THIS INSTRUMENT WAS PREPARED BY, EXHIBIT 10.6
AND WHEN RECORDED SHOULD BE
RETURNED TO:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP (DRS)
Pillsbury Center South
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
MORTGAGE, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS
AND FIXTURE FINANCING STATEMENT
THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND
FIXTURE FINANCING STATEMENT (this "Mortgage") is made as of December 3, 1997, by
▇▇▇▇▇▇ MANUFACTURING, INC., a corporation organized under the laws of the State
of Minnesota ("Borrower"), having its principal offices at Hopkins, Minnesota,
in favor of U.S. Bank National Association, a national banking association
("Lender"), having an office at St. ▇▇▇▇, Minnesota.
RECITALS
A. Lender has lent, or agreed to lend, to Borrower the principal sum of
TWO MILLION FOUR HUNDRED THOUSAND AND NO/100 DOLLARS ($2,400,000.00) (the
"Loan"), to be repaid with interest thereon, as evidenced by Borrower's Term
Note (the "Note", which term shall include any amendment, modification,
supplement, extension, renewal, replacement or restatement thereof). The Note
is dated the same date as this Mortgage, is hereby incorporated by reference,
and, together with this Mortgage and the Indemnification Agreement of even date
herewith from Borrower to Lender, as any of the same may be amended, modified,
supplemented, extended, renewed, replaced or restated, are sometimes
collectively referred to as the "Loan Documents".
B. The obligations secured by this Mortgage (the "Obligations") are as
follows:
(i) the principal amount of $2,400,000.00 or so much thereof as may be
advanced by Lender under the Note; plus
(ii) interest on the amount advanced and unrepaid, at the interest rate
or rates provided in the Note; plus
(iii) all other amounts payable by Borrower and all other agreements of
Borrower under the Loan Documents as the same now exist or may hereafter be
amended.
C. The Obligations shall mature on or before December 1, 2002 (the
"Maturity Date").
D. The maximum principal indebtedness secured hereby is
$2,400,000.00 plus amounts which may be advanced by Lender in protection of the
Mortgaged Property or this Mortgage.
NOW, THEREFORE, Borrower, in consideration of Lender making the Loan, and
to secure the Loan and payment and performance of the Obligations, hereby
grants, bargains, sells, conveys and mortgages to Lender, its successors and
assigns, forever, with power of sale, and grants to Lender, its successors and
assigns, a security interest in, the following, all of which is called the
"Mortgaged Property":
A. LAND AND IMPROVEMENTS
The land described in Exhibit A attached hereto and all mineral rights,
hereditaments, easements and appurtenances thereto (collectively the"Land"), and
all improvements and structures thereon (the "Improvements"); and
B. FIXTURES AND PERSONAL PROPERTY
All fixtures (the "Fixtures"), and all machinery, equipment and personal
property (collectively the "Personal Property") now or hereafter located on, in
or under the Land and the Improvements, and necessary or useful in connection
with the functioning of the Land or the Improvements for their general intended
purposes (but not to the extent primarily used in the operation of Borrower's
specific business), and which are owned by Borrower or in which Borrower has an
interest, including any construction and building materials stored on and to be
included in the Improvements, and also including those specific items, if any,
described in Exhibit B attached hereto, plus any repairs, replacements and
betterments to any of the foregoing and the proceeds and products thereof; and
C. LEASES AND RENTS
All rights of Borrower with respect to tenants or occupants now or
hereafter occupying any part of the Land or the Improvements, if any, including
all leases and licenses and rights in connection therewith, whether oral or
written (collectively the "Leases"), and all rents, income, both from services
and occupation, royalties, revenues and payments, including prepayments and
security deposits (collectively the "Rents"), which are now or hereafter due or
to be paid in connection with the Land, the Improvements, the Fixtures or the
Personal Property; and
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D. GENERAL INTANGIBLES
All general intangibles of Borrower which relate to any of the Land, the
Improvements, the Fixtures, the Personal Property, the Leases or the Rents,
including proceeds of insurance and condemnation or conveyance of the Land and
the Improvements, accounts, trade names, contract rights, accounts receivable
and bank accounts; and
E. AFTER ACQUIRED PROPERTY AND PROCEEDS
All after acquired property similar to the property herein described and
conveyed which may be subsequently acquired by Borrower and used in connection
with the Land, the Improvements, the Fixtures, the Personal Property and other
property; and all cash and non-cash proceeds and products of all of the
foregoing property.
TO HAVE AND TO HOLD the same, and all estate therein, together with all the
rights, privileges and appurtenances thereunto belonging, to the use and benefit
of Lender, its successors and assigns, forever.
PROVIDED NEVERTHELESS, should Borrower pay and perform all the Obligations,
then these presents will be of no further force and effect, and this Mortgage
shall be satisfied by Lender, at the expense of Borrower.
This Mortgage constitutes an assignment of rents and profits within the
meaning of Minnesota Statutes, Sections 559.17 and 576.01, and is intended to
comply fully with the provisions thereof, and to afford Lender, to the fullest
extent allowed by law, the rights and remedies of a mortgage lender or secured
lender pursuant thereto.
This Mortgage also constitutes a security agreement within the meaning of
the Uniform Commercial Code as in effect in the State of Minnesota (the "UCC"),
with respect to all property described herein as to which a security interest
may be granted and/or perfected pursuant to the UCC, and is intended to afford
Lender, to the fullest extent allowed by law, the rights and remedies of a
secured party under the UCC.
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BORROWER FURTHER agrees as follows:
ARTICLE I
AGREEMENTS
SECTION 1.1 PERFORMANCE OF OBLIGATIONS; INCORPORATION BY REFERENCE.
Borrower shall pay and perform the Obligations. Time is of the essence hereof.
All of the covenants, obligations, agreements, warranties and representations of
Borrower contained in the Note and the other Loan Documents and all of the terms
and provisions thereof, are hereby incorporated herein and made a part hereof by
reference as if fully set forth herein.
SECTION 1.2 FURTHER ASSURANCES. If Lender requests, Borrower shall sign
and deliver and cause to be recorded as Lender shall direct any further
mortgages, instruments of further assurance, certificates and other documents as
Lender reasonably may consider necessary or desirable in order to perfect,
continue and preserve the Obligations and Lender's rights, title, estate, liens
and interests under the Loan Documents. Borrower further agrees to pay to
Lender, upon demand, all costs and expenses incurred by Lender in connection
with the preparation, execution, recording, filing and refiling of any such
documents, including attorneys' fees and title insurance costs.
