AGREEMENT FOR LOAN OF MINNESOTA INVESTMENT FUND
THIS AGREEMENT is made and entered into as the 6th day of October, 1999, by and
between the City of Mankato, hereinafter called "City", and Xxxxxxx Electronics,
Inc., hereinafter called "Developer";
WITNESS TO:
WHEREAS, the City has applied to the Minnesota Department of Trade and Economic
Development for a Minnesota Investment Fund Grant (MIF) and received preliminary
approval for said grant; and
WHEREAS, a Grant Agreement, hereinafter called "Grant Agreement," between the
Minnesota Department of Trade and Economic Development and the City has been
executed and which Grant Agreement requires that the Developer, Xxxxxxx
Electronics, Inc., provide financing to complete the project and agree to loan
terms with the City for Minnesota Investment Funds used to assist in financing
the project; and
WHEREAS, all parties to this agreement agree to incorporate into this agreement
by reference said MIF Grant Agreement, Grant Number CDAP-99-0013-HFY99, as is
fully set forth herein word for word;
NOW, THEREFORE, it is agreed by and between the parties hereto as follows:
ARTICLE 1
Definitions
Section 1.1, Definitions. In this Agreement, unless a different meaning clearly
appears from the context:
"City" means the City of Mankato
"Developer" means Xxxxxxx Electronics, Inc.
"Bank" means Norwest Bank Minnesota South., Mankato office.
"Development Property" means the real property described as Xxxxxxxx Xxxxxxxxxx
Xxxxxx, Xxx 0 & N201.9'.
"Grantor Agency" means Minnesota Department of Trade and Economic Development.
"State" means the State of Minnesota.
"Grantor Agreement" means Minnesota Department of Trade and Economic Development
Grant Agreement # CDAP-99-0013-H-FY99.
"MIF" means Minnesota Investment Fund.
"Collateral" means a second mortgage on the development property specified in
Section 4.3.
"Leverage Funds* means the funds provided by or for the account of the Developer
pursuant to Section 2.1.
"Project" means ________________________________________________ thereof, as
generally discussed in the application for MIF funding which resulted in the
Grant Agreement.
ARTICLE 2
Financing for Projects
Section 2.1, Project Financing. The Developer shall secure from Norwest Bank
Minnesota South, financing necessary to complete the project.
Section 2.2, Developer's Equity and other Financing. The Developer shall commit
to $363,726 of other financing plus $100,000 of equity to be used for the
completion of the project development.
Section 2.3, MIF Loan. The Grantor Agency of the State has granted to the City
and the City shall loan to the Developer, MIF funds of an amount up to $150,000
according to the terms described in ARTICLE 3.
ARTICLE 3
MIF Loan Terms and Conditions
Section 3.1, Basic Loan Terms. The principle amount of the loan of MIF funds by
the City to the Developer shall not exceed $150,000. The loan shall bear
interest at a rate of six (6%) percent per annum for ten (10) years. The loan
terms may not be modified without prior written approval from the Grantor
Agency.
Section 3.2, Prepayment. Prepayment of the loan may occur at any time during the
loan without penalty.
Section 3.3, Assignment. The Developer will not sell the property or assign its
rights or interests or any party therein or its right or interest in this Loan
Agreement, or any part thereof. In the event the Developer sells, conveys,
transfers, further mortgages or encumbers or disposes of the property, or any
part thereof, or any interest therein, or agrees so to do, the Developer shall
immediately pay on the Loan an amount equal to same. This shall be in addition
to any other remedies at law or equity available to the city.
Section 3.4, Termination. This agreement shall automatically terminate without
any notice to Developer (1) if the loan proceeds have not been disbursed to the
Developer prior to December 31, 1999; or if a petition is filed against the
Developer under the U.S. Bankruptcy Code, or if voluntary, such a petition is
not dismissed within sixty (60) business days following such petition.
