6.4 EDSR 05-15-2017E lls
River`
Request for Action
To
Item Number
Economic Development Author*
6.4
Agenda Section
Meeting Date
Prepared by
General Business
July 20, 2015
Amanda Othoudt, EDD
Item Description
Reviewed by
19228, LLC (Promo Products) Consent to Sale
Cal Portner, City Administrator
Reviewed by
Action Requested
The EDA is asked to consider adoption of the attached Resolution consenting to the sale of business
relating to the loan to 19228, LLC (Promo Products)
Background /Discussion
On January 13, 2011, the city approved an Industrial Incentive Microloan for $30,000 for Promo
Products. The original maturity date of the loan was January of 2016 and on July 20, 2015, the EDA
approved a 2 -year extension.
The owners recently their business and the real estate they owned in the entity 19228, LLC. Brian Clark
is the new owner dba Liberty Clark, LLC.
The sale of the company and the real estate was intended to take place simultaneously however the buyer
proceeded with the purchase of Promo Products' assets. Both transactions were approved by 21"
Century Bank and an SBA 504 loan for the real estate was approved by Twin Cities -Metro CDC. Due to
new rules adopted by the EPA, an environmental review with vapor testing must be completed prior to
closing. To accomplish this, the property would undergo a "cold weather" vapor testing, as well as a
"warm weather" vapor testing. Unfortunately, the Cold Weather test cannot be completed until
November, after which time the property sale would be completed.
First National Bank's mutual customers have executed a lease with the new company and completed a
new appraisal which shows a positive cash flow. First National also will have a Loan -To -Value including
our Is' mortgage, the SBA Mortgage initiated by CMDC in 2010, and the City /EDA mortgage of
approximately 54 %.
The applicant is asking the EDA to consider continuing its loan until the earlier of the sale of the building
or the maturity of the city loan in January 2018. The loan originated in January 2011 with a 5 -year
maturity and the loan was extended for 24 months to mature in January 2018. Payments have been made
as agreed, the LTV is satisfactory, and the company has proven its ability to generate positive cash flow
and service its rent payments.
Financial Impact
None. Payments will continue to be received per the loan agreement.
4A UR
Attachments
• Request from First National Bank of Elk River
• Resolution
• Participation Agreement
• Promissory Note
• Subsidy Agreement
• Resolution 15 -04 approving extension request Duly 20, 2015)
N: \Departments \Community Development \Economic Development \EDA \Administrative \Agenda \EDA Agenda Packets \2017 \05 -15- 2017 \6.4 sr
Promo Products Industrial Incentive Loan Extension.docx
FIRST NATIONAL BANK of Elk River
1
May 11, 2017
Amanda Othoudt, EDFP
Economic Development Director
City of Elk River
13065 Orono Parkway
Elk River, MN 55330
Amanda
812 Main Street Phone 763.01.3637
Elk River, MN 55330 Fax 761.433 .3800
www.fnbeccom
As we discussed earlier, Andy Isle and Duane Hass recently had the opportunity to sell their business, Promo
Products, and the real estate they owned in the entity 19228, LLC in which Promo Products had operated. The
buyer of the company and real estate is a person by the name of Brian Clark who had formed a company called
Liberty Clark, LLC to operate the business. Andy has stayed on for a short period of time to transition to the
new owner, and two key people, Carl and Oscar, are still active with the business as employees.
It was intended that the sale of the company and the real estate would take place simultaneously. it is my
understanding that both transactions are approved by 21st Century Bank, and there would be a SBA 504 loan for
the real estate that has also been approved by Twin Cities -Metro CDC. Due to some new rules adopted by the
EPA, the environmental review of the property recommended vapor testing be completed prior to closing. To
accomplish this, the property would undergo a "cold weather" vapor testing, as well as a "warm weather" vapor
testing. Unfortunately, the Cold Weather test cannot be completed at this point until November, after which
time the property sale would be completed.
The buyer proceeded with the purchase of Promo Products' assets. Our mutual customers have executed a lease
with the new company and also completed a new appraisal, both of which I'd sent via e-mail. Based on this
information, we have a positive cash flow for our mutual borrower, 19228 LLC. We also would have a Loan -
To -Value including our IIt mortgage, the SBA Mortgage initiated by CMDC in 2010, and the City /EDA
mortgage of approximately 54 %.
I am asking for the EDA to consider continuing its loan to 19228, LLC until the earlier of the sale of the
building, or the maturity of the City loan in January 2018. As you'll recall, this loan originated in January 2011
with a 5 -year maturity, and the loan was extended for 24 months prior to its maturity in January 2016, per EDA
eligibility, to mature in January 2018. Payments have been made as agreed, the LTV is satisfactory, and the
company has proven its ability to generate positive cash flow and service its rent payments.
PleaseY r"oipff any questions you might have. Thank you!
)Vice President
First National Bank of Elk River
13785 Rogers Drive
Suite 100
Rogers, MN 55374
NMLS # 1249649
Y 5 -s } k -N_ fig♦ y>
k; '. i;J3 r
CITY OF ELK RIVER
ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 17 -04
RESOLUTION CONSENTING TO THE SALE OF BUSINESS
RELATING TO THE LOAN TO 19228 LLC
(PROMO PRODUCTS PROJECT)
WHEREAS, the Board of Commissioners (the "Board ") of the Economic Development Authority
of the City of Elk River (the "EDA ") has received a request from 19228 LLC (the `Borrower ") with
a recommendation from First National Bank of Elk River (the "Lender ") that the EDA consent to a
new operator relating to loan (the "Loan ") provided to the Borrower pursuant to the provisions of
the EDA's Microloan Program (the "Program ");
WHEREAS, on the date of issuance of the Loan, the Borrower leased the loan property to Promo
Products, LLC (the "Original Operator ") and the Original Operator agreed to provide a guarantee
of loan repayments and to operate its business on the loan property;
WHEREAS, the Original Operator has sold its business to Liberty Clark, LLC (the "New
Operator ");
WHEREAS, the Borrower is currently leasing the loan property to the New Operator and
anticipates selling the loan property to the New Operator upon completion of environmental testing
required on the loan property;
WHEREAS, the Lender has proposed to prepare necessary amendments to the Promissory Note,
Participation Certificate and Agreement and Loan Agreement (collectively, together with all related
documents necessary in connection therewith, the "Loan Documents ") with the Borrower reflecting
that notwithstanding that the Original Operator is no longer operating its business on the loan
property, the Loan will not be accelerated and the Borrower will continue making loan payments on
the Loan in accordance with the existing payment schedule until the earlier of (i) the date the loan
property is sold; or (ii) the maturity date of the Loan on January 13, 2018; and
WHEREAS, the EDA has determined that consenting to the operation of the loan property by the
New Operator and permitting the Loan to remain outstanding until maturity or sale of the loan
property will assist the Borrower and the New Operator in continuing the operation of the business
in the City of Elk River;
NOW THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Economic
Development Authority of the City of Elk River (the "Board ") as follows:
1. Notwithstanding that the Original Operator is no longer operating its business on the loan
property, the Board hereby consents to the Loan remaining outstanding and will permit the
Borrower to continue making loan payments on the Loan in accordance with the existing
payment schedule until the earlier of (i) the date the loan property is sold; or (ii) the maturity
499539v2 JSB ELI 85-34
date of the Loan on January 13, 2018 and also approves any amendments to the Loan
Documents necessary in connection therewith and the President and Executive Director are
hereby authorized and directed to execute, on behalf of the EDA, any such amendments to the
Loan Documents to which the EDA is a party and to carry out, on behalf of the EDA, the
EDA's obligations thereunder.
