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2021-08-26 Recorded Security Agreement3 XIA Conservation Fee $5.00 Mortgage Registration Tax $ . 0 Paid Date: Y- 2V202►i Trinity Nathe, Land Records Administrator By: t'LI'24pyd4 . Deputy MORTGAGE AND ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT Registration tax: $46,000.00 Doc. No. A1481783 OFFICE OF THE COUNTY RECORDER WRIGHT COUNTY, MINNESOTA Certified Filed and/or Recorded on August 26, 2021 2:45 PM Fee: $46.00 Tanya West, County Recorder The Property Tax Parcel Identification Numbers for the Real Property is: 101-500-352100 101-500-352401 THIS INDENTURE ("Mortgage") is made as of this 26th day of August, 2021 by and between ADVANCED VOLUMETRIC ALLIANCE, LLC, a Minnesota limited liability company, whose mailing address is 7535 River Road NE, Otsego, MN 55330 (hereinafter referred to as "Mortgagor"), and STEARNS BANK, N.A., whose mailing address is 4191 Second Street South, St. Cloud, MN 56301, as secured party ("Mortgagee'/. This Mortgage shall secure a loan to fund the cost of construction on Mortgaged Premises and for working capital. The maximum amount of the loan which may be secured at any one time is the cumulative principal amount of Twenty Million and No/100ths Dollars ($20,000,000.00), which amount constitutes the "Initial Amount of Debt" within the meaning of Minnesota Statutes § 287.03, and this Mortgage is further intended to secure the entire "Secured Indebtedness", herein defined, which is due and payable in full on August 26, 2047. The advance of the Secured Indebtedness Is for business purposes To secure to Mortgagee, its successors and assigns the following ("Secured Indebtedness'): 1. payment of a loan in the maximum principal amount of $20,000,000.00 ("Loan"), evidenced by a Promissory Note, of even date herewith, executed Mortgagor, as borrower, in favor of Mortgagee, as lender, plus interest at the rate stated in the Promissory Note, together with all extensions, amendments, modifications, renewals and replacements thereof ("Note"); A 2, payment to Mortgagee, Its successors and assigns, at the times demanded and with interest C.D. thereon at the same rate specified in the Note of all sums advanced to protect the lien of this Mortgage; I-- 2t 3. payment of taxes on the "Mortgaged Premises" (as hereinafter defined); ��� a �s �,ap� •,�.,;V .k•� ;K 6� ��w 220D W. Or l j ,RT V ROAD C GUITE 2206 C7i,:'. RO EVI LE., MN 55113 File No. -- 4. payment of insurance premiums covering all improvements on the Mortgaged Premises; S. payment of expenses and reasonable attorneys' fees herein provided for and all sums advanced for any other purpose authorized herein or authorized by law; and 6. for and to secure the performance of all the covenants and agreements contained in the Note, a Construction Loan Agreement of even date herewith, this Mortgage, and any extensions, amendments, modifications and renewals thereof, plus any and all other documents and agreements evidencing the above referenced lending relationship between Mortgagor and Mortgagee (collectively the "Loan Documents"). For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Mortgagor does hereby MORTGAGE, GRANT, BARGAIN, SELL AND CONVEY unto Mortgagee, its successors and assigns, forever, with the power of sale, and GRANTS A SECURITY INTEREST to Mortgagee, its successors and assigns, in any and all of the following property owned by Mortgagor (collectively referred to as the "Mortgaged Premises"): A. REAL PROPERTY All the tracts or parcels of real property lying and being in the County of Wright, State of Minnesota, located at the southeast corner of 70th Street and Kadler Avenue NE in Albertville, Minnesota, legally described as follows: Lot 1, Block 1, Ava Addition, Wright County, Minnesota. together with all the estates and rights in and to said real property and in and to real property lying in any and all streets, lanes, alleys, passages and roads adjoining said real property, including and together with all buildings, structures, improvements, fixtures, annexations, access rights, rights to common elements, easements, rights of way or use, servitudes, licenses, tenements, hereditaments, appurtenances, water and water rights, now or hereafter belonging or pertaining to said real property; and B. LEASES, RENTS, ISSUES AND PROFITS Any and all leases, subleases, licenses, guaranties and any other written or verbal agreements for the use and occupancy of the Mortgaged Premises, including renewals, replacements, modifications and/or extensions thereof or options thereunder; and All rents, issues and profits (including, but not limited to security deposits, minimum rents, percentage rents, additional rents, common area maintenance charges, parking charges, real estate taxes, or other applicable taxes, insurance premium contributions, liquidated damages following default, cancellation premiums, "loss of rents" insurance, revenues, royalties, proceeds, bonuses, accounts, contract rights, general intangibles, and all other rights and claims which Mortgagor may have regarding the Mortgaged Premises), now due or which may hereafter become due, whether as lessor or lessee, for the use or occupancy of the Mortgaged Premises or any part thereof; and The power irrevocably to take possession of the Mortgaged Premises, manage, control, operate and lease the Mortgaged Premises and collect leases, rents, issues and profits for such period of tirne as Mortgagee deems proper, upon Mortgagor's default hereunder; and C. PERSONAL PROPERTY All buildings, structures, equipment, fixtures, improvements, building supplies and materials and personal property owned by Mortgagor and now or hereafter attached to, located in, placed in or necessary to the use of the improvements on the Mortgaged Premises including, but without being limited to, all equipment, machinery, Page 2 of Mortgage fittings, fixtures, apparatus, equipment or articles used to supply heating, gas, electricity, air conditioning, water, light, waste disposal, power, refrigeration, ventilation, and fire and sprinkler protection, as well as all elevators, escalators, engines and machinery, boilers, ranges, furnaces, communication systems, and all furnishings decorations, appliances, supplies, draperies, maintenance and repair equipment, floor coverings, screens, storm windows, blinds, awnings, shades, locks, fences, trees, shrubbery and plants, as well as renewals, replacements, proceeds, additions, extensions, improvements, betterments, accessories, increases, parts, fittings and substitutes thereof, together with all interest of Mortgagor in any such items hereafter acquired, and all products and proceeds thereof, including without limitation all accounts, instruments, chattel paper, other rights to payment, money, insurance proceeds and general intangibles related to the foregoing property, and all refunds of insurance premiums due or to become due under all insurance policies covering the foregoing property, all of which personal