EXHIBIT 4.3
THIS INSTRUMENT WAS PREPARED BY,
AND WHEN RECORDED SHOULD BE
RETURNED TO:
Xxxxxx & Xxxxxxx LLP (JFC)
Pillsbury Center South
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
MORTGAGE, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS
AND FIXTURE FINANCING
THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND
FIXTURE FINANCING STATEMENT (this "Mortgage") is made as of August 6, 1999, by
WSI Industries, Inc., a corporation organized under the laws of the State of
Minnesota ("Borrower"), having its principal offices at Long Lake, Minnesota, in
favor of U.S. Bank National Association, a national banking association
("Lender"), having its principal offices at Minneapolis, Minnesota.
RECITALS
A. Lender has lent, or agreed to lend, to Borrower the principal sum of
Two Million Five Hundred Thousand Dollars and No Cents ($2,500,000) (the
"Loan"), to be repaid with interest thereon, as evidenced by Borrower's Note
(the "Note", which term shall include any amendment, modification, supplement,
extension, renewal, replacement or restatement thereof), which Loan is the
subject of a Loan Agreement between Borrower and Lender (the "Loan Agreement",
which term shall include any amendment, modification, supplement, extension,
renewal, replacement or restatement thereof). The Note, the Loan Agreement and
any other Loan Document (as defined in the Loan Agreement) are each dated the
same date as this Mortgage, we hereby incorporated by reference, and, together
with this Mortgage, 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 mount of $2,500,000 or so much thereof as may be
advanced by Lender under the Note and pursuant to the Loan Agreement;
plus
(ii) interest on the amount advanced and unpaid, 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 August 6, 2004 (the
"Maturity Date").
D. The maximum principal indebtedness secured hereby $2,500,000 plus
amounts which may be advanced by Lender in protection of the Mortgaged Property
of 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, or usable in connection with the Land or
the Improvements, 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, 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
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.
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 Loan Agreement 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, when aggregated with any previous
transfer made after the date hereof, changes the persons in control of Borrower
or transfers more than 25% of the beneficial interest in Borrower. 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 B attached hereto, and upon request of Lender shall furnish to
Lender proof of 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 following a material
adverse change in Borrower's financial condition, 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
with respect to the Mortgaged Property. All funds so deposited shall secure the
Obligations. Such deposits shall be held by Lender, or its nominee, in a
non-interest being 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
rates, 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 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 not 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 without the prior written consent of Lender.
(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, the "Costs") 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 that such indemnity shall not apply to
Costs resulting from the gross negligence or intentional 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
attorneys' fees. The indemnity contained in this Section shall survive 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 original principal amount of the Note exceeds 65% 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, rates, 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 canceled upon 30 days' or less notice.
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 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. 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:
(a) There shall be no Event of Default in existence at the time of
any disbursement of the condemnation 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 condemnation proceeds and other funds deposited by
Borrower with Lender.
(e) 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 Tender (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. An Event of Default, as defined in the
Loan Agreement, shall constitute an Event of Default hereunder.
SECTION 4.2 REMEDIES. Upon the occurrence of an Event of Default
described in Sections 6.1 (f), (g) or (h) of the Loan Agreement, 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 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, 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;
(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 when 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.
(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 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 the occurrence of any Event of Default and/or in pursuing the rights,
powers and remedies contained in this 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
toenforce 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 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 thedate of
delivery thereof if manually delivered, from the date of sending thereof if sent
bytelegram, 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:
If to Borrower: WSI Industries,
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxx, Xxxxxxxxx 00000
Attn: President
Telecopy No. (000) 000-0000
If to Lender: U.S. Bank National Association
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Attn: Xx. Xxx Xxxxxxx
Telecopy No. (000) 000-0000
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 hold 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.
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: WSI Industries, Inc.
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxx, Xxxxxxxxx 00000
Federal Tax I.D. No.: 00-0000000
(b) Name and address of
Secured Party: U.S. Bank National Association
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
(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.
WSI INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------
Title: President
------------------------------
EXHIBIT A
LEGAL DESCRIPTION (Granting Clause A)
Parcel 1: That part of the South half of Northeast Quarter of
Section 33, Township 118, Range 23, which lies East of the
East line of the plat of Orono Industrial Park, and its
extensions and West of the West line of the plat of Long
Lake West Industrial Park and its extensions, Hennepin
County, Minnesota.
Parcel 2: Lots 1 through 12, inclusive, Block 1, Orono Industrial
Park, and all of Lincoln Drive, vacated, as shown on the
plat of said Orono Industrial Park, Hennepin County,
Minnesota.
(Torrens Property, evidenced by Certificate of Title No. 819735)
PERMITTED ENCUMBRANCES (Section 2.1)
Real estate taxes not yet due and installments of special assessments payable
therewith.
1. Mortgage, Security Agreement, Assignment of Leases and Rents and
Fixture Filing dated December 10, 1993, filed December 30, 1993, as Document
No. 6210390 (abstract) and filed January 7, 1994, as Document No. 2463274
(Torrens), executed by Washington Scientific Industries, Inc., a Minnesota
corporation, to FBS Business Finance Corporation, a national banking
association, to secure $1,254,000.00.
