Unassociated Document

Exhibit
4.7


     

     

     

     

     

    
      
        

      

    

    THIRD
PARTY

    OPEN-END
MORTGAGE

    AND
ASSIGNMENT OF RENTS AND LEASES

    Total
Indebtedness Not to Exceed $3,250,000

     

    THIS
THIRD PARTY OPEN-END MORTGAGE AND ASSIGNMENT (this “Mortgage”) is executed as
of, 2008 by MOUND TECHNOLOGIES,
INC., a Nevada corporation
(“Mortgagor”), to CHOICE
FINANCIAL GROUP, a North Dakota state bank (“Mortgagee”).

     

    ARTICLE
I. MORTGAGE

     

    1.1 Grant. For the
purposes and upon the terms and conditions in this Mortgage, Mortgagor
irrevocably mortgages, grants, conveys and assigns to Mortgagee, with the right
of entry and possession, Mortgagor’s interest in: (a) all real property located
in

     

    County,
Ohio, and described on Exhibit A attached
hereto; (b) all easements, rights-of-way and rights used in connection with or
as a means of access to any portion of said real property; (c) all tenements,
hereditaments and appurtenances thereof and thereto; (d) all right, title and
interest of Mortgagor, now owned or hereafter acquired, in and to any land lying
within the right-of-way of any street, open or proposed, adjoining said real
property, and any and all sidewalks, alleys and strips and gores of land
adjacent to or used in connection with said real property; (e) all buildings,
improvements and landscaping now or hereafter erected or located on said real
property; (f) all development rights, governmental or quasi-governmental
licenses, permits or approvals, zoning rights and other similar rights or
interests which relate to the development, use or operation of, or that benefit
or are appurtenant to, said real property; (g) all mineral rights, oil and gas
rights, air rights, water or water rights, including without limitation, all
wells, canals, ditches and reservoirs of any nature and all rights thereto,
appurtenant to or associated with said real property, whether decreed or
undecreed, tributary or non-tributary, surface or underground, appropriated or
unappropriated, and all shares of stock in any water, canal, ditch or reservoir
company, and all well permits, water service contracts, drainage rights and
other evidences of any such rights; and (h) all interest or estate which
Mortgagor now has or may hereafter acquire in said real property and all
additions and accretions thereto, and all awards or payments made for the taking
of all or any portion of said real property by eminent domain or any proceeding
or purchase in lieu thereof, or any damage to any portion of said real property
(collectively, the “Subject Property”). The listing of specific rights or
property shall not be interpreted as a limitation of general
terms.


    
      
         


      

      
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    1.2 Address. The address
of the Subject Property (if known) is: 25 Mound Park Drive, Springboro, Ohio
45066. Neither the failure to designate an address nor any inaccuracy in the
address designated shall affect the validity or priority of the lien of this
Mortgage on the Subject Property as described on Exhibit A. In the
event of any conflict between the provisions of Exhibit A and said
address, Exhibit A
shall control.

     

    ARTICLE
II. OBLIGATIONS
SECURED

     

    2.1 Obligations Secured.
Mortgagor makes this grant and assignment for the purpose of securing the
following obligations (each, a “Secured Obligation” and collectively, the
“Secured Obligations”):

     

    (a) payment
to Mortgagee of all sums at any time owing and performance of all other
obligations arising under or in connection with that certain Promissory Note
(“Note”) dated as of the same date as this Mortgage, in the maximum principal
amount of Three Million Two Hundred Fifty Thousand and 00/100 Dollars
($3,250,000), with interest as provided therein, executed by HEARTLAND, INC., a
Maryland corporation (“Borrower”), and payable to Mortgagee or its order,
together with the payment and performance of any other indebtedness or
obligations incurred in connection with the credit accommodation evidenced by
the Note, whether or not specifically referenced therein; and

     

    (b) payment
and performance of all obligations of Mortgagor under this Mortgage, together
with all advances, payments or other expenditures made by Mortgagee as or for
the payment or performance of any such obligations of Mortgagor;
and

     

    (c) payment
and performance of all obligations, if any, and the contracts under which they
arise, which any rider attached to and recorded with this Mortgage recites are
secured hereby; and

     

    (d) payment
to Mortgagee of all liability, whether liquidated or unliquidated, defined,
contingent, conditional or of any other nature whatsoever, and performance of
all other obligations, arising under any swap, derivative, foreign exchange or
hedge transaction or arrangement (or other similar transaction or arrangement
howsoever described or defined) at any time entered into with Mortgagee in
connection with any Secured Obligation; and

     

    (e) payment
and performance of all future advances and other obligations that Borrower
and/or the then record owner of the Subject Property may agree to pay and/or
perform (whether as principal, surety or guarantor) for the benefit of
Mortgagee, when any such advance or other obligation is evidenced by a writing
which recites that it is secured by this Mortgage; and

     

    (f) pursuant
to the provisions of Ohio Revised Code §5301.232, all unpaid balances of loan
advances or future advances made by the holder of this Mortgage at the request
of Borrower or Mortgagor or their successors in title after this Mortgage is
delivered to the recorder for recording to the extent that such unpaid balances
or future advances in the aggregate and exclusive of interest accrued thereon do
not exceed the maximum amount of $3,250,000 at any time; and

     

    (g)
pursuant to the provisions of Ohio Revised Code §5301.233, all unpaid balances
of advances made with respect to the Subject Property after the Mortgage is
delivered to the recorder
for recording for the payment of taxes, assessments, insurance premiums, or
costs incurred for the protection of the Subject Property;
and


    
      
         


      

      
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    (h) all
modifications, extensions and renewals of any of the Secured Obligations
(including without limitation, (i) modifications, extensions or renewals at a
different rate of interest, or (ii) deferrals or accelerations of the required
principal payment dates or interest payment dates or both, in whole or in part),
however evidenced, whether or not any such modification, extension or renewal is
evidenced by a new or additional promissory note or notes.

