lease or other agreement shall place the responsibility for the control, care, management or repair of the Property upon Lender, nor make Lender liable for any negligence or other tortious conduct, whether by Lender or any other Person, with respect to the management, operation, upkeep, repair or control of the Property resulting in injury, death, property or other damage or loss of any nature whatsoever.  Mortgagor shall not cancel, amend or otherwise modify the terms and conditions of any Lease without obtaining Lender’s prior consent; nor shall Mortgagor accept payments of rent or the like more than one month in advance without obtaining Lender’s prior consent.  Lender may exercise Lender’s rights from time to time under this section without first commencing foreclosure

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proceedings against the Property if Lender so elects.  Any such election by Lender to exercise Lender’s rights from time to time under this section shall not prohibit Lender from simultaneously or thereafter foreclosing upon the Property or exercising any other rights available to Lender hereunder or at law.

14.                                  Lender’s Right to Perform Mortgagor’s Covenants .  If Mortgagor shall fail promptly and fully to pay, perform or observe any of the Obligations, then Lender may, at Lender’s option, but without any obligation to do so, and without waiving or releasing Mortgagor from any of the Obligations, pay any Obligation or perform any Obligation or take such other action as Lender deems necessary or desirable in order to cause such Obligation to be paid, performed or observed, as the case may be.  Mortgagor hereby grants to Lender, and agrees that Lender shall have, the absolute and immediate right to enter in and upon the Property to such extent and as often as Lender, in Lender’s discretion, deems necessary or desirable for such purpose.  Lender may pay and expend such sums of money as Lender, in its discretion, deems necessary for any such purpose, and Mortgagor hereby agrees to pay to Lender, on demand, all such sums so paid or expended by Lender, together with interest thereon from the date of each such payment or expenditure at the Default Rate (as hereinafter defined).  Any interest paid under this section in excess of the maximum interest rate permitted by law shall be deemed payment in reduction of the principal amount of the Obligations and the excess, if any, shall be refunded to Mortgagor without interest.  All sums so paid or expended by Lender, and the interest thereon, shall be added to the Obligations and shall be secured by the lien of this Mortgage.

15.                                  Security Agreement .  Mortgagor hereby grants to Lender, as further security for the Obligations, a security interest in all personal property of Mortgagor now or hereafter located on or about the Leased Premises or the Easement Premises or the improvements thereon, or which otherwise relate to the Property or Mortgagor’s use of the Property in any respect, including, without limitation, all of Mortgagor’s presently owned or hereafter acquired (i) goods, chattels, furniture, equipment, machinery, parts and tools, together with all additions, attachments, accessories, accessions and repairs thereto, (ii) building materials and supplies, (iii) inventory, (iv) accounts, chattel paper, instruments and general intangibles, (v) the Property which constitutes fixtures or personal property, including, without limitation, any buildings and/or improvements that are deemed to be personal property, whether due to be severed from the Leased Premises or the Easement Premises or otherwise, and (vi) all proceeds, products, replacements, additions and substitutions of the foregoing property described in the immediately preceding subclauses (i) through (v) (all of the foregoing property described in the immediately preceding subclauses (i) through (vi) being referred to herein as the “Personalty”).  The parties intend that this instrument shall constitute both a security agreement and a fixture financing statement within the meaning of the Uniform Commercial Code as enacted in the State of Illinois with respect to all of Mortgagor’s right, title and interest, whether now owned or existing or hereafter acquired or arising, in all Property and Personalty which constitutes fixtures and personal property, and that a security interest shall attach thereto, and to all products and proceeds thereof, for the benefit of Lender to secure the Obligations.  This Mortgage constitutes a “construction mortgage” as defined in Section 9-334 of the Uniform Commercial Code of the State of Illinois (810 ILCS 5/9-334) to the extent that is secures obligations incurred for the construction of improvements on the Leased Premises.

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16.                                  Transfer of the Property . Mortgagor shall not sell, assign, mortgage, hypothecate, transfer, or sublease the Property, without the prior written consent of Lender.

17.                                  Liens . This Mortgage is and shall be maintained as a valid first mortgage lien on the Property subject to no other liens, claims or encumbrances, except for liens created pursuant to this Mortgage and except as set forth on Exhibit B hereto. Mortgagor shall not create or permit to exist any security interest, lien, claim or other encumbrance against the Property, except for except for liens created pursuant to this Mortgage, liens in respect of local real property taxes which are not yet due and payable, and except as set forth on Exhibit B hereto.

