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Mortgage $625kDocument Number: A730787 Filed and/or Recorded on Aug 13, 2021 9:39 AM Office of the County Recorder/Registrar of Titles Carver County, Minnesota Kaaren Lewis, County Recorder Crystal Campos, Auditor Mary Kaye Wahl, Treasurer Deputy CS Document Recording Fees Conservation Fee Mortgage Registration Tax Document Total Pkg ID:7343594 $ 46.00 $ 5.00 $ 1437.50 $ 1488.50 Requesting Party: CUSTOM HOME BUILDERS TITLE, LLC Pages: 13 This cover page has been added to this document by Carver County Land Records and is now an official part of this recorded document MORTGAGE THIS MORTGAGE is made and entered on August 11, 2021 between Schaefco Development, LLC, a Minnesota Limited Liability Company and West Side Capital, LLC, a Minnesota limited liability company, having its principal office at 16233 Kenyon Avenue, Suite 120, Lakeville, Minnesota 55044. Mortgagor, its successors and assigns, covenant with Mortgagee as follows: meanings: Definitions. For purposes of this Mortgage, the following terms shall have the following "Indebtedness" means any and all indebtedness, liabilities and obligations of Mortgagor to Mortgagee now existing or hereafter arising under the Loan Documents. b. "Land" means the real property described as: Lots 1, 2 and 3, Block 1, Deer Haven, Carver County, Minnesota C. "Loan Agreement" means the Development Loan Agreement of even date herewith between Mortgagor and Mortgagee evidencing a loan ("Loan") in the amount of Six Hundred Twenty Five Thousand Dollars And No Cents ($625,000.00 concerning the purchase of the Land and the construction of certain improvements thereto. d. "Loan Documents" means the Loan Agreement, the Note, this Mortgage, and any other documents securing the Note. "Mortgagee" means West Side Capital, LLC, a Minnesota limited liability company. f. "Mortgagor" means Schaefco Development, LLC, a Minnesota Limited Liability Company. "Note" means the Mortgage Note executed by Mortgagor, as maker, and payable to Mortgagee, as payee, in the sum of Six Hundred Twenty Five Thousand Dollars And No Cents ($625,000,00), pursuant to the terms of the Loan Agreement, "Property" means the Land together with all buildings, structures and other improvements now or hereafter located on the Land, all building materials or supplies now or hereafter located on the Land which are suitable or intended to be incorporated in any building, structure or other Custom Home Builders Title, LLC L} f 13 10850 Old County Road 15, #100 Plymouth, MN 55441 improvement now or hereafter located on the Land, all heating, plumbing, lighting, air conditioning, ventilating, incinerating, motors, engines, machinery, water, gas and electrical equipment or apparatus, all fixtures now or hereafter located on or attached to the Land or any building, structure or other improvement now or hereafter located on the Land, and all additions, accessions, replacements, substitutions and betterments thereto, all hereditaments, easements, appurtenances, estates, rights, privileges and interests now or hereafter belonging to or in any way pertaining to the Land or any building, structure or other improvement now or hereafter located on the Land, all tangible personal property owned by Mortgagor now or hereafter located on or used in connection with the Land, and all rents, issues, profits, insurance proceeds, condemnation awards, revenues and income arising from the ownership, operation or sale of the Land or any building, structure or other improvement now or hereafter located on the land and all proceeds and products thereof. 2. Mortgage. Mortgagor, to secure the payment of the Indebtedness and any increases, extensions, modifications and renewals thereof, and the payment and performance of all other obligations of Mortgagor under this Mortgage, the Note, the Loan Agreement, and any other loan, contract or agreement between Mortgagor and Mortgagee, hereby mortgages the Property to Mortgagee, its successors and assigns. Mortgagor shall promptly pay the Indebtedness when due, whether at the stated maturity thereof, or by acceleration, call for redemption, or otherwise, and will fully and promptly perform all other covenants and agreements required to be performed by the Mortgagor under the Note, Loan Agreement and this Mortgage. 3. Maximum Principal Indebtedness. FOR PURPOSES OF COMPUTING THE MORTGAGE REGISTRY TAX, THE MAXIMUM PRINCIPAL INDEBTEDNESS SECURED BY THIS MORTGAGE IS $625,000.00. 4. Title. Mortgagor represents, warrants, covenants and agrees that it is duly organized, validly existing and in good standing under the laws of the State of Minnesota; that it is the owner of the Property; that it has the power to make and perform this Mortgage, the Note and the Loan Agreement; that it has the power to encumber the Property in the manner and to the extent contemplated hereby; that it has been duly authorized to enter into this Mortgage; that the Property is free from any and all encumbrances; that it will defend the title to the Property against all claims and demands whatsoever not specifically excepted herein; that the execution and delivery of the Note, the Loan Agreement and this Mortgage, and all other instruments and documents contemplated or required hereby, have been duly authorized by all necessary company action and are the valid and enforceable