SECTION 1.3 SALE, TRANSFER, ENCUMBRANCE. If Borrower sells, conveys,
transfers or otherwise disposes of, or encumbers, any part of its interest in
the Mortgaged Property, whether voluntarily, involuntarily or by operation of
law, without the prior written consent of Lender, Lender shall have the option
to declare the Obligations immediately due and payable without notice. Included
within the foregoing actions requiring prior written consent of Lender are: (a)
sale by deed or contract for deed; (b) mortgaging or granting a lien on the
Mortgaged Property; and (c) a transfer which changes the persons in control of
Borrower or which transfers more than 25% of the beneficial interest in
Borrower, except for transfers to related or affiliated entities. Borrower
shall give notice of any proposed action to Lender at least thirty (30) days
prior to taking such action. Borrower shall pay all costs and expenses incurred
by Lender in evaluating any such action. Lender may condition such consent upon
modification of the Loan Documents or payment of fees. No such action shall
relieve Borrower from liability for the Obligations. The consent by Lender to
any action shall not constitute a waiver of the necessity of such consent to any
subsequent action.
SECTION 1.4 INSURANCE. Borrower shall obtain, maintain and keep in full
force and effect (and upon request of Lender shall furnish to Lender copies of)
policies of insurance as described in, and meeting the requirements set forth
in, Exhibit C attached hereto, and upon request of Lender shall furnish to
Lender proof of
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payment of all premiums for such insurance. At least ten (10) days prior to the
termination of any such coverage, Borrower shall provide Lender with evidence
satisfactory to Lender that such coverage will be renewed or replaced upon
termination with insurance that complies with the provisions of this Section.
Borrower, at its sole cost and expense, from time to time when Lender shall so
request, will provide Lender with evidence, in a form acceptable to Lender, of
the full insurable replacement cost of the Mortgaged Property. All property
(including boiler and machinery) and liability insurance policies maintained by
Borrower pursuant to this Section shall (i) include effective waivers by the
insurer of all claims for insurance premiums against Lender, and (ii) provide
that any losses shall be payable notwithstanding (a) any act of negligence by
Borrower or Lender, (b) any foreclosure or other proceedings or notice of
foreclosure sale relating to the Mortgaged Property, or (c) any release from
liability or waiver of subrogation rights granted by the insured. All insurance
policies maintained by Borrower pursuant to the foregoing provisions shall
respond on a primary basis relative to any other insurance carried by Lender in
the event of loss. Insurance terms not otherwise defined herein shall be
interpreted consistent with insurance industry usage.
SECTION 1.5 TAXES, LIENS AND CLAIMS, UTILITIES. Borrower, at least five
(5) days before any penalty attaches thereto, shall pay and discharge, or cause
to be paid and discharged, all taxes, assessments and governmental charges and
levies (collectively "Impositions") imposed upon or against the Mortgaged
Property or the Rents, or upon or against the Obligations, or upon or against
the interest of Lender in the Mortgaged Property or the Obligations, except
Impositions measured by the income of Lender. Borrower shall provide evidence
of such payment at Lender's request. Borrower shall keep the Mortgaged Property
free and clear of all liens, encumbrances, easements, covenants, conditions,
restrictions and reservations (collectively "Liens") except those listed on
Exhibit A attached hereto (the "Permitted Encumbrances"). Borrower shall pay or
cause to be paid when due all charges or fees for utilities and services
supplied to the Mortgaged Property. Notwithstanding anything to the contrary
contained in this Section, Borrower shall not be required to pay or discharge
any Imposition or Lien so long as Borrower shall in good faith, and after giving
notice to Lender, contest the same by appropriate legal proceedings. If
Borrower contests any Imposition or Lien against the Mortgaged Property,
Borrower shall provide such security to Lender as Lender shall reasonably
require against loss or impairment of Borrower's ownership of or Lender's lien
on the Mortgaged Property and shall in any event pay such Imposition or Lien
before loss or impairment occurs.
SECTION 1.6 ESCROW PAYMENTS. If requested by Lender, Borrower shall
deposit with Lender monthly on the same date as payments are due under the Note
the amount reasonably estimated by Lender to be necessary to enable Lender to
pay, at least five (5) days before they become due, all Impositions against the
Mortgaged Property and the premiums upon all insurance required hereby to be
maintained
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with respect to the Mortgaged Property, provided, however, that Lender shall not
request such escrow deposits until after an Event of Default hereunder. All
funds so deposited shall secure the Obligations. Such deposits shall be held by
Lender, or its nominee, in a non-interest bearing account and may be commingled
with other funds. Such deposits shall be used to pay such Impositions and
insurance premiums when due. Any excess sums so deposited shall be retained by
Lender and shall be applied to pay said items in the future, unless the
Obligations have been paid and performed in full, in which case all excess sums
so paid shall be refunded to Borrower. Upon the occurrence of an Event of
Default, Lender may apply any funds in said account against the Obligations in
such order as Lender may determine.
SECTION 1.7 MAINTENANCE AND REPAIR; COMPLIANCE WITH LAWS. Borrower shall
cause the Mortgaged Property to be operated, maintained and repaired in safe and
good repair, working order and condition, reasonable wear and tear excepted;
shall not commit or permit waste thereof; except as provided in any Loan
Document, shall not remove, demolish or substantially alter the design or
structural character of any Improvements without the prior written consent of
Lender; shall complete or cause to be completed forthwith any Improvements which
are now or may hereafter be under construction upon the Land; shall comply or
cause compliance with all laws, statutes, ordinances and codes, and governmental
rules, regulations and requirements, applicable to the Mortgaged Property or the
manner of using or operating the same, and with any covenants, conditions,
restrictions and reservations affecting the title to the Mortgaged Property, and
with the terms of all insurance policies relating to the Mortgaged Property; and
shall obtain and maintain in full force and effect all consents, permits and
licenses necessary for the use and operation of the Mortgaged Property.
SECTION 1.8 LEASES.
(a) Borrower shall not enter into or amend any Lease without Lender's
prior written consent, and shall furnish to Lender, upon execution, a complete
and fully executed copy of each Lease. Borrower shall provide Lender with a
copy of each proposed Lease requiring the consent of Lender and with any
information requested by Lender regarding the proposed Tenant thereunder.
