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2022-08-30 Loan Agreement - MIFLOAN AGREEMENT MINNESOTA INVESTMENT FUND THIS AGREEMENT (the "Loan Agreement") is made and entered into as of this 30 A day of 2022 by and between the City of Albertville at 5959 Main Ave NE; P.O. Box 9 Albert ille, MN 55301 (the "Lender") and Advanced Volumetric Alliance, LLC and AVAOP, LLC 7535 River Road NE Albertville, MN 55301 (the "Co -Borrowers"); Recitals 1. The Lender has applied to the Minnesota Department of Employment and Economic Development (DEED) for a Minnesota Investment Fund Grant (the "MIF Grant") pursuant to an application (the "Grant Application") and received approval for the MIF Grant; and Grant Contract Agreement Number CDAP-21-0002-H-FY21 (the "Grant Contract Agreement") between the Minnesota Department of Employment and Economic Development (the "State") and the Lender has been executed and requires that the Borrower provide sufficient funds to complete financing and agree to loan terms with the Lender regarding the MIF Grant; and 3. The parties hereto agree to incorporate into this Loan Agreement by reference the Grant Application and Grant Contract Agreement; and 4. The work anticipated to be performed for the Borrower's Project is not geographically dependent. It therefore could have been located at any number of locations either within or outside of the State of Minnesota. The subsidy has been provided to enhance the financial attractiveness and financial feasibility of locating or retaining the Borrower's operations in the Jurisdiction, rather than at some other location. 5. Borrower and Lender wish to set forth the terms and conditions upon which Lender will make the Loan to Borrower and for the repayment thereof. NOW THEREFORE, it is agreed by and between the parties hereto as follows: ARTICLE 1 Definitions Section I.I. Definitions. In this Loan Agreement, unless a different meaning clearly appears from the context: "Bank" means Sterns Bank. "Benefit Date" means the earlier of the date equipment financed through a Minnesota Rev. March 2021 Investment Fund loan is fully operational or 3/1/2022. "Benefit" is defined as one or more of the following non -mandated compensation items paid by the Borrower on behalf of employees: health, dental, life and disability insurance, retirement program or profit-sharing. "City" means the City of Albertville, Minnesota. "County" means Wright County, Minnesota. "Compliance Date" means the date that is two (2) years after the Benefit Date. "Development Property" means the real property described in Exhibit A attached. "Effective Date" means 04/28/2021. "Expiration Date" means three months after the Compliance Date as defined in the Grant Contract Agreement. "Equipment" means the machinery & equipment purchased by the Borrower with the Loan Proceeds and described in Exhibit B attached. "Full -Time Equivalent (FTE)" is one or more people working a sum of 2,080 hours in a calendar year, which includes paid time off. "Grant Contract Agreement" means Minnesota Department of Employment and Economic Development Grant Contract Agreement # CDAP-21-0002-H-FY2021 and attached as Exhibit C. "Initial Disbursement Date" means the date of the first disbursement of any Loan Proceeds by the Lender to the Borrower. "Jurisdiction" means within the corporate boundaries of the Lender. "Loan" means the funds loaned by the Lender to the Borrower pursuant to this Loan Agreement. "Loan Documents" means this Loan Agreement, the Promissory Note, Security Agreement and security filings, and Personal Guarantees from Casey Darkenwald, Michael Hoagberg and Brian Nicholson "Loan Proceeds" means the proceeds of the Loan disbursed to the Borrower pursuant to this Loan Agreement. "MIF Program" means the Minnesota Investment Fund, Minn. Stat. § 116J.8731 and Minn. Rules Chapter 4300. Rev. March 2021 2 "MIF Grant" means the award of funds by the State to the Lender pursuant to the Grant Contract Agreement. "New Jobs" means the new permanent, Full -Time Equivalent, non -contract, non -seasonal jobs to be created by the Borrower. "Other Project Funds" means all funds required to complete the Project as defined in the Grant Application. "Project" means a proposal to construct up to a 178,000+ sq. ft. manufacturing plant on 33 acres in Albertville. The project is expected to create 135 jobs within two (2) years at an average cash wage of $27.84 per hour. The total project cost is $31,233,190. "Promissory Note" means a legal document that represents the Borrower's promise to repay the Loan per a given payment schedule, in substantially the form set forth by the State. "State" means the Minnesota Department of Employment and Economic Development. "Termination Date" means the date of the final payment made by the Borrower to the Lender under the terms of the Loan Agreement and Promissory Note (or the date that the Loan is forgiven by the State). ARTICLE 2 Loan, Use of Proceeds and Conditions of Repayment Section 2.1. MIF Loan/Funds. The Lender agrees, on the terms and subject to the conditions hereinafter set forth, to make a loan to the Borrower in an aggregate principal amount not to exceed $450,000 for the purchase of equipment The obligation of the Borrower to repay the Loan shall be evidenced by the Promissory Note. The Borrower's obligations under this Loan Agreement are expressly contingent on the Lender's receipt of the MIF Grant from the State in an amount adequate to make the Loan. Section 2.2. Non-MIF (Other) Project Funds. The Borrower has secured a commitment for the private financing necessary to complete the Project, in a form and under conditions satisfactory to the Bank, Borrower and Lender. (a) The Borrower shall commit not less than $6,272,640 of equity and not less than $24,510,550 of other private financing for the completion of the Project. (b) Other Project Funds described in the Grant Application must be used at the same amount, for the same purposes and under the same terms, rates and conditions as specified unless written consent is received from the State prior to expenditure. Rev. March 2021 3 Section 2.3. Loan Terms. FORGIVABLE LOAN: The Loan shall be forgiven by the Lender and the State upon satisfaction by the Borrower of the terms of this Loan Agreement. In the event the Loan is not forgiven, the Loan shall be repayable as set forth in Section 8.2 of this Loan Agreement. The Loan terms may not be modified without prior written approval from the State. Section 2.4. Early Repayment. The Promissory Note may be prepaid in whole or in part at any time without penalty. A prepayment shall first be applied against any accrued interest, and then against any outstanding and past due payments which are due and owing hereunder or under the Loan Agreement, and then the remaining portion of such prepayment shall be applied against the remaining outstanding and unpaid principal balance. Section 2.5. Maintenance and Operation of the Project. As long as any portion of the Loan is still outstanding, Borrower shall maintain and operate the Project and use the Loan Proceeds in compliance with the terms of MIF, this Loan Agreement, and all applicable federal, state and local laws, regulations and ordinances, including but not limited to all environmental laws and regulations. Article 3 Conditions of Lending Section 3.1. Condition Precedent to Any Advance. The obligation of the Lender to close the Loan and disburse the Loan Proceeds thereof to Borrower shall, subject to waiver by the State, be subject to the condition precedent that the Lender shall have received on or before the date of such closing the Promissory Note duly executed by the Borrower. The Borrower shall provide identifying information for the equipment prior to disbursement of the Loan Proceeds in accordance with Section 9.3 hereof. Section 3.2. Further Conditions Precedent to Disbursement. The obligation of the Lender to disburse the Loan Proceeds shall also be subject to the following conditions precedent: (a) The Loan which is being made to the Borrower shall be consistent with the provisions of MIF. (b) No Event of Default hereunder or event which would constitute such an Event of Default but for the requirement that notice be given or that a period of grace or time elapse, shall have occurred and be continuing. Section 3.3. Disbursement and Deposit of Loan Proceeds. Upon the execution of this Loan Agreement and the satisfaction of all of the conditions specified in Article 6, the Lender shall disburse the full Loan Proceeds to the Borrower. Section 3.4. Termination. This Loan Agreement shall automatically terminate without any notice to Borrower: Rev. March 2021 4 (a) If no Loan Proceeds have been disbursed to the Borrower prior to the Expiration Date; or (b) If the Borrower fails to pay its debts as they become due, makes an assignment for the benefit of its creditors, admits in writing its inability to pay its debts as they become due, files a petition under any chapter of the Federal Bankruptcy Code or any similar law, state or federal, now or hereafter existing, becomes "insolvent" as that term is generally defined under the Federal Bankruptcy Code, files an answer admitting insolvency or inability to pay its debts as they become due in any involuntary bankruptcy case commenced against it, or fails to obtain a dismissal of such case within sixty (60) days after its commencement or convert the case from one chapter of the Federal Bankruptcy Code to another chapter, or is the subject of an order for relief in such bankruptcy case, or is adjudged a bankrupt or insolvent, or has a custodian, trustee, or receiver appointed for it, or has any court take jurisdiction of its property, or any part thereof, in any proceeding for the purpose of reorganization, arrangement, dissolution, or liquidation, and such custodian, trustee, or receiver is not discharged, or such jurisdiction is not relinquished, vacated, or stayed within sixty (60) days of the appointment. ARTICLE 4 Acknowledgments, Incorporation, Representations, and Warranties Section 4.1. Acknowledgments/Incorporation. (a) The Borrower acknowledges that the Lender, in order to obtain funds for part of the Borrower's activities in connection with the Project, has applied for the MIF Grant to the State