property mentioned herein shall be deemed fixtures and accessory to the freehold and a part of the realty and not severable in whole or in part without material Injury to the Mortgaged Premises. D. JUDGMENTS AND AWARDS Any and all awards or compensation made by any governmental or other lawful authorities for the taking or damaging by eminent domain of the whole or any part of the Mortgaged Premises or rights appurtenant thereto, including any awards for a temporary taking, change of grade of streets or taking of access; and E. CONTRACT RIGHTS AND RIGHTS TO PAYMENT All rights, now and in the future, to the payment of money relating to or arising out of the Mortgaged Premises or the use or occupancy of the Mortgaged Premises, including, but not limited to: (1) payment for goods and other property sold or leased or for services rendered, including room rentals, whether or not earned by performance; (ii) any contract for the sale of the Mortgaged Premises or any part thereof (including any earnest money deposit); and (iii) rights to payment arising out of all present and future debt instruments, chattel paper and loans and obligations receivable and all accounts, instruments, chattel paper, investment property, letter of credit rights, letters of credit, other rights to payment, documents, deposit accounts, money, patents, patent applications, trademarks, trademark applications, copyrights, copyright applications, trade names, other names, software, payment intangibles, and other general intangibles of the Mortgagor, together with all goodwill related to the foregoing property and all rights, liens, security interests and other interests which the Mortgagor may at any time have by law or agreement against any account debtor, issuer or obligor obligated to make any such payment or against any of the property of such account debtor, issuer, or obligor, and all supporting obligations relating to the foregoing, whether now existing or hereafter arising, whether now owned or hereafter acquired. The above includes any rights and interests (including all liens and security interests) by law or agreement against any account debtor or obligor of Mortgagor; and F. GENERAL INTANGIBLES All general intangibles of Mortgagor including, but not limited to, tax refunds, applications for patents, patents, copyrights, trademarks, trade secrets, good will, trade names, customer lists, permits and franchises, service contracts, construction contracts, management agreements, purchase agreements, and all other contract rights of Mortgagor; and G. GOVERNMENT PAYMENTS AND PROGRAMS All payments, accounts, general intangibles, or other benefits (including, but not limited to, payments in kind, deficiency payments, letters of entitlement, warehouse receipts, storage payments, emergency assistance payments, diversion payments, and conversation reserve payments) in which Mortgagor now has and, in the future, may have any rights or interest and which arise under or as a result of any preexisting, current or future federal or state governmental program; and Page 3 of Mortgage H. AFTER -ACQUIRED PROPERTY All right, title, and interest of Mortgagor in and to extensions, improvements, betterments, renewals, substitutes, replacements of, and all additions and appurtenants to the items or types of property described in Sections A through G above, which are hereafter acquired by or released to Mortgagor, or are hereafter constructed, assembled or placed on the Mortgaged Premises, and all conversions of the security constituted thereby, immediately upon such acquisition, release, construction, assembling, placement, or conversion, as the case may be, and which in each such case, without any further mortgage, conveyance, assignment, or other act by Mortgagor, will become subject to the lien of this Mortgage as fully and completely, and with the same effect, as though now owned by Mortgagor and specifically described in the granting clause hereof, but at any and all times Mortgagor will execute and deliver to Mortgagee any and all such further assurances, mortgages, conveyances, or assignments thereof as Mortgagee may reasonably require for the purpose of expressly and specifically subjecting the same to the lien of this Mortgage, together with all products and proceeds of the property described in Sections A through G above. I. EXCEPTIONS FOR SUBSEQUENT FINANCING, CUSTOMER PODS Sections C and H of this Mortgage shall not apply to project -specific inventory that is not obtained by Mortgagor using the proceeds of the Note, or to after -acquired equipment or trade fixtures that are obtained by Mortgagor through a purchase money loan obtained by Borrower in compliance with the Loan Documents. The Morgagee acknowledges that volumetric customer pods ("Customer Pods' constructed by Mortgagor and financed by a third -party lender (a "Customer Lender'l will be produced on the Mortgaged Premises and stored thereon until shipped to the third -party construction site. Mortgagee agrees that upon Mortgagor's receipt of payment for the Customer Pods, the Customer Lender will obtain a first priority lien on the Customer Pods. TO HAVE AND TO HOLD the Mortgaged Premises unto Mortgagee forever. ARTICLE I MORTGAGOR'S REPRESENTATIONS, WARRANTIES COVENANTS AND AGREEMENTS Mortgagor makes and includes in this Mortgage the Statutory Covenants and other provisions set forth In Minnesota Statutes Section 507.15 or in any future Minnesota Statute providing for a statutory form of real estate mortgage, and the Mortgagor makes the following additional representations, warranties, covenants and agreements with the Mortgagee: 1.1. Good Title; Covenant to Defend. Mortgagor represents, warrants and covenants to and with Mortgagee that: (a) Mortgagor is the lawful owner of and has good and marketable title to the Mortgaged Premises in fee simple, free and clear of all liens and encumbrances; (b) Mortgagor has the right and lawful authority to mortgage, grant, sell, transfer and convey the Mortgaged Premises to Mortgagee, as provided herein; (c) all personal property pledged to Mortgagee is and will be owned by Mortgagor free and clear of all liens and claims; (d) this Mortgage is and will remain a valid and enforceable lien on the Mortgaged Premises; (e) Mortgagor will preserve its fee title and will warrant and defend such fee title to Mortgagee against all claims and demands of all persons and parties whomsoever; (f) all buildings, structures and other improvements now or hereafter located on the Mortgaged Premises are, or will be, located entirely within the boundaries of the Mortgaged Premises and are set back from said boundaries in accordance with all applicable zoning and "set- back" laws and ordinances; (g) the present or contemplated use of the Mortgaged Premises complies with all applicable zoning laws and ordinances; and (h) the execution of this Mortgage has been authorized by Mortgagor. 