Lender may declare each Lease to be prior or subordinate to this Mortgage, at
Lender's option.
(b) Borrower shall, at its cost and expense, perform each obligation to be
performed by the landlord under each Lease; not borrow against, pledge or
further assign any rents or other payments due thereunder;not permit the
prepayment of any rents or other payments due for more than thirty (30) days in
advance; and not permit any Tenant to assign its Lease or sublet the premises
covered by its Lease, unless required to do so by the terms thereof and then
only if such assignment does
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not work to relieve the Tenant of any liability for performance of its
obligations thereunder.
(c) If any Tenant shall default under its Lease, Borrower shall, in the
ordinary course of business, exercise sound business judgment with respect to
such default, but may discount, compromise, forgive or waive claims or discharge
the Tenant from its obligations under the Lease or terminate or accept a
surrender of the Lease.
(d) If Borrower fails to perform any obligations of Borrower under any
Lease or if Lender becomes aware of or is notified by any Tenant of a failure on
the part of Borrower to so perform, Lender may, but shall not be obligated to,
without waiving or releasing Borrower from any obligation in this Agreement or
any of the other Loan Documents, remedy such failure, and Borrower agrees to
repay upon demand all sums incurred by Lender in remedying any such failure,
together with interest thereon from the date incurred at the Default Rate (as
defined in the Note).
(e) For purposes of this Mortgage, the following terms shall have the
following meanings:
(i) "LEASE": Any lease or other document or agreement, written or
oral, permitting any Person to use or occupy any part of the Mortgaged Property.
(ii) "PERSON": Any natural person, corporation, partnership,
limited partnership, joint venture, firm, association, trust, unincorporated
organization, government or governmental agency or political subdivision or any
other entity, whether acting in an individual, fiduciary or other capacity.
(iii) "TENANT": Any person or party using or occupying any part of
the Mortgaged Property pursuant to a Lease.
SECTION 1.9 INDEMNITY. Borrower shall indemnify Lender and its
directors, officers, agents and employees (collectively the "Indemnified
Parties") against, and hold the Indemnified Parties harmless from, all losses,
damages, suits, claims, judgments, penalties, fines, liabilities, costs and
expenses (collectively a "Loss") by reason of, or on account of, or in
connection with the construction, reconstruction or alteration of the Mortgaged
Property, or any accident, injury, death or damage to any person or property
occurring in, on or about the Mortgaged Property or any street, drive, sidewalk,
curb or passageway adjacent thereto, provided such Loss is not caused by the
gross negligence or willful misconduct of the Indemnified Parties. The
indemnity contained in this Section shall include costs of defense of any such
claim asserted against an Indemnified Party, including reasonable attorneys'
fees. The indemnity contained in this Section shall survive
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payment and performance of the Obligations and satisfaction and release of this
Mortgage and any foreclosure thereof or acquisition of title by deed in lieu of
foreclosure.
SECTION 1.10 APPRAISALS. Lender shall have the right from time to
time, but not more often than once during any twelve (12)-month period, to
obtain an appraisal of the Mortgaged Property in form and substance satisfactory
to Lender and prepared by an independent MAI appraiser selected by Lender.
Borrower shall reimburse Lender for the cost incurred for any such appraisal
within ten (10) days following demand therefor by Lender, if Lender has reason
to believe that the value of the Mortgaged Property has declined materially, and
such appraisal determines that the then current principal amount of the Note
exceeds 75% of the value of the Mortgaged Property.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Borrower makes the following representations and warranties:
SECTION 2.1 OWNERSHIP, LIENS, COMPLIANCE WITH LAWS. Borrower owns
the Mortgaged Property free from all Liens, except the Permitted Encumbrances.
All applicable zoning, environmental, land use, subdivision, building, fire,
safety and health laws, statutes, ordinances, codes, rules, regulations and
requirements affecting the Mortgaged Property permit the current use and
occupancy thereof, and Borrower has obtained all consents, permits and licenses
required for such use. Borrower has examined and is familiar with all
applicable covenants, conditions, restrictions and reservations, and with all
applicable laws, statutes, ordinances, codes and governmental rules, regulations
and requirements affecting the Mortgaged Property, and the Mortgaged Property
complies with all of the foregoing.
SECTION 2.2 USE. The Mortgaged Property is not homestead property
nor is it agricultural property or in agricultural use.
SECTION 2.3 UTILITIES; SERVICES. The Mortgaged Property is serviced
by all necessary public utilities, and all such utilities are operational and
have sufficient capacity. There is no contract or agreement providing for
services to or maintenance of the Mortgaged Property which cannot be cancelled
upon 30 days' or less notice.
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ARTICLE III
CASUALTY; CONDEMNATION
SECTION 3.1 CASUALTY, REPAIR, PROOF OF LOSS. If any portion of the
Mortgaged Property shall be damaged or destroyed by any cause (a "Casualty"),
Borrower shall:
(a) give immediate notice to the Lender; and
(b) promptly commence and diligently pursue to completion (in
accordance with plans and specifications approved by Lender) the restoration,
repair and rebuilding of the Mortgaged Property as nearly as possible to its
value, condition and character immediately prior to the Casualty; and
(c) if the Casualty is covered by insurance, immediately make proof
of loss and collect all insurance proceeds, all such proceeds to be payable to
Lender or as Lender shall direct. If an Event of Default shall be in existence,
or if Borrower shall fail to provide notice to Lender of filing proof of loss,
or if Borrower shall not be diligently proceeding, in Lender's reasonable
opinion, to collect such insurance proceeds, then Lender may, but is not
obligated to, make proof of loss, and is authorized, but is not obligated, to
settle any claim with respect thereto, and to collect the proceeds thereof.
Borrower shall not accept any settlement of an insurance claim, the result of
which shall be a payment which is $10,000 or more less than the full amount of
the claim, without the prior written consent of Lender.
SECTION 3.2 USE OF INSURANCE PROCEEDS. Lender shall make the net
insurance proceeds received by it (after reimbursement of Lender's out-of pocket
costs of collecting and disbursing the same) available to Borrower to pay the
cost of restoration, repair and rebuilding of the Mortgaged Property, subject to
the following conditions:
(a) There shall be no Event of Default in existence at the time of
any disbursement of the insurance proceeds.