     

    2.2 Obligations. The term
“obligations” is used herein in its most comprehensive sense and includes any
and all advances, debts, obligations and liabilities heretofore, now or
hereafter made, incurred or created, whether voluntary or involuntary and
however arising, whether due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, joint or several, including without
limitation, all principal, interest, charges, including prepayment charges and
late charges, and loan fees at any time accruing or assessed on any Secured
Obligation.

     

    2.3 Incorporation. All
terms of the Secured Obligations are incorporated herein by this reference. All
persons who may have or acquire an interest in the Subject Property are hereby
deemed to have notice of the terms of the Secured Obligations and to have
notice, if provided therein, that: (a) the Note or any other Secured Obligation
may permit borrowing, repayment and reborrowing; and (b) the rate of interest on
one or more of the Secured Obligations may vary from time to time.

     

    ARTICLE
III. ASSIGNMENT OF
RENTS

     

    3.1 Assignment. For the
purposes and upon the terms and conditions set forth herein, Mortgagor
irrevocably assigns to Mortgagee all of Mortgagor’s right, title and interest
in, to and under all leases, licenses, rental agreements and other agreements of
any kind relating to the use or occupancy of any of the Subject Property,
whether existing as of the date hereof or at any time hereafter entered into,
together with all guarantees of and security for any tenant’s or lessee’s
performance thereunder, and all amendments, extensions, renewals and
modifications thereto (each, a “Lease” and collectively, the “Leases”), together
with any and all other rents, issues and profits of the Subject Property
(collectively, “Rents”). This assignment shall not impose upon Mortgagee any
duty to produce Rents from the Subject Property, nor cause Mortgagee to be: (a)
a “mortgagee in possession” for any purpose; (b) responsible for performing any
of the obligations of the lessor or landlord under any Lease; or (c) responsible
for any waste committed by any person or entity at any time in possession of the
Subject Property or any part thereof, or for any dangerous or defective
condition of the Subject Property, or for any negligence in the management,
upkeep, repair or control of the Subject Property. This is an absolute
assignment, not an assignment for security only, and Mortgagee’s right to Rents
is not contingent upon and may be exercised without taking possession of the
Subject Property. Mortgagor agrees to execute and deliver to Mortgagee, within
five (5) days of Mortgagee’s written request, such additional documents as
Mortgagee may reasonably request to further evidence the assignment to Mortgagee
of any and all Leases and Rents. Mortgagee, at Mortgagee’s option and without
notice, may notify any lessee or tenant of this assignment of the Leases and
Rents.

     

    3.2 Protection of Security.
To protect the security of this assignment, Mortgagor
agrees:

     

    (a) At
Mortgagor’s sole cost and expense: (i) to perform each obligation to be
performed by the lessor or landlord under each Lease and to enforce or secure
the performance of each obligation to be performed by the lessee or tenant under
each Lease; (ii) not to modify any Lease
in any material respect, nor accept surrender under or terminate the term of any
Lease; (iii) not to anticipate the Rents under any Lease; and (iv) not to waive
or release any lessee or tenant of or from any Lease obligations. Mortgagor
assigns to Mortgagee all of Mortgagor’s right and power to modify the terms of
any Lease, to accept a surrender under or terminate the term of or anticipate
the Rents under any Lease, and to waive or release any lessee or tenant of or
from any Lease obligations, and any attempt on the part of Mortgagor to exercise
any such rights or powers without Mortgagee’s prior written consent shall be a
breach of the terms hereof.


    
      
         


      

      
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    (b) At
Mortgagor’s sole cost and expense, to defend any action in any manner connected
with any Lease or the obligations thereunder, and to pay all costs of Mortgagee,
including reasonable attorneys’ fees, in any such action in which Mortgagee may
appear.

     

    (c) That,
should Mortgagor fail to do any act required to be done by Mortgagor under a
Lease, then Mortgagee may, but without obligation to do so and without notice to
Mortgagor and without releasing Mortgagor from any obligation hereunder, make or
do the same in such manner and to such extent as Mortgagee deems necessary to
protect the security hereof, and, in exercising such powers, Mortgagee may
employ attorneys and other agents, and Mortgagor shall pay necessary costs and
reasonable attorneys’ fees incurred by Mortgagee, or its agents, in the exercise
of the powers granted herein. Mortgagor shall give prompt notice to Mortgagee of
any default by any lessee or tenant under any Lease, and of any notice of
default on the part of Mortgagor under any Lease received from a lessee or
tenant thereunder, together with an accurate and complete copy
thereof.

     

    (d) To
pay to Mortgagee immediately upon demand all sums expended under the authority
hereof, including reasonable attorneys’ fees, together with interest thereon at
the highest rate per annum payable under any Secured Obligation, and the same,
at Mortgagee’s option, may be added to any Secured Obligation and shall be
secured hereby.

     

    3.3 License. Mortgagee
confers upon Mortgagor a license (“License”) to collect and retain the Rents as,
but not before, they come due and payable, until the occurrence of any Default.
Upon the occurrence of any Default, the License shall be automatically revoked,
and Mortgagee may, at Mortgagee’s option and without notice, either in person or
by agent, with or without bringing any action, or by a receiver to be appointed
by a court: (a) enter, take possession of, manage and operate the Subject
Property or any part thereof; (b) make, cancel, enforce or modify any Lease; (c)
obtain and evict tenants, fix or modify Rents, and do any acts which Mortgagee
deems proper to protect the security hereof; and (d) either with or without
taking possession of the Subject Property, in its own name, sue for or otherwise
collect and receive all Rents, including those past due and unpaid, and apply
the same in accordance with the provisions of this Mortgage. The entering and
taking possession of the Subject Property, the collection of Rents and the
application thereof as aforesaid, shall not cure or waive any Default, nor
waive, modify or affect any notice of default hereunder, nor invalidate any act
done pursuant to any such notice. The License shall not grant to Mortgagee the
right to possession, except as provided in this Mortgage.