1.2. Performance of the Loan Documents. Mortgagor will: (a) duly and punctually pay each and every installment of principal and interest and all other sums to become due under and in accordance with the Page 4 of Mortgage Loan Documents at the times and places and in the manner specified by the Loan Documents; (b) pay all other Secured Indebtedness as and when the same will become due; and (c) duly and punctually perform and observe all of the covenants, agreements and provisions contained herein, in the other Loan Documents and in any other instrument given as security for the payment of the Secured Indebtedness. No payment or collection of any of the Secured Indebtedness will reduce the amount secured by this Mortgage. 1.3. care of Mort a ed Premises, • No waste. Mortgagor will, at all times, keep and maintain the Mortgaged Premises in good condition, repair and operating condition, and will not commit, or suffer to be committed, any waste or misuse of the Mortgaged Premises, and will promptly repair, restore or replace any buildings, improvements or structures now or hereafter placed or located on the Mortgaged Premises which may become damaged or destroyed. Except as provided in the Loan Documents, Mortgagor will not, without the prior written consent of Mortgagee, which will not be unreasonably withheld, (a) remove or permit the removal of any buildings, structures or other improvements or fixtures, or (b) otherwise make any material alterations in any improvements which will alter the basic structure, reduce the market value, or change the existing architectural character of the Mortgaged Premises, and Mortgagor will complete within a reasonable time any structures which are now or at any time in the process of erection. Mortgagor will not acquiesce in any rezoning classification, modification or public or private restriction which in any way limits or otherwise affects the Mortgaged Premises, or any part thereof. Mortgagor will not vacate or abandon the Mortgaged Premises. The parties acknowledge that the construction work referenced in the Loan Documents shall not be a violation of this paragraph. 1.4. Payment of Utilities and Operating Costs. Mortgagor will pay, or cause to be paid, when due, all charges made for electricity, gas, heat, water, sewer, and all other utilities and operating costs and expenses, received, furnished or used in connection with the Mortgaged Premises, and will, upon request by Mortgagee, furnish proper receipt showing payment therefore. I.S. Liens. Mortgagor will pay or cause to be paid, from time to time when the same will become due, or contest such liens as provided in the Loan Documents, all lawful claims and demands of mechanics, material suppliers, laborers, and others which, if unpaid, might result in, or permit the creation of a lien on the Mortgaged Premises, or any part thereof, or on the revenues, rents, issues, income and profits arising therefrom, and in general will do or cause to be done everything necessary so that the lien of this Mortgage will be fully preserved, at the cost of Mortgagor, without expense to Mortgagee. Mortgagor, will not do, or permit to be done, anything that may in any way impair the value of the Mortgaged Premises, or weaken, diminish, or impair the security of this Mortgage. Mortgagor will promptly perform and observe, or cause to be performed or observed, all of the terms, covenants, and conditions of all permitted encumbrances, if any, the noncompliance with which may affect the security of this Mortgage, or may impose the duty or obligation upon Mortgagor or any sublessee or occupant of the Mortgaged Premises or any part thereof, and Mortgagor will do or cause to be done all things necessary to preserve intact and unimpaired all easements, appurtenances, and other interests and rights in favor of or constituting any portion of the Mortgaged Premises. 1.6. Real Property Taxes and Assessment. Mortgagor will pay or cause to be paid all property taxes and assessments on or before the date on which said payments become due and owing and any penalties and interest thereon and provide proof of payment to Mortgagee upon request. 1.7. Compliance with Laws. Mortgagor will comply with all present and future laws, ordinances, regulations, covenants, conditions and restrictions affecting the Mortgaged Premises or the operation thereof, and will pay all fees or charges of any kind in connection therewith. Mortgagor will not, by act or omission, permit any property which is not subject to this Mortgage to rely on the Mortgaged Premises or any part thereof or any interest therein to fulfill any governmental requirement for the character or use of such property; and the Mortgaged Premises will not rely on any property which is not subject to this Mortgage to fulfill any governmental requirement for the character or use of the Mortgaged Premises. I.S. Duty to Defend. Mortgagor will promptly notify Mortgagee of and appear in and defend any suit, action or proceeding that affects the value of the Mortgaged Premises, the Secured Indebtedness, or any Page 5 of Mortgage right or interest of Mortgagee under this Mortgage. Mortgagee may, at its option, elect to appear in or defend any such action or proceeding, and Mortgagor agrees to indemnify and reimburse Mortgagee from any and all loss, damage, expense or cost arising out of, or incurred In connection with any such suit, action or proceeding, including, but not limited to, costs of evidence of title and attorneys' fees. 1.9. Insurance Coverage. Mortgagor will obtain and keep in full force and effect during the term of this Mortgage, at its sole cost and expense, the following policies of insurance: (a) "All risk" hazard insurance, including the cost of debris removal, together with a vandalism and malicious mischief endorsement, all in the amounts of not less than the maximum insurable value or full replacement cost, without deduction for depreciation, of any improvements on the Mortgaged Premises, whichever is greater, covering all buildings, structures, fixtures, personal property and other improvements now existing or hereafter erected or placed on the Mortgaged Premises, which insurance will at all times be in an amount at least equal to the unpaid Secured Indebtedness at any given time and during any period of construction "builder's risk -completed value basis" insurance in an amount equal to the full replacement cost of the existing and contemplated improvements on the date of completion with coverage available on the so-called multiple peril form of policy. (b) If the Mortgaged Premises are now or hereafter located in a flood plain as defined by the Federal Insurance Administration, the Mortgagor shall obtain flood insurance in the maximum obtainable amount. (c) Comprehensive general public liability insurance covering the legal liability of Mortgagor against claims for bodily injury, death or property damage occurring on, in or about the Mortgaged Premises, in such amounts as are usually carried by persons operating similar properties in the same general locality but in any