2. The approval hereby given to the amendments to the Loan Documents includes approval of
such additional details therein as may be necessary and appropriate and such modifications
thereof, deletions therefrom and additions thereto as may be necessary and appropriate and
approved by legal counsel to the EDA and by the President and Executive Director prior to
executing said documents; and said officers are hereby authorized to approve said changes on
behalf of the EDA. The execution of any instrument by the President and Executive Director
shall be conclusive evidence of the approval of 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 be executed may be executed without further act or authorization of the
Board by any duly designated acting official, or by such other officer or officers of the Board as,
in the opinion of the City Attorney, may act in their behalf.
Approved by the Board of Commissioners of the Economic Development Authority of the City of Elk
River this 15th day of May, 2017.
President
ATTEST:
Executive Director
499539v2 JSB ELI 85-34
PARTICIPATION CERTIFICATE AND AGREEMENT
Certificate Number:
DATE AND PARTIES. The date of this Participation Certificate and Agreement (Agreement) is JANUARY 13, 2011. The parties and their addresses are:
ORIGINATING LENDER (Seller):
FIRST NATIONAL BANK OF ELK RIVER
812 Main Street
Elk River. MN 55330 -1575
PARTICIPATING LENDER (Purchaser):
ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY
13065 ORONO PARKWAY
ELK RIVER, MINNESOTA 55330
1. LOAN BACKGROUND INFORMATION. A Promissory Note evidencing a Loan was executed in favor of Seller as follows:
A. Borrower Name. 19228 LLC (Borrower)
B. Loan Number. 226430
C. Date Of Loan. 01/13/11
D. Loan Amount. Term loan with a Principal of $30,000.00.
E. Due Date. January 13, 2016
F. Additional Information. THIS LOAN IS BEING SOLD TO THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY WITHOUT RECOURSE.
2. SALE OF PARTICIPATION.
A. Term Loan. In consideration of the sum of $30,000 (Purchaser's Investment), Seller hereby sells and certifies to Purchaser an undivided 100% percent
interest (Share) in the Principal and interest hereafter accruing from the Loan. This sale is made without recourse to Seller.
B. First Refusal. Upon receipt by Purchaser of a bona fide offer from a third party to purchase, subparticipate or otherwise acquire Purchaser's interest in the
Loan, Purchaser will notify Seller of the offer and provide Seller with the right of first refusal. Seller will respond to Purchaser's offer in a timely manner. If
Seller elects not to obtain Purchaser's interest, Purchaser may transfer its interest to any third party in accordance with the terms in the ASSIGNMENT section
of this Agreement.
C. Purchaser's Fixed Interest Rate. Purchaser will receive interest on Purchaser's Investment at the fixed rate of 3.0% percent.
D. Purchaser Funding. Purchaser agrees to remit its portion of the Loan in the form of a Cashier's Check on the day of Seller's request. Any amounts not paid
to Seller shall bear interest at the Promissory Note rate.
This Agreement includes the sale to Purchaser of a Share in all notes and other instruments evidencing indebtedness of Borrower in the Loan, together with all
security interests in the Property securing such indebtedness. Purchaser and Seller agree that Purchaser will be considered for all purposes the legal and equitable
owner of the above Share in the Loan, related documents, and Property and will possess all applicable rights, privileges and remedies, subject to other provisions of
this Agreement.
3. PAYMENTS. Seller will receive all Payments and apply them to Borrower's account. Payments received by Seller under the Loan will be held for the benefit of
Seller and Purchaser until the payments are actually paid to and received by Purchaser. Purchaser's percentage of all Payments is 100% percent of Payments (with
appropriate provisions made for differences in interest rates, if any, between Seller and Purchaser). If Seller must refund any part of a Payment that was remitted to
Purchaser to Borrower or any other person, Purchaser shall remit to Seller immediately the amount received by Purchaser.
4. EXPENSES. Seller may at its discretion make additional advances for taxes, insurance premiums and other items deemed necessary by Seller to collect, enforce,
or protect the Loan and any Property securing the Loan including, but not limited to, attorneys' fees, court costs and disbursements. Seller will bear all Expenses.
5. BORROWER FEES. Seller will accept and retain all Borrower Fees.
6. ADMINISTRATIVE FEES. Seller will bear all costs of administering and servicing the Loan.
7. SECURITY. The Loan is secured by a guaranty and the following Property, all of which is evidenced by executed security agreements, assignments, mortgages,
deeds of trust or other instruments in favor of Seller. A security interest in the Property is assigned and sold to Purchaser, subject to other provisions within this
Agreement, in proportion to Purchaser's Investment and is held by Seller for the benefit of Purchaser. Upon full payment of Purchaser's Investment plus interest
thereon the security interest given to Purchaser will be null and void.
Property description: COMMERCIAL REAL ESTATE AT 19228 INDUSTRIAL BLVD NW, ELK RIVER, MINNESOTA 55330 (LEGAL TO GOVERN)
B. UNRELATED CREDIT OF BORROWER. If Borrower requests or continues other credit unrelated to the Loan, Seller may provide this credit without Purchaser's
approval. Purchaser may not provide this credit without the consent of Seller.
The Property, listed within this Agreement, securing Borrower's credit will not be liquidated nor will guaranties for the Loan relating to Borrower's Loan be enforced
unless the Loan is in default. In such event, if any Property is liquidated or guaranties included or relating to the Loan are enforced, the proceeds will be applied first
to the Loan, and second, to the unrelated financing.
9. DEFINITIONS. In this Agreement, pertinent terms and their definitions are as follows.
A. Borrower Fees. Borrower Fees include, but are not limited to, commitment fees, servicing fees, late charges, prepayment penalties and other similar fees
received from Borrower and not defined as a Payment.
B. Default. Default includes all definitions of the term used in any Loan Documents and other related instruments evidencing the Borrower's indebtedness.
C. Loan. Loan means Borrower's obligation as described in this Agreement and includes, but is not limited to, all extensions, renewals, modifications and
refinancings of Borrower's obligation as well as all collateral and assurances of repayment taken .in connection with the Loan.
