4.6. SR 08-20-2018
Request for Action
To Item Number
Mayor and City Council 4.6
Agenda Section Meeting Date Prepared by
Consent August 20, 2018 Amanda Othoudt, EDD
Item Description Reviewed by
Energy Efficiency Microloan Application for Cal Portner, City Administrator
Ralphie’s Minnoco.
Reviewed by
Action Requested
Adopt, by motion, a resolution approving an Energy Efficiency Microloan and authorize the
execution of the microloan documents for Ralphie’s Minnoco.
Background/Discussion
Ralphie’s Minnoco applied for a $19,175 Energy Efficiency Microloan. Owner Brian Brehmer plans to
use the loan to finance energy efficiency lighting to the property and the space leased to Mama D's Deli.
Ralphie’s received a $74,999 Energy Efficiency Microloan in 2013. They are current on their payments
and are scheduled to pay off the remaining balance of $41,104.35 on September 1, 2023.
EDA counsel stated fund disbursement for new expenditures should be structured as a new loan rather
than a modification of the first loan because it is a new project. If approved, the city could subsequently
consolidate the loans into one payment. The borrower would make one payment and comply with one
set of loan terms and documents.
The EDA is expected to recommend approval earlier this evening. A public hearing is not necessary by
Minnesota Statutes 116J.994 because the amount of the subsidy does not exceed $150,000.
The Joint Finance Committee reviewed the application at their July 31, 2018, meeting and recommended
approval of the application. The terms of the microloan are as follows:
Ralphie’s Minnoco
Amount requested: $19,175
Rate requested: Fixed at 3%
Equity proposed: 10%
Term: 5-year amortization
The EDA will maintain a subordinate position on the mortgage at 13374 U.S. Highway 10 by
amending and restating the mortgage, entity guarantee, and a personal guarantee.
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional
service, and community engagement that encourages and inspires prosperity
Financial Impact
The balance of the Microloan Fund account is $740,058.96. The loan request of $19,175 is proposed to
be amortized over 5 years at 3 percent interest. Funds in this account continue to revolve and payments
are received regularly.
Attachments
Resolution
EDA Meeting Packet (August 20, 2018)
CITY OF ELK RIVER
COUNTY OF SHERBURNE
STATE OF MINNESOTA
RESOLUTION NO. 18-____
RESOLUTION APPROVING LOAN AGREEMENT
(ALAN ARNOLD CORPORATION / RALPHIE’S MINNOCO ENERGY PROJECT)
WHEREAS, the Board of Commissioners (the “Board”) of the Economic Development
Authority of the City of Elk River (the “EDA”) for a second loan to assist the Borrower with energy
efficiency improvements to a building (the “Property”) located at 13374 U.S. Highway 10, Elk River,
Minnesota (the “City”).
WHEREAS, on September 10, 2013, the EDA provided a loan to the Borrower pursuant to
the EDA Energy Efficiency Improvement Program (the “Program”), in the amount of $74,999 (the
“Original Loan”) pursuant to an Energy Efficiency Improvement Program Loan Agreement, dated
September 10, 2013 (the “Original Loan Agreement”), between the Borrower and the EDA. The
Original Loan was secured by (i) a Promissory Note, dated September 10, 2013, from the Borrower
to the EDA; (ii) a Security Agreement, dated September 10, 2013, from Borrower to the Lender
providing a security interest in certain equipment purchased with the proceeds of the Original Loan;
(iii) a Personal Guaranty, dated September 10, 2013, from Brian Brehmer to the EDA; (iv) a
Personal Guaranty, dated September 10, 2013, from Nancy Brehmer to the EDA; (v) a Personal
Guaranty, dated September 10, 2013, from Allen Meyer; (iv) a Corporate Guaranty, dated September
10, 2013, from Yankee Doodle Enterprises, LLC to the EDA; and (vii) a Mortgage and Assignment
of Rents and Security Agreement and Fixture Financing Statement, dated September 10, 2013, from
the Corporate Guaranty to the EDA. The current outstanding principal balance of the Original
Loan is $40,482.91.
WHEREAS, the Borrower has requested an additional loan in the amount of $19,175.00 (the
“New Loan”) pursuant to the Program. Proceeds of the New Loan will be used by the Borrower to
increase the energy efficiency of the Property by purchasing new interior and exterior lights. In total,
the outstanding principal of the Original Loan and New Loan (together, the “Loan”) will be
$59,657.91.
WHEREAS, the EDA has caused to be prepared an Amended and Restated Loan
Agreement (the “Loan Agreement”) with the Borrower setting forth, among other things, the terms
and conditions under which the EDA will make the Loan. The Loan Agreement amends and
restates the Original Loan Agreement to provide for the issuance of the New Loan.
WHEREAS, the EDA approved the Loan and the Loan Agreement on this same date and a
copy of the Loan Agreement is on file with the City Clerk.
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River as
follows:
2.01 The City hereby approves the Loan Agreement as presented to the EDA, together with
all related documents necessary in connection therewith, including without limitation, an Amended and
Restated Promissory Note from the Borrower evidencing the Loan, an Amended and Restated
Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement, from
534205v2 JSB EL185-57
the corporate guarantor to the EDA, personal guaranties from Allen Meyer, Brian Brehmer, Nancy
Brehmer, and an entity guaranty from Yankee Doodle Enterprises, LLC. The City hereby consents to
the EDA entering into the Loan Documents with the Borrower.
2.02 The City hereby approves the Loan in accordance with the Loan Agreement in
substantially the form on file with the City’s Economic Development Director together 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 of the EDA
prior to executing said documents and the City further; 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.
th
Approved by the City Council of the City of Elk River this 20 day of August, 2018.
John J. Dietz, Mayor
ATTEST:
Tina Allard, City Clerk
534205v2 JSB EL185-57
Request for Action
ToItem Number
Economic Development Authority6.5
Agenda SectionMeeting DatePrepared by
General BusinessAugust 20, 2018Amanda Othoudt, EDD
Item DescriptionReviewed by
Energy Efficiency Microloan Application for Cal Portner, City Administrator
Ralphie’s Minnoco
Reviewed by
Action Requested
Consider the adoption of aresolution approving a Jobs Incentive Microloan. The EDAmay approve,
approvewith conditions, or denythe requestto the City Council.
The City Council will review the recommendations and formally act on the request at their regular
meeting later this evening.
Background/Discussion
Ralphie’s Minnocois a self-service gas station operating in a 3,000 square foot facility at13374 U.S.
Highway 10.The gas station emphasizes food service, fuel, inside sales, U-Haul rental, and propane
sales.Owner Brian Brehmer plans to use the loan to financeenergy efficiency lighting to the property
and the space leased to Mama D's Deli.
Mr. Brehmer is requesting a $19,175 Energy Efficiency Microloan to defray the cost of new LED lights
and improve perception of the gas station. He indicated a gas station image is a large determinant of its
success and improving the lighting and outward appearance will increase business.
Ralphie’sreceived a $74,999 Energy Efficiency Microloan in 2013. They are current on their payments
and are scheduled to pay off the remaining balance of $41,104.35 on September 1, 2023.
The EDA attorney stated fund disbursement for new expenditures should be structured as a new loan
rather than a modification of the first loan because it is a new project.If approved, the EDA could
subsequently consolidate the loans into one payment.
The Joint Finance Committee reviewed the application at their July 31, 2018, meeting and recommended
approval of the application. The terms of themicroloan are as follows:
Ralphie’s Minnoco
Amount requested: $19,175
Rate requested: Fixed at 3%
Equity proposed: 10%
Term: 5-year amortization
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness,exceptional
service,and community engagement that encourages and inspires prosperity
The EDA will maintain a subordinate position on the mortgage at 13374 U.S. Highway 10 by
amending and restating the mortgage, entity guarantee and a personal guarantee.
Financial Impact
The balance of the Microloan Fund account is $740,058.96.The loan request of $19,175isproposed to
be amortized over 5years at 3 percent interest. Funds in this account continue to revolve and payments
are received regularly.
Attachments
Resolution
Loan Documents
Joint Finance Committee Meeting Packet (July 31, 2018)
ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF ELK RIVER
COUNTY OF SHERBURNE
STATE OF MINNESOTA
RESOLUTION NO. 2018-_________
RESOLUTION APPROVING LOAN AGREEMENT AND RELATED DOCUMENTS
(ALAN ARNOLD CORPORATION / RALPHIE’SMINNOCOENERGY PROJECT)
WHEREAS, the Board of Commissioners (the “Board”) of the Economic Development
Authority of the City of Elk River (the “EDA”) has received a proposal from Alan Arnold
Corporation (the “Borrower”),for a secondloan to assist the Borrower withenergy efficiency
improvements to a building (the “Property”) located at 13374 U.S. Highway 10, Elk River,
Minnesota (the “City”).
WHEREAS, on September 10, 2013, the EDA provided a loan to the Borrower pursuant to
the EDA Energy Efficiency Improvement Program (the “Program”), in the amount of $74,999 (the
“Original Loan”) pursuant to an Energy Efficiency Improvement Program Loan Agreement,
dated September 10, 2013 (the “Original Loan Agreement”), between the Borrower and the
EDA. The Original Loan was secured by (i) a Promissory Note, dated September 10, 2013, from the
Borrower to the EDA; (ii) a Security Agreement, dated September 10, 2013, from Borrower to the
Lender providing a security interest in certain equipment purchased with the proceeds of the
Original Loan; (iii) a Personal Guaranty, dated September 10, 2013, from Brian Brehmer to the
EDA; (iv) a Personal Guaranty, dated September 10, 2013, from Nancy Brehmer to the EDA; (v) a
Personal Guaranty, dated September 10, 2013, from Allen Meyer; (iv) a Corporate Guaranty, dated
September 10, 2013, from Yankee Doodle Enterprises, LLC to the EDA; and (vii) a Mortgage and
Assignment of Rents and Security Agreement and Fixture Financing Statement, dated September
10, 2013,from the Corporate Guaranty to the EDA. The current outstanding principalbalanceof
the Original Loan is $40,482.91.
WHEREAS, the Borrower has requestedan additional loan in the amount of $19,175.00(the
“NewLoan”) pursuant to the Program. Proceeds of the New Loanwill be used by the Borrower to
increase energy efficiency of the Propertyby purchasing new interior and exterior lights. In total, the
outstanding principal of the Original Loan and New Loan (together, the “Loan”)will be
$59,657.91.
WHEREAS, the EDA has caused to be prepared an Amended and Restated Loan
Agreement (the “Loan Agreement”)with the Borrower setting forth, among other things, the terms
and conditions under which the EDA will make the Loan,a copy of which is on file with the
Executive Director. The Loan Agreement amends and restates theOriginal Loan Agreement to
provide for the issuance of the New 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.TheLoan Agreement as presented to the EDA, together with all related documents
necessary in connection therewith, including without limitation, an Amended and RestatedPromissory
Note from the Borrower evidencing the Loan,an Amended and Restated Mortgage and Assignment
534126v1 JSB EL185-57
of Rents and Security Agreement and Fixture Financing Statement, from the corporate guarantor
to the EDA, personal guaranties from Allen Meyer, Brian Brehmer, Nancy Brehmer, and an entity
guaranty from Yankee Doodle Enterprises, LLC (collectively, the “Loan Documents”) are hereby in all
respects approved, in substantially the form on file with the City’s Economic Development Director;
and the President and Executive Director are hereby authorized and directed to execute the Loan
Agreement and any Loan Documents to which the EDAis a party on behalf of the EDA and to carry
out, on behalf of the EDA, the EDA’s obligations thereunder.
1.02. The approval hereby given to the Loan Documents includes deviation from the
Program requirements as set forth in the Loan Documents and 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.
534126v1 JSB EL185-57
Approved by the Board of Commissioners of the Economic Development Authority of the
City of Elk River this 20thday of August, 2018.
President
ATTEST:
Executive Director
534126v1 JSB EL185-57
AMENDED AND RESTATED
ENERGY EFFICIENCY IMPROVEMENT PROGRAM
LOAN AGREEMENT
THIS AMENDED AND RESTATED ENERGY EFFICIENCY
IMPROVEMENT PROGRAM LOAN AGREEMENT (the “Agreement") is made
effective as of __________, 2018(the“Closing Date”), by and between ALAN
ARNOLD CORPORATION, a Minnesota corporation ("Borrower"), and the
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a
public body corporate and politic of the State of Minnesota("Lender"), and amends and
restatesin all respectsthe Loan Agreement, dated September 10, 2013(the “Original
Loan Agreement”), by and between the Borrower and the Lender.
RECITALS
A.On September 10, 2013, the EDA provided a loan to the Borrower
pursuant to the EDA Energy Efficiency Improvement Program, in the amount of
Seventy-Four Thousand Nine Hundred Ninety-Nine and No/100s Dollars ($74,999.00)
(the “Original Loan”)of which Forty Thousand and Four Hundred Eighty-Two and
91/100s Dollars ($40,482.91) is currently outstanding.The Original Loan was secured by
a PromissoryNote, dated September 10, 2013(the “Original Promissory Note”), from
Borrowerto the Lender, a Security Agreement, dated September 10, 2013 (the “Security
Agreement”), from the Borrower to the Lenderproviding a security interest in certain
equipmentfinanced with the proceeds of the Original Loan,and Guaranty Agreements,
each dated September 10, 2013(together, the “Original Guaranties”), from Brian
Brehmer, Nancy Brehmer,Allen Meyerand Yankee Doodle Enterprises, LLC.
B.To complete the Improvements described herein, the Borrowerhas
requestedan additional loanin the principal amount of $19,175.00 from the Lender,
pursuant to the EDA Energy Efficiency Improvement Program (the “New Loan”, and
together with the Original Loan, the “Loan”).
C.The Borrower and the Lender desire to amend and restated the Original
Loan Agreement to provide the New Loan to the Borrower subject to the terms and
conditions of this Agreement.
D.On the datein the principal amount of the Loan is Fifty-Nine Thousand
Six Hundred and Fifty-Eight and 91/100s Dollars ($59,657.91).
E.Contemporaneously with the execution hereof, Borrower is executing and
delivering to Lender the following security documents:
(i)An Amended and RestatedPromissory Note effective as of the
date herewith ("Note") made by Borrower and payable to the order of Lender
which amends and restated the Original Promissory Note and secures the Loan;
(ii)Personal Guaranties of Brian Brehmer, Nancy Brehmer and Allen
Meyer (the “Personal Guaranties”),owners of Yankee Doodle Enterprises, LLC
(“Corporate Guarantor”), owner of the real property commonly known as 13374
U.S. Highway 10, Elk River, Sherburne County, Minnesota as legally described
in the Mortgage (the "Loan Property");
(iii)A Corporate Guaranty of Corporate Guarantor, dated the date
herewith(the “Corporate Guaranty”, and together with the Personal Guaranties,
the “Guaranties”); and
(iv)AnAmended and RestatedMortgage, Assignment of Rents,
Security Agreement and Fixture Financing Statement, dated the date hereof
("Mortgage"), from the Corporate Guarantor to the EDAamendingand restating
the Mortgage, Assignment of Rents, Security Agreement and Fixture Financing
Statement securing the Corporate Guaranty, dated September 10, 2013 (the
“Original Mortgage”),by the Corporate Guarantor in favor of the Lenderto
reflect the New Loan. The Mortgage provides a security interest in the Loan
Property as security for the Corporate Guaranty.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, it is hereby agreed as follows:
1.Amount and Purpose of New Loan. Borrower agrees to take and Lender
agrees to make the New Loanin the principal amount of Nineteen Thousand One
Hundred Seventy-Fiveand No/100s Dollars ($19,175.00)to be advanced in a single
disbursement as hereinafter provided. The proceeds of the New Loan may only be used
to construct approved Improvements (as defined below).
2.Construction of Improvements. For the purposes of this Agreement, the
term “Loan Property” means the real estate described in the Mortgage together with all
improvements now located or hereafter placed thereon by Borrower.
Borrower agrees to use the proceeds of the New Loan (and Corporate Guarantor
approves) to improve as a part of the Loan Property (“Project”) consisting generally of
renovations to and equipping of the building located at 13374 U.S. Highway 10, Elk
River, Minnesota, substantially in accordance with plans and specifications which have
been provided to Lender. The improvements will consist of: certain improvements
which are intended to increase the energy efficiency of the Loan Property, as specifically
set forth on Exhibit A(the“Improvements”). Borrower covenants that when completed,
the Improvements shallcomply with all applicable restrictions, conditions, codes,
ordinances, regulations and laws of the City of Elk River (“City”) and all other
governmental bodies having jurisdiction over the Loan Property, including, without
limitation, the all municipal sign ordinances, the Americans with Disabilities Act and
those related to environmental protection.
533940v3 GAF EL185-57
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Borrower agrees to commence construction of the Improvements promptly after
the Closing Date and to carry on continuously, diligently and with reasonabledispatch
the construction of the Improvements to full and final completion.
The proceeds of the Original Loan financed the construction of certain other
energy efficiency improvements to the Loan Property.
3.Borrower’sDeliverables
. Borrower covenants and agrees to immediately
cause the compliance with the following conditions, which full and timely compliance is
acondition precedent to Lender’s obligations under this Agreement:
(a)Note. Deliver to Lender the Note.
(b)Security Agreement. Deliver to Lender the Security Agreement.
The Security Agreement was executed in connection with the Original Loan and
remains in full force and effect.
(c)Guaranties. Deliver to Lender the Guaranties.
(d)Mortgage. Deliver to Lender the Mortgage, together with evidence
that the Mortgage has been or will be duly filed for record.
(e)OrganizationalDocumentsandResolutions -Borrower. Deliver to
Lender copies of: (i) the Articles of Incorporation for Borrower, certified by the
Minnesota Secretary of State, (ii) a certificate of good standing for Borrower
issued by the Minnesota Secretary of State; (iii) the bylaws for Borrower; and (iv)
a certified copy of resolutions of Borrower authorizing the execution and delivery
of this Agreement, the Note, the Security Agreement, and any other document to
be executed by Borrower pursuant to this Agreement.
(f)Insurance. Deliver to Lender: (i) a certificate or policy for all
insurance required, under the terms hereof or of the Mortgage, to be maintained
by Borrower; and (ii) evidence that no part of the Loan Property is located in an
area designated as being a flood plain or flood hazard area as defined by the Flood
Hazard Boundary Map published by the Federal Insurance Administration.
(g)ComplianceWithLaws,Etc. Deliver to Lender such evidence as
Lender may require as to the compliance of the Loan Property and the
Improvements with: (i) all applicable laws, codes, rules, regulations and
ordinances, including, without limitation, those relative to environmental
protection, protection of wetlands, building and zoning matters and the Americans
with Disabilities Act; and (ii) the requirements of any restrictive covenants,
conditions and restrictions; conditional use permit and/or planned unit
development applicable to the Loan Property.
533940v3 GAF EL185-57
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(h)HazardousSubstances. Deliver to Lender evidence acceptable to
Lender, that: (i) the Loan Property has not knowingly been used as a hazardous
waste storage facility or burial site; (ii) the soil is believed to be free from
hazardous waste, hazardous substances, pollutants and contaminants; and (iii) no
known hazardous waste, hazardous substance, pollutant or contaminant has been
used in the construction or use of any building or other improvement on the Loan
Property. For purposes of this subparagraph, the terms "hazardous waste,"
"hazardous substances," “pollutants” and "contaminants" shall include, but not be
limited to, polychlorinated biphenyls (PCBs), asbestos, petroleum products and
any other chemical or substance determined to be a hazard to human health or the
environment.
(i)Contractors. All contractors and subcontractors must be bonded,
insured and licensed to do business in the State of Minnesota and be of good
repute. Lender reserves the right to reject any contractor or subcontractor that
does not meet the requirement of the previous sentence.
(j)Source of Funds Certificate. Deliver to Lender a sworn source of
funds certificate ("Source of Funds Certificate"), in a form acceptable to Lender,
verified on oath by a manager of Borrower showing an itemized breakdown of:
(i) the source and amount of all Project funds; and (ii)of the total cost of the
Improvements, including, without limitation, the cost of constructing the
Improvements, any special assessments, soft costs and all other costs and charges
to be paid from the Loan proceeds and/or other Project funds or necessary to
complete the Improvements. Borrower shall deliver to Lender lien waivers,
receipts for payment and other evidence of payment acceptable to Lender with
respect to any such portion of costs and charges incurred to the date of the Source
of Funds Certificate.
(k)EDA Review & Rebates. Deliver to Lender copies of the list of
rebates related to the approved Improvements. Borrower shall work with Lender
to accomplish any post-Closing inspections of the Improvements. The post-
completion inspection of the Improvementswill be considered timely if it occurs
th
on or before the thirtieth (30) day after issuance of the Certificate of Occupancy
for the Loan Property.
(l)Program Fee. Deliver to Lender the program fee of $2,000.00.
(m)Lease. Deliver to Lender a lease for the Loan Property by and
between Corporate Guarantor, as landlord, and Borrower, as Tenant.
Lender may waive any of the above requirements in its sole discretion.