event with limits of liability not less than $2,000,000.00 in the aggregate and $1,000,000.00 per occurrence. (d) Any insurance required under the Loan Documents. All such insurance will be written on forms and with companies satisfactory to Mortgagee, will name as the insured parties Mortgagor and Mortgagee as their interests may appear, will be in amounts sufficient to prevent Mortgagor from becoming a co-insurer of any loss thereunder, will name Mortgagee as a loss payee, will bear a satisfactory mortgagee clause in favor of Mortgagee, will provide that any action or failure to act by Mortgagor or owner of the insured property will not invalidate the interest of Mortgagee, and will contain an agreement of the insurer that the coverage will not be terminated or modified without providing to Mortgagee thirty (30) days' prior written notice of such termination or modification. All required policies of insurance or acceptable evidences of insurance thereof, together with evidence of the payment of current premiums therefor will be delivered to Mortgagee. Mortgagor will, within thirty (30) days prior to the expiration of any such policy, deliver other original policies or evidences of insurance of the insurer evidencing the renewal of such insurance together with evidence of the payment of current premiums therefor. In the event of a foreclosure of this Mortgage or any acquisition of the Mortgaged Premises by Mortgagee, all such policies and any proceeds payable therefrom, whether payable before or after a foreclosure sale, or during the period of redemption, if any, will become the absolute property of Mortgagee to be utilized at its discretion. In the event of foreclosure or the failure to obtain and keep any required insurance, Mortgagor empowers Mortgagee to effect insurance upon the Mortgaged Premises at Mortgagor's expense and for the benefit of Mortgagee in the amounts and types aforesaid for a period of time covering the time of redemption from a foreclosure sale, and if necessary therefor, to cancel any or all existing insurance policies. Mortgagor agrees to furnish Mortgagee with copies of all inspection reports and insurance recommendations received by Mortgagor from any insurer. In the event of a foreclosure of this Mortgage, the purchaser of the Mortgaged Premises will succeed to all of the rights of Mortgagor, including any right to honor any premiums in and to all policies of insurance assigned and delivered to Mortgagee hereunder, with respect to all property herein encumbered. Page 6 of Mortgage 1.10. Notice of Damage. Mortgagor will give Mortgagee prompt notice of any damage to or destruction of the Mortgaged Premises, if repair of the damage or destruction will cost more than $25,000 to repair, and authorizes Mortgagee to make proof of loss If not made promptly by Mortgagor. In case of loss covered by policies of insurance (either before or after any foreclosure sale), Mortgagee is hereby authorized at Its option and without the consent of Mortgagor to settle, adjust and compromise any claim arising out of such policies, and to collect and receive the proceeds payable therefrom; provided, that Mortgagor may adjust and collect for any losses arising out of a single occurrence aggregating not in excess of $100,000.00. Any expense Incurred by Mortgagee in the adjustment and collection of insurance proceeds (including the cost of any Independent appraisal of the loss or damage on behalf of Mortgagee) will be reimbursed to Mortgagee first out of any proceeds. The remaining proceeds or any part thereof will be applied to reduction of the Secured Indebtedness, whether due or not, without the application of any prepayment premium, or to the restoration or repair of the Mortgaged Premises, the choice of such application to be governed by Section 1.12. 1.11. Condemnation. Mortgagor will give Mortgagee prompt notice of any action, actual or threatened, in condemnation or eminent domain. Mortgagor hereby irrevocably assigns, transfers, and sets over to Mortgagee, to the extent of the remaining unpaid Secured Indebtedness, the entire proceeds of any award, payment or claim for damages for all or any part of the Mortgaged Premises taken or damaged less Mortgagor's attorney's fees, appraisal fees, and other court costs, whether temporary or permanent, under the power of eminent domain or condemnation, and authorizes Mortgagee to intervene in any such action in the name of Mortgagor and to collect and receive from the condemning authorities and give proper receipts and acquittances for such proceeds. Any expenses incurred by Mortgagee in intervening in such action or collecting such proceeds will be reimbursed to Mortgagee first out of the proceeds. The remaining proceeds or any part thereof will be applied upon or in reduction of the Secured Indebtedness then most remotely to be paid, whether due or not, without the application of any prepayment premium, or to the restoration or repair of the Mortgaged Premises, in Mortgagee's sole discretion. 1.12. Restoration of MorNacied Premises after Loss. If no Event of Default exists at the time of an Insured loss, then the decision to apply any insurance recovery to the reduction of the Secured Indebtedness or to restoration will be made by Mortgagor, but Mortgagor may only choose restoration if (a) according to a current appraisal, to be obtained by Mortgagor, at Mortgagor's sole cost, the remaining Secured Indebtedness does not exceed 80% of the value of the restored Mortgaged Premises or (b) Mortgagor pays an amount necessary to pay down the remaining Secured Indebtedness to an amount equal to 80% or less of the value of the restored Mortgaged Premises (no prepayment premium will be applied to any such payment). If, at the time of an insured loss, an Event of Default exists or Mortgagor fails to obtain the necessary appraisal within sixty (60) days of the loss or the requirements relating to the required loan to value ratios are not met, the decision to apply any insurance recovery to reduction of the Secured Indebtedness or to restoration will be made by Mortgagee, in Mortgagee's sole discretion. Should any insurance proceeds be applied to the restoration or repair of the Mortgaged Premises, the restoration or repair will be done under the supervision of an architect or contractor reasonably acceptable to Mortgagee, pursuant to plans and specifications approved by Mortgagee, and in accordance with all applicable building laws, regulations and ordinances. In such case, the proceeds will be held by Mortgagee for such purposes and will be disbursed by Mortgagee to defray the costs of such restoration or repair under such safeguards and controls as Mortgagee may reasonably require to assure completion in accordance with the approved plans and specifications, free of liens or claims. Any surplus which may remain after payment of all costs of restoration or repair may, at the option of Mortgagee, be applied on account of the Secured Indebtedness then most remotely to be paid, whether due or not, without application of any prepayment premium, or will be returned to Mortgagor as its interest may appear, the choice of application to be solely at the discretion of Mortgagee. 