D. Loan Documents. Loan Documents refer to all the documents executed as a part of or in connection with the Loan.
E. Obligor. Obligor includes all borrowers, co- makers, guarantors and indorsers of the Loan.
F. Payments. Payments includes principal, interest, and other charges received by Seller with respect to the Loan from whatever source derived including, but
not limited to, all sums realized from any endorser, guarantor, or other person liable with respect to the Loan; all sums realized from the exercise by Seller of any
rights pursuant to a lien or right of set -off with respect to any deposit balance or other property of the Borrower; any insurance proceeds or casualty awards;
and any proceeds from the sale, liquidation, exchange, or substitution of the Property.
19228 LLC
Minnesota Participation Certificate & Agreement
MN/ 4XXag068700178200007376018011211Y Wolters Kluwer Financial Services 01996, 2011 Bankers SystemsTm
G. Purchaser's Interest Rate. Purchaser's Interest Rate means the rate specified in this Agreement. Unless otherwise agreed, if Purchaser's Interest Rate is
"Variable" as indicated in this Agreement, then Purchaser's Interest Rate will incorporate the variable rate terms and conditions as specified in the Promissory
Note.
10. DOCUMENTATION OF LOAN. Except as required for recording, Seller will hold all writings concerning the Loan, including all security instruments and
guaranties, and will maintain records pertaining to the Loan. Purchaser acknowledges receipt of all copies of Loan Documents which Purchaser specifically
requested and deemed reasonably necessary to fully evaluate the quality of the Loan before consenting to this Agreement. All Loan Documents are available at
Seller's office for Purchaser's inspection and copying at normal lobby hours upon reasonable advance notice and at such other times as Seller may permit. Unless
otherwise agreed, Seller will from time to time provide Purchaser with complete and current credit information regarding the following: Loan accrual status; status of
principal and interest payments; financial statements, Property values and lien status; and any factual information bearing on the Borrower's continuing credit
worthiness.
11. SET -OFFS. In the event of a Default by Borrower and a set -off of funds by Seller, Seller's successors or assigns, Purchaser will share in all subsequent
Payments and collections from such set -off in proportion to the percentage of participation at the time of the occurrence of the Default.
12. ADMINISTRATION.
A. Loan Servicing. Seller may administer the Loan and any related security and guaranties as though it were the sole owner and holder thereof. Except as
provided below, Seller will make all decisions concerning the servicing of the Loan and any related security and guaranties, acceleration, foreclosure, acquisition
of other security or guaranties, deficiency judgments, purchase at foreclosure sales, and administration and disposition of acquired security. Seller will not,
without Purchaser's written consent, reduce principal or interest with respect to the Loan or release or allow for the substitution of any Property, outside the
normal course of dealing with Borrower so as to substantially reduce the possibility of repayment of the Loan. Seller will not, without Purchaser's written
consent, renew, extend or consent to the revision of the provisions of any note or security documents covered or waive any claim against Obligor.
B. Seller's Duty to Purchaser. Seller will use the same degree of care in servicing and collecting the Loan as it would for its own accounts. Seller will not be
liable to Purchaser for any action taken or omitted or for any error in judgment, except for bad faith or willful misconduct.
C. Participation Agreement. Seller will remit Purchaser's percentage of the Payments and any shared Borrower Fees not later than the close of the tenth
business day following receipt of any Payments or Borrower Fees. If shared, Expenses and Administrative Fees will be charged to and payable by Purchaser
from time to time as they are incurred or as otherwise agreed. Unless otherwise agreed, such charges will be deducted from the amount of any Payments or
Borrower Fees to be remitted to Purchaser from time to time, but will not exceed the total amount to be remitted to Purchaser at any one time. At Seller's
option, and upon reasonable notice to Purchaser, Seller may demand full payment of any outstanding Expenses or Administrative Fees due Seller. If Seller must
refund any part of a Payment that was remitted to Purchaser—to Borrower or any other person, Purchaser shall remit to Seller immediately the amount received
by Purchaser.
13. FAILURE TO REMIT PAYMENTS. If Seller fails to remit amounts'reoeived from Borrower that are due and payable to Purchaser as specified in this Agreement
then all of the following applies.
A. Purchaser's Duty. Purchaser will not be responsible for any Ezp`e"nses qr Administrative Fees incurred by Seller until all amounts owing Purchaser are paid in
full with applicable interest.
B. Seller's Penalty. Seller will pay to Purchaser, in addition to the full amount of any late amounts due and payable to Purchaser, a penalty on the late amounts
equal to any penalty specified on the Promissory Note or, if none is specified, "t.e�Promissory Note rate.
14. FUNDING OF THE LOAN. Purchaser will pay to Seller on demand (in immediately available funds as agreed to herein) the amount agreed to in this Agreement,
up to the stated limit, and subject to all other conditions of this Agreement. Within ten days of Seller's receipt of Purchaser's funds, Seller will deliver to Purchaser
a statement containing: the total amount of the advance to Borrower; the portion of the advance which was funded by Purchaser; the total amount of Borrower's
current obligation to Seller; and the portion of the total amount of Borrower's current obligation to Seller funded by Purchaser. If Purchaser fails to fund an advance
in a timely manner Seller may terminate this Agreement without notice.
15. SELLER'S REPRESENTATIONS. Seller represents that the Loan has not been classified at Seller's most recent examination; that the Loan is presently on an
accrual status; that the loan is not in default on principal or interest payments; and that the terms of the Loan have not been renegotiated or compromised due to the
deteriorating financial condition of Borrower.
16. PURCHASER'S WARRANTIES. Purchaser hereby represents and warrants to Seller that at the time Purchaser executes this Agreement, Purchaser has received
all authorizations of its loan committee, board of directors, shareholders, stockholders and such other bodies or persons as are necessary to authorize Purchaser's
purchase of the agreed upon Share, that such authorization was reflected in the appropriate minutes thereof and continues to be an official record of Purchaser, and
that Purchaser has the financial ability to perform its obligations under this Agreement.
17. LIABILITY AND DISCLAIMER OF WARRANTIES. Purchaser acknowledges that it has made an independent investigation of the Loan, and has satisfied itself
with respect to the credit standing of any Obligor of the Loan, the value of any security for the Loan, the validity and enforceability of the Loan agreement, the
Promissory Note and any guaranty and security and all other matters in connection with the Loan. Purchaser acknowledges that it is not relying upon Seller's
judgment, and that Seller has made no warranty of any kind, express or implied, in connection with the Loan or any of the foregoing. Unless otherwise agreed, Seller
makes no warranties or representations regarding the legality, perfection, enforceability, or priority of any security interests, mortgages, guaranties, or similar
documents issued in connection with the Loan. Purchaser agrees to share the risks of collection of the Loan and of the adequacy of the Property in proportion to
Purchaser's Share.
Purchaser releases Seller from any liability under state or federal securities laws arising from the failure of Seller to register the Purchaser's Share in the Loan.
Purchaser and Seller acknowledge that based on their independent evaluations, Purchaser's Share in the Loan is either not a security under a federal or state law or,
if a security, is exempt from registration or qualification.