ARTICLE 4
Default and Collateral
Section 4.1, Default. The Developer shall b e in default under this agreement
upon the happening of any of the following events:
(a) nonpayment, when due, of any amount payable on MIF loan or failure
to observe or perform any terms thereof; provided such nonpayment is not
remedied within ten (10) business days after written notice thereof by either
the Developer or the City,
(b) if Developer is in breach of any material respect of any obligation
or agreement of the Developer under this agreement, provided Developer remains
in breach in any material respect for thirty (30) business days after written
notice thereof to the Developer by the City; provided, however, that if such
breach shall reasonably be incapable of being cured within such thirty (30)
business days after notice, and if Developer commences and diligently prosecutes
the appropriate steps to cure such breach, no default shall exist so long as
Developer is proceeding to cure such breach;
(c) if any material covenant, warranty or representation of Developer
shall prove to be untrue in any material respect, provided such covenant,
warranty or representation of Developer remains untrue in any material respect
for thirty (30) business days after written notice thereof to the Developer the
City; provided, however, that if such untruth shall reasonably be incapable of
being corrected within such thirty (30) business days after notice, and if
Developer commences and diligently prosecutes the appropriate steps to correct
such untruth, no default shall exist so long as Developer is so proceeding to
correct such untruth;
(d) if the Developer becomes insolvent or generally unable to pay debts
as they mature or makes an assignment for the benefit of creditors, provided
such insolvency or general inability to pay is not remedied within sixty (60)
business days after written notice thereof by either Developer or the City;
(e) entry of a final judgment against Developer where such judgment the
City reasonably deems will have a material, adverse impact on Developer's
ability to comply with its obligations under this agreement;
(f) transfer by the Developer, of any part of the Collateral to any
entity other than a wholly-owned subsidiary of Developer provided such is not
approved in writing by the City, which approval will not be unreasonably
withheld;
(g) merger or consolidation where such merger or consolidation is not
approved in writing by the City, which approval will not be unreasonably
withheld; or
(h) loss, theft, substantial damage, destruction or encumbrance of any
of the Collateral, provided that such is not remedied within sixty (60) business
days after written notice thereof by either Developer of the City (including,
without limitation, by a pledge of insurance proceeds or by substitute
Collateral satisfactory to the City);
Section 4.2, Remedies Upon Default.
(a) In the event of a default and the failure to cure it in the time
allotted therefor to commence and diligently proceed to cure such default if
reasonably incapable of being cured within the time allotted therefor), the City
shall have the right as its option and without demand or notice, to declare all
or part of the loan (as described in Section 3.1) immediately due and payable,
and in addition to the rights and remedies granted hereby, the City shall have
all of the rights and remedies under the Uniform Commercial Code or any
applicable law.
(b) Developer agrees in the event of a default and the failure to cure
it in the time allotted therefor, to make the Collateral available to the City.
In the event of any lawsuit under this agreement reasonable attorney's fees and
costs will be awarded to the prevailing party. If any notice of sale,
disposition or other intended action by the City is required by law to be given
to Developer, such notice shall be deemed reasonably and properly given if
mailed to Developer at the Development Property or at such other address of
Developer as may be shown on the City's records, at least fifteen (15) days
before such sale, disposition or other intended action. Waiver of and default
hereunder by the City shall not be waived of any other default, or of the same
default, on a later occasion. No delays or failure by the City to exercise any
right or remedy shall be a waiver of such right or remedy shall preclude other
or further exercise thereof of the exercise of any other right or remedy at any
other time.
Section 4.3, Collateral. The Developer shall grant to the City a second mortgage
on the development property.
ARTICLE 5
Loan Disbursement Provisions
Section 5.1, Payment Requisition Documentation and Format. Loan disbursements
shall be for the construction of the addition to the existing building and in
the amount of $150,000. The loan funds may be disbursed to the Developer only
after the City has received from the Developer invoices for construction costs
and only on a cost-sharing ratio of 30% loan funds to 70% other funds.
Section 5.2, Provision for Evidentiary materials. No disbursements of loan funds
shall be made until all evidentiary materials required by the Grantor Agency
have been submitted and approved by the Grantor Agency.
Section 5.3, Project Time Frame (Schedule). The time frame outlined in the MIF
application pertaining to the Project shall be met by the Developer.
Section 5.4, Permanent Loan Terms. The permanent MIF loan of $150,000 shall be
for a term of ten (10) years, commencing not later than ___________, 19____. The
interest rate shall be six (6) percent per annum for the 120 months of the Loan
period. Monthly installments will be made in the amount of $1665.31 for 120
months. In the event that less than $150,000 of loan funds are not drawn down by
December 31, 1999 a revised amortization schedule shall be prepared to reflect
the lower monthly payments.
Section 5.5, Leverage Funds. The leveraged funds described in the MIF
application must be used for the same purposes and under the same terms, rates,
and conditions as specified unless prior written consent is received from the
Grantor Agency.
