2021-08-27 Secured Promissory NoteSECURED PROMISSORY NOTE
The Effective Date: August 27, 2021
Principal Amount: $5,182,885.82
FOR VALUE RECEIVED, ADVANCED VOLUMETRIC ALLIANCE, LLC, a
Minnesota limited liability company ("Maker"), promises to pay PETROS PACE FINANCE
TITLING TRUST, a Delaware statutory trust ("Holder"), or its designee, the principal sum of
$5,182,885.82, with interest from the date of this Note on unpaid principal owing from time to
time as provided below.
This Secured Promissory Note (this "Note") is issued and delivered under and pursuant to
that certain PACE Loan Agreement, including the exhibits and appendices attached thereto and
incorporated therein by reference, dated as of August 27, 2021 (as amended, modified,
supplemented, restated, or renewed from time to time, the "Loan Agreement"), between the
Maker and Holder. This Note is secured by the Special Assessment created by and pursuant to the
Notice of PACE Special Assessment and Special Assessment Agreement which is incorporated by
reference and attached to the Loan Agreement. The terms of this Note includes those stated in the
Loan Agreement and the Notice of PACE Special Assessment and Special Assessment Agreement.
This Note is subject to all such terms, and the Holder is hereby referred to the Loan Agreement for
a description of the obligations and duties of the Maker under the Loan Agreement. Capitalized
terms used herein but not otherwise defined in this Note shall have the respective meanings
ascribed to such terms in the Loan Agreement or the Notice of PACE Special Assessment and
Special Assessment Agreement as applicable.
This Note is further subject to the following terms and conditions.
1. Note Amount
Maker promises to pay to Holder, or order, the principal sum of FIVE MILLION ONE
HUNDRED EIGHTY-TWO THOUSAND EIGHT HUNDRED EIGHTY-FIVE AND 82/100
DOLLARS ($5,182,885.82) with interest at five and forty hundredths percent (5.40%) (the
"Applicable Interest Rate") per annum payable in forty (40) semi-annual equal installments of
principal and interest of $216,400.64 on each May 15 and each October 15, commencing on May
15, 2022 and continuing through October 15, 2041 (the "Maturity Date"), on which date all sums
outstanding under this Note shall be due and payable. Additionally, on the Closing Date, the
Maker shall make a payment in the amount of $122,056.96 for the accrued interest on the Principal
Amount from the Effective Date of this Note through October 15, 2021. Attached hereto as
Appendix 1 is a Note Payment Schedule reflecting the installment payment dates and the amount
to be paid on such date (assuming all payments are made timely and the absence of any pre-
payment, default or any other outstanding amounts under the Loan Agreement, including without
limitation, the Loan Expenses). Interest is computed on the basis of a 360-day year and applied to
the actual number of days elapsed.
2. Default Interest
In the event Maker, fails to make any payments due and owing under this Note or the Loan
Agreement when due, such "Default Amount" shall bear interest at the rate of EIGHTEEN
PERCENT (18%) or the highest interest rate allowed by applicable law, whichever is less (the
"Default Rate"), per annum, until such Default Amount is paid in full. Computations of Default
Interest shall be based on a year of 360-days but shall be calculated for the actual number of days
in the period for which Default Interest is charged.
3. Installment Pavments
Maker shall make payments in lawful money of the United States of America and in
immediately available funds. All payments under this Note shall be made in accordance with the
requirements included in the Notice of PACE Special Assessment and Special Assessment
Agreement. Provided, however, that in no event shall the requirements included in the Notice of
PACE Special Assessment and Special Assessment Agreement reduce Maker's liability under the
Note. All payments shall be applied first, to any Loan Expenses, penalties, costs, fees or other
amounts recoverable by the Holder under the Loan Agreement or the Notice of PACE Special
Assessment and Special Assessment Agreement; second, to unpaid Default Interest; third, to
accrued and unpaid interest at the Applicable Interest Rate; and fourth, to the principal balance
outstanding.
