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<br />. <br /> <br />. <br /> <br />. <br /> <br />MORTGAGEE AGREEMENT <br /> <br />This Agreement is made as of the day of , 1999 by and among the <br />City of Elk River, a public body corporate under the laws of the State of Minnesota (the "City"), the <br />First National Bank of Elk River, a national banking association (the "Mortgagee"), and the Boys and <br />Girls Club of Elk River, Inc., a Minnesota nonprofit corporation (the "Mortgagor"). <br /> <br />RECIT ALS <br /> <br />The City and the Mortgagor have entered into a Ground Lease dated March 16, 1999 for real <br />property described in Exhibit A attached hereto and incorporated herein by reference pursuant to <br />which the City, as lessor thereunder, agreed to consider entering into a form of mortgagee agreement <br />with the lessee's lender for purposes of financing construction of the improvement contemplated <br />pursuant to said Ground Lease. <br /> <br />The Mortgagor and the Mortgagee have entered into that certain Combination Mortgage, <br />Security Agreement and Fixture Financing Statement dated to secure a debt in the <br />maximum principal amount of Four Hundred Forty Thousand Dollars ($440,000) evidenced by a <br />Note of even date with said Mortgage, and related security documents (the "Mortgage") for the <br />purpose of financing the construction of the improvements contemplated pursuant to the Ground <br />Lease. <br /> <br />The Mortgagee has requested that the City consent to the Mortgage and enter into this <br />Mortgagee Agreement. <br /> <br />The terms used in this Agreement shall have the meanings defined in the Ground Lease unless <br />otherwise defined herein. <br /> <br />NOW, THEREFORE, in consideration of the foregoing and of the mutual promises and <br />covenants set forth herein, the parties hereto agree as follows: <br /> <br />1. The City hereby consents to the Mortgage. <br /> <br />2. In the event that Mortgagee institutes foreclosure proceedings pursuant to the <br />Mortgage, the City will, upon the expiration of the applicable Mortgagor's right of redemption <br />pursuant to the Mortgage, either (i) cure any default by Mortgagor pursuant to the Mortgage and <br />assume Mortgagor's obligations thereunder~ or (ii) pay the unpaid principal balance and interest <br />payable thereon pursuant to the Mortgage in full. <br /> <br />3. The choice of whether to cure a default under the Mortgage or pay the Mortgage in <br />full as described in Section 1 above shall be at the City's sole discretion, and the Mortgagee and <br />Mortgagor hereby agree to accept any decision by the City to cure and assume the Mortgage in lieu <br />of payment in full. <br /> <br />I3URN1S 592193.2 <br /> <br />-1- <br />