052295 EDA Official File Copy
CITY OF NEW HOPE
EDA AGENDA
EDA Regular Meeting//8 May 22, 1995
President Edward J. Erickson
Commissioner W. Peter Enck
Commissioner Pat La Vine Norby
Commissioner Gerald Otten
Commissioner Terri Wehling
1. Call to Order
2. Roll Call
3. Approval of Minutes of May 8, 1995, and May 15, 1995
4. Resolution Authorizing Mortgage to 7700 Partnership, L.L.P. for Property at 7700
42nd Avenue North (Improvement Project No. 539)
5. Resolution Approving Submission of the Minnesota City Participation Program
(MCPP) Application to the Minnesota Housing Finance Agency (MHFA)
6. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
Approved EDA Minutes May 8, 1995
Meeting //7
CALL TO ORDER President Erickson called the meeting of the Economic Development
Authority to order at 8:20 p.m.
ROLL CALL Present: Erickson, Enck, Otten, Norby, Wehling
Staff Present: Sondrall, Hanson, Donahue, Leone, McDonald, Bellefuil
APPROVE MINUTES Motion was made by Commissioner Otten, seconded by Commissioner
Wehling, to approve the EDA minutes of April 24, 1995. Voting in favor:
Erickson, Enck, Otten Norby; Abstained: Wehling; Absent: None. Motion
carried.
IMP. PROJECT 505 President Erickson introduced for discussion Item 4, Resolution Approving
Item4 Change Order for Construction Contract for 7901-7909 51st Avenue
North (Improvement Project No. 505).
EDA RESOLUTION Commissioner Enck introduced the following resolution and moved its
95-06 adoption: "RESOLUTION APPROVING CHANGE ORDER FOR
CONSTRUCTION CONTRACT FOR 7901-7909 51ST AVENUE NORTH
(IMPROVEMENT PROJECT NO. 505)". The motion for the adoption of the
foregoing resolution was seconded by Commissioner Wehling, and upon
vote being taken thereof, the following voted in favor thereof: Erickson,
Enck, Otten, Wehling; Abstained: Norby; and the following voted against
the same: None; Absent None; whereupon the resolution was declared
duly I~assed and adooted, signed by the president which was attested to
by the executive director.
IMP. PROJ. NO. 537 President Erickson introdUced for discussion Item 5, Motion Approving
Item 5 Letter of Agreement Between City of New Hope and Key Group
Advertising, Inc. for Shop New Hope Promotion (Improvement Project No.
537).
Mr. Donahue, City Manager, indicated that the EDA unofficially committed
approximately $32,000 in EDA funds to support the "Shop New Hope"
promotion. The agreement calls for a payment of $49,485. He stated to
date the business community has sponsored $15,750.
Commissioner Wehling reported that there are 67 star retailers contributing
$25 each, 8 gold star @ $500 or @ $750, and there are 6 gold plus ~
$1,500. She indicated there has been a very positive response from the
business community. She commented that the promotion should result in
a stronger retail community, improved communications between ciW and
commercial businesses, and an increased public awareness of local
businesses.
The EDA discussed the ways to measure the promotion's success and its
effect on the commercial and retail community.
New Hope EDA May 8, 1995
Page 1
It was noted that the retailers will track their sales during the promotion
and there will be a follow-up communication with retailers after the
promotion. Commissioner Wehling also noted that prospective tenants
may be drawn to the City due to this type of pro-active approach
undertaken by the City.
Mr. Donahue suggested that if a community-wide survey is conducted it
should include a structured questionnaire distributed only to the business
community to establish quantitative data relating to their perceptions,
sales, and their opinion on the value of the program.
MOTION Motion was made by Commissioner Otten, seconded by Commissioner
Item 5 Enck, to approv® the letter of agreement between City of New Hope and
Key Group Advertising, Inc. Voting in favor: All. Motion carried.
OTHER BUSINESS Mr. Donahue noted part of the Shop New Hope campaign was to improve
the downtown image.. He illustrated "Neighborly New Hope" sketches for
banners to be displayed from the light poles along 42nd Avenue. He
commented that the cost for 28 poles would be approximately $12-
15,000. The banners last between 5 to 10 years. He stated the cost
includes the necessary hardware from which other seasonal banners could
be attached.
Mr. Donahue noted the short time frame if the EDA is favorable to the
banner concept and wishes to have the banners in place prior to the kick-
off of the Shop New Hope campaign on June 14.
Commissioner Wehling emphasized that banners provide identity and help
build community togetherness.
The EDA directed staff to obtain quotes for the light pole banners.
ADJOURNMENT Motion was made by Commissioner Enck, seconded by Commissioner
Otten, to adjourn the meeting. All present voted in favor. The New Hope
EDA adjourned at 8:35 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA May 8, 1995
Page 2
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
Approved EDA Minutes May 15, 1995
Special Meeting #1
CALL TO ORDER President Erickson called the special meeting of the Economic Development
Authority to order at 8:21 p.m.
ROLL CALL Present: Erickson, Enck, Otten, Norby, Wehling
IMP. PROJECT 539 President Erickson introduced for discussion Item 11.1, Universal Color
Item 11.1 GAP Loan, 7700 42nd Avenue North, Improvement Project No. 539.
Mr. Dan Donahue, City Manager, distributed the report prepared by
Springsted Inc. on their review of Universal Color's request for financial
assistance.
Mr. Paul Anderson, President of Universal Color, Inc., was recognized.
President Erickson emphasized the importance of obtaining a financial
guarantee for the City's investment.
The EDA approved a loan for $140,000 at a rate of 8% with a 15-year
amortization period and a balloon at the end of year 10. The loan approval
was contingent upon both owners carrying $140,000 life insurance
policies and the City taking 3rd position on the mortgage. Universal Color
agreed to provide an annual $2,000 maximum retail cost donation for in-
kind services to the City.
Mr. Donahue stated the City Attorney will prepare the appropriate loan
agreement.
ADJOURNMENT Motion was made by Commissioner Wehling, seconded by Commissioner
Enck, to adjourn the meeting. All present voted in favor. The New Hope
EDA adjourned at 9:01 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
~ I EDA
REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
City Manager EDA
Kirk McDonald Item No.
By: Management Assistant By: 4
RESOLUTION AUTHORIZING MORTGAG[E TO 7700 PARTNERSHIP, L.L.P. FOR PROPERTY
AT 7700 42ND AVENUE NORTH (IMPROVEMENT PROJECT NO. 539)
At the May 15th EDA meeting, the EDA approved a gap financing loan to Universal Color, Inc. at a
rate of 8% with a 15-year amortization period and a balloon at the end of year 10 for acquisition
of/improvements to the Kuppenheimer building at 7700 42nd Avenue North. The loan approval was
contingent upon both owners carrying $140,000 life insurance policies and the City taking 3rd position
on the mortgage. Universal Color also agreed to provide an annual $2,000 maximum retail cost
donation for in-kind services to the City.
The City Attorney has prepared the enclosed loan documents containing the above conditions and the
enclosed resolution approves the loan. Staff recommends approval of the resolution.
Review: Administration: Finance:
I I RFA-O01 ~
CORRICK & SONDP,~L, P.A.
STEVEN A. SONDRALL ATTORNEYS AT LAW
MICHAEL R. LAFL. EUR
MARTIN P, MALECHA Edinburgh Execut/ve Office Plaza
W.UAM C. SrHA~T 8525 Edinbrook Crossing
Suite #203
Brooklyn Park, Minnesota 55443
TEL£PHONE IS~2) ~2S-~S?~
May 18, 1995
Daniel J. Donahue
Executive Director
Economic Development in and
for the City of New Hope
4401Xy]on Avenue North
New Hope, MN 55428
RE: Loan to 7700 Partnership, L.L.P.
City Project No. 539
Our File No: 99.11138
Dear Dan:
Enclosed you will find a Resolution authorizing a loan of
$140,000.00 to 7700 Partnership, L.L.P., a Minnesota limited
liability partnership consisting of Paul C. Anderson and Michael E.
Diederichs. The documentation attached to the Resolution includes
the following:
1. Mortgage Note. This promissory note calls for an
interest rate of 8% with the loan amortized over 15 years
and a balloon payment in 10 years.
2. Mortgage, Security Agreement and Fixture Financing
Statement. This document will be recorded against the
property to secure the promissory note. As you are
aware, this Mortgage will be third in line behind a
mortgage to Marquette Bank, N.A. and a mortgage to the
Small Business Administration.
3. Assignment of Leases and Rents. In the event of failure
by 7700 Partnership, L.L.P. to make payments under the
Mortgage, the EDA can "intercept" the rents due the
Partnership by its tenant, Universal Color, Inc. Again,
this legal right will likely be third in line behind the
Bank and the SBA.
Mr. Daniel J. Donahue
May 18, 1995
Page 2
4. Guaranty. This document is a personal guaranty signed by
Paul C. Anderson and Michael E. Diederichs, and also
signed by Universal Color, Inc. This Guaranty runs for
the life of the loan.
5. Security Agreement. This Security Agreement gives the
EDA a right to all of the equipment and other personal
property of Universal Color, Inc. as security for
Universal Color's obligations under the Guaranty. Under
certain circumstances, this document will authorize the
EDA to sell the equipment and other personal property of
Universal Color, Inc. to satisfy its obligations to the
EDA under the Guaranty. Again, Marquette Bank and the
SBA will be ahead of the EDA with respect to this
collateral.
If the enclosed meets with EDA approval, the Resolution with
attached Exhibits should be passed at the meeting on May 22nd.
Please contact me with any questions.
Sincerely,
Martin P. Malecha
s3t2
Enclosures
cc: Kirk McDonald (w/eric)
Valerie Leone (w/eric)
Steven A. Sondrall, City Attorney
EDA RESOLUTION NO. 95-
RESOLUTION AUTHORIZING MORTGAGE
TO 7700 PARTNERSHIP, L.L.P. FOR
PROPERTY AT 7700 42ND AVENUE NORTH
IMPROVEMENT PROJECT 539
WHEREAS, 7700 Partnership, L.L.P. ("Partnership") is a
Minnesota limited liability partnership formed by Paul C. Anderson
and Michael E. Diederichs ("Partners") and
WHEREAS, the Partnership is attempting to purchase certain
improved real estate at 7700 42nd Avenue North in the City of New
Hope ("Property"), and together with the Partners plans to renovate
the Property and move its photo processing business to the Property
(the "Project", also designated by the City of New Hope as
Improvement Project 539), and
WHEREAS, financing for the purchase and improvement of the
Property by the Partnership and the Partners will include a first
mortgage to Marquette Bank, N.A. and a second mortgage from the
Small Business Administration, combined with equity from the
Partners of approximately $75,600.00, and
WHEREAS, in order for the purchase and improvement of the
property to go forward, the Partnership and Partners need an
additional $140,000.00, and
WHEREAS, the Property is located within a redevelopment
district established pursuant to Redevelopment Plan 85-2,
Redevelopment Project 85-2, the administration of which is governed
by the EDA, and
WHEREAS, the Project will result in improvement to the
existing structure and the expected addition of five new full-time
employment positions at the Property, and
WHEREAS, the Project will eliminate the possibility of a
vacant building at 7700 42nd Avenue North and within the
Redevelopment area, and
WHEREAS, completing the Project will allow Autohaus at 7675
42nd Avenue North, also within the Redevelopment area, to complete
the improvements to property at 7675 42nd Avenue North, and
WHEREAS, the completion of the Project will be in the best
interests of the City and the Redevelopment District and its people
and will further the general plan of economic development, and
WHEREAS, the Partnership is requesting a loan of $140,000.00
from the EBA, and
WHEREAS, such a loan is authorized by Minn. Stat. §469.090 to
469.108, and
WHEREAS, the loan shall accure interest at a rate of eight
(8%) percent per annum based on a 15 year amortization period and
a final balloon after 10 years, and
WHEREAS, the loan will be secured by life insurance on a
declining term balance on the lives of Paul C. Anderson and Michael
E. Diederichs, each life insurance policy in the amount of the loan
balance, and
WHEREAS, the loan will be further secured by a Third Mortgage
upon the Property plus an Assignment of Leases and Rents, as well
as a Guaranty by Universal Color, Irc. and Paul C. Anderson and
Michael E. Diederichs personally, with the guaranty of Universal
Color, Inc. secured by a security interest in favor of the EDA in
all of its equipment, and
WHEREAS, other terms and conditions of the loan are as set
forth in the Mortgage, Security Agreement and Fixture Financing
Statement attached hereto as Exhibit A, the Promissory Note
attached hereto as Exhibit B, the Assignment of Rents and Leases
attached hereto as Exhibit C, the Guaranty attached hereto as
Exhibit D, and the Security Agreement attached hereto as Exhibit E,
and
WHEREAS, as a further condition of the loan, Universal Color,
Inc. will provide an annual $2,000.00 maximum retail cost donation
of photo development of services to the City for the life of the
loan.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development
Authority in and for the City of New Hope as follows:
1. That all of the foregoing recitals are incorporated
herein by reference.