1.13. Hazardous Substances. As used herein, the term "Toxic or Hazardous Substances" will be interpreted broadly to include, but will not be limited to, any material or substance that is defined or classified under federal, state or local laws as a "hazardous substance", a "hazardous waste", a "toxic pollutant", a "hazardous air pollutant", a "hazardous material", a "toxic substance" which will also include asbestos, polychlorinated biphenyls, petroleum and petroleum based derivatives, natural gas and natural gas based Page 7 of Mortgage derivatives and urea -formaldehyde. "Toxic or Hazardous Substances" will also mean any element, substance, compound, material, matter or thing, which is regulated by federal, state or local law, rule, ordinance, directive or decision because of its ignitability, corrosiveness, toxicity, volatility, radioactivity or carcinogenic or ill health effect. 1.14. Environmental Representations and Warranties. Mortgagor covenants, represents and warrants to Mortgagee that: (a) To the best of Mortgagor's actual knowledge, any handling, transportation, storage, treatment or use of Toxic or Hazardous Substances that has occurred on the Mortgaged Premises to this date has been in compliance with all applicable federal, state, and local laws and regulations and ordinances. (b) Mortgagor covenants and agrees that it will not use or permit the use of the Mortgaged Premises either directly or through contractors, agents or tenants, or lodging guests, for the generation, transportation, treatment, storage, manufacture, emission of or disposal of toxic or Hazardous Substances except for (1) use of any Hazardous Substances in the business operated at the Mortgaged Premises in strict compliance with all governmental laws or regulations and (ii) nominal amounts as might be expected in the normal operation of the commercial buildings utilized as collateral herein. (c) Mortgagor has no knowledge of and has received no notice of investigations or reports indicating that the Mortgaged Premises has been contaminated by Toxic or Hazardous Substances, other than such investigations and reports submitted to Mortgagee. (d) Mortgagor covenants and agrees to indemnify, defend (with counsel satisfactory to Mortgagee) and hold Mortgagee and its officers, employees, contractors and agents harmless from and against any and all claims, judgments, damages, penalties, fines, expenses, liabilities, or losses arising after the execution of this Mortgage or arising out of or in any way relating to the presence, release or disposal of Toxic or Hazardous Substances on or from the Mortgaged Premises or to a breach of the environmental representations, warranties or covenants made by Mortgagor herein. Without limitation, the indemnification provided by this Section 1.14 will specifically cover costs incurred in connection with any investigation of site conditions or any cleanup, remediation, removal or restoration work required by any federal, state or local governmental agency or political subdivision or other third party because of the presence or suspected presence of Toxic or Hazardous Substances in the soil, groundwater or soil vapor, on or under the Mortgaged Premises. The foregoing environmental indemnity will survive the expiration, satisfaction, foreclosure, release or termination of this Mortgage and/or any transfer of all or any portion of the Mortgaged Premises, or of any interest in this Mortgage. It will be governed by the laws of the State of Minnesota. Mortgagor will notify Mortgagee in writing within thirty (30) business days of all spills or releases of any Toxic or Hazardous Substances, all failures to comply with any federal, state, or local law, and with any regulation or ordinance, all inspections of the Mortgaged Premises by any regulatory entity concerning the same, all notices, orders, fines, or communications of any kind from any governmental entity or third party that relate to the presence or suspected presence of any Toxic or Hazardous Substances on the Mortgaged Premises or the migration or suspected migration of any Toxic or Hazardous Substances from other property onto or beneath the Mortgaged Premises or to other property from the Mortgaged Premises, and all responses or interim cleanup action taken by or proposed to be taken by any government entity or private party on the Mortgaged Premises. Mortgagee, its officers, employees, contractors, or agents, will have the right, but not the duty, after reasonable notice, to inspect areas on Mortgagor's property to determine whether Mortgagor or its tenants are complying with federal, state, and local laws, regulations, and ordinances pertaining to air and water quality, the handling, transportation, storage, treatment, usage, or disposal of Toxic or Hazardous Substances, air emissions, other environmental matters, and all zoning and other land use matters. Mortgagee will also have the right to establish test wells on the Mortgaged Premises if requested by the MPCA to monitor whether any chemical levels Page 8 of Mortgage are increasing on or near its Mortgaged Premises because of the activities of Mortgagor or its tenants or property owners. Mortgagee will use its best efforts to minimize interference with Mortgagor's business or that of its tenants but will not be liable for any interference caused thereby. If any investigation, site monitoring, containment, cleanup, removal, restoration, or other remedial work (the "Remedial Work") of any kind is requested by the MPCA or under any applicable local, state, or federal laws or regulations, or is required by any governmental entity or other third person because of or in connection with the presence or suspected presence of Toxic or Hazardous Substances on or under the Mortgaged Premises, Mortgagor will assume responsibility for all such Remedial Work and all costs and expenses of such Remedial Work will be paid by Mortgagor. 1.15. Mortgagee's Right of Entry. Mortgagor will permit Mortgagee or its authorized representatives to enter the Mortgaged Premises at normal business hours for the purpose of inspecting the same; provided, however, Mortgagee will have no duty to make such inspections and will not incur any liability or obligation for making or not making any such inspections. 1.16. Due on Sale. Mortgagor will not voluntarily or involuntarily sell, convey, transfer, further mortgage, encumber, or dispose of the Mortgaged Premises, or any part thereof, or any interest therein, legal or equitable, or agree to do so, except in accordance with the Loan Documents or upon obtaining the written consent of Mortgagee. Mortgagee's consent to any one transaction will not be deemed to be a waiver of the requirement to receive Mortgagee's consent to future or successive transactions. If Mortgagor is a corporation, partnership, limited liability company or other entity, the legal, beneficial or equitable ownership of such entity will not be changed by sale, conveyance, transfer, assignment or encumbrance, except that current owners may transfer ownership interests so long as they retain, in the aggregate, a majority interest in Mortgagor. 