1999-07-26 Agreement for Revolving Loan Fund
AGREEMENT FOR LOAN
OF THE
ALBERTVILLE REVOLVING LOAN FUND
THIS AGREEMENT is made and entered into as the 2{ th day of July,
1999, by and between the City of Albertville, hereinafter called "City," and Land
of Lakes Stone, LLC. and Gem Development Company, LLC., hereinafter
collectively called "Developer";
RECITALS
WITNESSETH:
WHEREAS, the Developer has applied to the City of Albe11ville for a
$75,000.00 loan from the City's Revolving Loan Fund; and
WHEREAS, the City of Albeltville has approved a low-interest loan to
Developer in the amount of $75,000.00 conditioned on Developer meeting certain
obligations as set out in this agreement;
NOW, THEREFORE, it is agreed by and between the patties hereto as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1, DEFINITIONS. In this Agreement, unless a different
meaning clearly appeal" from the context:
1. BANK means the Steams Bank in S1. Cloud, Minnesota.
2. CITY mean the City of Albel1ville.
3. DEVELOPER shall collectively mean Land of Lakes Stone, LLC. and Gem
Development Company, LLC.
4. DEVELOPMENT PROPERTY means the real propelty described as Lot 1,
Block 1 of Gem Business Park, Wright County, Minnesota.
5. MORTGAGOR shall mean Gem Development Company, LLC, a
Minnesota Limited Liability Company.
6. PROJECT means the Land of Lakes Stone development proje,ct, consisting
of the construction of a 31,728 square foot industrial building on the
Development Property of substantially the same shape, size and materials as
shown on Developer's site plan approved by the City on May 3, 1999
7. STATE means the State of Minnesota.
ARTICLE 2
FINANCING FOR PROJECTS
SECTION 2.1, PROJECT FINANCING. The Developer shall secure, from
the City and the Bank a commitment for funds necessalY to complete the project,
exclusive of the Developer's equity.
ARTICLE 3
LOAN TERMS AND CONDITIONS
SECTION 3.1, BASIC LOAN TERMS. The principal amount of the loan
by the City to the Developer shall not exceed $75,000.00, for funds drawn down
prior to final completion. The loan shall bear interest at rates shown in Section 5.4
below and shall be repaid according to the promissOlY note, attached hereto as
Exhibit A and incorporated by this reference.
SECTION 3.2, PREPAYMENT. Prepayment of the entire loan balance may
occur at any time during the loan without penalty.
SECTION 3.3, ASSIGNMENT. Neither Developer nor Mortgagor shall
sell the Development Propelty or assign its rights or interests or any pmty therein
or its right or interest, in this Loan Agreement, or any pmt thereof. In the event the
Developer or the MOltgagor, as the case may be, sells, conveys, transfers, fmther
mOltgages or encumbers or disposes of the Development Propelty, or any pmt
thereof, or any interest therein, or agrees so to do, the Developer shall immediately
pay on the Loan an amount equal to the unpaid principal balance and accrued
interest thereon to date of payment. This shall be in addition to any other remedies
at law or equity available to the City.
SECTION 3.4, TERMINATION. This contract shall automatically
terminate without any notice to Developer ( 1 ) if the LOAN proceeds have not been
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disbursed to the Developer prior to June 15, 2000; or (2) if a petition is filed by or
against the Developer under the U.S. Bankmptcy Code, and ifvoluntaty, such a
petition is not dismissed within thirty (30) business days following the date of
filing of any such petition.
ARTICLE 4
DEFAULT
SECTION 4.1, DEFAULT. The Developer shall be in default under this
Contract upon the happening of any of the following events:
(a) nonpayment, when due, of any amount payable under the promissOlY
note, attached hereto as Exhibit A or failure to observe or pelfonll
any telIDS of said note thereof; provided such nonpayment is not
remedied with ten (10) business days after written notice thereof by
either the Bonower or the City to the other patty,
(b) if Developer is in breach of any material respect of any' obligation or
agreement of the Developer under this Loan Agreement Contract,
provided Developer remains in breach in any material respect for
thilty (30) days after written notice thereof to the Developer by the
City;
(c) if any material covenant, wananty or representation of Developer
shall prove to be untrue in any material respect, provided such
covenant, wananty or representation of Developer remains untrue in
any material respect for thilty (30) business days after written
thereof to the Developer by the City;
(d) if the Developer becomes insolvent or generally unable to pay debts
as they mature or makes an assignment for the benefit of creditors,
provided such insolvency or general inability to pay is not remedied
within thilty (30) business days after written notice thereof by either
Developer or the City; or any voluntaty proceeding in bankmptcy is
instituted by the Developer; or any involuntaty proceeding in
bankmptcy which is not contested by the Developer,
( e) entIy of a final judgment against Developer when such judgment the
City reasonably deems will have a material, adverse impact on
Developer's ability to maintain its obligations under this contI'act;
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(f) transfer by the Developer, of any pmt of the Collateral to any entity
other than a wholly-owned subsidimy of Developer provided such is
not approved in writing by the City;
(g) merger or consolidation where such merger or con~olidation is not
approved in writing by the City, which approval wi'll not be
unreasonably withheld;
(h) loss, theft, substantial damage, destmction or encumbrance of any of
the Collateral securing the promissOlY note, provided that such is not
remedied within thiIty (30) days after written notice thereof by either
Developer or the City (including, without limitation, by a pledge of
insurance proceeds or by substitute Collateral satisfactOlY to the
City);
SECTION 4.2, REMEDIES UPON DEFAULT.