4.Disbursement of Loan. Upon receipt by Lender of the items required
pursuant to paragraph 4 above, the Lender shall disburse the proceeds of the New Loan to
the Borrower.
533940v3 GAF EL185-57
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5.Rebates.Pursuant to the Energy Efficiency Improvement Program,
Lender expects to receive certain rebates (the “Rebates”) relating to the energy efficiency
improvements made by Borrower to the Loan Property. By executing this Agreement,
Borrower assigns and Lender assumes all right and title to proceeds from any Rebate
arising from the Improvements. Borrower will execute any documentation reasonably
necessary to effectuate such assignment and will otherwise assist Lender in a timely
manner to obtain any available Rebate. All proceeds of the Rebates received by Lender
will be applied to the outstanding principal balance of this Note as set forth therein.
6.AccesstoLoanProperty. Lender and its respective representatives shall
have at all reasonable times the right to enterand have free access to the Project and the
Loan Property and the right to inspect all work done, labor performed and material
furnished in connection therewith.
7.BooksandRecords. Borrower agrees to maintain accurate and complete
books, accounts and records in regard to the Loan Property in a manner reasonably
acceptable to Lender. Lender and its representatives shall have the right to inspect,
examine and copy all such books and records of Borrower and Borrower shall, at
Lender's request, furnish such information as Lender may reasonably demand.
8.EncumbrancesandTransfer. Borrower agrees not to sell, transfer, lease or
convey its interest in the Loan Property or any part thereof, or any interest therein, or
further encumber the Loan Property or any part thereof, in any manner, without written
consent of Lender which consent may be granted or withheld in the sole discretion of
Lender. This requirement shall apply to each and every sale, transfer, lease, conveyance
or encumbrance, whether voluntary or involuntary and whether or not Lender has
consented to any such prior sale, transfer, lease, conveyance or encumbrance.
9.TimeofEssence. Time is of the essence in the performance of this
Agreement.
10.Assignability. Borrower shall not assign this Agreement or all or any part
of any Advances to be made hereunder without written consent of Lender, which consent
may be withheld, conditioned or delayed in Lender’s sole discretion. Lender may freely
assign or otherwise transfer (including by participation) all or any part of its interest in
the Loan or any or all of the Loan documents, in Lender’s sole discretion.
11.MiscellaneousCovenantsofBorrower. Borrower covenants and agrees
with Lender that, without costs to Lender, Borrower will:
(a)Performance of Conditions. Promptly keep, perform and comply
with all of the terms, covenants and conditions to be kept and performed by
Borrower, as required by the City and any other governmental body having
jurisdiction over the Loan Property as a condition of platting, rezoning or
developing the Loan Property; keep unimpaired the rights of Borrower under any
533940v3 GAF EL185-57
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permit or agreement issued or made by the City or other governmental body
having jurisdiction over the Loan Property and the Construction Contracts and
any other contracts obtained or held by Borrower in connection with the
construction or operation of the Improvements; and to enforce the prompt
performance of all of the terms, covenants and conditions to be kept and
performed by the City or other governmental body having jurisdiction over the
Loan Property, respectively, under any permits or agreements issued or made by
the City or such other governmental bodies, or by any design professional, the
general contractor and any other contractors under all contracts obtained or held
by Borrower in connection with construction or operation of the Improvements.
(b)Amendment, Etc. of Documents. Not amend, cancel, terminate,
supplement or waive any of the material terms, covenants and conditions of any
permit or agreement issued or made by the City or any other governmental body
having jurisdiction over the Loan Property, or any other contracts obtained or held
by Borrower in connection with the construction or operation of the
Improvements or any contracts, documents or agreements referred to herein
without the prior written approval of Lender. Borrower will provide to Lender
complete documentation concerning any change made to the Project.
(c)Performance of Note, Security Agreement, Etc.Withoutlimiting
the foregoing, keep and perform all of the terms, covenants, conditions and
requirements of the Note, the Security Agreement,and this Agreement.
(d)Insurance. During the term of the Mortgage, Borrower shall
procure and maintain or cause Corporate Guarantor to procure and maintain at
each party’s sole expense casualty insurance, public liability insurance and such
other types of insurance as are reasonably required by Lender from time to time,
including, without limitation, the coverages expressly required by the Mortgage,
insuring Lender and Borrower with coverages, in amounts and with companies
satisfactory to Lender. The policy or policies or duly executed certificate or
certificates for such insurance and renewals or replacements thereof shall be
deposited with Lender.
(e)Pay Charges. Immediately pay all loan charges including, but not
limited to: (i) Lender’s reasonable attorneys’ fees up to Five Thousand and
No/100 ($5,000.00) Dollars for the preparation of the Loan documents; (ii) title
insurance fees, costs and premiums; (iii) mortgage registration taxes and filing
fees of the Mortgage and any other instruments required under this Agreement.
(f)Copies of Plans, Contracts, etc.Furnish Lender from time to time
as reasonably requested by Lender, copies of the any plans and specification and
any contracts relating to the Improvements, together with estimated costs of such
Improvements.
(g)Title. Except as specifically set forth herein, as of the Closing
Date Borrower owns a fee titleinterest in the Loan Property and owns or within
533940v3 GAF EL185-57
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sixty (60) days after the Closing Date will own all of the fixtures, trade fixtures,
equipment, personal property and inventory located upon the Loan Property
(along with the Loan Property, collectively, the “Collateral”) “free and clear,” that
Lender will have a “first position” lien in the Collateral.
(h)Program Covenants. At all times while any portion of the Loan
remains outstanding, Borrower will: (i) maintain its status as a for profit entity;
(ii)maintain a positive net worth; and (iii) will operate from the Loan Property.
12.Warranties. Borrower represents and warrants to Lender the following:
(a)The Borrower is a corporation duly formed, validly existing and in
good standing under the laws of the State of Minnesota.
(b)The making and performance of this Agreement and the execution
and delivery of the Note, the Mortgage and any other instrument required
hereunder are within the powers of the Borrower and have been duly authorized
by all necessary company action on the part of the Borrower. This Agreement
and the Note, the Mortgage and any other instruments required hereunder have
been duly executed and delivered and are the legal, valid and binding obligations
of the Borrower enforceable in accordance with their respective terms.
(c)No litigation, tax claims or governmental proceedings are pending
or threatened against the Borrower or the Loan Property, and no judgment or
order of any court or administrative agency is outstanding against the Borrower or
the Loan Property which would have a material adverse effect on Borrower or the
Loan Property.
(d)Borrower has filed all tax returns (federal and state) required to be
filed for all prior years and paid all taxes shown thereon to be due, including
interest and penalties. Borrower will file all such returns and pay all such taxes
for the current and future years.
(e)All information, financial or other, which has been submitted by
Borrower and Guarantorsin connection with the Loan is true, accurate and
complete in all material respects.
13.Indemnification. Borrower agrees to indemnify Lender and save it
harmless against all loss, liability, expense, or damages including but not limited to
attorneys fees, which may arise by reasonof the assertion of any lien against the Loan
Property.
14.Defaults. Each of the following shall constitute an Event of Default:
533940v3 GAF EL185-57
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(a)Borrower abandons the Loan Property, work on construction of the
Improvements is halted or the Improvements are not constructed in accordance
with this Agreement.
(b)Bankruptcy, reorganization, assignment, insolvency or liquidation
proceedings, or other proceedings for relief under any applicable bankruptcy law
or other law for relief of debtors are instituted by or against Borrower and, if such
proceedings are instituted against Borrower, an order, judgment or decree,
without the consent of Borrower appointing a trustee or receiver for Borrower or
any part of its property or approving a petition under the bankruptcy laws of the
United States or any similar laws of any state or other competent jurisdiction,
shall have remained in force undischarged or unstayed for a period of thirty (30)
days.
(c)Any judgment, attachment, garnishment or other similar process is
entered against Borrower or against any property or assets of Borrower and is not
released, satisfied or discharged or bonded to Lender’s satisfaction within thirty
(30) days of entry.
(d)Borrower fails to commence or complete construction of the
Improvements within the time designated in this Agreement.
(e)Any of the terms, covenants or conditions of any permit or other
agreement issued or made by the City or other governmental body having
jurisdiction over the Loan Property, including, but not limited to,those relating to
the cost of or time for installation of the Improvements, are not complied with
within the time required thereby or are terminated or modified by the City or such
other governmental body and Borrower has not taken the necessary steps to
correct or cure the same within thirty (30) days after written notice is given by
Lender.
(f)Any mechanic's or material supplier's lien is filed against the Loan
Property and is not released, satisfied or discharged or bonded to Lender's
satisfaction, subject, however, to Borrower's right to contest the same in
accordance with the provisions of the Mortgage and applicable law.
(g)A transfer which violates by Paragraph 11 hereof, occurs.
(h)Borrower: (i) fails to pay any amount due under this Agreement,
the Note, or the Security Agreement; or (ii) fails to perform any other obligation
to be performed under this Agreement, the Note, the Security Agreement, or any
other document executed by Borrower pursuant to this Agreement and such
failure continues beyond any applicable cure period.
533940v3 GAF EL185-57
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(i)Any representation or warranty by Borrower contained herein or in
the Note, the Security Agreement or any other instrument required hereunder is
false or untrue in any material respect when made.
(j)Borrower defaults in the payment or performance of anything by it
to be paid or performed under any note, mortgage or other agreement now or
hereafter made by Borrower in favor of or with Lender or otherwise now or
hereafter held by Lender and as to defaults other thanin the payment of a sum
when due, the continuance thereof beyond any notice and/or cure period
contained therein.
Upon the occurrence of an Event of Default, Lender, at its option, shall, in addition to any
other remedies which it might be entitled to bylaw, have the right to:
(1)To refrain from making advances under this Agreement;
(2)To enter into possession of the Loan Property and perform any and all
work and labor necessary to complete the Improvements substantially as
required under this Agreement and to do all things necessary or incidental
thereto;
(3)To perform such other acts or deeds which reasonably may be necessary to
cure any default existing under this Agreement, and to this end, it is
hereby agreed as follows:
(i)All sums expended by Lender in effectuating its rights under
Subparagraphs (2) and (3) of this Paragraph shall be deemed to
have been advanced under this Agreement and to be secured by the
Security Agreement and any other security document required
under this Agreement as security for the Loan.
(ii)Borrower hereby constitutes and appoints Lender its true and
lawful attorney-in-fact with full power of substitution either in the
name of Lender or in the name of Borrower or in the name of both,
for the following purposes: (a) to complete the Improvements or
cause the same to be completed; to use the plans and
specifications; to make such additions, changes and corrections in
the plans and specifications as Lender reasonably shall deem
necessary or desirable; to collect and use any funds of Borrower; to
use any funds which may remain unadvanced under this
Agreement; to employ such contractors, subcontractors, agents,
design professionals and inspectors and enter into such contracts
and arrangements as Lender reasonably deems necessary for such
purposes; to pay, settle or compromise all existing bills and claims
which may be liens against the Loan Property or as may be
necessary or reasonably desirable for the completion of the
533940v3 GAF EL185-57
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Improvements or clearance of title; to execute all applications and
certificates in the name of Borrower; to prosecute and defend all
actions or proceedings in connection with the construction of the
Improvements on, or any other matter relating to, the Loan
Property and do any and every act which Borrower might do in its
own behalf; (b) to enforce by any means that Lender then
reasonably deems necessary or advisable, all of the terms,
covenants and conditions of any permit or agreement issued by the
City or any other governmental body having jurisdiction over the
Loan Property or the construction contracts or any other contracts
obtained or held by Borrower in connection with the construction
of and any other contracts; (c) to perform each of the terms,
covenants and conditions to be kept and performed by Borrower
under any permit or authorization issued by the City or any other
governmental body having jurisdiction over the Loan Property or
the construction contracts or any other contracts and/or leases
obtained or held by Borrower in connection with the construction
or operation of the Improvements, and any other contracts; (d)
without limiting the foregoing to perform each of the terms,
covenants and conditions to be kept or performed by Borrower
under this Agreement, the Security Agreement and any other
instrument required under this Agreement; and (e) to do all things
that Lender reasonably deems necessary or advisable for the
purpose of carrying out the powers enumerated in (a), (b), (c) and
(d) of this Subparagraph (ii);
(iii)The powers herein granted Lender shall be deemed to be powers
coupled with an interest and the same are irrevocable;
(4)cancel this Agreement;
(5)bring appropriate action to enforce such performance and the
correction of such Event of Default;
(6)declare the entire unpaid principal of the Note and all accrued
interest thereon immediately due and payable without notice;
(7)exercise and enforce any rights under the Security Agreement, the
Guaranties, the Mortgageand any other security instrument referred to in this
Agreement and/or exercise any other rights or remedies it may have under the
Security Agreement and such other security instrument.
15.DefaultunderNote and Security Agreement. The failure by Borrower to
keep or perform any of the terms, covenants and conditions to be kept or performed by it
under this Agreement shall constitute a default under the Note, the Security Agreement
and any other security instrument held by Lender in connection with the Loan.
533940v3 GAF EL185-57
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16.Notices. Any notices given hereunder shall be inwriting and shall be
deemed to have been given when delivered personally or three (3) days after deposited in
the United States mail, registered, postage prepaid, addressed as follows:
If to Borrower:
Alan Arnold Corporation
13374 U.S. Highway 10
Elk River, Minnesota 55330
Attention: Brian Brehmer
If to Lender:
Economic Development Authority of the City of Elk River
13065 Orono Parkway
Elk River, Minnesota 55330
Attention: Director of Economic Development
or addressed to any such party at such other address as such party shall hereafter furnish
by notice to the other party. Any notice delivered personally to Borrower shall be
delivered to an officer of Borrower, and any notice delivered personally to Lender shall
be delivered to an officer of Lenderat the address for Lender for the mailing of notices.
Either party may change its address for the giving of notices by giving the other party at
least ten (10) days notice in the manner provided above.
17.Headings. The headings used in this Agreementare for convenience only
and do not define, limit or construe the contents of this Agreement.
18.BindingsonSuccessorsandAssigns. Subject to the limitations on transfer
contained in this Agreement, this Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the parties hereto.
19.Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Minnesota, without giving effect to any choice or conflict of
law provision or rule.
20.Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be an original and all of which shall constitute the same
agreement.
21.Entire Agreement. This Agreement, the Note, the Mortgage and the other
documents executed by Borrower and/or Lender pursuant to this Agreement contain the
entire agreement between the parties with respect to the subject matter hereof and
supersede all prior understandings and agreements, both oral and written. This
Agreement may beamended only in a writing signed by the parties hereto.
533940v3 GAF EL185-57
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22.Fees and Expenses. Borrower agrees to pay to Lender immediately upon
demand all costs and expenses, including, without limitation, all attorneys fees, incurred
by Lender in connection with the enforcement of the Lender’s rights and/or the
collection of any amounts which become due to Lender under this Agreement, the Note,
the Mortgage or the other documents executed in connection herewith; and the
prosecution or defense of any action in any way related to this Agreement, the Note, the
Mortgage or the other documents executed in connection herewith.
\[Signature Pages follow\]
533940v3 GAF EL185-57
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Signature Page to 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.
ALAN ARNOLD CORPORATION, a
Minnesota limited liability company
By: ______________________
Name: Brian Brehmer
Its: President
533940v3 GAF EL185-57
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Signature Page to 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 DEVELOPMENT
AUTHORITY OF THE CITY OF ELK
RIVER
By: ______________________________
Name: ______________________
Its: _________________________
And
By: ______________________________
Name: ______________________
Its: _________________________
533940v3 GAF EL185-57
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EXHIBIT A
Improvementsand Rebates
Installation of LED lights in interior building
Installation of soffit lights on the exterior of the building
533940v3 GAF EL185-57
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AMENDED AND RESTATED
ENERGY EFFICIENCY IMPROVEMENT PROGRAM
LOAN AGREEMENT
THIS AMENDED AND RESTATED ENERGY EFFICIENCY
IMPROVEMENT PROGRAM LOAN AGREEMENT (the “Agreement") is made
effective as of __________, 2018 (the “Closing Date”), by and between ALAN
ARNOLD CORPORATION, a Minnesota corporation ("Borrower"), and the
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a
public body corporate and politic of the State of Minnesota ("Lender"), and amends and
restates in all respects the Loan Agreement, dated September 10, 2013 (the “Original
Loan Agreement”), by and between the Borrower and the Lender.
RECITALS
A.On September 10, 2013, the EDA provided a loan to the Borrower
pursuant to the EDA Energy Efficiency Improvement Program, in the amount of
Seventy-Four Thousand Nine Hundred Ninety-Nine and No/100s Dollars ($74,999.00)
(the “Original Loan”) of which Forty Thousand and Four Hundred Eighty-Two and
91/100s Dollars ($40,482.91) is currently outstanding. The Original Loan was secured by
a Promissory Note, dated September 10, 2013 (the “Original Promissory Note”), from
Borrower to the Lender, a Security Agreement, dated September 10, 2013 (the “Security
Agreement”), from the Borrower to the Lender providing a security interest in certain
equipmentfinanced with the proceeds of the Original Loan, and Guaranty Agreements,
each dated September 10, 2013 (together, the “Original Guaranties”), from Brian
Brehmer, Nancy Brehmer, Allen Meyer and Yankee Doodle Enterprises, LLC.
B.To complete the Improvements described herein, the Borrower has
requested an additional loan in the principal amount of $19,175.00 from the Lender,
pursuant to the EDA Energy Efficiency Improvement Program (the “New Loan”, and
together with the Original Loan, the “Loan”).
C.The Borrower and the Lender desire to amend and restated the Original
Loan Agreement to provide the New Loan to the Borrower subject to the terms and
conditions of this Agreement.
D.On the date in the principal amount of the Loan is Fifty-Nine Thousand
Six Hundred and Fifty-Eight and 91/100s Dollars ($59,657.91).
E.Contemporaneously with the execution hereof, Borrower is executing and
delivering to Lender the following security documents:
(i)An Amended and Restated Promissory Note effective as of the
date herewith ("Note") made by Borrower and payable to the order of Lender
which amends and restated the Original Promissory Note and secures the Loan;
(ii)Personal Guaranties of Brian Brehmer, Nancy Brehmer and Allen
Meyer (the “Personal Guaranties”),owners of Yankee Doodle Enterprises, LLC
(“Corporate Guarantor”), owner of the real property commonly known as 13374
U.S. Highway 10, Elk River, Sherburne County, Minnesota as legally described
in the Mortgage (the "Loan Property");
(iii) A Corporate Guaranty of Corporate Guarantor, dated the date
herewith (the “Corporate Guaranty”, and together with the Personal Guaranties,
the “Guaranties”); and
(iv)An Amended and Restated Mortgage, Assignment of Rents,
Security Agreement and Fixture Financing Statement, dated the date hereof
("Mortgage"), from the Corporate Guarantor to the EDA amending and restating
the Mortgage, Assignment of Rents, Security Agreement and Fixture Financing
Statement securing the Corporate Guaranty, dated September 10, 2013 (the
“Original Mortgage”), by the Corporate Guarantor in favor of the Lender to
reflect the New Loan. The Mortgage provides a security interest in the Loan
Property as security for the Corporate Guaranty.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, it is hereby agreed as follows:
1.Amount and Purpose of New Loan. Borrower agrees to take and Lender
agrees to make the New Loan in the principal amount of Nineteen Thousand One
Hundred Seventy-Five and No/100s Dollars ($19,175.00) to be advanced in a single
disbursement as hereinafter provided. The proceeds of the New Loan may only be used
to construct approved Improvements (as defined below).
2.Construction of Improvements. For the purposes of this Agreement, the
term “Loan Property” means the real estate described in the Mortgage together with all
improvements now located or hereafter placed thereon by Borrower.
Borrower agrees to use the proceeds of the New Loan (and Corporate Guarantor
approves) to improve as a part of the Loan Property (“Project”) consisting generally of
renovations to and equipping of the building located at 13374 U.S. Highway 10, Elk
River, Minnesota, substantially in accordance with plans and specifications which have
been provided to Lender. The improvements will consist of: certain improvements
which are intended to increase the energy efficiency of the Loan Property, as specifically
set forth on Exhibit A(the “Improvements”). Borrower covenants that when completed,
the Improvements shallcomply with all applicable restrictions, conditions, codes,
ordinances, regulations and laws of the City of Elk River (“City”) and all other
governmental bodies having jurisdiction over the Loan Property, including, without
limitation, the all municipal sign ordinances, the Americans with Disabilities Act and
those related to environmental protection.
533940v3 GAF EL185-57533940v3 GAF EL185-57
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Borrower agrees to commence construction of the Improvements promptly after
the Closing Date and to carry on continuously, diligently and with reasonabledispatch
the construction of the Improvements to full and final completion.
The proceeds of the Original Loan financed the construction of certain other
energy efficiency improvements to the Loan Property.
3.\[Title Insurance
. __________ ("Title"), is designated as the title
insurer with respect to this Agreement. Title will insure Lender against loss or
damage on account of mechanic's liens upon or unmarketability of the title to the
Loan Property, and will insure that the Mortgage constitutes a lien upon Corporate
Guarantor’s interest in the Loan Property, , as contemplated by this Agreement.