     

    ARTICLE
IV. RIGHTS AND DUTIES
OF THE PARTIES

     

    4.1 Title. Mortgagor
warrants that, except as disclosed to Mortgagee prior to the date hereof in a
writing which refers to this warranty, Mortgagor lawfully possesses and holds
fee simple title to, or if permitted by Mortgagee in writing, a leasehold
interest in, the Subject Property without limitation on the right to encumber,
as herein provided, and that this Mortgage is a valid lien on the Subject
Property and all of Mortgagor’s interest therein.


    
      
         


      

      
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    4.2 Taxes and Assessments.
Subject to the right, if any, of Mortgagor to contest payment of the
following pursuant to any other agreement between Mortgagor and Mortgagee,
Mortgagor shall pay prior to delinquency all taxes, assessments, levies and
charges imposed: (a) by any
public or quasi-public authority which are or which may become a lien upon or
cause a loss in value of the Subject Property or any interest therein; or (b) by
any public authority upon Mortgagee by reason of its interest in any Secured
Obligation or in the Subject Property, or by reason of any payment made to
Mortgagee pursuant to any Secured Obligation; provided however, that Mortgagor
shall have no obligation to pay any income taxes of Mortgagee. Promptly upon
request by Mortgagee, Mortgagor shall furnish to Mortgagee satisfactory evidence
of the payment of all of the foregoing. Mortgagee is hereby authorized to
request and receive from the responsible governmental and non-governmental
personnel written statements with respect to the accrual and payment of any of
the foregoing.

     

    4.3 Performance of Secured
Obligations. If not paid and performed by Borrower, Mortgagor shall
promptly pay and perform each Secured Obligation when due.

     

    4.4 Liens, Encumbrances and
Charges. Mortgagor shall immediately discharge any lien on the Subject
Property not approved by Mortgagee in writing. Except as otherwise provided in
any Secured Obligation or other agreement with Mortgagee, Mortgagor shall pay
when due all obligations secured by or reducible to liens and encumbrances which
shall now or hereafter encumber the Subject Property, whether senior or
subordinate hereto, including without limitation, any mechanics’
liens.

     

    4.5 Insurance. Mortgagor
shall insure the Subject Property against loss or damage by fire and such other
risks as Mortgagee shall from time to time require. Mortgagor shall carry public
liability insurance, flood insurance as required by applicable law and such
other insurance as Mortgagee may reasonably require, including without
limitation, business interruption insurance or loss of rental value insurance.
Mortgagor shall maintain all required insurance at Mortgagor’s expense, under
policies issued by companies and in form and substance satisfactory to
Mortgagee. Mortgagee, by reason of accepting, rejecting, approving or obtaining
insurance, shall not incur any liability for: (a) the existence, nonexistence,
form or legal sufficiency thereof; (b) the
solvency of any insurer; or (c) the payment of losses. All policies and
certificates of insurance shall name Mortgagee as loss payee, and shall provide
that the insurance cannot be terminated as to Mortgagee except upon a minimum of
ten (10) days’ prior written notice to Mortgagee. Immediately upon any request
by Mortgagee, Mortgagor shall deliver to Mortgagee the original of all such
policies or certificates, with receipts evidencing annual prepayment of the
premiums.

     

    4.6 Tax and Insurance Impounds.
At Mortgagee’s option and upon its demand, Mortgagor shall, until all
Secured Obligations have been paid in full, pay to Mortgagee monthly, annually
or as otherwise directed by Mortgagee an amount estimated by Mortgagee to be
equal to: (a) all taxes, assessments, levies and charges imposed by any public
or quasi-public authority which are or may become a lien upon the Subject
Property and will become due for the tax year during which such payment is so
directed; and (b) premiums for fire, other hazard and mortgage insurance next
due. If Mortgagee determines that amounts paid by Mortgagor are insufficient for
the payment in full of such taxes, assessments, levies and/or insurance
premiums, Mortgagee shall notify Mortgagor of the increased amount required for
the payment thereof when due, and Mortgagor shall pay to Mortgagee such
additional amount within thirty (30) days after notice from Mortgagee. All
amounts so paid shall not bear interest, except to the extent and in the amount
required by law. So long as there is no Default, Mortgagee shall apply said
amounts to the payment of, or at Mortgagee’s sole option release said funds to
Mortgagor for application to and payment of, such taxes, assessments, levies,
charges and insurance premiums. If a Default exists, Mortgagee at its sole
option may apply all or any part of said amounts to any Secured Obligation
and/or to cure such Default, in which event Mortgagor shall be required to
restore all amounts so applied, as well as to cure any Default not cured by such
application. Mortgagor hereby grants and transfers to Mortgagee a security
interest in all amounts so paid and held in Mortgagee’s possession, and all
proceeds thereof, to secure the payment and performance of each Secured
Obligation. Upon assignment of this Mortgage, Mortgagee shall have the right to
assign all amounts collected and in its possession to its assignee, whereupon
Mortgagee shall be released from all liability with respect thereto. The
existence of said impounds shall not limit Mortgagee’s rights under any other
provision of this Mortgage or any other agreement, statute or rule of law.
Within ninety-five (95) days following full repayment of all Secured Obligations
(other than as a consequence of a foreclosure or conveyance in lieu of
foreclosure of the liens and security interests securing any Secured
Obligation), or at such earlier time as Mortgagee in its discretion may elect,
the balance of all amounts collected and in Mortgagee’s possession shall be paid
to Mortgagor, and no other party shall have any right of claim
thereto.

     

    
      
         

      

      
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    4.7 Damages; Insurance and
Condemnation Proceeds.