18. NOTIFICATION. Seller and Purchaser will promptly notify each other should either receive actual notice or knowledge of any loss of Property or change in
financial condition of any Obligor under the Loan, which will have a material adverse effect upon continuation of payments under the Loan or its repayment on
default. All notices will be sent by first -class mail and sent to the address shown in this Agreement.
19. DEFAULT AND LIQUIDATION OF LOAN. Notwithstanding any payment terms to the contrary, in the event of Default, or if Seller in its sole discretion should
otherwise accelerate and liquidate the Loan, all Payments collected and received by Seller will be applied ratably as follows: first, to Expenses; second, to the
unpaid principal amount of the Loan in proportion to the respective unpaid investments of Seller and Purchaser in the Loan at the time of Default; and third, to the
respective accrued interest and other charges of Seller and Purchaser. Upon Borrower's Default, all Payments and Borrower Fees received from Borrower, whether
designated for repayment of the Loan or undesignated, will be deemed intended for the repayment of the Loan in accordance with this Agreement.
20. REMOVAL OF SELLER AS ADMINISTRATOR. The Seller may be removed as the Loan's administrator under the following terms and conditions.
A. Qualifying Events. Upon the occurrence of any of the following events, Purchaser may notify Seller and assume the administration of the Loan and related
guarantees and security agreements as well as demand any documentation or writings reasonably necessary to evidence proof of Purchaser's security interest
and perfection.
(1) Seller fails to comply with Seller's fiduciary, contractual or legal obligations as provided under this Agreement or by state or federal law.
(2) Seller petitions for or becomes subject to bankruptcy.
(3) Seller commits any act of insolvency.
19228 LLC
Minnesota Participation Certificate & Agreement
MN/ 4XXag068700178200007376018011211Y Wolters Kluwer Financial Services °1996, 2011 Bankers SystemsTM
(4) Seller is declared insolvent, is taken over, or otherwise closed by a governmental regulatory agency which has jurisdiction over Seller.
B. Multiple Participants. In the event of multiple participants in the Loan, the participating lender with the then largest share will have the option to assume
administration. If any participant possessing this option does not exercise its right upon the demand of the other participants, the option will then pass to the
participant with the next largest share. Unless otherwise agreed, participants possessing equal shares in the Loan will share equally in administration.
C. Purchaser Rights. Purchaser will have the right to notify and communicate with all Obligors of the Loan, and to direct them to pay any amounts due under
the Loan directly to Purchaser or such other participant assuming administration of the Loan. Seller will join in this notice to Obligor upon request by Purchaser.
Unless otherwise agreed, all remaining terms of this Agreement will survive Seller's removal as administrator until Purchaser's Investment is satisfied in full or
the Loan is repurchased by Seller as provided in this Agreement.
D. Loan Repayment. Upon the occurrence of any of the events in this section, all Payments received from Borrower, whether designated for repayment of the
Loan or undesignated, will be deemed intended for the repayment of the Loan in accordance with this Agreement.
21. ASSIGNMENT. Neither Purchaser nor Seller may sell, pledge, assign, sub - participate, or otherwise transfer its interest in the Loan, Loan security, Loan guaranty
or rights or obligations under this Agreement without the prior written consent of the other party which will not be unreasonably withheld, except that Seller may
sell other participations in the Loan. The duties and benefits of this Agreement will bind and benefit the permitted successors and assigns of Seller and Purchaser.
22. ATTORNEYS' FEES AND COSTS. If any lawsuit or proceeding is brought by Seller or Purchaser to enforce the terms of this Agreement, the unsuccessful party
will pay the prevailing party all its court costs and reasonable attorneys' fees incurred in bringing or defending such action.
23. GENERAL PROVISIONS.
A. Partnership, Joint Venture, Agency, Trust. Purchaser and Seller agree that this Agreement is not intended and is not to be construed to create a partnership,
joint venture, agency, or trust relationship.
B. Sale of Percentage. This Agreement constitutes a sale of a percentage ownership interest in the Loan and will not be construed as an extension of credit by
Purchaser to Seller. If federal or state laws or regulations, or a judicial decision, now or later provides that the purchase of a participation interest is an
extension of credit, Purchaser and Seller agree that this Agreement shall constitute a security agreement under the Uniform Commercial Code and hereby grants
to Purchaser a security interest in the Loan. Purchaser shall have all the rights and remedies of a secured party under the Uniform Commercial Code, including
but not limited to rights upon default. Seller authorizes Purchaser to file one or more financing statements against Seller with respect to the Loan from time to
time.
C. Applicable Law. This Agreement is governed by the laws�.of Minnesota, the United States of America, and to the extent required, by the laws of the
jurisdiction where the Property is located, except to the extents ch state laws are preempted by federal law.
D. Amendment, Integration And Severability. This Agreeme,nt, may not be amended or modified by oral agreement. No amendment or modification of this
Agreement is effective unless made in writing and executed by P`urchas'er and Seller. This Agreement is the complete and final expression of the agreement. If
any provision of this Agreement is unenforceable, then the unenforceable provision will be severed and the remaining provisions will still be enforceable.
E. Remedies. Nothing in this Agreement will be construed to limit Purcha'ser's" or Selle_r's remedies to those described in this Agreement. Purchaser and Seller
are allowed all Remedies at law or in equity.
F. Interpretation. Whenever used, the singular includes the plural and the plural includes the singular. The section headings are for convenience only and are
not to be used to interpret or define the terms of this Agreement.
G. Confidentiality. Purchaser acknowledges that all information relating to the Loan is confidential and solely for Purchaser's use. Purchaser agrees not to share
it with any other party.
24. AGREEMENT TO ARBITRATE. Seller or Purchaser may submit to binding arbitration any dispute, claim or other matter in question between or among Seller and
Purchaser that arises out of or relates to this Transaction (Dispute)', except as otherwise indicated in this section or as Seller and Purchaser agree to in writing. For
purposes of this section, this Transaction includes this Agreement and the other Loan Documents, and proposed loans or extensions of credit that relate to this
Agreement. Seller or Purchaser will not arbitrate any Dispute within any "core proceedings" under the United States bankruptcy laws.
Seller and Purchaser must consent to arbitrate any Dispute concerning a debt secured by real estate at the time of the proposed arbitration. Seller may foreclose or
exercise any powers of sale against real property securing a debt underlying any Dispute before, during or after any arbitration. Seller may also enforce a debt
secured by this real property and underlying the Dispute before, during or after any arbitration.
Seller or Purchaser may, whether or not any arbitration has begun, pursue any self -help or similar remedies, including taking property or exercising other rights under
the law; seek attachment, garnishment, receivership or other provisional remedies from a court having jurisdiction to preserve the rights of or to prevent irreparable
injury to Seller or Purchaser; or foreclose against any property by any method or take legal action to recover any property. Foreclosing or exercising a power of sale,
beginning and continuing a judicial action or pursuing self -help remedies will not constitute a waiver of the right to compel arbitration.