under the Minnesota Investment Fund Program, Economic Development Division, and that the Lender has entered into the Grant Contract Agreement with the State attached as Exhibit C, setting forth the terms, conditions, and requirements of the MIF Grant. The Borrower further acknowledges that it has made certain representations and statements in the Grant Application concerning its activities relating to the Project, and that the Borrower is designated and identified under the Grant Contract Agreement. (b) Under the Grant Contract Agreement, the Lender has undertaken certain obligations with respect to, and among other things, repayment to the State of the Loan Proceeds in the event certain conditions are not met. A copy of the Grant Contract Agreement and this Loan Agreement shall be on file in the offices of the Lender. In the event any provision of this Loan Agreement relating to the Borrower's obligations hereunder is inconsistent with the provisions of the Grant Contract Agreement relating to the Borrower's activities thereunder, the provisions of the Grant Contract Agreement shall prevail. (c) The Borrower acknowledges that nothing contained in the Grant Contract Agreement or this Loan Agreement, nor any act of the State or the Lender, shall be deemed or construed to create between the State and the Borrower (or, except as Borrower and Lender between the Lender and the Borrower) any relationship, including but not limited to that of third party beneficiary, principal and agent, limited or general partnership, or joint venture. As Rev. March 2021 5 such, the Borrower agrees to hold the State harmless from any claim, demand, suit, action, or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Loan Agreement, any events related to the Project or the Borrower's participation in this Loan, or Borrower's activities on the Development Property. Section 4.2. Representations and Warranties. The Borrower warrants and represents, in connection with the Loan and for the benefit of the State and the Lender, that: (a) It is a Minnesota Limited Liability Company registered and in good standing under the laws of the State of Minnesota, and is authorized to enter into this Loan Agreement and perform any of the acts required herein. (b) It has the legal authority and is duly authorized to operate the Project, to incur the indebtedness of the Promissory Note and to perform its obligations under this Loan Agreement, to execute and deliver the Loan Documents to which it is a party and it has taken all actions necessary and incident to its execution and delivery of the Loan Documents. (c) Its execution and delivery of the Loan Documents to which it is a party, and its incurrence of the Loan does not violate any provision of law or Borrower's corporate documents. (d) The Promissory Note was duly and validly authorized, executed and delivered, and it constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its terms. The Loan Documents to which it is a party, have been duly and validly authorized, executed and delivered, and are the legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms, except to the extent the enforceability thereof may be limited by bankruptcy, insolvency or other law affecting creditor's rights, or the application of equitable principles generally. (e) It is not in violation of any provisions of its organizational documents or of the laws of local governments, State of Minnesota or U.S. Government, and there are no actions, suits or proceedings pending, or to its knowledge threatened, before or by any judicial body or governmental authority, against or effecting it, and it is not in default with respect to any order, writ, injunction, decree, or demand of any court or any governmental authority which would impair its ability to enter into this Loan Agreement or to perform any of the acts required of it in the Loan Documents to which it is a party. (f) Neither the execution and delivery of the Loan Documents to which it is a party, nor compliance with any of the terms, conditions, requirements or provisions contained herein or in such referenced documents, is prevented by, is a breach of, or will result in a breach of any term, condition or provision of any agreement or document to which it is now a party or by which it is bound. (g) It will maintain adequate capital for the proper operation and administration of Rev. March 2021 its duties under this Loan Agreement. (h) It will comply with Minn. Stat. § 116J.8731 and Minn. Rules Chapter 4300 and all of the terms, conditions, provisions and requirements, contained in the Loan Documents to which it is a party. (i) Representations, statements, and other matters provided by the Borrower relating to those activities of the Project to be completed by the Borrower, which were contained in the Grant Application, were true and complete in all material respects as of the date of submission to the Lender and such representations, statements, and other matters are true as of the date of this Loan Agreement and there are no adverse material changes in the financial condition of the Borrower's business. (j) The Borrower acknowledges that the State, in selecting the Lender as recipient of the Grant, relied in material part upon the assured completion of the Project to be carried out by the Borrower, and the Borrower warrants that said Project will be carried out as promised. (k) The Borrower warrants that to the best of its knowledge, it has obtained all federal, state, and local governmental approvals, reviews, and permits required by law to be obtained in connection with the Project and has undertaken and completed all actions necessary for it to lawfully execute this Loan Agreement as binding upon it. (1) The Borrower warrants that it shall keep and maintain books, records, and other documents relating directly to the Other Project Funds, and that any duly authorized representative of the State 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 Borrower for seven years after the termination of the Loan Agreement or until such time that the Lender and the State have both determined that all issues, requirements, and close-out procedures relating to or arising out of the Loan have been settled and completed, whichever is later. (m) The Borrower warrants that no transfer of any or all of the Loan Proceeds by the Lender to the Borrower shall be or be deemed an assignment of Loan Proceeds, and the Borrower shall neither succeed to any rights, benefits, or advantages of the Lender under the Grant Contract Agreement, nor attain any right, privileges, authorities, or interest in or under the Grant Contract Agreement. Section 4.3. Affirmative Covenants. Borrower further warrants and agrees that: (a) It has sufficient funds to complete the purposes of the Project and sufficient capacity to administer the Project. (b) The Project will be performed in full compliance with all applicable federal, state and local laws, regulations, rules and ordinances, which include but are not limited to all Rev. March 2021 7 applicable environmental laws, regulations and rules. (c) Borrower agrees to submit reports required in Article 7 and Article 8. ARTICLE 5 Events of Default and Rights and Remedies Section 5.1. Events of Default. Any one or more of the following events shall be deemed and shall constitute an "Event of Default": (a) The interest or principal due under the Promissory Note, or any other payments due and payable under this Loan Agreement or any other document referred to herein, are not paid when due and such nonpayment is not remedied within ten (10) business days after written notice thereof to the Borrower by the Lender; (b) The Borrower is in breach of any of the requirements, terms, conditions, covenants or other agreements in the Loan Documents and remains in breach in any material respect for thirty (30) business days after written notice thereof to the Borrower by the Lender; provided, however, that if such breach shall reasonably be incapable of being cured within such thirty (30) business days after notice, and if the Borrower commences and diligently prosecutes the appropriate steps to cure such breach, no default shall exist so long as the Borrower is proceeding to cure such breach in a reasonable period of time; (c) Any representation or warranty made by the Borrower in the Loan Documents, any other document referred to in such documents, or any financial statement, certificate, or report furnished pursuant to this Loan Agreement, or any representation or warranty made order to induce the Lender to close the Loan or disburse the Loan Proceeds, which proves to have been untrue in any material respect or materially misleading as of the time such representation or warranty was made; (d) Borrower shall make an assignment for the benefit of its creditors, or shall be dissolved, or shall commit an act of bankruptcy under the United States Bankruptcy Act (as now or hereafter amended), or shall admit in writing its inability to pay its debts as they become due, or shall file a petition in bankruptcy, or shall become or be adjudicated as bankrupt or insolvent, however defined, or shall file a petition seeking any reorganization, dissolution, liquidation, arrangement, composition, readjustment or similar relief under any present or future bankruptcy or insolvency statute, law or regulation, or shall file an answer admitting to or not contesting the material allegations of a petition filed against it in such proceedings, or shall not, within 60 days after the filing of such a petition against it, have the same dismissed or vacated, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of a material part of its properties, or shall not, within 60 days after the appointment (without its consent or acquiescence) of a trustee, receiver or liquidator of any material part of its properties, have such appointment vacated; Rev. March 2021 8 (e) A court of competent jurisdiction shall enter an order, judgment or decree approving a petition filed against Borrower seeking any reorganization, dissolution or similar relief under any present or future federal, state or other statute, law or regulation relating to bankruptcy, insolvency or other relief for debtors, or any trustee, receiver or liquidator of such