Maker understands that payments under this Note shall be made by the Maker to Wright
County, Minnesota semi-annually every May 15 and October 15 (each, a `Payment Due Date')
pursuant to the property tax bill. Per Minnesota statute § 276.09-276.11, if payments are not
received on or prior to each Payment Due Date, Wright County cannot timely remit such PACE
payment to the Port Authority of the City of Saint Paul (the 'Administrator'), who subsequently
remits payments to the Holder by each July I and January I (each a "Remitted Payment Date'),
as applicable. Furthermore, any delay in Wright County's receipt of payment beyond the
applicable Payment Due Date will cause up to a six (6) month delay in Holder receiving timely
payment. In the event there is such a delay, Borrower will be charged Default Interest by the
Holder from the Remitted Payment Date through the date in which Holder actually receives the
applicable payment from the Administrator. Please note that a check dated prior to the Payment
Due Date and received by Wright County after the Payment Due Date is considered a late payment
and is subject to Default Interest.
4. Events of Default
The Events of Default are set forth in the Parties' Loan Agreement which are incorporated
herein by reference. Further, should Maker fail to pay (a) any principal payment on the due date
hereunder, or (b) any interest or other payment required pursuant to the terms hereof or the Loan
Agreement on the due date, then the Holder shall have the rights set forth herein, in addition to
any and all rights under the Parties' Loan Agreement and the Notice of PACE Special Assessment
and Special Assessment Agreement.
2
5. Rights of Holder upon Default
Upon the occurrence or existence of any Event of Default and at any time thereafter during
the continuance of such Event of Default, Holder may, by written notice to the Maker, exercise
any of the remedies set forth in the Parties' Loan Agreement. In addition to the foregoing
remedies, upon the occurrence or existence of any Event of Default, Holder may exercise any other
right, power or remedy granted to it hereunder or pursuant to applicable law. The Maker agrees
to pay all taxes levied or assessed upon the outstanding principal against any holder of this Note.
In addition, the Maker shall pay all reasonable costs, including the Trustee's fees and expenses,
attorneys' fees and expenses, costs relating to the appraisal and/or valuation of assets and -all other
costs and expenses incurred in the collection, protection, defense, preservation, or enforcement of
this Note or the Loan Agreement or any endorsement of this Note or in any litigation arising out
of any transactions relating to this Note, the Loan Agreement, or the Notice of PACE Special
Assessment and Special Assessment Agreement and such costs and expenses shall bear interest at
the Default Rate from the date of the occurrence of the Event of Default. Nothing contained herein
shall be construed to deny the Holder full recourse against the Maker under this Note.
Notwithstanding anything to the contrary, neither Maker nor any of its officers, directors,
members, managers or employees shall have any personal liability for any amounts owing under
this Note, and in the Event of Default under this Note and exercise by Holder of the remedies set
forth in the Loan Agreement, Holder shall not be entitled to seek any deficiency from Maker or
any of its officers, directors, members, managers or employees.
6. Governing Law Jurisdiction & Venue
This Note and each and every term and provision contained herein and any and all disputes,
claims or causes of action arising out of this Note or relating to it shall be governed by and
construed in accordance with the internal law of the State of Minnesota without regard to
provisions regarding choice of law that would result in the application of the laws of another
jurisdiction. Any action or proceeding relating in any way to this Note shall be brought and
enforced exclusively in the state courts for the State of Minnesota or the federal district courts for
the State of Minnesota and the Maker and Holder, by its acceptance hereof, each hereby
irrevocably submit to the exclusive venue and jurisdiction of such courts in respect of any such
action or proceeding, and hereby absolutely, irrevocably and unconditionally waive, to the fullest
extent permitted by applicable law, any objection that it may now or hereafter have to the venue
and jurisdiction of any such action or proceeding in any such court, and any claim that any such
action or proceeding brought in any such court has been brought in an inconvenient forum.
7. Amendments and Waivers
Any term of this Note may be amended or waived only with the written consent of the
Maker and the Holder. Any amendment or waiver effected in accordance with this provision shall
be binding upon the Maker, the Holder and each transferee of the Note; however, no such waiver
shall affect or impair the rights of Holder or its assigns to require observance, performance, or
satisfaction, either of that term or condition as it applies on a subsequent occasion or of any other
term or condition of this Note. Notwithstanding the foregoing, Maker expressly agrees that this
Note or any payment under this Note may be extended by Holder from time to time without in any
way affecting the liability of Maker.