2. That the loan to 7700 Partnership, L.L.P. in the amount
of $140,000.00 as detailed above is hereby approved,
conditioned upon the execution of the appropriate
documents attached hereto as Exhibits A, B, C, D and E by
7700 Partnership, L.L.P. and other designated entities
and further conditioned upon the execution of any other
supporting documents required by the attorneys for EDA.
3. The loan is further conditioned upon the agreement by
Color Lab, Inc. to provide the City of New Hope with an
annual $2,000.00 retail cost donation of photo
development services for the life of the loan.
4. That the President and Executive Director are authorized
and directed to sign the Mortgage and other loan
documents attached hereto as Exhibits A, B, C, D and E
and are futher authorized and directed to sign any
additional documents required to complete the loan.
Adopted by the Economic Development Authority in and for the
City of New Hope this day of , 1995.
Edw. J. Erickson, Chairman
Attest:
Daniel J. Donahue, Executive Director
MORTGAGE NOTE
$140,000.OO , Minnesota
, 1995
FOR VALUE RECEIVED, the undersigned, 7700 PARTNERSHIP, L.L.P.,
a Minnesota limited liability partnership (hereinafter "Borrower"),
promises to pay to the order of ECONOMIC DEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF NEW HOPE ("Lender"), (Lender and any holder of
this Note from time to time are each hereafter sometimes referred
to as "Holder") at its business address, 4401 Xylon Avenue North,
New Hope, Minnesota 55428, or at such other place as may be
designated in writing by the holder hereof, the principal sum of
One Hundred Forty Thousand Dollars ($140,000.00); together with
interest thereon at the rate of eight (8%) percent per annum from
the date hereof, computed on the unpaid principal balance from time
to time, in 120 monthly installments as follows: monthly
installments of $1,337.91 with the first payment due one month
after the date of this Note and all subsequent payments due on the
same date of each succeeding month until the last installment, when
any remaining principal balance and all accrued interest shall be
paid in full. The last installment shall be a balloon payment.
All payments received hereunder shall be applied first to the
payment of interest and then to reduction of principal. This Note
may be prepaid in full or in part at any time without penalty.
1
EXHIBIT A
If any installment is paid more than fifteen (15) days after
the due date thereof, the Borrower shall pay a late charge of 4% of
the installment to cover the expenses of collection.
This Note is secured by a Mortgage, Security Agreement and
Fixture Financing Statement of even date herewith ("Mortgage") upon
real property situated in Hennepin County, Minnesota. All of the
terms and conditions contained id the Mortgage which are to be kept
and performed by Borrower are hereby made a part of this Note and
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 pe-rformed,
strictly in accordance with their terms.
Time is of the essence hereof. In the event of a default in
the payment of any principal or interest due hereunder or in the
payment or performance of anything by Borrower to be paid or
performed under any of the terms and conditions in this Note or in
the Mortgage, the Holder at its option and without further notice,
demand or presentment for payment to Borrower or others, may
declare immediately due and payable the unpaid principal balance
and interest accrued thereon, together with any reasonable
attorneys' fees incurred by Holder in collecting or enforcing
payment thereof, whether suit be brought or not, and all other sums
due by Borrower hereunder or under the Mortgage anything herein or
in the Mortgage to the contrary notwithstanding, and payment
thereof may be enforced and recovered in whole in or in part at any
time by one or more of the remedies provided to Holder in this Note
or in the Mortgage.
The remedies of Holder as provided herein and in the Mortgage
shall be cumulative and concurrent and may be pursued singly,
successively or together, at the sole discretion of Holder, 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.
Borrower waives presentment for payment, demand, notice of
demand, notice of nonpayment or dishonor, protest and notice of
protest of this Note, and all other notices in connection with the
delivery, acceptance, performance, default or enforcement of the
payment of this Note.
Holder shall not be deemed by any act of omission or
commission to have waived any of its rights or remedies hereunder
unless such waiver is in writing and signed by the Holder, and then
only to the extent specifically set forth in the writing. A waiver
with reference to one event shall not be construed as continuing or
as a bar to or waiver of any right or remedy as to a subsequent
event.
All agreements herein are expressly limited so that in no
contingency or event whatsoever shall the amount paid or agreed to
3
be paid to the Holder for the use, forbearance or detention of the
money to be advanced hereunder exceed the highest lawful rate
permissible under applicable usury laws. If from any circumstances
whatsoever fulfillment of any provision hereof at the time
performance of such provisions shall be due, shall involve
transcending the limit of validity prescribed by law which a court
of competent jurisdiction may deem applicable hereto, then the
obligation to be fulfilled shall be reduced to the limit of such
validity and if from any circumstance the Holder shall ever receive
as interest an amount which would exceed the highest lawful rate,
such amount which would be excessive interest shall be applied to
the reduction of the unpaid principal balance due hereunder and not
to the payment of interest'.
This instrument shall be governed by and construed according
to the laws of the State of Minnesota.
IN WITNESS WHEREOF, Borrower, intending to be legally bound
hereby, has duly executed this Note the day and year first above
written.
7700 PARTNERSHIP, L.L.P.,
a Minnesota limited liability
partnership
By.
Its'General Partner
By.
Its General Partner
c:\ w p51 \cnh\7700.
MORTGAGE, SECURITY AGREEMENT AND
FIXTURE FINANCING STATEMENT
THIS MORTGAGE is made this day of , 1995,
between 7700 PARTNERSHIP, L.L.P., a Minnesota limited liability
partnership ("Mortgagor"), and ECONOMIC DEVELOPMENT AUTHORITY IN
AND FOR CITY OF NEW HOPE with a business address at 4401 Xylon
Avenue North, New Hope, MN 55428 ("Mortgagee").
WITNESSETH:
WHEREAS, Mortgagor is justly indebted to Mortgagee in the
principal sum of One Hundred Forty Thousand Dollars ($140,000.00),
with interest thereon, until paid, pursuant to which Mortgagor has
executed a Mortgage Note of even date herewith ("Note"), payable to
the order of Mortgagee at its office aforesaid, or at such other
place as the holder thereof may designate in writing, said
principal sum being payable as set forth in the Note with interest
at the rate set forth therein, to which Note reference fs hereby
made;
NOW, THEREFORE, THIS MORTGAGE WITNESSETH: That Mortgagor, in
consideration of the premises and for the purpose of securing (1)
payment of said indebtedness as in the Note provided, (2) payment
of all other monies secured hereby, and (3) the performance of all
the covenants, conditions, stipulations and agreements herein
contained, does by these presents grant, bargain, sell and convey
to Mortgagee, its successors and assigns, forever, the premises
described in paragraphs A through D hereof and to hold all said
property ("Mortgage Premises"), together with the possession and
right of possession thereof, unto Mortgagee, its successors and
assigns forever.
A. REAL PROPERTY
The "Real Property" conveyed hereby shall include the real
estate and premises located in Hennepin County, Minnesota,
described as follows:
See Exhibit A attached,
Together with all buildings, structures and improvements now
standing, or at any time hereafter constructed or placed upon the
above described real property, or any part thereof, including all
1
EXHIBIT B
rights, privileges, interests, easements, tenements, hereditaments
and appurtenances thereto; and
Together with all machinery, apparatus, equipment, fittings
and fixtures of every kind and nature whatsoever, affixed, attached
or annexed to the premises and used in connection with the
operation of the premises now owned or hereafter acquired by
Mortgagor and the proceeds thereof ("Fixtures"), and all of the
right, title and interest of Mortgagor in and for any Fixtures
which may be subject to any security agreement superior to the lien
of this Mortgage, Security Agreement and Fixture Financing
Statement ("Mortgage"). It is understood and agreed that the
aforesaid Fixtures are part of the premises and appropriated to the
use of the premises and, regardless of the manner in which they may
or may not be attached, affixed 'or annexed to the premises, shall
for purposes of this Mortgage be deemed conclusively to be Fixtures
and therefore a part of the real estate conveyed in this Mortgage.
B. PERSONAL PROPERTY
Mortgagor, in and for the same consideration, also by these
presents grants to Mortgagee, it successors and assigns, a security
interest in and to all personal property now owned or hereafter
acquired by Mortgagor and used in connection with the construction,
operation and maintenance of the Improvements on said Mortgage
Premises, including, but not limited to, all building materials,
furniture, furnishings, appliances, equipment, insurance proceeds,
plans and specifications, surveys, drawings and other personal
property now or hereafter owned by Mortgagor, or in which Mortgagor
now or hereafter has an interest, and all inventory of Mortgagor on
the premises and the proceeds thereof.
C. RENTS, LEASES AND PROF[TS
As further security for payment of the indebtedness and
performance of the obligations, covenants and agreements secured
hereby, Mortgagor hereby transfers, sets over and assigns to
Mortgagee all leases, rents, issues and profits of the premises
from time to time accruing, whether under leases or tenancies, now
existing or hereafter created.
D. JUDGMENTS AND AWARDS
As further security for the payment of the indebtedness and
performance of the obligations, covenants and agreements secured
hereby, Mortgagor hereby transfers, sets over and assigns to
Mortgagee all judgments, awards of damages and settlements
hereafter made resulting from condemnation proceedings, or the
2
taking of the Mortgage Premises or any part thereof under the power
of eminent domain, or for any damage (whether caused by such taking
or otherwise) to the Mortgage Premises or the improvements and
fixtures thereon or any part thereof, or to any rights appurtenant
thereto, including any award for change of grade of streets.
ARTICLE I
GENERAL COVENANTS, AGREEMENTS AND WARRANTIES
Section 1.1 Right and Authority to Mortgage. Mortgagor
represents, warrants and covenants that it is the owner in fee
simple of the Mortgage Premises; that it has good right and lawful
authority to mortgage and pledge the same as provided for herein;
that the Mortgage Premises are free from all liens and
encumbrances, except those permitted encumbrances specifically set
forth in Exhibit "B" attached and hereby made a part hereof
("Permitted Encumbrances"); that Mortgagee shall quietly enjoy and
possess the same; that Mortgagor will warrant and defend the title
to the Mortgage Premises against all claims and demands of others;
that all buildings and improvements now or hereafter located on the
Mortgage Premises are, or will be, located entirely within the
boundaries of the Mortgage Premises.
Section 1.2 Payment of Indebtedness. Mortgagor will promptly
and fully pay each and every installment of principal and interest
on the Note; Mortgagor will pay promptly all other sums secured
hereby when the same shall become due and payable; and Mortgagor
shall perform and observe all of the covenants, terms and
provisions contained herein, and those contained in the Note and in
any other instrument given as security for payment of the debt
secured hereby. Mortgagor will also promptly and fully pay each
installment of principal and interest on the promissory notes
secured by those mortgages set forth on Exhibit B attached hereto,
and will perform all other agreements and covenants to be performed
by it under those mortgages set forth on said Exhibit B.
Section 1.3 Maintenance and Repair of the Mortgage Premises.
Mortgagor agrees that it will keep and maintain the Mortgage
Premises in good condition and repair and that it shall not commit
waste or misuse. Mortgagor further agrees to comply with all laws,
ordinances, regulations, restrictions and covenants affecting the
Mortgage Premises and their use and will promptly repair or restore
any buildings, improvements or structures now or hereafter located
on the Mortgage Premises which may become damaged or destroyed.
Mortgagor agrees that it will not remove or demolish any building
or structure now or hereafter erected on the Mortgage Premises.
