6.1 EDSR 10-17-2016
Request for Action
ToItem Number
Economic Development Authority6.1
Agenda Section Meeting DatePrepared by
General BusinessAugust 15, 2016Amanda Othoudt, EDD
Item Description
Reviewed by
Amendment to the Loan Documentsbetween Cal Portner, City Administrator
Patriot Converting, Inc. and the Economic
Reviewed by
Development Authority of the City of Elk River
Action Requested
Approve, by motion, a request to amend the Loan Agreement and Security Agreementbetween Patriot
Converting, Inc. and the Economic Development Authority of the City of Elk River.
Background/Discussion
At their January 19 meeting, the Economic Development Authority ,000 Jobs Incentive
Microloan to Patriot Converting, Inc. to renovate an existing facility and purchase new equipment.
Patriot Converting was required to securethe loan by providing the EDA witha first lien security interest
in certain equipment acquired with the proceeds of the Loan, in addition, theywere required to sign a
personal guarantee.
Patriot Converting is in the process of purchasing new equipment
will be relocating some of their existing equipment to their facility in Iowa to make room for the new
equipment. Patriot has requested the EDA amend the Loan Documents to modify the equipment listed
as security for the Loanand file the updated UCC document.
The EDA will hold a first position security interest in the equiThe city will also
keep a blanket lien on all of Patriot Convertings Minnesota assets. In the event of defaulton a first
position security interest, the EDA could liquidate the equipment torecover the principal and interest
due on the loan and any costs associated with enforcing the security interest on the equipment from the
proceeds of the sale of the property.
Financial Impact
None. Patriot Converting has agreed to pay for all the legal and filing fees associated with m
Loan Documents.
Attachments
Amendment to the Loan Agreement
Amendment to the Security Agreement
UCC Filing
Resolution
FIRST AMENDMENTTO LOAN AGREEMENT
(Microloan)
FIRST AMENDMENTTOLOAN AGREEMENT (“Agreement”) ismade effective as of
___________,2016, by and between PATRIOT CONVERTING, INC., a Minnesota corporation
(“Borrower”), and the ECONOMIC DEVELOPMENT AUTHORITYOF THE CITY OF ELK
RIVER, a public body corporate and politic of the State of Minnesota (“Lender”).
RECITALS
A.The Borrower and the Lenderare parties to that certain Loan Agreement, dated as
of May 5, 2016(the “Loan Agreement”)whereby the Lender agreedto provide a loan to the
Borrower pursuant to its microloan program;
B.As security for the loan, the Lender required that the Borrower provide a first lien
security interest in certain equipment acquired with the proceeds of the loan;
C.The Borrower hadrequested that the Lender agree to amend the equipment
subject to the first lien security interestto reflect that the Borrower will use the loan proceeds to
purchase different equipment than originally anticipated; and
D.The Lender has agreedto the Borrower’s request on the condition that the Loan
Agreement be amended as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, it
is hereby agreed as follows:
1.Exhibit Ato the Loan Agreementis amended and restatedas set forth in Exhibit
Aattached hereto.
2.Paragraph C of the Loan Agreement shall be amended and restated as follows:
C.A Security Agreement, as amended by the First Amendment to Security
Agreement and all supplements and amendments thereto,securing the Note
(“Security Agreement”). The Security Agreement is of even date herewith, is
executed by the Borrower, in favor of the Lender, as secured party, and provides a
first lien security interest in the equipment acquired by the Borrower with the
proceeds of the Loan and a second lien security interest in all other equipment of
the Borrower located in Minnesota currently owned or hereafter acquired by the
Borrower (the “Equipment”);
3.Except as set forth herein, the Loan Agreement shall otherwise continue in full
force and effect, in accordance with itsterms.
4.The Borrower shall pay all costs associated with the preparation of this
Amendment, the First Amendment to Security Agreement, amended UCC filing statements, and
filing amended UCC filing statements with the Minnesota Secretary of State.
1
487829v2 EL185-39
Signature Page to First Amendmentto Loan Agreement
IN TESTIMONY WHEREOF, each of the parties hereto has caused these presents to be
effective as of the day and year first above written.
PATRIOT CONVERTING, INC.
By:
Michael Stilwell
Its:VicePresident
S-1
487829v2 EL185-39
Signature Page to First Amendmentto Loan Agreement
IN TESTIMONY WHEREOF, each of the parties hereto has caused these presents to be
effective as of the day and year first above written.