obligations of the Mortgagor in accordance with their respective terms; that neither the Note, this Mortgage, the Loan Agreement, nor the performance or observance by the Mortgagor of any of the matters or things provided for in any thereof, violate any court order, judgment or decree or any agreement to which the Mortgagor is a party or by which the Mortgagor or its property may be bound or affected; that no approval, consent or authorization of, or filing or registration with, any governmental or regulatory authority or agency is required in connection with the execution, delivery and performance of this Mortgage, the Note and the Loan Agreement, other than the recordings and filings necessary to perfect the liens created thereby and hereby; that all applicable zoning and environmental laws, ordinances and regulations affecting the Property permit the construction, use and occupancy thereof for its intended purposes, and the Mortgagor has obtained the necessary consents, permits and licenses to construct, occupy and operate the Property for its intended purposes. Mortgagee shall quietly enjoy and possess the Property. All improvements now or hereafter located upon the Property are, or will be, located entirely within the boundaries of the Property. Mortgagor shall warrant and defend the title to the Property against all claims and demands now or hereafter arising. The provisions of this Section shall survive the foreclosure of this Mortgage. 5. Liens and Encumbrances. Mortgagor shall keep the Property free from all liens, encumbrances and security interests now existing or hereafter arising, except as otherwise provided herein. 6. Taxes Assessments and Utilities. Mortgagor shall pay before any penalty attaches all taxes, assessments and other charges heretofore or hereafter levied or assessed against the Property and all charges for electricity, gas, heat, water, sewer and other utilities furnished or used in connection with the Property. Upon request by Mortgagee, Mortgagor shall furnish to Mortgagee receipts evidencing payment therefore. 7. Insurance. Mortgagor, at its sole expense, shall maintain the following insurance policies for the benefit of Mortgagee: (a) builders risk insurance, written on the so-called "builders risk -completed value basis", in an amount equal to the actual replacement cost of all improvements as of the date of completion, with coverage on the so-called "all risk", non -reporting form of policy; (b) "all risk" hazard insurance, including loss by fire, lightning, wind, vandalism, malicious mischief and other risks included in the standard extended coverage endorsement, in an amount equal to the actual replacement cost of all improvements now or hereafter located on the Property, without deduction for depreciation, or the unpaid balance of the Indebtedness, whichever is greater; (c) comprehensive general public liability insurance; (d) workman's compensation insurance; (e) flood insurance in an amount equal to the actual replacement cost of all improvements now or hereafter located on the Property or the maximum obtainable amount, whichever is less, provided the Property is located in a "flood plain area" as defined by the Federal Insurance Administration under the Federal Flood Disaster Protection Act of 1973; and (f) such other insurance as Mortgagee may require. All insurance policies and renewals thereof shall be issued by companies and in form and substance acceptable to Mortgagee. All insurance policies and renewals thereof shall be constantly assigned, pledged and held by Mortgagee as additional security for the Indebtedness, shall include a standard mortgage clause naming Mortgagee as mortgagee and loss payee, shall include a provision waiving any defense based on co- insurance, shall provide for written notice of cancellation, substantial modification or non -renewal to Mortgagee at least 30 days prior to cancellation, substantial modification or non -renewal, and shall provide that no act or negligence of Mortgagor, the owner or the occupant of the Property, and no occupancy or use of the Property for purposes more hazardous than permitted by the insurance policy, shall affect the validity or enforceability of the insurance policy by Mortgagee. Mortgagor shall promptly deliver to Mortgagee any renewals thereof together with evidence of the payment of the premiums therefore. If Mortgagor fails to obtain the insurance or fails to pay the premiums when due, Mortgagee may pay the premiums, renew the insurance policies or obtain a new policy and charge the premiums to Mortgagor. Mortgagor shall give prompt notice to Mortgagee and insurer of any loss or damage to the Property or any part thereof. Mortgagee is alone empowered to make proof of loss, adjust and compromise any claim under the insurance policies, appear and prosecute any action arising from the insurance policies and collect and receive the insurance proceeds. Mortgagor irrevocably authorizes, empowers and appoints Mortgagee its attorney -in -fact, which appointment is coupled with an interest, to do the foregoing in the name and on behalf of Mortgagor. The insurance proceeds or other payment shall be paid directly to Mortgagee. Mortgagee may, at its option, apply the insurance proceeds, after deducting Mortgagee's expenses in collecting the insurance proceeds, including reasonable attorneys' fees, to the restoration