Section 1.4 Payment of Prior Liens and Encumbrances.
Mortgagor agrees to pay promptly all operating costs and expenses
of the Mortgage Premises; to keep the Mortgage Premises free from
mechanics' or materialmen's liens and any other lien not
specifically subordinated to the lien of this Mortgage; to keep the
Mortgage Premises free from levy, execution or attachment; to pay
immediately all indebtedness which may be secured by mortgage, lien
or charge on the Mortgage Premises that is superior to or equal to
the lien of this Mortgage, except indebtedness secured by those
Mortgages listed on the attached Exhibit B; and, at Mortgagee's
request, to give Mortgagee satisfactory evidence of such payment
and discharge.
Section 1.5 Payment of Taxes, Assessments and Charges.
Mortgagor will pay when the same is due and before any penalty
attaches, all taxes, assessments, water charges, sewer charges, and
other fees, taxes, charges and assessments of every kind and nature
whatsoever assessed or charged against or constituting a lien on
the Mortgage Premises or any interest therein or upon the
indebtedness secured hereby ("Taxes and Assessments") and will upon
demand furnish to Mortgagee proof of payment of any such Taxes and
Assessments.
Section 1.6 Protection of Security. Mortgagor agrees to
promptly notify Mortgagee of and to appear in and defend any suit,
action or proceeding that may affect the value of the Mortgage
Premises, the indebtedness secured hereby or the rights or interest
of Mortgagee hereunder, including, but not limited to, eminent
domain, insolvency, code enforcement, or arrangements or
proceedings involving a bankruptcy or decedent. Mortgagee may
elect to appear in or defend any such action or proceeding and may
disburse such sums and take such action as is necessary to protect
Mortgagee's interest including, but not limited to, entry upon the
Mortgage Premises to make repairs. Mortgagor agrees to indemnify
and reimburse Mortgagee for any and all loss, damage, expense or
cost, including reasonable attorneys' fees, arising out of or
incurred in connection with any suit, action or proceeding.
Section 1.7 Insurance.
(a) So long as the Indebtedness remains unpaid, the
Mortgagor shall, at its own cost, maintain with insurers of
recognized responsibility acceptable to the Mortgagee,
insurance coverage on its physical assets and against other
business risks in such amounts and of such types as are
customarily carried by entities similar in size and nature,
and in the event of acquisition of additional property, real
or personal, or of incurrence of additional risks of any
nature, increase such insurance coverage in such manner and to
such extent as prudent business judgment and present practice
would dictate; and in the case of all policies covering
property mortgaged or pledged to Lender or property in which
Lender shall have a security interest of any kind whatsoever,
other than those policies protecting against casualty
liabilities to strangers, all such insurance policies shall
provide that the loss payable thereunder shall be payable to
the Borrower and Lender as their respective interests may
appear, all said coverage to be shown on an Acord 25
Certificate of Insurance. Insurance coverage shall
specifically include hazard and fire insurance on any
improvements 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 the Mortgagee, on the
basis of replacement cost without a co-insurance clause, in an
amount sufficient to prevent the Mortgagor from becoming a
co-insurer or any loss thereunder and at least equal to the
sum of the unpaid balance of the Indebtedness'and all amounts
secured by any senior mortgage or other lien which exists from
time to time against the Mortgaged Property (to which the
Mortgagee does not necessarily consent) or such additional
amounts and for such periods as may be_required by the
Mortgagee. The Mortgagor shall pay all premiums on insurance
required hereunder by making payment directly to the insurer.
The Mortgagee shall have the right to hold the policies and
renewals thereof, and the Mortgagor shall promptly furnish to
the Mortgagee all such policies, renewals thereof, renewal
notices and all paid-premium receipts received by it. All
policies of insurance and any and all refunds of unearned
premiums are hereby assigned to the Mortgagee as additional
security for the payment of the Indebtedness secured hereby.
In the event of foreclosure of this Mortgage, all right, title
and interest of the Mortgagor in and to any insurance policies
then in force shall pass to the purchaser at the foreclosure
sale.
(b) The policies of all such insurance shall have
loss payable provisions in favor of and in form
acceptable to the Mortgagee, shall provide for at least
thirty (30) days prior to written notices of
cancellation, termination or modification thereof to the
Mortgagee, shall permit Mortgagee to make premium
payments to prevent cancellation, and shall provide that
no act or negligence of the Mortgagor or 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 the
Mortgagor shall give prompt notice to the insurance carrier
and the Mortgagee; Mortgagor shall duly make proof of loss,
and shall immediately furnish to Mortgagee a copy of such
proof of loss. The Mortgagee is authorized and empowered to
collect and receive all insurance proceeds, and if no Event of
Default has occurred under this Mortgage, it will apply such
proceeds to the restoration of the Property and make
disbursements thereof accordingly. Any insurance proceeds not
so applied shall be applied to the payment of the
Indebtedness.
ARTICLE I!
UNIFORM COMMERCIAL CODE
Section 2.1 Security Agreement. It is agreed by the parties
that this Mortgage shall constitute a security agreement as defined
in the Uniform Commercial Code ("Code"), and Mortgagor hereby
grants to Mortgagee a security interest within the meaning of the
Code in favor of Mortgagee on all personal property, rents, issues,
profits, leases, proceeds thereof, judgments and awards
("Collateral") that are included in the Mortgage Premises.
Section 2.2 Fixture Filing. It is intended that this
Mortgage shall be effective as a financing statement filed as a
fixture filing from the date of its filing in the real estate
records of the county where the Mortgage Premises are located with
respect to those items of Collateral described in this Mortgage
that are, or are to become, Fixtures related to the real estate
mortgaged herein. The name of the record owner of said real estate
is the Mortgagor set forth in page one of this Mortgage.
Information concerning the security interest created by this
instrument may be obtained from Mortgagee, as secured party, at its
address as set forth on page one of this Mortgage. This document
covers goods which are or are to become Fixtures.
Section 2.3 Representation and Agreements. Mortgagor
warrants to Mortgagee as follows:
(a) Mortgagor is or, will be (in the case of property not yet
acquired) the true and 1,awful owner of Collateral
mentioned in any financing statement, subject to no
liens, charges, security interests or encumbrances other
than the lien hereof, and the liens previously disclosed
by written notice to Mortgagee;
(b) The Collateral is to be used by Mortgagor solely for
business purposes, being installed upon the Mortgage
Premises for Mortgagor's own use or as the equipment and
furnishings leased or furnished by Mortgagor, as
landlord, to tenants of the Mortgage Premises;
(c) The Collateral will be kept at the buildings comprised on
the Mortgage Premises and will not be removed therefrom
without the consent of Mortgagee, and the same may be
affixed to any such building but will not be affixed to
any other real estate;
(d) Unless stated otherwise in this Mortgage and except for
the interest of those mortgagees set forth in the
attached Exhibit B, the only persons having any interest
in the Col lateral are Mortgagor, Mortgagee and the
tenants (whose interests, if any, are subordinate to the
rights of Mortgagee) and no financing statement covering
any such property and any proceeds thereof is on file in
any public office except as set forth herein;
(e) The remedies of Mortgagee hereunder are cumulative and
separate, and the exercise of any one or more of the
remedies provided for herein or under the Code shall not
be construed as a waiver of any of the other rights of
Mortgagee, including having such Collateral deemed a part
of the realty of any foreclosure;
(f) If notice to any party of the intended disposition of the
Collateral is required by law in a particular instance,
such notice shall be deemed commercially reasonable if
given at least ten (10) days prior to such intended
disposition and may be given by mail at the address
herein specified, either separately or as a part of the
notice given to foreclose the real property or may be
given by private notice if such parties are known to
Mortgagee;
(g) The filing of a financing statement pursuant to the Code
shall never impair the stated intention of this Mortgage
that all equipment, personal property and Fixtures
comprising the Collateral are, and at all times and for
all purposes and all proceedings, both legal or
equitable, shall be regarded as part of the Mortgage
Premises hereunder, regardless of whether such item is
physically attached to the real property or any such item
is referred to or reflected in a financing statement;
(h) Mortgagor will, on demand, furnish all financing
st atements that may from time to time be required by
Mortgagee to establish and perfect the priority of
Mortgagee's security interest in such Collateral; and
(i) Mortgagor shall give advance written notice of any
proposed change in Mort gagor's name, identity or
structure and will execute and deliver to Mortgagee prior
to or concurrently with such change all additional
financing statements that Mortgagee may requi re to
establish and perfect the priority of Mort gages' s
security interest,
ARTICLE III
EVENTS OF DEFAULT
Section 3.1 Default. It shall be an "Event of Default" under
this Mortgage if:
(a) Mortgagor shall fail to pay when due any pnincipal,
interest or any other amount due hereunder or under the
Note, whether at the stated maturity date or on a date
fixed for the payment of any installment or otherwise or
shall fail to comply with the provisions of Section 1.2
hereof;
(b) Mortgagor shall default under, fail to comply with or
fail to perform any of the terms, conditions or covenants
of the Note, this Mortgage, or any other instrument
securing the Note;
(c) Mortgagor shall fail to pay when due any other
indebtedness secured hereby;
(d) Any representation or warranty made by or on behalf of
Mortgagor in connection with the application for and/or
closing of the loan evidenced by the Note proves to have
been false or misleading in any material respect;
(e) Mortgagor shall default in the performance of any
obligation contained in any documents evidencing any
other indebtedness owed to Mortgagee or relating thereto;
(f) Mortgagor shall sell, transfer, convey or further
encumber the Mortgage Premises;
8
(g) A custodianship, trusteeship, receivership or assignment
for the benefit of creditors shall be imposed upon
Mortgagor or the Mortgage Premises (or a substantial part
thereof) or shall be filed by or against Mortgagor or any
other person or petitioner for debtor's relief under any
state or federal bankruptcy, reorganization or insolvency
and the same shall not be discharged within a period of
sixty (60) days;
(h) Mortgagor or any maker, guarantor or surety of the Note
shall be adjudicated incompetent or die and satisfactory
provisions are not made for the substitution of the
liability of said party's estate for the repayment of the
indebtedness secured hereby; or
(i) Mortgagor shall allow to lapse a term life insurance
policy on the lives of each of Paul C. Anderson and
Michael E. Diederichs in the face amount of $140,000.00
for each policy wherein Mortgagee is named as
beneficiary. Said life insurance policy has been
provided as additional security for the payment of the
Mortgage Note.
(j) There is any change in the partnership structure of
Mortgagor, whether voluntary or involuntary.
Section 3.2 Mortgagee's Right to Foreclose. If an Event of
Default shall occur, Mortgagee may immediately and without further
notice to Mortgagor declare the entire unpaid principal balance of
the Note, together with all other indebtedness secured hereto, to
be immediately due and payable, and, thereupon, all of such unpaid
principal balance of the Note, together with all accrued interest
thereon and all other indebtedness secured hereby, shall be and
become immediately due and payable, and Mortgagor hereby authorizes
and fully empowers Mortgagee to foreclose this Mortgage by judicial
proceedings or by advertisement with full authority to sell the
Mortgage Premises and convey the same to the purchaser in fee
simple, all in accordance with and in the manner prescribed by law;
and out of the proceeds arising from the sale in foreclosure, to
retain the principal and interest due on the Note and the
indebtedness secured hereby, together with all sums of money as
Mortgagee shall have expended or advanced pursuant to this Mortgage
or pursuant to statute together with interest thereon as herein
provided and all costs and expenses of such foreclosure, including
lawful attorneys' fees; the balance after payment of all said sums,
if any, to be paid to the persons entitled thereto by law.