entity, shall be appointed without the consent or acquiescence of State; (f) Borrower shall refuse to allow the State, at any reasonable time and upon prior written notice, to inspect, audit, copy or abstract, any and all of its books, records, papers or other documents relevant to the Borrower's use of the Loan Proceeds; (g) Borrower shall refuse to allow the Minnesota Legislative Auditor or the State Auditor for the State of Minnesota, at any reasonable time and upon prior written notice, to inspect, audit, copy or abstract, any and all books referred to in Section 5.1(f); (h) Borrower shall fail to provide annual reporting information as described herein. (i) The Borrower sells, conveys, transfers, encumbers, or otherwise disposes of all or any part of the Development Property or the Equipment without the prior written approval of the State and Lender; 0) The Borrower merges or consolidates with an entity that is not an affiliate of the Borrower wherein the Borrower or such affiliate are not the surviving entity after such merger or consolidation without the prior written consent of the Lender; (k) There is a loss, theft, substantial damage, or destruction of all or any part of the Development Property or the Equipment that is not remedied to the Lender's satisfaction within sixty (60) business days after written notice thereof by the Lender to the Borrower; or (1) The Borrower is in breach of the requirements of Article 7 and Article 8, the Business Subsidy Agreement and Progress Reporting. (m) The occurrence of any other act or event that is noncompliant under the MIF Program. Section 5.2. Rights and Remedies. Upon the occurrence of an Event of Default and at any time thereafter until such Event of Default is cured to the satisfaction of the Lender, the Lender may, at its option, exercise any and all of the following rights and remedies (as well as any other rights and remedies available to it): (a) The Lender may, by notice in writing to the Borrower, refrain from disbursing any of the Loan Proceeds; provided, however, the Lender may make such disbursements after the occurrence of an Event of Default without thereby waiving its rights and remedies hereunder, or waiving its right to make any additional disbursements. Rev. March 2021 9 (b) The Lender may, by written notice to the Borrower, declare immediately due and payable all principal and interest due under the Promissory Note, together with all other sums payable under the Loan Documents and the same shall thereupon be immediately due and payable without presentment or other demand, protest, notice of dishonor or any other notice of any kind, all of which are hereby expressly waived. (c) The Lender shall have the right, in addition to any other rights provided by law or equity, to enforce its rights and remedies under the Loan Documents. (d) The Lender shall have the right, in addition to any other rights provided by law or equity, to initiate litigation for the breach of any term, condition, covenant, requirement or provision contained in the Loan Documents, and to recover damages for such breach. (e) The Lender shall have the right, in addition to any other rights provided by law or equity, to apply to any court, state or federal, for specific performance of any term, condition, covenant, requirement or provision contained in the Loan Documents; for an injunction against any violation of any such term, condition, covenant, requirement and/or provision; or for such other relief as may be appropriate, since the injury to the Lender arising from a default under any of the terms, conditions, covenants requirements and/or provisions of the Loan Documents, would be irreparable and the amount of damage would be difficult to ascertain. Section 5.3. Rights and Remedies Cumulative. The rights and remedies of the parties to this Loan Agreement, whether provided by operation of law or by this Loan Agreement, shall be cumulative, and the exercise by either party of any one or more of such remedies shall not be construed to preclude or waive its right to exercise, at the same or different times, any of the other such remedies for the same default or breach, or of any of its remedies for any other default or breach by the other party. No waiver made by either such party with respect to the performance, manner or time thereof, of any obligation of the other party or any condition to its own obligation under this Loan Agreement or any document referred to herein, shall be considered a waiver of any rights of the party making the waiver with respect to the particular obligation of the other party or condition to its own obligation beyond those expressly waived in writing and to the extent thereof, or a waiver in any respect in regard to any other rights of the party making the waiver or any other obligations of the other party. No delay or failure by either party to exercise any right or remedy shall be a waiver of such right or remedy, and no single or partial exercise by either party of any right or remedy shall preclude other or further exercise thereof for the exercise of any other right or remedy at any other time. Section 5.4. Collection. Upon the occurrence of an Event of Default and at any time thereafter until such Event of Default is cured to the satisfaction of the Lender and State, Borrower agrees to pay all costs and expenses of the Lender, including, but not limited to, reasonable attorney's fees, in the collection of any of the obligations or the enforcement of any of the Lender's rights. Rev. March 2021 10 If any notice of sale, disposition or other intended action by the Lender is required by law to be given to Borrower, such notice shall be deemed reasonably and properly given if mailed to Borrower at the address specified in Section 9.15(b), or at such other address of Borrower as may be shown on the Lender's records, at least 15 days before such sale, disposition or other intended action. The Lender shall have the right at its option and without demand or notice, to declare all or any part of the Loan immediately due and payable, and in addition to the rights and remedies granted hereby, the Lender shall have all of the rights and remedies available under the Uniform Commercial Code and any other applicable law. Section 5.5. Assignment. If, prior to the Termination Date, the Borrower sells, conveys, transfers, further mortgages or encumbers, or disposes of the Development Property, or any part thereof or interest therein, or enters into an agreement to do any of the foregoing, the Borrower shall immediately repay all amounts then outstanding on the Loan. This shall be in addition to any other remedies at law or equity available to the Lender. Section 5.6. Appointment for Foreclosure. Upon the occurrence of an Event of Default and at any time thereafter until such Event of Default is cured to the satisfaction of the Lender and State, Borrower agrees that the Lender may appoint an individual or entity to handle the default proceedings. ARTICLE 6 Disbursement Provisions Section 6.1. Payment Requisition Documentation. The Lender will disburse the loan funds upon receipt and approval by the Lender and the State of the following documentation: (a) This Loan Agreement, fully executed; (b) Evidence of equity injection in the amount of $6,272,640; (c) Promissory Note(s) from Stern Bank (d) Invoices for items funded by the Loan and matching funds. (e) The Promissory Note; (f) The Security Agreement and evidence of security filings; (g) The Personal Guarantee(s) from Casey Darkenwald, Michael Hoagberg and Brian Nicholson (h) The Borrower shall maintain insurance in adequate amounts covering loss or damage to the collateral. Provide evidence that the Lender has been listed as loss payee. Upon receipt of such information, the Loan funds will be disbursed upon approval of the Lender and the State up to a total disbursement amount of $450,000. Rev. March 2021 11 Section 6.2. Other Documentation. (a) Third party documentation of total project expenditures as outlined in the application sources and uses will be required prior to the Compliance Date. (b) Evidence that equipment or other items purchased with the Loan are in the Jurisdiction must be provided on or prior to the Benefit Date. Section 6.3. Review of Documents. The Borrower shall not be entitled to any disbursement of Loan Proceeds until the Lender's legal counsel and the State have reviewed and approved this Loan Agreement and the exhibits attached hereto. Section 6.4. Adverse Changes. The Lender and the State will not authorize disbursement of funds if there has been any adverse change in the Borrower's financial condition, organization, operations or their ability to repay the project financing. ARTICLE 7 Progress Reporting Section 7.1. Progress Information. The Borrower shall provide to the Lender information for incorporation into the Minnesota Investment Fund progress reports, as required by the State and as needed by the Lender, to monitor the Project for compliance with State and Lender guidelines. This information must be provided until the goals set forth in Section 8.1 have been met or until the Compliance Date, whichever is later. At the discretion of the State or Lender additional reporting may be required. This information must be submitted to the Lender no later than: (a) January 15, 2022 for the period ending December 31, 2021; (b) January 15, 2023 for the period ending December 31, 2022; (c) January 15, 2024 for the period ending December 31, 2023; (d) Fifteen days after the Compliance Date. Section 7.2 Documentation to be provided to the Lender: (a) Project status and the status of payments. (b) Additional Leverage. The Borrower must provide to the Lender invoices, sworn construction statements, and or any other information, with each progress report, to document Other Project Funds in addition to the originally included project costs. (c) Job Creation Documentation. The Borrower shall provide to the Lender information on the hiring of each New Job on forms provided by the Lender. This information must include: (1) Permanent jobs created; Rev. March 2021 12 (2) Job title of each New Job; (3) Date of hire of each new employee; (4) Hourly base wage paid; (5) List of Benefits provided; and (6) Hourly value of Benefits