Borrower agrees to promptly and fully observe and comply with the reasonable
requirements of Title and Lender with respect to the title, the Mortgage,
disbursements of funds and such other reasonable requirements as Title may make.\]
4.Borrower’s Deliverables. Borrower covenants and agrees to immediately
cause the compliance with the following conditions, which full and timely compliance is
a condition precedent to Lender’s obligations under this Agreement:
(a)Note. Deliver to Lender the Note.
(b)Security Agreement. Deliver to Lender the Security Agreement.
The Security Agreement was executed in connection with the Original Loan and
remains in full force and effect.
(c)Guaranties. Deliver to Lender the Guaranties.
(d)Mortgage. Deliver to Lender the Mortgage, together with evidence
that the Mortgage has been or will be duly filed for record.
(e)Title Insurance Policy. Deliver to Lender a Mortgagee's title
insurance policy ("Title Policy"), from Title issued to Lender in the amount of the
Note with respect to the Mortgage and insuring that the Mortgage is a lien on the
Loan Property free and clear of all mechanic's liens, materialmen's liens, taxes,
special assessments, rights of parties in possession; (f)Organizational
Documents and Resolutions -Borrower. Deliver to Lender copies of: (i) the
Articles of Incorporation for Borrower, certified by the Minnesota Secretary of
State, (ii) a certificate of good standing for Borrower issued by the Minnesota
Secretary of State; (iii) the bylaws for Borrower; and (iv) a certified copy of
resolutions of Borrower authorizing the execution and delivery of this Agreement,
the Note, the Security Agreement,and any other document to be executed by
Borrower pursuant to this Agreement.
(gf)Insurance. Deliver to Lender: (i) a certificate or policy for all
insurance required, under the terms hereof or of the Mortgage, to be maintained
by Borrower; and (ii) evidence that no part of the Loan Property is located in an
533940v3 GAF EL185-57533940v3 GAF EL185-57
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area designated as being a flood plain or flood hazard area as defined by the Flood
Hazard Boundary Map published by the Federal Insurance Administration.
(hg)Compliance With Laws, Etc
. Deliverto Lender such evidence as
Lender may require as to the compliance of the Loan Property and the
Improvements with: (i) all applicable laws, codes, rules, regulations and
ordinances, including, without limitation, those relative to environmental
protection, protection of wetlands, building and zoning matters and the Americans
with Disabilities Act; and (ii) the requirements of any restrictive covenants,
conditions and restrictions; conditional use permit and/or planned unit
development applicable to the Loan Property.
(ih)Hazardous Substances. Deliver to Lender evidence acceptable to
Lender, that: (i) the Loan Property has not knowingly been used as a hazardous
waste storage facility or burial site; (ii) the soil is believed to be free from
hazardous waste, hazardous substances, pollutants and contaminants; and (iii) no
known hazardous waste, hazardous substance, pollutant or contaminant has been
used in the construction or use of any building or other improvement on the Loan
Property. For purposes of this subparagraph, the terms "hazardous waste,"
"hazardous substances," “pollutants” and "contaminants" shall include, but not be
limited to, polychlorinated biphenyls (PCBs), asbestos, petroleum products and
any other chemical or substance determined to be ahazard to human health or the
environment.
(j)Indemnity. Deliver to Title any indemnity agreement in favor of
Title in the form required by Title in order for Title to issue the title insurance
policies referred to above. (ki)Contractors. All contractors and
subcontractors must be bonded, insured and licensed to do business in the State of
Minnesota and be of good repute. Lender reserves the right to reject any
contractor or subcontractor that does not meet the requirement of the previous
sentence.
(lj)Source of Funds Certificate. Deliver to Lender a sworn source of
funds certificate ("Source of Funds Certificate"), in a form acceptable to Lender,
verified on oath by a manager of Borrower showing an itemized breakdown of:
(i) the source and amount of all Project funds; and (ii) of the total cost of the
Improvements, including, without limitation, the cost of constructing the
Improvements, any special assessments, soft costs and all other costs and charges
to be paid from the Loan proceeds and/orother Project funds or necessary to
complete the Improvements. Borrower shall deliver to Lender lien waivers,
receipts for payment and other evidence of payment acceptable to Lender with
respect to any such portion of costs and charges incurred to the date of the Source
of Funds Certificate.
(mk)EDA Review & Rebates. Deliver to Lender copies of the list of
rebates related to the approved Improvements. Borrower shall work with Lender
533940v3 GAF EL185-57533940v3 GAF EL185-57
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to accomplish any post-Closing inspections of the Improvements. The post-
completion inspection of the Improvements will be considered timely if it occurs
th
on or before the thirtieth (30) day after issuance of the Certificate of Occupancy
for the Loan Property.
(nl)Program Fee. Deliver to Lender the program fee of $2,000.00.
(om)Lease
. Deliver to Lender a lease for the Loan Property by and
between Corporate Guarantor, as landlord, and Borrower, as Tenant.
Lender may waive any of the above requirements in its sole discretion.
5.4.Disbursement of Loan. Upon receipt by Lender of the items required
pursuant to paragraph 4 above, the Lender shall disburse the proceeds of the New Loan to
the Borrower.
6.5.Rebates. Pursuant to the Energy Efficiency Improvement Program,
Lender expects to receive certain rebates (the “Rebates”) relating to the energy efficiency
improvements made by Borrower to the Loan Property. By executing this Agreement,
Borrower assigns and Lender assumes all right and title to proceeds from any Rebate
arising from the Improvements. Borrower will execute any documentation reasonably
necessary to effectuate such assignment and will otherwise assist Lender in a timely
manner to obtain any available Rebate. All proceeds of the Rebates received by Lender
will be applied to the outstanding principal balance of this Note as set forth therein.
7.6.Access to Loan Property. Lender and its respective representatives shall
have at all reasonable times the right to enter and have free access to the Project and the
Loan Property and the right to inspect all work done, labor performed and material
furnished in connection therewith.
8.7.Books and Records. Borrower agrees to maintain accurate and complete
books, accounts and records in regard to the Loan Property in a manner reasonably
acceptable to Lender. Lender and its representatives shall have the right to inspect,
examine and copy all such books and records of Borrower and Borrower shall, at
Lender's request, furnish such information as Lender may reasonably demand.
9.8.Encumbrances and Transfer. Borrower agrees not to sell, transfer, lease or
convey its interest in the Loan Property or any part thereof, or any interest therein, or
further encumber the Loan Property or any part thereof, in any manner, without written
consent of Lender which consent may be granted or withheld in the sole discretion of
Lender. This requirement shall apply to each and every sale, transfer, lease, conveyance
or encumbrance, whether voluntary or involuntary and whether or not Lender has
consented to any such prior sale, transfer, lease, conveyance or encumbrance.
10.9.Time of Essence. Time is of the essence in the performance of this
Agreement.
533940v3 GAF EL185-57533940v3 GAF EL185-57
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11.10.Assignability. Borrower shall not assign this Agreement or all or any part
of any Advances to be made hereunder without written consent of Lender, which consent
may be withheld, conditioned or delayed in Lender’s sole discretion. Lender may freely
assign or otherwise transfer (including by participation) all or any part of its interest in
the Loan or any or allof the Loan documents, in Lender’s sole discretion.
12.11.Miscellaneous Covenants of Borrower
. Borrower covenants and agrees
with Lender that, without costs to Lender, Borrower will:
(a)Performance of Conditions. Promptly keep, perform and comply
with all of the terms, covenants and conditions to be kept and performed by
Borrower, as required by the City and any other governmental body having
jurisdiction over the Loan Property as a condition of platting, rezoning or
developing the Loan Property; keep unimpaired the rights of Borrower under any
permit or agreement issued or made by the City or other governmental body
having jurisdiction over the Loan Property and the Construction Contracts and
any other contracts obtained or held by Borrower in connection with the
construction or operation of the Improvements; and to enforce the prompt
performance of all of the terms, covenants and conditions to be kept and
performed by the City or other governmental body having jurisdiction over the
Loan Property, respectively, under any permits or agreements issued or made by
the City or such other governmental bodies, or by any design professional, the
general contractor and any other contractors under all contracts obtained or held
by Borrower in connection with construction or operation of the Improvements.
(b)Amendment, Etc. of Documents. Not amend, cancel, terminate,
supplement or waive any of the material terms, covenants and conditions of any
permit or agreement issued or made by the City or any other governmental body
having jurisdiction over the Loan Property, or any other contracts obtained or held
by Borrower in connection with the construction or operation of the
Improvements or any contracts, documents or agreements referred to herein
without the priorwritten approval of Lender. Borrower will provide to Lender
complete documentation concerning any change made to the Project.
(c)Performance of Note, Security Agreement, Etc.Without limiting
the foregoing, keep and perform all of the terms, covenants, conditions and
requirements of the Note, the Security Agreement, and this Agreement.
(d)Insurance. During the term of the Mortgage, Borrower shall
procure and maintain or cause Corporate Guarantor to procure and maintain at
each party’s sole expense casualty insurance, public liability insurance and such
other types of insurance as are reasonably required by Lender from time to time,
including, without limitation, the coverages expressly required by the Mortgage,
insuring Lender and Borrower with coverages, in amounts and with companies
satisfactory to Lender. The policy or policies or duly executed certificate or
533940v3 GAF EL185-57533940v3 GAF EL185-57
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certificates for such insurance and renewals or replacements thereof shall be
deposited with Lender.
(e)Pay Charges
. Immediately pay allloan charges including, but not
limited to: (i) Lender’s reasonable attorneys’ fees up to Five Thousand and
No/100 ($5,000.00) Dollars for the preparation of the Loan documents; (ii) title
insurance fees, costs and premiums; (iii) mortgage registration taxes and filing
fees of the Mortgage and any other instruments required under this Agreement.
(f)Copies of Plans, Contracts, etc.Furnish Lender from time to time
as reasonably requested by Lender, copies of the any plans and specification and
any contracts relating to the Improvements, together with estimated costs of such
Improvements.
(g)Title. Except as specifically set forth herein, as of the Closing
Date Borrower owns a fee title interest in the Loan Property and owns or within
sixty (60) days after the Closing Date will own all of the fixtures, trade fixtures,
equipment, personal property and inventory located upon the Loan Property
(along with the Loan Property, collectively, the “Collateral”) “free and clear,” that
Lender will have a “first position” lien in the Collateral.
(h)Program Covenants. At all times while any portion of the Loan
remains outstanding, Borrower will: (i) maintain its status as a for profit entity;
(ii) maintain a positive net worth; and (iii) will operate from the Loan Property.
13.12.Warranties. Borrower represents and warrants to Lender the following:
(a)The Borrower is a corporation duly formed, validly existing and in
good standing under the laws of the State of Minnesota.
(b)The making and performance ofthis Agreement and the execution
and delivery of the Note, the Mortgage and any other instrument required
hereunder are within the powers of the Borrower and have been duly authorized
by all necessary company action on the part of the Borrower. This Agreement
and the Note, the Mortgage and any other instruments required hereunder have
been duly executed and delivered and are the legal, valid and binding obligations
of the Borrower enforceable in accordance with their respective terms.
(c)No litigation, tax claims or governmental proceedings are pending
or threatened against the Borrower or the Loan Property, and no judgment or
order of any court or administrative agency is outstanding against the Borrower or
the Loan Property which would have a material adverse effect on Borrower or the
Loan Property.
(d)Borrower has filed all tax returns (federal and state) required to be
filed for all prior years and paid all taxes shown thereon to be due, including
533940v3 GAF EL185-57533940v3 GAF EL185-57
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interest and penalties. Borrower will file all such returns and pay all such taxes
for the current and future years.
(e)All information, financial or other, which has been submitted by
Borrower and Guarantors in connection with the Loan is true, accurate and
complete in all material respects.
14.13.Indemnification
. Borrower agrees to indemnify Lender and save it
harmless against all loss, liability, expense, or damages including but not limited to
attorneys fees, which may arise by reason of the assertion of any lien against the Loan
Property.
15.14.Defaults. Each of the following shall constitute an Event of Default:
(a)Borrower abandons the Loan Property, work on construction of the
Improvements is halted or the Improvements are not constructed in accordance
with this Agreement.
(b)Bankruptcy, reorganization, assignment, insolvency or liquidation
proceedings, or other proceedings for relief under any applicable bankruptcy law
or other law for relief of debtors are instituted by or against Borrower and, if such
proceedings are instituted against Borrower, an order, judgment or decree,
without the consent of Borrower appointing a trustee or receiver for Borrower or
any part of its property or approving a petition under the bankruptcy laws of the
United States or any similar laws of any state or other competent jurisdiction,
shall have remained in force undischarged or unstayed for a period of thirty (30)
days.
(c)Any judgment, attachment, garnishment or other similar process is
entered against Borrower or against any property or assets of Borrower and is not
released, satisfied or discharged or bonded to Lender’s satisfaction within thirty
(30) days of entry.
(d)Borrower fails to commence or complete construction of the
Improvements within the time designated in this Agreement.
(e)Any of the terms, covenants or conditions of any permit or other
agreement issued or made by the City or other governmental body having
jurisdiction over the Loan Property, including, but not limited to, those relating to
the cost of or time for installation of the Improvements, are not complied with
within the time required thereby or are terminated or modified by the City or such
other governmental body and Borrower has not taken the necessary steps to
correct or cure the same within thirty (30) days after written notice is given by
Lender.
533940v3 GAF EL185-57533940v3 GAF EL185-57
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(f)Any mechanic's or material supplier's lien is filed against the Loan
Property and is not released, satisfied or discharged or bonded to Lender's
satisfaction, subject, however, to Borrower's right to contest the same in
accordance with the provisions of the Mortgage and applicable law.
(g)A transfer which violates by Paragraph 11 hereof, occurs.
(h)Borrower: (i) fails to pay any amount due under this Agreement,
the Note, or the Security Agreement; or (ii) fails to perform any other obligation
to be performed under this Agreement, the Note, the Security Agreement, or any
other document executed by Borrower pursuant to this Agreement and such
failure continues beyond any applicable cure period.
(i)Any representation or warranty by Borrower contained herein or in
the Note, the Security Agreement or any other instrument required hereunder is
false or untrue in any material respect when made.
(j)Borrower defaults in the payment or performance of anything by it
to be paid or performed under any note, mortgage or other agreement now or
hereafter made by Borrower in favor of or with Lender or otherwise now or
hereafter held by Lender and as to defaults other than in the payment of a sum
when due, the continuance thereof beyond any notice and/or cure period
contained therein.
Upon the occurrence of an Event of Default, Lender, at its option, shall, in addition to any
other remedies which it might be entitled to by law, have the right to:
(1)To refrain from making advances under this Agreement;
(2)To enter into possession of the Loan Property and perform any and all
work and labor necessary to complete the Improvements substantially as
required under this Agreement and to do all things necessary or incidental
thereto;
(3)To perform such other acts or deeds which reasonably may be necessary to
cure any default existing under this Agreement, and to this end, it is
hereby agreed as follows:
(i)All sums expended by Lender in effectuating its rights under
Subparagraphs (2)and (3) of this Paragraph shall be deemed to
have been advanced under this Agreement and to be secured by the
Security Agreement and any other security document required
under this Agreement as security for the Loan.
(ii)Borrower hereby constitutes and appoints Lender its true and
lawful attorney-in-fact with full power of substitution either in the
533940v3 GAF EL185-57533940v3 GAF EL185-57
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name of Lender or in the name of Borrower or in the name of both,
for the following purposes: (a) to complete the Improvements or
cause the same to be completed; to use the plans and
specifications; to make such additions, changes and corrections in
the plans and specifications as Lender reasonably shall deem
necessary or desirable; to collect and use any funds of Borrower; to
use any funds which may remain unadvanced under this
Agreement; to employ such contractors, subcontractors, agents,
design professionals and inspectors and enter into such contracts
and arrangements as Lender reasonably deems necessary for such
purposes; to pay, settle or compromise all existing bills and claims
which may be liens against the Loan Property or as may be
necessary or reasonably desirable for the completion of the
Improvements or clearance of title; to execute all applications and
certificates in the name of Borrower; to prosecute and defend all
actions or proceedings in connection with the construction of the
Improvements on, or any other matter relating to, the Loan
Property and do any and every act which Borrower might do in its
own behalf; (b) to enforce by any means thatLender then
reasonably deems necessary or advisable, all of the terms,
covenants and conditions of any permit or agreement issued by the
City or any other governmental body having jurisdiction over the
Loan Property or the construction contracts or any other contracts
obtained or held by Borrower in connection with the construction
of and any other contracts; (c) to perform each of the terms,
covenants and conditions to be kept and performed by Borrower
under any permit or authorization issued by the City or any other
governmental body having jurisdiction over the Loan Property or
the construction contracts or any other contracts and/or leases
obtained or held by Borrower in connection with the construction
or operation of the Improvements, and any other contracts; (d)
without limiting the foregoing to perform each of the terms,
covenants and conditions to be kept or performed by Borrower
under this Agreement, the Security Agreement and any other
instrument required under this Agreement; and (e) to do all things
that Lender reasonably deems necessary or advisable for the
purpose of carrying out the powers enumerated in (a), (b), (c) and
(d) of this Subparagraph (ii);
(iii)The powers herein granted Lender shall be deemed to be powers
coupled with an interestand the same are irrevocable;
(4)cancel this Agreement;
(5)bring appropriate action to enforce such performance and the
correction of such Event of Default;
533940v3 GAF EL185-57533940v3 GAF EL185-57
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(6)declare the entire unpaid principal of the Note and all accrued
interest thereon immediately due and payable without notice;
(7)exercise and enforce any rights under the Security Agreement, the
Guaranties, the Mortgage and any other security instrument referred to in this
Agreement and/or exercise any other rights or remedies it may haveunder the
Security Agreement and such other security instrument.
16.15.Default under Note and Security Agreement. The failure by Borrower to
keep or perform any of the terms, covenants and conditions to be kept or performed by it
under this Agreement shall constitute a default under the Note, the Security Agreement
and any other security instrument held by Lender in connection with the Loan.
17.16.Notices. Any notices given hereunder shall be in writing and shall be
deemed to have been given when delivered personally or three (3) days after deposited in
the United States mail, registered, postage prepaid, addressed as follows:
If to Borrower:
Alan Arnold Corporation
13374 U.S. Highway 10
Elk River, Minnesota 55330
Attention: Brian Brehmer
If toLender:
Economic Development Authority of the City of Elk River
13065 Orono Parkway
Elk River, Minnesota 55330
Attention: Director of Economic Development
or addressed to any such party at such other address as such party shall hereafter furnish
by notice to the other party. Any notice delivered personally to Borrower shall be
delivered to an officer of Borrower, and any notice delivered personally to Lender shall
be delivered to an officer of Lender at the address for Lender for the mailing of notices.
Either party may change its address for the giving of notices by giving the other party at
least ten (10) days notice in the manner provided above.
18.17.Headings. The headings used in this Agreement are for convenience only
and do not define, limit or construe the contents of this Agreement.
19.18.Bindings on Successors and Assigns. Subject to the limitations on transfer
contained in this Agreement, this Agreement shall be binding upon and inure to the
benefit of the successors and assigns of theparties hereto.
533940v3 GAF EL185-57533940v3 GAF EL185-57
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20.19.Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Minnesota, without giving effect to any choice or conflict of
law provision or rule.
21.20.Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be an original and all of which shall constitute the same
agreement.
22.21.Entire Agreement. This Agreement, the Note, the Mortgage and the other
documents executed by Borrower and/or Lender pursuant to this Agreement contain the
entire agreement between the parties with respect to the subject matter hereof and
supersede all prior understandings and agreements, both oral and written. This
Agreement may be amended only in a writing signed by the parties hereto.
23.22.Fees and Expenses. Borrower agrees to pay to Lender immediately upon
demand all costs and expenses, including, without limitation, all attorneys fees, incurred
by Lender in connection with the enforcement of the Lender’s rightsand/or the
collection of any amounts which become due to Lender under this Agreement, the Note,
the Mortgage or the other documents executed in connection herewith; and the
prosecution or defense of any action in any way related to this Agreement, the Note, the
Mortgage or the other documents executed in connection herewith.
\[Signature Pages follow\]
533940v3 GAF EL185-57533940v3 GAF EL185-57
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Signature Page to 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.
ALAN ARNOLD CORPORATION, a
Minnesota limited liability company
By: ______________________
Name: Brian Brehmer
Its: President
533940v3 GAF EL185-57533940v3 GAF EL185-57
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Signature Page to 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 DEVELOPMENT
AUTHORITY OF THE CITY OF ELK
RIVER
By: ______________________________
Name: ______________________
Its: _________________________
And
By: ______________________________
Name: ______________________
Its: _________________________
533940v3 GAF EL185-57533940v3 GAF EL185-57
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EXHIBIT A
Improvements and Rebates
Installation of LED lights in interior building
Installation of soffit lights on the exterior of the building
533940v3 GAF EL185-57533940v3 GAF EL185-57
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AMENDED AND RESTATED MORTGAGE
AND
ASSIGNMENT OF RENTS
AND
SECURITY AGREEMENT
AND
FIXTURE FINANCING STATEMENT
ThisAmended and RestatedMortgage and Assignment of Rents and Security Agreement
and Fixture Financing Statement (“Mortgage”) is made as of ___________, by YANKEE
DOODLE ENTERPRISES, LLC,a Minnesota corporation(“Mortgagor”), in favor of the
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a public body
corporate and politic of the State of Minnesota (“Mortgagee”).