8. Transfer, Successors and Assigns
The terms and conditions of this Note shall inure to the benefit of and be binding upon the
respective successors and assigns of the Parties. Neither this Note nor any of the rights, interests
or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part,
by the Maker without the prior written consent of Holder. This Note and all benefits hereunder,
including all obligations and duties of Maker, are freely transferrable and assignable by the Holder
and the Maker's consent to any such transfer or assignment is not required and Maker hereby
expressly waives any objection thereto.
9. Notices
Any notice required or permitted by this Note shall be in writing and shall be deemed
sufficient upon delivery, when delivered personally or by a nationally -recognized delivery service
(such as Federal Express or UPS), or three (3) days after being deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, addressed to the Party to be notified at such
Party's address as set forth in the Loan Agreement or as subsequently modified by written notice.
10. Severability
If any provision or any word, term, clause, or part of any provision of this Note shall be
invalid for any reason, the same shall be ineffective and severed herefrom, but the remainder of
this Note and such provision shall not be affected and shall remain in full force and effect as if the
severed provision or part thereof were never part of this Note. To the extent possible, any invalid
provision or part thereof, shall be construed in a manner consistent with the Parties' intent as
evidenced by such invalid language.
11. Holder's Security
THIS NOTE IS SECURED BY A SPECIAL ASSESSMENT CREATED PURSUANT
TO THE NOTICE OF PACE SPECIAL ASSESSMENT AND SPECIAL ASSESSMENT
AGREEMENT BETWEEN THE MAKER AND HOLDER, WHICH IS ATTACHED TO AND
INCORPORATED BY REFERENCE INTO THE PARTIES' LOAN AGREEMENT AND
DATED THE SAME EFFECTIVE DATE AS THIS NOTE AND THE LOAN AGREEMENT.
12. Waiver of Presentment. Protest and Demand
Maker waives presentment, protest and demand, notice of protest, notice of demand and
dishonor, and notice of nonpayment of this Note. Maker expressly agrees that this Note or any
payment under this Note may be extended by Holder from time to time without in any way
affecting the liability of Maker.
4
13. Conflicts with Loan Agreement & Capitalized Terms
In the event any provision in this Note conflicts with any provision in the Loan Agreement,
the terms of this Note control. Capitalized terms not defined herein shall have the definition given
them in the Loan Agreement or the Notice of PACE Special Assessment and Special Assessment
Agreement.
14. Pre -payment
Notwithstanding any provision in any Loan Document, this Note may not be prepaid, in
whole or in part, (a) without payment of a "Pre -payment Premium", and, (b) with respect to
partial prepayments, without the prior written consent of Holder. The Pre -payment Premium will
be calculated as follows:
If the Note is prepaid:
Before the third (3rd) anniversary of the
Effective Date of this Note
On or after the third (3rd), but before the fifth
(5'') anniversary of the Effective Date of this
Note
On or after the fifth (5`h), but before the eighth
(8'h) anniversary of the Effective Date of this
Note
On or after the eighth (8'h), but before the tenth
(10'h) anniversary of the Effective Date of this
Note
On or after the tenth (10'h), but before the
twelfth (126h) anniversary of the Effective Date
of this Note
On or after the twelfth (12'h) anniversary of the
Effective Date of this Note
The Pre -payment Premium will be, as a
percentage of the Principal Amount to be
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
If the Pre -payment Premium is higher than the highest rate allowed by applicable Law,
then the Pre -payment Premium will be the highest rate allowed by applicable Law. The failure to
pay the Pre -payment Premium when due shall result in such unpaid amount accruing interest at
the Default Rate. In the event any partial pre -payments are made, such payments shall be credited
against the installments last falling due under the Note Payment Schedule.
Notwithstanding anything to the contrary in this Note or any other Loan Document,
prepayment shall be permitted and no Pre -payment Premium shall be due in connection with a
complete or partial prepayment resulting from the application of insurance proceeds or
condemnation payments or awards.