ARTICLE 6
Provision Of Evidentiary Materials
Section 6.1, Provision of Evidentiary Materials. The Developer shall agree to
provide to the City all evidentiary materials according to the format and
timetable cited in the Grant Agreement. The City will forward said materials to
the Grantor Agency and assist in expediting reviews leading to a release of MIF
funds.
Section 6.2, Documentation of Use of Funds. The Developer must provide the City
with necessary documentation that the MIF loan proceeds and leveraged funds have
been used for the items and purposes stated in the MIF application, prior to
submitting the final progress report and requesting grant closeout from the
Grantor Agency.
ARTICLE 7
Nondiscrimination
Section 7.1, Employment objective. The Developer agrees to take affirmative
action to ensure that 23 new permanent jobs will be created by the Project all
paying $8.00 and more hourly (excluding benefits). The Developer agrees to pay
benefits of $.75 per hour and more for the positions created. If those jobs are
not created by the Grantee's target date of June 30, 2001, the Developer will be
required to return to the City all or a proportional share of the grant funds
provided for job creation.
Section 7.2, Minnesota Statute 116J.991. Minnesota Statute 116J.991 requires
that a business receiving state assistance for economic development or job
growth purposes must create a net increase in jobs in Minnesota within two years
of receiving the assistance. The law also requires that the government agency
providing the assistance must establish wage level and job creation goals to be
met by the business receiving the assistance. If Xxxxxxx Electronics, Inc. fails
to meet the wage level and job creation goals as set forth in Special Condition
10 of the Agreement, the business must repay the assistance to the Grantee.
Section 7.3, Employment Documentation. The Developer shall complete and provide
to the City notification of employment semiannually of hiring each new employee.
This notification requirement will not be necessary after June 30, 2001 provided
the employment objective set forth in Section 7.1 has been met.
Section 7.4, Job Creation Documentation. The Grantee must include job creation
information in each semi-annual progress report. This information shall be
provided by the Developer and must include:
(a) permanent full-time equivalent jobs created;
(b) job title per job,
(c) date employees hired,
(d) hourly value of wages paid,
(e) value of benefits paid; and
(f) type of benefits provided (i.e. life, dental, health insurance
and retirement).
ARTICLE 8
Provision of Monitoring information Related To Project Progress
Section 8.1, Provisions of Progress Information. The developer shall agree to
provide to the City information for incorporation into progress reports, as
required by the Grantor Agency and as needed by the City, to monitor project
implementation for compliance with grantor and local guidelines.
ARTICLE 9
Nondiscrimination
Section 9.1, Nondiscrimination. The provisions of Minnesota Statutes, Section
181.59, which relate to civil rights and discrimination, shall be considered a
part of this Agreement as though wholly set forth herein.
ARTICLE 10
Developer's Acknowledgments, Representation, and Warrants
Section 10.1, Acknowledgments. The Developer acknowledges that the City, in
order to obtain funds for part of the City's activities in connection with the
Project, has applied for a Minnesota investment Fund Grant (MIF) (the "Grant")
to the Commissioner of the Minnesota Department of Trade and Economic
Development (the "Commissioner") under the Minnesota Investment Fund Program,
Business and Community Development Division, and the City will be entering into
the Grant Agreement with the Commissioner setting forth the terms, conditions,
and requirements as to the Grant. The Developer further acknowledges that the
Developer has made certain representations and statements as to those activities
of the Project to be carried out and completed by the Developer which were
contained in and made part of the application for the Grant and that the
Developer is designated and identified under the Grant Agreement.
A copy of the Grant Agreement shall be on file in the office of the Deputy City
Manager, City of Mankato. In the event any provision of this Agreement relating
to the Developer's obligations hereunder shall be inconsistent with the
provisions of the Grant Agreement relating to the Developer's activities
thereunder, the provisions of the Grant Agreement shall prevail.
The Developer acknowledges that nothing contained in the Grant Agreement of this
Agreement, nor any act of the Commissioner or the City shall be deemed or
construed to create any relationship or third-party beneficiary, principal and
agent, limited or general partnership, or joint venture, or of any association
or relationship involving the commissioner.
Section 10.2, Representations and warranties. Developer warrants and represents,
in connection with the Grant and for the benefit of the Commissioner and the
City, that:
(a) Representations, statements, and other matters provided by the
Developer relating to those activities of the Project to be Completed by the
Developer, which were contained in the application for the Grant, were true and
complete in all material respects as of the date of submission to the City and
that such representations, statements, and other matters are true as of the date
of this Agreement and there are no adverse material changes in the financial
condition of the business or its shareholders.