9
Section 3.3 Receiver. If an Event of Default shall occur,
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 Mortgage Premises or
adequacy of the security of the Mortgage Premises for the
indebtedness secured hereby, to apply for the appointment of a
receiver in accordance with law, who shall collect the rents and
all other income of any kind, manage the Mortgage Premises so as to
prevent waste, execute leases within or beyond the period of
receivership, pay all expenses for normal maintenance of the
Mortgage Premises, perform the terms of this Mortgage and apply the
rents, issues and profits in the following order:
(a) Payment of the fees of-said receiver;
(b) Application of any tenants' security deposits as required
by Minn. Stat. §504.20, if applicable;
(c) Payment when due of prior or current-real estate taxes or
special assessments with respect to the Mortgage
Premises;
(d) Payment of periodic escrow payments for such taxes or
special assessments, if required by this Mortgage or
those mortgages listed on Exhibit B attached hereto;
(e) Payment when due of the premiums for insurance of the
type required by this Mortgage, or if required by this
Mortgage or those mortgages listed on said Exhibit B,
payment of the periodic escrow for the payment of said
insurance premiums;
(f) Keeping of the covenants required of lessor or licensor
pursuant to Minn. Stat. §504.18, Subd. 1, if applicable;
and
(g) As provided in the Assignment of Leases and Rents
executed by Mortgagor as further security for the
indebtedness secured hereby (whether included in this
Mortgage or separate instrument), including, but not
limited to, applying the same to the cost and expenses of
receivership, including attorneys' fees, to the repayment
of the indebtedness secured hereby and to the operation,
maintenance, upkeep and repair of the Mortgage Premises,
including payment of taxes on the Mortgage Premises and
payment of premiums of insurance on the Mortgage
Premises. Mortgagor does hereby irrevocably consent to
such appointment of receiver.
10
Section 3.4 Rights Under the Uniform Commercial Code. In
addition to the rights available to a mortgagee of real property,
Mortgagee shall have all rights, remedies and recourse available to
a secured party under the Code, including the right to proceed
under the provisions of the Code governing default, as to any
personal property which may be included in the Mortgage Premises or
which may be deemed non-realty in a foreclosure of this Mortgage or
to proceeds of such personal property.
Section 3.5 Right to Discontinue Proceedings. In the event
Mortgagee shall have proceeded to invoke any right, remedy or
recourse permitted under this Mortgage and shall thereafter elect
to discontinue or abandon the same for any reason, Mortgagee shall
have the unqualified right to do so and in such event Mortgagor and
Mortgagee shall be restored to their former positions with respect
to the indebtedness secured hereby. This Mortgage of the Mortgage
Premises and all the rights, remedies and recourse of Mortgagee
shall then continue as if the same had not been invoked.
Section 3.6 AcknowledQment of Waiver of Hearing Before Sale.
Mortgagor understands and agrees that upon the occurrence of an
Event of Default under the terms of this Mortgage, Mortgagee has
the right, inter alia, to foreclose this Mortgage by advertisement
pursuant to Minn. Stat. Chapter 580, as hereafter amended, or
pursuant to any similar or replacement statute hereafter enacted;
that if Mortgagee elects to foreclose by advertisement, it may
cause the Mortgage Premises, or any part thereof, to be sold at
public auction; that notice of such sale must be published for six
(6) successive weeks at ]east once a week in a newspaper of general
circulation and that no personal notice is required to be served
upon Mortgagor. Mortgagor further understands that upon the
occurrence of such Event of Default, Mortgagee may also elect its
rights under the Code and take possession of the Personal Property
and dispose of the same by sale or otherwise in one or more parcels
provided that at least ten. (10) days' prior notice of such
disposition must be given, all as provided for by the Code, as
hereafter amended or by any similar or replacement statute
hereafter enacted. Mortgagor further understands that under the
Constitution of the United States and the Constitution of the State
of Minnesota it may have the right to notice and hearing before the
Mortgage Premises may be sold and that the procedure for
foreclosure by advertisement described above does not insure that
notice will be given to Mortgagor and neither of said procedures
for foreclosure by advertisement nor the Code requires any hearing
or other judicial proceeding. MORTGAGOR HEREBY RELINQUISHES,
WAIVES AND GIVES UP ANY CONSTITUTIONAL RIGHTS IT MAY HAVE TO NOTICE
AND HEARING BEFORE SALE OF THE MORTGAGE PREMISES AND EXPRESSLY
11
CONSENTS AND AGREES THAT THE MORTGAGE PREMISES MAY BE FORECLOSED BY
ADVERTISEMENT AND THAT THE PERSONAL PROPERTY MAY BE DISPOSED OF
PURSUANT TO UNIFORM COMMERCIAL CODE, ALL AS DESCRIBED ABOVE.
MORTGAGOR ACKNOWLEDGES THAT IT IS REPRESENTED BY LEGAL COUNSEL;
THAT BEFORE SIGNING THIS DOCUMENT, THIS PARAGRAPH AND MORTGAGOR'S
CONSTITUTIONAL RIGHTS WERE FULLY EXPLAINED BY SUCH COUNSEL AND THAT
MORTGAGOR UNDERSTANDS THE NATURE AND EXTENT OF THE RIGHTS WAIVED
HEREBY AND THE EFFECT OF SUCH WAIVER.
ARTICLE IV
OTHER PROVISIONS
Section 4.1 All Notices. All notices provided for herein
shall be in writing and shall be deemed to have been given when
delivered personally or when deposited in the United States mail,
registered or certified, return receipt requested, postage prepaid,
addressed as follows, or otherwise as the respective parties hereto
may give notice in writing from time to time, to-wit:
If to Mortgagor: 7700 Partnership, L.L.P.
If to Mortgagee: Economic Development Authority
in and for City of New Hope
4401Xylon Avenue North
New Hope, MN 55428
Section 4.2 Choice of Law. The loan secured by this Mortgage
is intended by the parties to be a Minnesota loan, and this
Mortgage is made and executed under the laws of the State of
Minnesota and is intended to be governed by the laws of that state,
without giving effect to those provisions of law relating to choice
of law.
Section 4.3 Successors and Assigns. This Mortgage and each
and every covenant, agreement or other provision herein contained
shall be binding upon Mortgagor and its heirs and assigns and shall
inure to the benefit of Mortgagee and its successors and assigns.
Section 4.4 Severability. The unenforceability or invalidity
of any provisions hereof shall not render any other provision or
provisions herein contained unenforceable or invalid.
12
Section 4.5 Captions and Headings. The captions and hearings
of the various sections of this Mortgage are for convenience only
and are not to be construed to confine or limit in any way the
scope or intent of the provisions hereof. Whenever the contents
require or permit, the singular shall include the plural, and the
plural shall include the singular, and the masculine, feminine and
neuter genders shall be freely interchangeable.
Section 4.6 Release of Mortgage. When all indebtedness
secured hereby has been paid, this Mortgage and all assignments
herein contained shall be void and this Mortgage shall be released
by Mortgagee at the cost and expense of Mortgagor; otherwise, it
shall remain in full force and effect.
Section 4.7 Hazardous Materials. Mortgagor covenants,
represents and warrants to Mortgagee, its successors and assigns,
that during the Mortgagor's ownership of the Property, the
operation of said Property has not violated and is not currently
violating any federal, state or local law, regulation, ordinance or
requirement governing Hazardous Materials; that the Property is not
listed in the United States Environmenta. 1 Protection Agency's
National Priorities List of Hazardous Waste Sites nor any other
list, schedule, log, inventory or record of Hazardous Materials or
hazardous waste sites, whether maintained by the United States
Government or any state or local agency, and that the building
improvements do not contain any formaldehyde, urea or asbestos,
except as may have been disclosed in writing to the Mortgagee by
the Mortgagor at the time of execution and delivery of this
Mortgage. The Mortgagor agrees to indemnify and reimburse the
Mortgagee, its successors and assigns, for any breach of these
representations and warranties and from any loss, damage, expense
or cost arising out of or incurred by Mortgagee which is the result
of a breach of, misstatement of or misrepresentation of the above
covenants, representations and warranties, together with all
attorneys' fees incurred in connection with the defense of any
action against the Mortgagee arising out of the above. These
covenants, representations and warranties shall be deemed
continuing covenants, representations and warranties for the
benefit of the Mortgagee, including any purchaser at a mortgage
foreclosure sale, any transferee of the title of the Mortgagee or
any subsequent purchaser at a foreclosure sale, and any subsequent
owner of the Property and shall survive any foreclosure of the
Mortgage and any acquisition of title by Mortgagee or anyone
claiming through or under the Mortgage as the title of the
Mortgagee. The amount of all such indemnified loss, damage,
expense or cost, shall bear interest thereon at the rate of
interest in effect on the Note and shall become so much additional
13
indebtedness, secured by this Mortgage and shall become immediately
due and payable in full on demand of the Mortgagee, its successors
and assigns. Said indemnity shall only apply in connection with
the conditions which were in existence, in whole or in part, prior
to the date on which Mortgagee acquires possession and title to the
Property and shall not apply in connection with liability of the
Mortgagee due to action taken by it or its assigns while it was
Mortgagee.
Section 4.8 Entire Agreement. The Note, this Mortgage, the
Guaranty and all other instruments securing the Note ("Loan
Documents") contain the entire agreement between Mortgagor and
Mortgagee relating to or connected with the loan to Mortgagor
secured hereby. Any other agreements relating to or connected with
the loan secured hereby not expressly set forth in the Loan
Documents are null and void and superseded in their entirety by the
provisions of the Loan Documents.
IN TESTIMONY WHEREOF, Mortgagor has caused these presents to
be executed as of the date first above written.
7700 PARTNERSHIP, L.L.P.,
a Minnesota limited liability
partnership
By
Its General Partner
By
Its General Partner
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this
day of , 1995, by and
, the general partners of 7700 Partnership,
L.L.P., a limited liability partnership under the laws of
Minnesota, on behalf of said limited liability partnership.
Notary Public
14
THIS DOCUMENT WAS DRAFTED BY:
CORRICK & SONDRALL, A PARTNERSHIP
OF PROFESSIONAL CORPORATIONS
Attorneys at Law
8525 Edinbrook Crossing, #203
Brooklyn Park, MN 55443
(612) 425-5671
c: \ ~ p51 \cnh\ucl. mtg
15
EXHIBIT A
That part of Tract A lying South of a line drawn at right
angles to the West line of said Tract A from a point thereon
200 feet North from the Southwest corner of Tract A except the
West 125 feet thereof; and Tract B.
Registered Land Survey No. 1282, Files of Registrar of Titles,
County of Hennepin.
All in Hennepin County, Minnesota.
EXHIBIT B
Permitted Encumbrances
1. First Mortgage to Marquette Bank, N.A., a national
banking association.
2. A Mortgage to the U.S. Small Business Administration
under its Section 504 Program.
ASSIGNMENT OF LEASES AND RENTS
THIS AGREEMENT is made this day of , 1995, by
7700 PARTNERSHIP, L.L.P., a Minnesota limited liability
partnership, party of the first part, its successors and assigns
(the "Borrower") to the ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR
THE CITY OF NEW HOPE, party of the second part, its successors and
assigns (the "Lender").
WHEREAS, Borrower has this day executed to the Lender a Loan
Note in the principal sum of One Hundred Forty Thousand and No/lO0
Dollars ($140,000.00); and
WHEREAS, as further security for the payment of the p-rincipal
balance and interest coming due on said Note and the full and
complete performance of the covenants, agreements and promises
contained in the Note, Borrower wishes to assign to Lender all of
Borrower's right, title and interest in the Lease(s) hereinafter
described;
NOW, THEREFORE, in consideration of the foregoing, and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by Borrower, Borrower hereby
grants, transfers and assigns to Lender:
1. All of the Borrower's interest in and to the "Leases".
The term "Leases" as used in this Assignment shall be deemed to
include any and all of the leases now or hereafter placed during
the term of this Assignment upon the land (the "Land") and the
EXHIBIT C
improvements (the "Improvements") (the Land and the Improvements,
hereinafter collectively, the "Project") covered by that certain
Mortgage, Security Agreement and Fixture Financing Statement
(the "Mortgage") of even date herewith executed by the Borrower to
the Lender, the Land being more fully described in Exhibit "I"
attached hereto and made a part hereof.
2. All rents, income, receipts and revenue arising from the
Lease(s) and all renewals and extensions thereof.
The Lease(s) and all rents, income, issues, benefits, proceeds
and revenues assigned hereby are hereinafter sometimes collectively
referred to as "Collateral"
I.
THIS ASSIGNMENT is made for the purpose of providing
additional security for the Note, and shall secure:
A, The payment of the principal sum, interest and any Other
indebtedness evidenced by the Note (as said Note may hereafter be
extended, renewed and modified) of even date herewith executed by
Borrower, payable to the Lender in the original principal sum of
One Hundred Forty Thousand and No/lO0 Dollars ($140,000.00) and
secured by the Mortgage.