5
15. UnconditionalObliization
No reference herein to the Loan Agreement or Notice of PACE Special Assessment and
Special Assessment Agreement and no provision of this Note or of the Loan Agreement or Notice
of PACE Special Assessment and Special Assessment Agreement shall alter or impair the
obligations of the Maker, which are absolute and unconditional, to pay the principal and interest
on this Note at the place, at the respective times, at the rate and in the manner prescribed herein.
16. Non -usurious InteresVSavinQs Clause
All interest, and any other payments made under this Note construed to be interest or
otherwise subject to usury laws under applicable law, shall not exceed the amount of non -usurious
interest that may be contracted for, taken, reserved, charged, or received under applicable law.
Any interest in excess of that maximum amount will be credited to the Principal Amount or, if the
Principal Amount has been paid, refunded. This provision overrides any conflicting provisions in
this Note and all other instruments concerning this debt and shall be applied to avoid the occurrence
of any usurious interest or unlawful charges and as necessary to ensure that the terms of this Note
and all charges thereunder are enforceable under applicable law.
17. Section headings: Construction
The headings of Sections in this Note are provided for convenience only and will not affect
its construction or interpretation. All references to "section(s)" or "provision(s)" are
interchangeable and refer to the corresponding section(s) of this Note unless otherwise specified.
All words used in this Note will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the words "hereof," "contained herein,"
"hereunder" and similar references, refer to this Note in its entirety and not to any specific section
or subsection hereof, the words "including" or "includes" do not limit the preceding words or term
and the word "or" is used in the inclusive sense. When the context requires, singular nouns and
pronouns include the plural.
[SIGNATURE PAGES) TO FOLLOW]
z
IN WITNESS WHEREOF, the Maker has caused this Note to be issued as of the Effective
Date written above.
AGREED TO AND ACCEPTED:
iVUK ER:
ADVANCED VOLUMETRIC ALLIANCE, LLC,
Eye
Name: Casey Darkenwald
Title: Chief Executive ,Of
State of k )
) ss
County of��)
The foregoing inst r u cnt was acknowledged before me this 91 14'day of N 4ALm
2021, by Casey Darkenwald, penonally known to me to be the person whose name is su ibed
to the within instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the entity upon behalf of which he acted,
executed the instrument. He is the Chief Executive Officer and .Authorized Representative of
Advanced Volumetric Alliance, LLC, a Minnesota limited liability company, for and on behalf of
said entity, and he acknowledged, sighed and delivered the instrument as his free and voluntary
act, for the uses and purposes therein set forth.
40
EMARQ f JNotary 114lic
NwaryPv9Ile
WCdant811iae EYpgry
Anvery 3r, 242d
Signature page to
Secured Promissory Note
APPENDIX 1:
Note Payment Schedule
Borrower Payment Schedule
Beginning
Ending
Payment
Total
Loan
Loan
Principal
Interest
Loan
Date
Period
Payment
Balance
Payment
Payment
Payment
Balance
9127/2021
0
-
j5,182,885.82j
-
-
-
(5,182,885.S2)
10/15/2021
0
122,056.96
(5,182,885.82)
122,056.96
-
122,056.95
(5,182,985.82)
5/15/2022
1
216,400.64
(5,182,885.82)
216,400.64
74,519.14
141,881.50
(5,108,366.69)
10/15/2022
2
216,400.64
(5,108,366.68)
216,400.64
74,519.14
141,881.50
(5,033,847.54)
5/15/2023
3
216,400.64
15,033,847,54)
216,4011.64
78,599.06
137,801.58
j4,955,248.48)
10/15/2023
4
216,400.64
(4,955,248.48)
216,400.64
78,599.07
137,801.57
(4,876,649.41)
5/15/2024
5
216,400.54
(4,876,649A1)
216,40m.64
82,902.36
133,498.28
{4,793,747.05)
10/15/2024
6
216,4C0.64
14,793,747.05)
216,400.64
82,902.36
133,498.28
(4,710,844.69)
5/15/2025
7
216,400.64
(4,710,844.69)
216,400.64
87,441.27
128,959.37
(4,623,403A2)
10/15/2025
8
216,400.64
(4,523,403A2)
216,400.64
87,411.26
128,959.38
(4,535,962.16)
5/1512026
9
216,400.64
J4,535,962.16)
216,400.64
92,228.68
124,171.95
1,14,443,733.49)
10/15/2026
10
216,400.64
(4,443,733.48)
216XO.64
92,228.67
124,171.97
(4,351,504.81)
511512027
11
216,400.64
(4,351,504.81)
215,400.154
97,278.20
119,122.44
:{4,234,226.61)
10/15/2027
12
216,400.64
14,254,226.61)
215,40D.54
97,278.19
119,122A5
(4,155,948.42)
5/15/2028
13
216,400.64
)4,156,948A2)
216,400.64
102,604.18
113,795.45
(4,054,344.24)
10/15/2028
14
216,400.64
14,054,344,24)
216,400.64
102,604.17
113,796A7
j3,951,740.07)
5/15/2029
15
216,400.64
(3,951,740.07)
216AW.64
108,221.76
108,178.88
(3,943,51831)
10/15/2029
15
216,400.64
13,843,518.31)
216,400.64
108,221.75
108,278,89
(3,735,296.56)
5/35/2030
17
216,400.54
(3,735,296.561..