(b) Lender shall have determined, in its reasonable discretion, that
the cost of restoration, repair and rebuilding is and will be equal to or less
than the amount of insurance proceeds and other funds deposited by Borrower with
Lender.
(c) Lender shall have determined, in its reasonable discretion, that
the restoration, repair and rebuilding can be completed in accordance with plans
and specifications approved by Lender (such approval not to be unreasonably
withheld), in accordance with codes and ordinances and in accordance with the
terms, and
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within the time requirements in order to prevent termination, of any Lease, and
in any event not less than six (6) months prior to the Maturity Date.
(d) All funds shall be disbursed, at Lender's option, in accordance
with Lender's customary disbursement procedures for construction loans.
(e) The Casualty shall have occurred more than twelve (12) months
prior to the Maturity Date.
If any of these conditions shall not be satisfied, then Lender shall have the
right to use the insurance proceeds to prepay the Loan in accordance with the
Note, and if the Loan is prepaid in full, Borrower shall not be required to
perform under Section 3.1(b) of this Mortgage. If any insurance proceeds shall
remain after completion of the restoration, repair and rebuilding of the
Mortgaged Property, they shall be disbursed to Borrower, or at the Lender's
discretion, used to prepay the Loan in accordance with the Note.
SECTION 3.3 CONDEMNATION. If any portion of the Mortgaged Property
shall be taken, condemned or acquired pursuant to exercise of the power of
eminent domain or threat thereof (a "Condemnation"), Borrower shall:
(a) give immediate notice thereof to Lender, and send a copy of each
document received by Borrower in connection with the Condemnation to Lender
promptly after receipt; and
(b) diligently pursue any negotiation and prosecute any proceeding in
connection with the Condemnation at Borrower's expense. If an Event of Default
shall be in existence, or if Borrower, in Lender's reasonable opinion, shall not
be diligently negotiating or prosecuting the claim, Lender is authorized, but
not required, to negotiate and prosecute the claim and appear at any hearing for
itself and on behalf of Borrower and to compromise or settle all compensation
for the Condemnation. Lender shall not be liable to Borrower for any failure by
Lender to collect or to exercise diligence in collecting any such compensation.
Borrower shall not compromise or settle any claim resulting from the
Condemnation if such settlement shall result in payment of $10,000 or more less
than Lender's reasonable estimate of the damages therefrom. All awards shall be
paid to Lender.
SECTION 3.4 USE OF CONDEMNATION PROCEEDS. Lender shall make the net
proceeds of any Condemnation received by it (after reimbursement of Lender's
out-of-pocket costs of collecting and disbursing the same) available to Borrower
for restoration, repair and rebuilding of the Mortgaged Property, subject to the
following conditions:
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(a) There shall be no Event of Default in existence at the time of
any disbursement of the condemnation proceeds.
(b) Lender shall determined, in its reasonable discretion, that the
cost of restoration, repair and rebuilding is and will be equal to or less than
the amount of condemnation proceeds and other funds deposited by Borrower with
Lender.
(c) Lender shall have determined, in its reasonable discretion, that
the restoration, repair and rebuilding can be completed in accordance with plans
and specifications approved by Lender (such approval not to be unreasonably
withheld), in accordance with codes and ordinances and in accordance with the
terms, and within the time requirements in order to prevent termination, of any
Lease, and in any event not less than six (6) months prior to the Maturity Date.
(d) All funds shall be disbursed, at Lender's option, in accordance
with Lender's customary disbursement procedures for construction loans.
(e) The Condemnation shall have occurred more than twelve (12) months
prior to the Maturity Date.
If any of these conditions shall not be satisfied, then Lender shall have the
right to use the condemnation proceeds to prepay the Loan in accordance with the
Note. If any condemnation proceeds shall remain after completion of the
restoration, repair and rebuilding of the Mortgaged Property, they shall be
disbursed to Borrower, or at Lender's discretion, used to prepay the Loan in
accordance with the Note.
ARTICLE IV
DEFAULTS AND REMEDIES
SECTION 4.1 EVENTS OF DEFAULT. The occurrence of any one or more of
the following events shall constitute an Event of Default:
4.1(a) Borrower shall fail to make when due, whether by
acceleration or otherwise, any payment of principal of or interest on the Note
or any other obligations of the Borrower to the Lender pursuant to this Mortgage
or any of the other Loan Documents.
4.1(b) Any representation or warranty made by or on behalf of
Borrower in this Mortgage or any of the other Loan Documents or by or on behalf
of Borrower in any certificate, statement, report or document herewith or
hereafter furnished to the Lender pursuant to this Mortgage or any of the other
Loan
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Documents shall prove to have been false or misleading in any material respect
on the date as of which the facts set forth are stated or certified.
4.1(c) A sale, transfer, conveyance or encumbrance of the
Mortgaged Property or any part thereof or of all or any part of Borrower's
interest therein in violation of Section 1.3 of this Mortgage shall occur.
4.1(d) Borrower shall fail to comply with any other agreement,
covenant, condition, provision or term contained in this Mortgage or any of the
other Loan Documents (other than those herein above set forth in this Section
4.1) and such failure to comply shall continue for thirty (30) calendar days
after the date Lender gives notice of such failure to the Borrower.
4.1(e) Borrower shall generally not pay its debts as they mature
or shall apply for, shall consent to, or shall acquiesce in the appointment of a
custodian, trustee or receiver of itself or for a substantial part of its
property, or, in the absence of such application, consent or acquiescence, a
custodian, trustee or receiver shall be appointed for Borrower or for a
substantial part of the property thereof and shall not be discharged within
sixty (60) days, or Borrower shall make an assignment for the benefit of
creditors.
4.1(f) Any bankruptcy, reorganization, debt arrangement or other
proceedings under any bankruptcy or insolvency law shall be instituted by or
against Borrower and, if instituted against Borrower, shall have been consented
to or acquiesced in by Borrower or shall remain undismissed for sixty (60) days,
or an order for relief shall have been entered against Borrower.
4.1(g) Any dissolution or liquidation proceeding shall be
instituted by or against Borrower and, if instituted against Borrower, shall be
consented to or acquiesced in by Borrower or shall remain for sixty (60) days
undismissed.
4.1(h) A judgment or judgments for the payment of money in excess
of the sum of $75,000 in the aggregate shall be rendered against Borrower and
either (i) the judgment creditor executes on such judgment or (ii) such judgment
remains unpaid or undischarged for more than sixty (60) days from the date of
entry thereof or such longer period during which execution of such judgment
shall be stayed during an appeal from such judgment.