B. The payment of all other sums with interest thereon being
due and payable to the Lender under the provisions of this
Assignment or of the Note, the Mortgage, or any other instruments
evidencing, securing, or concerning the Note (hereinafter the Note,
the Mortgage, this Assignment and said other instruments are
sometimes collectively referred to as the "Loan Documents").
C. The performance and discharge of each and every
obligation, covenant and agreement of the Borrower contained in
the Loan Documents.
THE BORROWER COVENANTS with the Lender (i) to observe and
perform all the obligations imposed upon the lessors under any
Lease(s) and not to do or permit to be done anything to impair the
Lender's security (ii) not to collect any of the rent, revenue, or
income arising or accruing under any Lease(s) or from the Project
materially in advance of the time when the same shall become due;
(iii) except for an assignment subject to the terms of this
Assignment, not to execute any other assignments of lessors'
interest in any Lease(s) or assignments of rents arising or
accruing from the Lease(s) or from the Project; (iv) not to
subordinate the Lease(s) to any encumbrances or to permit, consent
or agree to such subordination without the Lender's prior written
consent; (v) not to materially alter, modify or change the terms of
any Lease(s) or give any consent or exercise any option required or
permitted by such terms without the prior written consent of the
Lender; (vi) not to cancel or terminate any Lease(s) or to accept
a surrender thereof or to convey, transfer, suffer or permit a
conveyance or transfer of the Project or portion thereof or of any
interest therein so as to effect, directly or indirectly,
proximately or remotely, a termination or diminution of the
obligations of, lessees thereunder; (vii) not to alter, modify or
3
change the terms of any guaranty of any Lease(s) or cancel or
terminate such guaranty without the prior written consent of the
Lender; (viii) at the Lender's request to execute and deliver ail
such further assurances and assignments in the Project as the
Lender shall from time to time reasonably require, including
without limitation assignments of leases not yet executed; (ix) to
keep any Lease(s) free from any liens, encumbrances or security
interests whatsoever and (x) to maintain any Lease(s) in full force
and effect, to enforce all Lease(s) in accordance with their terms,
to appear in and defend any action or proceeding arising under or
in any manner connected with any of the Collateral and to give
prompt written notice to the Lender of any claim of material
default under any Lease(s) together with a true and complete copy
of any such claims.
III.
THIS ASSIGNMENT is made on the following terms, covenants and
conditions:
1. So long as (a) there shall exist no default by the
Borrower in the timely payment of the indebtedness secured by the
Mortgage or in the performance of any other obligation, covenant or
agreement set forth in the Loan Documents or in the Lease(s) to be
performed by the Borrower, (b) none of the statements,
representations or warranties made or furnished to the Lender by or
on behalf of the Borrower with respect to the Loan Documents be
untrue or incomplete in any material respect as of the date made
and (c) the Project is not subject to garnishment, levy, attachment
or lien, then in such event the Borrower shall have the right to
collect at the time'of, but not prior to, the date provided for the
payment thereof, all rents, income, receipts, revenue and proceeds
arising under all Lease(s) or from the Project described therein
and to retain, use and enjoy the same.
2. Upon or at any time after default in the timely payment of
the indebtedness secured by the Mortgage or default in the
performance of any obligation, covenant or agreement set forth in
the Loan Documents or any Lease(s), or if any of the statements,
representations or warranties made or furnished to the Lender by or
on behalf of the Borrower with respect to the Loan Documents be
untrue or incomplete in any material respect as of the date made,
or if the Project is subjected to garnishment, levy, attachment or
lien,.then in any such event the Lender, without in any way waiving
such default, may at its option without notice and without regard
to the adequacy of the security for the indebtedness secured by the
Mortgage, either in person or by agent, with or without bringing
any action or proceeding, or by a receiver appointed by a court,
take possession of the Project or any portion thereof, have, hold,
manage, lease and operate the same on such terms and for such
period of time as the Lender may deem appropriate and, either with
or without taking possession of the Project in its own name,
demand, sue for or otherwise collect and receive all rents, revenue
and income of the Project, including those past due and unpaid with
full power to make from time to time all alterations, renovations,
repairs or replacements thereto or thereof as may seem proper to
5
the Lender and to apply such rents, income and profits to the
fo]lowing items in the following order of priority: (a) to payment
of all reasonable fees of the receiver, if any, approved by the
court; (b) to the repayment when due of all tenant security
deposits, if any, with interest thereon, pursuant to the provisions
of Minnesota Statutes §504.20; (c) to payment of all delinquent or
current real estate taxes and special assessments payable with
respect to the Project, or if the Mortgage requires periodic escrow
payments for such taxes and assessments, to the escrow payments
then due; (d) to payment of all premiums then due for the insurance
required by the provisions of the Mortgage, or if the Mortgage
requires periodic escrow payments for such premiums, to the escrow
payments then due; (e) to payment of expenses incurred for normal
maintenance of the Project; and (f) to payment of the indebtedness
secured by the Mortgage, together with ail costs and attorneys'
fees, in such order or priority as to any of the items mentioned in
this paragraph as the Lender in its sole discretion may determine,
any statute, law, custom or use to the contrary notwithstanding.
The exercise by the Lender of the options granted it in this
paragraph and the collection of the rents, income and profits and
the application thereof as herein provided shall not be considered
a waiver of any default of the Borrower under the Loan Bocuments.
3. The Lender shall not be liable for any loss sustained by
the Borrower resulting from the Lender's failure to let the Project
after default or from any other act or omission of the Lender in
managing the Project after default un]ess such loss is caused by
6
the willful misconduct and bad faith of the Lender. The Lender
shall not be obligated to perform or discharge any obligation, duty
or liability under any Lease(s) or under or by reason of this
Assignment and the Borrower shall, and does hereby agree to,
indemnify the Lender for, and to hold the Lender harmless from, any
and all liability, loss or damage which may or might be incurred
under any Lease(s) or under or by reason of this Assignment and
from any and all claims and demands whatsoever which may be
asserted against the Lender by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms,
covenants or agreements contained in any Lease(s). Should the
Lender incur any such liability under any Lease(s) or under or by
reason of this Assignment or in defense of any such claims or
demands, the amount thereof, including costs, expenses and
reasonable attorneys' fees, shall be secured hereby and by the
Mortgage, and the Borrower shall reimburse the Lender for such
amounts immediately upon demand, It is further understood that
this Assignment shall not operate to place responsibility upon the
Lender either for the oontrol, care, management or repair of the
Project or for the carrying out of any of the terms and conditions
of any Lease(s); neither shall this Assignment operate to make the
Lender responsible or liable for any waste committed on the Project
by the tenants or any other parties, or for any dangerous or
defective condition of the Project, or for any negligence in the
management, upkeep, repair or control of the Project resulting in
7
loss or injury or death to any tenant, licensee, employee or
stranger.
4. Upon payment in full of the indebtedness secured by the
Mortgage, this Agreement shall become and be void and of no effect,
but the affidavit, certificate, letter or statement of any officer,
agent or attorney of the Lender showing any part of the
indebtedness to remain unpaid shall be and constitute conclusive
evidence of the validity, effectiveness and continuing force of
this Assignment and any person may, and is hereby authorized to,
rely thereon. The Borrower hereby authorizes and directs any
lessees named in any Lease(s) or any other or future lessee or
occupant of the Project, upon receipt from the Lender of written
notice to the effect that the Lender is then the holder of the Note
and the Mortgage and that a default exists thereunder or under the
Assignment, to pay over to the Lender all rents, revenues and
income arising or accruing under any Lease(s) or from the Project
and to continue so to do until otherwise notified by the Lender.
5. The Lender may take or release other security for the
payment of said indebtedness, may release any party primarily or
secondarily liable therefor and may apply any other security held
by the Lender to the satisfaction of such indebtedness without
prejudice to any of the Lender's rights under this Assignment.
6. Nothing contained in this Assignment and no act done or
omitted by the Lender pursuant to the powers and rights granted to
the Lender hereunder shall be deemed to be a waiver by the Lender
of the Lender's rights and remedies under the Loan Documents. This
8
Assignment is made and accepted without prejudice to any of the
rights and remedies possessed by the Lender under the terms
thereof. The right of the Lender to collect said indebtedness and
to enforce any other security held by the Lender may be exercised
by the Lender either prior to, simultaneously with, or subsequent
to any action taken by the Lender hereunder.
7. In case of any conflict between the terms of this
Assignment and the terms of the Mortgage, the terms of this
Assignment shall prevail, but whenever possible, the provisions
hereof shall be deemed supplemental to and not in derogation of the
provisions of the Mortgage.
8. Neither this Assignment nor any provisions hereof may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement
of the change, waiver', discharge or termination is sought.
9. Whenever the singular or plural number, or the masculine,
feminine or neuter gender is used herein, it shall equally include
the other.
10. This Assignment shall be governed by and interpreted in
accordance with the laws of the State of Minnesota.
11. Time is of the essence in this Assignment.
THIS ASSIGNMENT, together with the covenants and warranties
herein contained, shall inure to the benefit of the Lender and any
subsequent holder of the Note and the Mortgage and shall be binding
upon the Borrower and the Borrower's successors and assigns and any
subsequent owner of the Project.
IN WITNESS WHEREOF, the Borrower has caused this Assignment to
be duly executed as of the day and year first above written.
7700 PARTNERSHIP, L.L.P.,
a Minnesota limited liability
partnership
By
Its General Partner
By
Its General Partner
STATE OF MINNESOTA )
) SS.
COUNTY OF )
On this day of , 1995, before me, a Notary
Public within and for said County, personally appeared
and , to
me personally known, who being each by me duly sworn, did say that
they are both partners of 7700 PARTNERSHIP, L.L.P., a Minnesota
limited liability partnership, named as Borrower in the foregoing
instrument; and said individuals acknowledge said instrument to be
the free act and deed of said limited liability partnership.
Notary Public
THIS INSTRUMENT DRAFTED BY:
CORRICK & SONDRALL, P.A.
8525 Edinbrook Crossing, Suite 203
Brooklyn Park, MN 55443
(612) 425-5671
c:\ wp51\cnh\7700.l&r
10.
GUARANTY
(InCluding Subordination)
, Minnesota
THIS GUARANTY, made and entered into this day of
, 1995, by PAUL C. ANDERSON, MICHAEL E. DIEDERICHS, and
UNIVERSAL COLOR, INC., a Minnesota corporation (hereinafter
collectively referred to as the "Guarantors"), to the ECONOMIC
DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE, (hereinafter
referred to as the "Lender").
RECITALS'
A. Paul C. Anderson and Michael E. Diederichs are the
partners of 7700 Partnership, L.L.P., a Minnesota limited liability
partnership (hereinafter referred to as the "Debtor"), which is the
owner of certain real estate located in the County of Hennepin,
State of Minnesota, (hereinafter referred to as the "Premises").
B. Universal Color, Inc. is a corporation in which a
controlling interest is owned by Paul C. Anderson and Michael E.
Diederichs.
C. The Debtor and the Lender agree that the Lender will make
a mortgage loan ("Loan") to the Debtor in the principal amount of
One Hundred Forty Thousand and No/lO0 Dollars ($140,000.00) which
Loan is evidenced by a Loan Note of even date herewith from the
Debtor to the Lender (hereinafter referred to as the "Note") to be
disbursed pursuant to a Loan Agreement of even date.
D. To secure payment of the Note, the Debtor has executed and
delivered to the Lender a Mortgage, Security Agreement and Fixture
Financing Statement of even date herewith (hereinafter referred to
as the "Mortgage"), and an Assignment of Leases and Rents of even
date herewith (hereinafter referred to as the "Assignment of
Leases"), covering the Premises.
E. In order to induce the Lender to make the Loan and accept
the Note, the Mortgage and Assignment of Leases and as additional
security for the Loan and all monies to be advanced under the Note,
the Mortgage and the Assignment of Leases, and performance of all
obligations specified in the Loan Agreement, the Guarantors have
agreed to give this Guaranty.