1.17. Mortgagee's Right to Cure. If Mortgagor will fail, after reasonable notice, to comply with any of the covenants or obligations of this Mortgage, then Mortgagee may, but will not be obligated to, without further demand upon or notice to Mortgagor, and without waiving or releasing Mortgagor from any obligation contained in this Mortgage, perform such covenants and agreements, investigate and defend against such action or proceeding, and take such other action as Mortgagee reasonably deems necessary to protect its interest in the Mortgaged Premises or this Mortgage. Mortgagor agrees to repay upon demand all sums incurred by Mortgagee in remedying any such failure, together with interest at the rate as specified in the Note. All such sums, together with interest as aforesaid, will become so much additional Secured Indebtedness, but no such advance will be deemed to relieve Mortgagor from any failure hereunder. 1.18. Uniform Commercial Code uritv Interest. This Mortgage will constitute a security agreement as defined in the Uniform Commercial Code and WILL BE EFFECTIVE AS A FINANCING STATEMENT FILED AS A FIXTURE FILING which is to be filed in the real estate records of the county where the Mortgaged Premises are located. The name of the record owner of said real estate is Mortgagor set forth on page one of this Mortgage. Information concerning the security interest created by this Mortgage may be obtained from Mortgagee, as secured party, at its address as set forth on page one of this Mortgage. The name and address of Mortgagor, as debtor, and the name and address of Mortgagee, as secured party, are as set forth on page one of this Mortgage. This Mortgage covers goods which are, or are to become, fixtures. This Mortgage is sufficient as a financing statement, and as a Financing statement it covers goods which are, or are to become, fixtures on the Mortgaged Premises. In addition, Mortgagor will execute and deliver to Mortgagee, upon Mortgagee's request, any financing statements or amendments thereto or continuation statements thereto that Mortgagee may require to perfect a security interest in said items or types of property. Mortgagor will pay all costs of filing such instrument. This Mortgage is a "Construction Mortgage" within the meaning of the UCC. 1.19. Licenses Management Contracts and Franchise Agreements, Mortgagor will, at its own cost and expense, perform, comply with and discharge all of the obligations of Mortgagor under any and all licenses, management contracts, franchise agreements and other obligations and agreements for the use and operation of the Mortgaged Premises as a hotel and will use all its reasonable efforts to enforce or secure the Page 9 of Mortgage performance of each obligation and undertaking of the respective licenses, contracts and agreements and will appear in and defend, at its own cost and expense, any action or proceeding arising out of or in any manner connected with Mortgagor's interest in any agreements regarding the Mortgaged Premises. 1.20. No Consent. Nothing contained in this Mortgage will constitute any consent or request by Mortgagee, express or implied, for the performance of any labor or services or for the furnishing of any materials or other property in respect of the Mortgaged Premises or any part thereof, nor will it be construed as giving Mortgagor or any party in interest with Mortgagor any right, power or authority to contract for or permit the performance of any labor services or the furnishing of any materials or other property in such fashion as would create any personal liability against Mortgagee in respect thereof, or would permit the making of any claim that any lien based on the performance of such labor or services or the furnishing of any such materials or other property is prior to the lien of this Mortgage. 1.21. Further Assurances, Mortgagor will execute and deliver to Mortgagee from time to time, on demand, such further instruments, security agreements, financing statements under the Uniform Commercial Code and assurances and do such further acts as Mortgagee may require to carry out more effectively the purposes of this Mortgage and, without limiting the foregoing, to make subject to the lien hereof any property agreed to be subjected hereto or covered by the granting clause hereof, or so intended to be. Mortgagor will pay any recording fees, filing fees, mortgage registry taxes, stamp taxes and other charges arising out of or incident to the filing or recording of this Mortgage and all documents thereto. 1.22. Miscellaneous Rights „of Mortgagee. Without affecting the liability of any party liable for payment of the Secured Indebtedness or the performance of any obligation contained herein, and without affecting the rights of Mortgagee with respect to any security not expressly released in writing, Mortgagee may, at any time, and without notice to or the consent of Mortgagor or any party with an interest in the Mortgaged Premises or the Loan Documents (a) release any person or entity liable for payment of all or any part of the Secured Indebtedness or for the performance of any obligation herein, (b) enter into any agreement with Mortgagor extending the time or otherwise altering the terms of payment of all or any part of the Secured Indebtedness or modifying or waiving any obligation, or subordinating, modifying or otherwise dealing with the lien or charge hereof, (c) accept any additional security, (d) release or otherwise deal with any property, real or personal, including any or all of the Mortgaged Premises, including making partial releases of the Mortgaged Premises, or (e) resort to any security agreements, pledges, contracts of guaranty, assignments of rents and leases or other securities, and exhaust any one or more of said securities and the security hereunder, either concurrently or independently and in such order as it may determine. No act or thing, except full payment of the Secured Indebtedness, which but for this provision could act as a release, termination, satisfaction or impairment of this Mortgage will in any way release, terminate, satisfy or impair this Mortgage. ARTICLE II DEFAULTS AND REMEDIES 2.1. Events of Default. The occurrence of any one or more of the following events will constitute an Event of Default under this Mortgage: (a) If Mortgagor fails to make any payment required under the Loan Documents within ten (10) days after the date that the payment is due; (b) If Mortgagor fails to pay any other Secured Indebtedness when due; (c) If Mortgagor fails to observe and perform any covenant, condition or agreement contained in this Mortgage or contained in any other