(a) In the event of a default and the failure to cure it in the time allotted
therefore, the City shall have the right at its option 'and! without
demand or notice, to declare all or any pmt of the ihcluding but not
limited to the promissOlY note immediately due and payable; and in
addition to the rights and remedies granted hereby, all of the rights
and remedies of the City under the Unifonn Commercial Code or
any applicable law.
(b) Developer agrees in the event of a default and the failure to cure it in
the time allotted therefore, to make the Collateral available to the
City at a place in Minnesota to be designated by the City which is
reasonably convenient. In the event of any lawsuit under this
contract then reasonable attomey's fees and costs will be awarded to
the prevailing pmty. If any notice of sale, disposition or other
intended action by the City is required by law to be given to
Developer, such notice shall be deemed reasonably and properly
given if mailed to Developer at the Development Propelty or at such
other address of Developer as may be shown on the CitY's records, at
least fifteen (15) days before such sale, disposition other intended
action. Waiver of and default hereunder by the City shall not be a
waiver of any other default or of the same default, on a later
occasion. No delays or failure by the City to exercise any right or
remedy shall be a waiver of such right or remedy and no single or
pmtial exercise by the City of any right or remedy shall preclude
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other or fmiher exercise thereof of the exercise of any other right or
remedy at any other time.
SECTION 4.3, COLLATERAL.
(a) The Developer shall grant or cause MOligagor to grant to the City a
second mortgage and security interest in the Development Propelty
to secure the loan of funds made to Developer pursuant to this
agreement. Said mOligage shall be subordinate to the prior
mOligages of the Small Business Administration, Steams Bank and
the Central Minnesota Initiative Fund.
(b) The Developer shall also grant to the City a security interest in all
machinelY and equipment of Developer, said security interest being
evidenced by a standard UCC filing and being sub6'rdinate to the
prior security interests of the Small Business Administration, Stearns
Bank and the Central Minnesota Initiative Fund.
ARTICLE 5
LOAN DISBURSEMENT PROVISIONS '
SECTION 5. I, DISBURSEMENT OF LOAN FUNDS. Loan
disbursements in the amount of $75,000.00 shall be for the purchase of equipment
and payment of costs of construction of a building on the Development Propelty.
The loan funds shall be disbursed to the Bank, which shall disburse them to
Developer in the same manner and on the same basis which the Bank is disbursing
its loan funds to Developer for the purposes described in this paragraph.
SECTION 5.2, PROVISION OF EVIDENTIARY MATERIALs. Within
30 days of request by the City, Developer shall provide the City with documentmy
evidence of materials, labor and/or equipment purchased for use in this project in
at least the amount of the loan funds.
SECTION 5.3, PROJECT TIME FRAME (SCHEDULE). The Developer
shall, by December 3 I, 1999, construct the building on the Development Propelty
and equip it with suitable equipment to meet the employment goals established in
this Agreement.
SECTION 5.4, LOAN TERMS - REPAYMENT SCHEDULE. The loan of
$75,000.00 shall be for a tenn often (10) years. Repayment of the Principal sum,
together with interest thereon, shall be made in semi-annual installments
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commencing on Janumy 2, 2000 at the interest rates, times and installments as set
f011h in Exhibit A.
ARTICLE 6
[Intentionally left blank 1
ARTICLE 7
PROVISION OF NEW PERMANENT JOBS
SECTION 7.1, EMPLOYMENT CREATION. The Developer agrees to
take affilmative action to ensure that six (6) new pelmanent, full-time jobs will be
created by the Project, said jobs paying at least $13.00 per hour (including
benefits). Developer agrees that the above job requirement shall be completed by
June 15,2001. Developer shall immediately repay said $75,000.00 loan to the
City if Developer fails to meet the job creation goals established by this paragraph.
SECTION 7.2, EMPLOYMENT DOCUMENTATION. The Developer
shall complete and provide to the City notification of employment
semiannually of hiring each new employee. This notification
requirement will not be necessmy after Janumy I, 2002, unless
otherwise required by law, and provided that the employment
objective set fOlih in Section 7.1 has been met.
SECTION 7.3, JOB CREATION DOCUMENTATION. The grantee must
include job creation infonnation in each semiannual progress repOl1. This
inf01mation shall be provided by the Developer and must include:
(a) job created;
(b) date employee(s) hired; and
(c) any layoff by qUaI1er.