or repair of the Property or to the reduction of the unpaid balance of the Indebtedness, whether or not then due and in such order of application as Mortgagee may determine. Any application of insurance proceeds to the Indebtedness shall not extend or postpone the date of any payment or change the amount of any payment, and the surplus, if any, shall be paid to Mortgagor. In the event of the foreclosure of this Mortgage or the acquisition of title to the Property by Mortgagee, all right, title and interest of Mortgagor to the insurance policies, the unearned premiums and the proceeds resulting from any loss or damage to the Property prior to the sale or acquisition shall pass to Mortgagee to the extent of the Indebtedness immediately prior to the sale or acquisition. The provisions of this Section shall survive the foreclosure of this Mortgage. 8. Condemnation. Mortgagor shall give prompt notice to Mortgagee of any condemnation or eminent domain proceeding concerning the Property or any part thereof. Mortgagor irrevocably assigns to Mortgagee any award or other payment resulting from the condemnation or taking of the Property or any part thereof, or conveyance in lieu of condemnation or taking, to the extent of the Indebtedness. Mortgagee is alone empowered to adjust and compromise any claim, collect and receive the award or other payment and to give proper receipts in the name and on behalf of Mortgagor. The award or other payment shall be paid directly to Mortgagee. Mortgagee may, at its option, apply the award or other payment, after deducting Mortgagee's expenses in collecting the award or other payment, including reasonable attorneys' fees, to the restoration or repair of the Property or the reduction of the Indebtedness, whether or not then due and in such order of application as Mortgagee may determine. Any application of the award or other payment to the Indebtedness shall not extend or postpone the date of any payment or change the amount of the payment, and the surplus, if any, shall be paid to Mortgagor. The provisions of this Section shall survive the foreclosure of this Mortgage. 9. Compliance With Laws and Restrictions. Mortgagor shall comply with all present and future laws, ordinances, rules, regulations and orders and covenants and restrictions affecting the Property or the use thereof. 10. Maintenance. Mortgagor shall keep and maintain the Property in good repair and condition and shall not commit or permit waste thereon. Mortgagor shall not remove or permit the removal from the Property of any building, structure, improvement, fixture or personal property now or hereafter located on the Property without the prior written consent of Mortgagee. Mortgagor agrees that no fixture shall be installed on the Property subject to a lien or encumbrance unless the lien or encumbrance is subordinate to this Mortgage. 11. Inspections. Mortgagee, its agents or representatives, shall have the right at all reasonable times to enter upon and inspect the Property. 12. Transfer or Encumbrance. Mortgagee may, at its option, declare the entire Indebtedness to be immediately due and payable, without notice, in the event that Mortgagor sells, assigns, conveys, leases, mortgages or otherwise transfers or encumbers all or part of the Property (except for the sale of Lots in the ordinary course of business), whether the transfer or encumbrance is voluntary or involuntary, without the prior written consent of Mortgagee. However, any subsequent further encumbrance running in favor of Mortgagee shall be deemed to be made with the consent required under this Section. No transfer, conveyance, lease, sale or other disposition shall relieve Mortgagor from personal liability for its obligations hereunder or under the Note, whether or not the transferee assumes this Mortgage. The Mortgagee may, without notice to the Mortgagor, deal with any successor owner of all or any portion of the Property in the same manner as with the Mortgagor, without in any way discharging the liability of the Mortgagor hereunder or under the Note. 13. Actions Involving Property. In the event that any action or proceeding is commenced which involves, affects or brings into question the title to, any interest in or lien, encumbrance or security interest against the Property or any part thereof, Mortgagor agrees to pay all costs, expenses and attorneys' fees at any time incurred by Mortgagee, whether or not in connection with an original or appellate proceeding and whether or not Mortgagee is the prevailing party and this Mortgage shall secure payment thereof. The provisions of this Section shall survive the foreclosure of this Mortgage. 14. Protection of Mortgagee's Security. All advances made by Mortgagee to protect the security of this Mortgage for the purposes provided herein or otherwise provided by law, shall be immediately due and payable by Mortgagor to Mortgagee, without notice, and shall bear interest at the rate provided in the Note from the date of the advance and the payment of the advances shall be secured by this Mortgage. 