instrument or agreement evidencing or securing the Loan or executed in conjunction herewith, or contained in any instrument or agreement evidencing or securing any other loan by Mortgagee to Mortgagor; Page 10 of Mortgage (d) If any representation or warranty of Mortgagor contained in this Mortgage or the contents of any statement, certificate, document or instrument furnished in connection with the Loan or pursuant to this Mortgage or furnished in connection with any other indebtedness of Mortgagor to Mortgagee is untrue in any material respect; (e) If Mortgagor files a petition in bankruptcy or for reorganization or for an arrangement pursuant to any present or future federal bankruptcy law or under any similar federal or state law, or makes an assignment for the benefit of creditors, or admits in writing its Inability to pay its debts generally as they become due, or if an involuntary petition or answer is filed against Mortgagor in bankruptcy under any present or future federal bankruptcy law or any similar federal or state law and such petition or answer is not discharged within ninety (90) days after the filing thereof, or a receiver, trustee or liquidator of Mortgagor, or of substantially all the assets of Borrower, is appointed in any proceeding brought against Mortgagor and is not discharged within ninety (90) days after such appointment or if Mortgagor should consent or acquiesce in such appointment; (If) If Mortgagor fails to pay its obligations owed to persons or entities other than Mortgagee as they become due in the usual and ordinary course of business, and such failure to pay threatens Mortgagor's ability to perform under this Mortgage and/or the Loan Documents, in the sole discretion of Mortgagee; (g) Entry of any judgment for the payment of money against Mortgagor that is not satisfied within thirty (30) days, or the filing of any state or federal tax lien against Mortgagor; (h) Seizure or attempted seizure of any of Mortgagor's assets by any creditor of Mortgagor; (i) Dissolution or insolvency of Mortgagor. 2.2. Remedies. Upon the occurrence of an Event of Default, or at any time thereafter until such Event of Default is cured to the satisfaction of Mortgagee, Mortgagee may, at its option, and without notice to Mortgagor, exercise any or all of the following rights and remedies, and any other rights and remedies now or then available to it, either under any Loan Documents or at law or in equity: (a) Mortgagee may declare the entire unpaid principal balance of the Loan together with all other Secured Indebtedness to be immediately due and payable and, thereupon, all such unpaid principal balance of the Note together with all accrued Interest thereon and all other Secured Indebtedness will be and become immediately due and payable; (b) Mortgagee may foreclose this Mortgage by judicial action or advertisement and Mortgagor hereby authorizes and fully empowers Mortgagee to do so, with full authority to sell the Mortgaged Premises at public auction and convey the same to the purchaser in fee simple all in accordance with and in the manner prescribed by law, and out of the proceeds arising from sale and foreclosure to retain the principal and interest due on the Note and the Secured Indebtedness together with all such sums of money as Mortgagee will have expended or advanced pursuant to this Mortgage or pursuant to statute together with interest thereon as herein provided and all costs and expenses of such foreclosure, including lawful attorneys' fees, with the balance, if any, to be paid to the persons entitled thereto by law; (c) Mortgagee will be entitled as a matter of right without notice and without giving bond and without regard to the solvency or insolvency of Mortgagor, or waste of the Mortgaged Premises or adequacy of the security of the Mortgaged Premises, to apply for the appointment of a receiver in accordance with the statutes and law made and provided for who will collect the rents, and all other income of any kind; manage the Mortgaged Premises so to prevent waste; execute leases within or beyond the period of receivership, pay all expenses for normal maintenance of the Mortgaged Premises and perform the terms of this Mortgage and apply the rents, issues and profits in the following order to (i) payment of the reasonable fees of said receiver, (ii) payment when due of prior or current real estate taxes or special assessments with respect to the Mortgaged Premises or, if required by this Mortgage, payment of the periodic escrow for payment of the taxes or special Page I I of Mortgage assessments, and (ill) the payment when due of premiums for insurance of the type required by this Mortgage or if required by this Mortgage, payment of the periodic escrow for the payment of the premiums, to applying the same to the costs and expenses of the receivership, including reasonable attorney's fees, to the repayment of the Secured Indebtedness and to the operation, maintenance, upkeep and repair of the Mortgaged Premises, including payment of taxes on the Mortgaged Premises and payment of premiums of insurance on the Mortgaged Premises. Mortgagor does hereby irrevocably consent to such appointment. Nothing contained in this Mortgage and no actions taken pursuant to this Mortgage will be construed as constituting Mortgagee a mortgagee in possession; and (d) In addition to the rights available to a mortgagee of real property, Mortgagee will also have all the rights, remedies and recourse available to a secured party under the Uniform Commercial Code of the State of Minnesota, including without limitation the right to proceed under the provisions of the Uniform Commercial Code governing default as to any personal property which may be included in the Mortgaged Premises or which may be deemed non -realty in a foreclosure of this Mortgage or to proceed as to such personal property in accordance with the procedures and remedies available pursuant to a foreclosure of real estate. Upon request or demand of Mortgagee, Mortgagor will, at the expense of Mortgagor, assemble the personal property and make it available to Mortgagee at a reasonably convenient place designated by Mortgagee, and Mortgagor will promptly pay all costs of Mortgagee of collection and all of the costs of enforcing its security interest, including, without limitation, reasonable attomeys' fees and legal expenses and expenses of any repairs to any of the collateral and expenses of any repairs to any realty or other property to which any of the collateral may be affixed or be a part. The expenses of re -taking, holding, preparing for sale, selling or the like, will include Mortgagee's reasonable attorneys' fees and legal expenses. 