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notice. If such a transfer occurs, Mortgagee is hereby authorized and empowered to deal with any such buyer, transferee, or lessee with reference to the Premises or the indebtedness secured hereby, or with reference to any of the terms and conditions hereof, as fully and to the same extent as it might deal with the original parties hereto, without in any way releasing or discharging any of the liabilities or undertakings hereunder, and without giving notice to any person, firm, or corporation. This restriction on transfer of title does not apply to the ordinary leasing of individual units. Furthermore, this Section 1.11 shall not prevent or restrict transfers of partnership interests in the Mortgagor (or transfers of beneficial interests in the limited partner of Mortgagor), or the appointment of a substitute or additional general partner of Mortgagor, in accordance with Section 8.3 of this Mortgage. Section 1.12 NO JUNIOR FINANCING. Mortgagor will not, without the prior written consent of Mortgagee, grant or create any mortgage lien or consensual security interest on the Premises other than the lien and security interest of this Mortgage, and in the Permitted Encumbrances set forth on Exhibit B; however, such consent will not be unreasonably withheld or delayed. ARTICLE 2 ASSIGNMENT OF LEASES AND RENTS Section 2.1 PERFORMANCE OF LEASES. Mortgagor, at Mortgagor's own cost and expense, will perform, comply with, and discharge all of the obligations of Mortgagor under any leases or agreements for the use of the Premises in all material respects and use Mortgagor's best efforts to enforce or secure the performance of each obligation and undertaking of the respective tenants under any such leases and will appear in and defend, at Mortgagor's own cost and expense, any action or proceeding arising out of or in any manner connected with Mortgagor's interest in any leases of the Premises. Mortgagor will observe and comply with all provisions of law applicable to the operation and ownership of the Premises, including, without limitation, all applicable provisions of Minn. Stat. §504B. l78 with respect to any security deposits received by it and all covenants required of it by provisions of Minn. Stat. §504.B.161. Mortgagor shall permit no assignment of any of said leases, unless the right to assign is expressly reserved under the lease. Mortgagor shall not collect or accept any installment of rent for more than one month in advance of its due date. Section 2.2 PROTECTION OF SECURITY OF THIS MORTGAGE. If Mortgagor fails to perform or observe any material covenant or agreement contained in this Mortgage, then Mortgagee, but without obligation to do so and without releasing Mortgagor from any obligation hereunder, subject to the rights of senior lienholders, may make or do the same in such manner and to such extent as Mortgagee may deem appropriate to protect the security hereof, including, specifically, without limiting its general powers, the right to appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Mortgagee, and also the right to perform and discharge each and every obligation, covenant, and agreement of Mortgagor contained in the leases and in exercising any such powers to pay necessary costs and expenses, employ counsel, and pay reasonable attorneys' fees. Mortgagor will pay immediately upon demand all sums expended by Mortgagee under the authority of this Mortgage, together with interest thereon as provided in the Note, and the same shall be added to said indebtedness and shall be secured by this Mortgage. Section 2.3 PRESENT ASSIGNMENT. Subject to the rights of senior lien holders, this