The arbitrator will determine whether a Dispute is arbitrable. A single arbitrator will resolve any Dispute, whether individual or joint in nature, or whether based on
contract, tort, or any other matter at law or in equity. The arbitrator may consolidate any Dispute with any related disputes, claims or other matters in question not
arising out of this Transaction. Any court having jurisdiction may enter a judgment or decree on the arbitrator's award. The judgment or decree will be enforced as
any other judgment or decree.
Seller and Purchaser acknowledge that the agreements, transactions or the relationships which result from the agreements or transactions between and among Seller
and Purchaser involve interstate commerce. The United States Arbitration Act will govern the interpretation and enforcement of this section.
The American Arbitration Association's Commercial Arbitration Rules, in effect on the date of this Agreement, will govern the selection of the arbitrator and the
arbitration process, unless otherwise agreed to in this Agreement or another writing.
25. WAIVER OF TRIAL FOR ARBITRATION. Seller and Purchaser understand that the parties have the right or opportunity to litigate any Dispute through a trial by
judge or jury, but that the parties prefer to resolve Disputes through arbitration instead of litigation. If any Dispute is arbitrated, Seller and Purchaser voluntarily and
knowingly waive the right to have a trial by jury or judge during the arbitration.
SIGNATURES. By signing, Purchaser and Seller agree to the terms contained in this Agreement. Purchaser also acknowledges receipt of a copy of this Agreement.
PURCHASER:
ELK RIVER C DEVELOPM e AU 01
B
RMVEFTEIL15H, EXECUTIVE DIRECTOR
(Attest)
19228 LLC /
Minnesota Participation Certificate & Agreement Initials
MN/ 4XXag068700178200007376018011211Y Wolters Kluwer Financial Services °1996, 2011 Bankers SystemsT" Page
SELLER
First National Bank %E'Ik River
By
i
Leonard t6rsl —,Vice President
19228 LLC --
Minnesota Participation Certificate & Agreement
MN/ 4XXag068700178200007376018011211Y Wolters Kluwer Financial Services 01996, 2011 Bankers SystemsTI
LOAN NUMBER
LOAN NAME
ACCT. NUMBER
NOTE DATE
INITIALS
226430
19228 LLC
01/13/11
LPI<
NOTE AMOUNT
INDEX (w /Margin)
RATE
MATURITY DATE
LOAN PURPOSE
$30,000.00
Not Applicable
3.000%
01/13/16
'Commercial
Creditor Use Only
PROWSSORY NOTE
(Commercial - Single Advance)
DATE AND PARTIES. The date of this Promissory Note (Note) is January 13, 2011. The parties and their addresses are:
LENDER:
FIRST NATIONAL BANK OF ELK RIVER
812 Main Street
Elk River, MN 55330 -1575
Telephone: (763) 428 -7766
BORROWER:
19228 LLC
a Minnesota Limited Liability Company
12166 BLUEBIRD CIRCLE NW
COON RAPIDS, MN 55448 -2075
1. DEFINITIONS. As used in this Note, the terms have the following meanings:
A. Pronouns. The pronouns "I," "me, and "my" refer to each Borrower signing this Note, individually and together. "You" and
"Your" refer to the Lender.
B. Note. Note refers to this document, and any extensions, renewals, modifications and substitutions of this Note.
C. Loan. Loan refers to this transaction generally, including obligations and duties arising from the terms of all documents
prepared or submitted for this transaction such as applications, security agreements, disclosures or notes, and this Note.
D. Loan Documents. Loan Documents refer to all the documents executed as a part of or in connection with the Loan..
E. Property. Property is any property, real, personal or intangible, that secures my performance of the obligations of this Loan.
F. Percent. Rates and rate change limitations are expressed as annualized percentages.
2. PROMISE TO PAY. For value received, I promise to pay you or your order, at your address, or at such other location as you may
designate, the principal sum of $30,000.00 (Principal) plus interest from January 13, 2011 on the unpaid Principal balance until this
Note matures or this obligation is accelerated.
3. INTEREST. Interest will accrue on the unpaid Principal balance of this Note at the rate of 3.000 percent (Interest Rate).
A. Interest After Default. If you declare a default under the terms of the Loan, including for failure to pay in full at maturity, you
may increase the Interest Rate otherwise payable as described in this section. In such event, Interest will accrue on the unpaid
Principal balance of this Note at the Interest Rate in effect from time to time under the terms of the Loan, until paid in full.
B. Maximum Interest Amount. Any amount assessed or collected as interest under the terms of this Note will be limited to the
maximum lawful amount of interest allowed by state or federal law, whichever is greater. Amounts collected in excess of the
maximum lawful amount will be applied first to the unpaid Principal balance. Any remainder will be refunded to me.
C. Statutory Authority. The amount assessed or collected on this Note is authorized by the Minnesota usury laws under Minn.
Stat. § 47.59.
D. Accrual. Interest accrues using an Actual /360 days counting method.
4. REMEDIAL CHARGES. In addition to interest or other finance charges, I agree that I will pay these additional fees based on my
method and pattern of payment. Additional remedial charges may be described elsewhere in this Note.
A. Late Charge. If a payment is more than 10 days late, I will be charged 5.000 percent of the Amount of Payment or $10.00,
whichever is greater. However, this charge will not be greater than $100.00. 1 will pay this late charge promptly but only once
for each late payment. This amount may then increase so as to always be the highest amount allowed by law under Minnesota
Statutes § 47.59.
5. PAYMENT. I agree to pay this Note in 60 payments. This Note is amortized over 240 payments. I will make 59 payments of
$167.03 beginning on February 13, 2011, and on the 13th day of each month thereafter. A single "balloon payment" of the entire
unpaid balance of Principal and interest will be due January 13, 2016.
Payments will be rounded to the nearest $.01. With the final payment I also agree to pay any additional fees or charges owing and
the amount of any advances you have made to others on my behalf. Payments scheduled to be paid on the 29th, 30th or 31st day of
a month that contains no such day will, instead, be made on the last day of such month.
Each payment 1 make on this Note will be applied first to any charges that I owe other than principal and Interest then to interest that
is due, and finally to principal that is due. If you and I agree to a different application of payments, we will describe our agreement on
this Note. You may change how payments are applied in your sole discretion without notice to me. The actual amount of my final
payment will depend on my payment record.
6. PREPAYMENT. I may prepay this Loan in full or in part at any time. Any partial prepayment will not excuse any later scheduled
payments until I pay in full.
7. LOAN PURPOSE. The purpose of this Loan is TO PURCHASE PROPERTY AND RENOVATE.
8. SECURITY. The Loan is secured by separate security instruments prepared together with this Note as follows:
Document Name Parties to Document
Mortgage - 19228 INDUSTRIAL BLVD NW 19228 LLC
9. DEFAULT. I will be in default if any of the following events (known separately and collectively as an Event of Default) occur:
A. Payments. I fail to make a payment in full when due.
19228 LLC,
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B. Insolvency or Bankruptcy. The death, dissolution or insolvency of, appointment of a receiver by or on behalf of, application of
any debtor relief law, the assignment for the benefit of creditors by or on behalf of, the voluntary or involuntary termination of
existence by, or the commencement of any proceeding under any present or future federal or state insolvency, - bankruptcy,
reorganization, composition or debtor relief law by or against me or any co- signer, endorser, surety or guarantor of this Note or any
other obligations I have with you.