     

    (a) (i) All
awards of damages and all other compensation payable directly or indirectly by
reason of a condemnation or proposed condemnation (or transfer in lieu thereof)
for public or private use affecting the Subject Property; (ii) all other claims
and awards for damages to or decrease in value of the Subject Property; (iii)
all proceeds of any insurance policies payable by reason of loss sustained to
the Subject Property; and (iv) all interest which may accrue on any of the
foregoing, are all absolutely and irrevocably assigned to and shall be paid to
Mortgagee. At the absolute discretion of Mortgagee, whether or not its security
is or may be impaired, but subject to applicable law if any, and without regard
to any requirement contained in any other Section hereof, Mortgagee may apply
all or any of the proceeds it receives to its expenses in settling, prosecuting
or defending any such claim and apply the balance to the Secured Obligations in
any order, and release all or any part of the proceeds to Mortgagor upon any
conditions Mortgagee may impose. Mortgagee may commence, appear in, defend or
prosecute any assigned claim or action, and may adjust, compromise, settle and
collect all claims and awards assigned to Mortgagee; provided however, that in
no event shall Mortgagee be responsible for any failure to collect any claim or
award, regardless of the cause of the failure.

     

    (b) At its
sole option, Mortgagee may permit insurance or condemnation proceeds held by
Mortgagee to be used for repair or restoration but may impose any conditions on
such use as Mortgagee deems necessary.

     

    4.8 Maintenance and Preservation
of Subject Property. Subject to the provisions of any Secured Obligation,
Mortgagor covenants:

     

    (a) to keep
the Subject Property in good condition and repair;

     

    (b) except
with Mortgagee’s prior written consent, not to remove or demolish the Subject
Property, nor alter, restore or add to the Subject Property, nor initiate or
acquiesce in any change in any zoning or other land classification which affects
the Subject Property;

     

    (c) to
restore promptly and in good workmanlike manner any portion of the Subject
Property which may be damaged or destroyed, unless Mortgagee requires that all
of the insurance proceeds be used to reduce the Secured Obligations as provided
in the Section hereof entitled Damages; Insurance and
Condemnation Proceeds;

     

    (d) to comply
with and not to suffer violation of any or all of the following which govern
acts or conditions on, or otherwise affect the Subject Property: (i) laws,
ordinances, regulations, standards and judicial and administrative rules and
orders; (ii) covenants, conditions, restrictions
and equitable servitudes, whether public or private; and (iii) requirements of
insurance companies and any bureau or agency which establishes standards of
insurability;

     

    
      
         

      

      
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    (e) not to
commit or permit waste of the Subject Property; and

     

    (f) to do all
other acts which from the character or use of the Subject Property may be
reasonably necessary to maintain and preserve its value.

     

    4.9 Hazardous Substances;
Environmental Provisions. Mortgagor represents and warrants to Mortgagee
as follows:

     

    (a) Except as
disclosed to Mortgagee in writing prior to the date hereof, the Subject Property
is not and has not been a site for the use, generation, manufacture, storage,
treatment, disposal, release or threatened release, transportation or presence
of any substances which are “hazardous substances,” “hazardous wastes,”
“hazardous materials” or “toxic substances” under the Hazardous Materials Laws,
as defined below, and/or other applicable environmental laws, ordinances and
regulations (collectively, the “Hazardous Materials”).

     

    (b) The
Subject Property is in compliance with all laws, ordinances and regulations
relating to Hazardous Materials (collectively, the “Hazardous Materials Laws”),
including without limitation, the Clean Air Act, the Federal Water Pollution
Control Act, the Federal Resource Conservation and Recovery Act of 1976, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Superfund Amendments and Reauthorization Act of 1986, the Federal Toxic
Substances Control Act and the Occupational Safety and Health Act, as any of the
same may be amended, modified or supplemented from time to time, and any other
applicable federal, state or local environmental laws, and any rules or
regulations adopted pursuant to any of the foregoing.

     

    (c) There are
no claims or actions pending or threatened against Mortgagor or the Subject
Property by any governmental entity or agency, or any other person or entity,
relating to any Hazardous Materials or pursuant to any Hazardous Materials
Laws.

     

    (d) Mortgagor
hereby agrees to defend, indemnify and hold harmless Mortgagee, its directors,
officers, employees, agents, successors and assigns, from and against any and
all losses, damages, liabilities, claims, actions, judgments, court costs and
legal or other expenses (including without limitation, attorneys’ fees and
expenses) which Mortgagee may incur as a direct or indirect consequence of the
use, generation, manufacture, storage, treatment, disposal, release or
threatened release, transportation or presence of Hazardous Materials in, on,
under or about the Subject Property. Mortgagor shall pay to Mortgagee
immediately upon demand any amounts owing under this indemnity, together with
interest from the date of demand until paid in full at the highest rate of
interest applicable to any Secured Obligation. MORTGAGOR’S DUTY AND OBLIGATION
TO DEFEND, INDEMNIFY AND HOLD HARMLESS MORTGAGEE SHALL SURVIVE THE CANCELLATION
OF THE SECURED OBLIGATIONS AND THE RELEASE OR PARTIAL RELEASE OF THIS
MORTGAGE.

     

    (e)
Mortgagor shall immediately advise Mortgagee in writing upon Mortgagor’s
discovery of any occurrence or condition on the Subject Property, or on any real
property adjoining or in the vicinity of the Subject Property, that does or
could cause all or any part of the Subject Property to be contaminated with any
Hazardous Materials or otherwise be in violation of any Hazardous Materials
Laws, or cause the Subject Property to be subject to any restrictions on the
ownership, occupancy, transferability or use thereof under any Hazardous
Materials Laws.


    
      
         


      

      
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    4.10
Protection of
Security. Mortgagor shall, at Mortgagor’s sole expense: (a) protect,
preserve and defend the Subject Property and Mortgagor’s title and right to
possession of the Subject Property against all adverse claims; (b) if
Mortgagor’s interest in the Subject Property is a leasehold interest or estate,
pay and perform in a timely manner all obligations to be paid and/or performed
by the lessee or tenant under the lease or other agreement creating such
leasehold interest or estate; and (c) protect, preserve and defend the security
of this Mortgage and the rights and powers of Mortgagee under this Mortgage
against all adverse claims. Mortgagor shall give Mortgagee prompt notice in
writing of the assertion of any claim, the filing of any action or proceeding,
or the occurrence of any damage, condemnation offer or other action relating to
or affecting the Subject Property and, if Mortgagor’s interest in the Subject
Property is a leasehold interest or estate, of any notice of default or demand
for performance under the lease or other agreement pursuant to which such
leasehold interest or estate was created or exists.