15. Security Interest. This Mortgage is a security agreement with respect to any and all property included in the Property that may be subject to a security interest pursuant to the Uniform Commercial Code, and Mortgagor grants to Mortgagee a security interest in such property. Mortgagor hereby authorizes the Mortgagee to file any and all financing statements covering such personal property and fixtures (in a form satisfactory to the Mortgagee) as the Mortgagee may reasonably consider necessary or appropriate to perfect its security interest. Upon the request of Mortgagee, Mortgagor shall execute and deliver to Mortgagee any and all financing statements, continuation statements, amendments or other documents that Mortgagee may require to perfect its security interest in such property. Mortgagor shall pay any and all costs of filing such documents. 16. Fixture Filing. From the date of its recording, this Mortgage shall be effective as a financing statement filed as a fixture filing with respect to all goods constituting part of the Property which are or are to become fixtures related to the Land. For this purpose, the following information is given: a. Name and address of Debtor: Schaefco Development, LLC PO Box 219 Victoria, MN 55386-0000 b. Name and address of Secured Party: West Side Capital, LLC 16233 Kenyon Avenue, Suite 120 Lakeville, Minnesota 55044 Attention: Mr. Kyle Ambrasas This document covers goods which are or are to become fixtures. 17. Purchase Money and Construction Mortgage. This Mortgage is a purchase money mortgage and a "construction mortgage" within the meaning of Minn. Stat. § 336.9-334. 18. Events of Default. Each of the following occurrences shall constitute an event of default ("Event of Default") under this Mortgage: (a) Mortgagor shall fail to observe or perform any of the terms or conditions to be kept or performed by Mortgagor under this Mortgage, the Loan Agreement, or the Note; (b) Any representation or warranty made by Mortgagor herein is untrue or misleading in any material respect, or any statement, certificate or report furnished hereunder by or on behalf of Mortgagor is untrue or misleading in any material respect on the date as of which the facts set forth are stated or certified; (c) Mortgagor becomes insolvent or unable to pay its debts as they mature, or makes an assignment for the benefit of creditors, or any proceedings are initiated by or against Mortgagor, alleging that Mortgagor is insolvent or unable to pay its debts as they mature or a petition is filed by or against Mortgagor under any of the provisions of the United States Bankruptcy Code; (d) Death of a Guarantor; (e) Mortgagor shall fail to observe or perform any of the terms or conditions to be kept or performed by Mortgagor under any other contract or agreement with Mortgagee, now existing or hereafter arising, including by not limited to documents associated with other loans; (f) Filing of any tax lien against Mortgagor by any agency of the federal, state or local government which is not paid in full or satisfied or released of record within 30 days after the date of filing; (g) Entry of any final judgment against Mortgagor in excess of $10,000.00 unless within 30 days following entry of judgment, said judgment is paid in full or is appealed and enforcement thereof is stayed during the period of appeal; (h) Sale of all or substantially all of the assets of Mortgagor or a similar disposition without the prior written consent of Mortgagee; (i) Mortgagor sells, assigns, exchanges, leases, transfers or otherwise disposes of all or any portion of the Property, with the exception of homes sold to end buyers in the ordinary course of business, or mortgages, hypothecates, creates a security interest in or otherwise encumbers all or a part of the Property, whether such transfer or encumbrance is voluntary or involuntary, without the prior written consent of Mortgagee; Q) Commencement of any action or proceeding involving, affecting or bringing into question the title to, interest in, or lien of the Mortgage upon the Property; (k) Commencement of an action to acquire any part of the Property by eminent domain unless the same is dismissed within 30 days thereof; (1) Filing of any mechanic's lien against the Property which is not paid in full and satisfied or released of record within 30 days after the date of filing; (m) Execution or attachment shall have been levied against the Property or any part thereof and shall continue without stay and in effect for a period of more than 30 consecutive days; or (n) Mortgagor shall fail to observe or perform any of the terms or conditions to be kept or performed by Mortgagor under any contract for deed or other executory contract and any mortgage or other encumbrance concerning the Property, whether prior or subordinate to the lien of the Mortgage. The Mortgagee's exercise of any of the rights or remedies under this Mortgage and the application of the rents, profits and income pursuant to Section 18, shall not cure or waive any Event of Default (or notice of default) under this Mortgage or invalidate any act done pursuant to such notice. 