paid. (d) Payroll Report. A formal payroll report verifying job information will be due as of the Compliance Date. ARTICLE 8 Business Subsidy Agreement and Reporting Section 8.1. Business Subsidy Agreement. The provisions of this Section constitute the "Business Subsidy Agreement" for purposes of the Minnesota Business Subsidy Act (Minn. Stat. § 116J.993 — § 116J.995 and its successor statute.) (a) The Borrower acknowledges and agrees that the provisions of Minnesota's Business Subsidy Act apply to this Loan Agreement, as Borrower is receiving government assistance under the terms of this Loan Agreement. (1) The subsidy provided to the Borrower includes the $450,000 loan made hereunder which will be used for the purchase of equipment. (2) The public purposes and goals of the subsidy are to increase Borrower's net jobs in the City and encourage economic development. (3) The goals for the subsidy are to create jobs that pay a livable wage, per Section 8.1(b) of this Loan Agreement. (4) If the goals are not satisfied, the Borrower shall make payment to the Lender as required in Section 8.2 of this Loan Agreement. (5) The subsidy is needed because the Project cost is economically infeasible without the Loan. (6) The Borrower must continue operations in the Jurisdiction for at least five years following the Benefit Date. (7) The Borrower does not have a parent corporation. (8) In addition to the assistance provided under this Loan Agreement, the Borrower has received or expects to receive as part of this Project, the following financial assistance from other "grantors" as defined in the Business Subsidy Act: the project is considered and qualified for $175,000 JCF funds. (b) On the Compliance Date, the Borrower shall have: (1) Maintained zero ( 0 ) permanent, non -contract, non -seasonal FTE jobs; Rev. March 2021 13 (2) Created at least one hundred thirty-five (135) New Jobs at the Development Property with each job noted once within "wage brackets" as stated below: a. Four (4) New Jobs must pay a base cash wage of at least $16.83 per hour (exclusive of Benefits); The Borrower is entitled to forgivable Loan Proceeds in the amount of $2,177 for each jobs created in this wage bracket, b. Twenty three (23) New Jobs must pay a base cash wage of at least $18.00 per hour (exclusive of Benefits); The Borrower is entitled to forgivable Loan Proceeds in the amount of $2,830 for each jobs created in this wage bracket,; c. One hundred eight (108) New Jobs must pay a base cash wage of at least $21.00 per hour (exclusive of Benefits); The Borrower is entitled to forgivable Loan Proceeds in the amount of $3,483 for each jobs created in this wage bracket, (3) Any job created between the Effective Date and the Compliance Date shall pay at least $14.01 per hour, including Benefits. (4) New Jobs created on or after the Effective Date that meet the criteria outlined in 8.1(b)(2) will count toward the Borrower's job creation goal. Section 8.2. Default on Business Subsidy Act Requirements. (a) If the Borrower fails to meet the job creation goal and wage level commitment set forth in Section 8.1(b) above on the Compliance Date, the Lender may, after holding a public hearing, extend the Compliance Date for one year, after approval from the State. If no extension occurs, or if after the extension, the Borrower fails to meet the job creation goal and wage commitment, the Borrower will be required to repay to the Lender a pro rata share of the Loan principal plus interest as calculated in Section 8.2 (b) at an accelerated rate, based upon the difference between the wage bracket values defined in Section 8.1(b)(2) above and the wage bracket value of actual jobs created. Forgivable loan proceeds will be subject to collection first; once the forgivable funds are exhausted, repayable loan proceeds will be subject to accelerated repayment. (b) In an Event of Default occurring as a result of a breach by the Borrower of any provision of Section 8.1 of this Loan Agreement, the Borrower agrees to repay the principal amount as calculated in Section 8.2(a) hereof plus interest set at the greater of three percent (3%) or the implicit price deflator for government consumption expenditures and gross investment for state and local governments prepared by the Bureau of Economic Analysis of the United States Department of Commerce for the 12-month period ending March 315t of the previous year (c) Interest required in Section 8.2 (b) shall commence to accrue as of the Initial Rev. March 2021 14 Disbursement Date; (d) Nothing in this Section 8.2 shall be construed to limit the Lender's rights or remedies under any other provision of this Loan Agreement, and the provisions of Section 8.2 are in addition to any other such right or remedy the Lender may have available. (e) The Borrower shall provide to the Lender information regarding job and wage goals and results for two years after the Benefit Date or until the goals are met, whichever is later. This reporting requirement will expire if the goals are met on the Compliance Date. If the goals are not met, the Borrower must continue to provide information on the Loan until the Loan is repaid. The information must be filed on the Non-JOBZ Minnesota Business Assistance form as found on the MN Department of Employment and Economic Development website and shall include the following: (1) the type, public purpose, and amount of subsidies and type of district, if the subsidy is tax increment financing; (2) the hourly wage of each job created with separate bands of wages; (3) the sum of the hourly wages and cost of health insurance provided by the employer with separate bands of wages; (4) the date the job and wage goals will be reached; (S) a statement of goals identified in the subsidy agreement and an update on achievement of those goals; (6) the location of the recipient prior to receiving the business subsidy; (7) the number of employees who ceased to be employed by the recipient when the recipient relocated to become eligible for the business subsidy; (8) why the recipient did not complete the project outlined in the subsidy agreement at their previous location, if the recipient was previously located at another site in Minnesota; (9) the name and address of the parent corporation of the recipient, if any; (10) a list of all financial assistance by all grantors for the project; and (11) other information the Commissioner of the MN Dept. of Employment and Economic Development may request. (f) This information must be provided to the Lender no later than March 1 of each year for the previous year. If the Borrower does not submit the report, the Lender shall mail the Borrower a warning within one week of the required filing date. If, after 14 days of the postmarked date of the warning, the Borrower fails to provide a report, the Borrower must pay to the Lender a penalty of $100 for each subsequent day until the report is filed. The maximum penalty shall not exceed $1,000. ARTICLE 9 Other Conditions Section 9.1. Project Time Frame. The time frame outlined in the Grant Application and Grant Rev. March 2021 15 Contract Agreement pertaining to the Project shall be met by the Borrower. Section 9.2. Promissory Note. The Borrower shall execute a Promissory Note in substantially the form set forth by the State. Section 9.3. Collateral. The Borrower shall furnish the Lender description of collateral. Section 9.4. Annual Financial Statements. For the term of the Loan, upon request of the Lender, the Borrower shall submit the most recent annual financial statement prepared in accordance with generally accepted accounting principles. The annual financial statements shall include a profit and loss statement, balance sheet, and statement of cash flow, notes and an opinion from the accountants of such statements acceptable to the Lender. Section 9.5. Discrimination on Account of Race, Creed, or Color. The provisions of Minn. Stat. § 181.59 and any successor statutes, which relate to civil rights and discrimination, shall be considered a part of this Loan Agreement as though wholly set forth herein and the Borrower shall comply with each such provision throughout the term of this Loan Agreement. Section 9.6 Affirmative Action. The Borrower is encouraged to prepare and implement an affirmative action plan for the employment of minority persons, women, and the qualified disabled. Section 9.7. Job Listing Agreement_ (Minn. Stat. § Section 116L.66 and any successor statutes). When the Loan is for $200,000 or more, the Borrower shall enter into a Job Listing Agreement with the local CareerForce Center, MN Department of Employment and Economic Development. Section 9.8. Prevailing Wage. If the Borrower is awarded $500,000 or more of Loan Proceeds and the Loan is used for construction, installation (including equipment), remodeling and or repairs, the Borrower shall fully and completely comply with all applicable prevailing wage requirements contained in Minn. Stat. § 116J.871 and § 177.42, subd. 6. (a) Documentation. The Borrower shall maintain or ensure access to all documentation necessary to establish that the required prevailing wage was paid and shall allow the Lender, the Commissioner of the Department of Labor and Industry and the State reasonable access to such data. (b) Penalty. It is a misdemeanor for the Borrower, who has certified that prevailing wages will be paid to laborers and mechanics to subsequently fail to paythe prevailing wage. Each day a violation of this subdivision continues is a separate offense. Rev March 2021 16 Section 9.9. Surety Deposits Required for Construction Contracts_ If the Loan is used for construction, and the Borrower is hiring, contracting, or having a contract with a nonresidential person or foreign corporation to perform construction work, the Borrower must comply with Minnesota Statutes 290.9705, as amended, by deducting and withholding eight percent of cumulative calendar year payments to the contractor which exceeds $50,000. This condition may be waived if (1) the contractor gives the commissioner a cash surety or a bond, secured by an insurance company licensed by Minnesota, conditioned that the contractor will comply with all applicable provisions of this chapter and chapter 297A, or (2) the contractor has done