     

    4.11
Powers and Duties of
Mortgagee. Mortgagee may, upon written request, without obligation to do
so or liability therefor and without notice: (a) release all or any part of the
Subject Property from the lien of this Mortgage; (b) consent to the making of
any map or plat of the Subject Property; and (c) join in any grant of easement
or declaration of covenants and restrictions with respect to the Subject
Property, or any extension agreement or any agreement subordinating the lien or
charge of this Mortgage. Mortgagee may from time to time apply to any court of
competent jurisdiction for aid and direction in the exercise or enforcement of
its rights and remedies available under this Mortgage, and may obtain orders or
decrees directing, confirming or approving acts in the exercise or enforcement
of said rights and remedies. Mortgagee has no obligation to notify any party of
any pending sale or any action or proceeding (including, but not limited to,
actions in which Mortgagor or Mortgagee shall be a party) unless held or
commenced and maintained by Mortgagee under this Mortgage.

     

    4.12
Compensation;
Exculpation; Indemnification.

     

    (a) Mortgagor
shall pay Mortgagee reasonable compensation for services rendered concerning
this Mortgage, including without limitation, the providing of any statement of
amounts owing under any Secured Obligation. Mortgagee shall not directly or
indirectly be liable to Mortgagor or any other person as a consequence of: (i)
the exercise of any rights, remedies or powers granted to Mortgagee in this
Mortgage; (ii) the failure or refusal of Mortgagee to perform or discharge any
obligation or liability of Mortgagor under this Mortgage or any Lease or other
agreement related to the Subject Property; or (iii) any loss sustained by
Mortgagor or any third party as a result of Mortgagee’s failure to lease the
Subject Property after any Default or from any other act or omission of
Mortgagee in managing the Subject Property after any Default unless such loss is
caused by the willful misconduct or gross negligence of Mortgagee; and no such
liability shall be asserted or enforced against Mortgagee, and all such
liability is hereby expressly waived and released by Mortgagor.

     

    (b) Mortgagor
shall indemnify Mortgagee against, and hold Mortgagee harmless from, any and all
losses, damages, liabilities, claims, causes of action, judgments, court costs,
attorneys’ fees and other legal expenses, costs of evidence of title, costs of
evidence of value, and other expenses which Mortgagee may suffer or incur: (i)
by reason of this Mortgage; (ii) by reason of the performance of any act
required or permitted hereunder or by law; (iii) as a result of any failure of
Mortgagor to perform Mortgagor’s obligations; or (iv) by reason of any alleged
obligation or undertaking of Mortgagee to perform or discharge any of the
representations, warranties, conditions, covenants or other obligations
contained in any other document related to the Subject Property, including
without limitation, the payment of any taxes, assessments, rents or other lease
obligations, liens, encumbrances or other obligations of Mortgagor under this
Mortgage. Mortgagor’s duty to indemnify Mortgagee shall survive the payment,
discharge or cancellation
of the Secured Obligations and the release or satisfaction, in whole or in part,
of this Mortgage.

     

    
      
         

      

      
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    (c)
Mortgagor shall pay all indebtedness arising under this Section immediately upon
demand by Mortgagee, together with interest thereon from the date of demand
until paid in full at the highest rate per annum payable under any Secured
Obligation. Mortgagee may, at its option, add any such indebtedness to any
Secured Obligation.

     

    4.13
Due on Sale or
Encumbrance. Except as permitted by the provisions of any Secured
Obligation or applicable law, if the Subject Property or any interest therein
shall be sold, transferred (including without limitation, where applicable,
through sale or transfer of a majority or controlling interest of the corporate
stock, or any general partnership, limited liability company or other similar
interests, of Mortgagor), mortgaged, assigned, encumbered or leased, whether
voluntarily, involuntarily or by operation of law (each of which actions and
events is called a “Transfer”), without Mortgagee’s prior written consent, THEN
Mortgagee may, at its sole option, declare all Secured Obligations immediately
due and payable in full. Mortgagor shall notify Mortgagee in writing of each
Transfer within ten (10) business days of the date thereof.

     

    4.14
Releases, Extensions,
Modifications and Additional Security. Without notice to or the consent,
approval or agreement of any persons or entities having any interest at any time
in the Subject Property or in any manner obligated under any Secured Obligation
(each, an “Interested Party”), Mortgagee may, from time to time, release any
Interested Party from liability for the payment of any Secured Obligation, take
any action or make any agreement extending the maturity or otherwise altering
the terms or increasing the amount of any Secured Obligation, accept additional
security, and enforce, waive, subordinate or release all or a portion of the
Subject Property or any other security for any Secured Obligation. None of the
foregoing actions shall release or reduce the personal liability of any
Interested Party, nor release or impair the priority of the lien of this
Mortgage upon the Subject Property.

     

    4.15
Release of Mortgage.
Upon satisfaction in full of the Secured Obligations, Mortgagee, without
warranty, shall deliver for recording in the appropriate real property records a
satisfaction or release of Mortgage for the Subject Property, or that portion
thereof then covered hereby, from the lien of this Mortgage.

     

    4.16
Subrogation.
Mortgagee shall be subrogated to the lien of all encumbrances, whether or
not released of record, paid in whole or in part by Mortgagee pursuant to this
Mortgage or by the proceeds of any Secured Obligation.

     

    4.17
Mortgagor Different
From Obligor (“Third Party Mortgagor”). As used in this Section, the term
“Obligor” shall mean each person or entity obligated in any manner under any of
the Secured Obligations; and the term “Third Party Mortgagor” shall mean (1)
each person or entity included in the definition of Mortgagor herein and which
is not an Obligor under all of the Secured Obligations, and (2) each person or
entity included in the definition of Mortgagor herein if any Obligor is not
included in said definition.