19. Remedies; Foreclosure. In the event of the occurrence of any Event of Default as hereinabove described entitling the holder of the Note to accelerate the maturity thereof, or in case the principal of the Note shall have become due and payable, whether upon demand, lapse of time or by acceleration, then and in every such case, the Mortgagor confers upon the Mortgagee the authority and power, at its option, to proceed to protect and enforce its rights by a suit or suits in equity or at law, either for the specific performance of any covenant or agreement contained herein or in the Note or the Loan Agreement, or in aid of the execution of any power herein or therein granted, or for the foreclosure of this Mortgage, or for the enforcement of any other appropriate legal or equitable remedy. Mortgagee shall have the statutory power of sale, and upon foreclosure of this Mortgage, Mortgagee may retain statutory costs and attorney's fees. Mortgagee shall be entitled to the appointment of a receiver to operate and protect the Property and to collect to collect the rents, issues, income and profits therefor, to care for and repair the Property, to improve the same when necessary or desirable, to lease and rent the Property or portions thereof (including leases extending beyond the term of the receivership), and otherwise to use the property and to exercise such other duties as may be fixed by the court. The Mortgagor specifically agrees that the court may appoint a receiver without regard to the adequacy of the Mortgagee's security or the solvency of the Mortgagor or any guarantor of any of the Indebtedness and without regard to any other matters normally taken into account by courts in the discretionary appointment of receivers, it being the intention of the Mortgagor hereby to authorize the appointment of a receiver whenever an Event of Default has occurred and the Mortgagee has requested the appointment of a receiver. The Mortgagor hereby agrees and consents to the appointment of the particular person or firm (including an officer or employee of the Mortgagee) designated by the Mortgagee as receiver and hereby waives its rights to suggest or nominate any person or firm as receiver in opposition to that designated by the Mortgagee. Mortgagee is authorized and empowered to foreclose this Mortgage by action or advertisement pursuant to Chapters 580 to 582 of the statutes of the State of Minnesota and sell the Property at public auction, as provided by law, the Mortgagor to remain liable for any deficiency, if permitted by law. Mortgagor agrees that any notice of the foreclosure sale of this Mortgage may be served by mail upon Mortgagor pursuant to Section 21. The sheriffs sale may be as one tract or otherwise, at the sole option of the Mortgagee. The Mortgagor agrees that, for the purpose of applicable Minnesota law, the Property is a single tract. In the event proceedings are commenced to foreclose this Mortgage by advertisement, Mortgagor agrees to pay to Mortgagee the maximum attorneys' fees permitted by law. Mortgagor waives any right to require the marshalling of assets by Mortgagee. The Mortgagee may in the name, place and stead of the Mortgagor and without becoming a mortgagee in possession (i) enter upon, manage and operate the Property or retain the services of one or more independent contractors to manage and operate all or any part of the Property; (ii) make, enforce, modify and accept surrender of any leases; (iii) obtain or evict tenants, collect, sue for, fix or modify any rents and enforce all rights of the Mortgagor under any leases and (iv) perform any and all other acts that may be necessary or proper to protect the security of this Mortgage. Mortgagor acknowledges that the procedure for foreclosure by advertisement pursuant to Minnesota statutes requires that notice of the foreclosure be served upon any occupants of the Property, but does not provide for direct service upon the mortgagee, nor does it provide for a hearing or other judicial proceeding. Mortgagor hereby relinquishes, waives and gives up any claim to a constitutional right to notice and a hearing before sale of the Property and expressly consents and agrees that the Property may be foreclosed upon by advertisement, at the option of Mortgagee, following the provisions set forth in Minnesota statutes. 20. Satisfaction or Partial Release of Mortgage. Upon full and final payment of the Indebtedness, Mortgagee shall satisfy this Mortgage and Mortgagor shall pay all costs of recording the satisfaction. Except as otherwise provided in the Loan Agreement, Mortgagor shall not be entitled to a release of this Mortgage against part of the Property. 21. Notice. Any notice provided for in this Mortgage shall be in writing and given by mailing notice to the other party. Any notice to Mortgagor shall be given by mailing notice to the address provided herein or such other address as Mortgagor may designate by notice to Mortgagee as provided herein. Any notice to Mortgagee shall be given by mailing notice by certified mail, return receipt requested, to the address provided herein or such other address as Mortgagee may designate by notice to Mortgagor as provided herein. Notice shall be deemed to have been given when deposited in the mail, postage prepaid and properly addressed to the other party. 22. Common Interest Community. In the event that the Property or any part thereof is a common interest community within the meaning of Minn. Stat. §515B.1-103 (10), Mortgagor, its successors and assigns, waive any right to a partial release of a unit and any common elements appurtenant to the unit from the lien of the Mortgage pursuant to Minn. Stat. § 515B.3-117. 