2.3 Power of Attorney. To effectuate the terms and provisions of this Mortgage, Mortgagor designates and appoints Mortgagee and its designees or agents as Mortgagor's attorney -in -fact with the full power of substitution and with authority after an Event of Default: to endorse the name of Mortgagor on any notes, acceptances, checks, drafts, money orders, instruments or any other evidences of payment or proceeds of the Mortgaged Property that may come into Mortgagee's possession; to sign the name of Mortgagor on any invoices, documents, drafts against and notices to account debtors of Mortgagor, assignments and requests for verification of accounts; to execute proofs of claim and loss; to execute any endorsements, or other instruments of conveyance or transfer; to institute any action or proceedings necessary for the recovery and collection of any monies that may be due under any insurance policies; to execute releases; and to do all other acts and things necessary and advisable in the sole discretion of the Mortgagee to carry out and enforce this Mortgage. This power of attorney, being coupled with an interest, is irrevocable, while any of the Indebtedness remains unpaid. ARTICLE III MISCELLANEOUS 3.1. Mortaaaor's Acknowledament of Remedies. MORTGAGOR HEREBY CONSENTS AND AGREES TO THE FORECLOSURE AND SALE OF THE MORTGAGED PREMISES BY ACTION OR, AT THE OPTION OF MORTGAGEE, BY NONJUDICIAL SALE (BY ADVERTISEMENT). Mortgagor further understands that in the event of such default Mortgagee may also elect its rights under the Uniform Commercial Code and take possession of any and all personal property pledged as security pursuant to this Mortgage, and dispose of the same by sale or otherwise in one or more parcels provided that at least ten (10) days' prior notice of such disposition must be given, all as provided for by the Uniform Commercial Code, as hereafter amended or by any similar or replacement statute hereafter enacted. 3.2. Continued Priority. Any agreement hereafter made by Mortgagor and Mortgagee pursuant to this Mortgage will be superior to the rights of the holder of any intervening lien or encumbrance. 3.3. Cumulative Rights. Each right, power or remedy herein conferred upon Mortgagee is cumulative and in addition to every other right, power or remedy, express or implied, now or hereafter arising, available to Mortgagee, at law or in equity, or under the Uniform Commercial Code or other law, or under any Page 12 of Mortgage other agreement, and each and every right, power and remedy herein set forth or otherwise so existing may be exercised from time to time as often and in such order as may be deemed expedient by Mortgagee and will not be a waiver of the right to exercise at any time thereafter any other right, power or remedy. No delay or omission by Mortgagee in the exercise of any right, power or remedy arising hereunder or arising otherwise will impair any such right, power or remedy or the right of Mortgagee to resort thereto at a later date or be construed to be a waiver of any Event of Default under this Mortgage or any other Loan Documents. 3.4 Assignability. Participation Interests. Mortgagee shall have the right to assign this Mortgage, in whole or in part, or sell participation interests herein, to any person obtaining an interest in the indebtedness secured hereby. The Mortgagor acknowledges that the Mortgagee may and will have the right to sell participation interests in the Note. In the event any of the Mortgagee's participants require any additional information, the Mortgagor will use all reasonable efforts to obtain and deliver such information. 3.4 Waiver. MORTGAGOR HEREBY ACKNOWLEDGES AND AGREES THAT THE MORTGAGED PREMISES IS NOT HOMESTEAD PROPERTY AND FURTHER WAIVES, TO THE FULL EXTENT LAWFULLY ALLOWED, THE BENEFIT OF ANY HOMESTEAD, APPRAISEMENT, EVALUATION, STAY AND EXTENSION LAWS NOW OR HEREAFTER IN FORCE. MORTGAGOR WAIVES THE RIGHT TO A TRIAL BY JURY ON ANY MATTER RELATING TO THIS MORTGAGE OR THE SECURED INDEBTEDNESS. 3.5. Governina Law. This Mortgage is made and executed under the laws of the State of Minnesota and is intended to be governed by the laws of the State of Minnesota, except as otherwise specifically referenced in this Mortgage and/or the other Loan Documents. 3.6. Binding Effect. This Mortgage and each and every covenant, agreement and other provision hereof will be binding upon Mortgagor and its successors and assigns including without limitation each and every record owner of the Mortgaged Premises, from time to time, and any other person having an interest therein, will run with the land and will inure to the benefit of Mortgagee and its successors and assigns. As used herein the words "successors and assigns" will also be deemed to include the heirs, representatives, administrators and executors of any natural person who is a party to this Mortgage. 3.7. Severability and Survival. The unenforceability or invalidity of any provisions hereof will not render any other provision or provisions herein contained unenforceable or invalid. The foreclosure of this Mortgage will not affect or limit any remedy of Mortgagee on account of any breach by Mortgagor of the terms of this Mortgage occurring prior to such foreclosure, except to the extent of the amount bid at foreclosure. 3.8. Captions. The captions and headings of the various sections of this Mortgage are for convenience only and are not to be construed as confining or limiting in any way the scope or Intent of the provisions hereof. Whenever the context requires or permits the singular will include the plural, the plural will include the singular and the masculine, feminine and neuter will be freely interchangeable. 3.9. Counterparts. This Mortgage may be executed in one or more counterparts which together shall constitute one and the same instrument. 4.1. Notices. Any notice which any party hereto may desire or may be required to give to any other party will be in writing, and the mailing thereof by first class mail to their respective addresses as set forth on page one herein, or to such other places any party hereto may hereafter by notice in writing designate, will constitute service of notice hereunder. [SIGNATURE PAGE FOLLOWS] Page 13 of Mortgage MORTGAGOR REPRESENTS, CERTIFIES, WARRANTS AND AGREES THAT MORTGAGOR HAS READ THIS ENTIRE MORTGAGE AND UNDERSTANDS ALL THE PROVISIONS OF THIS MORTGAGE. MORTGAGOR ALSO AGREES THAT MORTGAGEE'S COMPLIANCE WITH THE EXPRESS PROVISIONS OF THIS MORTGAGE WILL CONSTITUTE GOOD FAITH AND WILL BE CONSIDERED REASONABLE FOR ALL PURPOSES. IN WITNESS WHEREOF, the undersigned has executed this Mortgage as of the day and year first above -written. A NCED VOLUMETR1CALLIANCE, LLC Casey Da Its: Chief Executive Officer State of Min ota, County of F i^— —t/) This instrument was acknowledged before me on the '� midday of August, 2021, by Casey Darkenwald, the Chief Executive Officer of Advanced Volumetric Alliance, LLC, a Minnesota limited liability company, on behalf of the company, LARRY MOUNTAIN NOTARY PUBLIC-MINNESOTA Idly Commission Expires January 31, 2025 This instrument was drafted by: Fryberger, Buchanan, Smith & Frederick, P.A. 302 West Superior Street, Suite 700 Duluth, MN 55802 (218) 722-0861 J RG/Ipg M:\DOCS\12793\001028\MOR\1A0648202, DOC _2 Notary Public Page 14 of Mortgage