     

    (a) Representations and
Warranties. Each Third Party Mortgagor represents and warrants to
Mortgagee that: (i) this Mortgage is executed at an Obligor’s request; (ii) this
Mortgage complies with all agreements between each Third Party Mortgagor and any
Obligor regarding such Third Party Mortgagor’s execution hereof; (iii) Mortgagee
has made no representation to any Third Party Mortgagor as to the
creditworthiness of any Obligor; and (iv) each Third Party Mortgagor has
established adequate means of obtaining from each Obligor on a continuing basis
financial and other information pertaining to such Obligor’s financial
condition.


    
      
         


      

      
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    Each
Third Party Mortgagor agrees to keep adequately informed from such means of any
facts, events or circumstances which might in any way affect such Third Party
Mortgagor’s risks hereunder. Each Third Party Mortgagor further agrees that
Mortgagee shall have no obligation to disclose to any Third Party Mortgagor any
information or material about any Obligor which is acquired by Mortgagee in any
manner. The liability of each Third Party Mortgagor hereunder shall be
reinstated and revived, and the rights of Mortgagee shall continue if and to the
extent that for any reason any amount at any time paid on account of any Secured
Obligation is rescinded or must otherwise be restored by Mortgagee, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise, all as
though such amount had not been paid. The determination as to whether any amount
so paid must be rescinded or restored shall be made by Mortgagee in its sole
discretion; provided however, that if Mortgagee chooses to contest any such
matter at the request of any Third Party Mortgagor, each Third Party Mortgagor
agrees to indemnify and hold Mortgagee harmless from and against all costs and
expenses, including reasonable attorneys’ fees, expended or incurred by
Mortgagee in connection therewith, including without limitation, in any
litigation with respect thereto.

     

    (b) Waivers.

     

    (i) Each
Third Party Mortgagor waives any right to require Mortgagee to: (A) proceed
against any Obligor or any other person; (B) marshal assets or proceed against
or exhaust any security held from any Obligor or any other person; (C) give
notice of the terms, time and place of any public or private sale or other
disposition of personal property security held from any Obligor or any other
person; (D) take any other action or pursue any other remedy in Mortgagee’s
power; or (E) make any presentment or demand for performance, or give any notice
of nonperformance, protest, notice of protest or notice of dishonor hereunder or
in connection with any obligations or evidences of indebtedness held by
Mortgagee as security for or which constitute in whole or in part the Secured
Obligations, or in connection with the creation of new or additional
obligations.

     

    (ii) Each
Third Party Mortgagor waives any defense to its obligations hereunder based upon
or arising by reason of: (A) any disability or other defense of any Obligor or
any other person; (B) the cessation or limitation from any cause whatsoever,
other than payment in full, of any Secured Obligation; (C) any lack of authority
of any officer, director, partner, agent or any other person acting or
purporting to act on behalf of any Obligor which is a corporation, partnership
or other type of entity, or any defect in the formation of any such Obligor; (D)
the application by any Obligor of the proceeds of any Secured Obligation for
purposes other than the purposes represented by any Obligor to, or intended or
understood by, Mortgagee or any Third Party Mortgagor; (E) any act or omission
by Mortgagee which directly or indirectly results in or aids the discharge of
any Obligor or any portion of any Secured Obligation by operation of law or
otherwise, or which in any way impairs or suspends any rights or remedies of
Mortgagee against any Obligor; (F) any impairment of the value of any interest
in any security for the Secured Obligations or any portion thereof, including
without limitation, the failure to obtain or maintain perfection or recordation
of any interest in any such security, the release of any such security without
substitution, and/or the failure to preserve the value of, or to comply with
applicable law in disposing of, any such security; (G) any modification of any
Secured Obligation, in any form whatsoever, including without limitation the
renewal, extension, acceleration or other change in time for payment of, or
other change in the terms of, any Secured Obligation or any portion thereof,
including increase or decrease of the rate of interest thereon; or (H) any
requirement that Mortgagee give any notice of acceptance of this Mortgage. Until
all Secured Obligations shall have been paid in full, no Third Party Mortgagor
shall have any right of subrogation, and each Third Party Mortgagor waives any
right to enforce any remedy which Mortgagee now has or may hereafter have
against any Obligor or any other person, and waives any benefit of, or any right
to participate in, any security now or hereafter held by
Mortgagee.


    
      
         


      

      
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    Each
Third Party Mortgagor further waives all rights and defenses it may have arising
out of: (1) any election of remedies by Mortgagee, even though that election of
remedies, such as a non-judicial foreclosure with respect to any security for
any portion of the Secured Obligations, destroys such Third Party Mortgagor’s
rights of subrogation or such Third Party Mortgagor’s rights to proceed against
any Obligor for reimbursement; or (2) any loss of rights any Third Party
Mortgagor may suffer by reason of any rights, powers or remedies of any Obligor
in connection with any anti-deficiency laws or any other laws limiting,
qualifying or discharging any Obligor’s obligations.

     

    (iii) If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waiver shall be effective to the extent permitted by applicable law
or public policy.

     

    4.18
Mechanics Liens.
Mortgagee is authorized to do all matters permitted and sanctioned
by Ohio Revised Code § 1311.14 as now existing or hereafter
amended.

     

    ARTICLE
V. DEFAULT
PROVISIONS

     

    5.1 Default. The
occurrence of any of the following shall constitute a “Default” under this
Mortgage: (a) Mortgagor shall fail to observe or perform any obligation or
agreement contained herein; (b) any representation or warranty of Mortgagor
herein shall prove to be incorrect, false or misleading in any material respect
when made; or (c) any default in the payment or performance of any obligation,
or any defined event of default, under any provisions of the Note or any other
contract, instrument or document executed in connection with, or with respect
to, any Secured Obligation.

     

    5.2 Rights and Remedies.
Upon the occurrence of any Default, and at any time thereafter, Mortgagee
shall have all the following rights and remedies:

     

    (a) With or
without notice, to declare all Secured Obligations immediately due and payable
in full.