THE MAXIMUM AMOUNT SECURED BY THIS MORTGAGE IS $59,658.00OF
PRINCIPAL INDEBTEDNESS, TOGETHER WITH ALL INTEREST ACCRUING
THEREON AND ANY AMOUNTS WHICH MAY BE ADVANCED BY MORTGAGEE IN
PROTECTION OF THE MORTGAGED PREMISES OR THE LIEN OF THIS MORTGAGE.
This Mortgagesalters an existing mortgage by providing for an increase in the
amount of debt secured by the Original Mortgage and therefore shall be taxed based upon
the increase in the amount of the debt secured by this Mortgage in the amount of
$19,175.00. This Amended and Restated Mortgage is an “amendment” as defined in
Minnesota Statutes, Section 287.01, subdivision 2, and as such it does not secure an
increased amount of debt, other than as set forth above.
RECITALS
A.The Mortgagorexecuted and delivered the Mortgage and Assignment of Rents
and Security Agreement and Fixture Financing Statement, dated September 10, 2013 (the
“Original Mortgage”) to secure its obligations as the guarantor under the Corporate Guaranty,
dated September 10, 2013 (the “Original Guarantor”) as the guarantor of a loan made by the
Mortgagee to Alan Arnold Corporation (the “Borrower”) in the amount of $74,999 (the “Original
Loan”) pursuant to an Energy Efficiency Improvement Program Loan Agreement, dated
September 10, 2013 (the “Original Loan Agreement”). The Original Loan is currently
outstanding in the principal amount of $40,482.91.
B.The Original Mortgage was filed on September18,2013as Document Number
49208in the Office of the County Recorder of SherburneCounty, Minnesotaand was amended
by a First Amendment to Mortgage and Assignment of Rents and Security Agreement and
Fixture Financing Statement, dated ________, 2017 and filed as Document Number ___ in the
Office of the County Recorder of Sherburne County, Minnesota.,
C.The Mortgagor proposes to amend and restate the Original Mortgage in order to
secure additional debt by delivering the Mortgage securing indebtedness in the principal amount
of $59,657.91to reflect that reflect that the Mortgagee is providing an additional loan in the
A-1
533955v3 GAF EL185-57
amount of $19.175.00 (the “New Loan”, and together with the Original Loan, the “Loan”) to the
Borrower pursuant to an Amended and Restated Energy Efficiency Improvement Program Loan
Agreement, dated the date hereof, between the Borrower and the Mortgagee. The Loan will be
secured by an Amended and Restated Promissory Note, dated the date hereof (the “Note”), from
the Borrower to the Mortgagee the balance of the Note being due and payable in full on
____________(the “Maturity Date”). The Note is secured by, among other items, a Corporate
Guaranty, from the Mortgagor to the Mortgagee.As a condition of making the New Loan, the
Mortgagee required that the Mortgagor deliver this Mortgage to secure the Corporate Guaranty.
.D.Mortgage registration tax was previously paid in connection with the Original
Mortgage with respect to a mortgage lienin the aggregate amount of $74,999 and currently
outstanding in the amount of $40,482.91and the Original Mortgage is being amended and
restated in its entirety bythe terms of this Mortgage with respect to a mortgage lien in the
aggregate amount of $59,657.91. The principal amount secured by this Mortgage has increased
by $19,175upon which mortgage registration tax is due and owing.
NOW THEREFORE, in consideration of the Recitals and for the purpose of securing the
payment and performance of all of Mortgagor’s obligations under the Corporate Guaranty
(collectively “Obligations”); and to secure the performance of all covenants, conditions and
agreements herein and in the Corporate Guaranty, Mortgagor does hereby mortgage, grant,
bargain, sell, release and convey unto Mortgagee, with power of sale, forever all of Mortgagor’s
right, title and interest in all the tracts or parcels of land lying and being in SherburneCounty,
Minnesota, legally described in Exhibit Ahereto, (hereinafter the “Land”), whether now owned
or hereafter acquired, together with: (i) all building materials, supplies and equipment now or
hereafter located on the Land and suitable or intended tobe incorporated in any building,
structure, or other improvement located or to be erected on the Land; and (ii) all of the buildings,
structures and other improvements now standing or at any time hereafter constructed or placed
upon the Land; and (iii) all heating, plumbing and lighting apparatus, motors, engines, and
machinery, electrical equipment, incinerator apparatus, air conditioning equipment, water and
gas apparatus, pipes, faucets, and all other fixtures of every description which are now or may
hereafter be placed or used upon the Land or in any building or improvement now or hereafter
located thereon; and (iv) all equipment purchased with the Loan proceeds, as set forth on
ExhibitAto the Loan Agreement, as updated from time to time (collectively, the “Equipment”);
and (v) all additions, accessions, increases, parts, fittings, accessories, replacements,
substitutions, betterments, repairs and proceeds to any and all of the foregoing; and (vi) all
hereditaments, easements, appurtenances, estates, rents, issues, profits, condemnation awards,
proceeds of policies of insurance and other rights and interests now or hereafter belonging or in
any way pertaining to the Land or to any building or improvement now or hereafter located
thereon; and (vii) all leases or other occupancy agreements now or hereafter in effect in any way
appertaining to the Land or to any building or improvement now or hereafter located thereon,
including, without limitation, all cash and security deposits, advance rentals and deposits or
payments of a similar nature (“Leases”), and all Rents (as herein defined) (all of the foregoing,
together with the Land, hereinafter being referred to as the “Property” or “Mortgaged Property”),
TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee forever;
533955v3 GAF EL185-57
PROVIDED, NEVERTHELESS, That this Mortgage is given upon the express condition
that if Mortgagor or Borrower shall cause to be paid and performed all of the Obligations, and
shall also keep and perform all and singular the covenants herein contained on the part of
Mortgagor to be kept and performed, then the Mortgage and the estate hereby granted shall cease
and be and become void and shall be released of record at the expense of Mortgagor or
Borrower; otherwise this Mortgage shall be and remain in full force and effect.
MORTGAGOR REPRESENTS, WARRANTS AND COVENANTS to and with
Mortgagee; that it has good right and full power and authority to execute this Mortgage and to
mortgage the Mortgaged Property; that the Mortgaged Property is free from all liens and
encumbrances; that Mortgagee shall quietly enjoy and possess the Mortgaged Property; that
Mortgagor will warrant and defend the title to the Mortgaged Property against all claims,
whether now existing or hereafter arising. The covenants and warranties of this paragraph shall
survive foreclosure of this Mortgage and shall run with the Land.
AND IT IS FURTHER COVENANTED AND AGREED AS FOLLOWS:
ARTICLE ONE
GENERAL COVENANTS, AGREEMENTS, WARRANTIES
1.1Payment of Obligations; Observance of Covenants.Mortgagor will duly pay and
perform its Obligations and will perform or cause to be performed all other agreements and
covenants by Mortgagor to be performed hereunder.
1.2Payment of Impositions. Mortgagor agrees to pay, before a penalty might attach
for nonpayment thereof, all taxes, assessments, water and sewer charges, and other fees, taxes
and charges of whatsoever nature levied upon or assessed or placed against the Mortgaged
Property (collectively “Impositions”). Mortgagor will likewise pay all taxes, assessments and
other charges, levied upon or assessed, placed or made against, or measured by, this Mortgage,
or the recordation hereof, or the Obligations, provided that Mortgagor shall not be obliged to pay
such tax, assessment or charge if such payment would be contrary to law or would result in the
payment of an usurious rate of interest on the Obligations. Mortgagor shall promptly furnish to
Mortgagee all notices received by Mortgagor of amounts due under this Section and upon
Mortgagee’s request, shall deliver proper receipts evidencing the payment of such amounts. In
the event of a judicial decree or legislative enactment after the date of this Mortgage, providing
that any such imposition may not be lawfully paid by Mortgagor, or in the event that the payment
of any such imposition by Mortgagor would result in the payment of a usurious rate of interest
on the Obligations, the Obligations, together with interest, shall become immediately due and
payable, or, at Mortgagee’s option, Mortgagee may pay any amount or portion of such
Imposition as renders the Obligations unlawful or usurious, in which event Mortgagor shall
concurrently therewith pay the remaining lawful and non-usurious portion or balance of said
Imposition.
1.3Payment of Operating Costs; Prior Mortgages and Liens. Mortgagor agrees that it
will pay, or cause to be paid, all operating costs and expenses of the Mortgaged Property; keep
the Mortgaged Property free from mechanics’ and material suppliers’ and other liens, subjectto
533955v3 GAF EL185-57
Mortgagor’s right to contest in good faith as set forth in Section 1.4 hereof; will keep the
Mortgaged Property free from levy, execution or attachment and will immediately pay when due
all indebtedness which may be secured by mortgage, lien or charge on the Mortgaged Property
and upon request will exhibit to Mortgagee satisfactory evidence of such payment and discharge.
1.4Contest of Impositions, Liens and Levies.Mortgagor shall not be required to pay,
discharge or remove any Imposition, lien or levy so long as Mortgagor shall in good faith contest
the same or the validity thereof by appropriate legal proceedings which shall operate to prevent
the collection of the levy, lien or Imposition so contested and the sale of the Mortgaged Property,
or any part thereof to satisfy the same; provided, however, that Mortgagor, prior to the date such
levy, lien or Imposition is due and payable or, in the case of a mechanic’s lien or other
involuntary lien within (30) days after the same shall have been filed, shall have given such
reasonable security as may be demanded by Mortgagee to insure such payments and any
penalties and interest that may accrue thereon and prevent any sale or forfeiture of the
Mortgaged Property by reason of such nonpayment. Any such contest shall be prosecuted with
due diligence and Mortgagor shall promptly after final determination thereof pay the amount of
any such levy, lien or Imposition so determined, together with all interest and penalties, which
may be payable in connection therewith. Notwithstanding the provisions of this Section,
Mortgagor shall, and Mortgagee may, pay any such levy, lien or Imposition notwithstanding
such contest if in the reasonable opinion of Mortgagee, the Mortgaged Property is in jeopardy or
in danger of being forfeited or foreclosed.
1.5Maintenance and Repairs; Inventory. Mortgagor agrees that it will keep and
maintain (or cause to be kept and maintained) the Mortgaged Property (including, without
limitation, the Equipment) in good condition and repair, free from any waste or misuse, and will
comply with all requirements of law, municipal ordinances and regulations, restrictions and
covenants affecting the Mortgaged Property and its use, and will promptly repair or restore any
buildings, improvements or structures now or hereafter on the Mortgaged Property which may
become damaged or destroyed. Mortgagor further agrees that without the prior consent of
Mortgagee it will not remove from the Mortgaged Property any or all of the Equipment or any
fixtures or any personal property that is included in the Mortgaged Property unless the same is
immediately replaced with like fixtures or personal property of at least equal value, or is
otherwise removable under Section 6.1 hereof; or expand any improvements on the Mortgaged
Property, erect any new improvements or make any material alterations in any improvements
which will materially alter the basic structure, materially and adversely affect the market value or
materially change the existing architectural character of the Mortgaged Property. Mortgagor
agrees that it will complete within a reasonable time any buildings now or at any time in the
process of erection on the Mortgaged Property. Mortgagor agrees not to acquiesce in any
rezoning classification, modification or restriction affecting the Mortgaged Property without
Mortgagee’s prior written consent. Mortgagor agrees that it will not abandon the Mortgaged
Property. Upon request of Mortgagee, Mortgagor shall deliver to Mortgagee an inventory in
detail reasonably acceptable to Mortgagee of any personal property owned by Mortgagor that is
included in the Mortgaged Property pursuant to the terms hereof together with a certification by
Mortgagor that said inventory is a true and complete schedule of the personal property to be
included in the Mortgaged Property pursuant to the terms hereof. Such inventory shall list any
conditional sales contracts and other title retention arrangements to which such personal property
may be subject.
533955v3 GAF EL185-57
1.6Insurance.
(a)So long asthe Obligations remains unpaid, Mortgagor shall, at its own
cost or by and through tenants of the Mortgaged Property, maintain or cause to be
maintained with insurers of recognized responsibility acceptable to Mortgagee the
following insurance:
(i)hazard and fire insurance on the improvements now existing or
hereafter constructed on the Land insuring against loss by fire, hazards included
in the term “extended coverage,” loss by vandalism or malicious mischief, and
such other hazards, casualties and contingencies as may be required by
Mortgagee, on the basis of replacement cost without a coinsurance clause, in an
amount equal to the full replacement cost thereof (without deduction for
depreciation) or such additional amounts and for such periods as may berequired
by Mortgagee;
(ii)comprehensive general public liability insurance covering the
liability of Mortgagor against claims for bodily injury, death or property damage
occurring on or about the Mortgaged Property in such minimum amounts and
limits as Mortgagee may require but in no event, less than $2,000,000.00
combined single limit per occurrence and naming Mortgagee as an additional
insured;
(iii)insurance covering the Mortgaged Property against loss or damage
by explosion, rupture or bursting of steam boilers, steam pipes, steam turbines,
steam engines or pressure vessels or fly wheels located on or a part of the
Mortgaged Property and providing for full repair and full replacement cost
coverages;
(iv)Intentionally Omitted; and
(v)such otherforms of insurance in such minimum amounts as
Mortgagee may reasonably require or as may be required by law.
Mortgagor shall pay or cause to be paid all premiums on insurance required
hereunder by making payment directly to the insurer. Mortgagee shall have the
right to hold the policies and renewals thereof, and Mortgagor shall promptly
furnish to Mortgagee all such policies, renewals thereof, renewal notices and all
paid-premium receipts received by it. All policies of insurance and any and all
refundsof unearned premiums are hereby assigned to Mortgagee as additional
security for the payment of the Obligations secured hereby. In the event of
foreclosure of this Mortgage, all right, title and interest of Mortgagor in and to
any insurance policies thenin force shall pass to the purchaser at the foreclosure
sale.
(b)The policies of all such insurance shall have mortgagee and loss
payable provisions in favor of Mortgagee. All such insurance shall be in form
reasonably acceptable to Mortgagee, shall provide for at least thirty (30) days’
533955v3 GAF EL185-57
prior written notice of cancellation, termination or modification thereof to
Mortgagee, shall permit Mortgagee to make premium payments to prevent
cancellation, and shall provide that no act or negligence of Mortgagoror of any
occupant of the Mortgaged Property, and no occupancy or use of the Mortgaged
Property for purposes more hazardous than permitted by the terms of the policy,
will affect the validity or enforceability of such insurance as against Mortgagee.
In the event of loss under such insurance Mortgagor shall give prompt notice to
the insurance carrier and Mortgagee; Mortgagor shall duly make proof of loss,
and shall immediately furnish to Mortgagee a copy of such proof of loss.
(c)Mortgagee is authorized and empowered to settle, collect and
receive all fire and hazard insurance proceeds, to apply such proceeds to all
expenses (including reasonable attorneys’ fees) reasonably incurred by Mortgagee
in collecting the same and, at Mortgagee’s option and in itssole discretion, apply
the balance of said proceeds (“Net Proceeds”) to payment of the Obligations or
make the Net Proceeds available for the repair and restoration of the Mortgaged
Property; provided, however, Mortgagor may settle claims without Mortgagee’s
consent if the loss is less than $5,000.00and no Event of Default exists at the time
of settlement. Mortgagor shall apply any such proceeds to the repair and
restoration of the Mortgaged Property. So long as no Event of Default exists, any
settlement of a fire and hazard insurance claim of more than $5,000.00 shall
require the consent of Mortgagor, which consent will not be unreasonably
withheld.
(d)If Mortgagee elects to apply the Net Proceeds to repair and
restoration of the Mortgaged Property (i) the Net Proceeds shall be held by
Mortgagee and at Mortgagee’s election may be disbursed either by Mortgagee or a
disbursing agent selected by Mortgagee and paid by Mortgagor, (ii) upon
Mortgagee’s request prior to disbursement of any Net Proceeds or thereafter, from
time to time, Mortgagor will deposit with Mortgagee such amounts in excess of
remaining Net Proceeds as Mortgagee reasonably determines is required to
complete the repair and restoration, (iii) the Net Proceeds and any funds deposited
by Mortgagor shall be held and disbursed in accordance with sound construction
loan disbursement practices, including, but not limited to, approval of the plans and
specifications, appraisal, its other conditions for disbursement of draw requests and
inspectionof the work, and such other reasonable conditions as Mortgagee may
impose and (iv) any Net Proceeds not so applied to repair and restoration shall be
applied to the payment of the Obligations. If an Event of Default occurs prior to
full disbursement, anyundisbursed portion of the Net Proceeds and any funds
deposited by Mortgagor with Mortgagee may at Mortgagee’s option be applied to
the Obligations.
1.7Inspection. Mortgagee, or its agents, shall have the right to enter upon the
Mortgaged Property during ordinary business hours for the purposes of inspecting the Mortgaged
Property or any part thereof. Mortgagee shall have no duty, however, to make such inspection.
Mortgagee, or its agents, shall also have the right during ordinary business hours to examine the
books and records of Mortgagor pertaining to the Mortgaged Property and to make extracts
533955v3 GAF EL185-57
therefrom and copies thereof. The parties agree that Mortgagee’s right to inspect the books and
records of Mortgagor, as described in this provision, relates solely to the Mortgaged Property.
1.8Protection of Mortgagee’s Security. If Mortgagor fails to perform any of the
covenants and agreements contained in this Mortgage and such failure shall continue beyond any
applicable notice and cure period contained in Article Two hereof or if any action or proceeding
is commenced which does or may adversely affect the Mortgaged Property or the interest of
Mortgagor or Mortgagee therein, or the title of Mortgagor thereto, then Mortgagee, at
Mortgagee’s option, may perform such covenants and agreements, defend against such action or
proceeding, or otherwise act as Mortgagee deems necessary to protect its interest. In the event
that, after damage to or destruction of the Mortgaged Property or condemnation of a portion of
the Mortgaged Property or a sale under threat thereof, the proceeds are used to restore the
Mortgaged Property, and the insurance, sale or condemnation proceeds which are paid to
Mortgagee are not sufficient to pay for such restoration, Mortgagee may nevertheless effect the
restoration. Any amounts disbursed or costs incurred by Mortgagee pursuant to this Section,
including interest and reasonable attorney’s fees, shall become additional Obligations of
Mortgagor secured by this Mortgage. All amounts disbursed or costs incurred by Mortgagee
pursuant to this paragraph shall be payable upon demand, and shall bear interest from the date of
disbursement or incurrence at the rate set forth in the Note unless payment of interest at such rate
would be contrary to law, in which event such amounts shall bear interest at the highest rate
permitted by law. Mortgagee shall, at its option, be subrogated to any encumbrance, lien, claim
or demand, and to all the rights and securities for the payment thereof, paid or discharged with
the principal sum secured hereby or by Mortgagee under the provisions hereof, and any such
subrogation rights shall be additional and cumulative security for this Mortgage. Nothing
contained in this Section shall require Mortgagee to incurany expense or do any act hereunder,
and Mortgagee shall not be liable to Mortgagor for any damages or claims arising out of action
taken by Mortgagee pursuant to this paragraph.
1.9Hazardous Materials. Mortgagor hereby represents and warrants to Mortgagee
that to the best of Mortgagor’s knowledge, the Mortgaged Property has not at any time been used
for storage, transfer, transportation or disposal of hazardous substances, hazardous wastes,
pollutants, contaminants or similar substances (collectively “Hazardous Substances”), or for the
discharge of the same into the environment in violation of any law, regulation, or judicial or
administrative order or judgment; and the Mortgaged Property is not contaminated by, and does
not contain, any Hazardous Substances. Mortgagor will not use or permit the use of the
Mortgaged Property for such purposes. Mortgagor will fully indemnify Mortgagee and defend
Mortgagee against any claims, losses, damages, actions, costs and expenses of any kind,
including without limitation, court costs and reasonable attorneys fees, in connection with any
Hazardous Substances now or hereafter located on the Mortgaged Property or any other violation
of any federal, state or local environmental statute, ordinance, rule or regulation (“Environmental
Laws”). This indemnity shall not apply to the extent that the willful act or omission of the
Mortgagee contributes to the actual or threatened discharge, dispersal, release, storage, treatment,
generation, disposal or escape of the HazardousSubstances. The indemnity provisions of this
Section shall survive the foreclosure or other termination of this Mortgage.