construction work in Minnesota at any time during the three calendar years prior to entering the contract and has fully complied with all provisions of this chapter and chapter 297A for the three prior years. Section 9.10. Publicity and Endorsement (a) Publicity. Any publicity regarding the subject matter of this Loan Agreement must identify the State as the sponsoring agency. For purposes of this provision, publicity includes notices, informational pamphlets, press releases, research, reports, signs, and similar public notices prepared by or for the Borrower individually or jointly with others, or any subcontractors, with respect to the MIF Program, publications, or services provided resulting from this Grant Contract Agreement. (b) Endorsement. The Lender and the Borrower must not claim that the State endorses its products or services. Section 9.11. Workers Compensation Insurance. The Borrower has obtained workers compensation insurance as required by Minn. Stat. § Section 176.181, subd. 2. The Borrower's workers compensation insurance information is as follows: (a) Company Name: The Builders Group (b) Policy Number: 01-0002243-2022 (c) Local Agent: Kraus Anderson - Sorel Johnson Section 9.12. Effect on Other Agreements. Nothing in this Loan Agreement shall be construed to modify any term of any other agreement to which the Lender and the Borrower are parties. Section 9.13. Release and Indemnification Covenants. Except for any breach of the representations and warranties of the Lender or the negligence or other wrongful act or omission of the following named parties, the Borrower agrees to protect and defend the Lender and the governing body members, officers, agents, servants, and employees thereof, now and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action, or other Rev. March 2021 17 proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from the acquisition, construction, installation, ownership, maintenance, and operation of the Project and the Borrower's activities on the Development Property. Section 9.14. Modifications. This Loan Agreement may be modified solely through written amendments hereto executed by the Borrower and the lender and approved by the State. Section 9.15. Notices and Demands. Any notice, demand, or other communication under this Loan Agreement by either party to the other shall be sufficiently given or delivered only if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally: (a) as to the Lender: City of Albertville ATTN: Adam Nafstad, City Administrator 5959 Main Ave NE; P.O. Box 9 Albertville, MN 55301 (b) as to the Borrower- Advanced Volumetric Alliance, LLC and AVAOP, LLC ATTN: Casey Darkenwald, CEO/President 7535 River Road NE Albertville, MN 55301 or at such other address with respect to any party as that party may, from time to time, designate in writing and forward to the others as provided in this Section 9.15(b). Section 9.16 Conflict of Interests; Representatives Not Individually Liable. (a) No employee, officer or agent of the Lender shall participate in the administration of a contract supported by this loan if a conflict of interest, real or apparent, would be involved. No employee, officer or agent of the Lender may obtain a financial interest in any agreement with respect to the Loan. No employee, officer, or agent of the Lender shall be personally liable to the Borrower or any successor in interest in the event of any default or breach by the Lender or for any amount that may become due to the Borrower or on any obligation or term of this Loan Agreement. (b) To the best of the Borrower's knowledge, no member, officer, or employee of the Lender, or its officers, employees, designees, or agents, no consultant, member of the governing body of the Lender, and no other public official of the Lender, who exercises or has exercised any functions or responsibilities with respect to the Project during his or her tenure shall have any Rev. March 2021 18 interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the Project or in any activity, or benefit there from, which is part of the Project. Section 9.17. Binding Effect. The covenants and agreements in this Loan Agreement shall bind and benefit the heirs, executors, administrators, successors, and assigns of the parties to this Loan Agreement. Section 9.18. Provisions Not Merged With Deed. None of the provisions of this Loan Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Development Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Loan Agreement. Section 9.19. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of this Loan Agreement are inserted only for convenience of reference and shall be disregarded in construing or interpreting any of its provisions. Section 9.20. Counterparts. This Loan Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.21. Choice of Law and Venue. This Loan Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota without regard to its conflict of laws provisions. Any disputes, controversies, or claims arising out of this Loan Agreement shall be heard in the state of Minnesota, and all parties to this Loan Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. Section 9.22. Waiver. The failure or delay of any party to take any action or assert any right or remedy, or the partial exercise by any party of any right or remedy shall not be deemed to be a waiver of such action, right, or remedy if the circumstances creating such action, right, or remedy continue or repeat. Section 9.23. Entire Agreement. This Loan Agreement, with the exhibits hereto, constitutes the entire agreement between the parties pertaining to its subject matter and it supersedes all prior contemporaneous agreements, representations, and understandings of the parties pertaining to the subject matter of this Loan Agreement. Section 9.24. Separability. Wherever possible, each provision of this Loan Agreement and each related document shall be interpreted so that it is valid under applicable law. If any provision of this Loan Agreement or any related document is to any extent found invalid by a court or other governmental entity of competent jurisdiction, that provision shall be ineffective only to the extent of such invalidity, without invalidating the remainder of such provision or the remaining provisions of this Loan Agreement or any other related document. Section 9.25. Immunity. Nothing in this Loan Agreement shall be construed as a waiver by the Rev. March 2021 19 Lender of any immunities, defenses, or other limitations on liability to which the Lender is entitled by law, including but not limited to the maximum monetary limits on liability established by Minn. Stat. § Chapter 466. Rev. March 2021 20 IN WITNESS WHEREOF, the Lender has caused this Loan Agreement to be duly executed in its name and behalf and the Borrower has caused this Loan Agreement to be duly executed in its name and behalf as of the date first above written. Lender Name: City of Albertville By Its {L By Its �d p Co -Borrowers Name: Advanced Volumetric Alliance, LLC and AVAOP, LLC By 6"mwvA4. CEO By &La.n, %k,m Its Vice President Rev. March 2021 21 EXHIBIT A Legal Description of Development Property Lot 1, Block 1, AVA Addition, Wright County, Minnesota. Rev. March 2021 22 EXHIBIT B Equipment List Bridge Crane and (3) Runway (10) 3-ton Bridge Cranes and (3) Runways systems (rotating lights and safety horns included) Rev. March 2021 23 EXHIBIT C Grant Contract Agreement Rev. March 2021 24 STATE OF MINNESOTA GRANT CONTRACT AGREEMENT DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT ECONOMIC DEVELOPMENT DIVISION Minnesota Investment Fund Grant Contract Agreement Grant Number: CDAP-21-0002-H-FY2021 Grant Amount: $450,000 Grantee: City of Albertville Borrower: Advanced Volumetric Alliance, LLC This grant contract agreement is between the State of Minnesota, acting through the Department of Employment and Economic Development, Economic Development Division, 332 Minnesota St., Suite E200, St. Paul, MN 55101("STATE") and City of Albertville 5959 Main Ave NE, Albertville, MN 55301 "GRANTEE"). Recitals 1. Under Minn. Stat. §116J.993 and 116J.994 which established the guidelines for providing business subsidies, and 116J.8731, which established the Minnesota Investment Fund, the State is empowered to enter into this grant contract agreement. 2. The State is in need of local government to administer financial assistance to eligible projects in accordance with Minn. Stat. § 11618731 Minnesota Investment Fund; Minnesota Rules Chapter 4300; and policies and procedures developed by the State. 3. The work anticipated to be performed for the Borrower's Project is not geographically dependent. It therefore could have been located at any number of locations either within or outside of the State of Minnesota. The subsidy has been provided to enhance the financial attractiveness and financial feasibility of locating or retaining the Borrower's operations in the Jurisdiction, rather than at some other location. 4. The Grantee represents that it is duly qualified and agrees to perform all services described in this grant contract agreement to the satisfaction of the State. 5. The Grantee and State are entering into this grant contract agreement for public purposes that include the creation or retention of jobs that pay quality wages, the enhancement of economic growth in the State of Minnesota and the expansion of the tax base of the local community where the business will locate or expand. Defined Terms Defined terms. As used in this grant contract agreement, the following terms shall have the meanings set out respectively after such term (the meanings to be equally applicable to both the singular and plural forms of the terms defined), unless the context specifically indicates otherwise: Rev. July 29, 2020 1 "Application" means the Grantee's application to the State for a Minnesota Investment Fund award for the purpose of providing a loan to Advanced Volumetric Alliance, LLC ("BORROWER"). "Benefit Date" means the date equipment financed through a Minnesota investment Fund loan is fully operational as defined in Section 1.2 of the Term of Agreement on page two of this grant contract agreement. "Compliance Date" is the date two years from the Benefit Date at which job creation and wage goals by the Borrower must be completed. "Full -Time Equivalent (FTE)" is one or more people working a sum of 2,080 hours in a calendar year. "Loan Agreement" is a document between the Grantee and Borrower defining the terms and conditions of the Loan. 1. Term of Grant Contract Agreement 1.1 Effective Dote. March 31, 2021 or the date the State obtains all required signatures under Minn. Stat. 4 16B.98 Subd. 5, whichever is later. Per Minn. Stat.