     

    (b) With or
without notice, without releasing Mortgagor from any Secured Obligation and
without becoming a mortgagee in possession, to cure any Default of Mortgagor
and, in connection therewith: (i) to enter upon the Subject Property and to do
such acts and things as Mortgagee deems necessary or desirable to protect the
security of this Mortgage, including without limitation, to appear in and defend
any action or proceeding purporting to affect the security of this Mortgage or
the rights or powers of Mortgagee hereunder; (ii) to pay, purchase, contest or
compromise any encumbrance, charge, lien or claim of lien which, in the judgment
of Mortgagee, is senior in priority to this Mortgage, the judgment of Mortgagee
being conclusive as between the parties hereto; (iii) to obtain, and to pay any
premiums or charges with respect to, any insurance required to be carried
hereunder; and (iv) to employ counsel, accountants, contractors and other
appropriate persons to assist Mortgagee.

     

    (c) To
commence and maintain an action or actions in any court of competent
jurisdiction to foreclose this Mortgage or to obtain specific enforcement of the
covenants of Mortgagor under this Mortgage, and Mortgagor agrees that such
covenants shall be specifically enforceable by injunction or any other
appropriate equitable remedy. For the purposes of any suit brought under this
subsection, Mortgagor waives the defenses of laches and any applicable statute
of limitations.


    
      
         


      

      
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    (d) To apply
to a court of competent jurisdiction for and obtain appointment of a receiver of
the Subject Property as a matter of strict right and without regard to: (i) the
adequacy of the security for the repayment of the Secured Obligations; (ii) the
existence of a declaration that the Secured Obligations are immediately due and
payable; or (iii) the filing of a notice of default; and Mortgagor consents to
such appointment.

     

    (e) To take
and possess all documents, books, records, papers and accounts of Mortgagor or
the then owner of the Subject Property; to make or modify Leases of, and other
agreements with respect to, the Subject Property upon such terms and conditions
as Mortgagee deems proper; and to make repairs, alterations and improvements to
the Subject Property deemed necessary, in Mortgagee’s judgment, to protect or
enhance the security hereof.

     

    (f) To resort
to and realize upon the security hereunder and any other security now or later
held by Mortgagee concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully taken non-judicial
proceedings, or both, and to apply the proceeds received in accordance with the
Section hereof entitled Application of Foreclosure
Sale  Proceeds, all in such
order and manner as Mortgagee shall determine in its sole
discretion.

     

    (g) Upon sale
of the Subject Property at any judicial foreclosure, Mortgagee may credit bid
(as determined by Mortgagee in its sole discretion) all or any portion of the
Secured Obligations. In determining such credit bid, Mortgagee may, but is not
obligated to, take into account all or any of the following: (i) appraisals of
the Subject Property as such appraisals may be discounted or adjusted by
Mortgagee in its sole underwriting discretion; (ii) expenses and costs incurred
by Mortgagee with respect to the Subject Property prior to foreclosure; (iii)
expenses and costs which Mortgagee anticipates will be incurred with respect to
the Subject Property after foreclosure, but prior to resale, including without
limitation, costs of structural reports and other due diligence, costs to carry
the Subject Property prior to resale, costs of resale (e.g., commissions,
attorneys’ fees, and taxes), Hazardous Materials clean-up and monitoring,
deferred maintenance, repair, refurbishment and retrofit, and costs of defending
or settling litigation affecting the Subject Property; (iv) declining trends in
real property values generally and with respect to properties similar to the
Subject Property; (v) anticipated discounts upon resale of the Subject Property
as a distressed or foreclosed property; (vi) the existence of additional
collateral, if any, for the Secured Obligations; and (vii) such other factors or
matters that Mortgagee deems appropriate. Mortgagor acknowledges and agrees
that: (A) Mortgagee is not required to use any or all of the foregoing factors
to determine the amount of its credit bid; (B) this Section does not impose upon
Mortgagee any additional obligations that are not imposed by law at the time the
credit bid is made; (C) the amount of Mortgagee’s credit bid need not have any
relation to any loan-to-value ratios specified in any agreement between
Mortgagor and Mortgagee or previously discussed by Mortgagor and Mortgagee; and
(D) Mortgagee’s credit bid may be, at Mortgagee’s sole discretion, higher or
lower than any appraised value of the Subject Property.

     

    5.3 Application of Foreclosure
Sale Proceeds. After deducting all costs, fees and expenses of sale,
including costs of evidence of title and attorneys’ fees in connection with a
sale, all proceeds of any foreclosure sale shall be applied first, to payment of
all Secured Obligations (including without limitation, all sums expended by
Mortgagee under the terms hereof and not then repaid, with accrued interest at
the highest rate per annum payable under any Secured Obligation), in such order
and amounts as Mortgagee in its sole discretion shall determine; and the
remainder, if any, to the person or persons legally entitled
thereto.

     

    5.4 Application of Other Sums.
All Rents or other sums received by Mortgagee or any agent or receiver
hereunder, less all costs and expenses incurred by Mortgagee or such agent or
receiver, including reasonable attorneys’ fees, shall be applied to payment of
the Secured Obligations
in such order as Mortgagee shall determine in its sole discretion; provided
however, that Mortgagee shall have no liability for funds not actually received
by Mortgagee.


    
      
         


      

      
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    5.5 No Cure or Waiver.
Neither Mortgagee’s or any receiver’s entry upon and taking possession of
the Subject Property, nor any collection of Rents, insurance proceeds,
condemnation proceeds or damages, other security or proceeds of other security,
or other sums, nor the application of any collected sum to any Secured
Obligation, nor the exercise of any other right or remedy by Mortgagee or any
receiver shall impair the status of the security of this Mortgage, or cure or
waive any breach, Default or notice of default under this Mortgage, or nullify
the effect of any notice of default or sale (unless all Secured Obligations and
any other sums then due hereunder have been paid in full and Mortgagor has cured
all other Defaults), or prejudice Mortgagee in the exercise of any right or
remedy, or be construed as an affirmation by Mortgagee of any tenancy, lease or
option of the Subject Property or a subordination of the lien of this
Mortgage.