(b) To the best of the Developer's knowledge, no member, officer, or
employee of the City or its designers or agents, no consultant, member of the
governing body of the City, and no other public official of the City, who
exercises or has exercised any functions or responsibilities with respect to the
Project during his or her tenure shall have any 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 therefrom, which
is part of this Project.
(c) The Developer acknowledges that the Commissioner, in selecting the
city as recipient of the Grant, relied in material part upon the assured
completion of the Project to be carried out by the Developer, and the Developer
assures the City that said Project will be carried out by the Developer.
(d) The Developer 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.
(e) The Developer warrants that it shall keep and maintain books,
records, and other documents relating directly to the leveraged funds and that
any duly authorized representative of the Commissioner shall, at all reasonable
times, have access to and the right to inspect, copy , audit, and examine all
such books, records, and other documents of the Developer until the completion
of all closeout procedures respecting the MIF grant and the final settlement and
conclusion of all issues arising out of the grant.
(f) The Developer warrant that no transfer of MIF loan proceeds by the
City to the Developer shall be or be deemed an assignment of the loan proceeds
and the Developer shall neither succeed to any rights, benefits, or advantages
of the City under the Grant Agreement, nor attain any right, privileges,
authorities, or interest in or under the Grant Agreement.
(g) The Developer warrant that it has fully complied with all
applicable state and federal laws pertaining to its business and will continue
said compliance throughout the terms of this Agreement. If at any time notice of
noncompliance is received by the Developer, he agrees to take any necessary
action to comply with the State or Federal law in question.
ARTICLE 11
Other Special Conditions
Section 11.1, Antitrust. Developer hereby assigns to the State of Minnesota any
and all claims for overcharges as to goods and/or services provided in
connection with this contract resulting from antitrust violations which arise
under the antitrust laws of the United States and the antitrust laws of the
State of Minnesota.
Section 11.2, Workers Compensation Insurance. The Developer has obtained
worker's compensation insurance as required by Minnesota Statutes, 1982, Section
176.181, Subd. 2. Developer's workers' compensation insurance information is as
follows:
(a) Company Name: ________________________
(b) Policy Number: ________________________
(c) Local Agent: ________________________
Section 11.3, The Developer must comply with Minnesota Statues, Section
290.9705 by either;
(a) Depositing with the State, eight percent of every payment made to
non-Minnesota construction contractors, where the contract exceeds $100, 000;
or,
(b) Receiving a waiver from this requirement from the Minnesota
Department of Revenue.
Section 11.4, Prevailing Wage Rate. Minnesota Statutes, Section 116J.871 applies
to this project. This statute requires of recipients of state assistance to pay
the prevailing wage rate to laborers and mechanics at the project site. The
recipient or person benefiting from the financial assistance must certify to the
Commissioner of Labor and Industry that laborers and mechanics assigned
prevailing wage rate is a misdemeanor and is punishable by a fine of not more
than $700, or imprisonment for not more than 90 days or both. Each day a
violation of this subdivision continues is a separate offense. If a subrecipient
is in noncompliance with prevailing wage rate requirements, the Grantee must
withhold payment of grant/loan funds to subrecipient until the Minnesota
Commission of Labor and Industry indicates that the subrecipient is in
compliance with the prevailing wage requirements.
Section 11.5, Business with the State of Minnesota-State Tax Laws. Notice to
Developer. You are required by Minnesota Statutes, 1982, Section 2790.66, to
provide your Minnesota tax identification number if you do business with the
State of Minnesota. This information may be used in the enforcement of Federal
and State tax laws. Supplying these numbers could result in an action to require
you to file State tax returns and pay delinquent State tax liabilities. This
contract will not be approved unless these numbers are provided. These numbers
will be available to Federal and State tax authorities and State personnel
involved in the payment of State obligations.
Xxxxxxx Electronics, Inc.
Minnesota Tax ID: 8023649
Federal Employer ID: 00-0000000
IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in
its name and behalf and the Developer and Formative has caused this Agreement to
be duly executed in its name and behalf as of the date first above written.
Subscribed and sworn to before City of Mankato
/s/ Xxxx Xxxxxx
me, a Notary Public, on this
5th day of October, By /s/ illegible
1999, My Commission expires
on 1-31-2005 Position Deputy City Manager
Subscribed and sworn to before DEVELOPER X. X. Xxxxxxx
me, a Notary Public, on this
5th day of October, By /s/ X. X. Xxxxxxx
1999, My Commission expires on
1-31-2005 Position CEO & Chairman