4.1(i) A default shall occur, and continue beyond any applicable
grace or cure period, under any note or other evidence of indebtedness or credit
or loan agreement, or other document or instruments executed in connection
therewith, including without limitation the Security Agreement and Financing
Agreement both of even date herewith and all other documents or instruments
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executed in connection therewith, all now or hereafter entered into between
Lender and Borrower, as any of the same may be amended, modified, supplemented,
extended, renewed or replaced.
4.1(j) The maturity of any material indebtedness of Borrower
(other than the Loan and any indebtedness referred to in the immediately
preceding subsection) shall be accelerated, or Borrower shall fail to pay any
such material indebtedness when due (after the lapse of any applicable grace
period) or any event shall occur or condition shall exist and shall continue for
more than the period of grace, if any, applicable thereto and shall have the
effect of causing, or permitting the holder of any such indebtedness to cause,
such material indebtedness to become due prior to its stated maturity or to
realize upon any collateral given as security therefor. For purposes of this
Section, indebtedness shall be deemed "material" if it exceeds $50,000 as to any
item of indebtedness or in the aggregate for all items of indebtedness with
respect to which any of the events described in this Section has occurred.
4.1(k) Any execution or attachment shall be issued whereby any
substantial part of the property of Borrower shall be taken or attempted to be
taken and the same shall not have been vacated or stayed within sixty (60) days
after the issuance thereof.
4.1(l) Any default shall occur under any other Loan Document, and
shall continue beyond any grace or cure period provided therein with respect to
such default.
SECTION 4.2 REMEDIES. Upon and during the occurrence of an Event of
Default described in Sections 4.1(e), (f) or (g) of this Mortgage, all of the
Obligations shall be accelerated and become immediately due and payable without
notice or declaration to Borrower. Upon the occurrence of one or more other
Events of Default, all of the Obligations, at the option of Lender, shall be
accelerated and become immediately due and payable upon notice to Borrower. In
either event, the Obligations shall be due and payable without presentment,
demand or further notice of any kind. Lender shall have the right to proceed to
protect and enforce its rights by one or more of the following remedies:
(a) LENDER SHALL HAVE THE RIGHT TO BRING SUIT either for damages, for
specific performance of any agreement contained in any Loan Document, for the
foreclosure of this Mortgage, or for the enforcement of any other appropriate
legal or equitable remedy.
(b) LENDER SHALL HAVE THE RIGHT TO SELL THE MORTGAGED PROPERTY AT
PUBLIC AUCTION AND CONVEY THE SAME TO THE PURCHASER IN FEE SIMPLE, as provided
by law, Borrower to remain liable
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for any deficiency. Said sale may be as one tract or otherwise, at the sole
option of Lender. In the event of any sale of the Mortgaged Property pursuant
to any judgment or decree of any court or at public auction or otherwise in
connection with the enforcement of any of the terms of this Mortgage, Lender,
its successors or assigns, may become the purchaser, and for the purpose of
making settlement for or payment of the purchase price, shall be entitled to
deliver over and use the Note and any claims for interest accrued and unpaid
thereon, together with all other sums, with interest, advanced or secured hereby
and unpaid hereunder, in order that there may be credited as paid on the
purchase price the total amount of the Obligations then due, including principal
and interest on the Note and all other sums, with interest, advanced or secured
hereby and unpaid hereunder or under any of the other Loan Documents.
(c) LENDER SHALL HAVE THE RIGHT TO OBTAIN THE APPOINTMENT OF A
RECEIVER at any time after the occurrence of an Event of Default. Lender may
apply for the appointment of a receiver to the district court for the county
where the Mortgaged Property or any part thereof is located, by an action
separate from any foreclosure of this Mortgage pursuant to Minnesota Statutes
Chapter 580 or pursuant to Minnesota Statutes Chapter 581, or as a part of the
foreclosure action under said Chapter 581 (it being agreed that the existence of
a foreclosure pursuant to said Chapter 580 or a foreclosure action pursuant to
said Chapter 581 is not a prerequisite to any action for a receiver hereunder).
Lender shall be entitled to the appointment of a receiver without regard to
waste, adequacy of the security or solvency of Borrower. The receiver, who
shall be an experienced property manager, shall collect (until the Obligations
are fully paid and satisfied and, in the case of a foreclosure sale, during the
entire redemption period) the Rents, and shall manage the Mortgaged Property,
execute Leases within or beyond the period of the receivership if approved by
the court and apply all rents, profits and other income collected by him in the
following order:
(i) to the payment of all reasonable fees of the receiver, if
any, approved by the court;
(ii) to the repayment of tenant security deposits, with
interest thereon, as required by Minnesota Statutes, Section 504.20;
(iii) to the payment when due of delinquent or current real
estate taxes or special assessments with respect to the Mortgaged Property, or
the periodic escrow for the payment of the same;
(iv) to the payment when due of premiums for insurance of the
type required by this Mortgage, or the periodic escrow for the payment of the
same;
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(v) to the payment for the keeping of the covenants required
of a lessor or licensor pursuant to Minnesota Statutes, Section 504.18,
subdivision 1;
(vi) to the payment of all expenses for normal maintenance of
the Mortgaged Property; and
(vii) the balance to Lender (a) if received prior to the
commencement of a foreclosure, to be applied to the Obligations, in such order
as Lender may elect and (b) if received after the commencement of a
foreclosure, to be applied to the amount required to be paid to effect a
reinstatement prior to foreclosure sale, or, after a foreclosure sale to any
deficiency and thereafter to the amount required to be paid to effect a
redemption, all pursuant to Minnesota Statutes, Sections 580.30, 580.23 and
581.10, with any excess to be paid to Borrower. Provided, that if this Mortgage
is not reinstated nor the Mortgaged Property redeemed as provided by said
Sections 580.30, 580.23 or 581.10, the entire amount paid to Lender pursuant
hereto shall be the property of Lender together with all or any part of the
Mortgaged Property acquired through foreclosure.
Lender shall have the right, at any time and without limitation, as
provided in Minnesota Statutes, Section 582.03, to advance money to the receiver
to pay any part or all of the items which the receiver should otherwise pay if
cash were available from the Mortgaged Property and sums so advanced, with
interest at the Default Rate set forth in the Note, shall be secured hereby, or
if advanced during the period of redemption shall be part of the sum required to
be paid to redeem from the sale.