Without limiting the generality of the foregoing, Mortgagor agrees that upon the
discovery of a release or threatened release of Hazardous Substances on or from the Mortgaged
533955v3 GAF EL185-57
Property, it will promptly, diligently and without cost to Mortgagee, proceed to remediate all
contamination in accordance with all applicable laws, ordinances, rules and regulations, and the
requirements of allgovernmental authorities having jurisdiction, and otherwise to the satisfaction
of Mortgagee. A failure to do so shall constitute a default by Mortgagor under this Mortgage.
1.10Escrows. Upon the request of Mortgagee after the occurrence of an Event of
Default (whether or not such Event of Default is subsequently cured), Mortgagor shall deposit
with Mortgagee, on the first day of each and every month, commencing with the date the first
payment shall be due on the Note which is after the date of such request, a deposit to pay the
Impositions and insurance premiums (collectively “Charges”) in an amount equal to:
(a)One-twelfth (1/12) of the Impositions next to become due upon the
Mortgaged Property; provided, however, that, in the case of the first suchdeposit, there
shall be deposited in addition an amount as estimated by Mortgagee which, when added
to monthly deposits to be made thereafter as provided for herein, shall assure that there
will be sufficient funds on deposit to pay the Impositions as they come due; plus
(b)One-twelfth (1/12) of the annual premiums on each policy of insurance
required to be maintained hereunder; provided that with the first such deposit there shall
be deposited, in addition, an amount equal to one-twelfth (1/12) of suchannual insurance
premiums multiplied by the number of months elapsed between the date premiums on
each policy are last paid to and including the date of deposit.
The amount of such deposits shall be based upon Mortgagee’s reasonable estimate as to the
amount of Impositions and premiums of insurance next to be payable. Mortgagee will, upon
timely presentation to Mortgagee by Mortgagor of the bills therefor, pay the Charges from such
deposits. In the event the deposits on hand shall not be sufficient to pay all of the Charges when
the same shall become due from time to time, or the prior deposits shall be less than the currently
estimated monthly amounts, then Mortgagor shall pay to Mortgagee on demand any amount
necessary to make up the deficiency. The excess of any such deposits shall be returned to
Mortgagor or credited towards subsequent Charges, at the discretion of Mortgagee. If an Event
of Default shall occur under the terms of this Mortgage, Mortgagee may, at its option, without
being required so to do, apply any deposits on hand to the Obligations, in such order and manner
as Mortgagee may elect. When the Obligations has been fully paid, any remaining deposits shall
be returned to Mortgagor as its interest may appear. All deposits are hereby pledged as
additional security for the Obligations, shall be held for the purposes for which made as herein
provided, may be held by Mortgagee and may be commingled with other funds of Mortgagee,
shall be held without any allowance of interest thereon, and shall not be subject to the decision or
control of Mortgagor. Mortgagee shall not be liable for any act or omission made or taken in
good faith. In making any payments, Mortgagee may rely on any statement, bill or estimate
procured from or issued by the payee without inquiry into the validity or accuracy of the same.
If the taxes shown in the tax statement shall be levied on property more extensive than the
Mortgaged Property, Mortgagee shall be under no duty to seek a tax division or apportionment of
the tax bill, and any payment of taxes based on a larger parcel shall be paid by Mortgagor, and
Mortgagor shall expeditiously cause a tax subdivision to be made.
533955v3 GAF EL185-57
ARTICLE TWO
EVENTS OF DEFAULT
Each of the following occurrences shall constitute an Event of Default hereunder:
2.1Failure to Pay.Mortgagor’s failure to pay any amount due under the Corporate
Guaranty or any other amount required to be paid by Mortgagor hereunder when due.
2.2Other Performance Failure. The Mortgagor’s failure duly to observe or perform
any of the other terms, conditions, covenants or agreements required to be observed or performed
by Mortgagor hereunder, in the Corporate Guaranty and the continuation of such failure for a
period of thirty (30) days after Mortgagee gives Mortgagor written notice of such failure.
2.3Breach of Warranty of Title. Subject to Mortgagor’s right to contest in good faith
as set forth in Section 1.4 hereof, the breach of any warranty of title or any other warranty made
by Mortgagor hereunder.
2.4Misrepresentation. The making of any material misstatement in any financial
statement or report submitted to Mortgagee by or on behalf of Mortgagor.
2.5Foreclosure. The foreclosure or other enforcement proceedings by the holder of
any other lien on the Mortgaged Property (without hereby implying Mortgagee’s consent to any
mortgage or other lien).
2.6Sale of Property. The sale, assignment, conveyance, mortgage, encumbrance,
lease or transfer of: (i) Mortgagor’s interest inthe Mortgaged Property or any partthereof, or
any interest therein; or (ii) any transfer in ownership or control of Mortgagor, without the prior
written consent of Mortgagee, which consent may be granted or withheld by Mortgagee at its
sole discretion.
2.9Breach of Other Agreements, etc. Any default or breach under any other note,
mortgage or other obligation of Mortgagor now held or hereafter acquired by Mortgagee, or any
other failure to comply with the terms and conditions thereof and the continuance thereof beyond
any applicable notice and/or cure period contained therein.
ARTICLE THREE
ACCELERATION AND FORECLOSURE; OTHER REMEDIES
Upon any Event of Default, Mortgagee may, at its option, exercise one or more of the
following rights and remedies (and any other rights and remedies available to it):
3.1Acceleration. Mortgagee may declare immediately due and payable all
unmatured Obligations secured by this Mortgage, and the same shall thereupon be immediately
due and payable, without notice or demand.
533955v3 GAF EL185-57
3.2UCC Remedies. Mortgagee shall have and may exercise with respect to all
fixtures and any personal property included in the Mortgaged Property, all the rights and
remedies accorded upon default to a secured party under the Uniform Commercial Code, as in
effect in the State of Minnesota.
3.3Foreclosure; Action or Advertisement. Mortgagee may (and is hereby authorized
and empowered to) foreclose this Mortgage by action or advertisement, pursuant to the statutes
of the State of Minnesota in such case made and provided, power being expressly granted to sell
the Mortgaged Property at public auction and convey the same to the purchaser to the full extent
of Mortgagor’s interest and, out of the proceeds arising from such sale, to pay all Obligations
secured hereby with interest, and all legal costs and charges of such foreclosure and the
maximum attorneys’ fees permitted by law, which costs, charges and fees Mortgagor agrees to
pay. Any real estate or interest or estate sold hereunder may be sold in one parcel, as an entirety,
or in such parcels and in such manner or order as Mortgagee, in its sole discretion, may elect. In
case of any sale of the Mortgaged Property pursuant to any judgment or decree of any court or at
public auction or otherwise in connection with the enforcement of any of the terms of this
Mortgage, Mortgagee, its successors and assigns, may become the purchaser, and for the purpose
of making settlement for or payment of the purchase price, shall be entitled to deliver over and
use any sum then due under the Corporate Guaranty and any claims for interest accrued and
unpaid thereon, together with all other sums, with interest, advanced and unpaid hereunder, and
all statutory charges for such foreclosure including maximum attorney’s fees allowed by law in
order that there may be credited as paid on the purchase price the sum then due under the Note
and all other sums, with interest, advanced and unpaid hereunder, and all charges and expenses
of such foreclosure including maximum attorney’s fees allowed by law.
3.4Receiver.Mortgagee shall be entitled as a matter of right without notice and
without giving bond and without regard to the solvency or insolvency of Mortgagor, or waste of
the Mortgaged Property or adequacy of the security of the Mortgaged Property, to apply for the
appointment of a receiver, in accordance with the statutes and law made and provided. The
receiver shall collect the rents, and all other income of any kind; manage the Mortgaged Property
so to prevent waste; execute leases within or beyond the periodof receivership, pay all expenses
for normal maintenance of the Mortgaged Property and perform the terms of this Mortgage and
apply the rents, issues and profits in its reasonable discretionto (i) payment of the reasonable
fees of said receiver, (ii) application of tenant security deposits as required by Minnesota Statutes
§ 504B.178, (iii) payment when due of prior or current real estate taxes or special assessments
with respect to the Mortgaged Property or, if this Mortgage so requires, to the periodic escrow
for the payment thereof, (iv) the payment when due of premiums for insurance of the type
required by this Mortgage or, if this Mortgage so requires, to the periodic escrow for the payment
thereof; and (v) as further provided in any Assignment of Rents executed by Mortgagor as
further security for the Obligations (whether included in this Mortgage or separate instrument),
including but not limited to applying the same to the costs and expenses of the receivership,
including reasonable attorney’s fees,to the repayment of the Obligations and to the operation,
maintenance, upkeep and repair of the Mortgaged Property, including payment of taxes and
payments of premiums of insurance. Mortgagor does hereby irrevocably consent to such
appointment.
533955v3 GAF EL185-57
3.5Specific Performance. Mortgagee may bring suit for specific performance of any
covenant or warranty hereunder.
3.6Forbearance and Other Rights of Mortgagee. Any delay by Mortgagee in
exercising any right or remedy hereunder, or otherwise afforded by law orequity, shall not be a
waiver of or preclude the exercise of such right or remedy or any other right or remedy
hereunder or at law or in equity. The failure of Mortgagee to exercise any option to accelerate
maturity of the Obligations secured by the Mortgage, the forbearance by Mortgagee before or
after the exercise of such option, or the withdrawal or abandonment of proceedings provided for
by this Mortgage shall not be a waiver of the right to exercise such option or to accelerate the
maturity of such Obligations by reason of any past, present or future event which would permit
acceleration. The procurement of insurance or the payment of taxes or other liens or charges by
Mortgagee shall not be a waiver of Mortgagee’s right to accelerate the maturity ofthe
Obligations. Mortgagee’s receipt of any awards, proceeds or damages shall not operate to cure
or waive default by Mortgagor. Mortgagee may at any time, without notice, release any person
liable for payment of any Obligations, extend the time or agree to alter the terms of payment of
any of the Obligations, accept additional security of any kind, release any plat or map of the
Mortgaged Property or the creation of any easement thereon or any covenants restricting use or
occupancy thereof, or agree to alter or amend the terms of this Mortgage in any way. No such
release, modification, addition or change shall affect the liability of any person other than the
person so released, for payment of any Obligations, nor affect the priority and first lien status of
this Mortgage upon any property not so released.
ARTICLE FOUR
ASSIGNMENT OF RENTS
4.1Assignment. As security in addition to the lien of this Mortgage upon the
Property, Mortgagor hereby grants, transfers and assigns to Mortgagee all of the right, title and
interest of Mortgagor in and to all Leases and all rents, income, profits, revenues, royalties,
bonuses, rights, accounts, contract rights, general intangibles and benefits (all of which are
sometimes hereinafter referred to as “Rents”), now or hereafter accruing or owing by reason of a
Lease of any or all of the Property.
4.2Covenants of Performance. To protect the security of this Assignment,
Mortgagor warrants, covenants and agrees:
(a)to faithfully abide by, perform and discharge each andevery
obligation, covenant and agreement under any Leases to be performed by
Mortgagor thereunder; to give prompt written notice to Mortgagee of any notice
of default on the part of Mortgagor with respect to any Lease received from a
tenant thereunder; toenforce or secure short of termination of any Lease the
performance of each and every obligation, covenant, condition and agreement of
the Leases by the tenants thereunder to be performed; not to borrow against,
pledge or assign any of the Rents, or anticipate the Rents; not to waive, excuse,
condone or in any manner release or discharge any tenant thereunder of or from
the obligations, covenants, conditions and agreements to be performed under the
533955v3 GAF EL185-57
Lease or to permit the tenant to assign its interest in the Lease unless required to
do so by the terms of the Lease; not to terminate the Leases or accept a surrender
thereof or a discharge of the tenant unless required to do so by the terms of the
Lease; not to consent to a subordination of the interest of the tenant thereunder to
any party other than Mortgagee and then only if specifically required to do so by
Mortgagee;
(b)at Mortgagor’s sole cost and expense, to appear in and defend any
action or proceeding arising under, growing out of or in any manner connected
with the Leases or the obligations, duties or liabilities of Mortgagor and tenants
thereunder, and to pay all costs and expenses of Mortgagee, including attorneys’
fees in a reasonable sum, in any such action or proceeding in which Mortgagee
may appear or with respect to which it may incur costs;
(c)that Mortgagor has the full right and title to assign the Rents; that
at the date of this Mortgage there exist no Leases which now or in the future
affect the Mortgaged Property which have not been disclosed to Mortgagee in
writing; and that there is no outstanding assignment or pledge of the Leases or
Rents; and
(d)to furnish to Mortgagee, at Mortgagee’s written request, a
complete list of all Leases and security deposits made thereunder as to any part of
the Mortgaged Property, showing the type of lease, the name of the tenant, the
monthly rental, the date to which paid, the term of the Lease, the date of
occupancy, and the date of expiration and any and every special premium,
concession or inducementgranted to the tenant.
4.3Assignment Absolute. This Assignment is absolute and is effective immediately.
Notwithstanding the foregoing, until an Event of Default, as defined in ARTICLE TWO above,
has occurred, Mortgagor may receive, collect and enjoy the Rents. Upon or at any time after an
Event of Default has occurred which remains uncured after any applicable notice and
opportunity to cure, Mortgagee may at its option, without notice:
(a)in the name, place and stead of Mortgagor (i) enter upon, manage
and operate the Mortgaged Property, or retain the services of an independent
contractor to manage and operate the same, (ii) make, enforce, modify and accept
surrender of the Leases, (iii) obtain or evict tenants, demand, collect, sue for,
receive andgive acquittances for, fix or modify Rents and enforce all rights of
Mortgagor under the Leases, and (iv) perform any and all other acts that may be
necessary or proper to protect the security of this Assignment; provided always,
however, that until the end of any redemption period available to Mortgagor after
any foreclosure of this Mortgage Mortgagee shall continue to deal with the Leases
on the Property in a reasonable businesslike manner, recognizing and protecting
Mortgagor’s continuing rights during such period to retake possession and control
of the Mortgaged Property upon paying the appropriate redemption price, and to
resume the management of such Leases;
533955v3 GAF EL185-57
(b)give or require Mortgagor to give notice to any and all tenants
under the Leases authorizing and directing the tenants to pay all Rents due under
the Leases directly to Mortgagee; and
(c)apply for, and Mortgagor hereby consents to, the appointment of a
receiver of the Mortgaged Property.
4.4Application of Rents.
(a)All Rents collected by Mortgagee, or by a receiver, shall be held and
applied by Mortgagee in its reasonable discretion, in accordance with applicable law,
including, without limitation to: (i) payment of all reasonable fees of the receiver, if any,
approved by the court; (ii) the repayment when due of all tenant security deposits
pursuant to the provisions of Minnesota Statutes § 504B.178; (iii) payment of all
delinquent or current real estate taxes and special assessments payable with respect to the
Property or, if this Mortgage so requires, to the periodic escrow for the payment thereof;
(iv) payment of all premiums then due for the insurance required by the provisions of this
Mortgage or, if this Mortgage so requires, to the periodic escrow for the payment thereof;
(v) payment of expenses incurred for normal maintenance of the Mortgaged Property.
(b)Any amounts remaining after such application shall be applied as follows:
(i)if received prior to any foreclosure sale of the Mortgaged Property to
Mortgagee for payment of theindebtedness secured by this Mortgage, but no such
payment made after acceleration of the indebtedness shall affect such
acceleration; and
(ii)if received during or with respect to a period after a foreclosure sale of the
Mortgaged Property:
(1)if the purchaser at the foreclosure sale is not Mortgagee, first to
Mortgagee to the extent of any deficiency of the sale proceeds to repay the
indebtedness secured by this Mortgage, second to the purchaser as a credit
to the redemption price, but if the MortgagedProperty is not redeemed,
then to the purchaser of the Mortgaged Property;
(2)if the purchaser at the foreclosure sale is Mortgagee, first to
Mortgagee to the extent of any deficiency of the sale proceeds to repay the
indebtedness secured by this Mortgage and the balance to be retained by
Mortgagee as a credit to the redemption price, but if the Mortgaged
Property is not redeemed, then to Mortgagee, whether or not such
deficiency exists.
4.5Continuing Effect. The rights and powers of Mortgagee under this Assignment
and the application of the Rents shall continue and remain in full force and effect both before and
after commencement of any action or procedure to foreclose this Mortgage, after any foreclosure
sale of Mortgagor’s interest in the Property in connection with the foreclosure of this Mortgage,
533955v3 GAF EL185-57
and until expiration of the period of redemption from any such foreclosure sale, whether or not
any deficiency from the unpaid balance of the Obligations exists after such foreclosure sale.
4.6Mortgagee Not Obligated. Mortgagee shall not be obligated by this Assignment
for the control, care, management or repair of the Mortgaged Property, nor for the carrying out of
any of the terms and conditions of the Leases; nor shall this Assignment operate to make
Mortgagee responsible or liable for any waste committed on the Mortgaged Property by the
tenants or any other party, or for any dangerous or defective condition of the Mortgaged
Property, or for any violation of Environmental Laws or for any negligence in the management,
upkeep, repair or control of the Mortgaged Property resulting in any loss or any injury or death to
any person.
4.7Hold Harmless. Mortgagor shall and does agree to indemnify and to hold
Mortgagee harmless of and from any and all liability, loss or damage which it may or might
incur under or by reason of this Assignment, and of and from any and all claims and demands
whatsoever which may be asserted against it by reason of any alleged obligations or undertakings
on its part to perform ordischarge any of the terms, covenants or agreements contained in the
Leases; provided, however, that such indemnification shall not apply if the same arises out of
Leases intentionally breached by Mortgagee which were made by Mortgagor in the ordinary
course of managing the Mortgaged Property and prior to the time Mortgagee obtained the right
to possess and manage the Mortgaged Property, or if the same arises out of the negligent or
willful act of Mortgagee in operating and using the Mortgaged Property. Should Mortgagee
incur any such liability, loss or damage under any Lease or by reason of this Assignment, or in
the defense of any such claims or demands, the amount thereof, including costs, expenses, and
reasonable attorneys’ fees, shall be secured hereby and Mortgagor shall reimburse Mortgagee
therefor immediately upon demand. Mortgagee shall give Mortgagor notice of any such claim
and Assignor shall have the opportunity to defend Mortgagee in connection therewith with
counsel reasonably acceptable to Mortgagee; provided Mortgagee’s failure to give such notice
and opportunity to defend shall not affect Mortgagor’s obligations under this Section except to
the extent Mortgagor is actually prejudiced by such failure.
4.8Authorization to Tenants. The tenants under any of the Leases are hereby
irrevocably authorized and directed to recognize the claims of Mortgagee or its assigns
hereunder without investigating the reason for any action taken by Mortgagee, or the validity or
the amount of indebtedness owingto Mortgagee, or the existence of any such event of default, or
the application of the Rents to be made by Mortgagee. Mortgagor hereby irrevocably directs and
authorizes each tenant to pay to Mortgagee all sums due under its Lease and consents and directs
that said sums shall be paid to Mortgagee without the necessity for a judicial determination that
any such event of default has occurred or that Mortgagee is entitled to exercise its rights
hereunder, and to the extent such sums are paid to Mortgagee, Mortgagor agrees that the tenants
shall have no further liability to Mortgagor for the same. The sole signature of Mortgagee shall
be sufficient for the exercise of any rights under this Assignment and the sole receipt of
Mortgagee for any sums received shall be a full discharge and release therefor to the tenants or
occupants of the Mortgaged Property.
4.9Mortgagee Attorney-in-Fact. Mortgagor hereby irrevocably appoints Mortgagee
as its agent and attorney in fact, which appointment is coupled with an interest, to exercise any
533955v3 GAF EL185-57
rights or remedies hereunder and to execute and deliver during the term of this Assignment such
instruments as Mortgagee may deem necessary to make this Assignment and any further
assignment effective.
4.10Mortgagee Not in Possession
. Nothing herein contained and no actions taken
pursuant to this Assignment shall be construed as constituting Mortgagee a “Mortgagee in
Possession.”
ARTICLE FIVE
CONDEMNATION
5.1Notice. Mortgagor will give Mortgagee prompt notice of any action, actual or
threatened, in condemnation or eminent domain, direct or inverse.
5.2Awards. Mortgagor hereby assigns, transfers, and sets over to Mortgagee the
entire proceeds of any award or payment which becomes payable by reason of any taking of or
damage to the Mortgaged Property, or any part or appurtenance thereof, either temporarily or
permanently, in or by condemnation or other eminent domain proceedings or by reason of sale
under threat thereof, or in anticipation of the exercise of the right of condemnation or other
eminent domain proceedings. Mortgagor will file or prosecute in good faith and with due
diligence what would otherwise be its claim in any such award or payment and cause the same to
be collected and paid over to Mortgagee, and Mortgagor irrevocably authorizes and empowers
Mortgagee, which power is coupled with an interest and is irrevocable, in the name of Mortgagor
or otherwise, in the event that Mortgagor fails to do so, to file and prosecute any such claim and
to collect, receipt for and retain the same. The proceeds of the award or payment, after deducting
all reasonable costs, attorneys fees and other expenses which may have been incurred by
Mortgagee in collection thereof, at the sole discretion of Mortgagee, may be released to
Mortgagor, applied to restoration of the Mortgaged Property or applied to the payment of any
part of the Obligations, in such order of application as Mortgagee may determine. If proceeds
are made available to be applied to restoration, they shall be held and disbursed in accordance
with Paragraph 1. 6 (d) hereof.