§16B.98, Subd. 5, the Grantee must not begin work until this grant contract agreement is fully executed and the State's Authorized Representative has notified the Grantee that work may commence. Per Minn. Stat. § 16B.99 Subd. 7, no payments will be made to the Grantee until this grant contract agreement is fully executed. 1.2 Benefit Date. 03/02/2022 1.3 Compliance Date: 03/01/2024 (two years after Benefit Date) 1.4 Expiratlon Date. 06/30/2024 (three months after Compliance Date) 1.5 Survival of Terms. The following clauses survive the expiration or cancellation of this grant contract agreement: 8. Liability, 9. State Audits; l0. Government Data Practices;12. Publicity and Endorsement;13, Governing Law, Jurisdiction and Venue;15. Data Disclosure; and Exhibit A 4. Repayments. 2. Grantee's Duties The Grantee, who is not a State employee, will: 2.1 Perform the duties specified in Exhibit A which is attached and incorporated into this grant contract agreement. 2.2 Include in any contract and sub -grant, including the Loan Agreement with the Borrower, in addition to provisions that define a sound and complete agreement, such provisions that require contractors, sub -grantees and the Borrower to comply with applicable state and federal laws. 2.3 Job Usting Agreements. Minn. Stat. § 116L.66, subd.1, requires a business or private enterprise to list any vacant or new positions with the state CareerForce Center if it receives more than $200,000 a year in grants from the State. If applicable, the business or private enterprise shall list any jab vacancy in its personnel complement with CareerForce at www.careerforcemn.com as soon as it occurs. Rev. July 29, 2020 2 2.4 Ensure that all contractors and subcontractors performing work covered by this Grant are paid for their work that is satisfactorily completed. The Grantee's sole obligation pursuant to this provision relates to contractors or subcontractors directly hired by the Grantee, such as the City's municipal advisor. The Grantee has no obligation or duty under this Section 2.4 relating to contractors or subcontractors hired directly or performing work on behalf of the Borrower. 2.5 Grantee shall make all reasonable efforts to collect and shall bear all costs associated with monitoring, servicing, reporting, and enforcing the terms of the Loan Agreement. 2.6 Comply with required grants management policies and procedures set forth through Minn. Stat. § 16B.97, Subd. 4 (a) (1). 3. Time The Grantee must comply with all of the time requirements described in this grant contract agreement. In the performance of this Grant, time is of the essence. 4. Consideration of payment 4.1 Consideration. The State will pay the Grantee under this grant contract agreement as follows: a) Compensation. The Grantee will be reimbursed according to the approved Budget contained in Exhibit B, which is attached and incorporated into this grant contract agreement. b) Travel Expenses. Reimbursement for travel and subsistence expenses actually and necessarily incurred by the Grantee as a result of this grant contract agreement will not exceed $0.00; provided that the Grantee will be reimbursed for travel and subsistence expenses in the same manner and in no greater amount than provided in the current "Commissioner's Plan" promulgated by the Commissioner of Minnesota Management and Budget (MMB). The Grantee will not be reimbursed for travel and subsistence expenses incurred outside Minnesota unless it has received the State's prior written approval for out of state travel. Minnesota will be considered the home state for determining whether travel is out of state. c) Total Obligation. The total obligation of the State for all compensation and reimbursement to the Grantee under this grant contract agreement will not exceed $450,000. 4.2 Payment Request. The State will disburse funds to the Grantee pursuant to this grant contract agreement, based upon payment requests submitted by the Grantee and reviewed and approved by the State. All funds must be disbursed within a twelve-month period of the Initial Disbursement Date with a maximum of three disbursements. Payment requests must be accompanied by supporting invoices that relate to the activities in the approved budget and the documentation detailed in Section 4.4 of this grant contract agreement. The State will provide payment request forms. If the Grantee has received invoices from the Borrower for expenditures made after Effective Date of this grant contract agreement but before the Grant is closed or until all funds are disbursed, whichever is earlier, the Grantee shall submit those invoices to the State for review and approval no later than 25 days after the end date of the state fiscal year of June 30th. To ensure that all funds are drawn down by the expiration date of the grant contract agreement, Rev. July 29, 2020 3 all Grantee payment requests must be received by the State at least 30 days prior to the Expiration Date. 4.3 Contracting and Bidding Requlrements. Per Minn. Stat. § 471.345, grantees that are municipalities as defined in Subd.1 must follow the law. For projects that Include construction work of $25,000 or more, prevailing wage rules apply per Minn. Stat. §§ 177.41 through 177.44 consequently, the bid request must state the project is subject to prevailing wage. These rules require that the wages of laborers and workers should be comparable to wages paid for similar work in the community as a whole. The provisions of this Section 4.3 shall apply only to contracts for supplies, materials, equipment or the rental thereof, or the construction, alteration, repair or maintenance of real or personal property entered into directly by the Grantee. This Section is not applicable to contracts for supplies, materials, equipment contracts for supplies, materials, equipment or the rental thereof, or the construction, alteration, repair or maintenance of real or personal property entered into by the Borrower. The grantee must not contract with vendors who are suspended or debarred in MN: httg'./Iwww.rnmd.admin state mn usldebargedre2or asp 4.4 Documentation. The following information must be submitted and approved by the State before funds will be released: a) loan Documents. Minnesota Investment Fund Loan Agreement. If funds are drawn prior to the Compliance Date a promissory note, personal guarantees, collateral, and evidence of security filings will be required. b) tender Documents. Documentation that participating lenders and or equity injections have closed on their financing: 1) Promissory note(s) for $24,510,550 from Sterns Bank 2) Evidence of equity injection in the amount of $6,272,640 c) Invoices. Invoices or other documentation as approved by DEED Loan Officer for $450,000 MIF reimbursement costs and $$450,000 in matching costs. Third party verification of additional leverage costs for project expenses identified in Exhibit B in the amount of $30,333,190 will be required prior to the Compliance Date. d) Eligible Costs. Eligible costs include the costs identified in Exhibit B ofthisgrant contract agreement that are incurred during the contract period for equipment or real estate in the corporate boundaries of the Grantee. S. Conditions of Payment. All services provided by the Grantee under this grant contract agreement must be performed to the State's satisfaction, as determined at the sole discretion of the State's Authorized Representative and in accordance with all applicable federal, state and local laws, ordinances, rules, and regulations. The Grantee will not receive payment for work found by the State to be unsatisfactory or performed in violation of federal, state or local law. The State will not authorize disbursement of funds if there has been any adverse change in the Borrower's financial condition, organization, operations, or their ability to repay the project financing. Funds must be disbursed to the Borrower within 21 days of receipt of MIF money. 6. Authorized Representative. Rev. July 29, 2020 4 The State's Authorized Representative is Muhubo Malin, Loan Officer, la National Bank Building, 332 Minnesota Street, Suite E200, St. Paul, MN 55101, 651-259-7426, Muhubo.malin@state.mn.us, or his/her successor, and has the responsibility to monitor the Grantee's performance and the authority to accept the services provided under this grant contract agreement. If the services are satisfactory, the State's Authorized Representative will certify acceptance on each payment request form submitted for payment. The Grantee's Authorized Representative (Staff Contact) is Adam Nafstad, City Administrator, 5959 Main Ave NE, Albertville, MN 55301, anafstad ci.albertville.mn.us , (763) 497-3384 x100, or his/her successor. If the Grantee's Authorized Representative changes at any time during this grant contract agreement, the Grantee must immediately notify the State. 7. Assignment, Amendments, Waiver, and Grant Contract Agreement Complete 7.1 Assignment. The Grantee shall neither assign nor transfer any rights or obligations under this grant contract agreement without the prior written consent of the State, approved by the same parties who executed and approved this grant contract agreement, or their successors In office. 7.2 Amendments. Any amendment to this grant contract agreement must be in writing and will not be effective until it has been executed and approved by the same parties who executed and approved the original grant contract agreement, or their successors in office. 7.3 Waiver. If the State falls to enforce any provision of this grant contract agreement, that failure does not waive the provision or the State's right to enforce it. 7.4 Grant Contract Agreement Complete. This grant contract agreement contains all negotiations and agreements between the State and the Grantee. No other understanding regarding this grant contract agreement, whether written or oral, may be used to bind either party. Where provisions of the Application are inconsistent with the other provisions of this grant contract agreement, the other provisions of this grant contract agreement will take precedence over the provisions of the Application. 