23. Hazardous Substances. Mortgagor, its successors and assigns, covenants and warrants to Mortgagee, its successors and assigns, that: (a) No pollutants or other toxic or hazardous substances, including but not limited to, any solid, liquid, gaseous or thermal irritant or contaminant, such as smoke, vapor, soot, fumes, acids, herbicides, pesticides, alkalis, chemicals or wastes (including materials to be recycled, reconditioned or reclaimed) have been or shall be discharged, dispersed, released, stored, treated, generated, disposed of, or allowed to escape on the Property; (b) No asbestos or asbestos - containing materials have been installed, used, incorporated in, or disposed of on the Property; (c) No polychlorinated biphenyls are located on or in the Property; and (d) There are not now and there have not ever been any underground storage tanks on the Property (or if there ever were any underground storage tanks located on the Property, such underground storage tanks were filled or removed in accordance with Environmental Laws as defined in the Loan Agreement and hereinafter referred to as "Environmental Laws"); and there are not now and have never been any tanks or other facilities on, under or at the Property which contained materials which, if known to be present in soils or groundwater, would require remedial action under Environmental Laws. The Mortgagor is aware that the Mortgagee is relying on the representations contained in this Section 23 in making the Loan secured by this Mortgage, and the Mortgagor hereby agrees to indemnify, defend and hold the Mortgagee harmless against any loss, cost, claims, demands, judgments, damages, causes of action, penalties and expenses incurred by the Mortgagee, whether during the term hereof or at any time thereafter, including, but not limited to, reasonable attorneys' fees, arising out of or in any way connected with any of the following: the actual, alleged or threatened discharge, dispersal, release, storage, treatment, generation, disposal or escape of pollutants or other toxic material or hazardous substances or hazardous waste on or from the Property, or the use, specification or inclusion of any product containing such substances, or the performance of (or failure to perform) the abatement of any source of pollution, or the replacement or removal of any soil, water, surface water or groundwater containing such substances. The Mortgagor, its successors and assigns, shall bear, pay and discharge when the same become due and payable, all such judgments, awards or claims for damages, penalties or otherwise against the Mortgagee, and shall hold the Mortgagee harmless therefrom, and shall assume the burden and expense of defending all suits, administrative proceedings, and negotiations with any and all persons, political subdivisions or government agencies arising out of any of the occurrences set forth in this Section 23. The indemnification set forth in this Section 23 shall survive any termination, satisfaction or release of this Mortgage. 24. Indemnification. The Mortgagor will protect, indemnify, defend and save harmless the Mortgagee from and against all liabilities, obligations, claims, damages, penalties, causes of action, costs, charges and expenses, including, without limitation, all of the actual attorneys' fees and expenses which may at any time be paid, imposed upon, incurred by or asserted against the Mortgagee by reason of any accident, injury to or death of any person or loss of or damage to any property occurring on or about the Property or the adjoining sidewalks, curbs, vaults and vault space, if any, streets or ways, during the term of this Mortgage; any use, nonuse or condition of the Property or the adjoining sidewalks, curbs, vaults and vault space, if any, streets or ways, during the term of this Mortgage; any failure on the part of the Mortgagor to perform or comply with any of the terms of this Mortgage; performance of any labor or services or the furnishing of any materials or other property in respect of the Property at the instance or request of the Mortgagor; or any prohibited transactions in violation of ERISA, provided that Mortgagor shall have no such indemnification obligation for acts or omissions by the Mortgagee, any receiver requested or appointed by Mortgagee or contractors to the Mortgagee or such receiver. Any amounts payable to the Mortgagee under this Section which are not paid within 10 days after written demand therefor by the Mortgagee shall bear interest at the Default Rate provided in the Note, which shall in no event exceed the maximum rate allowed by law from the date of such demand. In case any action, suit or proceeding is brought against the Mortgagee by reason of any such occurrence, the Mortgagor, upon the Mortgagee's request, will at the Mortgagor's expense resist and defend such action, suit or proceeding or cause the same to be resisted and defended, either by counsel designated by the Mortgagor and approved by the Mortgagee, or, where such occurrence is covered by liability insurance, by counsel designated by the insurer. The obligations of the Mortgagor under this Section shall survive any termination, satisfaction or release of this Mortgage. 