ARTICLE SIX
UNIFORM COMMERCIAL CODE
6.1Security Interest. This Mortgage shall constitute a security agreement as defined
in the Uniform Commercial Code with respect to, and Mortgagor hereby grants Mortgagee a
security interest in, the Equipment and all of fixtures and any personal property included in the
Mortgaged Property and substitutions therefor and proceeds thereof. Mortgagor hereby
authorizes Mortgagee to file one or more financing statements, covering such fixtures and
personal property (in a form satisfactory to Mortgagee) which Mortgagee may reasonably
consider necessary or appropriate to perfect its security interest. Mortgagor also authorizes
Mortgagee to file amendments to financing statements, and terminations of financing statements
filed by other secured parties, all with respect to all fixtures and personal property included in the
Mortgaged Property, in such form and substance as Mortgagee, in its reasonable discretion, may
determine.Mortgagor will pay to Mortgagee, on demand, the amount of any and all costs and
533955v3 GAF EL185-57
expenses (including reasonable attorneys’ fees and legal expenses) paid or incurred by
Mortgagee in connection with the exercise of any right or remedy referred to in this Section. In
any instance where Mortgagor in its sound discretion determines that any item subject to a
security interest under this Mortgage has become: (i) inadequate, obsolete, worn out, or (ii)
unsuitable, undesirable or unnecessary for the operation of the Mortgaged Property, Mortgagor
may, at its expense, remove and dispose of it and substitute and install other items not
necessarily having the same function, provided, that such removal and substitution shall not
impair the operating utility and unity of the Mortgaged Property. The foregoing
notwithstanding, any Equipment that is replaced pursuant to the foregoing sentence must be
replaced with new equipment of substantially similar function and value, unless Mortgagee
consents otherwise. In any such case, Mortgagor shall promptly inform Mortgagee of such
replacement and shall provide Mortgagee with any information Mortgagee reasonably requires to
secure its interest in such replacement Equipment. With respect to items which are a part of the
MortgagedProperty, all items substituted for such items shall become a part of the Mortgaged
Property and subject to the lien of this Mortgage. Any amounts received or allowed Mortgagor
upon the sale or other disposition of the removed items of property shall be applied against the
cost of acquisition and installation of the substituted items. Nothing herein contained shall be
construed to prevent any tenant or subtenant from removing from the Mortgaged Property trade
fixtures, furniture and equipment installed by it and removable by tenant under its terms of any
one or more of the Leases, on the condition, however, that Mortgagor shall assure the repair of
any and all damages to the Mortgaged Property resulting from or caused by the removal thereof.
Mortgagee acknowledges that no items of personal property are included in the
Mortgaged Property.
6.2Fixture Filing. From the date of its recording, this Mortgage shall be effective as
a financing statement with respect to all goods constituting part of the Mortgaged Property which
are or are to become fixtures related to the real estate described herein. For this purpose, the
following information is set forth:
(a)Name and Address of Debtors:
Yankee Doodle Enterprises, LLC
13374 U.S. Highway 10
Elk River, Minnesota
Attn: Chief Manager
Organization I.D. Number: ___________
(b)Name and address of Secured Party:
Economic Development Authority of the City of Elk River
13065 Orono Parkway
Elk River, MN 55330
Attn: Director of Economic Development
(c)This document covers goods which are or are to become fixtures.
533955v3 GAF EL185-57
(d)The real estate to which such fixtures are or are to be attached is
that described in Exhibit Aattached hereto. The owner of such real estate is
Debtor.
ARTICLE SEVEN
MISCELLANEOUS
7.1Mortgagee’s Remedies Cumulative. All remedies of Mortgagee are distinct and
cumulative to any other right or remedy under this Mortgage or afforded by law or equity, and
may be exercised concurrently or independently, as often as the occasion therefore arises.
7.2Successors and Assigns Bound; Captions. The covenants and agreements herein
contained shall bind, and the rights hereunder shall inure to, the respective heirs, legal
representatives, successors and assigns of Mortgagee and Mortgagor. The captions and headings
of the Sections of this Mortgage are for convenience only and are not to be used to interpret or
define the provisions hereof.
7.3Notices. Any notice from Mortgagee to Mortgagor under this Mortgage shall be
deemed to have been given by Mortgageeand received by Mortgagor, when delivered personally
to an officer of Mortgagor or three (3) days after the date it is mailed by certified mail addressed
as follows:
Yankee Doodle Enterprises, LLC
13374 U.S. Highway 10
Elk River, Minnesota
Attn: Brian Brehmer
7.4Governing Law; Severability. This Mortgage shall be governed by the Laws of
the State of Minnesota. In the event that any provision or clause of this Mortgage conflicts with
applicable law, such conflict shall not affect other provisions of this Mortgage which can be
given effect without conflicting provisions and to this end the provisions of this Mortgage are
declared to be severable.
7.5Counterparts. This Mortgage may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute one instrument.
7.6Waiver of Appraisement, Homestead, Marshaling. Mortgagor hereby waives the
benefit of any homestead, appraisement, evaluation, stay and extension laws now or hereinafter
in force. Mortgagor hereby waives any rights available with respect to marshaling of assets so as
to require the separate sales of any portion of the Mortgaged Property, or to require Mortgagee to
exhaust its remedies against a specific portion of the Mortgaged Property before proceeding
against the other.
533955v3 GAF EL185-57
7.7Subsequent Agreements. Any agreement hereafter made by Mortgagor and
Mortgagee pursuant to this Mortgage shall be superior to the rights of the holder of any
intervening lien or encumbrance.
7.8Construction Mortgage. This Mortgage secures an obligation incurred for the
construction of an improvement on land and is a construction mortgage.
533955v3 GAF EL185-57
Signature Page to Mortgage
IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly executed as
of the day and year first written.
YANKEE DOODLE ENTERPRISES, LLC, a
Minnesota limited liability company
By: ________________________
Nancy Brehmer
Its: Chief Financial Manager
STATE OF MINNESOTA)
) ss.
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledged before me on ___________ ____, 2018, by
Nancy Brehmer, the Chief Financial Manager of ALAN ARNOLD CORPORATION,a
Minnesota limited liability company, on behalf of the limited liability company.
____________________________
Notary Public
My Commission Expires:
THIS INSTRUMENT DRAFTED BY:
Kennedy & Graven, Chartered
470 US Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
533955v3 GAF EL185-57
EXHIBIT A
LEGAL DESCRIPTION
Lot 1, Block 1, YANKEE DOODLE CROSSING, according to the recorded plat thereof, on file
in the offices of the County Recorder and Registrar of Titles in and for Sherburne County,
Minnesota.
533955v3 GAF EL185-57
A-21
533955v3 GAF EL185-57
FIRST AMENDMENTTO MORTGAGEAND ASSIGNMENT OF RENTS AND
SECUIRTY AGREEMENT AND FIXTURE FINANCING STATEMENT
THIS AMENDMENT is made as ofJanuary __, 2017, between Yankee Doodle
Enterprises, LLC(the “Mortgagor”) and the Economic Development Authority of the City of Elk
River, Minnesota, as mortgagee (the “Mortgagee”).
RECITALS
A.Mortgagor, for the benefit of Mortgagee,has executed and delivered that certain
Mortgage, Security Agreement, Fixture Financing Statement and Assignment of Leases and
Rents,dated September10,2013,and filed on September18,2013as Document Number 49208
in the Office of the County Recorder ofSherburneCounty, Minnesota(the “Mortgage”).
B.To (i) reflect that certain real property subject to the Mortgage will be sold and
released from the Mortgage and certain other real property will be added to the lien of the
Mortgage and (ii) to allow certain easements over the mortgaged property as permitted
encumbrances,the Mortgagorhas requestedand Mortgageehas agreedto amend the Mortgageas
provided herein.
C.This is a mortgage amendment as defined in Minnesota Statutes, Section 287.01,
Subdivision 2, and as such it does not secure a new or an increased amount of debt. Minn. Stat.
287.05, Subd. 8. Mortgage registry tax waspaid with respect to the indebtedness secured by the
Mortgage on the date of recording.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
1.Recitals. The above recitals are true and correct as of the date hereof and
constitute a part of this Amendment.
2.Terms. All capitalized terms used herein shall have the meaning ascribed to them
in the Mortgage unless otherwise specifically defined herein.
493503v1 JSB EL185-13
3.Amendments.
(a)Exhibit A is amended to read as set forth in Exhibit A attached hereto.
(b)Exhibit B is amended to read as set forth in Exhibit B attached hereto.
4.Existing Provisions.Except as herein amended, all terms and provisions of the
Mortgage, as originally executed as September 10, 2013, shall remain in full force and effect.
5.Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Minnesota.
6.Execution Counterparts. This Amendment may be simultaneously executed in
several counterparts, each of which shall be an original and all of which shall constitute but one
and the same instrument.
(The remainder of this page is intentionally left blank.)
2
493503v1 JSB EL185-13
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed the date first above written.
MORTGAGOR:YANKEE DOODLE ENTERPRISES, LLC
By
Its Chief Financial Manager
STATE OF MINNESOTA)
)
COUNTY OF ________)
The foregoing instrument was acknowledged before me this ____ day of _____, 2017, by
___________________, the Chief Financial Managerof Yankee Doodle Enterprises, LLC,a
Minnesota limited liability company,on behalf of said limited liability company.
_______________________________
Notary Public
S-1
493503v1 JSB EL185-13
MORTGAGEE:ECONOMIC DEVELOPMENT AUTHORITY OF
THE CITY OF ELK RIVER, MINNESOTA
By____________________________
Its:President
By____________________________
Its:Executive Director
STATE OF MINNESOTA)
) ss.
COUNTY OF ________)
The foregoing instrument was acknowledged before me this ___ day of __________,
2017, by ______________________, the President and __________________, the Executive
DirectorofEconomic Development Authority of the City of Elk River, Minnesota,apublic body
corporate and politic, on behalf of the public body.
_______________________________
Notary Public
This instrument drafted by:
Kennedy & Graven, Chartered (JSB)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, Minnesota 55402
S-2
493503v1 JSB EL185-13
EXHIBIT A
LEGAL DESCRIPTION
\[Need Updated Legal Description\]
A-1
493503v1 JSB EL185-13
EXHIBIT B
PERMITTED ENCUMBRANCES
\[Need updated permitted encumbrances\]
B-1
493503v1 JSB EL185-13
PERSONAL GUARANTY
(Brian Brehmer)
Elk River, Minnesota
________________, 2018
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledged, and in consideration of and to induce financial accommodations of any kind, with or
without security, given or to be given or continued at any time and from time to time by the ECONOMIC
DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER(hereinafter called the "Lender") to or
for the account of ALAN ARNOLD CORPORATION(hereinafter called the "Borrower"), the
undersigned absolutely and unconditionally guarantees to the Lender the full and prompt payment when
due, whether at maturity or earlier by reason of acceleration or otherwise, of any and all indebtedness,
obligations and liabilities of the Borrower (and any and all successors of the Borrower) to the Lender, now
or hereafter existing, absolute or contingent, independent, joint, several or joint and several, secured or
unsecured, due or to become due, contractual or tortious, liquidated or unliquidated, arising by assignment
or otherwise, including without limitation all indebtedness, obligations and liabilities owed by the
Borrower (and any and all successors of the Borrower) as a member of any partnership, syndicate,
association or other group, and whether incurred by the Borrower (or any successor of the Borrower) as
principal, surety, endorser, guarantor, accommodation party or otherwise (hereinafter collectively referred
to as the "Indebtedness"), undersigned agrees to pay on demand all of the Lender's fees, costs, expenses
and reasonable attorneys' fees in connection with the Indebtedness, any security therefor, and this guaranty,
plus interest on such amounts at the highest rate then applicable to any of the Indebtedness.All capitalized
terms not otherwise defined herein shall have the meanings set forth in the Amended and Restated Energy
Efficiency Improvement Program Loan Agreement, dated the date hereof, by and between the Borrower
and the Lender.
The Lender may at any time and fromtime to time, without consent of or notice to the
undersigned, without incurring responsibility to the undersigned, without releasing, impairing or affecting
the liability of the undersigned hereunder, upon or without any terms or conditions, and in wholeor in part:
(1) sell, pledge, surrender, compromise, settle, release, renew, subordinate, extend, alter, substitute,
exchange, change, modify or otherwise dispose of or deal with in any manner and in any order any
Indebtedness, any evidence thereof, or any security or other guaranty therefor; (2) accept any security for,
or other guarantors of, any Indebtedness; (3) fail, neglect or omit to obtain, realize upon or protect any
Indebtedness or any security therefor, to exercise any lien upon or right to any money, credit or property
toward the liquidation of the Indebtedness, or to exercise any other right against the Borrower, the
undersigned, any other guarantor or any other person; and (4) apply any payments and credits to the
Indebtedness in the manner set forth in the Note. No act, omission or thing, except full payment and
discharge of the Indebtedness, which but for this provision could act as a release or impairment of the
liability of the undersigned hereunder, shall in any way release, impair or otherwise affect the liability of
the undersigned hereunder, and the undersigned waives any and all defenses of the Borrower pertaining to
the Indebtedness, any evidence thereof, and any security therefor, except the defense of discharge by
payment. The failure of any person or persons to sign this or any other guaranty shall not release, impair or
affect the liability of the undersigned hereunder. This guaranty is a primary obligation of the undersigned
and the Lender shall not be required to first resort for payment of the Indebtedness to the Borrower or any
other person, their properties or estates, or any security or other rights or remedies whatsoever. The
undersigned shall be and remain liable for any deficiency remaining after foreclosure of any mortgage or
security interest securing the Indebtedness, whether or not the liability of the Borrower or any other person
for such deficiency is discharged pursuant to statute, judicial decision or otherwise.
1
The liability of the undersigned under this guaranty is in addition to and shall be cumulative with
all other liabilities of the undersigned to the Lender, as guarantor or otherwise, without any limitation as to
amount, unless the writing evidencing or creating such other liability specifically provides tothe contrary.
If any payment applied by the Lender to the Indebtedness is thereafter set aside, recovered, rescinded or
required to be returned for any reason (including without limitation the bankruptcy, insolvency or
reorganization of the Borrower or any other person), the Indebtedness to which such payment was applied
shall for the purposes of this guaranty be deemed to have continued in existence, notwithstanding such
application, and this guaranty shall be enforceable as to such Indebtedness as fullyas if such application
had never been made.
The undersigned waives: (1) notice of acceptance of this guaranty and of the creation and
existence of the Indebtedness; (2) presentment, demand for payment, notice of dishonor, notice of
nonpayment, and protest of any instrument evidencing the Indebtedness; and (3) all other demands and
notices to the undersigned or any other person and all other actions to establish the liability of the
undersigned hereunder. The undersigned consents to the personal jurisdiction of the state and federal
courts located in the State of Minnesota in connection with any controversy related to this guaranty, waives
any argument that venue in such forums is not convenient, and agree that any litigation initiated by the
undersigned against the Lender in connection with this guaranty shall be venued in either the District Court
of Sherburne County, Minnesota, or the United States District Court, District of Minnesota.
The undersigned waives all claims, rights and remedies which the undersigned may now have or
hereafter acquire against any person at any time now or hereafter liable to payment of any of the
Indebtedness and as to any collateral security, including but not limited to all claims, rights and remedies
of contribution, indemnification, exoneration, reimbursement, recourse and subrogation, whether or not
such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise,
whether or not the Indebtedness has been fully paid, and all payments and recoveries under this guaranty
shall be considered equity investments by the undersigned in the Borrower; provided, nothing contained in
this guaranty shall deprive the undersigned of any claim, right or remedy, after the Indebtedness has been
fully paid, against any person other than the Borrower. No delay or failure by the Lender in exercising any
right, and no partial or single exercise thereof shall constitute a waiver thereof. No waiver of any rights
hereunder, and no modification or amendment ofthis guaranty shall be effective unless the same is in
writing duly executed by the Lender, and each such waiver, if any, shall apply only with respect to the
specific instance involved and shall not impair or affect the rights of the Lender or the provisions of this
guaranty in any other respect at any other time. Except as to the Borrower’s environmental indemnity
obligations which survive the termination of the Loan Agreement, this guaranty shall continue until the
Indebtedness is paid in full or untilwritten notice of revocation of this guaranty, executed by the
undersigned, has been received by the Lender; provided, no revocation of this guaranty shall affect in any
manner any liability of the undersigned under this guaranty with respect to Indebtedness arising before the
Lender receives such written notice of revocation, and the sole effect of revocation of this guaranty shall be
to exclude from this guaranty Indebtedness thereafter arising which is unconnected with Indebtedness
theretofore arising or transactions theretofore entered into.
Any invalidity or unenforceability of any provision or application of this guaranty shall not affect
other lawful provisions and applications hereof and to this end the provisions of this guaranty are declared
to be severable. This guaranty shall bind the undersigned and shall benefit the Lender, its successors and
assigns. This guaranty shall be governed by and construed in accordance with the laws of the State of
Minnesota.
THE UNDERSIGNED REPRESENTS, CERTIFIES, WARRANTS AND AGREES THAT THE
2
UNDERSIGNED HAS READ ALL OF THIS GUARANTY AND UNDERSTANDS ALL OF THE
PROVISIONS OF THIS GUARANTY. THE UNDERSIGNED ALSO AGREES THAT COMPLIANCE
BY THE LENDER WITH THE EXPRESS PROVISIONS OF THIS GUARANTY SHALL
CONSTITUTE GOOD FAITH AND SHALL BE CONSIDERED REASONABLE FOR ALL
PURPOSES.
________________________________
Brian Brehmer
3
PERSONAL GUARANTY
(Nancy Brehmer)
Elk River, Minnesota
______________, 2018
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledged, and in consideration of and to induce financial accommodations of any kind, with or
without security, given or to be given or continued at any time and from time to time by the ECONOMIC
DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER(hereinafter called the "Lender") to or
for the account of ALAN ARNOLD CORPORATION(hereinafter called the "Borrower"), the
undersigned absolutely and unconditionally guarantees to the Lender the full and prompt payment when
due, whether at maturity or earlier by reason of accelerationor otherwise, of any and all indebtedness,
obligations and liabilities of the Borrower (and any and all successors of the Borrower) to the Lender,
now or hereafter existing, absolute or contingent, independent, joint, several or joint and several, secured
or unsecured, due or to become due, contractual or tortious, liquidated or unliquidated, arising by
assignment or otherwise, including without limitation all indebtedness, obligations and liabilities owed by
the Borrower (and any and all successors of theBorrower) as a member of any partnership, syndicate,
association or other group, and whether incurred by the Borrower (or any successor of the Borrower) as
principal, surety, endorser, guarantor, accommodation party or otherwise (hereinafter collectively referred
to as the "Indebtedness"), undersigned agrees to pay on demand all of the Lender's fees, costs, expenses
and reasonable attorneys' fees in connection with the Indebtedness, any security therefor, and this
guaranty, plus interest on such amounts atthe highest rate then applicable to any of the Indebtedness.All
capitalized terms not otherwise defined herein shall have the meanings set forth in the Amended and
Restated Energy Efficiency Improvement Program Loan Agreement, dated the date hereof, by and
between the Borrower and the Lender.
The Lender may at any time and from time to time, without consent of or notice to the
undersigned, without incurring responsibility to the undersigned, without releasing, impairing or affecting
the liability of theundersigned hereunder, upon or without any terms or conditions, and in whole or in
part: (1) sell, pledge, surrender, compromise, settle, release, renew, subordinate, extend, alter, substitute,
exchange, change, modify or otherwise dispose of or deal within any manner and in any order any
Indebtedness, any evidence thereof, or any security or other guaranty therefor; (2) accept any security for,
or other guarantors of, any Indebtedness; (3) fail, neglect or omit to obtain, realize upon or protect any
Indebtedness or any security therefor, to exercise any lien upon or right to any money, credit or property
toward the liquidation of the Indebtedness, or to exercise any other right against the Borrower, the
undersigned, any other guarantor or any other person; and (4) apply any payments and credits to the
Indebtedness in the manner set forth in the Note. No act, omission or thing, except full payment and
discharge of the Indebtedness, which but for this provision could act as a release or impairment of the
liability of the undersigned hereunder, shall in any way release, impair or otherwise affect the liability of
the undersigned hereunder, and the undersigned waives any and all defenses of the Borrower pertaining to
the Indebtedness, any evidence thereof, andany security therefor, except the defense of discharge by
payment. The failure of any person or persons to sign this or any other guaranty shall not release, impair
or affect the liability of the undersigned hereunder. This guaranty is a primary obligation of the
undersigned and the Lender shall not be required to first resort for payment of the Indebtedness to the
Borrower or any other person, their properties or estates, or any security or other rights or remedies
whatsoever. The undersigned shall be and remain liable for any deficiency remaining after foreclosure of
any mortgage or security interest securing the Indebtedness, whether or not the liability of the Borrower
or any other person for such deficiency is discharged pursuant to statute, judicial decision or otherwise.