(d) LENDER SHALL HAVE THE RIGHT TO COLLECT THE RENTS from the
Mortgaged Property and apply the same in the manner hereinbefore provided with
respect to a receiver. For that purpose, Lender may enter and take possession
of the Mortgaged Property and manage and operate the same and take any action
which, in Lender's judgment, is necessary or proper to collect the Rents and to
conserve the value of the Mortgaged Property. Lender may also take possession
of, and for these purposes use, any and all of the Personal Property. The
expense (including any receiver's fees, attorneys' fees, costs and agent's
compensation) incurred pursuant to the powers herein contained shall be secured
by this Mortgage. Lender shall not be liable to account to Borrower for any
action taken pursuant hereto other than to account for any Rents actually
received by Lender. Enforcement hereof shall not cause Lender to be deemed a
mortgagee in possession unless Lender elects in writing to be a mortgagee in
possession.
(e) LENDER SHALL HAVE THE RIGHT TO ENTER AND TAKE POSSESSION of the
Mortgaged Property and manage and operate the same in conformity with all
applicable laws and take any action which, in Lender's judgment, is necessary or
proper to conserve the value of the Mortgaged Property.
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(f) LENDER SHALL HAVE ALL OF THE RIGHTS AND REMEDIES PROVIDED IN THE
UNIFORM COMMERCIAL CODE including the right to proceed under the Uniform
Commercial Code provisions governing default as to any Personal Property
separately from the real estate included within the Mortgaged Property, or to
proceed as to all of the Mortgaged Property in accordance with its rights and
remedies in respect of said real estate. If Lender should elect to proceed
separately as to such Personal Property, Borrower agrees to make such Personal
Property available to Lender at a place or places acceptable to Lender, and if
any notification of intended disposition of any of such Personal Property is
required by law, such notification shall be deemed reasonably and properly given
if given at least ten (10) days before such disposition in the manner
hereinafter provided.
(g) LENDER SHALL HAVE THE RIGHT TO FILE PROOF OF CLAIM and other
documents as may be necessary or advisable in order to have its claims allowed
in any receivership, insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceedings affecting Borrower, its
creditors or its property, for the entire amount due and payable by Borrower in
respect of the Obligations at the date of the institution of such proceedings,
and for any additional amounts which may become due and payable by Borrower
after such date.
Each remedy herein specifically given shall be in addition to every other right
now or hereafter given or existing at law or in equity, and each and every right
may be exercised from time to time and as often and in such order as may be
deemed expedient by Lender and the exercise or the beginning of the exercise of
one right shall not be deemed a waiver of the right to exercise at the same time
or thereafter any other right. Lender shall have all rights and remedies
available under the law in effect now and/or at the time such rights and
remedies are sought to be enforced, whether or not they are available under the
law in effect on the date hereof.
SECTION 4.3 EXPENSES OF EXERCISING RIGHTS POWERS AND REMEDIES. The
reasonable expenses (including any reasonable receiver's fees, attorneys' fees,
appraisers' fees, environmental engineers' and/or consultants' fees, costs
incurred for documentary and expert evidence, stenographers' charges,
publication costs, costs (which may be estimated as to items to be expended
after entry of the decree of foreclosure) of procuring all abstracts of title,
continuations of abstracts of title, title searches and examinations, title
insurance policies and commitments and extensions therefor, Torrens duplicate
certificates of title, UCC and chattel lien searches, and similar data and
assurances with respect to title as Lender may deem reasonably necessary either
to prosecute any foreclosure action or to evidence to bidders at any sale which
may be had pursuant to any foreclosure decree the true condition of the title to
or the value of the Mortgaged Property, and agent's compensation) incurred by
Lender after and during the occurrence of any Event of Default and/or in
pursuing the rights, powers and remedies contained in this
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Mortgage shall be immediately due and payable by Borrower, with interest thereon
from the date incurred at the Default Rate set forth in the Note, and shall be
added to the indebtedness secured by this Mortgage.
SECTION 4.4 RESTORATION OF POSITION. In case Lender shall have
proceeded to enforce any right under this Mortgage by foreclosure, sale, entry
or otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely, then, and in every such
case, Borrower and Lender shall be restored to their former positions and rights
hereunder with respect to the Mortgaged Property subject to the lien hereof.
SECTION 4.5 MARSHALLING. Borrower, for itself and on behalf of all
Persons which may claim under Borrower, hereby waives all requirements of law
relating to the marshalling of assets, if any, which would be applicable in
connection with the enforcement by Lender of its remedies for an Event of
Default hereunder, absent this waiver. Lender shall not be required to sell or
realize upon any portion of the Mortgaged Property before selling or realizing
upon any other portion thereof.
SECTION 4.6 WAIVERS. No waiver of any provision hereof shall be
implied from the conduct of the parties. Any such waiver must be in writing and
must be signed by the party against which such waiver is sought to be enforced.
The waiver or release of any breach of the provisions set forth herein to be
kept and performed shall not be a waiver or release of any preceding or
subsequent breach of the same or any other provision. No receipt of partial
payment after acceleration of any of the Obligations shall waive the
acceleration. No payment by Borrower or receipt by Lender of a lesser amount
than the full amount secured hereby shall be deemed to be other than on account
of the sums due and payable hereunder, nor shall any endorsement or statement on
any check or any letter accompanying any check or payment be deemed an accord
and satisfaction, and Lender may accept any check or payment without prejudice
to Lender's right to recover the balance of such sums or to pursue any other
remedy provided in this Mortgage. The consent by Lender to any matter or event
requiring such consent shall not constitute a waiver of the necessity for such
consent to any subsequent matter or event.
SECTION 4.7 LENDER'S RIGHT TO CURE DEFAULTS. If Borrower shall fail
to comply with any of the terms of the Loan Documents with respect to the
procuring of insurance, the payment of taxes, assessments and other charges, the
keeping of the Mortgaged Property in repair, or any other term contained herein
or in any of the other Loan Documents, Lender may make advances to perform the
same without releasing Borrower from any of the Obligations. Borrower agrees to
repay upon demand all sums so advanced and all sums expended by Lender in
connection with such performance, including without limitation attorneys' fees,
with interest at the Default Rate set forth in the Note from the dates such
advances are made, and all sums so advanced and/or expenses incurred, with
interest, shall be secured
-17-
hereby, but no such advance and/or incurring of expense by Lender, shall be
deemed to relieve Borrower from any default hereunder or under any of the other
Loan Documents, or to release Borrower from any of the Obligations.