     

    5.6 Costs, Expenses and
Attorneys’ Fees. Mortgagor agrees to pay to Mortgagee immediately upon
demand the full amount of all payments, advances, charges, costs and expenses,
including court costs and reasonable attorneys’ fees, expended or incurred by
Mortgagee pursuant to this Article V, whether incurred at the trial or appellate
level, in an arbitration proceeding or otherwise, and including any of the
foregoing incurred in connection with any bankruptcy proceeding (including
without limitation, any adversary proceeding, contested matter or motion brought
by Mortgagee or any other person) relating to Mortgagor or in any way affecting
any of the Subject Property or Mortgagee’s ability to exercise any of its rights
or remedies with respect thereto. All of the foregoing shall be paid by
Mortgagor with interest from the date of demand until paid in full at the
highest rate per annum payable under any Secured Obligation.

     

    5.7 Power to File Notices and
Cure Defaults. Mortgagor hereby irrevocably appoints Mortgagee and its
successors and assigns as Mortgagor’s true attorney-in-fact to perform any of
the following powers, which agency is coupled with an interest: (a) to execute
and/or record any notices that Mortgagee deems appropriate to protect
Mortgagee’s interest; and (b) upon the occurrence of any event, act or omission
which with the giving of notice or the passage of time, or both, would
constitute a Default, to perform any obligation of Mortgagor hereunder; provided
however, that Mortgagee, as such attorney-in-fact, shall only be accountable for
such funds as are actually received by Mortgagee, and Mortgagee shall not be
liable to Mortgagor or any other person or entity for any failure to act under
this Section.

     

    5.8 Remedies Cumulative; No
Waiver. All rights, powers and remedies of Mortgagee hereunder are
cumulative and are in addition to all rights, powers and remedies provided by
law or in any other agreements between Mortgagor and Mortgagee. No delay,
failure or discontinuance of Mortgagee in exercising any right, power or remedy
hereunder shall affect or operate as a waiver of such right, power or remedy;
nor shall any single or partial exercise of any such right, power or remedy
preclude, waive or otherwise affect any other or further exercise thereof or the
exercise of any other right, power or remedy.

     

    ARTICLE
VI. MISCELLANEOUS
PROVISIONS

     

    6.1 No Merger. No merger
shall occur as a result of Mortgagee’s acquiring any other estate in, or any
other lien on, the Subject Property unless Mortgagee specifically consents to a
merger in writing.

     

    6.2 Execution of Documents.
Mortgagor agrees, upon demand by Mortgagee, to execute any and all
documents and instruments required to effectuate the provisions
hereof.


    
      
         


      

      
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    6.3 Right of Inspection.
Mortgagee or its agents or employees may enter onto the Subject Property
at any reasonable time for the purpose of inspecting the Subject Property and
ascertaining Mortgagor’s compliance with the terms hereof.

     

    6.4 Notices. All notices,
requests and demands which Mortgagor or Mortgagee is required or may desire to
give to the other party must be in writing, delivered to Mortgagee at the
following address:

     

    Choice
Financial Group

    1697
South 42nd
Street

    Grand
Forks, North Dakota 58201_____

     

    and to
Mortgagor at its address set forth at the signature lines below, or at such
other address as either party shall designate by written notice to the other
party in accordance with the provisions hereof.

     

    6.5 Successors; Assignment.
This Mortgage shall be binding upon and inure to the benefit of the
heirs, executors, administrators, legal representatives, successors and assigns
of the parties hereto; provided however, that this Section does not waive the
provisions of the Section hereof entitled Due on Sale or Encumbrance.
Mortgagee reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of, or any interest in, Mortgagee’s
rights and benefits under the Note, any and all other Secured Obligations and
this Mortgage. In connection therewith, Mortgagee may disclose all documents and
information which Mortgagee now has or hereafter acquires relating to the
Subject Property, all or any of the Secured Obligations and/or Mortgagor and, as
applicable, any partners, joint venturers or members of Mortgagor, whether
furnished by any Mortgagor or otherwise.

     

    6.6 Rules of Construction.
(a) When appropriate based on the identity of the parties or other
circumstances, the masculine gender includes the feminine or neuter or both, and
the singular number includes the plural; (b) the term “Subject Property” means
all and any part of or interest in the Subject Property; (c) all Section
headings herein are for convenience of reference only, are not a part of this
Mortgage, and shall be disregarded in the interpretation of any portion of this
Mortgage; (d) if more than one person or entity has executed this Mortgage as
“Mortgagor,” the obligations of all such Mortgagors hereunder shall be joint and
several; and (e) all terms of Exhibit A, and each other exhibit and/or rider
attached hereto and recorded herewith, are hereby incorporated into this
Mortgage by this reference.

     

    6.7 Severability of Provisions.
If any provision of this Mortgage shall be held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or any remaining provisions of this Mortgage.

     

    6.8 Governing Law. This
Mortgage shall be governed by and construed in accordance with the laws of the
State of Ohio.


    
      
         


      

      
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    IN
WITNESS WHEREOF, Mortgagor has executed this Mortgage as of the date first set
forth above.

     

     

    
      
        	Mortgagor 	 	 	Address	 
	      
                Mound
      Technologies, Inc.

              	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By 	
                 

              	 	 	
                 

              	 
	Its	
                 

              	 	 	
                 

              	 
	 	 	 	 	
                 

              	 


      

    

                                          

     

    This
instrument prepared by:

     

    Winthrop
& Weinstine, P.A.

    225 South
Sixth Street, Suite 3500 

    Minneapolis,
Minnesota 55402

     

    STATE
OF                                )

    )
ss

    COUNTY
OF                           
)

     

    The
foregoing instrument was acknowledged before me this ___ day of                             
, 2008, by                                   ,
the                                    
of Mound Technologies, Inc., a Nevada corporation, on behalf of
the corporation.

     

      
        

      

    

    Notary
Public

     

     

    
      
         

      

      
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    EXHIBIT
A

    LEGAL
DESCRIPTION

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    16