ECONOMIC DEVELOPMENTAUTHORITY
OF THE CITY OF ELK RIVER
By:
Name:
Its:President
By:
Name:
Its: Executive Director
S-2
487829v2 EL185-39
EXHIBIT A
Equipment List
Description
ItemPurchasePrice
Status
Q-15-0902-9Track & Trolley System #2$38,941.0027246-TT
Q-21374Communication Closet Rebuild$35,000.00TBD
Q-21375Equipment Move & Relocate$25,000.00NA
Q-21380$25,000.00NA
Pits & Concrete
Al2 Rll Ph $1500000TBD
ToyotaPower Dolly$3,500.00TBD
ToyotaCascades Clamp$24,000.00TBD
Great Dane2 Semi Trailers$35,000.00TBD
Great Dane2 Semi Trailers$35,000.00TBD
A-1
487829v2 EL185-39
FIRST AMENDMENT TOSECURITY AGREEMENT
(Microloan)
This FIRST AMENDMENTTO SECURITY AGREEMENT (“Amendment”) is made to
be effective as of _________,2016,by PATRIOT CONVERTING, INC., a Minnesota
corporation(“Grantor”) and theECONOMIC DEVELOPMENT AUTHORITY OF THE CITY
OF ELK RIVER (the “Secured Party”).
RECITALS
A.On May 5, 2016, the Secured Party provided a loan to the Grantor pursuant to its
microloan program;
B.As security for the loan, the Grantor and the Secured Party entered intothat
certain Security Agreement effective as of May 5, 2016 (the “Security Agreement”)providing
the Secured Party a first lien security interest in certain equipment acquired with the proceeds of
the Loan;
C.The Grantor has requested that the Secured Party allow it to amend the collateral
securing the loan from the Secured Party to the Grantorto reflect that the Borrower will use the
loan proceeds to purchase different equipment than originally anticipated; and
D.The Grantor and Secured Party have agreed to amend the description of the
Collateral.
NOW THEREFORE, in consideration of the above recitals, and the promises set forth in
this Amendment, the parties agree as follows:
1.Exhibit Ato the Security Agreementis amended and restatedas set forth
in Exhibit Aattached hereto.
2.Paragraph 1 of the Security Agreement is amended and restated as
follows:
1.OBLIGATIONS. “Obligations”means collectively each debt,
liability and obligation of every type andnature which the Grantormay
now or at any time hereafter owe to SecuredParty (including without
limitation the obligations created under the loan agreement, and any
amendments thereto(the “Loan Agreement”),and the promissory note of
the Grantorto Secured Party of even date herewith and all amendments,
replacements, restatements, and substitutions therefor),whether now
existing or hereafter created or arising, and whether direct or indirect, due
or to become due, absolute or contingent, and the repayment or
performance of any of the foregoing if any such payment or performance
is at any time avoided, rescinded, set aside, or recovered from or repaid by
Secured Party, in whole or in part, in any bankruptcy, insolvency, or
1
487824v2 EL185-39
similar proceedinginstituted by or against the Grantor or any other
guarantor of any Obligation, or otherwise, including but not limited to all
principal, interest, fees, expenses and other charges.
3.The Borrower agrees to provide serial numbers for the new equipment
within 20 days of the date hereof.
4.Except as set forth herein, the Security Agreement shall otherwise
continue in full force and effect, in accordance with its terms.
[Signature Pages follow]
2
487824v2 EL185-39
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
PATRIOT CONVERTING, INC.:
PATRIOT CONVERTING, INC.,
a Minnesota corporation
By:
Its: ___________________________
Address:
Patriot Converting Inc.
Attn: Mike Stilwell
12698 Industrial Blvd
Elk River, MN 55330
S-1
487824v2 EL185-39
SECURED PARTY:
ECONOMIC DEVELOPMENT
AUTHORITY OF THE CITY OF ELK
RIVER
By:
Its:
By:
Its:
Address:
13065 Orono Parkway
Elk River, MN 55330
S-2
487824v2 EL185-39
EXHIBIT A
List of Equipment
All of the following property of the Grantor, whether now owned or hereafter acquired and
wherever located: (a) equipment specified below; (b) accessions, additions and improvements to,
replacements of, and substitutions for any of the foregoing; (c) all products and proceeds of any
of the foregoing; and (d) books, records and data in any form relating to any of the foregoing.
Description
ItemPurchasePrice
Status
Track & Trolley System #2$38,941.0027246-TT
Q-15-0902-3
Q-15-0902-9 Communication Closet Rebuild$35,000.00TBD
Equipment Move & Relocate$25,000.00NA
Q-15-0902-10
Q-21380$25,000.00NA
Pits & Concrete
Appleton2 Roll Pusher $15,000.00TBD
ToyotaPower Dolly$3,500.00TBD
ToyotaCascades Clamp$24,000.00TBD
Great Dane2 Semi Trailers$35,000.00TBD
A-1
487824v2 EL185-39
AMENDMENT
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS
A. NAME & PHONE OF CONTACT AT FILER (optional)
B. E-MAIL CONTACT AT FILER (optional)
C. SEND ACKNOWLEDGMENT TO: (Name and Address)
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1b.
1a.
This FINANCING STATEMENT AMENDMENT is to be filed [for record]
INITIAL FINANCING STATEMENT FILE NUMBER
(or recorded) in the REAL ESTATE RECORDS
Filer:attach Amendment Addendum (Form UCC3Ad) and provide Debtor’s name in item 13
2.TERMINATION:
Effectiveness of the Financing Statement identified above is terminated with respect to the security interest(s) of Secured Party authorizing this Termination
Statement
3.