C. Business Termination. 1 merge, dissolve, reorganize, end my business or existence, or a partner or majority owner dies or is
declared legally incompetent.
D. New Organizations. Without your written consent, I organize, merge into, or consolidate with an entity; acquire all or
substantially all of the assets of another; materially change the legal structure, management, ownership or financial condition; or
effect or enter into a domestication, conversion or interest exchange.
E. Failure to Perform. I fail to perform any condition or to keep any promise or covenant of this Note.
F. Other Documents. A default occurs under the terms of any other Loan Document.
G. Other Agreements. I am in default on any other debt or agreement I have with you.
H. Misrepresentation. I make any verbal or written statement or provide any financial information that is untrue, inaccurate, or
conceals a material fact at the time it is made or provided.
1. Judgment. I fail to satisfy or appeal any judgment against me.
J. Forfeiture. The Property is used in a manner or for a purpose that threatens confiscation by a legal authority.
K. Name Change. I change my name or assume an additional name without notifying you before making such a change.
L. Property Transfer. I transfer all or a substantial part of my money or property.
M. Property Value. You determine in good faith that the value of the Property has declined or is impaired.
N. Material Change. Without first notifying you, there is a material change in my business, including ownership, management, and
financial conditions.
O. Insecurity. You determine in good faith that a material adverse change has occurred in my financial condition from the
conditions set forth in my most recent financial statement before the date of this Note or that the prospect for payment or
performance of the Loan is impaired for any reason.
10. DUE ON SALE OR ENCUMBRANCE. You may, at your option, declare the entire balance of this Note to be immediately due and
payable upon the creation of, or contract for the creation of, any lien, encumbrance, transfer or sale of all or any part of the Property.
This right is subject to the restrictions imposed by federal law (12 C.F.R. 591), as applicable.
11. WAIVERS AND CONSENT. To the extent not prohibited by law, I waive protest, presentment for payment, demand, notice of
acceleration, notice of intent to accelerate and notice of dishonor.
A. Additional Waivers By Borrower. In addition, 1, and any party to this Note and Loan, to the extent permitted by law, consent to
certain actions you may take, and generally waive defenses that may be available based on these actions or based on the status of
a party to this Note.
(1) You may renew or extend payments on this Note, regardless of the number of such renewals or extensions.
(2) You may release any Borrower, endorser, guarantor, surety, accommodation maker or any other co- signer.
(3) You may release, substitute or impair any Property securing this Note.
(4) You, or any institution participating in this Note, may invoke your right of set -off.
(5) You may enter into any sales, repurchases or participations of this Note to any person in any amounts and I waive notice
of such sales, repurchases or participations.
(6) 1 agree that any of us signing this Note as a Borrower is authorized to modify the terms of this Note or any instrument
securing, guarantying or relating to this Note.
(7) 1 agree that you may inform any party who guarantees this Loan of any Loan accommodations, renewals, extensions,
modifications, substitutions or future advances.
B. No Waiver By Lender. Your course of dealing, or your forbearance from, or delay in, the exercise of any of your rights,
remedies, privileges or right to insist upon my strict performance of any provisions contained in this Note, or any other Loan
Document, shall not be construed as a waiver by you, unless any such waiver is in writing and is signed by you.
12. REMEDIES. After I default, you may at your option do any one or more of the following.
A. Acceleration. You may make all or any part of the amount owing by the terms of this Note immediately due.
B. Sources. You may use any and all remedies you have under state or federal law or in any Loan Document.
C. Insurance Benefits. You may make a claim for any and all insurance benefits or refunds that may be available on my default.
D. Payments Made On My Behalf. Amounts advanced on my behalf will be immediately due and may be added to the balance
owing under the terms of this Note, and accrue interest at the highest post- maturity interest rate.
E. Set -Off. You may use the right of set -off. This means you may set -off any amount due and payable under the terms of this
Note against any right I have to receive money from you.
My right to receive money from you includes any deposit or share account balance I have with you; any money owed to me on an
item presented to you or in your possession for collection or exchange; and any repurchase agreement or other non - deposit
obligation. "Any amount due and payable under the terms of this Note" means the total amount to which you are entitled to
demand payment under the terms of this Note at the time you set -off.
Subject to any other written contract, if my right to receive money from you is also owned by someone who has not agreed to pay
this Note, your right of set -off will apply to my interest in the obligation and to any other amounts 1 could withdraw on my sole
request or endorsement.
Your right of set -off does not apply to an account or other obligation where my rights arise only in a representative capacity. It
also does not apply to any Individual Retirement Account or other tax - deferred retirement account.
You will not be liable for the dishonor of any check when the dishonor occurs because you set -off against any of my accounts. I
agree to hold you harmless from any such claims arising as a result of your exercise of your right of set -off.
F. Waiver. Except as otherwise required by law, by choosing any one or more of these remedies you do not give up your right to
use any other remedy. You do not waive a default if you choose not to use a remedy. By electing not to use any remedy, you do
not waive your right to later consider the event a default and to,use any remedies if the default continues or occurs again.
13. COLLECTION EXPENSES AND ATTORNEYS' FEES. On or after the occurrence of an Event of Default, to the extent permitted by
law, I agree to pay all expenses of collection, enforcement or protection of your rights and remedies under this Note or any other Loan
Document. Expenses include, but are not limited to, attorneys' fees, court costs and other legal expenses. If not paid immediately,
these expenses will bear interest from the date of payment until paid in full at the highest interest in effect as provided in the terms of
this Note. All fees and expenses will be secured by the Property I have granted to you, if any. In addition, to the extent permitted by
the United States Bankruptcy Code, I agree to pay the reasonable attorneys' fees incurred by you to protect your rights and interests
in connection with any bankruptcy proceedings initiated by or against me.
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14. COMMISSIONS. I understand and agree that you (or your affiliate) will earn commissions or tees on any insurance products, and
may earn such fees on other services that 1 buy through you or your affiliate.
15. WARRANTIES AND REPRESENTATIONS. I make to you the following warranties and representations which will continue as long
as this Note is in effect:
A. Power. I am duly organized, and validly existing and in good standing in all jurisdictions in which I operate. I have the power
and authority to enter into this transaction and to carry on my business or activity as it is now being conducted and, as applicable,
am qualified to do so in each jurisdiction in which I operate.
B. Authority. The execution, delivery and performance of this Note and the obligation evidenced by this Note are within my
powers, have been duly authorized, have received all necessary governmental approval, will not violate any provision of law, or
order of court or governmental agency, and will not violate any agreement to which I am a party or to which I am or any of my
Property is subject.