1
The liability of the undersigned under this guaranty is in addition to and shall be cumulative with
all other liabilities of the undersigned to the Lender, as guarantor or otherwise, without any limitation as
to amount, unless thewriting evidencing or creating such other liability specifically provides to the
contrary. If any payment applied by the Lender to the Indebtedness is thereafter set aside, recovered,
rescinded or required to be returned for any reason (including withoutlimitation the bankruptcy,
insolvency or reorganization of the Borrower or any other person), the Indebtedness to which such
payment was applied shall for the purposes of this guaranty be deemed to have continued in existence,
notwithstanding such application, and this guaranty shall be enforceable as to such Indebtedness as fully
as if such application had never been made.
The undersigned waives: (1) notice of acceptance of this guaranty and of the creation and
existence of the Indebtedness; (2) presentment, demand for payment, notice of dishonor, notice of
nonpayment, and protest of any instrument evidencing the Indebtedness; and (3) all other demands and
notices to the undersigned or any other person and all other actions to establish the liability of the
undersigned hereunder. The undersigned consents to the personal jurisdiction of the state and federal
courts located in the State of Minnesota in connection with any controversy related to this guaranty,
waives any argument that venue in such forums isnot convenient, and agree that any litigation initiated
by the undersigned against the Lender in connection with this guaranty shall be venued in either the
District Court of Sherburne County, Minnesota, or the United States District Court, District of Minnesota.
The undersigned waives all claims, rights and remedies which the undersigned may now have or
hereafter acquire against any person at any time now or hereafter liable to payment of any of the
Indebtedness and as to any collateral security, including but not limited to all claims, rights and remedies
of contribution, indemnification, exoneration, reimbursement, recourse and subrogation, whether or not
such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise,
whether or not the Indebtedness has been fully paid, and all payments and recoveries under this guaranty
shall be considered equity investments by the undersigned in the Borrower; provided, nothing contained
in this guaranty shall deprive the undersigned of any claim, right or remedy, after the Indebtedness has
been fully paid, against any person other than the Borrower. No delay or failure by the Lender in
exercising any right, and no partial or single exercise thereof shall constitute a waiver thereof. No waiver
of any rights hereunder, and no modification or amendment of this guaranty shall be effective unless the
same is in writing duly executed by the Lender, and each such waiver, if any, shall apply only with
respect to the specific instance involved and shall not impair or affect the rights of the Lender or the
provisions of this guaranty in any other respect at any other time. Except as to the Borrower’s
environmental indemnity obligations which survive the termination of the Loan Agreement,this guaranty
shall continue until the Indebtedness is paid in full or until written notice of revocation of this guaranty,
executed by the undersigned, has been received by the Lender; provided, no revocation of this guaranty
shall affect in any manner any liability of the undersigned under this guaranty with respect to
Indebtedness arising before the Lender receives such written notice of revocation, and the sole effect of
revocation of this guaranty shall be to exclude from this guaranty Indebtedness thereafter arising which is
unconnected with Indebtedness theretofore arising or transactions theretofore entered into.
Any invalidity or unenforceability of any provision or application of this guaranty shall not affect
other lawful provisions and applications hereof and to this end the provisions of this guaranty are declared
to be severable. This guaranty shall bind the undersigned and shall benefit the Lender, its successors and
assigns. This guaranty shall be governed by and construed in accordance with the laws of the State of
Minnesota.
The undersigned is a member of Yankee Doodle Enterprises, LLC, a Minnesota limited liability
company (“Corporate Guarantor”), the owner of the real property commonly known as 13374 U.S.
Highway 10, Elk River, Minnesota (the “Property”). Borrower is the tenant of the Property, pursuant to
2
a written lease with Corporate Guarantor. The undersigned acknowledges and agrees that the
Indebtedness is being utilized by Borrower to make permanent and valuable improvements to the
Property, the ownership of which improvements will revert to Corporate Guarantor upon the expiration of
the Lease and therefore, the undersigned’s obligations under this Guaranty are proper, valid and
enforceable.
THE UNDERSIGNED REPRESENTS,CERTIFIES, WARRANTS AND AGREES THAT THE
UNDERSIGNED HAS READ ALL OF THIS GUARANTY AND UNDERSTANDS ALL OF THE
PROVISIONS OF THIS GUARANTY. THE UNDERSIGNED ALSO AGREES THAT COMPLIANCE
BY THE LENDER WITH THE EXPRESS PROVISIONS OF THIS GUARANTY SHALL
CONSTITUTE GOOD FAITH AND SHALL BE CONSIDERED REASONABLE FOR ALL
PURPOSES.
________________________________
Nancy Brehmer
3
PERSONAL GUARANTY
(Allen Meyer)
Elk River, Minnesota
______________, 2018
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledged, and in consideration of and to induce financial accommodations of any kind, with or
without security, given or to be given or continued at any time and from time to time by the ECONOMIC
DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER(hereinafter called the "Lender") to or
for the account of ALAN ARNOLD CORPORATION(hereinafter called the "Borrower"), the
undersigned absolutely and unconditionally guarantees to the Lender the full and prompt payment when
due, whether at maturity or earlier by reason of accelerationor otherwise, of any and all indebtedness,
obligations and liabilities of the Borrower (and any and all successors of the Borrower) to the Lender,
now or hereafter existing, absolute or contingent, independent, joint, several or joint and several, secured
or unsecured, due or to become due, contractual or tortious, liquidated or unliquidated, arising by
assignment or otherwise, including without limitation all indebtedness, obligations and liabilities owed by
the Borrower (and any and all successors of theBorrower) as a member of any partnership, syndicate,
association or other group, and whether incurred by the Borrower (or any successor of the Borrower) as
principal, surety, endorser, guarantor, accommodation party or otherwise (hereinafter collectively referred
to as the "Indebtedness"), undersigned agrees to pay on demand all of the Lender's fees, costs, expenses
and reasonable attorneys' fees in connection with the Indebtedness, any security therefor, and this
guaranty, plus interest on such amounts atthe highest rate then applicable to any of the Indebtedness.All
capitalized terms not otherwise defined herein shall have the meanings set forth in the Amended and
Restated Energy Efficiency Improvement Program Loan Agreement, dated the date hereof, by and
between the Borrower and the Lender.
The Lender may at any time and from time to time, without consent of or notice to the
undersigned, without incurring responsibility to the undersigned, without releasing, impairing or affecting
the liability of theundersigned hereunder, upon or without any terms or conditions, and in whole or in
part: (1) sell, pledge, surrender, compromise, settle, release, renew, subordinate, extend, alter, substitute,
exchange, change, modify or otherwise dispose of or deal within any manner and in any order any
Indebtedness, any evidence thereof, or any security or other guaranty therefor; (2) accept any security for,
or other guarantors of, any Indebtedness; (3) fail, neglect or omit to obtain, realize upon or protect any
Indebtedness or any security therefor, to exercise any lien upon or right to any money, credit or property
toward the liquidation of the Indebtedness, or to exercise any other right against the Borrower, the
undersigned, any other guarantor or any other person; and (4) apply any payments and credits to the
Indebtedness in the manner set forth in the Note. No act, omission or thing, except full payment and
discharge of the Indebtedness, which but for this provision could act as a release or impairment of the
liability of the undersigned hereunder, shall in any way release, impair or otherwise affect the liability of
the undersigned hereunder, and the undersigned waives any and all defenses of the Borrower pertaining to
the Indebtedness, any evidence thereof, andany security therefor, except the defense of discharge by
payment. The failure of any person or persons to sign this or any other guaranty shall not release, impair
or affect the liability of the undersigned hereunder. This guaranty is a primary obligation of the
undersigned and the Lender shall not be required to first resort for payment of the Indebtedness to the
Borrower or any other person, their properties or estates, or any security or other rights or remedies
whatsoever. The undersigned shall be and remain liable for any deficiency remaining after foreclosure of
any mortgage or security interest securing the Indebtedness, whether or not the liability of the Borrower
or any other person for such deficiency is discharged pursuant to statute, judicial decision or otherwise.
1
The liability of the undersigned under this guaranty is in addition to and shall be cumulative with
all other liabilities of the undersigned to the Lender, as guarantor or otherwise, without any limitation as
to amount, unless thewriting evidencing or creating such other liability specifically provides to the
contrary. If any payment applied by the Lender to the Indebtedness is thereafter set aside, recovered,
rescinded or required to be returned for any reason (including withoutlimitation the bankruptcy,
insolvency or reorganization of the Borrower or any other person), the Indebtedness to which such
payment was applied shall for the purposes of this guaranty be deemed to have continued in existence,
notwithstanding such application, and this guaranty shall be enforceable as to such Indebtedness as fully
as if such application had never been made.
The undersigned waives: (1) notice of acceptance of this guaranty and of the creation and
existence of the Indebtedness; (2) presentment, demand for payment, notice of dishonor, notice of
nonpayment, and protest of any instrument evidencing the Indebtedness; and (3) all other demands and
notices to the undersigned or any other person and all other actions to establish the liability of the
undersigned hereunder. The undersigned consents to the personal jurisdiction of the state and federal
courts located in the State of Minnesota in connection with any controversy related to this guaranty,
waives any argument that venue in such forums isnot convenient, and agree that any litigation initiated
by the undersigned against the Lender in connection with this guaranty shall be venued in either the
District Court of Sherburne County, Minnesota, or the United States District Court, District of Minnesota.
The undersigned waives all claims, rights and remedies which the undersigned may now have or
hereafter acquire against any person at any time now or hereafter liable to payment of any of the
Indebtedness and as to any collateral security, including but not limited to all claims, rights and remedies
of contribution, indemnification, exoneration, reimbursement, recourse and subrogation, whether or not
such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise,
whether or not the Indebtedness has been fully paid, and all payments and recoveries under this guaranty
shall be considered equity investments by the undersigned in the Borrower; provided, nothing contained
in this guaranty shall deprive the undersigned of any claim, right or remedy, after the Indebtedness has
been fully paid, against any person other than the Borrower. No delay or failure by the Lender in
exercising any right, and no partial or single exercise thereof shall constitute a waiver thereof. No waiver
of any rights hereunder, and no modification or amendment of this guaranty shall be effective unless the
same is in writing duly executed by the Lender, and each such waiver, if any, shall apply only with
respect to the specific instance involved and shall not impair or affect the rights of the Lender or the
provisions of this guaranty in any other respect at any other time. Except as to the Borrower’s
environmental indemnity obligations which survive the termination of the Loan Agreement,this guaranty
shall continue until the Indebtedness is paid in full or until written notice of revocation of this guaranty,
executed by the undersigned, has been received by the Lender; provided, no revocation of this guaranty
shall affect in any manner any liability of the undersigned under this guaranty with respect to
Indebtedness arising before the Lender receives such written notice of revocation, and the sole effect of
revocation of this guaranty shall be to exclude from this guaranty Indebtedness thereafter arising which is
unconnected with Indebtedness theretofore arising or transactions theretofore entered into.
Any invalidity or unenforceability of any provision or application of this guaranty shall not affect
other lawful provisions and applications hereof and to this end the provisions of this guaranty are declared
to be severable. This guaranty shall bind the undersigned and shall benefit the Lender, its successors and
assigns. This guaranty shall be governed by and construed in accordance with the laws of the State of
Minnesota.
The undersigned is a member of Yankee Doodle Enterprises, LLC, a Minnesota limited liability
company (“Corporate Guarantor”), the owner of the real property commonly known as 13374 U.S.
Highway 10, Elk River, Minnesota (the “Property”). Borrower is the tenant of the Property, pursuant to
2
a written lease with Corporate Guarantor. The undersigned acknowledges and agrees that the
Indebtedness is being utilized by Borrower to make permanent and valuable improvements to the
Property, the ownership of which improvements will revert to Corporate Guarantor upon the expiration of
the Lease and therefore, the undersigned’s obligations under this Guaranty are proper, valid and
enforceable.
THE UNDERSIGNED REPRESENTS,CERTIFIES, WARRANTS AND AGREES THAT THE
UNDERSIGNED HAS READ ALL OF THIS GUARANTY AND UNDERSTANDS ALL OF THE
PROVISIONS OF THIS GUARANTY. THE UNDERSIGNED ALSO AGREES THAT COMPLIANCE
BY THE LENDER WITH THE EXPRESS PROVISIONS OF THIS GUARANTY SHALL
CONSTITUTE GOOD FAITH AND SHALL BE CONSIDERED REASONABLE FOR ALL
PURPOSES.
________________________________
Allen Meyer
3
ENTITY GUARANTY
Elk River, Minnesota
___________, 2018
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledged, and in consideration of and to induce financial accommodations of any kind, with or without
security, given or to be given or continued at any time and from time to time by the ECONOMIC
DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER (hereinafter called the "Lender") toor
for the account of ALAN ARNOLD CORPORATION (hereinafter collectively called the "Borrower"), the
undersigned absolutely and unconditionally guarantees to the Lender the full and prompt payment when due,
whether at maturity or earlier by reason of acceleration or otherwise, of any and all indebtedness,obligations
andliabilitiesoftheBorrower(andanyandallsuccessorsoftheBorrower)tothe Lender, now or hereafter
existing, absolute or contingent, independent, joint, several or joint and several, secured or unsecured, due or
to become due, contractual or tortious, liquidated or unliquidated, arising by assignment or otherwise,
including without limitation all indebtedness, obligations and liabilities owed by the Borrower (and any and
all successors of the Borrower) as a member of any partnership, syndicate, association or other group, and
whether incurred by the Borrower (or any successorof the Borrower) as principal, surety, endorser,
guarantor, accommodation party or otherwise (hereinafter collectively referred to as the "Indebtedness");
and the undersigned agrees to pay on demand all of the Lender's fees, costs, expensesandreasonable
attorneys'feesinconnectionwiththeIndebtedness, anysecuritytherefor,andthis guaranty,plusintereston
suchamountsatthehighestratethenapplicabletoanyoftheIndebtedness.All capitalized terms not
otherwise defined herein shall have the meanings set forth in the Amended and Restated Energy Efficiency
Improvement Program Loan Agreement, dated the date hereof, by and between the Borrower and the
Lender.
The Lender may at any time and from time to time, without consent of or notice to the undersigned,
without incurring responsibility to the undersigned, without releasing, impairing or affecting theliabilityof
theundersignedhereunder,uponorwithoutanytermsorconditions,andinwholeorinpart:(1) sell, pledge,
surrender, compromise, settle, release, renew, subordinate, extend, alter, substitute, exchange, change,
modify or otherwise dispose of or deal with in any manner and in any order any Indebtedness, any evidence
thereof, or any security or other guaranty therefor; (2) accept any security for, or other guarantors of, any
Indebtedness; (3) fail, neglect or omit to obtain, realize upon or protect any Indebtedness or any security
therefor, to exercise any lien uponor right to any money, credit or property toward the liquidation of the
Indebtedness, or to exercise any other right against the Borrower, the undersigned, any other guarantor or
any other person; and (4) apply any payments and credits to the Indebtednessin any manner and in any
order. No act, omission or thing, except full payment and dischargeof the Indebtedness, which but for this
provision could act as a release or impairment of the liability of the undersigned hereunder, shall in any way
release, impair or otherwise affect the liability of the undersigned hereunder, and the undersigned waives any
and all defenses of the Borrower pertaining to the Indebtedness, any evidence thereof, and any security
therefor, except the defense of discharge by payment.The failure of any person or persons to sign this or any
other guaranty shall not release impair or affect the liability of the undersigned hereunder. This guaranty is a
primary obligation of the undersigned and the Lender shall not be required to first resort for payment of the
Indebtedness to the Borrower or any other person, their properties or estates, or any security or other rights
or remedies whatsoever. The undersigned shall be and remain liable for any deficiency remaining after
foreclosure of any mortgage or securityinterestsecuringtheIndebtedness,whetherornottheliabilityofthe
Borroweroranyother person forsuchdeficiencyisdischargedpursuanttostatute,judicialdecisionor
otherwise.
The liability of the undersigned under this guaranty is joint and several and is in addition to and shall
be cumulative with all other liabilities of the undersigned to the Lender, as guarantor or otherwise, without
any limitation as to amount, unless the writing evidencing or creating such other liability
1
specifically provides to the contrary. If anypayment applied by the Lender to the Indebtedness is
thereafter set aside, recovered, rescinded or required to be returned for any reason (including without
limitation the bankruptcy, insolvency or reorganization of the Borrower or any other person), the
Indebtednesstowhichsuchpaymentwasappliedshallforthepurposesofthisguarantybedeemedto
have continued in existence, notwithstanding such application, and this guaranty shall be enforceable as
to such Indebtednessasfullyasifsuchapplicationhadneverbeenmade.
Theundersignedwaive: (1)notice ofacceptanceofthisguarantyand ofthecreationand
existence of the Indebtedness; (2) presentment, demand for payment, notice of dishonor, notice of
nonpayment, and protest of any instrument evidencing the Indebtedness; and (3) all other demands and
notices to the undersigned or any other person and all other actions to establish the liability of the
undersigned hereunder. The undersigned consent to the personal jurisdiction of the state and federal
courts located in the State of Minnesota in connection with any controversy related to this guaranty,
waive any argument that venue in such forums is not convenient, and agree that any litigation initiated
by the undersignedagainst the Lender .in connection with this guaranty shall be venued in either the
District Court of SherburneCounty,Minnesota,ortheUnitedStatesDistrictCourt,Districtof
Minnesota.
All property of the undersigned, now or hereafter in the possession, control or custody of or in
transit to the Lender for any purpose, including without limitationthe balance of every account of the
undersigned with and each claim of the undersigned against the Lender, shall be subject to a lien and
security interest in favor of the Lender, as security for all liabilities of the undersigned to the Lender,
and shall be subject to be set off against any and all such liabilities, and the Lender may at any time and
from time to time at its option and without notice appropriate and apply any such property toward the
payment of any and all such liabilities. The undersigned agree to promptly provide the Lenderfrom
time to time with financial statements of the undersigned, in form and substance acceptable to the
Lender, at least once every 12 months and as otherwise requested by the Lender. The undersigned agree
to promptly provide the Lender from time to time with such other information respecting the condition
(financial and otherwise), business and property of the undersigned as the Lender may request, in form
and substance acceptable to theLender.
The undersigned waive all claims, rights and remedies whichthe undersigned may now have or
hereafter acquire against any person at any time now or hereafter liable to payment of any of the
Indebtedness and as to any collateral security, including but not limited to all claims, rights and
remedies of contribution,indemnification, exoneration, reimbursement, recourse and subrogation,
whether or not such claim, right or remedy arises in equity, under contract, by statute, under common
law or otherwise, whether or not the Indebtedness has been fully paid, and all payments and recoveries
under this guaranty shallbeconsideredequityinvestmentsbytheundersignedintheBorrower;
provided,nothingcontainedin this guaranty shall deprive the undersigned of any claim, right or
remedy, after the Indebtedness has been fullypaid,againstanypersonotherthantheBorrower.No
delayorfailurebytheLenderinexercising any right, and no partial or single exercise thereof shall
constitute a waiver thereof. No waiver of any rights hereunder, and no modification or amendment of
this guaranty shall be effective unless the same is in writing duly executed by the Lender, and each such
waiver, if any, shall apply only with respect to the specific instance involved and shall not impair or
affect the rights of the Lender or the provisions of this guaranty in any other respect at any other time.
This guaranty shall continue until written notice of revocation of this guaranty, executed by the
undersigned, has been received by the Lender; provided, no revocation of this guaranty shall affect in
any manner any liability of the undersigned under this guaranty with respect to Indebtedness arising
before the Lender receives such written notice of revocation, and the sole effect of revocation of this
guaranty shall be-to exclude from this guaranty Indebtedness thereafter arisingwhichisunconnected
withIndebtednesstheretoforearisingortransactionstheretoforeenteredinto.
2
Any invalidity or unenforceability of any provision or application of this guaranty shall not
affect other lawful provisions and applications hereof and to this end the provisions of this guaranty
are declared to be severable. This guaranty shall bind the undersigned and the heirs, representatives,
successors and
assigns of theundersigned, and of each of them respectively, and shall benefit the Lender,
its successors and assigns. This guaranty shall be governed by and construed in accordance with the laws
of the State of Minnesota.·
The undersigned is the owner of the real property commonly known as 13374 U.S. Highway
10, Elk River, Minnesota (the "Property"). Borrower is the tenant of the Property, pursuant to a
written lease with the undersigned. The undersigned acknowledges and agrees that the Indebtedness
is being utilizedby Borrower to make permanent and valuable improvements to the Property,
the ownership of whichimprovements will revert to Corporate Guarantor upon the expiration of the
Lease and therefore, theundersigned's obligations under this Guaranty are proper, valid and enforceable.
The undersigned's obligations hereunder are secured by that certain. Mortgage and
Assignment of Rents and Security Agreement and Fixture Filing made by the undersigned to Lender
of even date herewith.