216,400.64
114,146.90
102,253.74
(3,621,149.66)
10/1512030
18
216,400:64
(3,621,149.65)
216,400.64
114,146.89
102,253.75
(3,507,002.77)
5/15/203.1
19
216,400.64
(3,507,002.77)
215,400.64
120,396.44
96,004.20
(3,386,606.33)
10/15/2031
20
216,400.64
(3,386,606.33)
216,400.64
120,396.44
96,004.20
(3,265,209.89)
5/15/2032
21
216,400.64
13,266,209.89)
216,400.64
125,988.14
89,412.50
(3,139,221.75)
10/15/2032
22
216,400.64
13,139,221.75)
216,400.64
125,988.15
89,412.49
(3,012,233.6D)
5/15/2033
23
216,400.64
(3,012,233.60)
215,400.64
133,940.75
82,459.89
(2,878,292.85)
10/15/2033
24
216,400.64
(2,878,292.95)
216,40.64
133,94074
82,459.90
(2,744,352.11)
5/15/2034
25
216,400.64
(2,744,352.11)
216,40D.64
141,274.00
75,126.64
(2,503,078.11)
10/15/2034
26
216,400.64
j2,603,078.11)
216,4W.64
141,274.00
75,126.64
(2,461,804.11)
5/15/2035
27
216,400.64
(2,461,804.11)
216,400.64
149,008.75
67,391.89
(2,312,795.36)
10/15/2035
28
216,400.64
12,312,795.35)
216,400.64
149,008.75
67,391.89
(2,i63,785.61)
5/15/2036
29
216,400.64
12,163,785.61)
216,40fl.64
157,166.98
59,233.66
(2,005,619.63)
10/15/2036
30
216,400.64
(2,006,619.63)
216,400.64
157,156.98
59,233.66
(1,849,452.65)
5/15/2037
31
216,400.64
(1,844,452.65)
216,400.64
165,771.87
50,628.77
(1,683,680.78)
10/15/2037
32
216,400.64
11,683,680.78)
216,400.64
165,771.88
50,628.75
(1,517,908.90)
5/15/2038
33
216,400.64
11,517,908.90)
216,400.64
174,847.68
41,552.76
(1,343,061.02)
10/15/2038
34
21.6,4D0.64
11,343,061.02)
216,400.64
174,847.89
41,55275
(1,168,213.13)
5/15/2039
35
216,400.64
{1,168,213.13)
216,400.64
184,42081
31,979.83
(983,792.32)
10/15/2039
36
216,400.64
(983,792.32)
215,400.64
184,420.80
31,979.84
(799,371.52)
5/15/2040
37
216,400.64
(799,371.52)
216,400.64
194,517.94
21,882.80
(604,853.68)
10/15/2040
38
216,400.64
(604,853.68)
216,400.64
194,517.85
21,882.79
1410,335.931
5/15/2041
39
216,400.64
(410,335.83)
216,400.64
205,167.70
11,232.94
{205,168.13)
10115/2041
40
216,400.64
(205,168.13)
216,400.64
205,168.13
11,232.51
-
SIGNATURE PAGE
TO
SECURED PROMISSORY NOTE