RES 19-05ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF ELK RIVER
COUNTY OF SHERBURNE
STATE OF MINNESOTA
RESOLUTION NO. 19-05
RESOLUTION APPROVING AN AMENDED AND RESTATED LOAN AGREEMENT
AND RELATED DOCUMENTS
(DISTINCTIVE IRON PROJECT)
WHEREAS, on February 17, 2015, the Economic Development Authority of the City of
Elk River (the "EDA") provided a loan to Hemmer Companies L.L.C., a Minnesota limited
liability company (the "Borrower"), pursuant to the EDA's Microloan Program (the "Program")
in the amount of $126,000.00 (the "Original Loan") pursuant to a Loan Agreement, dated
February 17, 2015 (the "Original Loan Agreement"), between the Borrower and the EDA.
WHEREAS, the Original Loan was secured by (i) a Promissory Note, dated February 17,
2015 (the "Original Promissory Note"), from Borrower to the EDA; (ii) a Security Agreement,
dated February 17, 2015 (the "Original Security Agreement"), from Distinctive Iron, LLC (the
"Entity Guarantor"), in favor of the EDA providing the EDA with a security interest in certain
equipment (the "Equipment") owned by Distinctive Iron, LLC (the "Entity Guarantor"); (iii) a
Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement
(the "Original Mortgage"), executed by Borrower, in favor of EDA, covering property located in
the City of Elk River, Minnesota (the "City"); (iv) a Personal Guaranty, dated February 17, 2015,
from Cynthia Mae Hemmer & Steven Michael Hemmer (the "Original Personal Guaranties); and
(v) an Entity Guaranty, dated February 17, 2015 (the "Original Entity Guaranty" and together
with the Original Personal Guaranties, the "Original Guaranties"), from the Entity Guarantor.
The current outstanding principal balance of the Original Loan is $89,338.20.
WHEREAS, the Board of Commissioners (the "Board") of the EDA has received a
request from the Borrower that the EDA provide an additional loan to the Borrower in the
amount of $100,000.00 (the "New Loan") pursuant to the Program in order to assist in financing
the acquisition, renovation and equipping of a new facility in the City in connection with the
expansion of its current business in the City.
WHEREAS, the Borrower has proposed that the Borrower and the EDA enter into an
Amended and Restated Loan Agreement (the "Amended and Restated Loan Agreement") and
related documents in connection with the New Loan. In total, the outstanding principal of the
Original Loan and the New Loan (together, the "Loan") will be $189,338.20.
WHEREAS, the EDA has caused to be prepared the Amended and Restated Loan
Agreement 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 Amended and
Restated Loan Agreement amends and restates the Original 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:
611673v2EL185-30
Section 1. Business Subsidy.
1.01. The Loan constitutes a business subsidy within the meaning of Minnesota Statutes,
Section 116J.993 to 116J.995, as amended (the "Business Subsidy Act"), and the Loan Agreement
includes a "business subsidy agreement" as required under the Business Subsidy Act.
1.02. The City has adopted a Business Subsidy Policy (the "Subsidy Policy"), which sets
the general criteria for all types of subsidies granted by the EDA, all as required under the Business
Subsidy Act.
Section 2. Approval of Documents.
2.01. The Amended and Restated Loan Agreement as presented to the EDA, together with
all related documents necessary in connection therewith, including without limitation the following:
(i) an Amended and Restated Promissory Note from the Borrower evidencing the Loan, (ii) a
Mortgage and Assignment of Rents and Security Agreement and Fixture Financing Statement
providing the EDA with a second position lien on the Borrower's new facility; (iii) an Amended
and Restated Security Agreement providing a subordinate security interest in certain equipment of
the Entity Guarantor; (iv) an Amended and Restated Entity Guaranty from Distinctive Iron, LLC,
and (v) an Amended and Restated Personal Guaranty from Cynthia Mae Hemmer and Steven
Michael Hemmer, (all as defined in and described in the Amended and Restated Loan Agreement)
(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 Amended and Restated Loan Agreement and any
Loan Documents to which it is a party on behalf of the EDA and to carry out, on behalf of the EDA,
the EDA's obligations thereunder.
2.02. The approval hereby given to the Loan Documents includes approval of such
additional details therein as may be necessary and appropriate and such modifications thereof,
deletions therefrom and additions thereto as may be necessary and appropriate and approved by
legal counsel to the EDA and by the President and Executive Director prior to executing said
documents; and said officers are hereby authorized to approve said changes on behalf of the EDA.
The execution of any instrument by the President and Executive Director shall be conclusive
evidence of the approval of such document in accordance with the terms hereof. In the event of
absence or disability of said officers, any of the documents authorized by this Resolution to be
executed may be executed without further act or authorization of the Board by any duly designated
acting official, or by such other officer or officers of the Board as, in the opinion of the City
Attorney, may act in their behalf.
611673v2EL185-30
Approved by the Board of Commissioners of the Economic Development Authority of the
City of Elk River this 16th day of September, 2019.
President
611673v2EL185-30