THE UNDERSIGNED REPRESENT, CERTIFY, WARRANT AND AGREE THAT THE
UNDERSIGNED HAVE READ ALL OF THISGUARANTY AND UNDERSTAND ALL OF
THE PROVISIONS OF THISGUARANTY. THE UNDERSIGNED ALSO AGREE THAT
COMPLIANCE BY THE LENDER WITH THE EXPRESS PROVISIONS OF THISGUARANTY
SHALL CONSTITUTE GOOD FAITHAND SHALL BE CONSIDERED REASONABLE FOR
ALL PURPOSES.
YANKEE DOODLE ENTERPRISES,
LLC, a Minnesota limited liability company
By: __________________
Name: Nancy Brehmer
Its: Chief Financial Manager
3
AMENDED AND RESTATED PROMISSORY NOTE
Amended and
Original Principal Restated Principal Amended and
AmountAmountOriginal Issue DateRestated Date
$74,999.00$59,657.91September 10, 2013_______, 2018
FOR VALUE RECEIVED, the undersigned, ALAN ARNOLD
CORPORATION, a Minnesota corporation (“Borrower”), promises to pay to the order of
Economic Development Authority of the City of Elk River, a public body corporate and
politic of the State of Minnesota (“Lender”), at 13065 Orono Parkway, Elk River,
Minnesota 55330, or such other place as the Lender or any other holder of this note may
designate in writing, on or before September1, 2023(“Maturity Date”), the principal sum
of Fifty-Nine Thousand Six Hundred and Fifty-Seven and 91/100s Dollars($59,657.91),
or so much thereof as may have been advanced by the Lender to the Borrower (the
“Principal Balance”).
Original Note Balance. A portion of the outstanding Principal Balance in the
amount of $40,482.91 (the “Original Note Balance”) shall accrue interest at a fixed
interest rate of 2.00% per annum. The Borrower shall be obligated to make monthly
installments (“Original Note Monthly Installment”) in the amount of Seven Hundred
Twenty-four and 20/100 Dollars ($724.20), which Monthly Installment shall commence
st
onOctober 1, 2013, and continue on the first (1) day of each and every month thereafter
until the Maturity Date, when all unpaid principal and interest on the Original Note
Balance shall be payable in full.
NewNote Balance. A portion of the outstanding Principal Balance in the amount
of $19,175.00 (the “New Note Balance”) shall accrue interest at a fixed interest rate of
3.00% per annum. The Borrower shall be obligated to make monthly installments (“New
Note Monthly Installment”) in the amount of Three Hundred Forty-three and 65/100
($343.65), which Monthly Installment shall commence on October 1, 2018, and continue
st
on the first (1) day of each and every month thereafter until the Maturity Date, when all
unpaid principal and interest shall be payable in full.
This Note replaces and supersedes in all respects the Note issued on September
10, 2013, and this Note is the “Note” referred to in theAmended and Restated Energy
Efficiency Improvement Program Loan Agreement, of even date herewith(the “Loan
Agreement”), between Borrower and Lender. The Note is made to secure the Loan made
pursuant to the Loan Agreementandissecured by, among other things, those certain
Personal Guaranties, each dated the date herewith,made by Brian Brehmer,Nancy
Brehmer and Allen Meyer to the Lender, and that certain Corporate Guaranty, dated the
date herewith,made by Yankee Doodle Enterprises, LLCto the Lender.All of the terms
and conditions contained in the Loan Agreement which are to be kept and performed by
533959v3 GAF EL185-57
Borrower are hereby made a part of this note to the same extent and with the same force
and effect as if they were fully set forth herein; and Borrower covenants and agrees to
keep and perform them, or cause them to be kept and performed, strictly in accordance
with their terms.
If the Lender, or any other holder of this note, has not received the full amount of
any Original Note Monthly Installment or New Note Monthly Installment provided for in
this note, by the end of seven (7) calendar days after the date it is due, Borrower shall pay
a late charge fee to the Lender, or any other holder of this note. The amount of the late
charge fee shall be eight percent (8.00%) of the overdue Original Note Monthly
Installment or New Note Monthly Installment.The Borrower shall pay this late charge
fee on demand, however, collection of the late charge fee shall not be deemed a waiver of
the Lender’s right to declare an Event of Default and exercise its rights and remedies as
provided for in the Loan Agreement.
Each Original Note Monthly Installment, New Note Monthly Installment and
other payments made under this note shall be applied as follows: (i) first, to be applied
against and pay interest which has accrued and remains unpaid on the date the payment is
received; then (ii) to be applied against and pay unpaid late charges and any other
charges, including attorneys' fees and protective advances; and then (iii) all remaining
amounts, if any, shall be applied against and reduce the then outstanding principal
balance of this note.
If an Event of Default shall occur hereunder or under the Loan Agreement and
any cure period provided for in the Loan Agreement or the Mortgage has expired, the
Borrower agrees to pay a default rate of interest equal to ten percent (10.00%) per annum
as the applicable interest rate of this note, andthe entire principal amount outstanding,
accrued interest and any other charges due hereon shall at once become due and payable
at the option of the Lender or the holder hereof. Any failure of the Lender to exercise its
right to increase the interest rate by the default rate of interest set forth above or its option
to accelerate this note at any time shall not constitute a waiver of the right to exercise the
same right to increase the interest rate or accelerate at any subsequent time.
Notwithstanding anything contained herein to the contrary, the default rate of interest
hereon shall never exceed the highest rate permitted by law.
The Borrower may prepay the principal under this noteat any time and from time
to time, in whole or in part, without premium or penalty. No partial prepayment shall
postpone the due date of any Original Note Monthly Installment or New Note Monthly
Installment or reduce the amount of any such Original Note Monthly Installment or New
Note Monthly Installment unless the Lender agrees otherwise in writing.
All sums payable to the Lender under this note shall be paid in immediately
available funds.
The Borrower promises to pay all costs in connection with the enforcement of this
note, including but not limited to, those costs, expenses and attorneys' fees of Lender
whether or not suit is filed with respect thereto and whether or not such cost or expense is
533959v3 GAF EL185-57
-2-
paid or incurred or to be paid or incurred prior to or after the entry of judgment or for the
pursuance of, or defense of, any litigation, appellate, bankruptcy or insolvency
proceeding.
Presentment, notice of dishonor and protest are hereby waived by all makers,
sureties, guarantors and endorsers hereof. This note shall be binding upon Borrower, its
successors and assigns.
The remedies of Lender, as provided herein and in the Loan Agreement, shall
be cumulative and concurrent and may be pursued singly, successively or together, at
the sole discretion of Lender, and may be exercised as often as occasion therefor shall
occur; and the failure to exercise any such right or remedy shall in no event be
construed as a waiver or release thereof.
Time is of the essence hereof.
This note shall be governed by and be construed under the laws of the State of
Minnesota, without regard to principles of conflicts of law.
IN WITNESS WHEREOF, the undersigned has caused this note to be effective
as of the day and year first above written.
ALAN ARNOLD CORPORATION,
a Minnesota corporation
______________________________
By: Brian Brehmer
Its: President
533959v3 GAF EL185-57
-3-
AMENDED AND RESTATED PROMISSORY NOTE
Amended and
Original Principal Restated Principal Amended and
AmountAmountOriginal Issue DateRestated Date
$74,999.00$59,657.91September 10, 2013_______, 2018
FOR VALUE RECEIVED, the undersigned, ALAN ARNOLD
CORPORATION, a Minnesota corporation (“Borrower”), promises to pay to the order of
Economic Development Authority of the City of Elk River, a public body corporate and
politic of the State of Minnesota (“Lender”), at 13065 Orono Parkway, Elk River,
Minnesota 55330, or such other place as the Lender or any other holder of this note may
designate in writing, on or before __________September1,20__2023
(“Maturity Date”),
the principal sum of Fifty-Nine Thousand Six Hundred and Fifty-Seven and 91/100s
Dollars ($59,657.91), or so much thereof as may have been advanced by the Lender to
the Borrower (the “Principal Balance”).
Original Note Balance. A portion of the outstanding Principal Balance in the
amount of $40,482.91 (the “Original Note Balance”) shall accrue interest at a fixed
interest rate of 2.00% per annum. The Borrower shall be obligated to make monthly
installments (“Original Note Monthly Installment”) in the amount of Seven Hundred
Twenty-four and 20/100 Dollars ($724.20), which Monthly Installment shall commence
st
on October 1, 2013, and continue on the first (1) day of each and every month thereafter
until September 1, 2023 (the “Original NotetheMaturity Date”), when all unpaid
principal and interest on the Original Note Balance shall be payable in full.
New Note Balance. A portion of the outstanding Principal Balance in the amount
of $19,175.00 (the “New Note Balance”) shall accrue interest at a fixed interest rate of
3.00% per annum. The Borrower shall be obligated to make monthly installments (“New
Note Monthly Installment”) in the amount of __________________________
($_____________Three Hundred Forty-three and 65/100 ($343.65), which Monthly
st
Installment shall commence on October 1, 2018, and continue on the first (1) day of
eachand every month thereafter until ____________ (the “New Note Maturity Date”),
when all unpaid principal and interest shall be payable in full.
This Note replaces and supersedes in all respects the Note issued on September
10, 2013, and this Note is the“Note” referred to in the Amended and Restated Energy
Efficiency Improvement Program Loan Agreement, of even date herewith (the “Loan
Agreement”), between Borrower and Lender. The Note is made to secure the Loan made
pursuant to the Loan Agreement and issecured by, among other things, those certain
Personal Guaranties, each dated the date herewith, made by Brian Brehmer, Nancy
Brehmer and Allen Meyer to the Lender, and that certain Corporate Guaranty, dated the
date herewith, made by Yankee Doodle Enterprises, LLC to the Lender. All of the terms
533959v23GAF EL185-57
and conditions contained in the Loan Agreement which are to be kept and performed by
Borrower are hereby made a part of this note to the same extent and with the same force
and effect as if they were fully set forth herein; and Borrower covenants and agrees to
keep and perform them, or cause them to be kept and performed, strictly in accordance
with their terms.
If the Lender, or any other holder of this note, has not received the full amount of
any Original NoteMonthly Installment or New Note Monthly Installment provided for in
this note, by the end of seven (7) calendar days after the date it is due, Borrower shall pay
a late charge fee to the Lender, or any other holder of this note. The amount of the late
charge fee shall be eight percent (8.00%) of the overdue Original Note Monthly
Installment or New Note Monthly Installment. The Borrower shall pay this late charge
fee on demand, however, collection of the late charge fee shall not be deemed a waiver of
theLender’s right to declare an Event of Default and exercise its rights and remedies as
provided for in the Loan Agreement.
Each Original Note Monthly Installment, New Note Monthly Installment and
other payments made under this note shall be applied as follows: (i) first, to be applied
against and pay interest which has accrued and remains unpaid on the date the payment is
received; then (ii) to be applied against and pay unpaid late charges and any other
charges, including attorneys' fees and protective advances; and then (iii) all remaining
amounts, if any, shall be applied against and reduce the then outstanding principal
balance of this note.
If an Event of Default shall occur hereunder or under the Loan Agreement and
any cure period provided for in the Loan Agreement or the Mortgage has expired, the
Borrower agrees to pay a default rate of interest equal to ten percent (10.00%) per annum
as the applicable interest rate of this note, andthe entire principal amount outstanding,
accrued interest and any other charges due hereon shall at once become due and payable
at the option of the Lender or the holder hereof. Any failure of the Lender to exercise its
right to increase the interest rate by the default rate of interest set forth above or its option
to accelerate this note at any time shall not constitute a waiver of the right to exercise the
same right to increase the interest rate or accelerate at any subsequent time.
Notwithstanding anything contained herein to the contrary, the default rate of interest
hereon shall never exceed the highest rate permitted by law.
The Borrower may prepay the principal under this note at any time and from time
to time, in whole or in part, without premium or penalty. No partial prepayment shall
postpone the due dateof any Original Note Monthly Installment or New Note Monthly
Installment or reduce the amount of any such Original Note Monthly Installment or New
Note Monthly Installment unless the Lender agrees otherwise in writing.
All sums payable to the Lender under this note shall be paid in immediately
available funds.
The Borrower promises to pay all costs in connection with the enforcement of this
note, including but not limited to, those costs, expenses and attorneys' fees of Lender
533959v23GAF EL185-57
-2-
whether or not suit is filed with respect thereto and whether or not such cost or expense is
paid or incurred or to be paid or incurred prior to or after the entry of judgment or for the
pursuance of, or defense of, any litigation, appellate, bankruptcy or insolvency
proceeding.
Presentment, notice of dishonor and protest are hereby waived by all makers,
sureties, guarantors and endorsers hereof. This note shall be binding upon Borrower, its
successors and assigns.
The remedies of Lender, as provided herein and in the Loan Agreement, shall
be cumulative and concurrent and may be pursued singly, successively or together, at
the sole discretion of Lender, and may be exercised as often as occasion therefor shall
occur; and the failure to exercise any such right or remedy shall in no event be
construed as a waiver or release thereof.
Time is of the essence hereof.
This note shall be governed by and be construed under the laws of the State of
Minnesota, without regard to principles of conflicts of law.
IN WITNESS WHEREOF, the undersigned has caused this note to be effective
as of the day and year first above written.
ALAN ARNOLD CORPORATION,
a Minnesota corporation
______________________________
By: Brian Brehmer
Its: President
533959v23GAF EL185-57
-3-
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Meeting
of the
Tuesday, July 31, 2018
7:30 a.m.
Joint Finance
Elk River City Hall
Committee Upper Town Conference Room
Meeting Protocol
AGENDA
No sidebar discussions
No interruptions
State your concern
Ensure you understand
Don’t take things personally
Adhere to time limits
Come prepared
1.CALL MEETING TO ORDER
Ensure all are heard
2.CONSIDER AGENDA
3.CONSENT AGENDA
Considered to be routine and noncontroversial by the Economic Development Finance Committee and will be approved by one
motion. There will be no separate discussion of these items unless a Committee member, staff member, or citizen so requests, in
which case the item will be removed from the consent agenda and considered under the regular agenda.
3.1June 26, 2018, Minutes
3.2 Revolving Loan Fund Balance Report
4. GENERAL BUSINESS
4.1 Energy Efficiency Microloan Application for Ralphie’s Minnoco
5.ANNOUNCEMENTS
6.ADJOURNMENT
Meeting of the Elk River Joint Finance Committee
Held at Elk River City Hall
Tuesday, June 26, 2018
Members Present: Larry Toth, Ryan Hardin, Jim Gromberg, Bryan Provo, Rhonda Magnussen
Members Absent: Nate Ovall, Chad Vitzthum, Michelle Eder, Dan Tveite
Staff Present: Amanda Othoudt, Economic Development
Others Present: Jeff Orluck, Orluck Industries, Inc.
1. Call Meeting to Order
Pursuant to due call and notice thereof, the meeting of the Elk River Joint Finance
Committee was called to order at 7:40 a.m.
2. Consider Agenda
Motion by Gromberg and seconded by Hardin to approve the June 26, 2018, Joint
Finance Committee agenda.
Motion carried 5-0.
3. Consent Agenda
Motion by Gromberg and seconded by Provo to approve the June 26, 2018 Joint
Finance Committee consent agenda:
3.1. January 30, 2018 Joint Finance Committee meeting minutes.
3.2. Revolving Loan Fund Balance report.
Motion carried 5-0.
4.1 Jobs Incentive Microloan Application for Orluck Industries, Inc.
Ms. Othoudt presented the staff report. Members discussed various aspects of the
application.
Motion by Provo and seconded by Magnussen to recommend approval of the Jobs
Incentive Microloan Application for Orluck Industries, Inc. as outlined in the staff
report.
Motion carried 5-0 all in favor.
5.1 Announcements
There were no announcements.
6.Adjournment
There being no further business,Mr. Gromberg adjourned the meeting at 8:27 a.m.
Minutes prepared by Amanda Othoudt.
_____________________
Tina Allard
City Clerk
___________________
Amanda Othoudt
Economic Development Director
YYYYYYY
Current
Micro Loan Fund 240DEED Jobs Incentive Loan Fund 242
8
1
/
5
2
/
7
Principal
$56,227.61$41,104.35
$86,916.66$99,343.50175,522.41 200,000.00
Outstanding
$169,145.14$116,914.76$470,308.52$474,865.91
$936.90$965.61$967.61$724.20$874.72
Current
Monthly
Payment
$3,593.74$1,011.77$2,642.66
60606060606084
120
Term
(Months)
Rate
2.00%3.00%3.00%3.00%3.00%2.03%2.00%3.00%
CurrentInterest
Loan
$74,999
Amount
$185,200$100,000$200,000$100,000$126,000$200,000$200,000
MICRO LOANS
6/3/20165/5/20163/3/20158/6/2015
Date
Loan
10/1/20139/10/20137/17/2018
12/22/2016
$738,369.15$228,906.14
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8
1
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5
ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY
2
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Ralphies
BorrowerDie ConceptsHeritage MillworkPatriot ConvertingPreferred Powder TOTAL MICRO LOANSDistinctive IronScott Morrell LLCOrluckFMicro Loan Fund - 240State DEED Jobs Incentive -
242
Request for Action
ToItem Number
Joint Finance Committee 4.1
Agenda Section Meeting DatePrepared by
General July 31, 2018 Amanda Othoudt, EDD
Item Description Reviewed by
Review Energy Efficiency Microloan Application Cal Portner, City Administrator
for Ralphie’s Minnoco
Reviewed by
Action Requested
Consider and provide a recommendation regarding anEnergy Efficiency Microloan Application for
Ralphie’s Minnoco.
The Finance Committee may recommend approval, approval with conditions, or denial of the request.
Background/Discussion
Ralphie’s Minnoco is a self-service gas station operating in a 3,000 square foot facility at13374 U.S.
Highway 10. The gas station emphasizes food service, fuel, inside sales, U-Haul rental, and propane
sales.Owner Brian Brehmer plans to use the loan to finance energy efficiency lighting to the propertyand
the space leased to Mama D's Deli.
Mr. Brehmer has extensive experience in managing gas stations and has owned Ralphie's since July 1,
2013. He previously managed the Otsego F&F Food Mart for 19 years. He also worked as the Retail
Operations Manager for Adium Oil, an independent oil company operating six convenience stores.
Mr. Brehmer is requesting a $19,175 Energy Efficiency Microloan to defray the cost of new LED canopy
lights and improve perception of the gas station. He indicated a gas station image is a large determinant of
its success and improving the lighting and outward appearance will increase business.
Tom Sagstetter, ERMU Conservation and Key Accounts Manager, indicated they have exhausted all of
their 2018 rebate dollars. As such, this request can only be structured as a direct loan from the city.
Ralphie’sreceived a $74,999 Energy Efficiency Microloanin 2013. They are current ontheir payments
and are scheduled to pay off the remaining balance of $41,104.35 on September 1, 2023.
The EDAattorney stated funddisbursementfor new expenditures should be structured as anew loan
rather than a modification of the first loanbecause it is a new project.If approved, the EDAcould
subsequently consolidate the loans into one payment.The borrower would make one payment and
comply with one set of loan terms and documents.
In addition to the financial criteria that must be considered, the Finance Committee must also consider to
what degree the applicant satisfies the criteria set forth in the Microloan Fund policies outlined below:
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness,exceptional
service, and community engagement that encourages and inspires prosperity
Micro Loan Criteria-Energy Efficiency Improvement Program
Max. Loan Amount: $74,999
Interest rate: Fixed at 3%
Equity: 10% or more of project
Term: The maximum maturity date will be determined by the useful life of the improvement and the
energy payback achieved. For projects that have a shorter length of payback (2-5) years as calculated
according to energy savings, the loans will have an initial maturity of up to 5 years from the date of
closing. Longer-life improvements (6-15 years) may apply for a longer maturity of up to 10 years.
The loans will be secured by personal and corporate guarantees and if applicable a lien on equipment
financed and subordinate mortgage on the property.
Exempt from job creation and wage goals because the loan amount does not exceed $150,000 and
does not qualify as a business subsidy by state law.
Ralphie’s Minnoco
Amount requested: $19,175
Rate requested: Fixed at 3%
Equity proposed: 10%
Term: 5-year amortization
The EDA will maintain a subordinate position on the mortgage at 13374 U.S. Highway 10 by
amending and restating the mortgage, entity guarantee and a personal guarantee.
The EDA will consider the Finance Committee’s recommendation at their August 20, 2018, meeting.
Financial Impact
The Microloan Fund has a current cash balance of $738,369.15 with $537,038.15 in notes receivable.
Attachments
Microloan Application and Supporting Information
Corporate and Personal Financial Documents (distributed at the meeting)
2013 Loan Documents
N:\\Departments\\Community Development\\Economic Development\\EDA\\Administrative\\Agenda\\EDA Finance Committee Agenda
Packets\\2018\\July 31, 2018\\4.1 sr Ralphies Minnoco - Energy Efficiency Loan.docx