8. Liability The Grantee must indemnify, save, and hold the State, its agents, and employees harmless from any claims or causes of action, including attorney's fees incurred by the State, arising from the performance of this grant contract agreement by the Grantee or the Grantee's agents or employees. This clause will not be construed to bar any legal remedies the Grantee may have for the State's failure to fulfill its obligations under this grant contract agreement 9. State Audit Under Minn. Stat. § 168.98, Subd.B, the Grantee's books, records, documents, and accounting procedures and practices of the Grantee or other party relevant to this grant contract agreement or transaction are subject to examination by the State and/or the State Auditor or Legislative Auditor, as appropriate, for a minimum of seven (7) years from the end of this grant contract agreement, receipt and approval of all final reports, last payment, or the required period of time to satisfy all state and program retention requirements, whichever is later. 10. Government Data Practices Rev. July 29, 2020 5 10.1 Government Data Practices. The Grantee and State must comply with the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, as it applies to all data provided by the State under this grant contract agreement, and as it applies to all data created, collected, received, stored, used, maintained, or disseminated by the Grantee under this grant contract agreement. The civil remedies of Minn. Stat. § 13.08 apply to the release of the data referred to in this clause by either the Grantee or the State. If the Grantee receives a request to release the data referred to in this Clause, the Grantee must immediately notify the State. The State Will give the Grantee instructions concerning the release of the data to the requesting party before the data is released. The Grantee's response to the request shall comply with applicable law. 10.2 Intellectual Property Representations. The Grantee represents and warrants that Grantee's intellectual property used in the performance of this Grant does not and will not infringe upon any intellectual property rights of other persons or entities. Notwithstanding Clause 8, the Grantee will indemnify, defend, to the extent permitted by the Attorney General; and hold harmless the State, at the Grantee's expense, from any action or claim brought against the State to the extent that it is based on a claim that all or part of the Grantee's intellectual property used in the performance of this Grant infringe upon the intellectual property rights of others. The Grantee will be responsible for payment of any and all such claims, demands, obligations, liabilities, costs, and damages, including but not limited to, attorney fees. If such a claim or action arises, or in the Grantee's or the State's opinion is likely to arise, the Grantee must, at the State's discretion, either procure for the State the right or license to use the intellectual property rights at issue or replace or modify the allegedly infringing intellectual property as necessary and appropriate to obviate the infringement claim. This remedy of the State will be in addition to and not exclusive of other remedies provided by law. 11. Workers' Compensation The Grantee certifies that it is in compliance with Minn. Stat. § 176.181, subd. 2, pertaining to workers' compensation insurance coverage. The Grantee's employees and agents will not be considered State employees. Any claims that may arise under the Minnesota Workers' Compensation Act on behalf of these employees and any claims made by any third party as a consequence of any act or omission on the part of these employees are in no way the State's obligation or responsibility. 12. Publicity and Endorsement 12.1 Publicity. Any publicity regarding the subject matter of this grant contract agreement must identify the State as a sponsoring agency. For purposes of this provision, publicity includes notices, informational pamphlets, press releases, research, reports, signs, and similar public notices prepared by or for the Grantee individually or jointly with others, or any subcontractors, with respect to the program, publications, or services provided resulting from this grant contract agreement. All projects primarily funded by state grant appropriation must publicly credit the State of Minnesota, including on the grantee's website when practicable. 12.2 Endorsement The Grantee and the Borrower must not claim that the State endorses its products or services. 13. Governing Law, Jurisdiction, and Venue Minnesota law, without regard to its choice -of -law provisions, governs this grant contract agreement. Venue for all legal proceedings out of this grant contract agreement, or its breach, Rev. July 29, 2020 11 must be in the appropriate state or federal court with competent jurisdiction In Ramsey County, Minnesota. 14. Termination 14.1 Termination by the State. The State may immediately terminate this grant contract agreement with or without cause, upon 30 days' written notice to the Grantee. Upon termination, the Grantee will be entitled to payment, determined on a pro-rata basis for approved costs incurred. 14.2 Termination for Cause. The State may immediately terminate this grant contract agreement if the State finds that there has been a failure to comply with the provisions of the grant contract agreement, legal documents required for disbursement have not been executed within 90 days of execution of this grant contract agreement, that reasonable progress has not been made or that the purposes for which the funds were granted have not been or will not be fulfilled. The State may take action to protect the interests of the State of Minnesota, including the refusal to distribute additional funds and requiring the return of all or part of the funds already disbursed. 14.3 Termination for insufficient Funding, The State may immediately terminate this grant contract agreement if: a) It does not obtain funding from the Minnesota Legislature; b) Or, if funding cannot be continued at a level sufficient to allow for the payment of the services covered here. Termination must be by written or electronic notice to the Grantee. The State is not obligated to pay for any services that are provided after notice and effective date of termination. However, the Grantee will be entitled to payment determined on a pro-rata basis, for services satisfactorily performed to the extent that funds are available. The State will not be assessed any penalty if the contract is terminated because of the decision of the Minnesota Legislature, orotherfunding source, not to appropriate funds. The State must provide the Grantee notice of lack of funding within a reasonable time of the State's receiving that notice. 15. Data Disclosure Under Minn. Stat. § 270C.65, subd. 3, and other applicable law, the Grantee consents to disclosure of its social security number, federal employer tax identification number, and/or Minnesota tax identification number, already provided to the State, to federal and state agencies and state personnel involved with the payment of state obligations. These identification numbers may be used in the enforcement of federal and state tax laws which could result in action requiring the Grantee to file state tax returns and pay delinquent state tax liabilities, if any. Other Provisions 16. Conflict of Interest The State will take steps to prevent individual and organizational conflicts of interest in reference to Grantees per Minn. Stat. § 168.98 and Department of Administration, Office of Grants Management, Policy Number 08-01 Conflict of Interest Policy for State Grant -Making. When a conflict of interest concerning State grant -making is suspected, disclosed, or discovered, transparency shall be the guiding principle in addressing it. Rev. July 29, 2020 7 In cases where a potential or actual individual or organizational conflict of interest is suspected, disclosed, or discovered by the Grantee throughout the life of the grant contract agreement, they must immediately notify the State for appropriate action steps to be taken, as defined above. The Grantee must complete a Conflict of Interest Disclosure agreement and attach it to their proposal. 17. Successors and Assignees This grant contract agreement shall be binding upon any successors or assignees of the parties. 18. Minnesota Business Subsidy Law This grant contract agreement must comply with the Minnesota Business Subsidy Law, Minn. Stat. §§ 116J.993-116J.995 as applicable. Rev. July 29, 2020 8 1. STATE ENCUMBRANCE VERIFICATION Individual certifies that funds have been encumbered as required by Minn. Stat §§ 16A.15. Signed: A&;P C Date: 4/21/21 192698 PR 60970 PO 3000431330 SWIFT Contract/PO No(s) 3. STATE AGENCY By: /,;- o (with delegated authority) Title: - -pepuV QWw1g.io er �• Date:April 7g., 2021 2. GRANTEE The Grantee certifies that the appropriate person(s) have executed the grant contract agreement on behalf of the Grantee as required by applicable articles, bylaws, resolutions, or ordinances. Title: s, Ir Date: 1 WER Distribution: Agency Grantee State's Authorized Representative — Photo Copy Rev. July 29, 2020 EXHIBIT A GRANTEE DUTIES The Grantee, who is not a State employee, will, 1. Administer the project in accordance with the requirements of the Minnesota Investment Fund Program, Minn. Stat. § 116J.8731; Minn. Rules, Chapter 4300; and policies and procedures developed by the State. 2. Enter into a Loan Agreement with the Borrower $450,000, ("LOAN") and assure the following conditions are Included in such Loan Agreement: 2.1 Conditions a) Loan Term: 5 Years b) Interest Rate: 0.00% c) Collateral: Equipment d) The personal guarantees of Casey Darkenwald, Brian Nicholson, and Michael Mergens are required. 