C. Name and Place of Business. Other than previously disclosed in writing to you I have not changed my name or principal place
of business within the last 10 years and have not used any other trade or fictitious name. Without your prior written consent, I do
not and will not use any other name and will preserve my existing name, trade names and franchises.
16. INSURANCE. I agree to obtain the insurance described in this Loan Agreement.
A. Property Insurance. I will insure or retain insurance coverage on the Property and abide by the insurance requirements of any
security instrument securing the Loan.
B. Flood Insurance. Flood insurance is not required at this time. It may be required in the future should the property be included in
an updated flood plain map. If required in the future, 1 may obtain flood insurance from anyone I want that is reasonably
acceptable to you.
C. Insurance Warranties. I agree to purchase any insurance coverages that are required, in the amounts you require, as described
in this or any other documents I sign for the Loan. I will provide you with continuing proof of coverage. I will buy or provide
insurance from a firm licensed to do business in the State where the Property is located. If I buy or provide the insurance from
someone other than you, the firm will be reasonably acceptable to you. I will have the insurance company name you as loss payee
on any insurance policy. You will apply the insurance proceeds toward what I owe you on the outstanding balance. I agree that if
the insurance proceeds do not cover the amounts I still owe you, I will pay the difference. I will keep the insurance until all debts
secured by this agreement are paid. If I want to buy the insurance from you, I have signed a separate statement agreeing to this
purchase.
17. APPLICABLE LAW. This Note is governed by the laws of Minnesota, the United States of America, and to the extent required, by
the laws of the jurisdiction where the Property is located, except to the extent such state laws are preempted by federal law.
18. JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS. My obligation to pay the Loan is independent of the obligation of any
other person who has also agreed to pay it. You may sue me alone, or anyone else who is obligated on the Loan, or any number of us
together, to collect the Loan. Extending the Loan or new obligations under the Loan, will not affect my duty under the Loan and I will
still be obligated to pay the Loan. This Note shall inure to the benefit of and be enforceable by you and your successors and assigns
and shall be binding upon and enforceable against me and my personal representatives, successors, heirs and assigns.
19. AMENDMENT, INTEGRATION AND SEVERABILITY. This Note may not be amended or modified by oral agreement. No
amendment or modification of this Note is effective unless made in writing and executed by you and me. This Note and the other
Loan Documents are the complete and final expression of the agreement. If any provision of this Note is unenforceable, then the
unenforceable provision will be severed and the remaining provisions will still be enforceable. No present or future agreement securing
any other debt I owe you will secure the payment of this Loan if, with respect to this loan, you fail to fulfill any necessary
requirements or limitations of Sections 19(a), 32 or 35 of Regulation Z or if, as a result, this Loan would become subject to Section
670 of the John Warner National Defense Authorization Act for Fiscal Year 2007.
20. INTERPRETATION. Whenever used, the singular includes the plural and the plural includes the singular. The section headings are
for convenience only and are not to be used to interpret or define the terms of this Note.
21. NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise required by law, any notice will be given by
delivering it or mailing it by first class mail to the appropriate party's address listed in the DATE AND PARTIES section, or to any other
address designated in writing. Notice to one Borrower will be deemed to be notice to all Borrowers. 1 will inform you in writing of any
change in my name, address or other application information. I will provide you any financial statement or information you request.
All financial statements and information I give you will be correct and complete. I agree to sign, deliver, and file any additional
documents or certifications that you may consider necessary to perfect, continue, and preserve my obligations under this Loan and to
confirm your lien status on any Property. Time is of the essence.
22. CREDIT INFORMATION. I agree to supply you with whatever information you reasonably request. You will make requests for this
information without undue frequency, and will give me reasonable time in which to supply the information.
23. ERRORS AND OMISSIONS. I agree, if requested by you, to fully cooperate in the correction, if necessary, in the reasonable
discretion of you of any and all loan closing documents so that all documents accurately describe the loan between you and me. I
agree to assume all costs including by way of illustration and not limitation, actual expenses, legal fees and marketing losses for failing
to reasonably comply with your requests within thirty (30) days.
24. AGREEMENT TO ARBITRATE. You or I may submit to binding arbitration any dispute, claim or other matter in question between
or among you and me that arises out of or relates to this Transaction (Dispute), except as otherwise indicated in this section or as you
and 1 agree to in writing. For purposes of this section, this Transaction includes this Note and the other Loan Documents, and
proposed loans or extensions of credit that relate to this Note. You or I will not arbitrate any Dispute within any "core proceedings"
under the United States bankruptcy laws.
You and I must consent to arbitrate any Dispute concerning a debt secured by real estate at the time of the proposed arbitration. You
may foreclose or exercise any powers of sale against real property securing a debt underlying any Dispute before, during or after any
arbitration. You may also enforce a debt secured by this real property and underlying the Dispute before, during or after any
arbitration.
You or I may, whether or not any arbitration has begun, pursue any self -help or similar remedies, including taking property or
exercising other rights under the law; seek attachment, garnishment, receivership or other provisional remedies from a court having
jurisdiction to preserve the rights of or to prevent irreparable injury to you or me; or foreclose against any property by any method or
take legal action to recover any property. Foreclosing or exercising a power of sale, .beginning and continuing a judicial action or
pursuing self -help remedies will not constitute a waiver of the right to compel arbitration.
The arbitrator will determine whether a Dispute is arbitrable. A single arbitrator will resolve any Dispute, whether individual or joint in
nature, or whether based on contract, tort, or any other matter at law or in equity. The arbitrator may consolidate any Dispute with
any related disputes, claims or other matters in question not arising out of this Transaction. Any court having jurisdiction may enter a
judgment or decree on the arbitrator's award. The judgment or decree will be enforced as any other judgment or decree.
You and I acknowledge that the agreements, transactions or the relationships which result from the agreements or transactions
between and among you and me involve interstate commerce. The United States Arbitration Act will govern the interpretation and
enforcement of this section.
19228 LLC
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The American Arbitration Association's Commercial Arbitration Rules, in effect on the date of this Note, will govern the selection of
the arbitrator and the arbitration process, unless otherwise agreed to in this Note or another writing.
25. WAIVER OF TRIAL FOR ARBITRATION. You and I understand that the parties have the right or opportunity to litigate any Dispute
through a trial by judge or jury, but that the parties prefer to resolve Disputes through arbitration instead of litigation. It any Dispute is
arbitrated, you and I voluntarily and knowingly waive the right to have a trial by jury or judge during the arbitration.