25. Anti Terrorism Compliance. Anti -Terrorism Compliance. The Mortgagor shall not (a) be or become subject at any time to any law, regulation or list of any government agency (including, without limitation, the U.S. Office of Foreign Asset Control list) that prohibits or limits Mortgagee from making any advance or extension of credit to Mortgagor or from otherwise conducting business with Mortgagor, or (b) fail to provide documentary and other evidence of Mortgagor's identity as may be requested by Mortgagee at any time to enable Mortgagee to verify Mortgagor's identity or to comply with any applicable law or regulation, including, without limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318. Neither Mortgagor nor any of the agents of such Mortgagor, constituents or affiliates acting or benefiting in any capacity in connection with the Loan (individually a "Mortgagor Party" and collectively, the "Mortgagor Parties") is in violation of any laws relating to terrorism or money laundering, including but not limited to, Executive Order No. 13224 on Terrorist Financing, effective September 23, 2001 (the "Executive Order"), as amended from time to time, and the U.S. Bank Secrecy Act of 1970, as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, and as otherwise amended from time to time (collectively, with the Executive Order, "Anti - Terrorism Law"). No action, proceeding, investigation, charge, claim, report, or notice has been filed, commenced, or threatened against any Mortgagor Party alleging any violation of any Anti -Terrorism Law. No Mortgagor Party has, after due investigation and inquiry, knowledge or notice of any fact, event, circumstance, situation, or condition which could reasonably be expected to result in (a) any action, proceeding, investigation, charge, claim, report, or notice being filed, commenced, or threatened against any of them alleging any violation of, or failure to comply with, any Anti -Terrorism Law; or (b) The imposition of any civil or criminal penalty against any of them for any failure to so comply. No Mortgagor Party or, to Mortgagor' knowledge, the Seller of the Property (if any portion of the Property is being acquired with proceeds of the Loan), is a "Prohibited Person." A Prohibited Person means any of the following: (a) a person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (b) a person or entity owned or controlled by, or acting for or on behalf of, any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (c) a person or entity with whom Mortgagee is prohibited from dealing or otherwise engaging in any transaction by any Anti -Terrorism Law; (d) a person or entity who or that commits, threatens, or conspires to commit or supports "terrorism" as defined in the Executive Order; or (e) a person or entity that is named as a "specially designated national and blocked person" on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official web site or any replacement website or other replacement official publication of such list. Mortgagor has provided Mortgagee with sufficient information (including names, addresses, and where applicable, jurisdiction of formation or organization) to reasonably permit Mortgagee to verify the foregoing. No Mortgagor Party or, to Mortgagor's knowledge, the Seller of the Property (if any portion of the Property is being acquired with proceeds of the Loan): (a) conducts any business or engages in making or receiving any contribution of funds, goods, or services to or for the benefit of any Prohibited Person; (b) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked under the Executive Order; or (c) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti -Terrorism Law. The Mortgagor shall not (a) conduct any business or engage in making or receiving any contribution of funds, goods, or services to or for the benefit of any Prohibited Person; (b) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order or any other Anti -Terrorism Law; or (c) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti -Terrorism Law; (d) be or become subject at any time to any law, regulation or list of any government agency (including, without limitation, the U.S. Office of Foreign Asset Control list) that prohibits or limits Mortgagee from making any advance or extension of credit to Mortgagor or from otherwise conducting business with Mortgagor, or (e) fail to provide documentary and other evidence of Mortgagor's identity as may be requested by Mortgagee at any time to enable Mortgagee to verify Mortgagor's identity or to comply with any applicable law or regulation, including, without limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318. Before any changes in direct or indirect ownership of any Mortgagor Party (where such changes are otherwise permitted under this Agreement), Mortgagor shall give a written notice to Mortgagee (a) advising Mortgagee, in reasonable detail as to the proposed ownership change; and (b) reaffirming that the representations and warranties herein contained will remain true and correct. Mortgagor agrees promptly to deliver to Mortgagee (but in any event within ten (10) days of Mortgagee's written request) any certification or other evidence requested from time to time by Mortgagee in its reasonable discretion, confirming Mortgagor's compliance with the foregoing 26. Governing Law. This Mortgage has been executed in the State of Minnesota and shall be governed in all respects by the laws of Minnesota. 