2.2 Job Creation and Wages a) As of the project award date, the Borrower identified Zero (0) full time equivalent (FTE) base jobs that must be maintained through the Compliance Date March 01, 2024. If necessary base job number will be amended following the Effective Date to account for fluctuation during contract processing periods. b) The Borrower will create an additional One Hundred Thirty Five (135) permanent non- contract FTE jobs between the Effective Date and the Compliance Date. Each job created may be included in only one "wage bracket" as stated below: (i) Four (4) paying at least $16.83 per hour in cash wages, exclusive of Benefits. The Borrower is entitled to forgivable loan proceeds in the amount of $2,177 for each jobs created in this wage bracket, (ii) Twenty Three (23) paying at least $18 per hour in cash wages, exclusive of Benefits. The Borrower is entitled to forgivable loan proceeds in the amount of $2,830 for each jobs created in this wage bracket, (Ili) One Hundred eight (108) paying at least $18 per hour in cash wages, exclusive of Benefits. The Borrower is entitled to forgivable loan proceeds in the amount of $3,483 per for each jobs created in this wage bracket, c) All jobs created through the Compliance Date must pay at least $14.01 per hour, including Benefits, on the Compliance Date. Benefits are defined as one or more of the following: health, dental, life and disability insurance, retirement program and profit sharing paid by the Borrower. d) If the Borrower fails to meet the job creation and wage goal level commitments on the Compliance Date, the Grantee may, after approval by the State and after holding a public hearing, extend the Compliance Date for one year. If the Borrower fails to meet the job creation goal and wage level commitment by the revised Compliance Date, the award Rev. July 29, 2020 10 amount shall be reduced proportionally on a per job basis, and the Borrower will be required to repay the Grantee all or a proportional share of the Loan funds on an accelerated term. If the Borrower is required to repay a proportional share, the amount shall be determined based upon the "wage bracket" values defined in Section 2.1(b). The Grantee will then also be required to return to the State all or a proportional share of the Loan funds. The interest rate on the "accelerated" portion of the loan shall increase as defined in the Promissory Note. e) In the event that no jobs are created by the Borrower by the revised Compliance Date, or all jobs created do not meet the commitment noted in 2.2 (c), the Grantee will be required to return all loan funds to the State on an accelerated basis. 2.3 Payment of Prevailing Wages to Contractors Minn. Stat. § 116.1,871 applies if a business receives $500,000 or more in State loan funds and the State funds are used for construction, installation (including equipment), remodeling and repairs. 2.4 Loan Forgiveness If the job creation goals and wage level commitments detailed in Sections 2.2 in Exhibit A of this Agreement are met on the Compliance Date, the Loan will be forgiven. 3. Require the Grantee's attorney to review the loan agreement, promissory note, security agreement, mortgage, guaranty: and/or other documents, if any, considered necessary to secure the loan to ensure they are valid, binding and enforceable. 4. If applicable, retain 40% of each principal and interest payment made by the Borrower, up to $100,000. Repay to the State 60% of each principal and interest payment made by the Borrower until the Grantee has received $100,000 in repayments. Once the Grantee has received $100,000 in repayments, the Grantee will repay the State 100% of every payment on the loan until paid in full. In the event the loan is not paid in full or job and wage goals in Section 2.2 are not met, principal and interest the Grantee retains will be reduced proportionally and returned to the State. S. For any portion of the loan which is repayable under the Loan Agreement or which becomes repayable pursuant to Section 2.2(d) or (e) of this Exhibit A, the Grantee shall make all reasonable effort, in consultation with the State, to collect the repayable portion of the loan. if, after all reasonable effort has been made to collect, the Borrower continues to owe any repayable portion of the loan, the Grantee will have no obligation to repay the loan to the State from the Grantee's own funds, notwithstanding any funds owing under Section 4 of this Exhibit A. The Grantee shall continue to be obligated to remit to the State any loan funds that may be recovered from the Borrower in the future. 6. The Grantee will establish and maintain a revolving loan fund (RLF) consistent with Minn. Stat. § 116J.8731 Minnesota Investment Fund; Minnesota Rules Chapter 4300, and policies and procedures developed by the State and the State RLF Guidelines published by DEED. The Grantee must retain financial control and decision making authority regarding the use of repayments from the loan. Upon approval by the State, the Grantee may loan or grant money from its RLF to a regional development commission, or other regional entity, or statewide community capital fund to capitalize or to provide the local match required for capitalization of a regional or statewide RLF. Rev. July 29, 2020 11 7. Reporting a) Minnesota Investment Fund Annual Progress Reports 1) Submit to the State annual progress reports on forms provided by the State until the project goals have been met or until the Compliance Date, whichever is later. These reports must be submitted January 251h of each year for the period ending December 31, for as long as the project remains open. A final Progress Report is required within 25 days of the Compliance Date. (a) January 25, 2022; for the period ending December 31, 2021; (b) January 25, 2023; for the period ending December 31, 2022; (c) January 25, 2024; for the period ending December 31, 2023; (d) Twenty-five days after the Compliance Date. 2) Funds will not be disbursed on any Grant with past due progress reports per OGM Policy 08-09. 3) The final report must be submitted no later than 25 days after the Compliance Date. 4) The State, at its discretion, may require the submittal of additional progress reports. 5) Information required in these reports may include, but is not limited to the following: c Permanent jobs created a Hourly base wage o Date of hire o Job titles # Hourly value of benefits 0 Benefits provided • Project expenditures s Status of project v Status of payments 9 Payroll Report b) Minnesota Business Assistance Form (MBAF) Reports 1) Submit to the MN Department of Employment and Economic Development, Office of Economic Analysis, no later than April 11 of each year until the project goals have been met, but not less than two years. 8. Keep financial records, including properly executed contracts, invoices, receipts, vouchers, and other documents sufficient to evidence in proper detail the nature and propriety of the expenditures made pursuant to this grant contract agreement. Accounting methods must be in accordance with generally accepted accounting principles. 9. Complete the project in accordance with the approved budget within the time frames specified in this grant contract agreement. 10. Promptly notify the State of any proposed material change in the scope of the project, budget or completion date, which must be approved by the State, prior to implementation. 11. Have on file the necessary documentations to show that all project funds have been used for the items stated in the application. Rev. July 29, 2020 12 Exhibit B Approved Budget Rev. July 29, 2020 13 citriX I RightSignature SIGNATURE CERTIFICATE TRANSACTION DETAILS Reference Number 8 B 8EA242-E7B6-4773-98CF-0 FA31A8FEA3 D Transaction 'type Signature Request Sent At 08/23/2022 11:45 EDT Executed At 08/23/2022 13:41 EDT Identity Method email Distribution Method email Signed Checksum 213ae8218adc586el712679028dllcl98067bb4981a6f6a5cfbf020ba5fc2b18 Signer Sequencing Disabled Document Passcode Disabled SIGNERS SIGNER Name Casey Darkenwald Email casey@darkenwaldcorp.com Components 1 Name Brian Nicholson Email bnicholson@headwatersdevelopment.com Components 1 AUDITS E-SIGNATURE oa .o REFERENCE NUMBER 8B8EA242-E7B6-4773-98CF-OFA31AB FEA3 D a DOCUMENT DETAILS Document Name State Mif Loan Agreement Ava Loan 8-10-22 We Updated Filename state mif loan agreement ava_loan 8-30-22 wc_updated.pdf Pages 24 pages Content Type application/pdf File Size 462 KB Original Checksum 071aabf66e68993234448b84a2e51948460e5bf6772b4b2128a57d3843ee44cf Status signed Multi -factor Digital Fingerprint Checksum 147b5bd8e28bfb0871096856ccc040960fb064aa3dlcBcf37el2054e8abl6caf IP Address 24.179.186.132 Device Safari via Mac Typed Signature c4a.1;r bmumWala. Signature Reference ID 6FCCBA13 Status signed Multi -factor Digital Fingerprint Checksum 5e2242b2b3a16e877e6b8580a31633c567416b5c4df5e5eeflf3519ea3710ele IP Address 47.225.235.50 Device Mobile Safari via iOS Typed Signature &Za.r►. 7.i,r�.oLd. Signature Reference ID C95A4678 TIMESTAMP AUDIT 08/23/2022 11:45 EDT Erin Carlson (eaconsulting425@gmail.com) created document EVENTS Viewed At 08/23/2022 13:40 EDT Identity Authenticated At 08/23/2022 13:41 EDT Signed At 0823/2022 13:41 EDT Viewed At 08/23/2022 11:51 EDT Identity Authenticated At 08/23/2022 11:51 EDT Signed At 08/23/2022 11:51 EDT 'state_mif loan_agreement ava_loan_8-10-22_wc_updated.pdf' on Chrome via Windows from 73.164.83.45. 08/23/2022 11:45 EDT Brian Nicholson (bnicholson@headwatersdevelopment.com) was emailed a link to sign. 08/23/2022 11:45 EDT Casey Darkenwald (casey@darkenwaldcorp.com) was emailed a link to sign. 08/23/2022 11:51 EDT Brian Nicholson (bnicholson@headwatersdevelopment.com) viewed the document on Mobile Safari via iOS from 47.225.235.50. O8/23/2022 11:51 EDT Brian Nicholson (bnicholson@headwatersdevelopment.com) authenticated via email on Mobile Safari via iOS from 47.225.235.50. 08/23/2022 11:51 EDT Brian Nicholson (bnicholson@headwatersdevelopment.com) signed the document on Mobile Safari via iOS from 47.225.235.50. 08/23/2022 13:40 EDT Casey Darkenwald (casey@darkenwaldcorp.com) viewed the document on Safari via Mac from 24.179.186.132. 08/23/2022 13:41 EDT Casey Darkenwald (casey@darkenwaldcorp.com) authenticated via email on Safari via Mac from 24.179.186.132. 08/23/2022 13:41 EDT Casey Darkenwald (casey@darkenwaldcorp.com) signed the document on Safari via Mac from 24.179.186.132.