NOW, THEREFORE, in consideration of the premises, the
Guarantors hereby, jointly and severally, covenant and agree with
the Lender as follows:
EXHIBIT D
1. The Note, the Mortgage, the Assignment of Leases and Loan
Agreement are hereby made a part of this Guaranty by reference
thereto with the same force and effect as if fully set forth herein
(said documents are sometimes hereafter referred to collectively as
the "Loan Documents").
2. The Guarantors hereby, jointly and severally,
unconditionally and absolutely, guarantee to Lender the due and
prompt payment, and not just the collectibility, of the principal
and interest and late charges and all other indebtedness, if any,
on the Note, when due, whether at maturity, pursuant to mandatory
or optional prepayments, by acceleration or otherwise all at the
times and places and at the rates described in, and otherwise
according to the tenor of the Note, the Mortgage and the Assignment
of Leases.
3. The Guarantors further hereby jointly and severally,
unconditionally and absolutely guarantee to Lender the due and
prompt performance by the Debtor of all duties, agreements and
obligations of the Debtor contained in the Note, the Mor,tgage, the
Assignment of Leases, and Loan Agreement respectively, and the due
and prompt payment of all costs incurred, including attorneys'
fees, in enforcing the payment and performance of the Note, the
Mortgage, the Assignment of Leases, Loan Agreement and this
Guaranty (the payment and performance of the items set forth in
Paragraphs 2 and 3 of this Guaranty being hereinafter collectively
referred to as the "Indebtedness Guaranteed").
4. The Guarantors hereby agree that the Lender may from time
to time without notice to or consent of the Guarantors and upon
such terms and conditions as the Lender may deem advisable without
affecting this Guaranty (a) re]ease any maker, surety or other
person liable for payment of all or any part of the Indebtedness
Guaranteed; (b) make any agreement extending or otherwise altering
the time for or the terms of payment of all or any part of the
Indebtedness Guaranteed; (c) modify, waive, compromise, release,
subordinate, resort to, exercise or refrain from exercisin9 any
right the Lender may have hereunder, under the Note or any other
Loan Document given for the Indebtedness Guaranteed; (d) accept
additional security or guarantees of any kind; (e) endorse,
transfer or assign the Note, and other Loan Documents to any other
party; (f) accept from Debtor or any other party partial payment or
payments on account of the Indebtedness Guaranteed; (g) from time
to time hereafter further loan monies or give or extend credit to
or for the benefit of the Debtor; (h) release, settle or compromise
any claim of the Lender against the Debtor, or against any other
person, firm or corporation whose obligation is held by the Lender
as collateral security for the Indebtedness Guaranteed.
5. The Guarantors hereby unconditionally and absolutely waive
(a) any obligation on the part of the Lender to protect, secure or
insure any of the security given for the payment of the
Indebtedness Guaranteed; (c) any of the security given for the
payment of the Note; (d) notice of acceptance of this Guaranty by
the Lender; (e) notice of presentment, demand for payment, notice
of nonperformance, protest, notices of protest and notices of
dishonor, notice of nonpayment or partial payment; (f) notice of
any defaults under the Note or in the performance of any of the
covenants and agreements contained therein or in any other Loan
Document given as security for the Note; (g) any limitation or
exculpation of liability on the part of the Debtor whether
contained in the Note or otherwise; (h) the transfer or sale by the
Debtor or the diminution in value thereof of any security given for
the Indebtedness Guaranteed; (i)' any failure, neglect or omission
on the part of the Lender to realize or protect the Indebtedness
Guaranteed or any security given therefor; (j) any right to insist
that the Lender prosecute collection of the Note or resort to any
instrument or security given to secure the Indebtedness Guaranteed
or to proceed against the Debtor or against any other guarantor or
surety prior to enforcing this Guaranty; provided, however, at its
sole discretion the Lender may either in a separate action or an
action pursuant to this Guaranty pursue its remedies against the
Debtor or any other guarantor or surety, without affecting its
rights under this Guaranty; (k) notice to the Guarantors of the
existence of or the extending to the Debtor of the Indebtedness
Guaranteed, (1) any order, method or manner of application of any
payments on the Indebtedness 'Secured hereby; or (m) any right to
insist Lender disburse the full principal amount of the Note to
Debtor or the order, method, manner or amounts disbursed under the
Note.
6. Without limiting the generality of the foregoing, the
Guarantors will not assert against the Lender any defense of
waiver, release, discharge in bankruptcy, statute of limitations,
res judicata, statute of frauds, anti-deficiency statute, fraud,
ultra vires acts, usury, illegality or unenforceability which may
be available to the Debtor in respect of the Note or any other Loan
Document, or any setoff available against the Lender to the Debtor
whether or not on account of a related transaction, and the
Guarantors expressly agree that they shall be and remain liable for
any deficiency remaining after foreclosure of any mortgage or
security interest securing the Note, notwithstanding provisions of
law that may prevent the Lender from enforcing such deficiency
against the Debtor. The liability of the Guarantors shall not be
affected or impaired by any voluntary or involuntary dissolution,
sale or other disposition of all or substantially all the assets,
marshalling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or
other similar event or proceeding affecting the Debtor or any of
its assets and that upon the institution of any of the above
actions, at the Lender's sole discretion and without notice thereof
or demand therefor, the Guarantors' obligations shal] become due
and payable and enforceable against the Guarantors, whether or not
the Indebtedness Guaranteed is then due and payment. The
Guarantors further agree that no act or thing, except for payment
in full, which but for this provision might or could in law or in
equity act as a release of the liabilities of the Guarantors
hereunder shall in any way affect or impair this Guaranty and the
Guarantors agree that this shall be a continuing, absolute and
unconditional Guaranty and shall be in full force and effect until
the Indebtedness Guaranteed has been paid in full.
7. The Guarantors agree that all indebtedness, liability or
liabilities now or at any time or times hereafter owing by Debtor
to the Guarantors are hereby subordinated to the Indebtedness
Guaranteed and any payment of indebtedness of the Debtor to the
Guarantors, if the Lender so requests, shall be received by the
Guarantors as trustee for the Lender on account of the Indebtedness
Guaranteed. The Guarantors agree that the payment of any amount or
amounts by the Guarantors pursuant to this Guaranty shall not in
any way entitle the Guarantors whether at law, in equity or
otherwise to any right to participate in any security held by the
Lender for the payment of the Indebtedness Guaranteed, any right to
direct the application or disposition of any such security or any
right to direct the enforcement of any such security. Performance
by the Guarantors under this Guaranty shall not entitle the
Guarantors to be subrogated to any of the Indebtedness Guaranteed
or to any security therefor, unless and until the full amount of
the Indebtedness Guaranteed has been fully paid.
8. The Guarantors agree this Guaranty is executed in order to
induce the Lender to make and disburse the Loan and with the intent
that it be relied upon by the Lender in making and disbursing the
Loan. Disbursement of any part of the Loan without any further
action or notice, shall constitute conclusive evidence of the
reliance hereon bY the Lender. This Guaranty shall run with the
Note and other Loan Documents and without the need for any further
assignment of this Guaranty to any subsequent holder of the Note or
the need for any notice to the Guarantors thereof. Upon
endorsement or assignment of the Note to any subsequent holder,
said subsequent holder of the Note may enforce this Guaranty as if
said holder had been originally named as Lender hereunder.
9. The Guarantors consent to be sued in any jurisdiction in
which the Debtor may be sued as well as the Guarantors' principal
place of business and residence and in the State where this
Guaranty is executed.
10. No right or remedy herein conferred upon or reserved to
the Lender is intended to be exclusive of any other available
remedy or remedies but each and every remedy shall be cumulative
and shall be in addition to every other remedy given under this
Guaranty' or now or hereafter existing at law or in equity. No
waiver, amendment, release or modification of this Guaranty shall
be established by conduct, custom or course of dealing, but only by
an instrument in writing duly executed by the Lender.
11. This Guaranty is delivered in and made in and shall in
all respects be construed pursuant to the laws of the State of
Minnesota.
12. This Guaranty, and each and every part hereof, shall be
binding upon the Guarantors and upon their heirs, administrators,
representatives, executors, successors and assigns and shall inure
to the benefit of each and every future holder of the Note,
including the heirs, administrators, representatives, executors,
successors and assigns of the Lender.
13. The promises and agreements herein shall be construed to
be and are hereby declared to be joint and several in each and
every particular and shall be fully binding upo~ and enforceable
against any or all of such parties or persons, and neither the
death nor release of any person or party to this Guaranty shall
affect or release the joint and several liability of any other
person or party.
IN WITNESS WHEREOF, the Guarantors have executed this Guaranty
as of the day and year first above written.
Paul C. Anderson
Michael E. Diederichs
UNIVERSAL COLOR, INC., a
Minnesota corporation
By
Its
By
Its
STATE OF MINNESOTA )
)ss
COUNTY OF )
The foregoing instrument was acknowledged before me this
day of , 1995, by Paul C. Anderson.
Notary Public
STATE OF MINNESOTA )
)ss
COUNTY OF )
The foregoing instrument was acknowledged before me this__
day of , 1995, by Michael E. Diederichs.
Notary Public
STATE OF MINNESOTA )
)ss
COUNTY OF )
The foregoing instrument was acknowledged before me this __
day of , 1995, by and
, the and
of Universal Color, Inc., a Minnesota
corporation, on behalf of said corporation.
Notary Public
THIS INSTRUMENT DRAFTED BY:
CORRICK & SONDRALL, P.A.
8525 Edinbrook Crossing, Suite 203
Brooklyn Park, MN 55443
(612) 425-5671
c:\wp51\cnh\ucl, gua
6
SECURITY AGREEMENT
UNIVERSAL COLOR, INC., a Minnesota corporation, whOse address
is
(hereinafter called "Debtor") does hereby grant unto the ECONOMIC
DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE, whose
address is 4401Xylon Avenue North, New Hope, MN 55428 (hereinafter
called "Secured Party"), a security interest in the following
described property (hereinafter called "Collateral")-
1 Collateral.
a) All equipment of Debtor, whether now owned or
hereafter acquired located or to be located at the
Premises legally described on Exhibit I, including,
but not limited to, all present and future
machinery, vehicles, furniture, fixtures,
manufacturing equipment, shop equipment, office and
record keeping equipment, parts and tools, and goods
described in any equipment schedule or list herewith
or hereafter furnished to Secured Party by Debtor
(but no such schedule or list need be furnished in
order for the security interest granted herein to
be valid as to all of Debtor's equipment).
b) To the extent the same relates directly or
indirectly to the property described on Exhibit I,
each and every right of Debtor for the payment of
money, whether such right to payment now exists or
hereafter arises, whether such right to payment
arises out of a sale, lease or other disposition of
goods or other property by Debtor, out of a
rendering of services by Debtor, out of a loan by
Debtor, out of the overpayment of taxes or other
liabilities of Debtor, or otherwise arises under
any contract or agreement, whether such right to
payment is or is not already earned by performance,
and howsoever such right to payment may be
evidenced, together with all other rights and
interests (including all liens and security
interests) which Debtor may at any time have by law
or agreement against any account debtor or other
obligor obligated to make any such payment or
against any of the property of such account debtor
or other obligor; all including, but not limited to,
all present and future debt instruments, chattel
paper, accounts, loans and obligations receivable
and tax refunds.
1
EXHIBIT E'
c) A11 general intangibles of Debtor, whether now owned or
hereafter acquired, including, but not limited to,
applications for patents, patents, copyrights,
trademarks, trade secrets, goodwill, trade names,
customer lists, permits and franchises, and the
right to use Debtor's name to the extent they relate
to the property described on Exhibit I.
d) All substitutions and replacements for and products
of any of the foregoing property not constituting
consumer goods and together with proceeds of any
and all of the foregoing property and, in case of
all tangible collateral, together with all
accessions and, except in the case of consumer
goods, together with: (i) all accessories,
attachments, parts, equipment and repairs now or
hereafter attached or affixed to or used in
connection with any such goods, and (ii) all
warehouse receipts, bills of lading and other
documents of title now or hereafter covering such
goods.