Amended by Amendment to Mortgage and Extension Agreement dated April 1,
1994, filed September 28, 1994, as Document No. 6345512 (abstract) and 2554631
(Torrens).
Amended by Amendment to Mortgage and Extension Agreement dated February
28, 1995, filed February 28, 1995, as Document No. 6402162 (abstract) and
2592164 (Torrens).
Amended by Amendment to Mortgage and Extension Agreement dated March 31,
1995, filed May 15, 1995, as Document No. 6427082 (abstract) and 2608260
(Torrens).
Amended by Fourth Amendment to Mortgage and Extension Agreement dated
April 30, 1997, filed August 29, 1997, as Document No. 2840001.
Assigned to U.S. Bank National Association, a national banking
association, by Assignment of Mortgage dated January 2, 1998, filed January 7,
1998, as Document No. 3016787.
2. Mortgage, Security Agreement, Assignment of Leases and Rents and
Fixture Financing Statement dated December 10, 1993, filed January 19,
1994, as Document No. 6220671 (abstract), and filed January 24, 1994,
as Document No. 2470147 (Torrens), executed by Washington Scientific
Industries, Inc., a Minnesota corporation, to Northwestern National
Life Insurance Company, a Minnesota corporation, Farm Bureau Life
Insurance Company of Michigan, a Michigan corporation, and FB Annuity
Company, a Michigan corporation, to secure $580,288.00.
Assigned to FBS Business Finance Corporation, a Delaware corporation,
by Assignment of Mortgage dated March 31, 1995, filed May 1, 1995, as Document
No. 2605592.
Amended by Consolidation of and Amendment to Mortgages dated March 31,
1995, filed May 1, 1995, as Document No. 2605594.
Assignment to U.S. Bank National Association, a national banking
association, by Assignment of Consolidated Mortgages dated January 2, 1998,
filed Much 30, 1998, as Document No. 2902741, and filed September 30,1998, as
Document No. 3065225.
Amended by Amendment to Mortgage and Extension Agreement dated
April 8, 1998, filed April 14, 1998, as Document No. 3003909.
3. Mortgage, Security Agreement, Assignment of Leases and Rents and
Fixture Financing Statement dated December 10, 1993, filed January 19,
1994, as Document No. 6220672 (abstract), and filed January 24, 1994,
as Document No. 2470148 (Torrens), executed by Washington Scientific
Industries, Inc., a Minnesota corporation, to Northwestern National
Life Insurance Company, a Minnesota corporation, and Northern Life
Insurance Company, a Washington corporation, in the amount of
$1,300,712.00.
Assigned to FBS Business Finance Corporation, a Delaware corporation,
by Assignment of Mortgage dated March 31, 1995, filed May 1, 1995, as Document
No. 2605593.
Amended by Consolidation of and Amendment to Mortgages dated March 31,
1995, filed May 1, 1995, as Document No. 2605594.
Assigned to U.S. Bank National Association, a national banking
association, by Assignment of Consolidated Mortgages dated January 2, 1998,
filed March 30, 1998, as Document No. 2902741, and filed September 30, 1998, as
Document No. 3065225.
Amended by Amendment to Mortgage and Extension Agreement dated April 8,
1998, filed April 14, 1998, as Document No. 3003909.
4. Real Property Waiver dated October 28, 1994, filed January 13, 1995,
as Document No. 2582652, executed by FBS Business Finance, to CLC
Equipment Company.
5. Real Property Waiver dated November 3, 1994, filed January 13, 1995,
as Document No. 2582653, executed by Northwestern National Life
Insurance Company and Northern Life Insurance Company to CLC Equipment
Company.
6. Easements for utilities and drainage as shown on the recorded plat.
(a) Terms and conditions of Conditional Use Permit filed December 27,
1988, as Document No. 5491246.
(b) Easement for ingress, egress and utility in favor of U.S. West
Communications, Inc. as created in document dated April 26, 1994,
filed May 9, 1994, as Document No. 2512678.
(c) Easement for utilities and drainage in favor of City of Orono as
created in document dated December 31, 1994, filed January 18, 1995,
as Document No. 2583345.
(d) Easement for highway purposes for US Highway 12 over part of the
above-described land lying within Minnesota Department of
Transportation Right of Way Plat No. 27-55 filed August 23, 1994, as
Document No. 6329982 (abstract), provided, however, that the right to
erect and maintain snow fences has been released as evidenced by Quick
Claim Deed recorded as Document No. 6311743 (abstract) as to Parcel 1
hereinbefore described.
(e) Easement in favor of City of Orono for underground utility purposes,
over the East 20 feet of the above-described land as created by
easement filed as Document No. 3736406 (abstract) as to Parcel 1
hereinbefore described.
(f) Easement rights to use the drainage ditch along the Easterly boundary
of property in favor of the owners, encumbrancers and occupants of
Xxxx 0, 0 xxx 0 xx Xxxx Xxxx Xxxx Xxxxxxxxxx Xxxx as determined in
Torrens Case No. 19977. (See Court Order Document No. 2571925) as to
Parcel 1 hereinbefore described.
EXHIBIT B
(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: Vll (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"
--- Earthquake Coverage
--- 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 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, non-owned 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
II. 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.