SECTION 4.8 SUITS AND PROCEEDINGS. Lender shall have the power and
authority, upon prior notice to Borrower, to institute and maintain any suits
and proceedings as Lender may deem advisable to (i) prevent any impairment of
the Mortgaged Property by any act which may be unlawful or by any violation of
this Mortgage, (ii) preserve or protect its interest in the Mortgaged Property,
or (iii) restrain the enforcement of or compliance with any legislation or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid, if, in the sole opinion of Lender, the enforcement of or compliance
with such enactment, rule or order might impair the security hereunder or be
prejudicial to Lender's interest.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 BINDING EFFECT; SURVIVAL; NUMBER; GENDER. This Mortgage
shall be binding on and inure to the benefit of the parties hereto, and their
respective heirs, legal representatives, successors and assigns. All
agreements, representations and warranties contained herein or otherwise
heretofore made by Borrower to Lender shall survive the execution, delivery and
foreclosure hereof. The singular of all terms used herein shall include the
plural, the plural shall include the singular, and the use of any gender herein
shall include all other genders, where the context so requires or permits.
SECTION 5.2 SEVERABILITY. The unenforceability or invalidity of any
provision of this Mortgage as to any person or circumstance shall not render
that provision unenforceable or invalid as to any other person or circumstance.
SECTION 5.3 NOTICES. Any notice or other communication to any party
in connection with this Mortgage shall be in writing and shall be sent by manual
delivery, telegram, telex, facsimile transmission, overnight courier or United
States mail (postage prepaid) addressed to such party at the address specified
below, or at such other address as such party shall have specified to the other
party hereto in writing. All periods of notice shall be measured from the date
of delivery thereof if manually delivered, from the date of sending thereof if
sent by telegram, telex or facsimile transmission, from the first Business Day
(as defined in the Loan Agreement) after the date of sending if sent by
overnight courier, or from four days after the date of mailing if mailed.
Notices shall be given to or made upon the respective parties hereto at their
respective addresses set forth below:
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If to Borrower: ▇▇▇▇▇▇ MANUFACTURING, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Lender: U.S. Bank National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
Either party may change its address for notices by a notice given not less than
five (5) Business Days prior to the effective date of the change.
SECTION 5.4 APPLICABLE LAW. This Mortgage and the other Loan
Documents shall be construed and enforceable in accordance with, and be governed
by, the laws of the State of Minnesota, without giving effect to conflict of
laws or principles thereof, but giving effect to federal laws of the United
States applicable to national banks. Whenever possible, each provision of this
Mortgage and any other statement, instrument or transaction contemplated hereby
or relating hereto, shall be interpreted in such manner as to be effective and
valid under such applicable law, but, if any provision of this Mortgage or any
other statement, instrument or transaction contemplated hereby or relating
hereto shall be held to be prohibited or invalid under such applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Mortgage or any other statement, instrument or
transaction contemplated hereby or relating hereto.
SECTION 5.5 WAIVER OF JURY TRIAL. Borrower and Lender each
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or relating to this Mortgage or any of the other Loan Documents
or the transactions contemplated hereby or thereby.
SECTION 5.6 EFFECT. This Mortgage is in addition and not in
substitution for any other guarantees, covenants, obligations or other rights
now or hereafter held by Lender from any other person or entity in connection
with the Obligations.
SECTION 5.7 ASSIGNABILITY. Lender shall have the right to assign
this Mortgage, in whole or in part, or sell participation interests herein, to
any person obtaining an interest in the Obligations.
SECTION 5.8 HEADINGS. Headings of the Sections of this Mortgage are
inserted for convenience only and shall not be deemed to constitute a part
hereof.
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SECTION 5.9 FIXTURE FILING. This instrument shall be deemed to be a
Fixture Filing within the meaning of the Minnesota Uniform Commercial Code, and
for such purpose, the following information is given:
(a) Name and address of Debtor: ▇▇▇▇▇▇ MANUFACTURING, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Federal Tax I.D. No.: ▇▇-▇▇▇▇▇▇▇
(b) Name and address of
Secured Party: U.S. Bank National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(c) Description of the types (or
items) of property covered
by this Fixture Filing: See granting clause on pages 2 and 3
hereof.
(d) Description of real estate
to which the collateral is
attached or upon which it
is or will be located: See Exhibit A hereto.
Some of the above-described collateral is or is to become fixtures upon the
above-described real estate, and this Fixture Filing is to be filed for record
in the public real estate records.
IN WITNESS WHEREOF, Borrower has executed this Mortgage as of the date
first written above.
▇▇▇▇▇▇ MANUFACTURING, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this 3rd day of
December, 1997, by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ , the PRESIDENT of ▇▇▇▇▇▇ MANUFACTURING,
INC., a corporation organized under the laws of the State of Minnesota , on
behalf of the corporation.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
Notary Public
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EXHIBIT A
LEGAL DESCRIPTION (Granting Clause A)
▇▇▇ ▇, ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, together
with all of that part of vacated ▇ ▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇ lying between the Easterly
and Westerly boundary lines of said Lot 3 extended Northerly.
PERMITTED ENCUMBRANCES (Section 2.1)
1. Real estate taxes and installments of special assessments not yet due and
payable.
2. Drainage Ditch Easement recorded as Torrens Document No. 1396934.
3. Underground Utility Easement recorded as Torrens Document No. 890732.
4. Roadway and Utility Easement recorded with the County Recorder as Document
No. 6730545.