27. No Mercier. In the event that Mortgagee is now or hereafter the holder of a junior mortgage which is a lien against the Property, the junior mortgage is foreclosed and Mortgagee acquires fee title to the Property thereby, the lien of this Mortgage shall not merge in the fee title acquired thereby and the Indebtedness secured by this Mortgage shall not be extinguished. This Mortgage shall continue to be and remain a valid and subsisting lien on the Property for the amount due thereunder 28. Successors and Assigns. The covenants and warranties in this Mortgage shall bind Mortgagor, its successors and assigns, and shall inure to the benefit of Mortgagee, its successors and assigns. 29. Amendment. No change, addition or modification of this Mortgage shall be valid unless it is in writing and signed by the party to be charged. 30. Severability. The provisions of this Mortgage shall be deemed severable, and the invalidity or unenforceability of any provision shall not affect the validity and enforceability of the other provisions. 31. Counterparts. This Mortgage may be executed in several counterparts, each of which shall be an original, and all of which shall constitute but a single instrument. 32. Remedies Cumulative; No Waivers. Each and every power or remedy specifically given herein shall be in addition to every other power or remedy, existing or implied, now or hereafter given or existing at law or in equity, or in any other instrument given to secure the Note, and each and every power and remedy specifically given herein or otherwise so existing or given may be exercised from time to time and as often and in such order as may be deemed expedient by the Mortgagee or the holder of the Note, and the exercise or the beginning of the exercise of one power or remedy shall not be deemed a waiver of the right to exercise at the same time or thereafter any other power or remedy. No delay or omission of the Mortgagee or of any holder of the Note to exercise any right, power or remedy accruing upon any Event of Default shall exhaust or impair any such right, power or remedy or shall be construed to waive any such Event of Default or to constitute acquiescence therein. Every right, power and remedy given to the Mortgagee may be exercised from time to time and as often as may be deemed expedient by the Mortgagee. No waiver of any Event of Default hereunder shall extend to or affect any subsequent or any other Event of Default then existing, or impair any rights, powers or remedies consequent thereon. If the Mortgagee grants forbearance or an extension of time for the payment of any sums secured hereby; takes other or additional security for the payment thereof; waives or does not exercise any right granted in the Note, this Mortgage, the Loan Agreement, or any other instrument securing the Note; releases any part of the Property from the lien of this Mortgage or otherwise changes any of the terms of the Note, this Mortgage, the Loan Agreement, or any other instrument securing the Note; consents to the filing of any map, plat or replat of the Land; consents to the granting of any easement on or over the Land; or makes or consents to any agreement changing the terms of this Mortgage or subordinating the lien or any charge hereof, no such act or omission shall release, discharge, modify, change or affect the original liability under the Loan Agreement, Note, this Mortgage or otherwise of the Mortgagor, or any subsequent purchaser of the Property or any part thereof or any maker, co-signer, endorser, surety or guarantor. No such act or omission shall preclude the Mortgagee from exercising any right, power or privilege herein granted or intended to be granted in case of any Event of Default then existing or of any subsequent Event of Default nor, except as otherwise expressly provided in any instrument or instruments executed by the Mortgagee, shall the lien of this Mortgage be altered thereby. No receipt of partial payment shall waive the acceleration 33. Headings. Headings are for reference purposes only and shall not be considered in the interpretation of this Mortgage. (Signature page follows) Schaefco Development, LLC STATE OF MINNESOTA ) ) ss. COUNTY OF i 6— ) The foregoing instrument was acknowledged before me this day of by Timothy J. Brown, the Vice President of Schaefco evel pment, LLC, a Minnesota Limited Liability Company, on behalf of the company. GALE E. LARSON Notary Public -Minnesota ..�+' My Conxrossion Expires Jan 31, 2025 THIS INSTRUMENT WAS DRAFTED BY: West Side Capital, LLC 16233 Kenyon Avenue, Suite 120 Lakeville, Minnesota 55044 Telephone (651) 289-6400 Loan 7065 Notary Public SEND TAX STATEMENTS TO: West Side Capital, LLC 16233 Kenyon Avenue, Suite 120 Lakeville, MN 55044 Telephone (651) 289-6400 WAIVER OF TWELVE-MONTH REDEMPTION PERIOD THIS AGREEMENT is made and entered on August 11, 2021 by Mortgagor. In the event of the foreclosure of this Mortgage, Mortgagor waives Mortgagor's right under Minn. Stat. No. 580.23, Subd. 2(6) to a twelve-month redemption period based upon the Land being in agricultural use as of the date of the execution of this Mortgage. Schaefco Development, LLC STATE OF MINNESOTA ) ) ss. COUNTY OF 64i 1L,) The foregoing instrument was acknowledged before me this //ram day of I , by Timothy J. Brown, the Vice President of Schaefco Develo ment, LLC, a Minnesota Limited Liability Company, on behalf of the company. d`"`"'"• GALE E. LARSON Notary Public -Minnesota �.+.� My C m"ftsbn Expires Jon 31, 2025 ANNA THIS INSTRUMENT WAS DRAFTED BY: West Side Capital, LLC 16233 Kenyon Avenue, Suite 120 Lakeville, Minnesota 55044 Telephone (651) 289-6400 Loan 7065 f. X AX,4-r,_-) Notary Public