ARTICLE 8
[Intentionally left blank]
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ARTICLE 9
NONDISCRIMINA TION
SECTION 9.1, NONDISCRIMINATION. The provisions of Minnesota
Statutes, Section 181.59, which relate to civil rights and discrimination, shall be
considered a part of this Agreement as though wholly set fmih herein.
ARTICLE 10
DEVELOPER'S ACKNWLEDGEMENTS, REPRESENTATIONS, AND
WARRANTS
SECTION 10.1, ACKNOWLEDGEMENTS. The Developer acknowledges
that the City is loaning its funds from its Revolving Loan Fund and that the City
must adhere to certain state-required guidelines in loaning said funds, including
requiring the Developer to meet certain requirements and engage in certain
activities as specified in this Agreement.
The Developer fmther acknowledges that the Developer has made celtain
representations and statements as to those activities of the Project to be carried out
and completed by the Developer.
The Developer acknowledges that nothing contained in this Agreement, nor
any act of the City shall be deemed or construed to create any relationship of third-
patty beneficiary, principal and agent, limited or general pmtnership, or joint
venture.
SECTION 1 0.2, REPRESENTATIONS AND W ARRANTIE~. Developer
warrants and represents, in connection wi th the Grant and for the bellefit of the
Commissioner and the City, that:
(a) The Developer acknowledges that the City, in selecting the
Developer as recipient of revolving loan funds, relied in material palt
upon the assured completion of the Project to be carried out by the
Developer, and the Developer assures the City that said Project will
be carried out by the Developer.
(b) The Developer waITants that to the best of its knowledge, it has
obtained all federal, state, and local govelnmental approvals,
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reviews, and permits required by law to be obtained in connection
with the Project.
( c) The Developer walTants that it shall keep and maintain books,
records and other documents relating directly to the receipt and
disbursements of revolving loan proceeds and that any duly
authorized representative of the City shall, at all reasonable times,
have access to and the right to inspect, copy, audit, and examine all
such books, records and other documents of the Developer necessaIY
to detennine compliance with this agreement until the conclusion of
all issues arising out of this loan.
(d) The Developer walTants that it has fully complied with all applicable
state and federal laws pe11aining to its business and will continue
said compliance throughout the tenns of this Agreement. If at any
time notice of noncompliance is received by the Developer, he
agrees to take any action to comply with the State and Federal law in
question.
(e) The Developer walTants that the $75,000.00 loan which is the
subject of this agreement is neceSSaIY to achieve the creation of the
jobs required to be created under this Agreement, and is neceSSaIY
for the successful completion of the improvements to the
Development Prope11y.
(f) Developer walTants that the $75,000.00 loan which is the subject of
this agreement will be used only for one or more of the following
uses:
I.) Acquisition of land;
2.) Construction or rehabilitation of manufacturing facilities;
3.) Site improvements;
4.) Utilities or infrastructure;
5.) MachinelY and Equipment
ARTICLE 11
OTHER SPECIAL CONDITIONS
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SECTION 11.1, WORKERS COMPENSATION INSURANCE. Developer
has obtained worker's compensation insurance as required by Minnesota Law.
SECTION 11.2, PAYMENT OF CITY'S COSTS. Developer shall pay
reasonable attomeys fees incUlTed in preparing all documentation related to this
loan and all other costs incuned by the City in processing this loan request,
including recording fees and mOligage registration tax.
IN WITNESS WHEREOF, the City has caused this Agreement to be duly
executed in its name and behalf and the Developer has caused this Agreement to
be duly executed in its name and behalf as of the date first above written,
(SEAL)
GRANTEE:
CITY OF ALBERTVILLE
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John A. Olson, Mayor i
v/
GEM DEVELOPMENT COMPANY,
LLC
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B~eio?J ~-;(L/
Its: Chief Manager/President
LAND OF LAKES STONE, LLC
By: Eric E. Dudley
Its: Chief Mangerfi .
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State of Minnesota
County of Wright
regoing instmment was acknowledged before me this %~day of
, 1999 by Linda Goeb, as Clerk-Administrator of the City of
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State of Minnesota
County of Wright
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foregoing instmment was acknowledged before me this 2.3 day of
, 1999 by John A. Olson, as Mayor of the City of Albeltville.
. .
I LINDA M. HOUGHTON I
NOTAl" PUIlIC.MIHNESOTA .
WRtGHT COUNTY
MyCt1lllll..ienEI~"'Jan. 31, 2000
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State of Minnesota
County of Wright
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NotaIY Public
The foregoing instrument was acknowledged before me this 26th day of July, 1999
by Eric E. Dudley, as Chief Manager/President of Land of Lakes Stone, LLC.
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_ , .., '. MICHAEL C. COllRI , i
,: ," ", ~ NOTARY PUBLIC-MINNESOTA JI,.
. ": HENNEPIN COUNTY"
. ,.. My Commission Expires Jan. 31. 2000._,
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NotaIY Public
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