To secure prompt payment to Secured Party at the address
stated above or such other place as designated of a Guaranty dated
, 1995, executed by UNIVERSAL COLOR, INC.,
a Minnesota corporation, to Secured Party to guranty a Promissory
Note dated , 1995, in the sum of One Hundred
Forty Thousand and No/lO0 Dollars ($140,000.00) executed by 7700
Partnership, L.L.P., a Minnesota limited liability partnership
(hereinafter "Partnership") with intereSt as provided therein, and
any and all extensions and renewals thereof, and any and all future
advances made by Secured Party to Partnership at Secured Party's
option, together with all other liabilities of Partnership to
Secured Party (primarily, secondarily, direct, contingent, sole,
joint, or several) due or which may be hereafter contracted or
acquired and the performance by Debtor of all of the terms and
2
conditions of this Security Agreement (hereinafter referred to as
("Obligations").
DEBTOR WARRANTS, REPRESENTS AND AGREES THAT:
1. Debtor is the owner of the Collateral, or will be the
owner of the Collateral to be acquired after the date hereof, free
of all liens, encumbrances and security interests except the
ecurity interest hereby created, and except any other security
interests as of this date held by Secured Party, and has authority
to execute this Agreement.
2. Any and all accounts receivable which are Collateral are
genuine and enforceable, and there are no offsets, counterclaims,
or defenses to any of them.
3. Debtor's inventory, books, records, contract rights and
other property above specified relating to the Collateral are or
will be kept at ,
and Debtor will not, without the prior written consent of Secured
Party, remove or permit the same to be removed from the location
or locations set forth above.
4. Debtor will keep the Collateral insured at all times
against loss by fire and/or other hazards concerning which, in the
Judgment of the Secured Party, insurance protection is reasonably
necessary, in a company or companies satisfactory to the Secured
Party and in amounts sufficient to protect Secured Party against
loss or damage to said Collateral and will pay the premiums
therefor; that such policy or policies of insurance will be
delivered to and held by the Secured Party, together with loss
payable clauses in favor of the Secured Party as its interest may
appear, in form satisfactory to the Secured Party; and Secured
Party may act as attorney for Debtor in obtaining, adjusting,
settling and cancelling such insurance and endorsing any drafts.
5. No financing statement covering the Collateral, or any
part thereof, is on file in any public office, except in favor of
Secured 'Party.
6. Debtor will at any time or times hereafter execute such
financing statements and other instruments and perform such acts
as the Secured Party may request to establish and maintain a valid
security interest in the Collateral, and will pay all costs of
filing and recording.
7. Until Secured Party shall notify Debtor of the revocation
of such power and authority, Debtor will, at is own expense,
endeavor to collect, as and when due, any accounts which are
Collateral, including the taking of such action with respect to
such collection or the repossession of the goods as Debtor may deem
advisable or as Secured Party may reasonably request. Debtor will
forthwith deliver all proceeds of such collections and all
repossessed or returned goods to Secured Party at its request;
provided Debtor will, on demand, pay to Secured Party the full
unpaid contract price of repossessed goods or the invoice value of
returned goods.
4
8. Debtor will not compromise any accounts which are
Collateral without the prior written consent of Secured Party.
9. Debtor will at all times keep accurate and complete
records of the Collateral and permit Secured Party to inspect same
and the Collateral at all reasonable times. Debtor will, upon
request of Secured Party, furnish to Secured Party such reports and
statements as Secured Party may request with respect to the
Col lateral.
10. If accounts receivable are Collateral, Secured Party may
.notify account debtors of Secured Party's security interest, and
that payment of all sums due or to become due shall be paid
directly to Secured Party, and upon request of Secured Party,
Debtor will notify account debtors of such security interest.
Secured Party shall have the power to demand, receive and sue for
all moneys or other proceeds due from said accounts, to endorse the
name of Debtor on all commercial paper given in payment or part
payment thereof, and to settle, adjust or compromise any claims or
disputes as to said accounts.
11. Debtor will keep and maintain the Collateral in 9ood
order and repair and will not sell, encumber, offer to sell,
transfer, lease or otherwise dispose of the Collateral other than
in the ordinary course of its business without the written consent
of Secured Party.
12. Until default Debtor may retain possession of the
Col lateral.
5
13. Debtor shall be in default under this agreement upon the
happening of any of the following events:
a) Nonpayment, when due, or any amount payable on any of the
Obligations or failure to observe or perform any term
hereof;
b) If any covenant, warranty or representation shall prove
to be untrue in any material respect;
c) Any Debtor becomes insolvent or unable to pay debts as
they mature or makes an assignment for the benefit of
creditors, or any proceeding is instituted by or against
any Debtor alleging that such Debtor is insolvent or
unable to pay debts as they mature;
d) Entry of any Judgment against any Debtor;
e) Dissolution, merger or consolidation, or transfer of a
substantial part of the property of any Debtor which is
a corporation or partnership;
f) If Secured Party deems itself insecure for any reason; or
g) Default under the terms of any loan agreement or other
security instrument of even date.
14. In the event of a default:
a) Secured Party shall have the right, at its option and
without demand or notice, to declare all or any part of
the Obligations immediately due and payable;
b) Secured Party may exercise, in addition to the rights and
remedies granted hereby, all of the rights and remedies
of a Secured Party under the Uniform Commercial Code or
any other applicable law;
c) Secured Party may effect all necessary insurance, pay the
premiums thereon, and may pay any taxes, liens and
encumbrances on the Collateral, and any such payments
made by Secured Party with interest at the highest legal
rate allowed by law shall be a part of the Obligations;
d) Debtor agrees to make the Collateral available to the
Secured Party at a place or places acceptable to the
Secured Party; and
e) Debtor agrees to pay all costs and expenses of Secured
Party, including reasonable attorneys' fees, in the
collection of any of the Obligations or the enforcement
of aris of Secured Party's riqhts.
15. If any notification of intended disposition of any of the
Collateral is required by law, such notification shall be deemed
reasonable and properly given if mailed at least ten (10) days
before such disposition, postage prepaid, addressed to the Debtor
at the address shown herein.
16. Waiver of any default hereunder by Secured Party shall
not be a waiver of any other default or of a same default on a
later occasion. No delay or failure by Secured Party to e×ercise
any right or remedy shall be a waiver of such right or remedy and
no single or partial exercise by Secured Parts of any right or
remedy shall preclude other or further exercise thereof or the
exercise of any other right or remedy at any other time.
17. This agreement and all rights and obligations hereunder,
including matters of construction, validity and performance, shall
be governed by the laws of Minnesota. If any part of this contract
shall be adjudged invalid, the remainder shall not thereby be
invalidated.
18. If more than one party shall sign this Security
Agreement, the term "Debtor" shall mean all such parties and each
of them and all such parties shall be jointly and severally
obligated hereunder. All rights of Secured Party shall inure to
the benefit of the Secured Party's successors and assigns, and all
obligations of Debtor shall bind Debtor's heirs, executors,
administrators, successors and assigns.
19. This Security Agreement contains the entire agreement
between the parties, and no oral agreements shall be binding.
Dated: , 1995.
SECURED PARTY: DEBTOR:
ECONOMIC DEVELOPMENT AUTHORITY UNIVERSAL COLOR, INC.,
IN AND FOR THE CITY OF NEW HOPE a Minnesota corporation
By By
Its President Its
By By
Its Executive Director Its
8
EXHIBIT I
TO FINANCING STATEMENT
UNIVERSAL COLOR, INC.,
a Minnesota corporation
All of the following items of personal property of the Debtor
to the extent, and only to the extent that they relate to, are used
in, or located upon the real property lying and being in the County
of Hennepin, State of Minnesota,- legally described as:
a) All equipment of Debtor, whether now owned or hereafter
acquired, including, but not limited to, all present and
future machinery, vehicles, furni'(ure, fixtures,
manufacturing equipment, shop equipment, office and
record keeping equipment, parts and tools, and goods
described in any equipment schedule or list herewith or
hereafter furnished to Secured Party by Debtor (but no
such schedule or list need be furnished in order for the
security interest granted herein to be valid as to all of
Debtor's equipment).
b) All inventory of the Debtor, whether now owned or
hereafter acquired and wherever located.
c) Each and every right of Debtor for the payment of money,
whether such right to payment now exists or hereafter
arises, whether such right to payment arises out of a
sale, lease or other disposition of goods or other
property by Debtor, out of a renderirg of services by
Debtor, out of a loan by Debtor, out of the overpayment
of taxes or other liabilities of Debtor, or otherwise
arises under any contract or agreement, whether such
right to payment is or is not already earned by
performance, and howsoever such right to payment may be
evidenced, together with all other rights and interests
(including all liens and security interests) which Debtor
may at any time have by law or agreement against any
9
account debtor or other obligor obligated to make any
such payment or against any of the property of such
account debtor or other obligor; all including, but not
limited to, all present and future debt instruments,
chattel paper, accounts, loans and obligations receivable
and tax refunds.
d) All general intangibles of Debtor, whether now owned or
hereafter acquired, including, but not limited to,
applications for patents, patents, copyrights,
trademarks, trade secrets, goodwill, trade names,
customer lists, permits and franchises, and the right to
use Debtor's name.
e) All substitutions and replacements for and products of
any of the foregoing property not constituting consumer
goods and together with proceeds of 'and all of the
foregoing property and, in case of all tangible
collateral, together with all accessions and, except in
the case of consumer goods, together with: (i) all
accessories, attachments, parts, equipment and repairs
now or hereafter attached or affixed to or used in
connection with any such goods, and (ii) all warehouse
receipts, bills of lading and other documents of
title now or hereafter covering such goods.
c:\ wp51\cnh\uc~.sa
10
CORRICK ~[ SONDRALL, P.A.
STEVEN A. SONDRALL ATTORNEYS AT LAW LEGALAS$1$TANT$
MICHAEL R. LAFLEUR~ Ed/nburgh Execut/ve' Office Plaza LAVON.E E. KES~
W.U^M c. ST.^~T 8525 Edinbrook Crossing
Suite #203
Brook]y~ Park, Mhmesota 55443
TELEPHONE (612) 425.S671
FAX (612) 425-5867
(REVISED RESOLUIION- EDA IIB4. 4).
May 19, 1995
Daniel d. Donahue
Executive Director'
Economic Development in and
for the' City o'f New Hope
4401Xyton Avenue North
New Hope, MN 55428
RE: Loan to 7700 Partnership, L.L.P.
City Project No. 539
OUr File No: 99.11138
Dear Dan:
Enclosed you will find a revised: Resolution authorizing a loan of
$140,000 O0 to 7700 Partnership, L L.P., a Minnesota limited
liability partnership consisting of Paul C. Anderson and Michael E.
Diederichs. The documentation attached to the Resolution includes
the following:
1. Mort:gage; Note. Th!i:s pro,missory note call. s for
interest rate of 8~ with the loan'amortized over 15 years
and a balloon payment in 10 years,
2. Mortgage, Security Agreement and Fixture Financing
Statement. This document will be recorded against the
property to secure the mortgage note. As you are aware,
this Mortgage will be third in line behind: a mortgage to
Marquette Bank, N.A. and a mortgage to the Small Business
Administration.
3. Assignment of Leases and Rents. In the event of failure
by 7700 Partnership, L.L.P. to make payments under the
Mortgage, the EDA can "intercept" the rents due the
Partnership by its tenant, Universal Color, Inc. Again,
this legal right will likely be third in line behind the
Bank and the SBA.
Mr. D~ni. eld, Don,~hue
May 19, 1995
Page 2
4. Guaranty. This document is a personal guaranty signed by
Paul C. Anderson and Michael E. Diederichs, and also
signed by Universal Color, Inc. This Guaranty runs for
the life of the loan.
If the enclosed meets with EDA approval, the Resolution with
attached Exhibits should be passed at the meeting on May 22nd.
Please contact me with any questions.