26. SIGNATURES. By signing, I agree to the terms contained in this Note. I also acknowledge receipt of a copy of this Note
BORROWER:
19228 L
By
DUAN( . HASS, GENERAL MANAGER
19228 LLC
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SUBSIDY AGREEMENT
The Economic Development Authority of the City of Elk River (hereinafter referred to
as the "EDA ") and Promo Products, LLC (hereinafter referred to as the
"Company ") agree that the assistance under this Agreement is a "Business Subsidy" as
defined by the City of Elk River Micro Loan Policy and is subject to the provisions
thereof, including without limitation, job creation goals, reporting requirements, five
year commitment by the Company, and repayment of the subsidy if the Company is in
default under this agreement, including this Section hereof. The assistance under this
Agreement does not qualify as a "Business Subsidy" as defined by Minnesota Statutes,
Sections 1 16J.993 through 1 16J.995 (the "Subsidy Law "), however this Agreement is
reflective of the Subsidy Law requirements.
Accordingly, it is agreed:
(a) The amount if the subsidy is $ 30,000
The type of subsidy is City Micro Loan, sub -prime financing
The subsidy will be used by the Company to finance a portion of building
renovations including HVAC, lighting, flooring and office remodel
(b) The public purposes of the subsidy includes
iob creation and enhancement of the citv's industrial tax base
(c) The goals of the subsidy include the above public purposes, the completion of
the project and the retention of the project for at least five years after the
"Benefit Date" of the project, as defined in the Subsidy Law, which is hereby
determined to be the date upon which this loan is closed.
(d) If the Company fails to meet its obligations under this Agreement, the Company
shall repay all amounts of the subsidy theretofore paid to the Company by the
EDA, together with interest accruing at the annual rate per annum equal to the
implicit price deflator of Minnesota statutes, Section 275.70, subdivision 2, with
all such interest accruing on each subsidy payment made to the Company
hereunder from the date of said payments. If the Company meets some but not
all of the job goals hereinafter defined, the Company may request in writing, and
the EDA may agree, in its absolute discretion, that the subsidy be repaid by the
Company on a pro rata basis. The Company represents that the subsidy is
needed in order to induce the Company to complete the project in the City of
Elk River. The Company covenants that it will continue its operations at the
project for at least five years after the benefit date.
(e) The Company represents that it is a subsidiary of the following parent
corporation:
Company Name: Not Applicable
Address:
City of Elk River Business Subsidy Agreement — Promo Products, LLC Page I of 3
(f) The Company represents that it has accepted subsidies from the additional
following public entities:
• Not Applicable
(g) The Company represents that it is not in default on the date hereof on any
subsidy agreement entered into by the Company under the Subsidy Law.
(h) The Company represents that it is not able to complete this project in its
current location, which is Not Appicable because
(i) The Company represents that it currently has in the State of Minnesota 8
full -time equivalent permanent employees and, for its "job goals" hereunder, will
create due to the project an additional 2 full time equivalent permanent
employee positions within two years of the benefit date, with these jobs having
wage levels of at least 1$ 0.00 per hour, exclusive of benefits, as required by
City of Elk River Micro Loan Policy.
(j) The Company shall complete and file with the EDA an annual report in a form
supplied by its Executive Director. If the Company does not file such reports,
when due, the EDA must mail the Company a warning within one week of the
filing date, and if, after 14 days after the postmark data of that warning, the
Company continues to fail to report, then the Company is required to and shall
pay the EDA a penalty of $100 for each subsequent day until the report is filed,
up to a maximum of $1,000.00. The Company shall file these reports with the
EDA, in care of its Executive Director at the following times:
On March I of each year, beginning with the March I immediately
following the benefit date.
Within 30 days of the "Compliance Date," hereby defined to be the
date that is two years after the benefit date.
If the job goals are not met by the compliance date, every subsequent
anniversary thereof until the subsidy is repaid, as may be required
hereunder.
Each March I report shall reflect the prior calendar year, and each subsequent
report shall reflect the period since the last reporting period.
(k) If the Company fails to meet the job goals by the compliance date, the EDA,
upon receiving written request by the Company indicating the reasons why the
job goals have not been met and the Company's reasonable assurance that the
goals will be met, may, in its absolute discretion, grant a one year extension of
the compliance date.
(1) In the event that any provision of this Agreement is inconsistent or in conflict
with any provision of the Subsidy Law, and in the event that any provision of the
Subsidy Law provides additional requirements, the provisions of the Subsidy Law
shall apply and govern.
City of Elk River Business Subsidy Agreement — Promo Products, LLC Page 2 of 3
In witness whereof, the EDA and the Company have dully executed this agreement
by their duly authorized representatives.
Promo Products, LLC
(Company)
By
Its
Economic Development Authority
Of the City of Elk River
By
Its Executive Director
Date
City of Elk River Business Subsidy Agreement — Promo Products, LLC Page 3 of 3
ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF ELK RIVER
COUNTY OF SHERBURNE
STATE OF MINNESOTA
RESOLUTION NO. 115 -04
RES0I11TION AUTHORIZING `I`WO -YEAR EXTENSION TO THE MATURITY DATE OF
THE NOTE AND LOAN AGREE MENTTO 19228 LLC
(PROMO PRODUCT, PROJEC I)
WHEREAS, the Board of Commissioners (the "Board ") of the Economic Development
Authority of the City of Elk Riser (the "EDA ") has received a request from 19228 LLC (the
"Borrower ") with a recommendation from First National Bank of Elk River (the "Lender ") that the
EDA authorize a two -year extension to the maturity date of its loan to Borrower pursuant to the
provisions of the FDA's Microloan Program (the "Program ").
WHEREAS, the Lender has proposed to prepare necessary amendments to the Promissory
Note, Participation Certificate and Agreement and Loan Agreement (collectively, together with all
related documents necessary in connection therewith, the "Loan Documents ") Nvith the Borrower
setting forth the two -year extension to the maturity date; and
WHEREAS, the EDA has determined that an extension of the maturity date of the loan will
benefit the Borrower's economic growth;
NOW THEREFORE, BE IT RESOLVED by the Board of Cortunissioners of the Economic
Development Authority of the City of Elk River as follows:
1.01. The two -Year extension of the maturity date of the FDA's loan to Borrower from
January 13, 2016 to January 13, 2018 is hereby approved together with all amendments to the Loan
Documents, necessary in connection therewith, and the President and Executive Director are hereby
authorized and directed to execute, on behalf of the EDA, such amendments to the Loan Documents
to which the FDA is a party and to carry out, on behalf of the EDA, the £DA's obligations thereunder.
1.02. The approval hereby given to the amendments to the Loan Documents includes
approval of such additional details therein as may be necessary and appropriate and such modifications
thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved
by legal counsel to the EDA and by the President and Executive Director prior to executing said
documents; and said officers are hereby authotized to approve said changes on behalf of the EDA.
The execution of any instrument by the President and Executive Director shall be conclusive evidence
of the approval of 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 be executed may be
executed without further act or authorization of the Board by any duly designated acting official, or by
such other officer or officers of the Board as, in the opinion of the City Attorney, may act in their
behalf.
Approved by the Board of Cotntnissioners of the Econonuc Development Authority of the
City of Elk River this 20di day of July, 2015.
President
A TFEST.
cutive Director