ASSIGNMENT
(full or partial): Provide name of Assignee in item 7a or 7b, and address of Assignee in item 7c and name of Assignor in item 9
For partial assignment, complete items 7 and 9 and also indicate affected collateral in item 8
4.CONTINUATION:
Effectiveness of the Financing Statement identified above with respect to the security interest(s) of Secured Party authorizing this Continuation Statement is
continued for the additional period provided by applicable law
5.PARTY INFORMATION CHANGE:
AND
Checkone of these three boxes to:
Checkone of these two boxes:
CHANGE name and/or address: CompleteADD name: Complete itemDELETE name: Give record name
Secured Party of record
This Change affectsDebtororitem 6a or 6b; and item 7a or 7b and item 7c7a or 7b, and item 7cto be deleted in item 6a or 6b
6.CURRENT RECORD INFORMATION:
Complete for Party Information Change - provide only one name (6a or 6b)
6a. ORGANIZATION'S NAME
OR
6b. INDIVIDUAL'S SURNAMEADDITIONAL NAME(S)/INITIAL(S)SUFFIX
FIRST PERSONAL NAME
7.CHANGED OR ADDED INFORMATION:
7a. ORGANIZATION'S NAME
OR
7b. INDIVIDUAL'S SURNAME
INDIVIDUAL'S FIRST PERSONAL NAME
INDIVIDUAL'S ADDITIONAL NAME(S)/INITIAL(S)SUFFIX
7c. MAILING ADDRESSCITYSTATEPOSTAL CODECOUNTRY
8.COLLATERAL CHANGE:
ADD collateralDELETE collateralRESTATE covered collateralASSIGN collateral
Also check one of these four boxes:
Indicate collateral:
SECURED PARTYRECORD
9.NAME AUTHORIZING THIS AMENDMENT:
OF OF Provide only one name (9a or 9b) (name of Assignor, if this is an Assignment)
DEBTOR
If this is an Amendment authorized by a , check hereand provide name of authorizing Debtor
9a. ORGANIZATION'S NAME
OR
9b. INDIVIDUAL'S SURNAMEFIRST PERSONAL NAMEADDITIONAL NAME(S)/INITIAL(S)SUFFIX
10.OPTIONAL FILER REFERENCE DATA:
FILING OFFICE COPY —
UCC FINANCING STATEMENT AMENDMENT (Form UCC3) (Rev. 04/20/11)
ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF ELK RIVER
COUNTY OF SHERBURNE
STATE OF MINNESOTA
RESOLUTION NO. 16-____
RESOLUTION APPROVING A FIRST AMENDMENT TO LOAN
AGREEMENT AND RELATED DOCUMENTS
(PATRIOT CONVERTING PROJECT)
WHEREAS, the Board of Commissioners (the Board ) of the Economic Development
Authority of the City of Elk River (the EDA ) previously approved a Loan Agreement (the Loan
Agreement ) with Stilwell Holdings, LLC (the Borrower ) for the renovation and equipping of an
existing building located on certain real property in the City of Elk River
providing a loan to the Borrower in the amount of $200,000 (the
Microloan Program (the Program ).
WHEREAS, the EDA has received a request from the Borrower to amend the Loan
Agreement to amend the equipment provided as security for the Loan.
WHEREAS, the EDA has caused to be prepared a First Amendment to
(the First Amendment to Loan Agreement ) and First Amendment to Security Agreement (the
First Amendment to Security Agreement , and together with the F
Agreement, the Amendment Documents ), setting forth, among other things, equipment providing
security for the Loan.
NOW THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Economic
Development Authority of the City of Elk River as follows:
1.01.The AmendmentDocumentsas presented to the EDA, together with all related
documents necessary in connection therewith (collectively, the Loan Documents ) are hereby in all
respects approved, in substantially the form on file with the Citys Economic Development Director;
and the President and Executive Director are hereby authorized a
Agreement and any Loan Documents to which the EDA is a party on behalf of the EDA and to carry
out, on behalf of the EDA, the EDAs obligations thereunder.
1.02. The approval hereby given to the Loan Documents includes approva
additional details therein as may be necessary and appropriate and such modifications thereof, deletions
therefrom and additions thereto as may be necessary and appropri
the EDA and by the President and Executive Director prior to exe
officers are hereby authorized to approve said changes on behalf o
instrument by the President and Executive Director shall be conc
such document in accordance with the terms hereof. In the event of absence or disability of said
officers, any of the documents authorized by this Resolution to
further act or authorization of the Board by any duly designated
or officers of the Board as, in the opinion of the City Attorney, may act in
487990v1 GAF EL185-39
Approved by the Board of Commissioners of the Economic Developme
City of Elk River this 17th day of October, 2016.
President
ATTEST:
Executive Director
487990v1 GAF EL185-39