Sincerely,
Martin P. Malbch'a'
s3f2
Enclosures
cc: Kirk McDonald
Valerie Leone (w/enc~z_~"
Steven A, Sondrall, City Attorney'
EDA RESOLUTI~ON NO. 95-
RESOLUTION AUTHORIZING MORTGAGE
TO 7700 PARTNERSHIP, L.L.P. FOR
PROPERTY AT 7700 42ND AVENUE NORTH
IMPROVEMENT PROJECT 539
WHEREAS, 7700 Partnership, L.L.P. ("Partnership") is a
Minnesota l:imited Ii.ability partnership formed by Paul O. Anderso:n~
and Micha:et E. Diederichs ("Partners") and
WHEREAS, the Partnership is attempting to purchase certain
imp:roved rea:] e. state &t 770.0 42nd ~venue Nort. h in the City o[ New.;
Hope ("Property"), and together with the Partners plans to renovate
the Property and move its photo processing business to the Property
(collectively the "Project", also designated by the City of New
Hope as [mprovement Project 539), and
WHEREAS, finan:c~ng for the: purchase: and improvemeht' of: the.
Property by the Partnership and the Partners will include a first
mortgage, to Uarq.Ue~te Bank, N.A. and a second' mor'tgage from the;.
Small Business Administration, combined with equity from the
Partners of approximately $75,600.00, and
WHEREAS, in order for the purchase and improvement of the
property to go forward, the Partnership and Partners need an
additional $140,000.00, and
WHEREAS, the Property is located with:in a redeve]op, ment
distr'ict estabt'ished~ pursu~nt', to Redev'eTopmen. t! Plan 815!-2,
Redev.elopment Project 85-2, the administration of which is governed
by the EDA, and
WHEREAS, the Project will result in improvement to the
existing structure and the expected addition of five new full-time
employment posi't:ions a.t the Property, and
WHEREAS, the Project will eliminate the possibility of' a
vacant building at 7700 42nd Avenue North and within the
Redevelopment area, and
WHEREAS, completing the Project will allow Autohaus at 7675
42nd Avenue North, ~l:so wi;thiln the RedeveloPment area, to complete
the improvements to property at 7675 42nd Avenue North, and
WHEREAS, the completion of the Project will be in the best
interests of the City and the Redevelopment District and its people
and will further the genera] plan of economic development, and
WHEREAS, the Partnership is requesting a loan of $140,000.00
from the EDA, and
WHEREAS, such a loan is authorized by Minn. Stat. §469.090 to
469.108 and Minn. Stat. §469.192, and
WHEREAS, the loan shaT1: accure interest at' a rate of eight
(8%) percent per annum based on a 15 year amortization period and
a final balloon after 10 years, and
WHEREAS, the loan will be secured by life insurance on a
declining term balance on. the l iYes of Paul C. Anderson and Michael
E. Diederichs, each life insurance policy in the amount of' the ~oan
balance,, add
WHEREAS, the loan will be further secured by a Third. blo.rtgage
upon the Property plus an Assignment of Leases and Rents, as well
as a Guaranty by Universal Color, Inc. and by Paul C. Anderson and
Michael E. Diederichs personally, and
WHEREAS, other terms and conditions of the loan are as set
forth in the Mortgage, Security Agreement and Fixture Financing
Statement attached hereto as Exhibit A, the Promissory Note
attached hereto: as E×hibit B, the Assignment of Rents and Leases
attached hereto as Exhibit C, and the Guaranty attached hereto as
Exhibit D, and
WHEREAS, as a further condition of the loan, Universal Color,
Inc. will provide an annual $2,000.00 maximum retail cost donation
of photo development of services to the City for the life of the
loan.
NOW, THEREFORE, BE IT RESOLVED by the Economi~c Development
Authority in and for the City of New Hope as follows:
1. That all of the foregoing recitals are incorporated
herein by reference.
2. That the loan to 7700 Pantnership, L.L.P. in the amount
of $140,000.00 as detailed above is hereby approved,
conditioned upon the execution of the appropriate
documents attached hereto as Exhibits A, B, C and D by
7700 Partnership, L.L.P. and other designated entities
and further conditioned upon the execution of any other
sup:porting documents required by the attorneys for E'DA.
The loan is further conditioned upon the agreement by
Color Lab, Inc. to provide the City of New Hope with an
annual $2,000.00' retail cost donation of photo
development services for the life of the loan.
That the President and Executive Director are authorized
and directed to sign the Mortgage and other Toan
documents attached hereto as Exhibits A, B, C and D and
are futher authorized and directed to sign any additional
documents required to complete the loan.
Adopted by the Economic Development Authority in and for the
City af~New~HopJ'e~,th&s day o¢ ~ 1995¥
Edw. J. Erickson, President
Attest:
Daniel J. Donahue, Executive Director
EDA
REQUF~T FOR ACTION
Originating Department Approved for Agenda Agenda Section
City Manager EDA
795
Sarah Bellefuil Item No.
By: Administrative Analyst By: 5
RESOLUTION APPROVING SUBMISSIO~ OF THE MINNESOTA CITY PARTICIPATION
PROGRAM (MCPP) APPLICATION TO THE' MINNESOTA HOUSING FINANCE AGENCY
(MHFA)
The MCPP is a program through the MHFA in which the MHFA is able to sell mortgage revenue bonds
on behalf of participating cities to meet locally-identified housing needs. The proceeds from the bonds
provide below-market interest rate mortgage loans for low and moderate income first-time homebuyers.
This resource is available to cities throughout the state.
This year the local housing pool for mortgage revenue bonds is estimated to be around $43 million.
The final determination of the total amount of program funds available to each participating city will
be made by the MHFA as determined by a per capita distribution method. In 1994, the City received
$849,000 MCPP allocation and $630,000 of those funds were used in first-time homebuyer loans.
In 1995, the MCPP program term is six months. During the first four months, participating cities have
exclusive use of their individual allotment. During the f'mal two months, the individual allotments will
go into a statewide pool that will be available to all MCPP participating cities. This allows cities with
higher demands to access funds that were not used during the preceding four month period. The
program term will begin shortly after the bond sale which should occur during the summer of 1995.
In order for persons to apply for money through this program they must:
a) be a first-time homebuyer;
b) occupy the home within 60 days of mortgage closing;
c) meet certain household income requirements ($40,800 or less - for a family of four);
d) and purchase an existing home or build new for $95,000 or less.
MOTION BY /~/~t/~~ SECOND BY ~
Review: Administration: Finance:
RFA-O01 ~
Request for Action 2 5-22-95
The fee for participating in the program is $20 for each $100,000 in allotment provided. Also, an
application deposit of 1% of the allocation amoum specified in the agreement is needed. The 1%
deposit is refunded within a month of the closing of the bond sale.
In order to participate in the MCPP, cities must arrange with local lenders to originate mortgage loans
under the program. These lenders will be required to enter into a contract with the MHFA as to
program and loan origination requirements. Each city applying for the MCPP must have at least one
lender.
The application is due by Friday, June 8, 1995.
The application packet from the MHFA is enclosed.
Staff recommends approval of the resolution.
EDA RESOLUTION NO. 94-
RESOLUTION APPROVING SUBMISSION
OF THE MINNESOTA CITY PARTICIPATION PROGRAM (MCPP)
APPLICATION TO THE MINNESOTA HOUSING FINANCE AGENCY (MHFA)
WHEREAS, the City of New Hope, through their Housing Action Plan, promotes the purchase
of homes in New Hope to modest income first-time homebuyers, avoiding
concentrating such housing in a single area; and
WHEREAS, the City of New Hope, through their Housing Action Plan, wishes to maintain a
high quality residential environment through rehabilitation or where necessary,
redevelopment of substandard units; and
NOW, THEREFORE, BE IT RESOLVED that the Economic Development Authority in and for
the City of New Hope approves the submittal of the application for funding to the
Minnesota Housing Finance Agency for inclusion in the Minnesota City
Participation Program.
Adopted by the Economic Development Authority in and for the City of New Hope, this 23rd
day of May, 1995.
President
Attest:
Executive Director
APPLICATION FOR FUNDING
MINNESOTA HOUSING FINANCE AGENCY
1995 MINNESOTA CITY PARTICIPATION (MCPP)
(SEVEN-COUNTY T~IN CITIES METROPOLITAN AREA
(Anoka, Carver, Dakota, Hennepi~ Ra~sey, $c~ott or Washington co, unties)
The following is an Application for Funding under MHFA's Minnesota City Participation
Program. As opposed to providing an application blank, this request is provided in the
form of an outline which includes areas and questions that must be addressed by the
applicant. This has been done to accommodate the variety of word processing systems
that may be used to respond to this offering. Entities responding to the MCPP should
carefully follow the format in the outline and type both each area or question for which
information is requested as well as a response, addressing, each question in sufficient
detail.
Review the attached cover letter for details on program restrictions before completing
this application. Final determination of the total amount of program funds available and
individual allotments will be made by MHFA in compliance with a per capita distribution
method specified in statute. Any questions may be directed to Gene Aho in MHFA's
Homeownership Opportunity Division at 297-3129 or by dialing 1-800-657-3802 if you ~re
located in Greater Minnesota.
Applications must be delivered to MHFA offices between 8:00 a.m., June
1 and 4:30 p.m., June 8, 1995 for funding consideration under this
program phase.
(a) Name and address of your organization.
(b) Name and phone number of your contact person.
(c) Type of organization (City Department, Port Authority, HRA, or EDA).
(d) Amount of funds requested, and the estimated number of loans to be provided.
If preferred, state "maximum allow&ble" (by population formula).
(e) If desired, specify the minimum .sized allocation you will accept for your 1995
program. If the new per capita allocation formula does not provide this level,
MHFA will cancel your application.
(f) Information on any unused Mortgage Revenue Bond (MRB) or Mortgage Credit
Certificate (MCC) resources still available in your community (non-MHFA).
Cities must designate at least one lender who will take mortgage applications and
process loans for your program. Attach a letter from each lender confirming their
willingness to participate in your program.
Additional lenders may not be added later in the program term, unless approved
by MHFA for extenuating circumstances. (e.g.: To replace lenders that have
dropped ou0.
Describe or attach a copy of the "Housing Plan" developed for your community. At
a minimum, each plan must contain the following information:
(a) A description of your city's principal housing needs.
(b) The data sources or methods used to determine the described needs.
(c) The Specific plan developed to meet your identified housing needs, inctuding
the resources to be accessed, and the methods used to carry out the plan.
(d) Description of any target areas tO be addressed in the plan.
(e) How the plan will be implemented and the administrative capacity of your city
to do so.
Note: If you have already completed a Housing Plan in accordance with
Minnesota Statutes, Section 462C.03 within the past 12 months, you may attach
a copy in lieu of the above requirement. Housing Plans developed over '12
months ago are also acceptable, provided that the information contained
therein is still valid, and the plan is updated with appropriate attachments and
comments.
Describe your first-time homebuyer program proposal, including the following
information:
(a) How your program fits into your comprehensive housing plan.
(b) Borrower income limits. (See the attached cover letter for limitations.)
(c) Home purchase price limits. (See the attached cover letter for limitations.)
(d) Targeting of specific population ~roups, if any (e.g., minorities, handicapped,
business employees, etc.).
(e) Targeting of area or housing stock, if any (e.g., rehab areas, new construction
developments, etc.).
(f) Any optional program enhancements such as subsidy funds, waived fees, use
of tax-forfeit properties, etc.
(g) Any proposed schedule for release of funds (whether immediate, delayed, or
on a proportional/divided basis).
Describe why you feel there is sufficient demand in your market to use the MCPP
funds requested in this application. Indicate the data sources used to project
MCPP-1-TC
3/1/o~4
demand, such as real estate sales over the past year; Realtor, builder or lender
information; indicators of a housing shortage; and recent area business/economic
expansion.
Newly constructed homes may only be financed with funds under the MCPP if one
of the three following criteria is met. If your program involve, s new construction,
indicate which category (a, b or c, below) will be incorporated into your program,
and include appropriate details on area, type of structure, or affordability initiative
as is applicable.
(a) New construction located in a qualified redevelopment area. Include a brief
description and/or map defining the boundaries of your city's redevelopment
area. *
(b) New construction to replace a structurally substandard structure or structures.
(c) New construction which will be developed under one or more of the
"affordability initiatives" allowed under administrative rules (see Attachment
1).
· ~Redevelopment area~ means a compact and contiguous area within which 70% of the parcels are
developed (buildings, streets, utilities, etc.), and where more than 25% of the buildings are structurally
substandard to a degree requiring substantial renovation or clearance.
/
Provide authorized signature(s) from the organization placing this application,
including printed or typewritten name, title and phone number.
MCPP-1-TC