18.                                  Default . The Obligations shall become immediately due and payable in full at the option of Lender upon the occurrence of any one or more of the following (subject to any and all applicable cure periods) (an “Event of Default”):

a)                                       Mortgagor shall fail to pay any installment of principal, interest or fees, if any, owing under the Notes or under any of the other Obligations in accordance with their respective terms and such failure continues for a period beyond any applicable grace period afforded in the Loan Documents;

b)                                      Mortgagor shall fail to pay any Imposition on or before the date such Imposition may be paid without any penalty, interest or other premium;

c)                                       Mortgagor shall fail to pay timely any premiums for insurance required hereunder or Mortgagor shall fail to reimburse Lender on demand for premiums paid by it on the insurance required hereunder;

d)                                      Mortgagor shall directly or indirectly create, suffer or permit to be created or to stand against the Property or against the rents, issues and profits therefrom, any lien, security interest, charge, mortgage, Mortgage or other encumbrance not expressly permitted herein, or in the Loan Agreement or other Loan Documents, without in each instance obtaining Lender’s prior written consent thereto;

e)                                       Mortgagor’s default in the observance or performance of any other monetary or non-monetary covenant of Mortgagor hereunder (other than a covenant the performance or observance of which is  specifically referred to elsewhere in this section) beyond any applicable grace period, including but not limited to the obligations under the Lease set forth in paragraph 4 of this Leasehold Mortgage, or any of the Loan Documents;

f)                                         Any representation or warranty of Mortgagor to Lender set forth herein or elsewhere, including, without limitation, the other Loan Documents, having been incorrect, incomplete or misleading in any material respect at the time when made, or any such representation or warranty subsequently becomes incorrect, incomplete or misleading in any material respect and Mortgagor fails to give Lender prompt notice thereof;

g)                                      Except as otherwise provided for in this Leasehold Mortgage, Mortgagor shall sell, convey, alienate, assign or otherwise transfer the Property, or any part thereof or interest therein, in any manner, whether voluntary, involuntary, by operation of law or otherwise,

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or Mortgagor shall enter into any agreement, written or oral, to so sell, convey, alienate, assign or otherwise transfer the Property, or any part thereof or interest therein;

h)                                      There shall occur a default or an event of default under any other mortgage or like real property security instrument which encumbers the Property, or under any document evidencing any obligation secured thereby, or any foreclosure or similar proceeding shall commence with respect to the Property;

i)                                          Mortgagor shall deliver to Lender any notice terminating or purporting to terminate, or Mortgagor shall take any other action to terminate or purporting to terminate, the operation of this Leasehold Mortgage as security for any future advances or future obligations;

j)                                          The condemnation or taking of any part of the Leased Premises which, in Lender’s determination, materially and adversely affects the use or intended use of the Property as a whole or otherwise materially and adversely affects Mortgagor’s business prospects;

k)                                       Any loss, theft, damage or destruction of any of the Property not fully covered (subject to such deductibles as Lender shall have permitted) by insurance;

l)                                          If there shall occur any default or event of default (however defined or described) under the Loan Agreement, the Notes or any of the other Loan Documents;

m)                                    Any Guarantor shall revoke or attempt to revoke the Guaranty Agreement signed by such Guarantor, or shall repudiate such Guarantor’s liability thereunder or shall be in default under the terms thereof;

n)                                      If any judgment or order, singly or in the aggregate, for the payment of money in excess of $100,000 shall be rendered against Borrower or any of its assets and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order, or (ii) there shall be any period of fifteen (15) consecutive days during which a stay of enforcement of such judgment or order by reason of a pending appeal or otherwise, shall not be in effect;

o)                                      If this Leasehold Mortgage after delivery to Lender shall for any reason, except to the extent permitted by the terms thereof, cease to create a valid and perfected first priority lien and security interest in any of the collateral purported to be covered thereby; or

p)                                      Any challenge, whether by litigation or otherwise, shall be asserted against the validity of the Notes, this Leasehold Mortgage or any of the Loan Documents, including, without limitation, a claim that such transaction violates any federal, state or municipal constitution, charter, law, ordinance, regulation, resolution or rule, or any court order.

19.                                  Appointment of Receiver . After the occurrence of an Event of Default, or if any action shall be commenced to foreclose this Mortgage, without obligation to do so, Lender, to the extent permitted by applicable law, may apply for the appointment of a receiver of the rents, issues and profits of the Property without notice or demand, and shall be entitled to the appointment of such receiver as a matter of right, without consideration of the value of the

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Property as security for the amounts due to Lender or the solvency of any Person liable f