EXHIBIT B
LIST OF PERSONAL PROPERTY (Granting Clause B)
All fixtures, machinery, equipment and personal property now or hereafter
located on, in or under the land , hereafter described ("Land") and the
improvements constructed thereon ("Improvements") or which are necessary or
useful in connection with the functioning of the Land or Improvements for their
general intended purposes ( but not to the extent primarily used in the
operation of Borrower's specific business) and which are owned by Borrower
including any construction and building materials stored on and to be included
in the Improvements plus any repairs, replacements, and betterments thereto and
proceeds and products thereof (the "Fixtures and Personal Property"); and all
rights of the Borrower with respect to tenants or occupants now or hereafter
occupying any part of the Land or Improvements, if any, whether oral or written,
including all leases and licenses and rights in connection therewith (the
"Leases"), and all rents, income, both from services and occupation, royalties,
revenues and payments, including prepayments and security deposits
(collectively, the "Rents"), which are now or hereafter due or to be paid in
connection with the Land, Improvements, Fixtures, or Personalty; and all general
intangibles of Borrower which relate to any of the Land, Improvements, Fixtures,
Personal Property or Leases as related to the functioning of the Land or
Improvements for their general intended purposes (but not to the extent
primarily used in the operation of Borrower's specific business), including
proceeds of insurance and condemnation or conveyance of the Land and
Improvements, accounts, trade names, contract rights, accounts receivable, and
bank accounts as related to the functioning of the Land or Improvements for
their general intended purposes (but not to the extent primarily used in the
operation of Borrower's specific business); and all after acquired property
similar to the property herein described and conveyed which may be subsequently
acquired by Borrower and used in connection with the Land, Improvements,
Fixtures, Personal Property or Leases as related to the functioning of the Land
or Improvements for their general intended purposes (but not to the extent
primarily used in the operation of Borrower's specific business); and all cash
and noncash proceeds and products of all of the foregoing property ("Proceeds").
EXHIBIT C
(Insurance Requirements)
I. PROPERTY INSURANCE
As to Improvements while under construction:
An ORIGINAL (or evidence acceptable to Lender of) Builder's Risk
"All-Risk", Completed Value (Non-Reporting) Form POLICY naming Borrower as
an insured, and covering the interests of all contractors (of all tiers) in
the Mortgaged Property, reflecting coverage of 100% of the insurable
replacement cost, and written by a carrier approved by Lender with a
current A.M. Best Company rating of at least A:VII (which is authorized to
do business in the State of Minnesota), that includes:
-- Lender's Loss Payable Endorsement naming U.S. Bank National
Association as Mortgagee
-- 30-day notice to Lender in the event of cancellation or non-renewal by
either party or material adverse change
-- Replacement Cost Measure of Recovery
-- Stipulated Value/Agreed Amount Endorsement (No Coinsurance)
-- Coverage for Foundations, Off-site (Unscheduled and Temporary
Locations), Transit, Testing, Flood, Earthquake, Collapse, and Boiler
and Machinery/Mechanical and Electrical Breakdown, in such amounts as
Lender and Borrower mutually agree is appropriate
-- Coverage for indirect loss exposures (customarily referred to as "soft
cost" exposures), "Contingent Liability from Operation of Building
Laws" coverage, "Demolition Costs" coverage, "Increased Cost of
Construction" coverage, and "Increased Time to Rebuild" coverage, with
such additional limits for such coverages as Lender may reasonably
require
-- Policy to permit partial occupancy
-- No insurer subrogation action or recovery against any party whose
interests are covered under the policy
-- Deductible not to exceed $5,000
-- Coverage to become effective upon the date of the Notice to Proceed,
the date of site mobilization, or the start of any shipment of
materials, machinery or equipment to the site, whichever is earlier,
and to remain in effect until replaced by the permanent All Risk
Property Insurance described below, or until such other time as may be
mutually agreed upon by Lender and Borrower
As to completed Improvements:
An ORIGINAL (or evidence acceptable to Lender of) Special Form (or
so-called All Risk) Hazard Insurance POLICY naming Borrower as an insured,
reflecting coverage of 100% of the replacement cost, and written by a
carrier approved by Lender with a current A.M. Best Company rating of at
least A:VII (which is authorized to do business in the State of Minnesota),
that includes:
-- Lender's Loss Payable Endorsement naming U.S. Bank National
Association as Mortgagee
-- 30-day notice to Lender in the event of cancellation or non-renewal by
either party or material adverse change
-- Replacement Cost Measure of Recovery
-- Stipulated Value/Agreed Amount Endorsement (No Coinsurance)
-- Boiler and Machinery Coverage (including business income, extra
expense coverage)
-- Flood Insurance
-- One (1) year's business interruption, leasehold interest and/or rent
loss insurance in an amount acceptable to Lender
-- Extra expense coverage in an amount acceptable to Lender
-- "Contingent Liability from Operation of Building Laws" coverage,
"Demolition Costs" coverage, "Increased Cost of Construction"
coverage, and "Increased Time to Rebuild" Coverage, with such
additional limits for such coverages as Lender may reasonably require
-- No exclusion for "Collapse"
-- Deductible not to exceed $5,000
II. LIABILITY INSURANCE
An ORIGINAL (or evidence acceptable to Lender of) Commercial General
Liability Insurance POLICY (Insurance Services Offices policy form title)
naming Borrower as an insured, providing coverage on an "occurrence" rather
than a "claims made" basis, and written by a carrier approved by Lender
with a current A.M. Best Company rating of at least A:VII (which is
authorized to do business in the State of Minnesota), that includes:
-- Combined general liability policy limit of at least $2,000,000.00 each
occurrence, applying to liability for Bodily Injury, Personal Injury
and Property Damage, which combined limit may be satisfied by the
limit afforded under the Commercial General Liability Policy, or by
such Policy in combination with the limits afforded by an Umbrella or
Excess Liability Policy (or policies); provided, that the coverage
afforded under any such Umbrella or Excess Liability Policy is at
least as broad in all material respects as that afforded by the
underlying Commercial General Liability Policy
-- Coverage for Bodily Injury, Property Damage, Personal Injury,
Contractual Liability, Independent Contractors and Products-Completed
Operations Liability
-- Automobile Liability insurance covering liability for Bodily Injury
and Property Damage arising out of the ownership, use, maintenance or
operation of all owned, nonowned and hired automobiles and other motor
vehicles utilized by Borrower in connection with the Mortgaged
Property, which coverage may be provided under a separate policy
-- Dram shop coverage if liquor is sold or served at or in the Mortgaged
Property, which coverage may be provided under a separate policy
-- Deductible not to exceed $5,000
-- Additional Insured Endorsement naming U.S. Bank National Association
and a Severability of Interest provision
-- 30-day notice to Lender in the event of cancellation or non-renewal by
either party or material adverse change
III. WORKER'S COMPENSATION
An ORIGINAL CERTIFICATE of Worker's Compensation coverage in the statutory
amount, naming Borrower as an insured, written by a carrier approved by
Lender.